Social sustainability in the Malaysian rice supply chain:an institutional theory perspective

Abstract

In recent years, Sustainable Supply Chain Management (SSCM) research has gained interest from both scholars and practitioners as a way forward in addressing significant sustainability issues in the supply chain. In comparison to environmental and economic sustainability issues, less attention has been paid to social sustainability issues in the supply chain. Hence, this study seeks to address this research gap by exploring the institutional pressures, institutional logics, institutional complexity, barriers and enablers associated with implementing socially SSCM, specifically from the multi-stakeholder perspective in a developing country context. Using the multi case study approach, this study present evidence from three tiers of the Malaysian rice supply chain – the retailer and distributor and farmer tiers; as well as evidence on the roles of external stakeholders – government and non-government organisations (NGOs). This thesis developed a conceptual framework and proposes novel interactions between institutional pressures, institutional logics, institutional complexity, barriers and enablers. Using the empirical findings to clarify these relationships, the study contributes towards a better understanding of the implementation of social sustainability in the supply chain. First, the evidence has illustrated the role of enablers, i.e. management support, compliance with labour law and compliance with certification requirements, on strengthening the impact of institutional pressures, e.g. government enforcement of immigration laws, employee social security provision, employee provident fund, and MyGAP certifications, on supply chains in order to achieve positive isomorphism. On the other hand, evidence related to barriers, i.e. behavioural issues, high cost, market forces, process delay, lack of resources, lack of expertise, lack of clear guidelines and poverty, indicates that they have reduced the impact of institutional pressures leading towards slower isomorphism. The study also uncovers institutional logics that influence the way organisations respond to social sustainability initiatives. In particular, despite persistent institutional pressures, the evidence suggests that financial logics will remain dominant in commercial supply chains. Specifically, this is due to the way in which financial logics will tend to influence the perceived barriers. For example, high cost is perceived to be a strong barrier for organisations when profitability logic is strong. Hence, when financial logics influence barriers, this could in turn reduce the impact of institutional pressures. On the other hand, sustainability logic is likely to be more prevalent when enablers are present. For example, management support is stronger when organisations have sustainability logic. Hence, sustainability logic can increase the effectiveness of enablers and consequently, strengthen the relationship between institutional pressures and increased social sustainability. Finally, the stakeholders i.e. Government and NGOs have a significant role in the implementation of socially SSCM. In particular, Government exerts coercive pressures for social initiatives such as the enforcement of immigration laws, employee social security, employee provident fund, and MyGAP certifications. On the other hand, NGOs are promoting normative pressures such as upstream/downstream education through knowledge fairs and training programs for the supply chain. Furthermore, NGOs were found to extend their support to assist the supply chain to gain political influence, government financial support and seek new markets for socially sustainable products.