Essays on Political Risk in Supply Chain and Operations Management Practices
Abstract
This dissertation investigates the influence of political risk on firms’ operations and supply chain practices. Since 2008, the enactment of nearly 10,000 government interventions discriminating foreign commercial interests have pushed firms to reconsider their supply chain design and strategy. This research anchors political risk in this recent global resurgence of country protectionism and nationalist sentiment; and it examines political risk’s effects on firms’ challenges and opportunities from a supply chain and operations management lens. The first essay builds propositions linking a country’s nationalistic goals to demand, supply, and operational risks for foreign firms, using China as an example. We contribute to the literature on supply chain risk management by offering a research agenda. We theorize contemporary political risk for operations and supply chain management at the firm and individual levels. The second essay explores the influence of China’s political environment on Western firms’ strategic supply chain partner engagement by using a multiple case field study and a grounded theory methodology. We induct a theoretical process model from which three empirical patterns emerge to show when and how firms adapt their supply chain partners’ engagement to the host national strategy. We contribute to the legitimacy-based view by showing that strategic supply chain practices can complement strategic management efforts to mitigate political risk; however, we illustrate that contingencies exist. The third essay examines the influence of political institutions on firms’ use of domestic input by using four secondary dataset and regression analyses. We contribute to the global operations literature by offering the first empirical insights with respect to the influence of political institutions on firms’ sourcing strategy.