Linking supply chain network complexity to interdependence and risk-assessment: Scale development and empirical investigation

Abstract

Concepts like supply chain network complexity, interdependence and risk assessment have been prominently discussed directly and indirectly in management literature over past decades and plenty of frameworks and conceptual prescriptive research works have been published contributing towards building the body of knowledge. However previous studies often lacked quantification of the findings. Consequently, the need for suitable scales becomes prominent for measuring those constructs to empirically support the conceptualized relationships. This paper expands the understanding of supply chain network complexity (SCNC) and also highlights its implications on interdependence (ID) between the actors and risk assessment (RAS) in transaction relationships. In doing so, SCNC and RAS are operationalized to understand how SCNC affects interdependence and risk assessment between the actors in the supply chain network. The contribution of this study lies in developing and validating multi-item scales for these constructs and empirically establishing the hypothesized relationships in the Indian context based on firm data collected using survey-based questionnaire. The methodology followed included structural equation modeling. The study findings indicate that SCNC had significant relationship with interdependence, which in turn significantly affected risk assessment. This study carries both academic and managerial implications and provides an empirically supported framework linking network complexity with the two key variables (ID and RAS), playing crucial roles in managerial decision making. This study contributes to the body of knowledge and aims at guiding managers in better understanding transaction relationships.