Full length article
Enablers of sustainable supply chain management and its effect on competitive advantage in the Colombian context

https://doi.org/10.1016/j.resconrec.2018.08.018Get rights and content

Highlights

  • Top and middle management support and strategic purchasing are enablers to the adoption of sustainable supply chain practices.

  • The adoption of social supply chain practices tends to enhance competitive advantage.

  • Features of a developing country context help to understand the link between social practices and competitive advantage.

Abstract

This article aims to evaluate whether the enablers top and middle management support and strategic purchasing facilitate the development of sustainable supply chain practices, as well as the effect of the latter on competitive advantage (CA). Partial least squares structural equation modelling (PLS-SEM) was applied to test the proposed model based on a sample from companies operating in Colombia. The main hypotheses of the research were supported, implying that a suitable combination between internal enablers and the adoption of sustainable supply chain practices is important to pursue competitive advantage. However, the hypothesis for the expected effect of environmental practices wasn’t supported, suggesting that there is a win-win perspective between social practices in supply chains and competitive advantage in the context of emerging economies. And the analysis of the non-supported hypothesis is one of the contributions of the article.

Introduction

Currently, businesses and their supply chains are challenged to pursue their objectives and conduct their operations in an increasingly open and unstable world (Winston, 2014). This scenario is particularly demanding when considering stakeholders’ requests for economic, social and environmental performance within focal firms’ supply chains (Seuring and Muller, 2008). These requests are relative to the application of sustainability to supply chains, that is, sustainable supply chain management (SSCM) (Carter and Rogers, 2008). Recent literature suggests that in response to these requests, companies need to develop new specific capabilities (Bowen et al., 2001; Liu et al., 2013; Meixell and Luoma, 2015; Paulraj, 2011; Sarkis, 2012; Shi et al., 2012).

The above considerations are particularly important for developing or emerging economies, where SSCM practices and corporate social performance have not been widely addressed by the academic and business communities, in comparison to studies conducted in developed countries (Jabbour et al., 2017; Fahimnia et al., 2015; Kusi-Sarpong and Sarkis, 2017; Mani et al., 2018; Silvestre, 2015a, b).

Some of the factors that hinder the adoption of SSCM practices in developing countries are the high complexity and uncertainty of the business environment. In turn, these factors can be associated with institutional voids, corruption, poor infrastructure, poverty, inequality, and informal employment (Silvestre, 2015a). Thus, the study of SSCM in Latin America can address the need for empirical and theoretical work in a context that lacks proper research on the subject (de Morais, 2017, p. 33).

In particular, empirical studies of specific enablers and outcomes of social sustainability adoption in developing countries remain rare (Köksal et al., 2018; Mani and Gunasekaran, 2018, p. 150). Consequently, this article aims to evaluate whether two enablers – top and middle management support, and strategic purchasing – facilitate the development of SSCM practices (considered organizational capabilities), as well as the effect of the latter on the CA of focal firms located in the city of Bogotá, Colombia.

We intend to achieve these objectives by addressing the following research questions:

RQ1: Do top and middle management support and strategic purchasing affect the adoption of SSCM practices in the context of a developing economy?

RQ2: Does any competitive advantage accrue for firms that implement social and environmental supply chain management practices in the context of a developing economy?

We expect to contribute to the field of SSCM by providing evidence on whether the development of social and environmental supply chain capabilities benefits from a strategic view of the purchasing function and top and middle management support. Additionally, we intend to fulfil the need for empirical studies that address the relationship between sustainable supply chain practices and competitive advantage in the context of Latin American countries.

The article has been underpinned by the following previous findings and arguments from the literature of the field of SSCM.

Golicic and Smith (2013, p. 82) argue that “specific supply chain practices, such as environmentally related practices, also represent capabilities that contribute to the variation in performance across firms”. In turn, CA depends on how well firms develop these capabilities to deal with the natural environment (Fowler and Hope, 2007; Masoumik et al., 2015). Thus, it can be inferred that the adoption of SSCM practices refers to an organizational capability and leads to firm performance. For example, Marshall et al. (2015a) and Lee et al. (2016) conceptualize environmental and social supply chain management with a resource-based logic.

