Management innovation driving sustainable supply management

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Tilburg University

Management innovation driving sustainable supply management

Koster, Mieneke; Vos, Bart; Schroeder, Roger

Published in:

BRQ Business Research Quarterly

DOI:

10.1016/j.brq.2017.06.002

Publication date:

2017

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Link to publication in Tilburg University Research Portal

Citation for published version (APA):

Koster, M., Vos, B., & Schroeder, R. (2017). Management innovation driving sustainable supply management.

BRQ Business Research Quarterly, 20(4), 240-257. https://doi.org/10.1016/j.brq.2017.06.002

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www.elsevier.es/brq

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Business

Research

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ARTICLES

Management

innovation

driving

sustainable

supply

management

Process

studies

in

exemplar

MNEs

Mieneke

Koster

a_,_∗

_,

_Bart

_Vos

a

_,

_Roger

_Schroeder

b a_Tilburg_University,_Postbus_90153,₅₀₀₀_LE_Tilburg,_NL,_The_Netherlands

b_Carlson_School_of_Management,_University_of_Minnesota,₃₂₁_Nineteenth_Avenue_South,_Suite_4-300,_Minneapolis,_MN 55455-9940,USA

Received20November2016;accepted4June2017 Availableonline25August2017

JEL CLASSIFICATION O0; O3; L2 KEYWORDS Sustainability; Supplychain management; Management innovation; Processstudies

Abstract Althoughresearchintheareaofsustainablesupplymanagement(SSM)hasevolved overthepastfewdecades,knowledgeabouttheprocessesofemergenceandinnovationofSSM practiceswithinorganizationsissurprisinglylimited.Theseinnovationprocessesare,however, importantbecauseoftheconsiderableimpacttheymayhaveonresultingsustainablepractices andbecauseofSSM’scomplexsocietalandintra-ﬁrmchallenges.Inaprocessstudyon manage-mentinnovation,thesequencesofSSMinnovationprocessesintwoexemplarcasecompanies arestudiedtoaddress:‘WhatarethesequencesthroughwhichSSMemergeswithinexemplar organizations?’,and‘InwhatwaydomanagementinnovationprocessesinﬂuenceresultingSSM practices?’.

Webuildonliteratureregardingﬁrstlymanagementinnovationandsecondlycommunitiesand internalnetworksofpractice.AnSSMinnovationmodelandpropositionsaredeveloped, propos-inghowtheprocessofmanagementinnovationaffectsSSMpracticesandﬁrmperformancein abroaderperspective.

Introduction

The strategic signiﬁcance of sustainable supply manage-ment (SSM), including related topics such as sustainable operationsandsustainablelogistics,isincreasingly

acknowl-∗_{Corresponding}_author.

E-mailaddress:h.r.koster@uvt.nl(M.Koster).

edged within both academia and industry. SSM addresses sustainabilityintheinboundpartof supplychain manage-ment.Manyauthorshave realizedthatSSM1 _is_an _entirely

1_It_is_useful_to_note_that_from_the_plethora_of_available_terms,_we

useSSM,alsoininstanceswherethearticlesquotedmayhaveused otherrelatedterms.

http://dx.doi.org/10.1016/j.brq.2017.06.002

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newwayofworking(PagellandShevchenko,2014).Pagell and Wu (2009)for example studied what is characteristic of SSM processes in exemplars. They concluded that the exemplarcompanieshadmadea radicalbreakwith tradi-tionalSCMapproaches.

For radically new SSM practices however, new busi-ness models are needed (Pagell and Shevchenko, 2014). Thisimpliesthatprogressivecompanieshavegonethrough managementinnovation processesinordertoget sustain-ableSCMpractices.Management innovationrefersto‘the invention andimplementationof a managementpractice, process,structure,ortechniquethatisnewtothestateof theartandisintendedtofurtherorganizationalgoals’.(cf.

Birkinshawetal.,2008).

DespitethegrowingbodyofSSMliterature(Touboulicand Walker,2015),scantattentionhasbeenpaidtothe manage-mentinnovationprocesswhichentailstheemergence and developmentof sustainablepracticesin the supplychain. For several reasons however, it is of substantiveinterest for the SSM ﬁeld of research to study processes of how SSM emerges and develops as a management innovation. Firstofall,SSMmanagementinnovationprocessesareinall likelihoodsteering resultingpracticesand their effective-ness,whichmakestheminterestingandimportantfactorsin themselves(cf.Birkinshawetal.,2008;MolandBirkinshaw, 2009).Secondly,insightsintoexemplarSSMinnovation pro-cesses will help practitioners and policy makers (Walker etal.,2012)tomake informeddecisionsaboutinnovation processes. The SSM processes arerelatively new, tacit in natureandcomplex(Goldetal.,2010),andsotheir devel-opment poses a novel challenge to adopting companies. Finally, from the perspective ofmanagement innovation, SSMisinterestingaswellsinceitishighlycomplexinseveral respects: it requires theexpertise of different functional areas,itinvolvesnumerousinternalandexternal stakehol-dersrelationships(Goldetal.,2010),andithasethicaland societaldimensionswhichtouchpublicinterest.

Throughprocessstudiesintwoexemplarcompanies,this researchfocussesongaininginsightsintotheinnovation pro-cessofSSM,itsemergenceanditsestablishmentwithinthe boundariesofanorganization,andintotheinﬂuenceofthis processon resultingSSM practices.In line withthe ratio-nalperspective onManagementInnovation (cf.Birkinshaw etal.,2008),wefocuson(1)itsdevelopmentsequencesat themicro-organizationallevelof(2)actorsandﬁrm commu-nities,andwithinthosesequences(3)theroleofknowledge accumulation.Thisinformsusabouttheinnovationprocess thatwaspursuedandtherationalebehindit.

Theresearchquestionsare:

1. What are the sequences through which SSM emerges withinexemplarorganizations?

2. Inwhatwaydomanagementinnovationprocesses inﬂu-enceresultingSSMpractices?

Ourprocessstudiesintwoexemplarcasecompanies elu-cidate the emergence and internal diffusion of SSM, its sequences and its impact. In this process study we con-necttwoareasofresearch(SSMandManagementInnovation literature).

For SSM literature, we provide insights in an under-researched area of innovation processes itself and its influenceonresultingpractices.Inthespecific contextof SSM, a sequencesmodel outlinesthe emergence of Com-munitiesofPractice(CoPs)whichtransformtoan internal NetworkofPractice(iNoP)andthedistinctiverolesofkey actorslikepioneersandleadersthroughoutthosesequences andtheneed fortacit knowledgewhich isrequired about internalcross-functionalcollaborationontheonehandand external inter-firm collaboration. Besides, the influence of management innovation processes on SSM practices is elucidated. Next, in the area of management innovation literature,thisworkaddsthespecificinsightsofaSSM pro-cessstudy,meetingcallsforstudieslookingintotheprocess ofcreationandimplementationofmanagementinnovation (MolandBirkinshaw,2009).

Theoretical

background

Sustainablesupplymanagement

SSMadds adimensionof sustainabilitytothefieldof sup-plymanagement.Itcanbedefinedasthemanagementof material, informationand capital flows, as well as coop-erationamongcompaniesalong theinboundsupply chain, whiletakingeconomic,environmentalandsocialdimensions intoaccount(cf.SeuringandMüller,2008).SSMisvitalfor companiesthatstrivetobesustainable,sinceformany com-paniesover half of theirturnovercomes fromservices or productsbought from suppliers.This impliesthat a firm’s inboundsupplychainoffers substantialpotentialfor influ-encingitstriple-bottom-line(Handfieldetal.,2005;Paulraj, 2011).

Researchonsustainabilityinthesupplychainhasevolved overthe past twodecades,ashasbeen acknowledged by various literature reviews (e.g. Carter and Easton, 2011; Sarkisetal., 2011). This hasresulted in a broad array of studies, ranging from its proﬁtability (Golicic and Smith, 2013)andthecapabilitiesandantecedentsrequired(Bowen etal.,2001;GattikerandCarter,2010;PagellandWu,2009; Paulraj,2011;Reuteretal.,2010)toorganizations’ moti-vation andbarriers tostrivefor sustainablesupply chains (Hoferetal.,2012;Walkeretal.,2008).Considerable atten-tion has been paid in the past to the business case for sustainablebusinessin general(MargolisandWalsh, 2003; Orlitzky etal., 2003)and for SSCMand SSM in particular (GolicicandSmith,2013).However,becauseofthewidely acknowledged,compellingneedforsustainability,the chal-lengehaschangedfrom‘‘whether’’toactinasustainable wayto‘‘how’’toactinasustainableway(Kleindorferetal., 2005;PagellandWu,2009).Economic gains alonearetoo narrow as a motivation for SSM (Pagell and Shevchenko, 2014).

