Antecedents of proactive supply chain risk management – a contingency theory perspective

Abstract

Since supplier insolvencies are a major source of supply chain disruptions, scholars have continuously suggested managing supply chain risk management (SCRM) proactively in order to avoid their occurrence. However, business practice seems to fail with this task. This paper investigates antecedents which foster proactive SCRM implementation from a contingency theory perspective. As a major contingency we choose past supplier insolvencies as an indicator for the level of vulnerability of organisations and investigate inter-organisational, intra-organisational, and individual antecedents. By consulting supply chain management and management accounting literature, hypotheses are developed and tested via content analysis in 63 interviews with representatives from the automotive industry. The findings demonstrate that a mechanistic management control system, a rational cognitive style and relational buyer–supplier relationships have positive impacts on proactively managing supplier insolvency risks. Furthermore, past experience with supplier insolvencies has a moderating, though not a direct, effect on proactiveness. This research suggests that a holistic risk management approach is required to proactively mitigate supplier insolvency risk.