Multi-tier sustainable supply chain management: The role of supply chain leadership

Abstract

Sustainable Supply Chain Management (SSCM) has been considered increasingly important by both industry and academia in recent years. Among the main streams of SSCM research, little is known on how multi-national corporations (MNCs), assuming leadership in their supply chain, have been able to facilitate their supply chain members to learn sustainability practice in an emerging economy context. To answer this research question, a multiple-case study was designed. Multi-tier supply chains of three MNCs were selected to investigate their proactive sustainability projects in China. A framework was proposed based on the constructs of supply chain leadership, multi-tier supply chain governance, multi-tier supply chain structure and supply chain learning. We found that the combined effect of supply chain leadership and governance mechanisms affects both supply chain structure and supply chain learning and MNCs change their supply chain structure to facilitate supply chain learning. Three sets of propositions are advanced and implications for future research are elucidated.

Introduction

Since the early 2000s, Sustainable Supply Chain Management (SSCM) has drawn much attention from both industry and academia alike. Organizations review their products and processes in order to deliver more environmental friendly products and services. A high number of papers have been published to follow the trend (Seuring, 2013). Of the SSCM research, existing literature is focused on building the definitions of SSCM - defining SSCM and building the related roadmaps and frameworks (Carter and Rogers, 2008, Seuring and Muller, 2008); some start looking at the implementation of SSCM (Lam, 2011, Walker and Jones, 2012); while others discuss the strategies of SSCM (Seuring and Muller, 2008, Harms et al., 2013). Most authors focus their discussion on the enablers and barriers for organizations implementing SSCM (Seuring and Muller, 2008, Walker et al., 2008, Gimenez and Tachizawa, 2012, Walker and Jones, 2012, Harms et al., 2013). Some focus the debate on SSCM governance mechanisms (Mamic, 2005, Gimenez and Tachizawa, 2012); others consider the decisions to pursue sustainability in a complex and uncertain environment (Pagell and Wu, 2009, Wu and Pagell, 2011).

In recent years, the research interest in SSCM has shifted from focusing on focal companies to Tier 1 suppliers (Wilhelm et al., 2016a, Wilhelm et al., 2016b) and multi-tier supply chains (Mena et al., 2013, Grimm et al., 2014, Tachizawa and Wong, 2014). However, among these studies, very few contributions (e.g. Defee et al., 2009a, Defee et al., 2009b, Defee et al., 2010, Gosling et al., 2016) focus on the role of supply chain leadership in the implementation of sustainable initiatives in a multi-tier SSCM context, although organization leadership is believed to be vital to win competitive advantage. Biotto et al. (2012) provide a single case study of Illycaffe Group, focusing on quality oriented supply chain learning where Illycaffe played a supply chain coordinator role (and a leader role) in order to efficiently and effectively manage quality along the whole supply chain. They conclude that the coordination of supply chain learning needs substantial effort and resource commitment from the leader organization (Biotto et al. (2012)).

We study the MNCs' SSCM practices in China because China is the ‘factory of the world’ (Harney, 2008) and is still one of the most rapidly developing centres of production in the world (Biggermann and Fam, 2011). On the other hand, China has also been the ‘largest carbon emission country’ and ‘largest energy consumer country’ (Chinese Academy of Sciences, 2012). Since academic and anecdotal evidence show that MNCs are leaders of their supply chains in China, many Chinese suppliers and customers are attempting to learn sustainability initiatives of MNCs. Thus, to address the gaps in the literature (lack of answer to how to implement and lack of research on SSCM in multi-tier supply chains), we attempt to explore the below research question:

“What role does MNC's supply chain leadership play in learning of sustainability in multi-tier supply chains?”

We attempt to draw insights from emerging areas of research in SCM, namely: multi-tier SSCM, supply chain leadership; and supply chain learning for the investigation of the topic. To the best of our knowledge, there is no previous research studying SSCM through the lenses of supply chain leadership and supply chain learning in a multi-tier supply chain context (Gosling et al., 2016).

This research contributes to the SSCM literature in the following ways: first, it may be the first empirical attempt that applies both supply chain learning and leadership lenses to investigate SSCM and to answer the research question of how to implement sustainable initiatives. This helps to explain how MNCs implement sustainable initiatives in China; second, this research enriches our understanding of the role of organizational leadership in MNCs' SSCM, in particular the role of supply chain leadership in the leaning of sustainability; third, the research contributes to the multi-tier supply chain management research through adopting new lenses of supply chain leadership and supply chain learning.

After this introduction, section 2 provides a literature review on the research that has been undertaken on the key concepts; section 3 presents the case study research method; sections 4 and 5 present the within and cross case analysis of the three cases regarding the similarities and differences and identifying patterns; section 6 discusses the case findings against the reviewed literature and develops a number of propositions; Finally, section 7 summarizes theoretical and practical contributions, acknowledges limitations of the research and indicates potential research directions.