Abstract
Global Value Chains (GVC) and their participants are dynamic. Events can provoke distinct strategic responses from different firms, even when they are part of a GVC. We investigated how both organizational and supply-chain path dependence can influence the capabilities that a firm needs to achieve a higher value-added position in a GVC. We have integrated three branches of theory, covering Global Value Chains, Organizational Capabilities, and Path dependence. We conducted a case study of a large Brazilian shoe firm, analyzing its relationships with buyers in GVCs. We found that path-dependent elements had locked-in the firm, preventing ascension to higher added value positions and keeping the organization in captive global value chain, even when it moved into new markets. Additionally, we propose a theoretical model that should prove fruitful in future research in other sectors and countries.
Highlights
Value chain manufacturing is far from being a recent phenomenon
We focus on organizational path dependence and path dependence in Global Value Chains (GVC)
External factors related to the dynamics of shoe industry GVCs led to changes to the firm’s strategies and to its modes of participation in supply chains
Summary
Value chain manufacturing is far from being a recent phenomenon. The process has clearly accelerated over the last few decades. Supply chains evolved because of lower transaction costs, and as a result of economies of scale and reduced production costs enabled by changing industry standards. Development of capabilities among suppliers contributes to this evolution (Gereffi, Humphrey, & Sturgeon, 2005). These capabilities are marked by the legacy of historic decisions that will continue to affect future decisions in a form of path-dependency (Arthur, 1989; Mahoney, 2000)
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