Market or Hierarchy? An Empirical Analysis of Factors Influencing Governance Structure of Supply Chain

Because of globalization and modernization, the governance structure of supply chain has changed in a significant ways since 1980s, especially in some industries like vehicle and electronic products. Vertical integration and vertical disintegration are happening simultaneously in this business world. Different supply chain networks are formed by invisible market rules, like market or hierarchy. This research aims to gain an insight into the factors that influence the governance structure of supply chain network. Data from 93 firms is collected by survey. The result highlights that competition, risk, supply chain process, and final product value are the important factors that lead to different supply chain governance structures.