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gonethroughprocessesofmanagement innovation,which haveresultedintheseneworganizationalpracticesand pro-cesses.Thesemanagementinnovationprocessesareofreal interestintheirownright, sincetheprocessofSSM emer-genceandinnovationcanaffectresultingSSMpracticesand sustainableoutcomes(cf.Birkinshawetal.,2008;Moland Birkinshaw,2009).Inaddition,SSMprocessesarerelatively newandcomplex(Goldetal.,2010)andpose achallenge ofinter-ﬁrmcollaborationtoadoptingcompanies.Thisisa challengeinwhichfarmoreperformancecriteriahavetobe metthanfortraditionalcoreoperationalissues(Goldetal., 2010).

However,despitethegrowingbodyonSSMliterature(see

TouboulicandWalker,2015forarecentliteraturereview), managementinnovationprocessesrelatedtotheemergence andimplementationofSSM,havehardlyreceivedattention. Illustrativefor thisvoidinresearchisthat,basedon liter-atureresearchonsociallyandenvironmentallyresponsible procurement,HoejmoseandAdrien-Kirby(2012)includeda fullsectiononimplementation,whichoutlined implemen-tation of and issues to do with codes of conduct, rather thananythingtodowithimplementationofinnovativeSSM. Basedontheir structuredliterature reviewontheories in sustainablesupplychainmanagement,TouboulicandWalker (2015) alsoconclude that the evolution of business prac-ticeshasnotbeenthoroughlyexplored.Hence,theypropose that future research focuses on the SSM implementation processby framing it as a change in organizational prac-tices(TouboulicandWalker,2015,p.35).Thispleaisinline withanobservationofPagellandWu(2009)thatsofaronly fragmentedinformationregardingtheprocesstoward SSM wasavailable.Nocoherentinsightshaveemergedregarding theinnovationprocessesorganizationsdeploytointernally develop and prepare SSM processes and regarding chal-lenges in these innovation processes.In thisrespect, the SSMdomaincanbeneﬁtfromtheemergingknowledgebase regardingmanagementinnovation.

Managementinnovation

Thereisalarge,multi-disciplinaryanddiversebodyof aca-demicliteratureoninnovation(e.g.AndersonandTushman, 1990;CohenandLevinthal,1990;Fagerberg,2004;Nelson andWinter,1982;TushmanandAnderson,1986;VandeVen et al., 1999). Innovations can focus on different dimen-sionsandsohavedifferentoutcomessuchasnewproducts or services(product innovation),but also newproduction processes(processinnovation)(CrossanandApaydin,2010) andnewwaysoforganizingwork(organizationalinnovation) (Fagerberg,2004).

Westudytheprocessesoforganizationalinnovationand more specifically of management innovation (Birkinshaw etal.,2008;BirkinshawandMol,2006;Hamel,2006;Lam, 2004),giventheimportanceofSSMdevelopmentasan inno-vationprocess.Managementinnovationis arelatively new and stillunder-researched form of organizational innova-tion (Birkinshaw et al., 2008; Birkinshaw and Mol, 2006; Damanpour et al., 2009; Vaccaro et al., 2010). Yet, it is a significant topic in the field of strategic management (Wu,2010).In terms of managementinnovation, SSM can bedefinedas‘‘anewsetofpracticesandprocessesaimed

at embedding sustainability in supply management’’ (cf.

Birkinshawetal.,2008).Birkinshawetal.(2008)categorize four perspectives on management innovation. Firstly, the institutional perspective addressesinstitutional conditions which stimulate emergence and diffusion of management innovation; secondly, the fashion perspective views man-agement innovation as a management idea that can be propagated on the market; thirdly, the cultural perspec-tive incorporates organizational culture as an important condition forhowmanagementinnovation isshaped inan organization;and,fourthly, therationalperspective hasa centralroleforhumanagency.

Our perspective of management innovation in this researchisrelatedtotherationalperspective,inlinewith ourfocusonprocessesofSSMinnovationandtheimportant roleof decision-makingbyinternal andexternal stakehol-ders(GattikerandCarter,2010;Sarkisetal.,2011;Wuand Pagell,2011)andinlinewiththenotionthathumanagency shouldgetattentioninmanagementinnovation(Birkinshaw etal.,2008).Therationalperspectivepositsthat manage-ment innovations are introduced by individuals with the goal of making their organization work more effectively. The rational perspective studies the roles of internal and externalactorsinthesequencesinwhichmanagement inno-vation develops within an organization at an operational level(Birkinshawetal.,2008;Vaccaroetal.,2010).Inline with the rational perspective, we study the roles of the actorsinvolvedintheSSMmanagementinnovationprocess. Apartfromtheroleofhumanagency,management inno-vation involves sequences. Birkinshaw and Mol(2006) and

Birkinshaw et al. (2008) have pointed to somewhat com-mon stages within the management innovation process.

Birkinshawetal.(2008)havedevelopedtheoreticalstagesof motivation,invention,implementationandlabeling(which mayoccuriteratively),andtheyrelatethistoactionscarried outbyinternalandexternalchangeagents.Theyhavecalled forfutureresearchtostudyandmakesenseofmanagement innovation sequencesin practice.Other studies have also pointedtothesequencesintimeacrossdifferentformsof innovation(Damanpouretal.,2009;Lam,2004).

Communitiesandinternalnetworksofpractice Throughoutthose‘managementinnovationsequences’,itis particularlyinterestingtolookattheroleofactorsand com-munitiesinthisprocess.Thisisinlinewithourfocusonthe rationalperspectiveonmanagementinnovation(Birkinshaw et al., 2008), in which human agency has a crucial role. As explained in the previous section, the human agency notion entails the involvement of internal and external actorswhointroduceinnovative managementpracticesto improveorganizationaleffectiveness.

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ofadaptingtochangingmembershipandchanging circum-stances,suchcommunitiescanbehotspotsforinnovations. Building on this argument, Cox (2005, p. 529) proposes that organizations should value and foster CoPs as infor-malnetworkswhich actuallyfigure outhowtoimplement formsofshopfloorinnovation.Individualsinvolvedinsuch communitiestypicallyshare (largelytacit) knowledge and understanding,language,culture,andvaluesonaspecific jointpractice(TallmanandChacar,2011).

Despitetheirinnovationpotential,itshouldberealized that CoPs are not static, yet emerging informal entities, thatcantechnically speakingnotbeestablishedbysenior management.Still,managementcanfacilitateandactively support emerging CoPs (Roberts, 2006). Such managerial efforts may in turn foster the development of Internal Networks of Practice, INoPs. Tallman and Chacar (2011)

describesuchINoPsasinformalnetworksthatcombine mul-tiple CoPs around a joint practice and that support the developmentofcommonknowledgeandroutines,building onashared architecture.This descriptionalready implies that, unlikeCoPs, INoPs areless likelyto arisenaturally, yet their development requires a ‘delicate intervention’ (TallmanandChacar,2011,p.280)byaﬁrm’ssenior manage-ment.Thestrategicrationaleforsuchinterventionsisthat the ﬁrm-level architecturecreated via INoPs can beseen asvaluableandrare,thusprovidingopportunitiestocreate novelknowledgeasasourceofcompetitiveadvantage.

Sinceknowledgeisindeedcommonlyseen askeytoall forms ofinnovation (Nonaka,1994; Nonaka andTakeuchi, 1995), it is particularly interesting to look at the accu-mulation of knowledge (Wu, 2010) in CoPs and INoPs. Organizational knowledge comprises tacit knowledge of individuals, which should be integrated into the explicit knowledge base of the ﬁrm (Lam, 2004). In other words, organizations should capture and utilize the accumulated knowledgeofitsactorsinordertoreapthepotential strate-gicbeneﬁtsfrommanagementinnovations(Wu,2010).

