Supplier selection at the base of the chain: navigating competing institutional logics for shared mutual value

Abstract

PurposeTraditional purchasing best practices primarily follow a commercial logic and may not necessarily be applicable for social enterprises (SEs) supplier selection. This study examines how SEs focused on poverty alleviation select suppliers amidst competing institutional logics to achieve both social impact and economic performance.Design/methodology/approachA grounded theory methodology is applied to guide semi-structured interviews with 18 fair trade verified SEs. Constant comparison methods aided in determining the point of data saturation was reached.FindingsThe results of this study indicate that SEs select marginalized suppliers based on implicit criteria that is initially based on social-welfare logic and then through a blend of commercial and social-welfare logic based on company structure.Originality/valueThis study is the first to reveal that SEs addressing social issues do not follow the traditional criteria for supplier selection but have their own unique selection criteria when selecting suppliers.