Incorporating sustainability in supplier relationship management a study of Swedish manufacturing SMEs

Abstract: "The future belongs to those who give the next generation reason for hope" (Pierre Teilhard de Chardin; 1881-1955). This hope may rely on sustainable development and sustainability of corporations. Corporations have found that one way to achieve sustainability is to establish it in cooperation with their suppliers. Existing research, however, offers limited insights into sustainable supply management and effective buyer-supplier cooperation. Based on the literature on purchasing sustainable responsibility (PSR), commitment-trust theory of relationship marketing, and the triple bottom line of sustainability as an interconnection among economic, environmental, and social issues, a conceptual framework has been developed. By adopting the concepts of PSR and buyer-supplier cooperation, this thesis proposes that buying firms can enhance sustainability performance of suppliers, thereby improving suppliers‘ adoption of environmentally and socially responsible capabilities. To explore this proposition, this study develops and tests a number of hypotheses concerning the direct relationships among PSR adoption, buyer-supplier relationship, and sustainability performance of suppliers. Also, a set of hypotheses regarding how a buyer‘s dependency on sustainable suppliers moderates their relationship has been developed so as to offer more precise insights to practitioners as well as scholars. In testing the study hypotheses, the researcher used both qualitative and quantitative approaches to develop the research instrument. The survey instrument captures the opinions and views of a sample of 400 Swedish purchasing professionals who have dealt with sustainable purchasing for at least one year. After data collection, a structural equation modeling approach was used to analyze the data and test the research hypotheses. The results concerning the direct-effect hypotheses indicate that the buyer-supplier relationship can be improved by adoption of sustainable purchasing. Also, buyer-supplier cooperation can improve the sustainability performance of suppliers. This thesis also shows that suppliers‘ adoption of PSR directly leads to improvements in their sustainability performance. Regarding the analyses of moderator effects, results indicate that some moderating effects exist. Findings indicate that the buyer shows lower levels of trust in, commitment to, and cooperation with suppliers in highly dependent situations. Overall, this thesis offers empirical results evidence that PSR is an effective approach to improve the buyer-supplier relationship and boost the sustainability performance of suppliers. The results of the direct and moderating-effect hypotheses lead to recommendations to buyers and suppliers regarding important factors to consider when making PSR adoption decisions.