As multinational enterprises (MNEs) increasingly source from suppliers in emerging markets, a particular challenge is how to manage their relationships with suppliers within potentially deleterious institutional environments. A large body of research has investigated supply chain management from multiple theoretical viewpoints, mostly from transaction cost economics and relational exchange perspective (Carey et al., 2011). From these perspectives, companies can use both formal governance mechanisms such as contracts, control, and monitoring as well as informal governance mechanisms such as trust, socialization, and relational norms to manage the relationships with their suppliers (Cao and Lumineau, 2015; Li et al., 2010; Villena et al., 2011).
