Agency Theory and Supply Chain Management: A Literature Review

Chapter
First Online:
Part of the SpringerBriefs in Business book series (BRIEFSBUSINESS)

Abstract

The chapter is dedicated to the literature review on agency theory in supply chain management contexts. After an overview on the original formulation of agency theory and a brief description of the most recent development, the review presents the state of the art of theoretical and empirical research on the topic and discusses the areas in which agency theory has been more usefully adopted. The study also shows the explanatory power of the theory for understanding the role of opportunism in supply chain relationships.

Keywords

Agency theory Opportunism Review Supply chain 
This is a preview of subscription content, log in to check access

References

  1. Agrell, P., & Norrman, A. (2004). Understanding supply chain risk sharing: A three-tier principal-agent approach. In H. Aronsson (Ed.), 16th Anuual Conference for Nordic Researchers in Logistics (NOFOMA) (pp. 17–33). Linkoping: Linkoping University.Google Scholar
  2. Agrell, P., Lindroth, R., & Norrman, A. (2004). Risk, information and incentives in telecom supply chains. International Journal of Production Economics, 90(1), 1–16.CrossRefGoogle Scholar
  3. Arrow, K. (1985). The economics of agency. In J. Pratt & R. Zeckhauser (Eds.), Principals and agents: The structure of business (pp. 37–51). Boston, MA: Harvard University Press.Google Scholar
  4. Basov, S., & Bardsley, P. (2005). A general model of coexisting hidden action and hidden information. Working paper 958, December, Department of Economics, The University of Melbourne, Melbourne.Google Scholar
  5. Bergen, M., Dutta, S., & Walker, O. C., Jr. (1992). Agency relationships in marketing: A review of the implications and applications of agency and related theories. The Journal of Marketing, 56(3), 1–24.CrossRefGoogle Scholar
  6. Camuffo, A., Furlan, A., & Rettore, E. (2007). Risk sharing in supplier relations: An agency model for the Italian air-conditioning industry. Strategic Management Journal, 28(12), 1257–1266.CrossRefGoogle Scholar
  7. Celly, K. S., & Frazier, G. L. (1996). Outcome-based and behavior-based coordination efforts in channel relationships. Journal of Marketing Research, 33(2), 200–210.CrossRefGoogle Scholar
  8. Cheng, S. K., & Kam, B. H. (2008). A conceptual framework for analysing risk in supply networks. Journal of Enterprise Information Management, 22(4), 345–360.CrossRefGoogle Scholar
  9. Ciliberti, F., de Haan, J., de Groot, J., & Pontrandolfo, P. (2011). CSR codes and the principal-agent problem in supply chains: Four case studies. Journal of Cleaner Production, 19, 885–894.CrossRefGoogle Scholar
  10. Cooper, M., Lambert, D., & Pagh, J. (1997). Supply chain management: More than a new name for logistics. The International Journal of Logistics Management, 8(1), 1–14.CrossRefGoogle Scholar
  11. Cousins, P. D. (2002). A conceptual model for managing long-term inter-organisational relationships. European Journal of Purchasing & Supply Management, 8(2), 71–82.CrossRefGoogle Scholar
  12. Danese, P. (2011). Towards a contingency theory of collaborative planning initiatives in supply networks. International Journal of Production Research, 49(4), 1081–1103.CrossRefGoogle Scholar
  13. Delbufalo, E. (2012). Outcomes of inter-organizational trust in supply chain relationships: A systematic literature review and a meta-analysis of the empirical evidence. Supply Chain Management: An International Journal, 17(4), 377–402.CrossRefGoogle Scholar
  14. Delbufalo, E., & Bastl, M. (2018). Multi-principal collaboration and supplier’s compliance with codes-of-conduct. International Journal of Logistics Management (forthcoming).Google Scholar
  15. Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57–74.Google Scholar
