SUSTAINABLE GLOBAL SUPPLIER MANAGEMENT: THE ROLE OF DYNAMIC CAPABILITIES IN ACHIEVING COMPETITIVE ADVANTAGE

TLDR

Organizations face mounting stakeholder pressure to embed corporate responsibility and sustainability across operations, with legal and extra‑legal demands evolving rapidly, especially as outsourcing and global supply chains shift spending toward emerging markets and expose firms to reputational risk from supplier misconduct. The study extends the dynamic capabilities framework to examine how purchasing and supply management integrates sustainability into global supplier management processes. The authors analyze four chemical‑industry case studies to assess the development and impact of sustainable global supplier management capabilities. They find that robust SGSM capabilities generate competitive advantage, are path‑dependent, and provide greater benefits for early adopters responsive to stakeholder pressure.

Abstract

Organizations face increased pressure from stakeholders to incorporate a plethora of corporate responsibility (CR) and sustainability aspects in their business practices. Legal and extra-legal demands are dynamically changing; almost no organizational function is unaffected. Owing to the outsourcing wave of the last decade, in particular purchasing and supply management (PSM) plays an ever more important role in assuring sustainable production of the firm's products offered in the marketplace. The supply base of many Western firms has become increasingly global and spend volumes have shifted towards emerging countries. In order to avoid the risk of reputational damage to the buying company, the PSM department must ensure that their international suppliers comply with their corporate codes of conduct and that environmental and social misconduct at supplier premises does not occur. In this paper, “sustainability” refers to the pursuit of the tripartite of economic, environmental, and social performance. We contribute to prior research in the fields of sustainability and CR by extending insights of the dynamic capabilities view to analyze how the PSM function integrates sustainability aspects in its global supplier management processes. Based on four case studies in the chemical industry, we propose that profound sustainable global supplier management (SGSM) capabilities are a source of competitive advantage. These capabilities are path dependent and particularly valuable when organizations are receptive to external stakeholder pressure. Early movers in the field of SGSM reap competitive benefits to a notable extent as a result of resource accumulation and learning processes over time.