An exploration of supplier selection practices across the supply chain

The US auto industry has undergone tremendous changes during the past decade. Companies have increased their level of out-sourcing and are relying more heavily on their supply chain as a source of their competitive advantage. Thus, determining which suppliers to include in the supplier chain has become a key strategic consideration. However, previous studies of supplier selection have not considered a company's position in the supply chain. In this paper, we compare supplier-selection practices based on a survey of companies at different levels in the auto industry. Our findings rebut the common thinking that indirect suppliers who are more involved in commodity purchasing emphasize initial price and de-emphasize relational considerations. We learned that selecting suppliers based on the potential for a cooperative, long-term relationship is just as important to direct and indirect suppliers as it is to the auto assemblers. We also learned that price is one of the least important selection items, regardless of position on the supply chain. Further, contrary to the existing understanding that quality and delivery are separate constructs, they formed a single construct in our study. To summarize the empirical results, no differences among the auto assemblers, direct suppliers, and indirect suppliers were found for the importance placed on consistency (quality and delivery), reliability, relationship, flexibility, price, and service. Statistically significant differences were found between the auto assemblers and indirect suppliers on the importance placed on technological capability and financial issues.     

Governing local supplier opportunism in China: Moderating role of institutional forces

China provides a vast and prominent manufacturing base, so curtailing its local supplier opportunism represents a primary concern for local and foreign buyers. Drawing on institutional theory, this study examines how regulatory uncertainty and relationship structure moderate the role of contracts and trust in restricting local supplier opportunism in China. An analysis of 293 buyer–supplier dyads in China reveals that contracts are more effective in deterring supplier opportunism when regulatory uncertainty is high. In addition, contracts help curtail opportunism more in domestic, compared with international, buyer–supplier relationships, whereas trust is more effective in restricting supplier opportunism in international relationships than in domestic ones.     

Corporate sustainability and institutional shareholders: The pressure of social responsible pension funds on environmental firm practices

This paper analyses the role of social responsible (SR) pension funds as influential institutional shareholders in the corporate sustainability of investee firms. We study the influence of 197 UK SR pension funds on 1,253 firms with 31 environmental, social, and governance (ESG) indicators from 2002 to 2018. According to the indicator nature, we perform logit and ordinary least square (OLS) estimations with panel error correction models to control causality. Our results show that SR pension funds significantly impact on 41.93% of the ESG indicators studied. We find that larger pension‐fund shareholding positively influences on ESG firm performance and encourages proactive behaviour towards environmental practices. Firms with larger pension‐fund shareholding are more likely to use renewable energies and disclose environmental information, increasing the firm transparency towards stakeholders. This study contributes to understand that, besides stakeholders, institutional shareholders (SR pension funds) demand sustainable development and are able to transfer important values for the society and the environment to corporate governance.     

Understanding the dynamics of global supply chain sustainability initiatives: The role of institutional distance from the buyer's perspective

Research points to sustainable supply chain management as a core strategic goal for most global firms. However, managers continue to struggle with implementing successful sustainability initiatives both internally and throughout their globally dispersed supply chains. Using grounded theory, our findings uncover a potential explanation for how firms manage sustainability initiatives in the context of global supply chain management, from a buyer's perspective. Institutional theory of the firm is applied to help explain the challenges of developing and implementing global supply chain sustainability-related initiatives within buyer-supplier relationships. Analysis of the data from qualitative interviews show that institutional distance is an influential factor that produces mixed effects on the global buyer-supplier relationships in our sample in the context of buyer and supplier strategic orientation toward sustainability. The findings can help guide managers when approaching sustainability-related initiatives in the context of global supply chains. Theoretical and managerial implications are discussed as well as areas for future research.     

Sustainability in multi-tier supply chains: Understanding the double agency role of the first-tier supplier

In light of the growing complexity of globally dispersed, multi-tier supply chains, the involvement of first-tier suppliers has become instrumental in the quest for achieving sustainability compliance along the supply chain. We describe this new responsibility as the double agency role. We employ agency and institutional theory arguments to explore the conditions under which first-tier suppliers will act as agents who fulfill the lead firm's sustainability requirements (i.e., the primary agency role) and implement these requirements in their suppliers' operations (i.e., the secondary agency role). The findings from three in-depth case studies embedded in different institutional contexts highlight the importance for lead firms to incentivize each agency role separately and to reduce information asymmetries, particularly at the second-tier level. In addition, our inductive analysis reveals several contingency factors that influence the coupling of the secondary agency role of the first-tier supplier. These factors include resource availability at the first-tier supplier's firm, the lead firm's focus on the triple-bottom-line dimension (i.e., environmental or social), the lead firm's use of power, and the lead firm's internal alignment of the sustainability and purchasing function. We integrate our findings in a conceptual framework that advances the research agenda on multi-tier sustainable supply chains, and we subsequently outline the practical implications of assigning the double agency role to first tier suppliers.     

