Sustainability Governance Mechanisms in Supply Chains: An Application in the Retail Sector

Abstract

This study analyzes supply chain sustainability governance mechanisms, and their characterization, typology, adoption and relationship with the overall level of sustainability in the supply chain, and with the adopting firm’s competitive strategy. It is a case-based study conducted in the Spanish retail sector. A representative set of mechanisms is identified, and both their theoretical background and their degree of practical adoption is established. These mechanisms are then characterized in terms of several traits regarding either the mechanisms themselves or the way they are adopted both by the focal company (internal view) and by its suppliers (external view) in each of the cases. Results suggest that mechanisms might be classified into either ‘enablers’, which increasingly constitute a prerequisite for achieving acceptable levels of sustainability, and ‘differentiators’, which can potentially confer sustainable strategic advantages. Actually, achieving these advantages, however, seems contingent on the additional attainment of a comprehensive ‘depth’ in the implementation of an integrated set of mechanisms of both types, both internally within the focal company and throughout the whole supply chain, as measured by the traits proposed in the study. Furthermore, the concept of ‘circular improvement models’ for sustainable supply chains, akin to Total Quality Management models, is proposed by the authors. The resulting model encompassing enabling and differentiating governance mechanisms could guide the self-evaluation and improvement plans of companies aiming to improve their supply chains sustainability; further guidance on ‘deep adoption’ comprehensive strategies and on the potential for self-reinforcing continuous improvement in sustainability beyond a certain threshold are provided by the study’s conclusions.