THE EFFECT OF INSTITUTIONAL CONTEXT ON THE GOVERNANCE OF EMERGENT SUPPLY CHAINS: A CASE STUDY OF CASSAVA SECTOR IN VIETNAM

Kien Trung Nguyen

Abstract


Abstract: This paper investigates how transactions between firms are organized in an emerging market and how supply network governance affect supply network outcomes and catching up of merging market firms. We explored firms’ choices of governance in a specific context of Vietnam, where legal institution is characterized by a weak legal system for contractual enforcement and socio-economic institution is characterized by transition from central planning into market mechanism. This study examines how firms in the cassava sector in Vietnam structure their transactions and how supply network governance relates to certain supply network outcomes. A comparative case study method was adopted in this research. Two cassava supply networks, of which one is traditional type and another is led by a foreign invested firm, were selected for study. Our findings indicate that institutional context, supply chain structure, product characteristic, relationship investment influence on firms’ choices of governance and firms’ choices of governance affect supply chain network outcomes and local firms’ catching up. In the absence of legal enforcement, market governance is popularly applied in the supply chain with fragmented structure while relational governance is a popular used in more concentrated supply network. Higher value creation and more possibilities for catching up but more inequality in income distribution in supply chain with large scale lead firm. Lower value creation, rare possibilities for catching up but more equality in income distribution in supply chain with fragmented small scale firms.  

 

Abstrak: Kajian ini menyelidiki tentang bagaimana transaksi antar perusahaan diorganisasikan dalam sebuah pasar yang sedang berkembang, serta bagaimana tata kelola jaringan pasokan mempengaruhi hasil jaringan pasokan dan mengejar ketertinggalan dari penggabungan pasar perusahaan. Kajian ini mengeksplorasi pilihan tata kelola perusahaan dalam konteks spesifik Vietnam, di mana lembaga hukum dicirikan oleh sistem hukum yang lemah untuk penegakan kontrak dan lembaga sosial-ekonomi ditandai oleh transisi dari perencanaan pusat ke mekanisme pasar. Kajian ini untuk mengetahui bagaimana perusahaan sektor singkong di Vietnam menyusun transaksi dan bagaimana tata kelola jaringan pasokan memengaruhi hasil jaringan pasokan yang ada.  Kajian ini menggunakan metode studi komparasi kasus. Dua jaringan singkong, tipe tradisional dan perusahaan investasi asing dipilih dalam penelitian ini. Hasil kajian menunjukkan bahwa konteks kelembagaan, struktur rantai pasokan, karakteristik produk, pengaruh investasi pada pilihan tata kelola perusahaan dan pilihan tersebut memengaruhi hasil jaringan rantai pasokan dan mengejar ketertinggalan perusahaan. Tidak adanya penegakan hukum dalam membuat tata kelola pasar secara populer diterapkan dalam rantai pasokan dengan struktur terfragmentasi, sedangkan tata kelola relasional pada umumnya digunakan dalam jaringan pasokan yang lebih terkonsentrasi. Penciptaan nilai yang lebih tinggi dan lebih banyak kemungkinan untuk mengejar ketinggalan, namun lebih banyak ketimpangan dalam distribusi pendapatan dalam rantai pasokan dengan perusahaan pemimpin berskala besar. Penciptaan nilai yang lebih rendah jarang memiliki kemungkinan untuk mengejar ketertinggalan, namun distribusi pendapatannya lebih merata dalam rantai pasokan dengan perusahaan skala kecil yang terfragmentasi.


Keywords


cassava supply chain; inter-firm governance; economic transactions; contract enforcement; institutional environment; rantai pasok singkong; tata kelola antar perusahaan; transaksi ekonomi; penegakan kontrak; lingkungan kelembagaan

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DOI: https://doi.org/10.20961/sepa.v16i2.35718

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