Enablers are factors that facilitate the adoption of SSCM practices by a focal firm (Sancha et al., 2015). SP, understood as organizations’ recognition of the strategic relevance of the purchasing function, has been identified as an important enabler of the implementation of more advanced supply management practices (Chen et al., 2004; González-Benito, 2007; Sánchez-Rodríguez, 2009) and SSCM practices (Bowen et al., 2001; Jaenglom and Tariq, 2013; Tay et al., 2015).

On this subject, Large and Thomsen (2011) argue that SP exerts an important effect on facilitating the adoption of green purchasing and environmental collaboration with suppliers. However, with the exception of the studies by Bowen et al. (2001), Knight et al. (2017), Large and Thomsen (2011) and Paulraj (2011), the literature contains little empirical research on the relationship between SP and sustainable supply chain practices. Simultaneously, in many organizations, the purchasing function remains a low priority (Johnsen et al., 2014).

These studies emphasize that one of the main features of SP is a buyer-supplier collaborative relationship characterized by strong inter-organizational interactions as an enabler of sustainability practices in the supply chain. Therefore, the purchasing function plays a significant role in enabling firms to accomplish strategic objectives due to the increase in organizational efficiency through strong collaboration with the firm’s suppliers (Knight et al., 2017). Without a strategically orientated purchasing function, organizations cannot take advantage of the specialized capabilities from their suppliers (Johnsen et al., 2014), which is coherent with the work of Kirchoff et al. (2016) and Oelze (2017), who suggest that strategic aspects as enablers have been identified as crucial for the successful implementation of SSCM practices.

Although SP seems to be an important enabler of sustainable supply chain practices, SSCM requires support from top and middle management. Support from top management has an important role in strategy formulation and implementation, as well as in the provision of financial resources to promote social and environmental activities within the organization and in its supply chain (Dubey et al., 2016; Floyd and Wooldridge, 1994; Kor, 2006; Tobescu and Seuring, 2013). Thus, management commitment has been suggested as a central enabler for the sustainable management of supply chains (Mathivathanan et al., 2018; Oelze, 2017, p. 15;), which is coherent with studies that suggest that social and environmental practices in the supply chain have similar organizational antecedents (Marshall et al., 2015b).

In summary, this article aims to evaluate whether two enablers – top and middle management support and strategic purchasing – facilitate the development of SSCM practices (considered organizational capabilities), as well as the effect of the latter on the CA of focal firms located in the city of Bogotá, Colombia.

Colombia is the third largest economy in Latin America and the Caribbean. Although lower oil prices have put a strain on economic growth, Colombia is still one of the region’s best economic performers (Jansen and Veeneman, 2016, p. 6). However, despite major economic, environmental and social advances made in Colombia in recent years, the country still has not been able to overcome structural problems associated with the concentration of economic activity in a few sectors, its reliance on products with low technological content, low levels of productivity and high inequality. In particular, social and environmental management activities are conducted primarily within companies but not integrated along value chains (OECD, 2015).

A key challenge for Colombia in the coming years deals with the implementation of signed peace agreements with the main insurgent group after an internal conflict of more than 50 years. The implementation of the agreement – which includes, among other actions, investment in the rural economy, land restitution, and the reintegration of combatants into society – without eroding Colombia’s natural and social capital is critical, as Clerici et al. (2016) point out. Thus, the post-conflict environment in Colombia could offer opportunities for companies to redefine their role in society and contribute to sustainable and inclusive economic growth.

In this regard, two important steps to boost the productivity and competitiveness of supply chains and thus contribute to making growth more resilient, greener and socially equitable in Colombia, are strengthening the role of higher-value primary and agriculture sectors, and developing sustainable value chain practices (OECD, 2015; Jansen and Veeneman, 2016). For these reasons, this context appears as a relevant background to study the enablers of sustainable supply chain management and its relationship with CA.

To achieve our research objectives, this paper is organized as follows. First, the hypotheses and the research framework adopted in this study are introduced. The next section describes the sample and research methods. The article continues with the study's findings and a discussion of their implications, and then ends with the conclusions, which also identify the limitations of the study, provide some managerial implications and present directions for future research.

