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Tackling the sustainability iceberg

Tackling the sustainability iceberg The purpose of this paper is to investigate how buying firms manage their lower tier sustainability management (LTSM) in their supply networks and what contextual factors influence the choice of approaches. As most of the environmental and social burden is caused in lower tiers, the authors use the iceberg analogy.Design/methodology/approachFindings from 12 case studies and 53 interviews, publicly available and internal firm data are presented. In an abductive research approach, transaction cost economics (TCE) conceptually guides the analytical iteration processes between theory and data.FindingsThis study provides eight LTSM approaches grouped into three categories: direct (holistic, product-, region-, and event-specific) indirect (multiplier-, alliance- and compliance-based) and neglect (tier-1-based). Focal firms choose between these approaches depending on the strength of observed contextual factors (stakeholder salience, structural supply network complexity, product and industry salience, past supply network incidents, socio-economic and cultural distance and lower tier supplier dependency), leading to perceived sustainability risk (PSR).Research limitations/implicationsBy depicting TCE’s theoretical boundaries in predicting LTSM governance modes, the theory is elevated to the supply network level of analysis. Future research should investigate LTSM at the purchasing category level of analysis to compare and contrast PSR profiles for different purchase tasks and to validate and extend the framework.Practical implicationsThis study serves as a blueprint for the development of firms’ LTSM capabilities that suit their unique PSR profiles. It offers knowledge regarding what factors influence these profiles and presents a model that links the effectiveness of different LTSM approaches to resource intensity.Originality/valueThis study extends the application of TCE and adds empirically to the literature on multi-tier and sustainable supply chain management. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Operations & Production Management Emerald Publishing

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0144-3577
DOI
10.1108/ijopm-03-2017-0141
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to investigate how buying firms manage their lower tier sustainability management (LTSM) in their supply networks and what contextual factors influence the choice of approaches. As most of the environmental and social burden is caused in lower tiers, the authors use the iceberg analogy.Design/methodology/approachFindings from 12 case studies and 53 interviews, publicly available and internal firm data are presented. In an abductive research approach, transaction cost economics (TCE) conceptually guides the analytical iteration processes between theory and data.FindingsThis study provides eight LTSM approaches grouped into three categories: direct (holistic, product-, region-, and event-specific) indirect (multiplier-, alliance- and compliance-based) and neglect (tier-1-based). Focal firms choose between these approaches depending on the strength of observed contextual factors (stakeholder salience, structural supply network complexity, product and industry salience, past supply network incidents, socio-economic and cultural distance and lower tier supplier dependency), leading to perceived sustainability risk (PSR).Research limitations/implicationsBy depicting TCE’s theoretical boundaries in predicting LTSM governance modes, the theory is elevated to the supply network level of analysis. Future research should investigate LTSM at the purchasing category level of analysis to compare and contrast PSR profiles for different purchase tasks and to validate and extend the framework.Practical implicationsThis study serves as a blueprint for the development of firms’ LTSM capabilities that suit their unique PSR profiles. It offers knowledge regarding what factors influence these profiles and presents a model that links the effectiveness of different LTSM approaches to resource intensity.Originality/valueThis study extends the application of TCE and adds empirically to the literature on multi-tier and sustainable supply chain management.

Journal

International Journal of Operations & Production ManagementEmerald Publishing

Published: Oct 18, 2018

Keywords: Transaction cost economics; Case studies; Lower tier sustainability management; Multi-tier supply chains; Perceived sustainability risk; Sub-suppliers

References