A neo-institutional view of the transaction cost drivers of construction supply chain risk management

Purpose In a departure from the efficiency theory assumptions implicit in most supply chain risk management (SCRM) literature, this study aims to explore the role that external neo-institutional pressures play in shaping the risk management strategies deployed to mitigate transaction cost risks in construction supply chains (CSC). Design/methodology/approach A theory-elaborating case study is used to investigate how regulatory, normative and mimetic neo-institutional pressures underpin SCRM strategies in state-led and private-led CSC in China. Findings The study finds that institutionalized Confucianist networks serve as proxies for regulatory accountability and thereby create a form of dysmorphia in the regulatory, normative and mimetic drivers of SCRM strategies in state-led and private-led CSC in China. Originality/value The findings reveal that relational costs such as bargaining, transfer and monitoring costs underpin SCRM in state-led CSC. Behavioral costs associated with search, screening and enforcement are the core drivers of SCRM in private-led CSC. These differences in transaction cost drivers of SCRM arise from the risk-buffering effect of personalized Guanxi networks, creating variants of institutional pressures on actors' risk analysis, identification and treatment strategies in China. Considering China's global hegemony in construction and related industries, this study provides valuable insights for practitioners and researchers on the need for a constrained efficiency view of SCRM in global CSC.

Automated summary

This study explores the impact of external neo-institutional pressures on shaping risk management strategies in construction supply chains in China. The findings indicate that Confucianist networks serve as proxies for regulatory accountability, influencing risk management strategies in both state-led and private-led supply chains. The study highlights the importance of relational and behavioral costs in driving supply chain risk management practices, and emphasizes the need for a nuanced understanding of efficiency in global construction supply chains.