Research in the Decision Sciences for Global Business: Best Papers from the 2013 Annual Conference

20. Building Risk Management Capability

—Astrid Hanghøj, Business Consultancy, Risskov, Denmark

—Ram Narasimhan, Department of Supply Chain Management, Michigan State University, Michigan, USA

Abstract

This paper applies Day’s (1994) framework to purchasing. The framework in this paper classifies capabilities as inside-out, outside-in, or spanning capabilities. Using this framework, this paper examines the effect of intelligence capability (outside-in capability), negotiation capability, and contract design capability (spanning capabilities) on a firm’s risk management capability (inside-out capability). The analysis is carried out using structural equation modeling based on data from 699 Danish companies. The results show that intelligence ...