Swimming Against the Tide: Supplier Bridging Roles in Diffusing Sustainability Upstream and Downstream in Supply Networks

While sustainability risks frequently stem from sub-tier suppliers, a critical challenge for companies is to diffuse sustainability from the focal company through supply networks using individual supplier relationships as conduits.

The effective diffusion of sustainability across supply networks requires transmitting or relaying sustainability requirements through individual buyer-supplier relationships from one tier to the next.

Although previous research has pointed to the role of first-tier suppliers in facilitating or hindering sustainability diffusion into supply networks, there is limited evidence on how first-tier suppliers can act as relay points or bridges to cascade the sustainability practices of focal companies to lower-tier suppliers.

Research has also begun to investigate the facilitating role of the procurement function of companies in diffusing sustainability to suppliers. Aiming to elaborate on our current understanding of how procurement can facilitate the bridging role of first-tier suppliers in diffusing sustainability in supply networks, we seek to answer the following research questions:

1. How does the supplier bridging role facilitate sustainability diffusion to lower-tier suppliers?
2. What is the role of focal company procurement functions in managing the bridging role of first-tier suppliers in diffusing sustainability in supply networks?

The paper is based on an embedded case study of two coffee bean roasting company supply networks. The embedded cases focus on coffee beans and packaging supply networks and involve a focal coffee beans roasting company, coffee beans traders, packaging suppliers, and non-governmental organisations (NGOs).

The coffee beans industry is a very relevant industry to study sustainability diffusion in supply networks because it is a global commodity with production taking place in rural areas, often underdeveloped, and exported worldwide, with several sustainability challenges involving, e.g., working conditions and the environmental impact of farming and packaging.

This paper contributes to sustainable supply network management by demonstrating the bridging role of first-tier suppliers in diffusing sustainability to lower-tier suppliers.

In contrast to previous research that suggested the lack of procurement intervention in sustainability implementation with first-tier suppliers can halt sustainability diffusion to lower-tier suppliers, our findings demonstrate that sustainability can be augmented and diffused through the bridging role of first-tier suppliers and the involvement of their procurement functions in the implementation process with lower-tier suppliers. This paper contributes to structural hole theory by providing a typology of the various bridging roles that actors, such as suppliers, can undertake.

We can discern three bridging roles by examining the supply network ties structure. While the three bridging roles share a cooperation aspect, they reflect three types of bridges.

The first relates to the bridging role of the traders, where the intensity of sustainability practices increased from the focal company to the farmers through the traders. We call this bridging role the "amplifier" bridging role, as the traders boosted sustainability practices diffusion to lower-tier suppliers.

The second one is the "two-way amplifier" bridging role, which resembles the bridging role undertaken by the traders in increasing sustainability practices amongst suppliers, but this bridging role also involves the flow of sustainability practices to the customers.

The third type is a "transmitter" bridging role, as played by NGO1, where there was no change in sustainability practices intensity, and the same number of sustainability practices or information was transmitted from the focal company to lower-tier suppliers through NGO1.

Our study gives insights and recommendations to companies aiming to build sustainable supply networks by diffusing sustainability practices to lower-tier suppliers. Our study reveals three bridging roles that first-tier suppliers or other actors, such as NGOs, can undertake to cascade sustainability to second-tier suppliers. Each type offers different cascading effects. Knowing the supplier bridging role type can give companies a better view of the possibilities and limitations for diffusing sustainability into their supply networks.

Equally important, companies can augment sustainability diffusion by partnering with suppliers with amplifier bridging characteristics. The cascading effect can be multiplied from the focal company to lower-tier suppliers. Likewise, companies that partner with suppliers of the two-way amplifier bridging type may benefit from adopting suppliers' sustainability innovation and enhancing their sustainability and economic performances.

The procurement function's role in sustainability diffusion is central, especially when sustainability practices require close interactions with suppliers, such as supplier sustainability development. The intervention of the procurement function can induce real benefits for companies in terms of sustainability innovation capturing and sustainability orientation alignment amongst supply network actors.

The procurement function needs to work in close relationship with other functions, e.g., with R&D for joint development projects with suppliers, thus acting as a broker or facilitator of the collaboration.

Finally, tackling complex sustainability problems requires collaboration with various supply network actors. Seeking the collaboration of NGOs can be fruitful for companies to diffuse sustainability in supply bases that are geographically stretched and require special sustainability knowledge. NGOs can act as bridges for sustainability practices transfer to suppliers, and an important consideration for companies is to deploy NGOs' bridging role to be more than just a transmitter of sustainability practices towards building sustainability capabilities at suppliers.

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Authors at the Department of Management

Toloue Miandar – Assistant Professor

Academic disciplines: Organizational behavior, Corporate social responsibility, Sustainability management

Teaching areas: Business ethics and sustainability, Sustainability oriented innovation

Research fields:  Organizational behavior, Corporate social responsibility, Sustainability management, Sustainable development, Supply chain sustainability

Toloue Miandar is an Assistant Professor at the Department of Management of the University of Bologna and a faculty member at Bologna Business School. Her research focuses on sustainability and corporate social responsibility in the organization and management field, sustainable development, and supply chain sustainability. She has published in academic journals such as JBE and IJOPM.