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25 March 2019 at 2:00 p.m.
ESCP Europe – Campus République – Room 4310

Mauro FRACAROLLI-NUNES, PhD candidate in the PhD programme ESCP EuropeMauro FRACAROLLI-NUNES, PhD candidate in the PhD programme ESCP Europe, will publicly defend his PhD thesis in Management Sciences.
Thesis Title:
Supply Chain Contamination, the Inertial Effect, and the Collateral Effects of Negative Corporate Events: an Incidental Stakeholder Perspective

Jury 

Advisors:

  • Prof. Aurélien ACQUIER,
    ESCP Europe
  • Prof. Valentina CARBONE
    ESCP Europe

Referees:

  • Prof. Emmanuelle REYNAUD,
    Université Aix-Marseille
  • Prof. Karine SAMUEL,
    Grenoble Institut d’ingénierie Université Grenoble Alpes

Suffragant:

  • Prof. Ely Laureano PAIVA
    Escola de Administração de Empresas de São Paulo da Fundação Getulio Vargas (FGV-EAESP)

Abstract

The association of firms to crimes, condemnable management practices, operational difficulties and/or fails carried out by their partners suggests that negative events occurred in a firm (i.e. source firm) hold the potential to negatively affect others. As firms’ direct and indirect relationships with their partners become less obvious, supply chain risks (March and Shapira, 1987) must be reconsidered to account for this contemporary and possibly hazardous prospect. In addressing this issue, the present dissertation investigates the impacts of negative corporate events to supply chain partners.

Throughout three individual but interconnected articles, empirical evidence suggest that beyond the interruption of physical flows, unfavorable circumstances may not be restricted to firms originating them, spreading across their networks. More specifically, based on the premises of the Efficient Market Hypothesis (Fama, Fisher, Jensen and Roll, 1969; Fama, 1970; Jensen, 1978), the utilization of the event study method (Fama, 1970; Brown and Warner, 1980) allowed the demonstration of negative reactions from investors of supply chain partners upon the disclosure of adverse news. In referring to these outcomes, the concept of supply chain contamination is here defined as “the dissemination of negative events through supply chains, negatively affecting not only the market value of customers and suppliers (possibly that of customers of customers and suppliers of suppliers and so on), as well as potentially other dimensions such as corporate reputations, for instance” (Fracarolli Nunes, 2018: 581).

Initial theorization of this process is also proposed. The mechanics leading a company to be affected by events originated out of its organizational borders is portrayed in the concept of the inertial effect, illustrated in the image of “the waves caused by a stone that hits the water previously rested” (Fracarolli Nunes and Lee Park, 2016: 292). Within the reasoning of unintended or unanticipated consequences (Merton, 1936), the occurrence of supply chain contamination through the inertial effect is considered a collateral effect. From the intersection of the literatures on supply chain management and the Stakeholder Theory, a new conceptual model is developed. Building on the idea that stakeholders stand for any individual, entity or group that shall either affect or be affected by the operations of a company (Freeman, 1984), the empirical demonstration that investors of a supply chain partner must be affected (i.e. collateral effect) by negative events occurred in or caused by a source firm (i.e. supply chain contamination through the inertial effect), allows the proposition of the concept of incidental stakeholders, here defined as “stakeholders of stakeholders, which, as such, may not be aware of their links with other companies, or even not consciously willing to take the risks associated with such a subsidiary connection” (Fracarolli Nunes, 2019: 4). In this sense, the investigation of 30 cases classified in 5 distinct categories (environmental disaster, corporate social and environmental irresponsibilities, operational failure, corporate fraud and corruption) is expected to offer new perspectives on the structural risks associated to supply chains. Along with the theoretical discussions, practical utilizations are approached, as well as avenues for future inquiries.

Location

Organiser: ESCP Europe - Campus Paris

Paris - France

Map

Date

Start date: 25/03/2019

Start time: 2:00 PM

End time: 4:00 PM