Trust and Power in Strategic Supply Chains

The role of trust and power in strategic supply chains has a significant impact on an organization's overall business operations. The framework of the strategic supply chain sheds light on competitive advantage for organizations. Supply chain strategy (strategic supply chain management) mainly reflects on the corporate-level design of an organization. For instance, an organization's supply chain strategy aims to reduce waste in overall supply chain processes. Thus, this strategy may also influence all other firms' decisions related to supply chain management functions, including procurement, operations, and logistics. Resultantly, it brings about fruitful results to the organization's profit due to the reduction in waste and an increase in efficiency level. To properly implement this strategy, organizations need to carry out a full-fledged strategic supply chain process.

When it comes to trust, it applies to the strategic supply chain management process. For example, contractual trust between two organizations entails a mutual understanding. The two companies strictly adhere to the agreement made between them concerning to supply chain process. On the other hand, competence trust fosters the belief that a particular organization has technical and managerial perquisites to successfully perform a given task (Meqdadi, Johnsen & Johnsen, 2017).  Apart from competence trust and contractual trust, organizations also rely on goodwill trust.

In addition to trust, power indicates a coercive set of actions used to evoke desired results from partners. In short, firms that own scarce resources have significant control over those firms which are dependent in terms of resources. Thus, influential firms with "scarce resources" may use a coercive approach to run their supply chain management functions smoothly.

It has been learned that power and trust are two different approaches. Firms strive to seek desired behavior in their partners. "Power and trust" are complementary but opposing components in the domain of strategic supply chain management. Therefore, in the context of power and trust, firms may strategically adjust or mend social relations to accomplish desired results for their business by implementing a successful strategy in supply chain management activities.

Reference

Meqdadi, O., Johnsen, T. E., & Johnsen, R. E. (2017). The role of power and trust in spreading sustainability initiatives across supply networks: A case study in the bio-chemical industry. Industrial Marketing Management, 62, 61-76.