So,inconclusion,whilestudyingmanagementinnovation processesintheareaofSSM,particularattentionshouldbe paid toﬁrstly the role of human agency(as well in com-munitiesandnetworksofpractice),secondlythesequences within this innovation process and ﬁnally the process of knowledgeaccumulationintheareaofSSM.

Research

methods

Casebasedprocessstudies

Much more time needs to be spent on ‘‘studying the presentlysmallnumberofsupplychainsthataretryingnew thingsthatdonotﬁtexpectedpatternsandsoon.’’(Pagell andShevchenko, 2014).Two qualitative casestudies form the empirical part of this process research in which we aim toinvestigate how exemplar organizations do indeed trytoimplementsuch‘newthings’.Qualitativecase stud-ies ‘‘primarily use contextually rich data from bounded real-worldsettingstoinvestigateafocused phenomenon’’ (Barrattetal.,2011),andtheyaresuitedtoprocess stud-iesthataimtounderstandpatternsofevolutionovertime (Langley and Abdallah, 2011), such as processes of man-agementinnovation.Collaborationwiththecasecompanies

encouragestheexplorationofresearchterritorythatis rel-evanttotheindustry(GuideandVanWassenhove,2007).

TheunitofanalysisistheinnovationprocessofSSM prac-ticeswithintwoselectedmultinationalenterprises (MNEs) at the micro-organizational level of their actors and ﬁrm communities.Ourcasedataareusedasprocessnarratives inordertostudychangeandnarratesequencesofeventsor ‘changestages’within‘realentities’(VandeVenandPoole, 2005).Narrativescanproviderichdataonrealphenomena (Doz,2011)whenaimingtodevelopprocesstheoriesbased ondeeper structures, that are not directly observable in practicalsettings(seealsoWelchetal.,2011).Inourcases, thesequenceof events intheirSSM developmentandthe rolesofvariousactorsinthisdevelopmentprocessare ‘nar-rated’.

Samplinganddatacollectionmethods

Samplingofmorethanonecaseenablescross-case compar-isonandadds conﬁdenceinﬁndings(MilesandHuberman, 1994). We selected a limited number of cases (two), as isoften encounteredin processresearch(Van deVenand Poole, 2005). Barratt et al. (2011) and Siggelkow (2007)

point out there is room for one or two cases when the researchstudyusesexemplars.Inourresearch,both com-panies decided to go public with their ‘‘company-wide’’ sustainabilityannouncement,which allowedustowitness theactualtransitionprocesstowardfull-companySSM prac-tices.

Whenselectingthetwocases,purposivesampling,based ontheoreticalunderpinnings, wasused(Eisenhardt,1989; Milesand Huberman,1994). Ourresearchfocus is onSSM whichhas been subjectto substantivemanagement inno-vation.Thisimplied theselectionofexemplar companies, whichwereaheadofothersintermsoftheirSSM.Two exem-plarcompaniesintheﬁeldofSSMwereselected,basedon publiclyavailabledocumentationandarangeofthirdparty ratings,reportsandrankings.Forthelastﬁveyearsatleast, bothcompanieshadbeenconsistentlyratedamongthe high-estscorersintheirindustrybytheDowJonesSustainability Index,DJSI(Fowler andHope,2007).They hadalso been highlyrankedbyotherindicatorssuchas,amongstothers, the‘ResponsibleSupplyChainBenchmark’and(oneofthe two case companies) in ‘the Global 100 List’.2 _Secondly, inbothcasecompaniessupplymanagementisofstrategic importancetotheircoresupplychainprocesses.

Both case companies are multibillion Euro companies withtens of thousands of employees. Table 1 introduces shortlybothcasecompanies.

Various data collection methods are used in order to enabletriangulation.Majorsourcesofinformationwere:(i) semi-structuredinterviews,(ii)archivaldatafrominternal and external publications, including annual reports, sus-tainabilityreports, companypublications, and newspaper articlesaboutthecompany.Inaddition,(iii)aninternational

2_See: _{http://www.duurzaamaandeel.nl/medialibrary/235/}

benchmark-responsible-supply-chain-management-2010; see:

http://www.global100.org/annual-lists/2010-global-100-list.html;

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Table1 Introductiontothecasecompanies. ‘CompanyA’ _•Multinationalheadquarteredin

Europe,butwithlocationsworldwide andaspecialfocusonemerging markets

•Producesandpacksbrandedfood, homeandhealthcareproducts •ListedontheEuropeanstock market

•Thecompanyhasinitiatedand participatedinroundtableswith variousstakeholdersandin

developmentofglobalsustainability standardsinthepastdecade; sustainabilityisattheheartofits mission,stronglysupportedbyitstop managementteam

•ConsistentlyamongsthighestDJSI rankingsforoveradecade

‘CompanyB’ •Multinationalinthechemical industryheadquarteredinEurope, withlocationsonﬁvecontinents •Createschemicalmaterialsfora broadrangeofindustries

•ListedontheEuropeanstock market

•Historically,health,safety,and, later,theenvironment,havebeen importanttoCompanyB;anannual sustainabilityreportispublishedfor overtenyears

•Ithasbeenrankedamongstthe highestDJSIscorersforseveralyears.

supplychainconferenceinEurope(2010)atwhichbothcase companiespresentedtheoutlinesoftheirSSMapproaches, wasattended.

An interview guide was developed for the semi-structuredinterviews,andveriﬁedduringtwoseparatepeer reviews withsupply management experts, aspart of the casestudyprotocolwhichwasdevelopedbeforedata collec-tiontoenhancereliabilityofthecase studies(Eisenhardt, 1989; Yin,2009).In addition, alsoserving the purposeof verifyingtheinterviewguide,asmallpilotstudyinanother exemplar multinational fromthe electronics industry was conductedupfront.This pilotstudydidnotresultinmajor changesin thesetup;it didallow minorimprovements to theprotocol.Interviewsfollowed,butwerenotrestricted to the interview guide (see Appendix A). For both case studies,interviewshappenedtotakeplacejustbeforethe company-widelaunchofsustainabilitytargetsinvolvingSSM. Theresearchersonlyknewthattheselauncheswereplanned aftertheresearchhadstarted,sincethisinformationwas highlyclassiﬁedandnotpubliclyavailable.Duetothe tim-ingofthecasestudies,importantpartsofthemanagement innovationprocesswerestillinanearlystageandrecently planned.This meant thatonly a selectnumber ofpeople wereawareand involved in theinnovations andcouldbe interviewed.Thoseinterviewees fromeach case company

happenedtohavedifferentfunctionalbackgrounds. Inter-viewees fromdifferent functional areas,provide multiple approaches tothesamephenomenaandthe possibilityof triangulation,whichenhancesthereductionofsocial desir-abilitybiases(Podsakoffetal.,2003).ForCompanyA,this meantinterviewingaselectgroupoftheGlobalSustainable ProcurementDirector,theProcurementDirector Commodi-ties Europe, the Supply Management Director of Supplier Assurance and Compliance and the Global Supply Chain Director Sustainable Agriculture. ForCompany Bthe Vice PresidentPurchasingChemicals,theSustainabilityDirector andtheVicePresidentofR&Dofoneofitsmajorbusiness unitswereinterviewed.Allinterviewswererecorded. Inter-views variedfromonetothreeandahalf hoursandtook placemainlybyvisitingsitesinEurope.

Archival data from internal and external publications were a second important data source (see Table2 for an overview).Thearchivaldatahelpedtovalidateandinsome casesextendinformationfrominterviewees.

Athirdsourceofinformation, inadditiontointerviews andarchivaldata,wasaninternationalsupplychain confer-ence(2010)atwhichbothcasecompaniespresentedtheir SSMstrategy.Notesandrecordingsmadeatthisconference served especiallyto broaden and strengthen researchers’ insightsintothecompanies’strategiesandcommunication abouttheirSSMprocesses.