Making tough choices: A policy capturing approach to evaluating the tradeoffs in sustainable supplier development initiatives

This research explores the tradeoffs that decision makers are willing to make when implementing development initiatives to improve supplier sustainability performance. We employ a policy capturing methodology in which respondents are forced to choose between multiple potential sustainable supplier development initiatives. Data were collected from traditional and executive MBA students. The results suggest that when confronted with tradeoffs, decision makers value improvements in supplier cost savings and injury reduction equally, which was somewhat unexpected. Further, both improvements in supplier cost savings and injury reduction were valued over supplier emissions performance. Because we measure individual tradeoff preferences, multi-level regression analysis was used to better understand the impact of respondent value structure regarding sustainably developing suppliers. Our findings suggest a hierarchy of tradeoff preferences for decision makers as they pertain to sustainable supplier development. As the pressure to ensure supply chain sustainability increases, more firms will engage in sustainable supplier development. The outcomes of the choices they make when choosing between initiatives, and how managers make these choices, will be of increasing interest in both industry and academia. This research answers previous calls for further examination of decision maker tradeoff preferences in sustainable supply chain development.     

Antecedents of supply chain visibility in retail supply chains: A resource-based theory perspective

Although visibility has become a popular buzzword in the supply chain literature it remains an ill-defined and poorly understood concept. It is assumed that if companies across supply chains have visibility of demand, inventory levels, processes, etc., that organizational performance improves. This research explores the antecedents of high levels of supply chain visibility from a resource-based theory perspective across five different external supply chain linkages. We find that the level of visibility across these linkages differs considerably based on various contributing factors which are both technology and non-technology based. Using resource-based theory, we identify those factors that can give a sustainable competitive advantage to a supply chain linkage through a “distinctive” or high level of visibility.     

Implementing supply chain information integration in China: The role of institutional forces and trust

This study investigates the effects of Chinese companies’ institutional environment on the development of trust and information integration between buyers and suppliers. Three aspects of China's institutional environment are salient: legal protection, government support, and the importance of guanxi (interpersonal relationships). This study uses structural equation modeling to analyze data collected from 398 Chinese manufacturing companies. Government support and importance of guanxi significantly affect trust, which subsequently influences two elements of information integration, namely, information sharing and collaborative planning. Furthermore, the importance of guanxi has a direct, positive impact on information sharing, and government support has a direct, positive effect on both information sharing and collaborative planning.     

Lock-in situations in supply chains: A social exchange theoretic study of sourcing arrangements in buyer–supplier relationships

Social exchange theory is used to gain a better understanding of the relationship between a buyer and a supplier that is characterized by lock-in situations. We begin by reviewing the theoretical foundations of social exchange theory. Next, we use an illustrative multinational business example from a Danish Business Group to demonstrate the complexities of the lock-in situation. Conjectures related to lock-in behaviors are initially developed and then examined by means of a game-theoretic model. The analysis provides a basis for the development of propositions which are examined employing a behavioral experiment. The results indicate that the optimal pricing strategy of the supplier is to lower the price with increasing demand and the optimal investment intensity of the buyer decreases with increasing demand. The paper concludes by presenting directions for future research.     

