CONTENTS of Volume 28, Number 2, December 2022
The Association between Social Ties Within Boards and Human Resource Investment in Internal Control
Author HO-YOUNG LEE, JU HYOUNG PARK, HYUN-YOUNG PARK
Keywords board of directors, social ties, human resource investment, internal control, financial reporting
According to prior literature and media articles, outside directors that have social ties with inside directors do not monitor managers appropriately. This study examines the association between social ties within boards and human resource investment in internal control (IC) over financial reporting. Using Korean firm data, we found that social ties within boards are negatively associated with the IC of firms’ accounting and public disclosure departments, which could negatively affect the reliability of their financial reporting and disclosures. These findings have valuable implications for interested parties such as investors and regulators.
Strategic Reliability Investments in Multi-Indenture Supply Chains
Author SANG-HYUN KIM
Keywords performance-based contracting, supply chain, incentives
It has been documented that Performance-based contracting (PBC) promotes improvement of product reliability for maintenances of highvalued products. However, nontrivial challenges exist in a typical supply chain that consists of multiple suppliers providing services for distinct subsystems. We identify a source of inefficiency in this environment that leads the suppliers to underinvest in reliability. Using PBC neutralizes such inefficiency, but unexpectedly, it results in an overinvestments in reliability. Interestingly, long-term supply chain cost is reduced when PBC is combined with cost-sharing contracts, counter to the common belief that fixed-price contracts are more effective in reducing costs.
The Effect of Supply Chain Integration on Supply Chain Risk Management Capability and Firm Performance in the Ppuri Industry
Author JAEWOOK JUNG, JAEHO SHIN, HONGSUK YANG
Keywords Ppuri industry, Supply chain integration, Supply chain risk management capability, Firm performance
The Ppuri industry continues to stagnate as it is interlocked with other industries and lacks the ability to respond to environmental changes. Structural equation model is adopted to analyze the effect of supply chain integration on supply chain risk management capability and firm performance. Results demonstrate that external integration might not have a direct effect on firm performance, whereas internal integration can directly help improve financial performance. Although integration with suppliers does not turn out to directly affect firm performance, it can help improve supply chain risk management capability, which in turn positively affects firm performance.
COVID-19 and Beyond: Implications on Supply Chain Network Design
Author MICHAEL K. LIM
Keywords COVID-19, supply chain disruption, robust network design, flexibility, agility, preparedness
The unprecedented nature of the COVID-19 pandemic―the global scope, long-lasting impacts, and the simultaneous supply and demand disruptions―calls for a rethink of supply chain network design beyond what was studied in the literature. This study provides managerial insights on the design and operations of supply chain networks for the new normal. Building on the latest theoretical development in supply chain disruption and using an extensive simulation study based on the data of confirmed COVID-19 cases and lockdown measures, we analyze the dynamics of alternative supply chain network strategies under various pandemicinduced disruption scenarios. Our study highlights the principle of robustness, that a supply chain network should be designed to withstand alternative disruption scenarios that could emerge, which can be achieved through strategic design elements. We find that flexibility offers strategic redundancies to effectively combat the sources of uncertainty that trigger the forward and reverse bullwhip effects. In addition, we find that flexibility complemented with the strategies of preparedness and agility can be especially valuable in robust network. In particular, preparedness (securing emergency backup suppliers) is most effective when flexibility is deployed downstream; whereas, agility (proactive stocking policies in response to imminent disruptions) can be most helpful when flexibility is deployed upstream.
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)
ISSN 2713-6213 (Online)