Dataanalysismethods

In theﬁrst phaseof ourdata analysis,a preliminary cod-ing listhad been set up ex ante,with general categories based on the research questions (Miles and Huberman, 1994).Transcriptswerereadvarioustimesinorderto iden-tify and applyappropriate codes and sharpen, adapt and detailthecodinglist(seeAppendixB).Forexample,actor roles could be added according to the roles we encoun-tered in ourresearch. Transcripts and archivaldata were reread and recoded. Final analysis of coding was carried outindependentlybytwodifferentresearcherstoincrease reliability(Barratt etal., 2011;Eisenhardt, 1989). Differ-encesin interpretationsofdataandcodeswerediscussed andresolveduntilfullconsensuswasreachedbetweenthe tworesearchers.

In the second stage of data analysis, emerging pat-terns and themes were identiﬁed per case, resulting in diagrams and timelines of events. This within-case anal-ysisaimedtoprovideanin-depthunderstandingofhowSSM managementinnovationhadevolvedinthetwocase compa-nies.Diagramsservedtoconnectandselectmajorthemes iteratively.

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Table2 Archivaldatafrominternalandexternalpublications.

CompanyA CompanyB Remarks

Internalpublications(publishedbythecasecompany)

Annualreports (Sustainability)reports 2008---2010

(Sustainability)reports 2008---2010&2002---2007

SSM-relatedinformationwas selected/codedinthose documents. (Internal)policy documents(both publicand non-public) Approx.15internal publications,incl.e.g.: •CodeofBusiness Principles •Procurement:Supplier Presentation •SupplierCode •SustainabilityPlan2010 •SustainableSourcingCode

Approx.32internal publications,incl.e.g.: •RiskManagementReport2009 •SupplierCode •SuppliersSustainability Questionnaires •SustainabilityPlan2010 •VisionDocument Sustainability •BusinessPrinciples

Thosepublicationsprovided: •tri-angulation[i]:

conﬁrmationofinformation frominterviews(e.g.on companypolicies:company strategypresentations,vision documents,suppliercodesof conduct)

•someextensionsoradditional details/examples(e.g. projectsintheearly

communitiesworkingonSSM) •tri-angulation[ii]:real examplesofcommunication aboutSSMinnovation(e.g.in pressreleases)

Externalpublications(publishedaboutthecasecompany)

Approx.30external publicationsaboutcompany A’ssustainabilityapproach (journals,academic journals,papers,internet), incl.e.g.:

•Externalbenchmark document2010 •DJSISAMdocument •Proﬁleofindustryprogram forresponsiblesourcing

Approx.12external

publicationsaboutcompanyB’s sustainabilityapproach (journals,academicjournals, papers,internet),incl.e.g.: •Externalbenchmark document2010 •DJSISAMdocument

Archivaldatasuchasexternal notes(ontheinternet),reports andratingsprovided:

•externalconﬁrmationof exemplarstatus

•backgroundinformationon thecasecompanies(whichhad beenthesubjectofcase studiesinacademicarticles)

adoptionofSSMpractices.Fig.1illustrateshowthose pre-conditionsappearedbyclusteringrawdataintothemes.

Finally,representativesofbothcasecompaniesvalidated theanalysistoenhancethecredibilityoftheﬁndings.This didnotleadtomajorchangesin thecontentsofthecase descriptions.

Case

ﬁndings

Weﬁrst present awithin-casedescription of theSSM pro-cessinourtwocasecompanies.Subsequently,across-case comparison is made to capture both similarpatterns and differences.

Within-caseprocessdescriptionCompanyA

Inthemid-nineties,theenvironmentalofﬁcerofCompany A put to a board member the sustainability of sourced materials as ‘‘something relevant that will increasingly needattention’’.Theboardmemberrecognizedandshared this opinion and the employee was given a budget to develop hisideas.Sustainableagriculture wasselectedas

relevant to the company and the initiative has gradually grownsincethen.In 1998 itbecame aseparate program, of which the first five years were spent on developing sustainabilitystandardsforfivekeymaterials. Inaddition, elsewhere in the organization, other projects were set up,suchas,for instance,asustainabledairyprogramthat has resulted in the use of sustainable milk for selected products. Preliminary participation in industry initiatives wasalsoestablished.

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sourc-Level of tacit

knowledge about

collaboration

Infrastructure

investments

Internal collaboration

•A; Departments should integrate: Break out of your silo! •B; integration of procurement with the business is very important and this importance will only grow

1st ORDER CLASSIFIED DATA 2nd ORDER THEMES CORE CONCEPTS

External collaboration

•A; We should be less strict on intellectual properties, more relaxed and be prepared to take more risk... we should approach our relations fluffier

•B; We will find them (smallsuppliers with brilliant ideas) and create a winning chain together/increasingly there is room

Public

announcement & communication

•A; now it is business imperative, connected to communication to the comsumer

•B; we get undisputable scientifically refereed material •A; experts judge whether it can be used as proof to the world

Internal support structure

•A; it requires investments, development of capabilities (...) and infrastructures

•A; I also try to recruit... sustainability conversion managers

•B; there is a lot of money being spent on it since it needs to happen in a professional way

•A; the sustainability advisory board verifies processes

Figure1 Preconditions:clusteringrawdataintothemes.

ing.Responsiblesourcing arethe obligationsaboutwhich wedonotneedtotalkalot...’’Forresponsiblesourcing, CompanyAconnectedtoanon-linedataexchangebetween suppliersandcustomersin 2009,enabling supplier assess-mentstobesharedviaacommondatabase.

In 2010, top management presented a company-wide ‘‘SustainabilityPlan’’totheworld.Thisplanhasambitious revenuesgrowth targets for the decade until 2020, while simultaneouslyaiming toreduceenvironmental andsocial impactthroughoutthesupplychain.TheSustainabilityPlan focuses on the whole life cycle of the products in which the sourcing of raw materials is recognized as an impor-tantimpactareaforsustainability. Greenhousegases,use of water, waste management and sustainableagricultural sourcingarepresentedaspillarsoftheenvironmental tar-gets.

In ordertorealize the commitmentsannounced, Com-pany A has established an internal team to support the company-widesustainability approachboth internallyand externally.This teamisexpectedtotackle SSM’scomplex challenges, which are outlined by the Global Sustainable ProcurementDirectoras‘‘...newbusinessmodelsof work-ingwithsuppliersthatrequireinvestments,developmentof capabilities,trainingpeople,coursesandinfrastructures.’’ Thisglobal‘‘SustainableProcurementTeam’’ofﬁvepeople providesinternal training onsustainable procurement for internal employeesand addresses communication and

co-operationwithsuppliers.Moreover,thisteamtrainsselected suppliers in sustainable practices. A second team works on ‘‘sustainable sourcing development’’, being responsi-ble for the furtheroptimization of standardsand policies andanewstrategyfornon-renewablematerials.Thisteam aimstotackle morestrategicquestionsaboutappropriate approachestowardsustainabilityandSSM.

The introduction of a company-wide SSM approach requiresrealchangeintheinternalorganization,as under-lined by the Global Sustainable Procurement Director: ‘‘Departmentsshouldintegrate:Breakoutofyoursilo!For thisamindsetswitchisneeded...’’Inasimilarvein,talking aboutexternalcollaboration,heindicatesthatintellectual propertiesshouldnotbemanagedtoostrictly:‘‘Weshould bemorerelaxedandbepreparedtotakemorerisk;then suppliersopenup,theycanshowtheirideas....Weshould approachourrelationsﬂufﬁer---ourCEOemphasizedthis ---andtakecalculatedrisksbecausethenpeoplewillcometo you.Thisisamindsetswitchhowever.’’Thisopenattitudeis stressedasthemostvitalchangeneededintheorganization forsuccessfulcompany-wideSSMpractices.

Within-caseprocessdescriptionCompanyB

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accordingtothedifferentenvironmentsandchallengesof thoseBU’sandwerenotconnected.

