Making agency theory work for supply chain relationships: a systematic review across four disciplines

• Published in: International journal of operations & production management Vol. 42; no. 13; pp. 299 - 334
• Main Authors: Matinheikki, Juri, Kauppi, Katri, Brandon–Jones, Alistair, van Raaij, Erik M.
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Publishing Limited 19.12.2022; Emerald Group Publishing Limited
• Subjects: Agency theory; Alliances; Literature reviews; Self interest; Suppliers; Supply chain management; Supply chains; Systematic review; Buyer-supplier relationships; Supply chain relationships; Information asymmetry; Agency theory; Systematic literature review
• ISSN: 0144-3577; 1758-6593
• DOI: 10.1108/IJOPM-12-2021-0757

PurposeContemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.Design/methodology/approachThe study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.FindingsThe authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.Research limitations/implicationsThe developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.Practical implicationsThe review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.Originality/valueThe first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.