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The dark side of supply chain digitalisation: Supplier- perceived digital capability asymmetry, buyer opportunism and governance

Son, B-G. ORCID: 0000-0002-7395-0598, Kim, H. J., Daesik, H. & Nachiappan, S. (2021). The dark side of supply chain digitalisation: Supplier- perceived digital capability asymmetry, buyer opportunism and governance. International Journal of Operations and Production Management, 41(7), pp. 1220-1247. doi: 10.1108/IJOPM-10-2020-0711


Purpose: In this paper, we seek to contribute to the supply chain digitalisation literature by investigating a potential dark side of supply chain digitalisation from the viewpoint of the small and medium sized enterprise (SME) suppliers: namely, digital capability asymmetry and the partner opportunism of more digitally capable large buyers against SME suppliers. We seek to contribute further to the governance literature by investigating the effectiveness of the governance mechanism (legal contracts and relational contracts) in suppressing partner opportunism of this nature.

Design/methodology/approach: Using survey data collected from 125 Korean SMEs, we employed a hierarchical regression method to test a set of hypotheses focusing on the dark side of supply chain digitalisation and the effectiveness of the governance mechanism.

Findings: Our findings suggest that supplier-perceived digital capability asymmetry, wherein a buyer has a superior digital capability than its SME supplier, increases the SME supplier’s dependence on the more digitally capable buyer, with the result that it is more exposed to buyer opportunism. Moreover, the results suggest that only relational governance is effective in protecting SME suppliers from buyer opportunism of this nature.

Originality/value: So far, the overwhelming majority of supply chain digitalisation research has debated its ‘bright side’. On the contrary, from the resource dependence theory perspective, this paper explains its dark side by providing empirical evidence on (1) the links between supplier-perceived digital capability asymmetry and a buyer’s opportunism through an increased supplier’s dependence, and (2) the effectiveness of different types of governance in opportunism suppression.

Publication Type: Article
Publisher Keywords: Digitalisation, Buyer–supplier relationship, Opportunism, Governance, SMEs, Resource dependence theory
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Departments: Bayes Business School > Management
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