The role of HRM practices in product development: Contextual ambidexterity in a US MNC’s subsidiary in India

Abstract

Recent studies have started exploring the linkages between organisational ambidexterity (OA) and HRM practices. OA is noted as a critical resource in achieving product, process, and business model innovations. By adopting an inductive case study of a US MNC subsidiary in India, we found empowerment-focused HRM practices were being used for exploration of new ideas and efficiency-focused HRM practices were adopted for the exploitation of the organisation’s existing strengths. Empowerment-focused HRM practices created a culture of openness and risk-taking, which facilitated the creation of an ambidextrous context. Further, ambidextrous learning was moderated by the adoption of a managerial/leadership style that focused on ‘mirroring competencies’ between the parent operation and its subsidiary. HRM practices were aimed at developing behaviours that valued the team-based co-development of graphic processor designs by means of a ‘parallel processing’ approach to product development. Additionally, the HRM practice of offering intrinsic employee rewards and both informal and formal training facilitated OA in delivering product innovation. This study represents a pioneering exploration of multiple levels of analysis (individual, functional, and organisational) for product innovation through the lenses of ambidexterity, innovation, and HRM practices. The implications for both theory and practice are also discussed.     

Sourcing for the base of the pyramid: Constructing supply chains to address voids in subsistence markets

Substantial work has described downstream distribution systems for subsistence markets, but little is known about how upstream supply chains support these efforts. We suggest that a multinational corporation (MNC) entering these markets must resolve the institutional voids in product, labor, and capital markets, as well as address issues of regulatory ambiguities and the lack of contracting mechanisms that exist at the raw material, manufacturing, distribution, and marketing stages of the supply chain. We analyze the nature of these voids and their challenges, map them onto the value chain, discuss their interconnections, and suggest that they do not impact all firms equally. We provide examples from the food, beverage, and textile industries of how four firms have addressed institutional voids in constructing their supply chains. We conclude by providing implications, both across the value chain and regarding the trade-offs of partnering with non-profit agencies. Our analysis highlights the importance of going beyond the broad impact of the institutional environment to understanding its more nuanced and multi-faceted effect on supply chains.     

Understanding the effect of market orientation on circular economy practices: The mediating role of closed-loop orientation in German SMEs

The implementation of circular economy (CE) practices is considered a key driver towards sustainable development of firms. Earlier studies point to the general strategic approach of market orientation as an antecedent to CE practice implementation. Still, insights are limited as the mechanisms underlying this relationship remain unclear. Based on a sample of 121 German small and medium-sized enterprises (SME), we empirically examine how the strategic approach of closed-loop orientation mediates the relationship between market orientation and the implementation of three types of CE practices. Using structural equation modelling, we find that while market orientation is positively related to all three types of CE practices, closed-loop orientation mediates these relationships for only two. Our study extends CE literature by suggesting that market orientation is translated into closed-loop orientation to spur CE practice implementation. We also offer a differentiated understanding of CE practice implementation in the context of German SMEs.     

Environmental management practices and financial performance using data envelopment analysis in Japan: The mediating role of environmental performance

This study investigates the relationship between environmental management practices (EMPs) and financial performance (FP) and consequently ascertains whether environmental performance (EP) can mediate the EMPs–FP nexus. Distinctly using data envelopment analysis and generalised method of moments techniques to analyse a comprehensive dataset of Nikkei 225 listed firms from 2007 to 2018 (1920 firm-year observations), our findings first suggest that EMPs have a positive effect on FP. Second, the desired EP can be achieved through the adoption of comprehensive EMPs. Third, improved EP has a substantial impact on shaping the EMPs' effect on FP. These findings are consistent with the predictions of resource-based view and institutional theories. The results are robust to controlling for different types of alternative measures and endogeneities. The findings have important implications for academics, investors, managers, policymakers and regulators.     

Understanding the adoption of project management in Serbian organizations: Insights from an exploratory study

The article contributes to our understanding of the drivers behind, and the nature of, project management implementation in the complex context of a transitional economy. Relevant insights are generated through an integrated and dynamic analysis of interviews and secondary data from a sample of local organizations, based on a conceptual model of strategic transformation. The analysis concludes with propositions about how both adoption of and resistance to project management implementation in the region could be understood from a strategic point of view, taking into account complex and dissonant circumstances of transition, history, cultural tradition, embedded social values, and identities of individual organizational members.     

Integrating sustainable development in the supply chain: The case of life cycle assessment in oil and gas and agricultural biotechnology

It is widely accepted that firms play an important stewardship role in addressing sustainable development concerns. A key challenge in this role is to balance the often conflicting pressures created by sustainable development—firm-level economic performance versus environmental degradation and social disruption. Drawing on complexity theory, risk management, stakeholder theory and the innovation dynamics literature, we discuss the problems of integrating sustainable development concerns in the supply chain, specifically the applicability of life cycle assessment (LCA). Many authors have emphasized the importance of the “cradle to grave” approach of LCA in optimizing closed-loop supply chains, improving product design and stewardship. Based on two case studies (an agricultural biotechnology and an oil and gas company) with supporting data collected from key stakeholders, we argue that sustainable development pressures have increased complexities and presented ambiguous challenges that many current environmental management techniques cannot adequately address. We provide a framework that addresses these deficiencies and discuss implications for practitioners and management theory.     

