Global Value Chain Resilience: Understanding the Impact of Managerial Governance Adaptations

While COVID-19 has caused significant short-term disruptions in global value chains (GVCs), in the longer run, the pandemic will not be the primary catalyst in GVC evolution. As GVCs recover from the initial shock, managers will make GVC restructuring decisions guided by long-term strategic considerations. This article describes barriers that lead firm managers may encounter when rethinking location/control decisions for value chain activities and suggests that, in addition to structural changes, managerial governance adaptations are instrumental in enhancing GVCs’ long-term resilience. Lessons learned from responding to the pandemic can help managers enhance GVC efficiency in the increasingly uncertain global environment.

Leveraging Plastics Linkages for Diversification

The chapter considers the role of linkages, lead firm strategies, industrial policies, and value chain governance in the performance of the South African plastic products industry. The extent to which the linkages of the plastic products sub-sector backwards with the polymers industry, and forwards to plastic automotive components, have influenced the performance of the industry is assessed. The forward linkages to the automotive industry are assessed through a comparative assessment of technological capability accumulation in South Africa with its relatively more successful upper-middle-income counterpart, Thailand. The analysis shows that vertical integration and horizontal collaborations through clusters, as well as the different roles played by multinational corporations and the state, have exerted a stronger influence on the accumulation of capabilities in Thailand, compared with South Africa. The assessment of backward linkages to polymers shows how the linkage development in South Africa has been undermined by market power in the upstream polymers industry. This is coupled with a failure of industrial policy to support diversified industries such as plastic products, including through addressing the challenges related to input prices and supporting the accumulation of capabilities.

Hiring the Right CEO: How Does the Type of CEO Industry Experience Affect Firm Performance, Firm Risk-Taking Behavior, and CEO Compensation?

This paper examines how the type of CEOs’ industry experience (whether a CEO has cross-industry or specific-industry experience) on firm performance, firm risk-taking behavior, and their own compensation. We find that CEOs with cross-industry experience tend to relatively lower the firm performance as well as invest less on R&D. On the other hand, CEOs with specific-industry experience lead firm to higher performance and invest more on R&D expenditures until it reaches a certain threshold, especially among high-growth firms. Total compensation paid to the CEO does not seem to be affected by the type of CEO industry experience. This paper contributes to the literature that examines the impact of CEO characteristics on firm outcomes and CEO compensation. One important business application of our paper is that to optimize firm performance, firms should hire CEOs with the length of specific-industry experience not beyond the threshold levels.

Waste Management Firms as Catalysts for Developing SME's Circular Business Models: the Possibilities of Industrial Symbiosis

The purpose of this research was to explore possibilities for waste management firms (WMFs) to act as lead firms in industrial symbiosis (IS) processes with small and medium enterprise (SME) clients in order to promote circular business models. We were curious to see how willing, and able four local WMFs were regarding the adoption of a firm lead role and under what conditions. We used a case study design because of the lack of research on the topic and the explorative nature of the research itself. First, we interviewed nine representatives from four WMFs using a semi-structured interview protocol. We then presented our results to the representatives as a basis for further discussion. We found that WMFs are open to adopting the various roles associated with a lead firm position in industrial symbiosis but need various kinds of support in order to so, for example, in coordinating the IS – network and for financing the activities. Our research is original in the sense that we look at the concept of IS from the specific context of a WMF-SME symbiotic relationship. We also contribute to both the IS literature as well as that of new business model development. Management implications include understanding why firms are willing to explore new business models with their client partners.

Lead firm’s reconfiguration decision and performance of the value chain

Purpose This paper aims to trace the performance consequences of within-lead firm reconfigurations of global value chains with respect to business performance and upgrading. Design/methodology/approach The study is based on two detailed company case studies which are analysed in an organizational design approach. Findings Lead firms systematically separate and internalize high value-added activities in otherwise low value-added processes leading to constant reconfigurations and reorganizations of the production processes in global value chains. The study finds that similar reconfigurations may trigger different changes and changes and performance consequences may differ considerably according to the level of analysis. The two cases help to understand the specific roles of the outsourcing and offshoring decisions in shaping actual global value chain structures. Originality/value The consequences of within-lead firm reconfigurations are rarely analysed in the literature.

Forward-Looking Sustainability Agency for Developing Future Cruise Ships

The study addressed sharing of futures insights as a component of sustainability agency for long-term company enhancement in an interorganizational shipbuilders’ network. The purpose was to analyze social structures under “agency” terminology. This joint sustainability project involved a partnership of firms, academia, and nongovernmental organization (NGO) actors in collaborative cruise ship building. The study adapted a mixed method approach where social network analysis (SNA) was enriched with other contextual data to make network data more applicable and accessible. The results revealed a loose and thin network structure, with relatively high trust among network actors. The network’s social structure was found to facilitate insight sharing. Lead firm actors clearly played a central role in enhancing sustainability, and the researchers, as well as industrial association actors, made a significant contribution to insight sharing and transmission. The findings suggest that the case network would benefit from an open and balanced social structure that incorporates a number of insight brokers to enhance forward-looking sustainability agency (F-L SA). Futures insight sharing enhances agency in the context of joint sustainability actions and improves capacity to respond to systemic challenges. Understanding how proactive agency can be promoted in network settings strengthens strategic aspects of managerial practice and contributes to discourse around sustainability agency.

Value Creation and Value Capture: Lessons Learnt from Indonesian Suppliers Inserted into GVC

The development of global value chain (GVC) has confirmed a paradigm shift in international studies. GVC suggests that the globalization of economic activity brings about gains for developing countries through capability improvement of their firms supplying for lead firm. Nevertheless, there is only a small number of developing countries insert into GVC and successfully enhance their economy. This paper aims to understand how developing countries decide to participate in and to upgrade along GVC by taking cases from Indonesian suppliers across industries. The narratives reveal that the distribution of value creation between Indonesian suppliers and lead firm within GVC is critical for the decision making to engage and to upgrade. It indicates that the suppliers scrutinize the relationship to ensure that the value creation is not only technically feasible to fit intheir existing resources and capabilities, but more importantly economically justifiable to capture more of value being created. The problem of power asymmetry tends to result in inequitable distribution of cost and benefit in value capture by Indonesian suppliers and lead firm. This makes the value creation and value upgrading within GVC less economically attractive course of action. The implication for further research on GVC shouldhighlight the value capture particularly within governance in which power asymmetry exists, while public policy should facilitate to strengthen distinctive resources and capabilities of suppliers.

Supermarkets and Rural Inequality in India: A Case Study of Reliance Fresh

Drawing upon insights from growing strand of value chain literature, this article examines primary data collected from farmers supplying cauliflower and spinach to Reliance Fresh in the outskirts of Jaipur to understand the implication for farmer households of emergence of supermarket in a smallholder-dominated setting. The article finds that as a lead firm, Reliance Fresh is adopting flexible models of sourcing, devoid of any resource provision, to procure fresh produce of required quality and standards. In such a context, the barrier to participation of smallholders in supermarket-driven agri-food system varies across crops, depending on resource intensity of crops. Participation of smallholders, poorly endowed with human and physical capital, is limited in resource-intensive crop, such as cauliflower, because of high entry barrier in terms of requirement of assets. In contrast, entry barrier is low for smallholders in labour-intensive crop such as spinach, but competition among them, endowed with family labour, bid the rent down to the minimum. Gini decomposition exercise indicates that the emergence of supermarket-driven agri-food system has adverse distributional consequence in rural agrarian setting. Promotion of wholesale market with better infrastructure and encouragement of farmer federation as institutional innovations are suggested for inclusive agri-food marketing system.