Why companies choose minority equity ownership as a supply chain governance strategy and its relationship to performance

Supply Chain Management (SCM) stresses relationship management. Whether based upon the Global Supply Chain Forum (GSCF) framework or the Supply Chain Council's (SCC) Supply-Chain Operation Reference (SCOR) framework, managers seek to reduce the total costs, maximize the efficiency, and create competitive advantages through their supply chains. As supply chains become more global and complex, governance issues are brought to the forefront. No longer can corporations be solely concerned with internal operations. Deciding how (and by whom) the supply chain should be managed affects how successful companies will be in their SCM strategy.;Some firms rely on arm's length transactions, while other firms have formed strategic alliances, including partnerships and joint ventures. Still other films have relied upon vertical integration as a primary strategy for SCM governance. However, a number of firms incorporate minority equity ownership of key supply chain members as a method to manage supply chain relationships. Through minority equity ownership, companies expect to effectively align priorities, reduce costs, increase speed, and share rewards.;This dissertation examines why and when companies choose partial equity ownership as a supply chain governance strategy as well as its effect on supply chain performance, in terms of productivity, agility, innovation, and reputation. The research provides a framework for practitioners and researchers and suggests opportunities for future research. This dissertation focuses on minority equity ownership as one of several forms of strategic alliances. Companies and researchers should both be interested in this research as they consistently seek to maximize value through the supply chain.;Keywords: Supply Chain Management, Minority Equity Ownership, Strategic Alliance, Equity Positions within Supply Chain, Vertical Keiretsu.