Supply-chain, Operations, and Management Science
Supply Chain & Operations Theories
Optimizing resources, logistics, and organizational efficiency in the context of entrepreneurship
These theories form the backbone of modern operations management, helping founders navigate the "Make vs. Buy" decisions, technological integration, and process scaling.
Resource-Based View (RBV)
RBV suggests that a firm's performance is determined by its internal resources. For a startup, this means identifying assets that are Valuable, Rare, Inimitable, and Organized (VRIO).
Read Full Post »Agency Theory
Examines the relationship between "principals" (owners) and "agents" (managers). It helps design incentive structures that ensure employees act in the best interest of the company.
Read Full Post »Agglomeration Theory
Explains why startups cluster in specific areas (like Silicon Valley) to gain access to specialized suppliers, labor pools, and shared knowledge.
Read Full Post »Dynamic Capabilities
Focuses on the firm’s ability to integrate, build, and reconfigure internal competencies to address rapidly changing environments.
Read Full Post »Actor-Network Theory (ANT)
Views an operation as a network of human and non-human "actors." In supply chains, this theory is critical for understanding how technology (RFID, AI) acts as an agent that shapes organizational behavior.
Read Full Post »Architectural Innovation Theory
The reconfiguration of existing product components or operational linkages in a new way. It explains how efficiency is gained not by inventing new parts, but by optimizing how they connect.
Read Full Post »Competence Destruction Theory
Explains the risk inherent in upgrading operations: new technology can render existing competencies and supply chain relationships obsolete, requiring a total process reset.
Read Full Post »Diffusion of Innovations Theory
Models how new operational technologies spread through an industry. It helps managers predict the rate of adoption for tools like automation or cloud-based logistics.
Read Full Post »Digital Entrepreneurship
Focuses on operations where assets are digitized. This shifts the supply chain focus from moving atoms to moving bits, enabling zero-marginal-cost scaling.
Read Full Post »Disruptive Innovation Theory
When a simpler, cheaper operational model (often using new tech) undercuts complex legacy systems. This is the mechanism by which startups overthrow incumbents.
Read Full Post »Information Processing Theory
Views the firm as a system that processes information to reduce uncertainty. In operations, this dictates how data is gathered to forecast demand and manage inventory.
Read Full Post »Real Options Theory
Applies financial option logic to real assets. It encourages staged operational investments (e.g., a pilot plant) to manage risk before full-scale commitment.
Read Full Post »Transaction Cost Theory
The fundamental framework for the "Make or Buy" decision. It analyzes the costs of using the market (outsourcing) versus internal hierarchy (vertical integration).
Read Full Post »X-Efficiency Theory
Leibenstein’s concept that firms often operate below their production possibility frontier. It highlights "organizational slack" and the need for competitive pressure to tighten operations.
Read Full Post »Explore the full dictionary of frameworks at Entrepreneurship Theories A-Z.
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