Quantifying strategic choice along the vertical coordination continuum: implications for the agri-food chain performance

Abstract

Given the increasing emergence of highly integrated agri-food supply chains, a key question arises as to how to measure the performance of these chains. This chapter postulates that agri-food supply-chain performance can be best understood with the help of three separate, but related phenomena: the individual firm’s desire to participate in the supply chain; the governance structure of the whole chain; and the application of industrial organization and institutional economic theory. The Peterson, Wysocki and Harsh (PWH) model of vertical coordination strategy selection is provided. A brief overview of the various forms that agri-food chains may take on and a multi-disciplinary approach to understanding agrifood chain performance are offered, including channel master, chain web and chain organism. The chapter ends with research challenges still needing to be addressed including the limited access to information and measurement issues. We conclude that the PWH model, learning supply-chain governance structures, and application of additional economic theories model can be useful in understanding and measuring performance in agri-food chains.