Revisiting Theories of Governance for Last Mile Supply Networks in Omnichannel Retailing

Omnichannel fulfillment strategies are driving significant change in the retail sector. We investigate how retailers govern their supply networks to support e-commerce development of last-mile delivery. While Transaction Cost Economics (TCE) and the Resource-Based View (RBV) have been applied to understanding a firm’s vertical integration choices in relatively static manufacturing and professional service environments, their application in the dynamic omnichannel context has received little examination. Using a theory elaboration approach, we use multiple embedded case studies to explore how retailers respond to the presence of transaction costs and capability heterogeneity in the governance of their last mile supply networks. We find a differential mix of transaction cost and resource-based constructs contribute to governance decisions. Results highlight that, by considering the interplay between TCE and …