Implementing value‐transparency in supply relations

Abstract

Purpose

To explore and identify the strategic approaches firms may follow in their pursuit of value transparency (VT) in inter‐organisational relations in supply networks.

Design/methodology/approach

Through the use of game theory an understanding of the difficulties of co‐operation and information transfer is developed. Game theory and marginal analysis facilitate an advanced application of VT.

Findings

While the article acknowledges the limitations of prescriptive precision in strategy matters, it is not proposed that firms would follow any single part of the outlined strategies. However, through rational analysis of the strategic options presented it may be possible to foresee potential negative outcomes, and through structuring undesirable scenarios managers may be able to reduce the risk of their occurrence.

Practical implications

A model is proposed that aids firms in the selection of supply partners for VT and VT modes. Recognising that certain conditions will be more likely to support a more rapid and extensive adoption of VT, the paper identifies the role that aspects of organisations' economic environments may play.

Originality/value

The article acknowledges the limitations of modelling and game theory‐based approaches but suggests that through considering the interests and benefits of the other party, practical insights may be developed and the likely outcomes of various scenarios considered.

Citation

Lamming, R., Zhang, J., Caldwell, N. and Phillips, W. (2005), "Implementing value‐transparency in supply relations", Management Decision, Vol. 43 No. 6, pp. 810-820. https://doi.org/10.1108/00251740510603574