On a company level, a start was made from 2005 on toevaluate suppliers systematicallyin terms of minimum sustainabilitystandards.CompanyBlabelsthisasanearly stage of SSM, initiated by its procurement department. The evaluationsystemis basedoninternal standards(like a code of conduct), procedures and audits. Audits are carried out by internal staff rather than external offices in order to learn from those audits and to coach and assist suppliers. In 2010, Company B publicly announced a company-widestrategy involving explicit targetsetting, which would affect sustainability in the Supply Chain for thenextfiveyears.Withthisstrategy,sustainabilityis pos-itioned asa value driver,ratherthan a complianceissue. Sustainabilityisoneofthepillarsthatshouldsupport com-panyB’smaximum sustainableandprofitablegrowth.The sustainabilityambitions,reflectedinthefive-yeartargets, impliedthatover75%ofnewly developedproductsshould havealowecologicalimpactcomparedwiththemain com-petingsolutions(baseduponinternalexpertopinions),while half of the existing products should have a low ecologi-cal impactcompared with the main competing solutions. Substantialincreasesinenergyefficiencyandreductionsin greenhousegases arealso targets for the nextten years. Achieving these targets requires intense involvement of supply chain members. Since Company B controls only a smallpartofthelifecycle,collaborationwithsupplychain members is important to reduce the overall ‘ecological footprint’.

CompanyBhasstartedtoworkthroughanetwork struc-turewithchampionstointegratesustainabilitythroughout thebusiness.Onesustainabilitychampionper department is selected and assigned, based on his/her afﬁnity with sustainablebusiness. Thesechampions areselected tobe linkingpins betweenthe sustainabilityactivities and poli-cies fromstaffdepartmentslikethecentral sustainability departmentandtheirowndepartmentorbusinessunit.They aregivenaroleratherthanafunction.Alongsidethis net-workstructure,thePurchasingStrategicDialogueTeam,in which purchasingmanagersof the BUsparticipate, devel-ops ideasabout howtodevelop sustainablesourcing.The aimistoincludecustomizedandfar-reachingcollaboration withsuppliers.Inparallel withthenetwork structure and the strategic dialog team, external experts are involved, amongstotherstoshareknowledge,butalsoasameansof externalveriﬁcation.

The introduction ofa company-wideSSM approachwill require substantial change in the attitude toward inter-naland externalcollaboration.TheSustainability Director indicateshowtheprocurementfunctionshouldbefurther integrated in the business: ‘‘Integration of procurement withthebusinessesisveryimportant,andthisimportance will onlygrow. If we cansell ‘‘green’’, thenwe have to paymoreattentiontothatintermsofprocurement....‘‘ He continuesin a similarvein about suppliers:‘‘Weneed tochangefrom ‘liabilitythinking’to‘assetthinking’.’’... The need for a more open attitudetoward potential new suppliers,isalsostressedbytheVicePresidentPurchasing Chemicals,‘‘Somesupplierswilldisappear,butwewillwin others,like the littleboutiques thathave brilliantideas whichnotyethavebeenrecognizedamidstthebigones.We

willﬁndthemandcreateawinningchaintogether....’’In companyB,internalandexternal collaborationhave been identiﬁedasabsolutekeyenablersforsuccessful company-wideSSM.

Cross-casecomparison

Sequencesofmanagementinnovation

Whencomparingthetimelinesandthesequencesof devel-opmentrelatedtoSSMforbothcases,itturnsoutthatboth casesshowapatternofdisruptionintheprocessof innovat-ingSSMthroughmanagementintervention,withtheaimof strengtheningSSMintheorganization.

First, there is a period of small-scale SSM initiatives over many years. Those ﬁrst initiatives can be described as projects that try out and set out new directions for SSM, undertaken on a relatively small scale by small groups.

Second,in2010bothcompaniesmarkthestartofanew periodbythepublicannouncementofambitious company-wide targets, instigated by the respective management teams.The policiesannouncedcover thelifecycle ofthe productsandsoheavilyinvolvesupplymanagementinboth cases.Moreover,bothannouncementsincludequantitative corporatetargetsforthecomingtenyears.Bothcompanies alsodevelopednewprocessesandresponsibilitiesto facili-tateacompany-wideroll-out.Basedonthetimelinesinboth companies,wecanidentifytwosubsequent,mainstagesof SSMdevelopment(seeTable3).

Throughout the two stages shown in Table 3, differ-ences between both case companiesalso become visible. Thescatteredinitiativesinthefirststageseemtobemore diverseincompanyBwhere separateinitiativesregarding SSMemergein differentbusinessunits.Initiativesin com-panyAarediverseaswell,butingeneraltheyshareafocus onthedevelopmentofsustainable(industry)practicesand codes.Asecondnoteworthydifferenceisfoundinthe eval-uation of suppliers’ social conduct. Company B considers its‘‘evaluation’’ activities asan important first initiative intheprocessofSSM,designedtomitigaterisks.Company A,bycontrast,labelsevaluationactivitiesas‘‘responsible sourcing’’,supportedbyaseparatedepartmentofsupplier assurance and compliance, and not as part of SSM. Both companiesintroducedasystemofevaluationaround2005. However,whereascompanyBintroducedacompany-specific procedureofsupplier(self-)assessmentsandauditscarried outby itsownemployees,companyA participatedin the developmentofanindustryprogramforresponsible sourc-ing.

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Table3 Cross-casecomparisonforemergenceofSSM.

Stage CompanyA CompanyB

Stage1: Startingbetween 1990and2000 FirstSSM initiatives Developmentofsustainable agriculturalpracticesand codesresultinginexternal certiﬁcationforcertain productsandaninternal standard.

Separateinitiativesregarding SSMindifferentbusiness entities. Evaluationof suppliers’social conduct Co-developmentofindustry programforresponsible sourcingstartedin2006. Connectiontoexternalprocess andsoftwarewasrealizedin 2009.

Internallydevelopedprocedure ofsupplier(self-)assessments andaudits.Companyspeciﬁc, startedin2005. Managementintervention: Introductiontostage2;2010 Announcementof company-wide sustainability commitments In2010,CompanyA’s sustainabilityplans---witha majorroleforSSM---forthe nexttenyearsarepresented.

In2010thelonger-term corporatestrategyispresented withanimportantpositionfor sustainabilityandSSM. PublishedSSM

commitments

Quantitativesustainability commitmentsone.g. decouplinggrowthfrom environmentalimpactand achievingabsolutereductions acrosstheproductlifecycle.

Quantitativecommitmentson actualandfutureproducts, whichshouldleadtoa signiﬁcantlylower

environmentalimpactduring thetotallifecyclecompared withthealternativesthey competewith.

Stage2;targethorizons 2015/2020 Supportstructure tofacilitate company-wide realizationof targets.

Twosupportteamshavebeen setupto(1)enablethe businesstofulﬁllitstarget commitmentsonsustainable sourcingbytrainingand supportingbothinternal employeesandselected suppliersand(2)tofurther optimizeofstandardsand policies.

Targethorizon:2020.

Networkstructurewithsupport rolesthroughoutthe

organization(champions)to integratesustainability throughoutthebusiness. Alongsidethis,purchasing teamsdevelopsustainable sourcingideas.

Targethorizon:2015.

thebusinesstofulﬁllitstargetcommitments,whileanother teamisresponsibleforthefurtheroptimizationofstandards andpolicies.

Keyactorsandassignedactors

Differenttypesofactorsplayaroleinduringthesequences ofSSMmanagementinnovationinourcases:earlypioneers, topmanagementandassignedactorslikeexternalexperts andtheinternalsupportforce.Inbothcasecompanies,early pioneersstartSSMinitiativesandsubsequentlytop manage-mentbecomesanimportantdrivingforce,placingithighon thecorporateagendabysettingtargetsfortheentire com-panyand publicly announcing these targets. An overview offourarchetypalactor rolesthat havebeen identiﬁedis providedinTable4.

Tacitknowledge

Bothcasesdemonstratethat‘‘knowinghowtocollaborate’’ isurgently needed toenhance SSM, for both internal and

external relations.In terms of internal relations, employ-ees working on SSM need to understand that, despite resistance, intra-organizational commitment and cross-functional collaborationarecoreconditionsfor successful implementationofSSM(GattikerandCarter,2010).Interms ofexternal relations,likesuppliers,collaborationinvolves thesharingofideasandplanninginanatmosphereof open-nessbetweenﬁrms(Goldetal.,2010;SeuringandMüller, 2008).