Section snippets

Hypotheses and research framework

This section briefly introduces a set of hypotheses that are organized into a conceptual framework that can be empirically tested to explore the stated relationships.

Methodology

The study adopts a quantitative research design implemented through the development and application of a self-assessment survey research instrument comprising 69 items (Appendix A). This survey questionnaire incorporates items obtained from both the extant literature and developed from an initial qualitative study that conducted in-depth interviews with company executives from four different firms and performed a content analysis of the data. Departing from an extensive (non-exhaustive) review

Evaluation of the measurement model

Internal consistency reliability, convergent validity and discriminant validity were assessed using composite reliability indices (CR), Cronbach's alpha, average extracted variance (AVE) and cross loadings of the indicators, respectively. All these criteria satisfied the cut-off values suggested in the literature (Fornell and Larcker, 1981; Hair et al., 2014) (Table 1, Table 2, Table 3).

Evaluation of the structural model

To evaluate the structural model, the primary evaluation criteria used were the coefficients of determination

Discussion

Rooted in a resource-based perspective and a review of the extant SSCM literature, this research evaluated whether two enablers – top and middle management support and strategic purchasing – facilitate the development of sustainable supply chain practices (organizational capabilities), as well as the effect of the latter on CA. The literature claims that social issues are lacking from most SCM analyses and that much work needs to be done to incorporate them into future research and practice.

Conclusions

Drawing from a theoretical framework rooted in the RBV, this article aimed to evaluate whether two enablers – top and middle management support and strategic purchasing – facilitate the development of sustainable supply chain practices (organizational capabilities), as well as the effect of the latter on the CA of a group of 126 focal firms in the city of Bogotá, Colombia. The testing of the proposed framework indicated positive relationships between the factors involved, with the exception of

Acknowledgements

The authors are very thankful to Escuela Colombiana de Ingeniería Julio Garavito. Universidad Nacional de Colombia and Montpellier Business School for their research support.The researchers would like to also thank the companies and participants from industry and government who took the time to be involved in this research. Finally, the authors are also very much thankful to the anonymous peer reviewers for their valuable comments.

References (200)

  • I.J. Chen et al.

    Towards a theory of supply chain management: the constructs and measurements

    J. Oper. Manag.

    (2004)
  • I.J. Chen et al.

    Strategic purchasing, supply management, and firm performance

    J. Oper. Manag.

    (2004)
  • T.A. Chin et al.

    Green supply chain management, environmental collaboration and sustainability performance

    Procedia CIRP

    (2015)
  • D. Delmonico et al.

    Unveiling barriers to sustainable public procurement in emerging economies: evidence from a leading sustainable supply chain initiative in Latin America

    Resour. Conserv. Recycl.

    (2018)
  • R. Dubey et al.

    Green supply chain management enablers: mixed methods research

    Sustain. Prod. Consum.

    (2015)
  • R. Dubey et al.

    Towards, a theory of sustainable consumption and production: consructs and measurement

    Resour. Conserv. Recycl.

    (2016)
  • T.K. Eltayeb et al.

    Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: investigating the outcomes

    Resour. Conserv. Recycl.

    (2011)
  • A. Esfahbodi et al.

    Sustainable supply chain management in emerging economies: trade-offs between environmental and cost performance

    Int. J. Prod. Econ.

    (2016)
  • B. Fahimnia et al.

    Green supply chain management: a review and bibliometric analysis

    Int. J. Prod. Econ.

    (2015)
  • F.J. García-Rodríguez et al.

    Implementation of reverse logistics as a sustainable tool for raw material purchasing in developing countries: the case of Venezuela

    Int. J. Prod. Econ.

    (2013)
  • I. Gavronski et al.

    A resource-based view of green supply management

    Transp. Res. Part E Logist. Transp. Rev.

    (2011)
  • C. Gimenez et al.

    Sustainable operations: their impact on the triple bottom line

    Int. J. Prod. Econ.

    (2012)
  • E. Hassini et al.

