Fostering firms' ability to cascade sustainability through multi-tier supply chains: an investigation of power sources

Abstract

Purpose: A firm's ability to cascade sustainability requirements further down to lower-tier suppliers might be affected by inter-firm power relations. This study aimed to identify the power sources of focal firms and first- and lower-tier suppliers and to investigate how they may affect their ability to cascade sustainability requirements along multi-tier supply chains. Design/methodology/approach: A multiple case study of 24 companies was conducted to investigate the sources of power in multi-tier supply chains. In total, 42 informants from five focal companies, ten first-tier suppliers and nine lower-tier suppliers were interviewed. Findings: Differences were found between the sources from which focal firms and first- and lower-tier suppliers drew power. Findings revealed that firms' power sources may increase or impair their ability to cascade sustainability requirements to lower supply chain tiers. Furthermore, multi-tier supply chain-level power sources constitute a significant determinant of firms' ability to disseminate sustainability requirements to lower-tier suppliers. Practical implications: The results can help companies and purchasing managers understand how their own and suppliers' power may affect their ability to cascade sustainability agendas to lower-tier suppliers. In particular, the results can be useful for supplier selection and the development of supplier relationship management strategies for fostering sustainability in multi-tier supply chains. Originality/value: This study places traditional power perspectives in the context of multi-tier sustainable supply chain management, broadening the view beyond dyadic relationships that have traditionally been the focus of the supply management literature.