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Table4 Archetypalinternalandexternalactorrolesthroughoutthetwomainstages. Role

(inter-nal/external)

Roleprevalentin: Focusofactivities:

Keyinternalactors Pioneers(internal) Stage1 PlaceSSMissuesontheagendaandinitiate andexperimentwithnewSSM

developments,resultinginCommunitiesof Practice

Managers (internal)

Stage2 1.Recognitionofbusinessrelevance.2. Company-wideintroductionthrough strategyandtarget-setting.Interveneto transformfromCommunitiesofPractice intoaninternalNetworkofPractice Assignedactors Supportforce

(internal)

Stage2,roll-out Anassignedroleforcascadingdownand supportingrealizationofthenewstrategy throughtrainingand/orcommunication Experts(external

mostly)

Preparationsinstage1,and furtherdevelopmentsinstage 2

1.Processcontentdevelopmentsupport 2.Involvementofexpertsenhances legitimacyintheeyesofbothinternaland externalstakeholders

Theoretical

elaboration

and

propositions

Commonpatternstodowithsequences,actorsand knowl-edgeaccumulationanddispersioncanbedrawnfromboth cases.Weelaborateonthosepatternsinthissection, result-inginanoverviewof(1)SSMinnovationsequences,actors andknowledgeaccumulationand(2)inﬂuencesof innova-tionprocessesonresultingSSMpractices.

Sequences,actorrolesandknowledge

CoPs,INoPsandactors

The small communities, which were already working on SSMbeforeanycompany-wideinitiativestookplace, resem-blethe CoPs described earlier in this paper.In both case companies, the process of emerging SSM initiatives share a bottom-upmechanism that expands toa CoP. This first stageofCoPdevelopment,whichextendsovermanyyears, confirmsthatmanagementinnovationisadiffuseand grad-ualprocess(BirkinshawandMol,2006),providingimportant experiencesandknowledgeasabasisforfurther company-wide management innovation within SSM. Key identified actorsintheseearlystagesofemergingSSMinitiativesare ‘pioneers’and‘leaders’.Wedescribepioneersasindividuals (typically at the middle or lower level of the organiza-tion)whosetupSSMinitiativeswhichtakerootsomewhere intheorganization.Thesepioneers resemble environmen-tal project champions (Gattiker and Carter, 2010), who facethechallengeofovercomingintra-organizational resis-tance, mainly across functional boundaries.In our cases, pioneers initiated new developments, while top manage-mentfacilitated them,in linewiththe usualspontaneous emergenceofCoPs,whichbenefitfrommanagerial cultiva-tion(Roberts,2006).Althoughmanagementinnovationisnot necessarily developedby topmanagement,theymay cre-atetheorganizationalconditionsforexperimentationwith andintroductionofnewmanagementprocesses,practices orstructures(Vaccaroetal.,2010).

After a relatively long period of CoPs emergence, both case companies made a drastic change to INoPs, a company-wideapproachcomprisinglarger,moredispersed groupsofcommunitiesandindividuals.Thischangeusually requires dedicated managerial intervention, which in our casesmainly tookthe formof (i)preparations andpublic announcementofcompany-widetargets,(ii)settingupofa dedicatedinfrastructuretocascadethenewtargetsacross alloperations.

Targetsetting appeared tohave twomajoreffects. Its ﬁrsteffectderivesfromitspubliccharacter.Public commit-mentsarelikepledgestosociety,whichwouldnotnormally be made if they had no societal relevance. The public announcementof targets by both case companiescan be seenasadistinctformofpro-activeengagementwithkey stakeholdersandascommunicationtocustomers,whichis recognizedasamajorfacilitatorofSSM(CarterandEaston, 2011).Secondly,thepublicannouncementoftargets under-linestheimportanceofSSMtotheinternalorganizationand providesinternalmomentumtoemployees.

Besides public target setting, a second managerial intervention in our cases is the setting up of a ded-icated infrastructure to strengthen SSM as part of the company-wide sustainabilityapproach. Typically, manage-ment innovations in general are intangible and emerge, like CoPs, without a customized infrastructure (Vaccaro etal., 2010).However,fortheir company-wide consolida-tionintoanINoP(Birkinshawetal.,2008),bothcompanies developedacustomizedinfrastructure,whichincluded sup-portingroles,likethechampionstructurewithinCompany B or the sustainable procurement team within Company A. We here deﬁne infrastructure as the set of meas-ures, new roles and organizational changes that have been set up to facilitate the company-wide roll-out of SSM.

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anINoP.Duetoitsprominentrolewithintheorganization, topmanagementisvital(CarterandJennings,2004;Pagell andWu, 2009)and can inﬂuence management innovation considerably(Vaccaroetal.,2010).

Roleofknowledge

Inthecaseorganizations,theleveloftacitknowledgeabout collaborationhasbeen indicatedasvital.Tacitknowledge or ‘‘know-how’’ is the ability to put explicit knowledge (‘‘know-what’’) into practice and is hard to spread or co-ordinate(Brown and Duguid, 1998). It is intuitive and unarticulated and of key importance in organizational learningandinnovation(Lam,2000).Collaborationis char-acterized by tacit knowledge integration, which occurs throughinformationexchangeinarichcommunication set-ting(KlassenandVachon,2003).

Themainchallengeofknowledgemanagement through-outthestagesofinnovationliesspeciﬁcallyinthetransfer oftacitknowledge.Themoretacittheknowledge,theless likelyitisthatitwillbeunderstoodoutsidetheCoPwhere it has been developed (Tallman and Chacar, 2011), mak-ing it harder to spread. In terms of collaboration, which is tacit innature and hasbeen indicated by interviewees asakeyconditionforenhancementofSSMandakeyneed withintheir organization,it underlinesthe importanceof having a good level of ‘‘knowing how tocollaborate’’ in placethroughouttheorganization.

Enablers of ‘knowing how to collaborate’ refer to generic, organizational skills that are not needed solely forSSM.Yet,intervieweesexplicitlyidentifiedcollaborative skills as a key area requiring their attention during the transitiontoanINoP,andoneinwhichconsiderable improve-ments should be made. This implies that SSM innovation activitiesalso requirea focusonandthe developmentof generic, collaborative skills in our case companies. This findingat first sightappears tobe counterintuitive, since suchcollaborativeskills mightbeexpectedtobein place in globally operating companies where inter- and intra-organizationalcollaborationisvitalforsomanyprocesses.

‘Knowinghowtocollaborate’appliesﬁrstofallto cross-functionalcollaborationbetweendepartmentshavingtodo withSSMinsidetheorganization.Secondly,itrefersto exter-nalcollaborationbetween organizationswithinthe supply chain.

We therefore advance the following proposition for exemplars:

Proposition1. TheemergenceofSSMincommunities of practice, succeeded by a discontinuity through manage-mentintervention withpublic commitments,sequentially extendsSSMpracticesintoaninternalnetworkofpractice.

Insummary,throughoutthesequencesleadingfromCoPs to an iNoP, SSM knowledge is created, accumulated and spreadwithpioneersandleadersplayingaprominentrole. ThediscontinuityobservedintheprocessofSSMinnovation iscausedbymanagementinterventionwithorganizational leadersplayingakeyrole.

Inﬂuenceofthemanagementinnovationprocess onresultingSSMpractices

PathdependencybetweenCoPsandINoPs

Managementinnovationcandeliverasustainedfirst-mover advantagebecauseof itscontext-specificcharacter which cannot (easily) be copied. Throughout its sequences, specific organizationalcapabilities can bedeveloped and, incombinationwithresources,bereconfiguredtorespond totherequirementsofachangingenvironment.

Thisprocessinvolvesa‘pathdependency’,also encoun-tered in studies of dynamic capabilities (Teece, 2007). Path dependency refersto the history of an organization (SchreyöggandKliesch-Eberl,2007),implyingthatafirm’s current position and its future depend on past develop-ments. Sequences in management innovation may reveal suchpaths.Forinstance,SSMcapabilitiesandtheresources that aredevelopedin CoPs caninfluence thepotential of anINoP.Knowledgeaccumulationintheearlystagesisthe context-specificbasisforsubsequentsequences.

