Competing Pressures of Risk and Absorptive Capacity Potential on Commitment and Information Sharing in Global Supply Chains

Abstract

Organisations’ competitiveness and success are no longer dependent solely on their own performance, but rather are dependent on the competitiveness of the supply chains in which they participate. Increasingly, these supply chains are globally distributed introducing the possibility of greater benefits, as well as greater risk. This study examines the countervailing impact of a global supply chain partner’s B2B e-commerce business risk and absorptive capacity on an organisation’s willingness to commit to and share information with that supply chain partner. We survey 207 organisations on their perceptions of specific offshore outsourcing and supply chain partners across dimensions of risk, absorptive capacity, commitment, and information sharing. The results support the theorized relationships indicating that a supply chain partner’s increased levels of perceived risk has a strong negative effect on an organisation’s commitment and information sharing; conjointly, increases in a supply chain partner’s absorptive capacity has a strong positive effect on commitment and information sharing. For both risk and absorptive capacity, commitment partially mediates the relationship with information sharing. Testing for systemic effects from geographical/cultural location on the relationship factors provides no evidence of a regional effect on measured items.

Keywords: global supply chain, e-commerce risk, interorganisational relationships, absorptive capacity, information sharing

JEL Classification: M40, M11