Theories of Supply Chain Management
In order to efficiently review the importance of the management of the supply chain in all industries especially among the members of the Health Care, this study shall first review the different theories of supply management, and give an overview of each.
These theories are the following, as enumerated by Halldorsson and his colleagues (2007): (1) Resourced-based view or RBV; (2) Transaction Cost Analysis or TCA; (3) Knowledge-based view or KBV; (4) Strategic choice theory or SCT; (5) Agency theory or AT; (6) Institutional theory or InT; (7) Systems theory or ST; and lastly, (8) Network Perspective or NP.
Resourced-Based View or RBV Wernerfelt (1984) defines the resource-based view as an economic tool being used by most firms or organizations in order to determine the strategic resources that are available to them. Generally, it is based upon the principle of finding one’s competitive advantage which is usually present in the organization’s possession of valuable resources (Wernerfelt, 1984).
Transaction Cost Analysis or TCA The transaction cost analysis is another important theory seen to contribute so much to the development of practices related to supply management. Generally, Migdley (2003) have sent his particular theory to provide a means by which organizations could measure the relative performance
Under the knowledge-based theory, it is no longer the resources that play the important role in determining the success of the company. Rather, what is more important is the role of knowledge since these are generally difficult for their competitors to imitate and at the same time, socially complex, thus becoming a major source of their competitive advantage and superior corporate performance (Conner, 1991).