The Governance of Global Value Chains

It can be very insightful to see how supply chains are viewed in other research fields. Gereffi, Humphrey and Sturgeon (2005) take a transaction-based political economy perspective to explain The Governance of Global Value Chains. To do so, three variables (complexity of transactions, ability to codify transactions, capabilities in the supply base) are identified, and combinations of the values of these variables constitute the structure of global value chains, leading to five types of governance (market, modular, relational, captive, hierarchy). Hereby, “market” contains the lowest level of explicit coordination and power asymmetry, whereas “hierarchy” contains the highest one. I was somewhat surprised that the article, although having been cited more than 2,700 times, has been quite ignored by SCM researchers. Likewise, Ponte and Sturgeon (2014) in their recent article that attempts to draw together GVC theory lacks any citation to the SCM literature. We might, more than in the past, think outside of the boxes we have framed if we don’t want to miss results potentially relevant for our highly overlapping fields of enquiry.

Gereffi, G., Humphrey, J., & Sturgeon, T. (2005). The Governance of Global Value Chains. Review of International Political Economy, 12 (1), 78-104 DOI: 10.1080/09692290500049805

Ponte, S., & Sturgeon, T. (2014). Explaining Governance in Global Value Chains: A Modular Theory-building Effort. Review of International Political Economy, 21 (1), 195-223 DOI: 10.1080/09692290.2013.809596