Incentivization for Transparency between Supply Chain Partners : A Risk Management Perspective

Abstract: Background: Due to unforeseen world events such as the Covid-19 pandemic or war inUkraine, the discussion of risk management in supply chains is increasing. Supply chains areinherently subject to risk as they are completely susceptible to outside entities’ behaviour thatare largely out of their control. Supply chains that have less risk in them, are clearly desirableas they will be more resilient in times of crisis. Companies are searching for ways to increaseresiliency in their supply chains through various methods, which include internal and externaltransparency. However, SC partners can experience barriers to releasing SC information. Therefore, improvements in incentivization strategies will be the goal moving forward. Purpose: This study aims to contribute to supply chain risk management theory by developinga comprehensive and practicable framework of incentivization to increase supply chain transparency. The proposed framework will provide businesses with a clear overview of barriers,benefits, and drawbacks of internal and external transparency, as well as explain how and whento employ specific incentivization methods. Method: This study will be accomplished by analysing supply chain management literatureand carrying out a qualitative interview study with industry professionals. Seven interviews areconducted with various supply chain professionals to gather a broad scope of transparency benefits, incentivization methods, and barriers to transparency. This deductive approach will allowfor comparing and combining of theory and practice, resulting in a more accurate and holisticmodel. Conclusion: The findings of this study reveal the existence of numerous incentivization methods, barriers, and benefits associated with transparency. In addition, this study highlights somedisparity between literature and actual practices. Moreover, this study identifies additional barriers to transparency that were not previously addressed in examined literature. In light of thesefindings, a comprehensive incentivization framework has been developed to provide guidancefor businesses in addressing relevant barriers by selecting appropriate incentivization methods.