Organisational consequences of asymmetries in task dependence: the moderating role of HR practices

This study integrates recent advances in interdependence theory with the literature on commitment‐based HR practices. New research on interdependence theory suggests that differences, or asymmetries, in task dependence among organisational members can cause interests to diverge. Prior research has shown that this can negatively affect interpersonal relations, individual outcomes and team processes. However, these insights gained on the dyadic, individual and team levels of analysis have not yet been explored at the organisational level and, until now, no research had yet connected these advances in interdependence theory to the field of HRM research. Hence, the current study investigates (a) whether asymmetries in task dependence do (or do not) matter at the organisational level and affect organisational effectiveness, (b) why this relationship may work by assessing a key mediator, namely, trust climate and (c) if and how these relationships can be altered by commitment‐based HR practices. Our moderated‐mediation model was tested and fully supported by a multi‐source data set of 8,390 employees from 67 organisations.     

Interference among conflicting institutions and technical-economic conditions: the adoption of the Assessment Center in French,German, Italian,UK, and US multinational firms

We analyze the adoption of the Assessment Center (AC), one of the most complex human resource management techniques, in 161 British, French, German, Italian and US multinational firms both at the headquarters and in their Italian subsidiaries. Combining both quantitative analysis and qualitative accounts, we investigate how different and partially contradictory institutional influences stemming from national business systems and professions, global corporate networks and professions, and different technical-economic conditions affect the adoption of the AC. Our study shows that AC-diffusion is similar at headquarters level in all national contexts, testifying to the paramount importance of transnational institutions of Anglo-American origin for MNCs of any nationality, despite great local variation in the degree of institutionalization of the AC, which ranges from fully-fledged support in culture and the professions as, for example, in Germany, the UK and the USA, to weak or negative backing as in France and Italy. However, the study also reveals how different characteristics of the corporate field of firms with headquarters in different countries, as well as organizational size and labor market conditions, still explain adoption of the AC in their subsidiaries in Italy.     

The adoption of high performance work practices in small businesses: the influence of markets,business characteristics and HR expertise

This paper explores the extent to which the adoption of high performance work practices (HPWPs) in UK small businesses with less than 50 employees is associated with the nature of the market in which the business operates, its business characteristics and its access to HR expertise. Drawing on data from the 2004 Workplace Employment Relations Survey, the analysis suggests that, where market-related factors are concerned, the uptake of HPWPs is higher in small businesses that require a highly skilled workforce but is unrelated to either the degree of market competition or the presence of large dominant customers. In terms of access to HR expertise, the analysis finds greater use of HPWPs in small businesses that have contact with external sources of HR advice via membership of business advisory networks or Investors in People (IiP) recognition. However, uptake is unrelated to the presence of personnel/HR specialists. Overall, the findings suggest that rather than depicting employment practices in small businesses as the inevitable consequence of market circumstances, encouraging greater small business involvement with business advisory networks and IiP may have the potential to increase the adoption of HPWPs in the sector.     

Protecting expatriates in hostile environments: institutional forces influencing the safety and security practices of internationally active organisations

Abstract

The operations of internationally active organisations continue to encroach on hostile locations that are vulnerable to the negative consequences of crises such as political upheaval, terrorist attacks or natural disasters. Yet research into how firms ensure the physical and psychological safety and security of international staff in these locations is limited. This article reports an empirical study exploring the expatriate safety and security practices of 28 internationally active organisations from three industries that commonly operate in hostile environments. We unveil starkly different approaches across the three industries, and label these approaches ‘regulatory’ (mining and resources), ‘informal mentoring’ (news media) and ‘empowering’ (international aid and development). We use institutional theory to propose that these configurations reflect legitimacy-seeking choices that these organisations make in response to the various institutional environments that affect each sector. Our results provide a platform for initial theory building into the interrelated elements of organisations’ safety and security practices, and the institutional factors that shape the design of these.