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Singh, Nitya P.; Hong, Paul C.
European management journal, 10/2020, Volume: 38, Issue: 5Journal Article
Increasingly, creating and delivering value through complex supply chain networks involves substantial risks. However, strategy development under business risk conditions is not well-understood. This cross-country research examines how, under conditions of supply chain network risk, firms develop effective risk management practices. Using a literature review and survey research of managers from global firms; we present a research model, and empirically test the hypothesized relationships. The results show that under conditions of uncertainty, management decision-making is more likely to be cautious until visible forms of risks emerge, and prudent response mechanisms are put in place. This study identifies the crucial role of supply chain exploration and exploitation practices, and their influence in development of network risk management practices, leading to competitive financial outcomes. •Firms with global supply chain networks face disruption risks leading to financial loss.•Supply chain disruption events negatively impact strategic decision-making.•Strategic decisions developed through risk analysis are effective in risk mitigation.•Such decisions lead to development of effective risk management practices.•Risk management practices enable organizations to achieve positive financial outcomes.
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