Governance of Supply Chains for Sustainability: A Network-Based Approach

Governance of Supply Chains for Sustainability: A Network-Based Approach

Pınar Özbilen
Copyright: © 2017 |Pages: 16
DOI: 10.4018/978-1-5225-2036-8.ch007
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Abstract

The main objective of this chapter is to shed some light on governance and membership strategies of network organizations. Today's business environment compels firms to join forces in order to be competitive and sustainable. However, the success of the networks mainly depends on their network composition and how they are governed. In this chapter, the author proposes some strategies and the proper governance structure facilitating these strategies by taking the effects of severity of resource acquisition challenges and external legitimacy of whole network organization into consideration. The arguments are based on Resource Based Theory and Stakeholder theory. Moreover, the author of this chapter suggests a counter example for the claim propounded by Provan and Kenis (2007) that the evolution of network governance from more formalized one to the less formalized one is unlikely. From these respects, the chapter contributes to the literature since mentioned points have been rarely discussed.
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Introduction

Competitive pressures in the business environment necessitate both efficiency and effectiveness. All players in the markets have to keep up with increasing competitive pressures and innovations while achieving lower product or service costs. The new dynamics of markets have urged firms to develop a new business equation. Firms started to adopt a new strategy enabling competitive success that focuses on “doing fewer things better, with less” rather than resource accumulation and control. Naturally, companies in today’s business world find themselves constructing into networks in which one firm may take the role in research and design of a product, another firm may take responsibility for production and a third firm may provide distribution, and so on (Snow et al., 1993)

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