Supplier Internal Control Quality and the Duration of Customer-Supplier Relationships

2017 ◽  
Vol 93 (3) ◽  
pp. 59-82 ◽  
Author(s):  
Andrew M. Bauer ◽  
Darren Henderson ◽  
Daniel P. Lynch
Keyword(s):  
Supply Chain ◽  
Internal Control ◽  
Information Quality ◽  
Reverse Causality ◽  
Supplier Relationships ◽  
Relationship Termination ◽  
Control Quality ◽  
Operational Quality ◽  
And Performance ◽  
Matching Techniques

ABSTRACT Internal controls influence information quality, thus affecting the ability of supply chain partners, who rely on collaborative systems of information sharing, to reliably contract. Using SOX-related internal control assessments as a proxy for internal control quality and U.S. GAAP-mandated major customer disclosures, we find that supplier internal control quality influences supply chain relationship duration. Specifically, our evidence demonstrates that: (1) poor internal control quality increases the likelihood of subsequent customer-supplier relationship termination; (2) timely control weakness remediation attenuates termination likelihood; and (3) weaknesses affecting customer contracting drive the effect of internal control quality on relationship termination. Our results control for supplier operational quality and performance, and are robust to propensity score matching techniques, controls for reverse causality, and alternative proxies for relationship termination and internal control quality. Overall, our findings are consistent with customers viewing strong supplier controls as important, albeit overlooked, contracting elements with significant implications for supply chain relationships.

Internal Control Quality and Bank Risk-Taking and Performance

2020 ◽  
Author(s):  
Matthew Baugh ◽  
Matthew Ege ◽  
Christopher G. Yust
Keyword(s):  
Internal Control ◽  
Risk Taking ◽  
Downside Risk ◽  
Internal Controls ◽  
Bank Risk ◽  
Material Weakness ◽  
Control Quality ◽  
Interest Income ◽  
Upside Risk ◽  
And Performance

Using a sample of bank-years from 2005 to 2017, we examine the effect of internal control quality on future risk-taking and performance. We find that banks that disclose a material weakness in internal controls have higher risk-taking and worse performance in the future, including having a higher (lower) likelihood of experiencing large losses (gains). These findings suggest that weak controls increase (reduce) downside (upside) risk-taking or conversely that strong controls increase (reduce) upside (downside) risk-taking. Path analyses suggest that 22.3 to 43.7 percent of the effect of internal control quality on future performance is through risk-taking. Additionally, material weaknesses are negatively associated with total asset, loan, interest income, and non-interest income growth, suggesting that internal control quality affects both core and non-core activities of banks. Overall, results suggest that strong internal controls improve bank risk-taking, in part through asymmetrically reducing downside risk-taking while facilitating upside risk-taking, ultimately improving bank performance.

scholarly journals Improving retail supply flexibility using buyer-supplier relational capabilities

2017 ◽  
Vol 37 (3) ◽  
pp. 343-362 ◽  
Author(s):  
Raymond Obayi ◽  
S.C. Koh ◽  
David Oglethorpe ◽  
Seyed M. Ebrahimi
Keyword(s):  
Supply Chain ◽  
Supplier Relationships ◽  
Chain Flexibility ◽  
Content Type ◽  
Mediating Role ◽  
Supply Chain Flexibility ◽  
And Performance ◽  
Relational Capabilities ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the mediating role of three important relational capabilities – absorptive capacity (AC), transactive memory systems (TMS), and organisational interoperability (OI); on the flexibility of buyer-supplier relationships and performance in retail supply chains. Drawing on the relational view of strategic management, the impact of relational capabilities on two forms of supply chain flexibility is examined – configuration flexibility (CF) for switching suppliers with minimal penalties, and planning and control flexibility (PCF) for altering supply schedules, quality, and delivery lead-time. Design/methodology/approach Strategic- and tactical-level managers from 211 retail stores in the UK were surveyed. The authors validated a measurement model with structural equation modelling and tested four hypotheses on the mediating role of relational capabilities on supply chain flexibility and retail performance, controlling for size, duration of relationship, and market segment. Findings Results showed that the three relational capabilities partially mediated the positive effect of CF and PCF on operational performance in big middle and niche retailers. Examining the interaction effect of the forms of flexibility on the relational capabilities and performance, the authors found positive interaction effects on TMS and OI but a non-significant effect on AC. Practical implications In addition to providing novel theoretical insights on supply chain flexibility, the findings have practical implications for supplier selection and buyer-supplier relationship management. Originality/value Overall, the study highlights the impacts of relational capabilities on adopted operational strategies such as flexibility, buyer-supplier relationships, and retail performance.

scholarly journals E-Commerce Transaction Mechanisms And Buyer-Supplier Relationship

2011 ◽  
Vol 7 (2) ◽  
Author(s):  
Sungmin Ryu ◽  
Ken Hung
Keyword(s):  
Supply Chain ◽  
Information Systems ◽  
Supply Chain Management ◽  
Information Exchange ◽  
Font Size ◽  
Supplier Relationships ◽  
Relational Context ◽  
Chain Management ◽  
And Performance ◽  
Share Information