In both case companies, the periodof ﬁrst SSM initia-tives in smallcommunities (CoPs) is relatively long up to twodecades(seeTable3),providingvaluabletimeforSSM knowledgeaccumulation,whichwasevidencedinbothcase companies.Thecompaniesbeneﬁtfromasituationinthese communities of practice where sustainable practices and approaches are developed and improved without explicit timepressure.Bothknowledgeon(1)sustainablepractices itselflikedevelopmentofsustainableagriculturalpractices and codes, and (2) knowledge on management practices (evaluationpractices,self-assessments,audits)isdeveloped indepthasoutlinedinTable3.Thisknowledgedevelopment providesasolidbasisforthesubsequentiNoPinwhichthe indepthknowledgeandexperiencesaresharedandapplied onalargerscale.WearguethatthemoredevelopedSSMis intheearlystagesofCoPs,thestrongerthebasisforfuture, company-wideimplementationanddevelopment,andsothe greaterthelikelihoodofincorporatingSSMpracticesinthe succeedingINoP.Wethereforeadvancethefollowing propo-sition:

Proposition 2. There isa positive relationship between investments in communities of practice focused on SSM knowledgeaccumulationandtheextenttowhichSSM prac-ticesareincorporatedin the succeedinginternalnetwork ofpractice.

Inﬂuenceofdiscontinuity;managementintervention

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(Sources of) Knowledge accumulation Scope Human agency: Key actors

STAGE 1

Pioneers Leaders Innovated SSM practices small-scale Innovated SSM practices full-scale

STAGE 2

SSM initiatives Communities of Practice (CoPs) Company-wide target setting & support structure Internal networks of practice (iNoPs) Knowledge accumulation Knowledge accumulation and dissemination DISCONTINUITY: management intervention DEDICATED INFRA-STRUCTURE

Figure2 OverviewofSSMmanagementinnovationsequences:fromCoPsthroughadedicatedinfrastructureaniNoP.

dedicatedinvestmentsactuallyaddressthechallengesthat sustainabilityinitiativesfaceduetoresistancebyemployees invariousfunctionalareasacrosstheorganization(Gattiker andCarter,2010).Thepublicsettingoftargetsconcerning sustainability criteriais a vital mechanism for guarantee-ingsustainabilityresultstotheoutsideworld,especiallyfor sociallyrelevantthemes(Smith,2009).

Pioneersandleadersinvolveandassignother actorsto work on this infrastructure. For instance, employees are assignedtofacilitatetheroll-out;inaddition,external (sus-tainability)expertshaveadvisoryroles.Theemployeeswho areassignedtofacilitatetheroll-outarepartofthe inter-nal infrastructure for the company-wide consolidation of SSM. Aparticularcategory ofassignedactorsareexternal experts,whooftenplayalegitimacy-enhancingrole. Man-agementinnovatorsneedtoreinforcethelegitimacyofthe newpracticeinordertomakeitacceptablewithinthe orga-nization(Birkinshawetal.,2008).InthecaseofSSM,withits importantsocietalaspects,legitimacyintheeyesofthe out-sideworldisvitalaswell.Duringtheﬁrststage,expertsmay provideadviceonnewprocessesandstructures,whilefor thecompany-wideroll-outtheyprovideexternalvalidation (Birkinshawetal.,2008).Hence,thededicated

infrastruc-ture,whichincludeshiredpersonnel(likeexperts),enables andfacilitatesSSMasamanagementinnovationinternally, but especially externally as well. Legitimacy in the eyes of the outside world is further reinforced by the public announcement of targets and by ongoing communication effortstotheoutsideworld,whichisadistinct infrastruc-turalinvestmentinitself.

Insummary,acompany’seffortstoimplement company-wideSSM practices to meet publicly set targets, requires an infrastructure capable of dispersing SSM throughout the organization and of communicating about it inter-nally and externally. We therefore advance the following proposition:

Proposition3. Investmentsinadedicatedinfrastructure via[1]aninternalsupportstructure and[2]publictarget settingareprerequisitesforembeddingSSMpracticesina company-wideinternalnetworkofpractice.

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pro-cess.InlinewithTallmanandChacar(2011),the‘bubbles’ inthemiddleofthisoverviewreinforcethecrucialroleof managementinterventioninthetransitionfromCoPstoan INoP.

Managerial

implications

OurproposedSSMmanagementinnovationmodel,asshown inFig.2,hasseveralmanagerialimplications.Firstofall, the importance of initial investments in CoPs for later practicesindicates that suchinitial workshould be facili-tatedandfostered.Leadersshouldbeopenandreceptive topioneers’ work.Additionally, insubsequentphases,the managerialinterventionofsettingtargetsshouldbe accom-panied by infrastructural investments in SSM within the company,butalsoacrosscompanyborders(relatedtosupply chainpartners).Thisrequires,forinstance,theinvolvement ofinternalandexternalexperts,thetrainingofemployees andsuppliersandacross-bordersupportstructure.

Second,the preconditionthatatransitionto company-wideSSMrequirescollaborativeskillsalsohasimplications forpractice.Theseskills might havebeen expectedtobe inplacealready withinourexemplar case companies, for exampleasabasisforSCMorR&D,andyettheyappeared tobeacriticalimprovementarea.This mayprompt man-agers whoare aiming todevelop their SSM processes, to reconsider internal collaborative skills and the proﬁles of employeesworkingonSSMandtooffertrainingortoattract newpeople.Suchcollaborativecapabilitiessupport,nextto SSM,otherorganizationalcapabilitiesaswell.

Third, not all organizations considering SSM have the samecapabilitiesandresourcesastheorganizationsinour casestudies.Still,wefeelthatother,smallertypesof orga-nizationscan still applyparts of it. For instance, evenif anorganizationdoesnot‘‘develop’’(asthecasecompanies didintheirCoPs)butinstead‘‘adopt’’knowledge(Crossan andApaydin, 2010) about SSM for company-wide applica-tion,itwillstillneedtoinvestinaninfrastructureinorder tocommunicate and implement these adopted practices. Andalthoughsupply managementandcollaborationmight haveadifferentpositioninorganizationswhichdonotcarry outphysicalproductioninternally,therequiredchangesto move over to SSM will need internal and, in many cases, externalcollaborationaswell, albeitindifferentrespects andvaryingintensities.

Discussion

and

conclusions

Our process studies on two exemplar case companies advanceourunderstandingoftheemergence andinternal diffusionofSSM,itssequencesanditsimpact.Theseactual processesofSSMemergenceandinnovationare understud-iedin the growing body of literature on SSM (see Carter andEaston,2011;Sarkisetal.,2011;TouboulicandWalker, 2015),despiteitspotentialimpactontheadoptionSSM prac-tices.Inthisprocessstudyweconnecttwoareasofresearch (SSMandmanagementinnovation),identifyingSSM innova-tionsequencesintwoexemplarcompanies.

This processstudycontributestoSSMliterature in dif-ferentways.Firstlyweprovideprocessinsightsthroughthe sequencesmodel which goes beyondthe narrow research

focusontheimplementationofcodesofconduct(Hoejmose and Adrien-Kirby, 2012). The sequences model outlines the emergence of CoPs which transform to an INoP and the distinctiveroles of keyactors like pioneersand lead-ers throughout those sequences. For this transformation from CoPs to an INoP enabled by management interven-tion (cf. Tallman and Chacar, 2011) (Proposition 1), it is foundthattacitknowledgeisrequiredaboutbothinternal cross-functional collaboration and external inter-ﬁrm col-laboration.

Secondly,theinﬂuenceof managementinnovation pro-cesses on SSM practices has been elucidated in several ways,proposing(Proposition2)thatthedepthandscopeof smallscaleknowledgedevelopmentinCoPsarerelatedto scopeintheresultingINoPwithitscompanywidepractices. Moreover,investing in thedevelopmentof a management supported infrastructure is required to enable that small scale (CoP) becomesfull scale (INoP),asreﬂected in our thirdproposition.

Next,thereisalsoacontribution tomanagement inno-vationliterature.PhenomenalikeCoPsevolvingintoINoPs (TallmanandChacar,2011),andtheimportantroleofhuman agency have been acknowledged in the innovation liter-ature. Our research, however, adds speciﬁc insights of a SSM process study, meeting calls for studies looking into the process of creation and implementation of manage-mentinnovation(MolandBirkinshaw,2009).Ourempirical study shows the importanceof humanagency beyond the roleof leaders,which hasmainly been emphasizedin lit-erature(D’AmatoandRoome,2009;Vaccaroetal.,2010). Ratherthaninternalandexternalagents(Birkinshawetal., 2008), we recognize ‘key actors’who initiateinnovations andactorswhoareassigned(bothinternallyandexternally) tosupporttheinnovationprocess.Ourstudyalsorevealsthe importanceofthepublicannouncementofSSMtargets(as part of the managementsupported infrastructure), which arenotnormallyobservedinmanagementinnovation stud-iesandarerelatedtoSSM’ssocietalrelevance,sincepublic interest creates pressure (Smith, 2009). These announce-mentsenablepublicsocietalscrutiny,whichisanimportant mediumformonitoringtherealizationofthecommunicated sustainability targets and hence ﬁrm performance in this area(Zott,2003).

