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Governance and social capital formation in buyer‐supplier relationships

Sinéad Carey (School of Management, University of Bath, Bath, UK)
Benn Lawson (Judge Business School, University of Cambridge, Cambridge, UK)

Journal of Manufacturing Technology Management

ISSN: 1741-038X

Article publication date: 8 February 2011

2563

Abstract

Purpose

Building social capital within buyer‐supplier relationships is often associated with high performing supply chains. However, little research has examined the mechanisms by which social capital is formed. The purpose of this paper is to examine the effects of relational and contractual governance mechanisms on the formation of social capital under varying levels of demand and supply uncertainty.

Design/methodology/approach

A conceptual framework is developed, grounded in the literature on supply chain management and social capital theory (SCT).

Findings

A series of propositions showed that relational governance leads to the formation of social capital under conditions of supply uncertainty, but is subject to opportunism when customer product demand is uncertain. By contrast, in conditions of high demand uncertainty, contractual governance is associated with social capital formation.

Practical implications

The paper illustrates the need for managers to consider both the way in which their choice of governance mechanisms (contractual and relational) contributes to social capital, as well as highlighting the contingent nature of these mechanisms depending on the environmental context.

Originality/value

This paper is a novel contribution, applying SCT to the literature on supply chain management.

Keywords

Citation

Carey, S. and Lawson, B. (2011), "Governance and social capital formation in buyer‐supplier relationships", Journal of Manufacturing Technology Management, Vol. 22 No. 2, pp. 152-170. https://doi.org/10.1108/17410381111102199

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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