<p class="MsoBodyText" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">Information exchange between the buyer and supplier is an important aspect of supply chain management. B2B e-commerce helps firms to share information, maintain relationships, and conduct transactions more efficiently. The choice of B2B e-commerce transactions will influence, and as well as affect, the relationships between exchange parties. </span><span style="font-size: 10pt; mso-fareast-language: KO; mso-bidi-font-weight: bold;">Thus, the choice of e-commerce transaction mechanisms has a relational context. An </span><span style="font-size: 10pt; mso-fareast-language: KO;">appropriate choice of a transaction mechanism can affect a firm&rsquo;s strategy, procurement decisions, and performance. It had been argued that </span><span style="font-size: 10pt;">e-commerce facilitates both discrete and relational exchanges, and it has a dual impact on business relationships. In this paper, we examine a collection of diverse studies on EDI and e-marketplace from marketing and information systems literatures. We assimilate these findings for managers considering choices on e-commerce transaction mechanisms. We hope that this will provide managers a more consistent understanding of buyer-supplier relationships in the B2B e-commerce context. </span></span></p>

scholarly journals SUPPLY CHAIN MANAGEMENT AND ITS PRACTICAL IMPACT

2021 ◽  
Vol 9 (2) ◽  
pp. 357-364
Author(s):  
Shreyansh Jain, Et. al.
Keyword(s):  
Supply Chain ◽  
Information Quality ◽  
Joint Decision ◽  
Future Studies ◽  
Independent Variables ◽  
Performance Risk ◽  
And Performance ◽  
The Impact ◽  
Practical Impact

This paper studied about the role of different independent factors on supply chain responsiveness. Here, we considered factors such as joint decision making, information quality and performance risk as three independent variables and supply chain responsiveness as a dependent variable. We tried to survey different supply chain professionals working in different sectors to have an unbiased image in our study. After applying Pearson corelation in our study, we understood the significance of our independent variables on supply chain responsiveness. The positive significance shows the importance of these factors while working on our dependent variable. All three relationships are showcasing either positive or strong corelation. Finally, we could infer that there are a lot more factors that we can take in to consideration for calculating the impact on supply chain responsiveness in future studies. This will definitely strengthen the case and will help in practical explanation.                       

The Impact of Supply Chain Partnerships on Supplier Performance

2004 ◽  
Vol 15 (1) ◽  
pp. 57-72 ◽  
Author(s):  
Rachel Duffy ◽  
Andrew Fearne
Keyword(s):  
Multivariate Analysis ◽  
Supply Chain ◽  
Empirical Study ◽  
Financial Performance ◽  
Collaborative Relationships ◽  
Supplier Relationships ◽  
Relative Contribution ◽  
Supplier Performance ◽  
And Performance ◽  
The Impact

In this paper, We present a framework of buyer‐supplier relationships used in an empirical study to investigate how the development of more collaborative relationships between UK retailers and fresh produce suppliers, affects the financial performance of suppliers. Relationships between key partnership characteristics and performance are described and empirically tested. In addition, multivariate analysis is used to identify the dimensions of buyer‐supplier relationships that make the greatest relative contribution to the explanation of the performance construct.

Collaborative supply chain practices and performance: exploring the key role of information quality

2010 ◽  
Vol 15 (6) ◽  
pp. 463-473 ◽  
Author(s):  
Frank Wiengarten ◽  
Paul Humphreys ◽  
Guangming Cao ◽  
Brian Fynes ◽  
Alan McKittrick
Keyword(s):  
Supply Chain ◽  
Information Quality ◽  
And Performance ◽  
Role Of Information

Internal control and real earnings management in the French context

2020 ◽  
Vol 18 (2) ◽  
pp. 363-387 ◽  
Author(s):  
Sonda Wali ◽  
Sana Mardessi Masmoudi
Keyword(s):  
Control System ◽  
Earnings Management ◽  
Internal Control ◽  
Information Quality ◽  
Real Earnings Management ◽  
System Quality ◽  
Entire Study ◽  
Content Type ◽  
Control Quality ◽  
Internal Control System

Purpose This study aims to examine whether the internal control system quality in the French context improve the information quality having been reflected by the level of real earnings management (REM) measured by inventory overproduction, discretionary expenses reduction and sales manipulation. Design/methodology/approach The research uses a multiple regression analysis to examine the association between internal control and REM. The years 2010-2015 are used as analysis period by focusing on the French context. Three panel data are applied to the companies belonging to the Cotation Assistée en Continu (CAC) 40 index for the entire study period. Findings The results show that high internal control index has a negative impact on the REM and that better internal control indeed makes financial reporting more credible to investors. Further, the results demonstrate that control environment, risk assessment, control activities and monitor are the components that mainly affect REM. Originality/value The results contribute to the literature dealing with the relationship between internal control quality and REM by shedding light on the importance of internal control quality in improving information quality in the French context. Moreover, this study is using a quantitative measure of the internal control quality while much of the prior literature uses material weaknesses to estimate the effectiveness of internal control system.

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