Amongthelimitationsofourresearchisitslimited gen-eralizabilityduetothelimitednumberofcases,thespeciﬁc typeofcompanies(exemplars),andthedevelopmentstage of SSM at the time of research. Nevertheless, our cases yielded valuable insights into a small number of supply chainsthat areexperimentingwithnewdirections(Pagell andShevchenko, 2014).Thismayhelpother organizations aimingtofurtherdeveloptheirSSMinitiatives.

Aninterestingdirectionforfutureresearchwouldbeto challengeandtestourﬁndingsandpropositionsonalarger scaleandinotherempiricalsettings,forinstancein organi-zationswhichadoptnewSSMpracticesratherthandevelop them.

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com-panieswhere inter- andintra-collaboration is vital for so manyprocesses.

Finally, sensingmarketandsocietalopportunitiesleads tokeyactors’initiativesonSSMinnovation(cf.Teece,2007). This indicatesanotherpromising areaforfutureresearch, namelytoaddressthis‘sensing’andstudywhathasbeenthe thresholdat whichseniormanagementintervenesinorder tomove toan organization-wide SSM approach. Consider-ing thequite similartiming of management innovationin ourtwocases,societaldevelopmentsandexternal stimuli could be taken into accountexplicitly, alongside internal stimuli.

Appendix

A.

Interviewguideforsemistructuredinterviews Categoriesofquestionsfor thesemi-structuredinterviews are listed, although the interview is not limited to those questions,implyingroomfordifferentoradditionaltopics. Especially categories III and IV are optional. Terminology and deﬁnitions in the area of Corporate Social Responsi-bility (CSR) are still diffuse (Crane et al., 2008). Hence, terminologymayvaryperorganizationandsoperinterview. Forthatreasone.g.CSR andsustainabilityareoftenboth mentioned.

I. GeneralCSRandorganization

HascareforCSR/sustainabilitybeenassignedtopartsof theorganization?IsaCSR-departmentinplace?

WhatmanagerialcommitmenttowardCSR/sustainability isinplace?

What stakeholders (internal and/or external) drive CSR/sustainabilitydevelopmentswithintheorganization?

Are therebranchinitiativesinrelation toCSR,or more speciﬁcallySS(C)Minitiatives?

HowisSCM/sourcingorganized? II. SS(C)M

Whatismeantby[1]SS(C)Mintheorganizationand[2] itsobjectives?

Are any informationdocuments in place regarding the SS(C)Mactivities?

Actualactivities:

What investments have been made in the area of SS(C)M? What SS(C)M approach is in place (Code of con-duct, Audits/evaluationwith follow up, Collaboration)?Is

thefocusonpractices ofsuppliersor does it alsoinclude reversedlogisticsorotherinnovativeSCMapproaches? • What timeline was underlying those

invest-ments/activities?

• Howdoes prioritizationof SS(C)Mtake place(e.g.what categoriesorsuppliersgetpriority)?

• (How)isthepro-activestancestimulated?

• Withwhichsuppliersarethoseactivitiestakingplace (dif-ferentiation one.g. typeof relation or risk profile)? To what part of the chain does it reach (first tier suppli-ersor further)?Towhatextent areinvestments generic for allsuppliers andidiosyncraticfor specific suppliers? Issupplierdevelopmentsecuredfortheownorganization (isolatingmechanisms)?

• Is the ‘‘People’’ part of the SS(C)M approach as much developedastheenvironmentalpart?

• Whichpartofthespendisoutofscope?E.g.NPR?What aboutrisksthere?

• Doyouhavebenchmarks?InwhataspectsisyourSS(C)M approachdifferentfromothers?

Organization/actors:

• WhohasdecidedontheapproachtowardSS(C)M?How? • By whom are SS(C)M activities organized? (Purchasing

department?)Howhasthisbeendeveloped?Sincewhen? Isit integralpartofthebusinessora separateproject? Knowledgeexchange?

• HowisSS(C)Mprogressing?Results?Howisitbeing moni-tored?Whathaschangedin-andexternally?

• Howisthiscommunicatedtostakeholders? • Wherearehickups/challengesintheprocess?

Future/plannedactivities:

• IsaroadmapinplaceforSS(C)M?

• Isany‘‘broadsustainability’’(Sarkisetal.,2010)planned intheareaofSS(C)M(explainthroughexamples)? • Whatcapabilitiesareneedednow/infuture?

III. Sustainabilityrisksfromthesupplychain(OPTIONALper interviewee)

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M. K oster et al.

Appendix

B.

Codingstructure

Subject Codes Remarks

Generalinformationonthe organization(General

backgroundinformation)

ORG- Organization Contextualinformationaboutthecompany,itsCSR

organizationandpolicy,SCMorganizationandpolicy

ORG-CSR CSR

ORG-STRAT Strategy

ORG-STAKE Stakeholders

ORG-SCM Purchasing/SCM

ORG-SUPP.REL Supplierrelations

Timeline/sequences(First

researchquestion onsequences)

TI-1INIT TI1:ﬁrstinitiatives Timeandsequencesarecentralinprocessstudies(Langley etal.,2013)andinnovationofmanagementpractices (Birkinshawetal.,2008).

•ThesubcodesTI-1,TI-2andTI-3havebeenaddedduringthe codingprocess.

Findings:overviewTable3

TI-2CONSOL TI2:consolidation/ announcement TO-3ROLL-OUT TI3:company-wide

roll-out&infrastructure

Managementinnovation characteristicsand

requirements(Secondresearch question:diversityofindications forMIprocess:incltacit/ relationalskills/knowledge)

MI-STR MI:structure/tools CharacteristicsandrequirementsoftheSSMinnovation:

•(Tobe)innovatedtacitskills(MI-TSK)or(tobe)innovated structures,tools,procedures(MI-STR)(likee.g.evaluation tools(KlassenandVachon,2003)

•Inter-organizationalrelationsmayprovidecompetitive advantagefromarelationalpointofview(DyerandSingh, 1998).MI-RELconcernsSSMinnovationsaffectingthose relations.

•Initiallycodeswereinplaceforbroadandsmall

sustainability(Sarkisetal.,2010),thosehavebeennonactive sincebroadsustainabilitywasnotyetencountered.

•Codeshavebeenaddedfor(1)thedevelopmentprocess (DEV)regardingmeetings,brainstorms,actionstoplanforSSM developmentand(2)organizationalambidexterity(DUAL), coveringthecontinuityofestablishedapproacheswhile planningfornewpractices(BennerandTushman,2003)

MI-TSK MI:tacit

skills/behavioral

MI-REL MI:relational

(17)

innovation driving sustainable supply management 255

Appendix

B.

Codingstructure

Subject Codes Remarks

Actors/drivers(Actors&drivers

(Secondresearch question:diversity

ofindicationsforMIprocess:

inclhumanagency)

ACT-PION ACT:pioneers •Motivation(riskaverseoropportunitydriven)anddrivers potentiallyaffecteffectivenessoforganizationalprocesses (cf.KennedyandFiss,2009)

•Thefour(driving)rolesofdifferentactorsasdrivershave beenaddedduringthecodingprocessassub-codes.Both internalandexternalactorsplayarticulatedrolesin managementinnovation(Birkinshawetal.,2008). Findings:overviewactorsTable4

ACT-LEAD ACT:leaders ACT-WORKF ACT:workforce ACT-EXP ACT:experts

DR-RISK DR:risk

DR-OPP DR:opportunity

Focus(Backgroundinformation) FO:environm FO-env FocusofSSMactivities:

•Socialvs.environmental(whilemaintainingeconomic stability)(Elkington,1998)

•Evaluationorcollaborationcharacter(KlassenandVachon, 2003)

FO:social FO-soc

FO:evaluation FO-eval

FO:

collaboration

FO-collab

(18)

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