    A literature review and a case study of sustainable supply chains with a focus on metrics

    Int. J. Prod. Econ.

    (2012)
  • S.U. Hoejmose et al.

    Socially and environmentally responsible procurement: a literature review and future research agenda of a managerial issue in the 21st century

    J. Purch. Supply Manage.

    (2012)
  • S. Hoejmose et al.

    Green” supply chain management; the role of trust and top management in B2B and B2C markets

    Ind. Mark. Manage.

    (2012)
  • S.U. Hoejmose et al.

    Is doing more doing better? The relationship between responsible supply chain management and corporate reputation

    Ind. Mark. Manage.

    (2014)
  • Md.S. Islam et al.

    Assesing green supply chain practices in Bangladesh using fuzzy importance and performance approach

    Resour. Conserv. Recycl.

    (2018)
  • K.S. Khor et al.

    Reverse logistics in Malaysia: investigating the effect of green product design and resource commitment

    Resour. Conserv. Recycl.

    (2013)
  • P. Ahi et al.

    Measuring social issues in sustainable suppluy chains

    Meas. Bus. Excell.

    (2015)
  • H.B. Ahmadi et al.

    Assessing the social sustainability of supply chains using best worst Method

    Resour. Conserv. Recycl.

    (2017)
  • R.J. Alsop

    Corporate reputation: anything but superficial-the deep but fragile nature of corporate reputation

    J. Bus. Strategy

    (2004)
  • J.C. Anderson et al.

    Structural equation modeling in practice: a review and recommended two-step approach

    Psychol. Bull.

    (1988)
  • Z.N. Ansari et al.

    Exploring the framework development status for sustainability in supply chain management: a systematic literature synthesis and future research directions

    Bus. Strategy Environ.

    (2017)
  • J.A. Aragón-Correa et al.

    A contingent resource-based view of proactive corporate environmental strategy

    Acad. Manage. Rev.

    (2003)
  • R. Arend

    Social and environmental performance at SMEs: considering motivations, capabilities, and instrumentalism

    J. Bus. Ethics

    (2014)
  • N.A. Aya Patrana et al.

    Corporate social responsibility: perceptions and practices among SMEs in Colombia

    Public Relat. Rev.

    (2014)
  • D.S. Bido et al.

    Destruction of measurement scale through exploratory factor analysis in production and operations research

    Gest. Prod.

    (2018)
  • F.E. Bowen et al.

    The role of supply management capabilities in green supply

    Prod. Oper. Manage.

    (2001)
  • E.M. Burke

    Corporate Community Relations: The Principle of the Neighbor of Choice

    (1999)
  • J. Cambra-Fierro et al.

    Sustainable business practices in Spain: a two-case study

    Eur. Bus. Rev.

    (2011)
  • J.L. Campbell

    Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility

    Acad. Manage. Rev.

    (2007)
  • A.S. Carr et al.

    The impact of purchasing and supplier involvement on strategic purchasing and its impact on firm’s performance

    Int. J. Oper. Prod. Manag.

    (2002)
  • A.B. Carroll et al.

    The business case for corporate social responsibility: a review of concepts, research and practice

    Int. J. Manag. Rev.

    (2010)
  • C.R. Carter et al.

    A framework of sustainable supply chain management: moving toward new theory

    Int. J. Phys. Distrib. Logist. Manag.

    (2008)
  • M. Chavan

    An appraisal of environment management systems A competitive advantage of small businesses

    Manag. Environ. Qual. Int. J.

    (2005)
  • Y.S. Chen et al.

    Enhance environmental commitments and green intangible assets toward green competitive advantages: an analysis of structural equation modeling (SEM)

    Qual. Quant.

    (2013)
  • C.J.C. Chiappetta Jabbour et al.

    Latin America: research opportunities on management for sustainable

    Latin Am. J. Manage. Sustain. Dev.

    (2014)
  • W.W. Chin

    The partial least squares approach to structural equation modeling

  • W.W. Chin

    How to write up and report PLS analyses

  • J.-Z. Chiu et al.

    The impact of restaurants’ green supply chain practices on firm performance

    Sustainability

    (2016)
  • Cited by (0)

    View full text