NGOs’ Initiatives to Enhance Social Sustainability in the Supply Chain: Poverty Alleviation through Supplier Development Programs

AuthorDaniel Arenas,Mark Pagell,Jorge A. Rodríguez,Cristina Giménez Thomsen
Date01 July 2016
DOIhttp://doi.org/10.1111/jscm.12104
Published date01 July 2016
NGOSINITIATIVES TO ENHANCE SOCIAL
SUSTAINABILITY IN THE SUPPLY CHAIN: POVERTY
ALLEVIATION THROUGH SUPPLIER DEVELOPMENT
PROGRAMS
JORGE A. RODR
IGUEZ
Escuela Superior Politecnica del Litoral
CRISTINA GIM
ENEZ THOMSEN AND DANIEL ARENAS
ESADE - Ramon Lull University
MARK PAGELL
University College Dublin
This research studies how nongovernmental organizations (NGOs) can
implement supply-management practices for poverty alleviation. The
research inductively builds a theoretical framework from a nested case
study, which includes one NGO and six firms implementing supplier
development (SD) programs. The framework suggests a set of resources
that enhance the social sustainability of the supply chain without creating
trade-offs between economic and social performance. This study has
implications for decision-makers in firms and NGOs about the type of
resources they need to develop, and the characteristics they should seek
when choosing partners for undertaking collaborative initiatives in social
sustainability.
Keywords: sustainability; partnering; supplier management; case studies
INTRODUCTION
Discussions of sustainable supply-chain manage-
ment acknowledge that nongovernmental organiza-
tions (NGOs) might participate in a supply chain. But
NGOs are typically identified as “nontraditional”
members of the supply chain (e.g., Pagell & Wu,
2009) and viewed as agents to help for-profit supply
chains become more sustainable. Yet NGOs have
goals and supply chains of their ownsomething the
previous literature has generally not considered.
Therefore, this research explores how NGOs use tradi-
tional supply-chain management tools while collabo-
rating with other chain members, including
impoverished suppliers and for-profit buyers, to
improve the social and economic sustainability of all
chain members.
Social problems, such as poverty alleviation, sweat-
shops and child labor, negatively affect both the wel-
fare of society and the productivity of firms in the
supply chain. These problems are complex because
their solution requires the involvement of govern-
ments, the private sector, and civil society organiza-
tions (Selsky & Parker, 2005). The private sector has
struggled at leading these efforts (e.g., Lund-Thomsen
& Lindgreen, 2014).
For instance, in the apparel industry, firms that
source products from developing countries are
required to adopt labor standards that promote social
justice and human rights, and they have responded by
joining industry consortia and implementing supplier
audits and certifications (Mamic, 2005). However,
these programs have been criticized for making supply
chains less socially unsustainable, rather than more
socially sustainable (Pagell & Shevchenko, 2014) and
they did not prevent events such as the Rana Plaza
tragedy (Lund-Thomsen & Lindgreen, 2014).
NGOs, working in the same space, can initiate pro-
jects that improve the social sustainability of supply
chains and the communities where they operate
(McDonald & Young, 2012). For instance, the Rain-
July 2016 83
forest Alliance has conducted projects to train and cer-
tify poor producers to be incorporated into firms’ sup-
ply chains that have resulted in reductions in child
labor and improvements in poor producers’ profits
and women’s access to labor opportunities (Rainforest
Alliance, 2014). Similarly, Solidaridad has undertaken
projects that have certified and incorporated poor
farmers into agricultural supply chains for commodi-
ties such as livestock, cotton, soy, tea, and coffee (Sol-
idaridad, 2014). NGOs and other not-for-profits are
likely to take a leading role in the creation of socially
sustainable supply chains.
We know that NGOs are often better placed than
for-profits to address many issues of social sustainabil-
ity, and we know that they manage their supply
chains to do so. What motivates this study is how lit-
tle we know about these phenomena. To begin to fill
this void and contribute to the socially sustainable
supply-chain literature, this paper explores how NGOs
use their supply chains to alleviate poverty. The
research answers the following research questions: (1)
what resources do NGOs use when they undertake
supply-management practices for poverty alleviation?
And (2) what firm resources do NGOs seek when they
undertake supply-management practices for poverty
alleviation?
We used a nested case study analysis to inductively
build a theoretical framework to answer these ques-
tions. We purposefully chose to study a supplier
development (SD) project conducted by a single NGO
working to alleviate poverty in Ecuador. We studied
six SD programs conducted by the NGO that involved
six buying firms and multiple suppliers. Focusing on a
single NGO working in a single country allowed us to
isolate NGO-level variables and focus on the deploy-
ment of resources in multiple supply chains.
This research provides a framework that explains
how noneconomic actors use traditional supply man-
agement practices to create innovative, socially sus-
tainable supply chains in contexts with no foreseen
synergies between social and economic performance.
The framework posits that the NGO resources of
knowledge for localizing SD programs and a bridging
capability are critical for designing and setting up the
SD program. The NGO resources are complemented
by the buying firm resources of knowledge transfer
routines, logistical resources, and relational contract-
ing based on procedural fairness that are critical to
carry out the transactions and protect the value in the
buyersupplier relationship. NGO resources and buy-
ing firm resources are intertemporal complements that
enhance a supply chain’s social sustainability.
This research’s primary contribution comes from
identifying and conceptualizing the resources that
NGOs should develop themselves and acquire from
the buying firms in order to set up SD programs to
alleviate poverty. The research also explains the
dynamics across time between the identified resources
and the SD programs.
The research also makes a contribution to the wider
literature. By treating the NGO as the focal actor in
the network, rather than as a “nontraditional” chain
member, the research shows that traditional supply-
chain management practices are successfully used by
not-for-profit organizations to improve the social sus-
tainability of both the community and firms operating
in the community. In so doing, this research helps to
open a pathway to further understand organizations
and supply chains that have goals other than profit
maximization. Previous research suggests that the
achievement of truly socially sustainable supply chains
entails the development of new practices and/or col-
laboration with stakeholders in creative ways (Klassen
& Vereecke, 2012; Margolis & Walsh, 2003). This
research suggests that fully understanding these prac-
tices and collaborations will require examining the
supply chains of both for-profit and not-for-profit
supply chains.
The remainder of the paper is structured as follows.
First, we review the literature that shapes and explains
the phenomenon of interest. Second, we describe and
justify our research method. Third, the analysis and
results are presented. Fourth, we return to the litera-
ture and discuss the relevance of our findings. Finally,
we present our conclusions.
LITERATURE REVIEW
The literature review is structured in two parts.
First, we describe how the topic of poverty allevia-
tion fits into the literature on social sustainability.
Second, we explore how business initiatives can be
applied for poverty alleviation and how NGOs can
engage in supply-management practices to alleviate
poverty.
Social Sustainability and Poverty Alleviation
A socially sustainable firm makes profits without
harming society (Carter & Rogers, 2008). The litera-
ture classifies social practices as either internal or
external. Internal practices include providing safe and
healthy working conditions and freedom of associa-
tion for the firm’s workers (Gimenez, Sierra & Rodon,
2012; Pullman, Maloni & Carter, 2009). External prac-
tices aim to control supplier behaviors and to foster
social equity along the supply chain. External practices
include auditing or certifying suppliers to avoid sweat-
shops and child labor, participation in consumer
associations to promote customers’ well-being,
and engagement with stakeholders to foster the
development of local communities (Gimenez et al.,
2012; Pullman et al., 2009).
Volume 52, Number 3
Journal of Supply Chain Management
84

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT