Supply Chain Leadership in Emerging Markets: Understanding the Role of Trust, Information Management, and Collaboration

Introduction

In the past few years emerging markets have drawn a lot of attention from researchers and practitioners alike due to their sheer size and potential. Large corporations, particularly from developed countries such as the USA, Japan and European countries, have found that globalization is one of the biggest challenges facing them. While on one hand globalization has provided them with a larger customer base, the challenges of doing business with and managing operations in distant locations, not merely in terms of distance, have been immense. As an effect of globalization organizations have been able to leverage the developing or emerging markets to reduce cost of operations and increase profits . Yet, these emerging markets have posed a myriad of challenges in implementation of global strategies. Characterised by institutional voids i.e. absence of specialized intermediaries, contract-enforcing mechanisms and regulatory frameworks (Khanna, Palepu, Sinha, 2005; Silvestre, 2015b), and high environmental turbulence, emerging markets inhibit application of strategies that have successfully been used in developed markets (Accenture Global Operations Megatrends Study, 2014). Moreover, emerging markets vary in terms of political and social systems defined by the many ethnic, regional and linguistic groups and their relationships, a large but heavily segmented population which is difficult of predict due to lack of adequate and authentic data, unavailability of skilled labour and lack of well-regulated capital and financial markets (Khanna et al 2005; Deloitte Report, 2013). Hence, the success of these global organizations depends not just on developing special strategies for emerging markets, but also identifying novel ways of implementing them (Khanna et al, 2005; Krishnan & Jha, 2011).

These challenges of emerging markets extend to supply chain as well. Global outsourcing trends since the early 1990s has reshaped global supply chain systems and have transformed emerging countries into significant players in the global economy (O’Rourke, 2005). Global supply chains are significantly more complex, involving multiple players from emerging and developed economies requiring considerable amount of coordination. Today, a product could be part sourced and manufactured in India, assembled in China and sold in the United States of America. Such movement of goods, material and services across various types of economies raises multiple challenges. Growing economies, complex business environments, and a diverse consumer base make supply chain management a challenge in emerging markets. Supply chains in developing and emerging economies face greater barriers to integration, collaboration, innovation, and sustainability than supply chains operating in developed countries do. Like all other operations, the challenges of lack of infrastructure, high levels of corruption, pressing social issues, and informality affect supply chains in emerging markets making their management difficult (Khanna et al, 2005; Silvestre, 2015a, 2015b). In such a milieu, Supply Chain Leadership (SCL) becomes a critical determinant of success for global organizations.

In this context, we note two pertinent knowledge gaps. First, many studies have focused on supply chain leadership in advanced economies, but much less research has addressed emerging markets. Second, the massive growth of emerging economies attracts many companies to set up manufacturing units despite the potential environmental threats. This calls for extensive study on various sustainable supply chain practicessince the research in this area is fragmented.

This study is an attempt to identify the critical determinants of successful supply chain leadership in emerging markets. It is aimed at addressing the following two main objectives,: (i) to provide a complete review of the current usage and penetration of the SCL concept (including SCL styles, dimensions and influences) based on the existing literature; and, (ii)to set the direction for future research.