The Management of Risks and Crises within MNCs - A case study of Volvo Group and its Business Areas

Abstract

Recent global crises have shed light on the importance of having good risk and supply chain risk management processes in place. Prior research has mainly focused on risk identification and risk management strategies. Few studies have examined supply chain risk management during an ongoing global crisis, especially in MNCs. Therefore, this study has examined how risk and crisis can be managed in an MNC within the automotive industry during a global crisis. Through a case study of Volvo Group, 11 interviews have been conducted with senior managers located in Brazil, China, Europe, India, and Japan. The study enlightens how supply chain risks are managed during a crisis and how vital suppliers are to ensure resilience. Collaboration, evaluation, and relations with suppliers are key factors to manage disruptions within the supply chain successfully. Communication internally and with suppliers is another crucial factor to manage risk or crisis successfully. The findings also suggest that robustness, resilience, and visibility should be considered. For automotive companies to go from robustness to resilience, suppliers also must be resilient, which can be ensured through increased visibility beyond tier 1 and 2. This study contributes to the field of International Business by showing how companies can manage risk and crises in different geographical locations, the importance of sourcing strategies, and diversification of production. However, companies have limited resources and it is costly to invest in proactive strategies to reduce risks.