Strategic Alliances for the Management of Multi-tier Supply Chains with Focus on Sustainability

Abstract

As focal companies nowadays are held responsible for everything that occurs in their supply chains, they not only have to manage their first-tier suppliers but also their lower-tier suppliers in order to prevent reputational damage resulting from sustainability violations in their upstream supply chains. Involving sub-suppliers in supplier management practices creates new challenges due to sub-supplier specific characteristics, which can be tackled more efficiently in collaboration with other firms. Thus, our empirical study investigates assessment sharing strategic alliances (ASSAs) through the conduction of an embedded multiple case study in the railway, telecommunication and pharmaceutical industry. We examine how companies collaborate within ASSAs to manage suppliers with respect to sustainability and reveal resulting effects on the management of suppliers within multi-tier supply chains. Results show that supplier assessment and optionally supplier collaboration practices are performed collaboratively among the alliances’ members. Even though all ASSAs in general improve suppliers’ compliance with a focal company’s corporate sustainability standard, the degree of improvement strongly depends on the respective ASSA’s configuration. Configurations such as compulsory centrally controlled follow-up activities, a high degree of jointly executed supplier collaboration practices and the involvement of suppliers in ASSAs are especially beneficial.