Redesigning global supply chains during compounding geopolitical disruptions: the role of supply chain logics

What is it about?

By answering the research question: Why do managers redesign global supply chains in a particular manner when faced with compounding geopolitical disruptions?, this study identifies a constrained system of reasoning employed by supply chain managers to navigate highly uncertain global operating environments, which we call ‘supply chain logics’. We conducted 40 elite interviews with senior supply chain executives in 28 companies across nine industries from November 2019 to June 2020, when the United Kingdom was preparing to leave the European Union, the US-China trade war was escalating, and COVID-19 was spreading rapidly around the globe. Our study builds on the institutional logics perspective by finding that supply chain logics are a function of three distinct environmental conditions: 1) institutional pressures, 2) the perceived severity of disruption risk, and 3) the relative mobility of suppliers and supply chain assets. Intense government pressure and persistent geopolitical disruption risk appear to impact firms in the same industry, resulting in similar supply chain design responses. However, a dominant supply chain logic emerges only under conditions of immobile suppliers and fixed supply chain assets. Our study contributes to the institutional logics perspective by extending the concept of logics to the supply chain domain. We find that managerial decision-making is not solely guided by institutional pressures, but also by perceptions of disruption risk and the fixity of supply chain assets. We contribute to the literature by going beyond existing studies that explain how companies manage supply chain disruption risk and where managers locate supply chain assets. Instead, we explain why managers design supply chains in a specific manner when confronted with compounding geopolitical disruptions.

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