Summary
Summary of the article ‘An Agency Theory Investigation of Supply Risk Management’
- Course
- Institution
Summary of the article ‘An Agency Theory Investigation of Supply Risk Management’
[Show more]
Seller
Follow
JonasKlein
Content preview
Supply risksSamenvatting ‘An Agency Theory Investigation of Supply Risk
Management’
Every organization needs to acquire goods and services in order to carry out its mission and
goals. Varying degrees of risk are associated with obtaining these inputs. An unplanned
event may occur in their acquisition, delivery, and use that can negatively affect a firm’s
ability to serve its own customers. Supply risk is defined as the probability that such an
event will occur and the resulting detrimental consequence on the purchasing firm.
Because the context for managing supply risk involves a principal (purchasing organization)
and agents (suppliers), an appropriate theoretical perspective for studying supply risk
management is agency theory.
There are different supply risk sources:
The purchasing organization (principal) should embrace management efforts that reduce
the probability and/or impact of a detrimental event that could arise with the supplier
(agent). The question is then what firms can do when supply uncertainty becomes a
significant factor.
The management of risk can be categorized by behavior- and buffer-based management:
A behavior-based focus addresses supplier processes rather than simply outcomes.
Agents (suppliers) are evaluated on their behaviors, which then have an effect on
outcomes.
Buffers are an outcome-based approach to dealing with risk. Rather than reduce the
likelihood of a detrimental event, firms employ buffers to reduce the detrimental
effects of supply risk events.
And award suppliers that consistently meet predetermined criteria
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller JonasKlein. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.20. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53068 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now