The governance of supply networks: a systematic literature review

The purpose of this paper is to establish what is known regarding how supply network governance leads to network outcomes, what mechanisms underlie this relationship, and how context impacts it.

A systematic literature review identified 44 conceptual and empirical studies. Purely dyadic studies were excluded. Synthesis used the context‐intervention‐mechanism‐outcomes (CIMO) logic.

From a categorization of contexts, governance instruments, mechanisms and outcomes a contingent conceptual framework is developed in the paper relating governance instruments to network outcomes dependent on the context. In general, formal instruments are adopted in dynamic and unstable circumstances defined as risky, uncertain, unpredictable or during organizational change. These instruments can result in coordination, control, viability and performance outcomes. Informal instruments tend to be adopted in contexts where prior relationships exist between actors.

Arising from the conceptual framework three robust propositions are developed. A more nuanced view of power and trust is proposed to augment the explanations provided by transaction costs and social embeddedness. This provides opportunities for further research, including longitudinal and comparative studies.

The conceptual framework provides three propositions suggesting that in dynamic or unstable circumstances formal governance instruments can provide viability, control, coordination or performance outcomes. Informal governance instruments are more effectively used in established relationships to improve performance, control and viability.

The synthesis reveals contingencies in the appropriate governance modes of supply networks for desired outcomes in specific contexts, resolving apparent inconsistencies between prior studies.