Abstract
This paper has a conceptual character and explores an approach between transaction cost analysis theory and network theory when applied to supply chains in a broader context: industrial management research. This approach raises the assumptions that fast supply chains, i.e., supply chains made of short time relationships and multiple partners can contribute to destroying trust and collaboration between companies, ending up by stressing actual systems’ arrangements in somehow stable supply chains/network chains. As a consequence, transforming them in distrust arrangements and thus giving birth to new (old) approaches based only on transaction cost analysis theory: opportunism and limited rationality as the continuum for relationships between companies in a globalized world with numerous potential agents/companies that can play several roles. Too high levels of entropy can show this reality: the number of potential players (suppliers, customers or complementors) with theoretically equal probability of establishing partnerships with one focal company in a supply chain or network arrangement is excessive in relation to the number of current suppliers, customers and complementors, and for that reason, the focal company is somehow dissipating energy in identifying several potential players and in a state of giving one way or another equal importance to them all, situation that can affect stable relations with current partners. Theoretically, this will create what looks like strategic fast supply—demand chains or network chains: fast because they are rapidly settle down and fast as they are also rapidly dismantled. Those arrangements are the ones responsible for several possible and fast relations (internalizing resources from the environment and/or externalizing resources to the environment) but, anyway, contributing to loose trust, credibility and running against profitable games with partners already involved with focal companies in stable supply chains.
Highlights
The exercise developed throughout this paper is to briefly review systems theory, applications and implications to industrial management and, once having a general frame that serves as a basis for thinking and conceptually concluding, explaining the consequences of strategic fast supply-demand chains as possible destructive arrangements for stable relationships, collaborative planning and profitable games for all the participants in a supply or network chain configuration
High entropy values may show arrangements composed by a large number of potential companies, as partners, and eventually signalling the trend to a focal company to participate in strategic fast supply-demand chains and, in consequence, to lose the ability to stabilize partnerships and to profit from deep relations, trust and joint work
The paper will focus on five main issues in order to explore strategic fast supply-demand chain arrangements main aspects of systems theory and relations with SCM; 2) strategic fast supply-demand chains created over broad network contexts; 3) types of companies interested in strategic fast supply-demand chains or fast network chains, with short times for creation and for destruction of such chains/networks; 4) some conclusions
Summary
The exercise developed throughout this paper is to briefly review systems theory, applications and implications to industrial management and, once having a general frame that serves as a basis for thinking and conceptually concluding, explaining the consequences of strategic fast supply-demand chains as possible destructive arrangements for stable relationships, collaborative planning and profitable games for all the participants in a supply or network chain configuration Within this frame (system theory, largely disseminated in the industrial management community) one may emphasize the importance of a certain degree of stability and trust and analyse the consequences of having a value of entropy (high value of entropy) that exposes an high and equal probability of having several potential relationships between a focal company and other latent participants (being suppliers, clients—remembering that good clients are not all the possible clients—or complementors) in a supply chain. High entropy values may show arrangements composed by a large number of potential companies, as partners, and eventually signalling the trend to a focal company to participate in strategic fast supply-demand chains and, in consequence, to lose the ability to stabilize partnerships and to profit from deep relations, trust and joint work
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