PAPER 3 SUMMARY

An important aspect of firm supply chain strategy is to manage business risk. Consequently,
various perspectives exist on how organizations can develop capabilities to mitigate the various
types of supply chain risks facing them). Firms currently are no longer confined to traditional
supply chain risk factors, but are exposed to a multitude of risks (quality, safety, product,
leadership, labor and environmental), making it difficult for managers to develop effective risk
management strategies.
This paper aims to address the question by identifying: How firms can develop risk resilience
from supply chain disruption events, by developing BDA capabilities within their
organization?
Theoretical framework base on two theories. Institutions can be defined by a set of rules within
an environment that forms a pattern of acceptable behavior among those operating within that
environment. Institutional theory further argues that external pressures influence firm strategies
and organizational decision making, as firms seek to legitimize their practices in the view of
other stakeholders.
The concept of DCs was proposed by Teece and Pisano (1994). They defined Dynamic
Capability theory as the “subset of the competences/capabilities which allow the firm to create
new products and processes and respond to changing market circumstances” (Teece and
Pisano, 1994).
Due to the nature of the research question, we adopted a grounded theory research design.
Hypothesis are: H1a. Institutional response to supply chain disruption events (ISCD) positively
impacts firm capability to develop supply chain risk resilience (RiskRes).
H1b. Institutional response to supply chain disruption events (ISCD) positively impacts BDA
capabilities within a firm.
The study adopts a quantitative approach which involves development of a survey instrument
and the use of SEM, to investigate the hypothesized relationships. The survey adopts a five-
point Likert scale to capture respondent responses on various constructs. Scale reliability was
found to be high with a Cronbach’s α loading of 0.934 for the entire scale. Finding supports
H1a, but with an inverse relationship.
The results show that prior firm experience of dealing with supply chain disruption events does
not translate into future disruption mitigation capabilities. However, if the organization
develops BDA capabilities, it positively impacts firm ability to harness firm resident
knowledge to mitigate future supply chain disruption events.
As with all studies, however, this study too suffers from some limitations. First, the study is
focused primarily on companies in the USA and Europe.
Second, the study is extremely broad in terms of industry segments being covered.
However, despite these shortcomings, the study does offer significant insights, and can be
considered as a starting point on how to develop a better understanding of the role played by
BDA in enabling firms develop supply chain risk resilience.