Immigrant networks, trust and supply chain speed

An article in the Economist (Nov 19,2011) describes a hypothetical example of a Chinese trader in Indonesia who, seeing a market opportunity for umbrellas, uses his cousin in Shenzhen to quickly source and ship product for sale in Indonesia.  Contract formation and delivery are hastened by trust, suggesting the potential benefit to tapping immigrant networks. Another study describes the role of immigrant Chinese in US firms who speed up the firm’s expansion in China. Are immigrants networks a way to speed up contract formation in a global supply chain? Is there a downside to firms that rely heavily on such relationship contracts? Are there benefits to “arms length” contracting that does not rely on trust based schemes ?

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About aviyer2010

Professor
This entry was posted in Collaboration, Global Contexts, Service Operations, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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