One of the key challenges for firms is to manage sustainability along the supply chain, which comprise interdependent units that can influence one another's reputation and performance. To try to manage supply chain sustainability, firms have developed strategies that extend their traditional corporate governance processes beyond the firm boundary to their supply chain partners (Kytle and Ruggie, 2005). The most visible indicator of this extension is the implementation of CSR oriented practices such as suppliers' code of conduct. In 2008, over 90 percent of the world's largest 250 companies had a supply chain code of conduct (KPMG, 2008). Despite the long history of CSR, SCM thinking and CSR have only begun to be merged in the last 15 years (Maloni and Brown, 2006). Early works focused mainly on the role of purchasing and supply management to improve environmental performance (e.g. Drumwright, 1994; Zsidisin and Hendrick, 1998; Carter et al., 1998; Min and Galle, 1997; Noci, 1997 and Zhu and Geng, 2001). Later, researchers added other CSR dimensions such as safety, working conditions, and ethical issues in purchasing decisions (e.g. Murphy and Poist, 2002; Carter and Jennings, 2002a and Carter and Jennings, 2004a, 2004b) and identified practices in specific industries (e.g. Maloni and Brown, 2006; Andersen and Skjoett-Larsen, 2008; Park-Poaps and Rees, 2010). However, most of the recent literature on supply chain CSR practices has focused on the governance mechanisms to extend CSR practices to suppliers. One stream of this literature on governance mechanisms covers the implementation of suppliers' code of conduct or international standards (e.g. Krueger, 2008; Mueller et al., 2009; Preuss, 2009; Van Tulder et al., 2009; Yu, 2008) while others have reconsidered the underlying market governance mechanisms in the light of proposals for more extensive collaboration (e.g. Lim and Phillips, 2008; Park-Poaps and Rees, 2010; Spence and Bourlakis, 2009; Vachon and Klassen, 2008; Vurro et al., 2009). However, very few papers compare the impact of both governance mechanisms on sustainability (e.g. Klassen and Vachon, 2003 and Jiang, 2009a, 2009b). Although the term sustainability integrates social, environmental and economic responsibilities, this paper focuses on the environmental dimension. The main reason for that is that stakeholders are now giving much more importance to environmental issues. For example, in August 2007, the Wall Street Journal reported on the huge pollution problems associated with China's textile and apparel production. "After labor issues, the environment is the new frontier," Daryl Brown, Vice President for Ethics and Compliance at Liz Claiborne Inc., told The Wall Street Journal. "We certainly don't want to be associated with a company that's polluting the waters" (Spencer, 2007). The aim of this paper is to analyze the effectiveness of two different governance mechanisms (i.e. supplier assessment and collaboration with suppliers) to greening suppliers, and therefore, improve the environmental performance of the buying firm. Few papers have compared the impact of both approaches on environmental performance and provided mixed results (e.g. Walton et al., 1998; Theyel, 2001 and Klassen and Vachon, 2003). The contribution of our paper is twofold: Firstly, we provide some clarification regarding the impact of supplier assessment and collaboration on environmental performance, testing a synergistic effect (which has been discussed in some case studies but not tested yet in a bigger sample). Secondly, based on the finding of Krause et al. (2000) for general supplier development strategies, we consider that green supplier assessment acts as enabler of collaborative efforts.

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Giménez Thomsen, Cristina; Sierra Olivera, Vicenta

Sustainable supply chains: Governance mechanisms to greening suppliers

One of the key challenges for firms is to manage sustainability along the supply chain, which comprise interdependent units that can influence one another's reputation and performance. To try to manage supply chain sustainability, firms have developed strategies that extend their traditional corporate governance processes beyond the firm boundary to their supply chain partners (Kytle and Ruggie, 2005). The most visible indicator of this extension is the implementation of CSR oriented practices such as suppliers' code of conduct. In 2008, over 90 percent of the world's largest 250 companies had a supply chain code of conduct (KPMG, 2008). Despite the long history of CSR, SCM thinking and CSR have only begun to be merged in the last 15 years (Maloni and Brown, 2006). Early works focused mainly on the role of purchasing and supply management to improve environmental performance (e.g. Drumwright, 1994; Zsidisin and Hendrick, 1998; Carter et al., 1998; Min and Galle, 1997; Noci, 1997 and Zhu and Geng, 2001). Later, researchers added other CSR dimensions such as safety, working conditions, and ethical issues in purchasing decisions (e.g. Murphy and Poist, 2002; Carter and Jennings, 2002a and Carter and Jennings, 2004a, 2004b) and identified practices in specific industries (e.g. Maloni and Brown, 2006; Andersen and Skjoett-Larsen, 2008; Park-Poaps and Rees, 2010). However, most of the recent literature on supply chain CSR practices has focused on the governance mechanisms to extend CSR practices to suppliers. One stream of this literature on governance mechanisms covers the implementation of suppliers' code of conduct or international standards (e.g. Krueger, 2008; Mueller et al., 2009; Preuss, 2009; Van Tulder et al., 2009; Yu, 2008) while others have reconsidered the underlying market governance mechanisms in the light of proposals for more extensive collaboration (e.g. Lim and Phillips, 2008; Park-Poaps and Rees, 2010; Spence and Bourlakis, 2009; Vachon and Klassen, 2008; Vurro et al., 2009). However, very few papers compare the impact of both governance mechanisms on sustainability (e.g. Klassen and Vachon, 2003 and Jiang, 2009a, 2009b). Although the term sustainability integrates social, environmental and economic responsibilities, this paper focuses on the environmental dimension. The main reason for that is that stakeholders are now giving much more importance to environmental issues. For example, in August 2007, the Wall Street Journal reported on the huge pollution problems associated with China's textile and apparel production. "After labor issues, the environment is the new frontier," Daryl Brown, Vice President for Ethics and Compliance at Liz Claiborne Inc., told The Wall Street Journal. "We certainly don't want to be associated with a company that's polluting the waters" (Spencer, 2007). The aim of this paper is to analyze the effectiveness of two different governance mechanisms (i.e. supplier assessment and collaboration with suppliers) to greening suppliers, and therefore, improve the environmental performance of the buying firm. Few papers have compared the impact of both approaches on environmental performance and provided mixed results (e.g. Walton et al., 1998; Theyel, 2001 and Klassen and Vachon, 2003). The contribution of our paper is twofold: Firstly, we provide some clarification regarding the impact of supplier assessment and collaboration on environmental performance, testing a synergistic effect (which has been discussed in some case studies but not tested yet in a bigger sample). Secondly, based on the finding of Krause et al. (2000) for general supplier development strategies, we consider that green supplier assessment acts as enabler of collaborative efforts.
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Sustainable supply chains: Governance mechanisms to greening suppliers
Giménez Thomsen, Cristina; Sierra Olivera, Vicenta
EBEN Annual Conference 2011
Katholieke Universiteit Leuven
Leuven (Belgium), 15/09/2011 - 17/09/2011

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