Framework for the study of governance in the supply networks : Wal-mart : "Enlightened Despot" model

Abstract

Extensive research work has been conducted on the topic of collaboration in supply chain management, but the more general topic of governance in supply networks has never truly been addressed. This research proposes to achieve three connected objectives. The first objective is to define the concepts of governance and supply network in a consistent and non value based way. These concepts have been, to some extent, clouded respectively by an extensive focus on collaboration and an indistinct terminology ("value networks", "supply networks", "value chains", "supply chains" and the less common "netchains"). The second objective is to study the case of Wal-Mart as a generally recognized governance best practice. The main focus will be on (i) the relation between the company's pricing strategy and its supply chain strategy, (ii) the enforcement of investments in supply chain technology throughout the network and (iii) the risks and benefits structure of the governance model. The third objective is to propose a practical framework for the study of governance in supply networks. This framework will be presented in the form of a roadmap for the study of other best practices in the field. It will then be retroactively applied to the case of Wal-Mart in order to confirm both (i) its validity and usefulness as a research tool and (ii) the intuition that the pricing strategy is, in the particular case, the critical enabler of the governance model for the entire supply network.