Previous literature has emphasized that developing trust among supply chain (SC) firms is a critical element in achieving SC effectiveness. Since developing trust is an expensive task, however, making an informed decision whether to invest or not in trust requires careful assessment of trust benefits. Therefore, we advance a simulation-based methodology to quantify performance improvements associated with trust in SCs. We develop an NK simulation model of a generic SC that captures the SC dynamics under two alternative scenarios, characterized by the presence and absence of trust respectively. A procedure is then illustrated to quantify the benefits of trust in the SC. We also apply our proposed methodology to a real-world SC. Results show that, when trust is pervasive across the SC, performance increases at both the levels of the overall SC and its leading firm.
Prof. Antonio Capaldo, Ph.D.
Institution: Catholic University of the Sacred Heart
Department: S.E.GEST.A. Department of Management
Antonio Capaldo is an Associate Professor of Strategic Management at the Catholic University of the Sacred Heart, Rome (Italy), S.E.GEST.A. Department of Management. He earned his Ph.D. in Strategy and Organization from the University of Bologna and has been a Visiting Research Fellow at Warwick Business School (UK). Dr. Capaldo’s research interests include strategic alliances and networks, supply chain issues, and the processes of interorganizational collaboration. He also researches in innovation management, design management, behavioral strategy, and cross-cultural management. He has published extensively on these topics in various academic journals including Strategic Management Journal, Journal of Management, International Journal of Production Economics, European Management Review, Industrial Marketing Management, Scandinavian Journal of Management, Technology Analysis & Strategic Management, and The Global Community.