  16. Fama, E. F. & Jensen, M. C. (1983). Separation of ownership and control. In J. B. Barney & W. G. Ouchi (Eds.), Organizational economics. California: Jossey-Bass Inc. Publishers (Reprinted in slightly adapted form from the Journal of Law and Economics 26).CrossRefGoogle Scholar
  17. Fayezi, S., O’Loughlin, A., & Zutshi, A. (2012). Agency theory and supply chain management: A structured literature review. Supply Chain Management: An International Journal, 17(5), 556–570.CrossRefGoogle Scholar
  18. Fleisher, C. S. (1991). Using an agency-based approach to analyze collaborative federated interorganizational relationships. The Journal of Applied Behavioral Science, 27(1), 116–130.CrossRefGoogle Scholar
  19. Halldórsson, A., & Skjøtt-Larsen, T. (2006). Dynamics of rela-tionship governance in TPL arrangements: A dyadic perspective. In-ternational Journal of Physical Distribution & Logistics Manage-ment, 36(7), 490–506.CrossRefGoogle Scholar
  20. Harris, M., & Raviv, A. (1979). Optimal incentive contracts with imperfect information. Journal of Economic Theory, 20(April), 231–259.CrossRefGoogle Scholar
  21. Hart, O., & Holmström, B. (1987). The theory of contract. In T. Bewley (Ed.), Ad-vanced in economic theory, Fifth world congress. London: Cambridge University Press.Google Scholar
  22. Heracleous, L., & Lan, L. L. (2011). Agency theory, institutional sensitivity, and inductive reasoning: Towards a legal perspective. Journal of Management Studies, 49(1), 223–239.CrossRefGoogle Scholar
  23. Hornibrook, S. (2007). Agency theory and supply chain management: Goals and incentives in supply chain organisations. Working paper 147, 24 July, Kent Business School, University of Kent, Canterbury.Google Scholar
  24. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360.CrossRefGoogle Scholar
  25. Knoppen, D., & Christiaanse, E. (2007). Supply chain partnering: A temporal multidisciplinary approach. Supply Chain Management: An International Journal, 12(2), 164–171.CrossRefGoogle Scholar
  26. Kudla, N. L., & Klaas-Wissing, T. (2012). Sustainability in shipper-logistics service provider relationships: A tentative taxonomy based on agency theory and stimulus-response analysis. Journal of Purchasing & Supply Management, 18, 218–231.CrossRefGoogle Scholar
  27. La Londe, B., & Masters, J. (1994). Emerging logistics strategies: Blueprints for the next century. International Journal of Physical Distribution & Logistics Management, 24(7), 35–47.CrossRefGoogle Scholar
  28. Lassar, W. M., & Kerr, J. L. (1996). Strategy and control in supplier-distributor relationships: An agency perspective. Strategic Management Journal, 17(8), 613–632.CrossRefGoogle Scholar
  29. Lee, H., & Whang, S. (2000). Information sharing in a supply chain. International Journal of Manufacturing Technology and Management, 1(1), 79–93.CrossRefGoogle Scholar
  30. Logan, M. S. (2000). Using agency theory to design successful outsourcing relationships. The International Journal of Logistics Management, 11(2), 21–32.CrossRefGoogle Scholar
  31. Manatsa, P. R., & McLaren, T. S. (2008). Information sharing in a supply chain: Using agency theory to guide the design of incentives. Supply Chain Forum: International Journal, 9(1), 18–26.CrossRefGoogle Scholar
  32. Melek, A. A., Van den Ende, J., & Ianniello, G. (2015). Inter-organizational coordination patterns in buyer-supplier-design agency triads in NPD projects. International Journal of Operations & Production Management, 35(11), 1512–1545.CrossRefGoogle Scholar
  33. Mitnick, B. M. (1973). Fiduciary rationality and public policy: The theory of agency and some consequences. 1973 Annual Meeting of the American Political Science Association, New Orleans, LA. In Proceedings of the American Political Science Association.Google Scholar
  34. Morgan, N. A., Kaleka, A., & Gooner, R. A. (2007). Focal supplier opportunism in supermarket retailer category management. Journal of Operations Management, 25(2), 512–527.CrossRefGoogle Scholar
