Research Article
The effects of sustainable supply chain management on relational social capital and supplier sustainability performance: An integrative model of the fair, green, and responsible supply chain
Eco Frontier Co., Ltd.
Published: January 2014 · Vol. 43, No. 2 · pp. 275-302
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Abstract
Firms have increasingly reexamined their supply chains in response to a number of interrelatedeconomic, social, and environmental, collectively named as sustainability, challenges as theyhave faced a wide range of risks associated with their supply chains. With the emergence ofsustainability as a legitimate business concern in supply chain management (SCM), researchershave explored the drivers and the effects sustainable SCM as well as characteristics ofsustainable SCM. However, several important aspects have received little attention. First,very few studies have addressed fair, environmental, and social issues simultaneously in thesupply chain. Previous studies have generally focused on the environmental dimension of sustainableSCM. Second, the literature has provided mixed results on the relationship between sustainableSCM and performance. This implies that identification of intervening variables may provide abetter explanation of the direction of this relationship. Third, most previous studies have morefocused on large buying firms’ performance, and thus little attention have paid to suppliers, inparticular that of small and medium size (SME) suppliers. In the light of these gaps in the literature, this paper proposed an integrative model ofsustainable ScM and empirically analyzed the relationship between sustainable SCM andsupplier sustainability performance by considering an important intervening variable of relationalsocial capital. First, this study developed an integrative framework for sustainable SCM by synthesizing fairness, green SCM, and responsible supply chain based on the integration ofsustainability and SCM. Second, this study suggested a mediating role of relational social capitalin the relationships between sustainable SCM and the environmental and manufacturingperformance of the supplier. Third, this study provided empirical validation for the hypothesessuggested in the integrative model. Consistent with the purpose of this study, the study focused on medium-sized suppliers. Atotal of 197 responses from SME suppliers were used for the empirical analysis. The results ofa series of rigorous tests provided support for the validity and reliability of the scales, includingthree sub-constructs of sustainable SCM: fair, environmental-friendly, and responsible SCM. Overall, the research results indicate that the hypotheses for the relationships between sustainableSCM, relational capital, and supplier environmental and manufacturing performance weresupported. First, the results provided strong support for the argument that sustainable SCMcan increase relational social capital between the buyer and supplier. As a reciprocal programbetween a buyer and its suppliers, sustainable SCM facilitates the relational capital accumulation. Second, the results empirically also verified a significant positive effect of sustainable SCM onthe environmental and manufacturing performance through relational capital accumulation. In other words, relational capital was found to mediate the effects of sustainable SCM on thesustainability performance of the supplier. Third, fairness among three dimensions of sustainableSCM was shown to have the most significant influence on relational capital and performance. This study provides insightful implications for managers of buyers as well as suppliers whowish to foster stronger environmental performance as well as manufacturing performance. First,integrating fairness, environmental and social issues into conventional SCM practices is advisable,but firms, particularly large buyers, should make efforts to make it work. Second, sustainableSCM practices do not build on an entirely new set of skills, and the three dimensions ofsustainable SCM are closely interrelated. Therefore, efforts to foster more sustainable practicesshould enhance firms’ capabilities. Third, managers should enhance frequent communication,mutual understanding, goal congruence, and benefit sharing with their supply chain partners,which can be a source of relational capital leading to supply chain performance.
