Dynamics of Value Chain Governance: Increasing Supplier Competence and Changing Power Relations in the Periphery of Automotive Production—Evidence from Bursa, Turkey

Abstract

Adopting a global value chain (GVC) approach, this paper focuses on the ways in which global automotive transnational corporations coordinate their value chains with suppliers in the periphery of automotive production. In particular, it directs attention to particular forms of chain relations established by lead firms with suppliers in Turkey and the ways in which these chains are coordinated. Findings indicate that as component suppliers in the periphery of automotive production, such as those in Bursa, have gained the competencies not only to manufacture to the cost, quality and flexibility specifications required by their customers but also of design and product development, lead firms in the automotive industry have turned to modular value chains, where competent suppliers provide a range of services with less dependence on their customers, as a way of sourcing from these suppliers. I use this evidence to argue that GVC governance is dynamic and suppliers in the periphery have some room for breaking power asymmetries associated with specific modes of governance in GVCs.

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