Summary of Supply Chain Strategy_SC Conflicts-alternative resolutions_325240-M-6

Alternate dispute resolution
1. Dispute
− Disputes are unavoidable
• Mild disagreements to outright conflict

− Power perspective is common
• More powerful party gets it way

• GM → squeezing suppliers

• Ended up loosing its position

• Power based contracts can generate 40% higher costs


2. Some typical assumptions and responses
− Exchange partner will be opportunistic
• Unreasonable assumption?

• Does it match reality?

• A Hobbesian world of war against all

− Response: EXIT
• Alternate suppliers -> go to the market

• Problems: when markets are thin, and dependency is high

− Governance literature
• Some agents are opportunistic some of the time

• Bounded rationality/ measurement problems

• Continuity of relationships is important

− Response: VOICE