Academic journal article Journal of East European Management Studies

Supply Chain Quality and Its Managerial Challenges Insights from Ukrainian Agri-Food Business*

Academic journal article Journal of East European Management Studies

Supply Chain Quality and Its Managerial Challenges Insights from Ukrainian Agri-Food Business*

Article excerpt

This article analyses the effect of the East-European business environment on quality management as a means of operationalising chain management strategies. The particular focus on the Ukrainian agri-food business in combination with fifteen in-depth expert interviews reveals the infancy of chain (quality) management in transition economies. General mechanisms of chain management are primarily installed by foreign enterprises acting as focal companies in their supply chain networks. At the same time, progress in operationalisation of chain management (including quality management) is still hampered, mainly due to infrastructural and institutional conditions.

In diesem Artikel wird der Einfluss wirtschaftlichen Rahmenbedingungen Osteuropas auf das Qualitätsmanagement (QM) analysiert. Hierbei wird QM als Operationalisierung von Chain Management Strategien verstanden. Der Fokus auf das ukrainischen Agribusiness kombiniert mit fünfzehn Tiefeninterviews lassen erkennen, dass die Entwicklung des Chain (Quality) Managements in den Transformationsländern sich erst in der Anfangsphase befindet. Es konnte gezeigt werden, dass im Allgemeinen die Mechanismen des Chain Managements von ausländischen Investoren, die als fokale Unternehmen in ihren Supply Chain Netzwerken agieren, eingeführt werden. Dabei wird der Fortschritt der Operationalisierung von Chain Management (inkl. Qualitätsmanagement) hauptsächlich durch die ungünstigen infrastrukturellen und institutionellen Rahmenbedingungen behindert.

Key words: Ukraine, agri-food business, supply chain networks, chain quality management

* Manuscript received: 22.07.08, accepted: 29.06.09 (1 revision)

1. Introduction

Food production, processing, distribution, and retailing have never been under greater scrutiny by stakeholders than (they are) today. The necessity to increase food safety and quality, to reduce costs and waste, to build customer and stakeholder value, and to achieve social and environmental stewardship requires the whole food chain to act jointly. This condition promotes the process of vertical coordination in the agri-food business, i.e. the tightening of the procurement relationships. Depending on relative transaction costs and costs of physical product flows, vertical coordination becomes apparent in the form of vertically integrated Arms or vertically cooperating hybrids. As these hybrids consist of many organizations that are mutually dependent on the performance and actions of their/each member, they have to act in unison (Brito/Ro seira 2005). Moreover, as such collaborations are most often encouraged by focal companies, i.e. branded processors or retailers, hybrids dispose of a pyramidalhierarchical structure (Wildemann 1997; Jarillo 1988; Gulati et al. 2000).

In this regard, Central and East - European countries (CEEC) are no exception. Indeed, they show a significantly wider scope, as well as a higher complexity of vertical coordination than Western economies. But, paradoxically, this development is to a large extent induced by the Western investors who strive for establishing well-functioning supply chains. Imported chain-wide business models usually bring about competitive advantages for the Western investors in CEEC economies. In order to successfully compete with foreign capital, local companies mainly recourse to imitating these chain-wide strategies.

Of course, such chain-wide collaborations demand firm boundary overlapping management approaches; a view that is widely agreed upon in scientific literature. Although there is a consensus about the need for chain management concepts, the vast number of different approaches, ranging from "nothing more than a different name of integrated logistics of firms" (Tyndall et al. 1998) to "a management philosophy" (Ellram/Cooper 1990; Min/Mentzer 2004) is confusing rather than helpful. However, all approaches address the same crucial question, how to organize and to run the vertical collaboration? …

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