Affiliation:
1. Shailesh J. Mehta School of Management, Indian Institute of Technology Bombay Mumbai India
Abstract
AbstractThe uncertainties associated with modern businesses complicate decision‐making, especially in complex supply chains, such as those of the textile industry, which has its hub in emerging South Asian countries. Using the Indian textile industry as the research setting, this paper explores from a psychological lens how suppliers process uncertainties while adopting sustainability practices. The study uncovers certification agencies, interpersonal trust between suppliers and buyers, and suppliers' size, as key constructs that influence how suppliers perceive and process risks and ambiguities, and in turn how that influences their adoption of sustainability practices. Combining these empirical insights with the stakeholder and relational view theories, we develop a comprehensive framework to model suppliers' sustainability decision‐making in the face of uncertainty. This study uncovers nuances of uncertainty aversion, which provide valuable insights for practitioners while also breaking fertile ground for future academic research to quantify the emergent propositions.