Making agency theory work for supply chain relationships: A systematic review across four disciplines

Juri Matinheikki, Katri Kauppi, Alistair Brandon-Jones, Erik van Raaij

Research output: Contribution to journalArticlepeer-review

17 Citations (SciVal)

Abstract

Purpose
Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.

Design/methodology/approach
The study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.

Findings
The authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.

Research limitations/implications
The developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.

Practical implications
The review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.

Originality/value
The first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.
Original languageEnglish
Pages (from-to)299-334
Number of pages36
JournalInternational Journal of Operations & Production Management
Volume42
Issue number13
DOIs
Publication statusPublished - 16 Aug 2022

Bibliographical note

Funding Information:
The research was funded by the Academy of Finland (No: 316020) as part of the research projectnamed “Alternative Causes to Agency Problems in Inter-organizational Relationships” (ACAP) as well as by the Finnish Foundation for Economic Education (No: 16-8806). The previous versions of this paper were presented in EurOMA 2019 conference in Helsinki as well as in virtual Academy of Management Annual Meeting 2020, and the authors thank all anonymous reviewers and sessions participants for their comments. Finally, the authors would like especially thank the IJOPM editor Professor Tobias Schoenherr and two anonymous reviewers for the constructive comments during the publication process helping develop the paper.

Keywords

  • Agency theory
  • Buyer-supplier relationships
  • Information asymmetry
  • Supply chain relationships
  • Systematic literature review

ASJC Scopus subject areas

  • General Decision Sciences
  • Strategy and Management
  • Management of Technology and Innovation

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