Agency theory and supply chain management: A structured literature review

Sajad Fayezi, Andrew O'Loughlin, Ambika Zutshi

Research output: Contribution to journalReview ArticleResearchpeer-review

89 Citations (Scopus)

Abstract

Purpose: The paper aims to explain how agency theory can be used to inform our understanding of the dynamics surrounding supply chain behaviours and relationships. Design/methodology/approach: A structured review of the literature using a three-stage refinement process is used. The articles were sourced through online databases and keyword classifications, such as "agency theory", "principal-agent relationships" and "supply chain management". The search initially identified over 86 articles. After further screening these were reduced to 19 for final assessment and comparison. Findings: Despite agency theory's prevailing descriptive and predictive qualities there is scarcity in its application to the SCM discipline. The authors posit that agency theory provides valuable insights for relationship engineering within supply chains where social, political, legal and behavioural dynamics dominate. Practical implications: It is a critical task for managers to understand and mitigate abnormal behaviours across the supply chain. Agency theory serves this need by providing them with a useful tool to respond to transaction cost dilemmas through contractual and non-contractual remedies. Originality/value: This is one of the first studies that examines the current state of agency theory application in the SCM literature and suggests potential avenues for future research.

Original languageEnglish
Pages (from-to)556-570
Number of pages15
JournalSupply Chain Management
Volume17
Issue number5
DOIs
Publication statusPublished - Aug 2012
Externally publishedYes

Keywords

  • Agency theory
  • Behaviour uncertainty
  • Collaboration
  • Literature review
  • Relationship management
  • Research results
  • Supply chain management
  • Uncertainty management

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