Management strategies for supply risk dependencies: empirical evidence from the gulf region

Abstract

PurposeThe purpose of this study is to propose a conceptual model for managing supply risk (SR) dependencies in regional supply networks (SNs). Grounded on resource dependency theory (RDT), the research conceptualises the management of SR as buffering and bridging strategies that enable organisations to redefine their SN to cope with SR and as a three-stage transformation mechanism.Design/methodology/approachFour supply failure case studies from the aluminium and the oil and gas industries in the Gulf Cooperation Council (GCC) region inductively provide empirical insights for a revised conceptual framing. Within and cross case analysis on transcribed semi-structured interviews with 11 SN managers focus on the SRs and dependencies associated with the supply failures and an abstraction of risk management (RM) strategies for coping with these failures.FindingsThe analysis finds that underpinning ‘second-order’ buffering and bridging strategies from RDT are four main ‘first-order’ RM strategies: unit independency, organisational adaptation, network reconfiguration and environmental acceptance. These RM strategies are due to controllability and predictability levels that influence investment in RM and reflect the locations for implementing RM practices, i.e. the business unit, the organisation, the SN and the environment.Originality/valueThe article contributes to research through the conceptual framework of SR dependencies and unique insights on SR management within the GCC region. Practically, the research is novel in offering strategic directions for RM evaluations and investments that reflect the controllability and predictability of risk incidents. Such evaluations are potentially valuable in orchestrating regional SNs, for managing GCC companies in global supply chains, and for strategic decisions to expand or outsource to the GCC region.