Abstracts:Although an increase in flexibility for firms usually entails further investments and higher operating overhead for their suppliers (Sheikhzadeh et al., 1998Koste and Malhotra, 1999), most studies have focused exclusively on the benefits derived from additional flexibility enjoyed by the buyer firms neglecting the impact on the financial performance of their suppliers (e.g., Malhotra and Mackelprang, 2012; Gligor, 2014; Mandal, 2015). To explore the complex supplier-customer interplay, we introduce the concept of buyer-supplier flexibility fit (i.e., the match between the level of flexibility the customer expects from its supplier and the supplier's level of flexibility) and explore its impact on the supplier's financial performance (i.e., ROA). We collected dyadic archival and survey data from 638 firms (319 supplier-customer dyads) to test these relationships. Our results indicate that buyer-supplier flexibility fit has a direct and positive impact on the supplier's ROA. Further, the strength of the relationship increases when firms operate in munificent and/or dynamic environments but does not change significantly in complex environments. The relationship also becomes stronger as the exchanged business volume increases between the customer and its supplier, and as the relationship progresses in age. In addition, our findings indicate that firms with perfect buyer-supplier flexibility fit perform best, followed by firms with negative misfit (i.e., the supplier's level of flexibility is lower than its customer's expected level of flexibility), while firms with positive misfit (i.e., the supplier's level of flexibility is higher than its customer's expected level of flexibility) are the laggards. Interestingly, positive misfit has a stronger negative impact on suppliers' ROA compared to misfit in general and negative misfit. Key corresponding managerial implications are derived.

Abstracts:Empirical research examining whether and how competition influences product recalls is limited. We address this important research gap by creating a novel measure of product competition using data from the Food and Drug Administration's Orange Book, and combining it with product recall data across a 12-year period. Our results show that product competition is positively associated with manufacturing-related recalls, providing evidence of a possible downside to competition in the pharmaceutical industry. Although competition is fostered by numerous federal regulations, we find that it may encourage companies to relax quality standards during the manufacturing process, which may result in lower quality products. We also find that this relationship is contingent on managerial discretion surrounding the recall decision. While product competition is associated with an increase in high severity, low discretion recalls, it is associated with a decrease in low severity, high discretion recalls. Findings from this study have critical implications for policy-makers who regulate product competition in the pharmaceutical industry.

Abstracts:Emergency Departments (EDs) commonly face capacity imbalances and long wait times in a service system handling patients with different priorities. These problems are particularly important for low-priority patients who often remain in the queue for extended periods. We investigate two distinct approaches to address these challenges: fast track (FT) and dynamic priority queue (DPQ). Traditionally, EDs have prioritized patients using an Emergency Severity Index (ESI), in conjunction with FT, to strictly or partially dedicate resources to different ESI patient classes. With our proposed DPQ, patients are prioritized using ESI and additional real-time operational information about the patient, specifically the amount of accumulated wait time and flow time. Using an empirical simulation, we compare the impact of different resource allocation and prioritization approaches on patient length of stay (LOS), including the existing system at the ED, FT with strict and partial dedication and the possibility of shorter and less variable service times, and versions of the proposed DPQ using simple dynamic prioritization. Our main results are that: (i) the DPQ approach dominates the other approaches tested; (ii) for various ED sizes, FT with strict and partial dedication do not reduce average LOS of low-priority patients without significantly increasing average LOS of high-priority patients, unless service time mean and variance are reduced; (iii) DPQ using accumulated wait time or accumulated flow time improves performance. The results are robust to changes in the proportion of patients in each priority level. Overall, expanding decision making about patient prioritization from only considering the patient's clinical condition to also including operational data can improve performance dramatically, even without improved service times.

Abstracts:When western multinational enterprises (MNEs) build end-to-end supply chains (SCs) to produce and distribute a product or deliver a service in emerging economies, the process is called supply chain localization. These companies encounter institutional environments with regulative, normative and cognitive characteristics very different from those in their home countries. SC localization uncovers and creates institutional voids; we argue that SC localization is a process of institutional change, requiring the MNE to build new institutional infrastructure. To the best of our knowledge, little is known about the institutional process of SC localization and its effects. We carry out a longitudinal case study to investigate SC localization of four MNEs in China. These MNEs are leaders of sustainable business practices in their industries, a distinction that highlights institutional voids in their SC settings. Based on the idea of fields in institutional theory, we build a mid-range theory by introducing the notion of the supply chain field. Our study identifies and contextualizes the key elements of an SC field. It recognizes MNEs, government and semi-government entities, and other participants as institutional actors who serve as architects and builders of the new SCs. We find that SC localization is an institutional process, taking place at both actor and field levels, where continuous ideation of new operations practices leads to structuring of the both the SC and SC field.

Abstracts:Research on social sustainability in multi-tier supply chains is limited. Specifically, we know very little about a) the micro-processes involved in the way in which sub-suppliers (i.e., first-tier suppliers or sourcing agents) respond to the sustainability requirements imposed by their intermediaries; and b) the micro-level antecedents that condition their responses. To address these gaps, we used a longitudinal multiple case study method to explore multiple intermediary – sub-supplier dyads in South India's knitwear garment industry and drew upon constructs of behavioural economics. We found that the way in which intermediaries frame social sustainability requirements and their associated procedures influence both the way in which sub-suppliers perceive the procedural fairness of those requirements and the way in which they thus reciprocate. When intermediaries frame social sustainability requirements as ‘opportunity’ and engage in various procedures perceived to be procedurally fair by sub-suppliers, the latter reciprocate positively. Contrastingly, when intermediaries frame social sustainability requirements as ‘insulation’ and engage in various procedures perceived to be procedurally unfair by sub-suppliers, the latter reciprocate negatively. Under the production-dominant framing, sub-suppliers exhibit positive reciprocity only related to processing production orders. Our analysis inductively generated propositions that emphasize the important role played by framing in shaping the perceptions of fairness held by sub-suppliers towards social sustainability requirements and the reciprocity of the latter's responses to them.

Abstracts:The supply chain literature has devoted much attention to studying how the variability of orders propagates upstream. We explore how this insight extends to the variability of payments to suppliers and its impact on how risk is generated and propagates upstream. To do so, we model the financial features of a supply chain based on industry reports and empirical findings from the finance literature. Capturing policies and constraints of the agents in the supply chain in a formal model, we are able to generate and explain the behavior observed in real supply chains. We show that payment variability occurs and propagates, even if orders are constant, in a cash-constrained supply chain. Furthermore, our model reveals that payment variability may even become amplified under severe cash restrictions. We identify the factors that drive the propagation of variability—the industry risk, the firm's operational leverage, the existence of a financial leverage target, and the cost of debt. The model also makes it possible to explore states of nature not often observed in practice, but that may have an effect in managers' behavior, for example, bankruptcies. We numerically illustrate the impact of these drivers on the risk of upper echelons (suppliers and suppliers' suppliers) as well as the interactions between order and payment variability. We close by summarizing our findings and discussing future research opportunities.