An institutional analysis of supply chain innovations in global marketing channels

Abstract

The adoption of sophisticated supply chain innovations by trading partners in global channels of distribution is often limited by the institutional context of the international transaction. In particular, the regulatory, normative, and cultural–cognitive elements of institutional environments around the world can enhance or inhibit the ability of trading partners to craft the contractual, ownership, and social elements of institutional arrangements required by an innovation. Because supply chain innovations often require costly, new investments and activity sets, firms may be reluctant to participate in an innovation unless a new institutional arrangement can be crafted to provide adequate safeguards and guarantees. A conceptual model is developed to explain the role of institutions in the successful deployment of supply chain innovations in global marketing channels.