Global Value Chain Governance in the MNE: A Dynamic Hierarchy Perspective

Abstract

The pandemic crisis caused a severe shock to global value chains and led to supply shortages for complex medical goods such as respiratory ventilators. What followed were calls to reshore production for security, and the loss of efficiencies from foreign global value chain (GVC) operations for the multinational enterprise. This article merges internalization and GVC theory to demonstrate a dynamic hierarchy managerial response to these crisis conditions. An optimally configured GVC under hierarchy governance can resiliently eliminate global supply line ruptures yet maintain the benefits of global efficiency.