Supply chain learning of sustainability in multi-tier supply chains

TLDR

The study investigates how multinational corporations orchestrate internal and external resources to enable multi‑tier supply chains to learn sustainability knowledge. The authors conducted an exploratory multiple‑case study of three Chinese MNCs, gathering data from 43 semi‑structured interviews with managers of the firms and their suppliers. The study finds that MNCs facilitate sustainability learning by orchestrating resources both broadly—through new internal departments and third‑party collaborations—and deeply—by directly engaging upstream suppliers with varied governance mechanisms throughout the project lifecycle—leading to structural changes in the supply chain and offering a framework for designing sustainable initiatives.

Abstract

Purpose The purpose of this paper is to explore how multinational corporations (MNCs) orchestrate internal and external resources to help their multi-tier supply chains learn sustainability-related knowledge. Design/methodology/approach An exploratory multiple case study approach was adopted and three MNCs’ sustainable initiatives in China were examined. The data were primarily collected through 43 semi-structured interviews with managers of focal companies and their multi-tier suppliers. Findings The authors found that in order to facilitate their supply chains to learn sustainability, MNCs tend to orchestrate in breadth by internally setting up new functional departments and externally working with third parties, and orchestrate in depth working directly with their extreme upstream suppliers adopting varied governance mechanisms on lower-tier suppliers along the project lifecycle. The resource orchestration in breadth and depth and along the project lifecycle results in changes of supply chain structure. Practical implications The proposed conceptual model provides an overall framework for companies to design and implement their multi-tier sustainable initiatives. Companies could learn from the suggested learning stages and the best practices of case companies. Originality/value The authors extend and enrich resource orchestration perspective (ROP), which is internally focused, to a supply chain level, and answer a theoretical question of how MNCs orchestrate their internal and external resources to help their supply chains to learn sustainability. The extension of ROP refutes the resource dependence theory, which adopts a passive approach of relying on external suppliers and proposes that MNCs should proactively work with internal and external stakeholders to learn sustainability.