Managing Financially Distressed Suppliers: An Exploratory Study

Christoph Bode, Denis Huebner, and Stephan Wagner (2014), "Managing Financially Distressed Suppliers: An Exploratory Study," Journal of Supply Chain Management, Vol. 50 No. 3.

45 Pages Posted: 23 Aug 2013

See all articles by Christoph Bode

Christoph Bode

University of Mannheim - Business School

Denis Hübner

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)

Stephan M. Wagner

Swiss Federal Institute of Technology Zurich, Chair of Logistics Management

Date Written: August 15, 2013

Abstract

The early anticipation and proactive management of financially distressed suppliers have become crucial for buying firms in order to protect themselves against supplier default risk. To this end, firms need to be able to read the early warning signals from suppliers that are running into financial distress, to take appropriate remedial actions, and to gather such experiences in repositories of organizational knowledge for future actions. The objective of this study is to explore how and why firms differ in these behaviors and capabilities. We use the organizational information-processing perspective as a guiding theoretical framework and analyze qualitative data obtained from interviews conducted with 14 global, case study manufacturing firms. By comparing these firms’ behaviors in terms of scanning and interpreting warning signals, reacting to distressed or defaulting suppliers, and learning from such experiences, we are able to isolate several risk management archetypes and develop four sets of propositions that describe the occurrence of these archetypes.

Keywords: supply chain risk, supplier financial distress, supplier default, organizational learning and knowledge, qualitative data analysis, case studies

Suggested Citation

Bode, Christoph and Hübner, Denis and Wagner, Stephan M., Managing Financially Distressed Suppliers: An Exploratory Study (August 15, 2013). Christoph Bode, Denis Huebner, and Stephan Wagner (2014), "Managing Financially Distressed Suppliers: An Exploratory Study," Journal of Supply Chain Management, Vol. 50 No. 3., Available at SSRN: https://ssrn.com/abstract=2313939

Christoph Bode (Contact Author)

University of Mannheim - Business School ( email )

L5, 5
Mannheim, 68131
Germany
+49 621 181 1659 (Phone)
+49 621 181 1653 (Fax)

HOME PAGE: http://procurement.bwl.uni-mannheim.de

Denis Hübner

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

ETH-Zentrum
Zurich, CH-8092
United States

Stephan M. Wagner

Swiss Federal Institute of Technology Zurich, Chair of Logistics Management ( email )

Department of Management, Technology and Economics
Weinbergstrasse 56/58
Zurich, 8092
Switzerland
+41 44 632 3259 (Phone)
+41 44 632 1526 (Fax)

HOME PAGE: http://www.scm.ethz.ch

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