Drivers and Enablers That Foster Environmental Management Capabilities in Small‐ and Medium‐Sized Suppliers in Supply Chains

TLDR

Small‑ and medium‑sized enterprises often lack the capabilities and resources to respond to environmental pressures, which can harm large buying firms. The study aims to map the factors that initiate and improve environmental capabilities in small‑ and medium‑sized suppliers over time. Using a case‑study method with multiple suppliers of two large buying firms, the authors identified mechanisms by which buyers’ green supply‑chain management and internal championing drive capability development. Buyers’ green supply‑chain management and internal championing of environmental concerns jointly foster resource acquisition and capability development, creating synergistic linkages that, when integrated with prior research on larger suppliers, form a framework guiding suppliers, buyers, and public agencies to enhance environmental performance.

Abstract

The limited capabilities and resources available within many small‐ and medium‐sized enterprises frequently hamper an effective response to environmental pressures, which in turn hurts large buying firms (i.e., customers). Using a case study method with multiple suppliers of two large buying firms, we mapped factors that initiated and improved environmental capabilities in small‐ and medium‐sized enterprises over time. Through several specific mechanisms, buyers' green supply chain management initiated and then enabled the improvement of suppliers' environmental capabilities. Independent of buyers, internal championing of environmental concerns also provided an impetus for small‐ and medium‐sized enterprise suppliers to acquire resources outside the supply chain. Thus, synergistic linkages emerged in supportive buyer‐supplier relationships, resource acquisition, and capability development. When these findings are combined with earlier research on larger suppliers, an integrative framework emerges that provides direction for suppliers, buyers, and public agencies seeking to improve environmental performance.