Abstract
Public and academic attention towards sustainably managing companies and corresponding supply chains has been gaining significant momentum in recent years. While extensive literature is available on corporate sustainability and the original equipment manufacturers’ (OEMs) downstream supply chains, there is little empirical knowledge concerning why first-tier (FT) suppliers in the upstream supply chain implement sustainability into their supplier selection (SS) processes. However, FT suppliers have a crucial role in ensuring sustainability in upstream supply chains, as they are a key transmitter and often accountable for their OEMs’ sub-supplier portfolios. Grounded on a cross-case study approach of five FT suppliers, two associations and three non-governmental organizations (NGOs) as well as stakeholder theory, this paper investigates how different stakeholder groups are influencing the integration of sustainability aspects into FT suppliers’ SS processes. Therefore, government, NGOs, OEMs and employees are investigated as stakeholder groups. Characteristics, such as FT suppliers’ size, legal structure, material criticality, employees’ distance to the supply chain function, company culture and industry culture, could be identified as factors that influence the urgency of stakeholders’ sustainability claims and thus FT suppliers’ perceived sustainability pressure. Moreover, with regard to the OEM stakeholder group, it was found that, depending on the urgency of OEMs’ sustainability claims, FT suppliers align their sustainable SS processes to the actions and expectations of different stakeholder groups and thus fulfill the OEM’s sustainability expectations to varying degrees. Thus, our study contributes empirical knowledge to this so far underrepresented research field and is moreover beneficial for decision makers.
Highlights
Driven by various trends such as ever increasing outsourcing and stakeholder pressure on environmental and social standards, expectations with regard to sustainably managing companies and corresponding supply chains are gaining significant momentum in recent years (e.g., Carter and Easton 2011; Schneider et al 2014; Foerstl et al 2015)
Grounded on a cross-case study approach of five FT suppliers, two associations and three non-governmental organizations (NGOs) as well as stakeholder theory, this paper investigates how different stakeholder groups are influencing the integration of sustainability aspects into FT suppliers’ supplier selection (SS) processes
FT suppliers within the automotive sector have been selected as our unit of analysis since (1) approximately 75% of a car’s value creation takes place on a supplier level (OICA 2018), giving upstream processes a significant influence on company metrics, (2) stakeholder expectations and requirements concerning sustainability are increasingly articulated on a product and operations level, making sustainability as a whole a strategic issue in the automotive industry (Koplin et al 2007; Orsato and Wells 2007; Lienland et al 2013), and (3) supply chain management in the automotive industry is characterized by relatively long supply chains (Choi and Hong 2002) compared to those of other industries such as the textile, chemical or food industry
Summary
Driven by various trends such as ever increasing outsourcing and stakeholder pressure on environmental and social standards, expectations with regard to sustainably managing companies and corresponding supply chains are gaining significant momentum in recent years (e.g., Carter and Easton 2011; Schneider et al 2014; Foerstl et al 2015). Sustainable supplier management plays a decisive role in building sustainable supply chains and to achieve economic, environmental and social benefits (Luzzini et al 2014; Zimmer et al 2016). Suppliers which carefully integrate environmental and social concerns may support their customers through increased efficiency, fewer operational disruptions, fewer reputational consequences, or through a robust image. This is especially crucial when considering the fact that focal companies are often made responsible for their suppliers’ failures (Dai and Blackhurst 2012; Theißen and Spinler 2014; Zimmer et al 2016). The tier suppliers and especially the first-tier (FT) suppliers in the upstream supply chain play a crucial role in enhancing and safeguarding a sustainable supply chain (Wilhelm et al 2016a)
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