  35. Norrman, A. (2008). Supply chain risk-sharing contracts from a buyers’ perspective: Content and experiences. International Journal of Procurement Management, 1(4), 371–393.CrossRefGoogle Scholar
  36. O’Loughlin, A., & Clements, M. (2007). Relational exchange, supply chain myopia and zones of turbulence. In Sohal, A. (Ed.), Proceedings of the Eighth International Research Conference on Quality Innovation and Knowledge Management (QIK), New Delhi (pp. 610–620).Google Scholar
  37. Perrow, C. (1986). Complex organizations: A critical essay (3rd ed.). New York: Random House.Google Scholar
  38. Prosman, E. J., Scholten, K., & Power, D. (2016). Dealing with defaulting suppliers using behavioral based governance methods: An agency theory perspective. Supply Chain Management: An International Journal, 21(4), 499–511.CrossRefGoogle Scholar
  39. Ritchie, B., Brindley, C. S., & Armstrong, N. (2008). Risk assessment and relationship management: Practical approach to supply chain risk management. International Journal of Agile Systems and Management, 3(3/4), 228–247.CrossRefGoogle Scholar
  40. Ross, S. A. (1973). The economic theory of agency: The principal’s problem. The American Economic Review, 63(2), 134–139.Google Scholar
  41. Shapiro, S. P. (2005). Agency theory. Annual Review of Sociology, 31, 263–284.CrossRefGoogle Scholar
  42. Simatupang, T., & Sridharan, R. (2002). The collaborative supply chain. The International Journal of Logistics Management, 13(1), 15–30.CrossRefGoogle Scholar
  43. Stock, J. (1997). Applying theories from other disciplines to logistics. International Journal of Physical Distribution & Logistics Management, 27(9/10), 515–539.CrossRefGoogle Scholar
  44. Surana, A., Kumara, S., Greaves, M., & Raghavan, U. (2005). Supply-chain networks: A complex adaptive systems perspective. International Journal of Production Research, 43(20), 4235–4265.CrossRefGoogle Scholar
  45. Tate, W. L., Ellram, L. M., Bals, L., Hartmann, E., & Van Der Valk, W. (2010). An agency theory perspective on the purchase of marketing services. Industrial Marketing Management, 39(5), 806–819.CrossRefGoogle Scholar
  46. Villena, V. H., Gomez-Mejia, L. R., & Revilla, E. (2009). The decision of the supply chain executive to support or impede supply chain integration: A multidisciplinary behavioral agency perspective. Decision Sciences, 40(4), 635–665.CrossRefGoogle Scholar
  47. Whipple, J. M., & Roh, J. (2010). Agency theory and quality fade in buyer-supplier relationships. The International Journal of Logistics Management, 21(3), 338–352.CrossRefGoogle Scholar
  48. Williamson, O. E. (1988). Corporate finance and corporate governance. The Journal of Finance, 43(3), 567–591.CrossRefGoogle Scholar
  49. Wilson, M. (2006). Supply chains behaving badly: A dynamic model of inter-organisational supply chain exchange behaviour under rational, relational and chaotic paradigms (Ph.D.). Lincoln University, Lincoln.Google Scholar
  50. Zomorrodi, M., & Fayezi, S. (2011). Understanding the concept of elasticity in supply chain relationships: An agency theory perspective. Asian Journal of Management Research, 1(2), 452–472.Google Scholar
  51. Zsidisin, G. A., & Ellram, L. M. (2003). An agency theory investigation of supply risk management. Journal of Supply Chain Management, 39(3), 15–27.CrossRefGoogle Scholar
  52. Zsidisin, G. A., & Smith, M. E. (2005). Managing supply risk with early supplier involvement: A case study and research propositions. Journal of Supply Chain Management, 41(4), 44–57.CrossRefGoogle Scholar
  53. Zsidisin, G. A., Ellram, L. M., Carter, J. R., & Cavianto, J. L. (2004). An analysis of supply risk assessment techniques. International Journal of Physical Distribution & Logistics Management, 34(5), 397–413.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.Department of Human ScienceEuropean University of RomeRomeItaly

Personalised recommendations