Optimal levels of (de)centralization for resilient supply chains

Purpose – The purpose of this paper is to illustrate how centralization and decentralization of supply chains (SCs) play a major role in creating organizational resilience.
Design/methodology/approach – Starting with the basic tenets of contingency theory and applying a grounded theory approach, results from exploratory qualitative and quantitative studies are combined to investigate the impact of (de)centralization on SC resilience capabilities.
Findings – The findings from a comprehensive literature review combined with two empirical surveys indicate that four important organizational capabilities are needed in order to cope with internal and external disruptions: fast reactions to unforeseen disturbances, reducing the number of negative external forces,
reducing the impact of negative external forces and the quick return to normal operating processes. Furthermore, it is illustrated how (de)centralization activities can support these capabilities and thus maximize the SC resilience.
Originality/value – This paper presents 12 measures for (de)centralization and shows how they can support the four major capabilities of resilient companies. The results from qualitative and quantitative surveys allow for a holistic understanding of the organization and provide a basis for future SC resilience research.
Keywords – Grounded theory, Survey, Europe, Centralization, Decentralization, Supply chain resilience, Empirical research, Contingency theory