Heeding Supply Chain Disruption Warnings: When And How Do Cross‐Functional Teams Ensure Firm Robustness?

Firms can adopt several strategies to increase their robustness to potential supply chain (SC) disruptions. One promising strategy is the use of a cross-functional team with representatives from functional departments. Such a team may facilitate sharing relevant information, enabling the firm to respond effectively to SC disruption warnings. However, despite their potential, cross-functional teams also differ in their ability to respond to SC disruption warnings and to ensure firm robustness. Extending insights from information-processing theory and team research to the field of SC management, we propose that a cross-functional team’s ability to handle high numbers of SC disruption warnings depends on the extent to which the team adopts centralized decision-making, with one or two members orchestrating the decision-making process. We also introduce internal integration problems as a mediating mechanism explaining why a cross-functional team lacking centralized decision-making may be unable to handle high numbers of SC disruption warnings. In two independent studies, we use multi-source data on cross-functional teams’ performance in dealing with SC disruption warnings during a realistic SC management simulation; the results support our predictions.