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The effects of risk and reward sharing on quality performance

Lookup NU author(s): Dr Minhao Zhang



This is the authors' accepted manuscript of an article that has been published in its final definitive form by Emerald Publishing Limited, 2018.

For re-use rights please refer to the publisher's terms and conditions.


Purpose: Firms face critical challenges in managing product quality in a global supply chain. In many cases, these challenges could be regarded as an agency problem which is a result of the goal conflict between the supply chain members. To address such agency problem, the purposes of this study are to explain how risk and reward sharing practices contribute to firms’ quality performance in the supply chain, and to identify the drivers of applying risk and reward sharing. Design/Methodology/Approach: The hypothesised model, based on agency theory, is empirically verified by original survey data of 200 Chinese manufacturing companies using the structural equations modelling approach in a context of product recall. Findings: Supplier involvement and task programmability are two significant antecedents of risk and reward sharing. Further, the paper shows that risk and reward sharing have a positive effect on quality performance however in terms of contribution to quality performance, risk sharing and reward sharing may be substitution practices. Practical Implications: This research explains how managers could embrace better preparedness for risk and reward sharing in their supply chains. It is also suggested that although risk and reward sharing are seen as efficient means to improve quality performance, such practices should not be treated as a bundle. Originality/Value: Building on supply partnership literature, this paper contributes to agency theory by providing a solution to the agency problem i.e., risk and reward sharing and adding to the limited understanding of the antecedents of risk and reward sharing and examining the effects of risk and reward sharing on quality performance.

Publication metadata

Author(s): Tse YK, Zhang M, Jia F

Publication type: Article

Publication status: Published

Journal: International Journal of Operations & Production Management

Year: 2018

Volume: 38

Issue: 12

Pages: 2367-2388

Print publication date: 01/12/2018

Online publication date: 14/08/2018

Acceptance date: 24/05/2018

Date deposited: 24/05/2018

ISSN (print): 0144-3577

ISSN (electronic): 1758-6593

Publisher: Emerald Publishing Limited


DOI: 10.1108/IJOPM-12-2016-0759


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