INTRODUCTION TO INTERNATIONAL BUSINESS
2020 – 2021
Assignment: HBR 3
Group number: 24 Team number: 04
Tutorial lecturer: R.S.Marapin
Student: Linda Drent Student number: S43135432
Student: Anton Rothe Student number: S4325826
Date: 14-12-2020
, The questions
Question 1
Villena and Gioia (2020) identify several problems in supply networks. Discuss how
these problems relate to Verbeke his model and the issues of bounded rationality
and/or bounded reliability. (Note: not all elements of the model might be applicable).
Bounded rationality is about the decision making of managers that could include imperfect
assessment of a future or present state of affairs that is leading to information problems and
incorrect beliefs, caused by a lack of information. Bounded reliability refers to imperfect effort,
which leads to incomplete fulfilment. Agents don’t always follow the path on their expressed
intentions to achieve a performance goal or particular outcome. This can arise from opportunism
that involves false promises, but also benevolent preference reversal, which means that the actors
promise is made with faith but that the preferences have changed overtime. Bounded rationality
is having a big influence on the supply networks. In Mexico all the five lower-tier suppliers
lacked environmental management systems, and four lacked procedures for handling red-flag
social problems such as sexual harassment, retaliation by supervisors, and hazardous labor
conditions (Villena and Gioia, 2020, p. 88). This can be related to the amount of how the
managers are involved in the supply chain process and the level of information is required to
have a working management system.
Question 2
According to Locke and Romis (2007), what could be a potential problem with the direct
approach that Villena and Gioia (2020) introduce?
Locke and Romis argue that MNEs should go beyond monitoring their supplies and instead
cooperate intensively with them. The potential problem with the direct approach introduced by
Villena and Gioia (2020) is that this approach focuses on surveys and evaluations of the
2
2020 – 2021
Assignment: HBR 3
Group number: 24 Team number: 04
Tutorial lecturer: R.S.Marapin
Student: Linda Drent Student number: S43135432
Student: Anton Rothe Student number: S4325826
Date: 14-12-2020
, The questions
Question 1
Villena and Gioia (2020) identify several problems in supply networks. Discuss how
these problems relate to Verbeke his model and the issues of bounded rationality
and/or bounded reliability. (Note: not all elements of the model might be applicable).
Bounded rationality is about the decision making of managers that could include imperfect
assessment of a future or present state of affairs that is leading to information problems and
incorrect beliefs, caused by a lack of information. Bounded reliability refers to imperfect effort,
which leads to incomplete fulfilment. Agents don’t always follow the path on their expressed
intentions to achieve a performance goal or particular outcome. This can arise from opportunism
that involves false promises, but also benevolent preference reversal, which means that the actors
promise is made with faith but that the preferences have changed overtime. Bounded rationality
is having a big influence on the supply networks. In Mexico all the five lower-tier suppliers
lacked environmental management systems, and four lacked procedures for handling red-flag
social problems such as sexual harassment, retaliation by supervisors, and hazardous labor
conditions (Villena and Gioia, 2020, p. 88). This can be related to the amount of how the
managers are involved in the supply chain process and the level of information is required to
have a working management system.
Question 2
According to Locke and Romis (2007), what could be a potential problem with the direct
approach that Villena and Gioia (2020) introduce?
Locke and Romis argue that MNEs should go beyond monitoring their supplies and instead
cooperate intensively with them. The potential problem with the direct approach introduced by
Villena and Gioia (2020) is that this approach focuses on surveys and evaluations of the
2
