A Study on Supply Chain Risk Information Processing Capability: Antecedents, Inner Mechanism and Contingencies


Student thesis: Doctoral Thesis

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Awarding Institution
Award date23 Mar 2017


The threat of supply chain risks (SCRs) and their actual negative impacts on the operational continuity of supply chains and the corporate performance of individual firms have attracted significant attention from practitioners and researchers in the field of supply chain management. To mitigate and respond to SCRs, previous research often views supply chain risk management as a management process that identifies, assesses, mitigates, and responds to supply chain risk. While supply chain risk information plays a crucial role in the implementation and decisions making of many of these sub-processes, the importance of a firm’s information processing capability to its supply chain risk management effort has received very little attention in the literature. Moreover, although the extant literature provides valuable insights on specific SCRM sub-processes, little attention has been paid to studying the holistic SCRM process. The theoretical foundation and empirical evidence concerning the logicality and the effectiveness of the holistic SCRM process are scant. Based on information processing theory (IPT), this study endeavors to offer an information processing perspective of supply chain risk management and build a supply chain risk information processing capability.

Specifically, first in line with the notion of information processing theory (IPT) that relies on an organization’s information processing capability to cope with uncertainty, this study integrates several SCRM sub-processes as a firm’s SCR information processing capability to deal with SCR. This study proposes three SCRM sub-processes, namely risk information sharing, risk analysis and assessment, and risk sharing mechanism to form SCR information processing capability and examines the interacting mechanism of the three sub-processes of this capability. Second, the three sub-processes contain the abilities of collecting, processing, and applying of SCR information respectively. With these abilities, firms’ overall SCR information processing capability is supposed to improve firms’ operational performance. Third, according to IPT, to be effective, this information processing capability should fit with its information processing needs. Two uncertainty factors, namely technological turbulence and market turbulence, are the information processing needs in this context. Thus the effectiveness of the SCR information processing capability is likely to contingent on the two uncertainty factors. Fourth, drawing on the literature on organizational change, this study examines three organization factors, namely SCRM culture diffusion, SCRM team support, and SCRM strategy alignment that are supposed to facilitate the implementation of the sub-processes of SCR information processing capability. As a result, this study builds a conceptual model that focuses on the antecedents, inner mechanism, contingencies, and consequence of the SCR information processing capability.

This study empirically tests the conceptual model using the data collected from 350 manufacturing firms in China. The results suggest that SCRM culture diffusion positively influences risk information sharing and risk analysis and assessment, but it does not influence risk sharing mechanism. SCRM team support positively influences all the three sub-processes. SCRM strategy alignment positively influences risk information sharing and risk sharing mechanism, which does not influence risk analysis and assessment. Risk information sharing positively influences risk analysis and assessment, which then influences risk sharing mechanism. All the three sub-processes of SCRM are the sub-dimensions of the SCR information processing capability. This capability could positively influence operational performance. The effect would be stronger when technological turbulence or market turbulence is high.

Both theoretical and practical implications are explored from the results. Theoretically, this study offers an information processing perspective of supply chain risk management and build a supply chain risk information processing capability. It provides a novel theoretical interpretation of the process of SCRM by organising three SCRM sub-processes as an integral SCR information processing capability. The examination of the interrelationships among the three sub-processes provides empirical evidence concerning the logic of the holistic SCRM process. By identifying and examining the effects of three organizational factors on the SCRM sub-processes, this study contributes to the literature on the organizational antecedents of SCRM initiatives. By examining the impact of SCR information processing capability on firms’ operational performance, this study contributes to the literature on the consequences of SCRM initiatives. By applying the theoretical framework of IPT to SCRM research, this study offers specific insights on the circumstances under which SCR information processing capability is particularly effective. Practically, this study offers an information processing perspective of supply chain risk management for managers and provides guidelines for its implementation.