Supply risk management and competitive advantage: a misfit model

Abstract

Purpose – The purpose of this paper is to develop a model of congruence for the management of supply risk that is easy to apply, but also accurate. The authors also aim at providing empirical evidence about the relationship between misfit – i.e. the incongruence between a firm’s preparedness in (supply) risk management and the potential riskiness characterising the context – and competitive advantage. Design/methodology/approach – In line with the purpose, literature and field interviews were used to develop a model of congruence in the context of supply risk management (SRM) and operationalise it within a questionnaire. Then, the authors collected survey data to validate the model. Findings – Results show that competitive advantage decreases when the firm’s preparedness in SRM does not match to the pattern of risk conditions (i.e. environmental vulnerabilities). Research limitations/implications – The model of congruence here developed is simple to apply but offer effective decisions support. This study, thus, stimulates future research on the assessment and management of supply chain risk. This study, also, fosters the attention to the non-linear relationship between risk management and business performance. Practical implications – This study develops a model that can be used by practitioners to configure an optimal adoption of SRM practices. Also, the analysis allows to draw some specific recommendations for supply chain managers aiming at improving their preparedness in SRM. Originality/value – By relying on SRM literature, the balanced-resilience logic and the theoretical framework of contingency theory, this study develops and test a model of congruence that shows how companies can gain competitive advantage through the management of supply risk.