The success parameters of Supply Chain Sustainability Cooperation

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The success parameters of

Supply Chain Sustainability Cooperation

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October 2014

Author L. Weemstra

Student number 1624482

Email liekeweemstra@hotmail.com

Education Technology Management

Faculty of Economics and Business University of Groningen

Client W. Haalboom

C.A. Meijles

Province Friesland Supervisors educational institution H. de Vries

De Vries Business Consultancy X. Zhu

Faculty of Economics and Business University of Groningen

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Management Summary

The department sustainable innovation of the province of Friesland aims to build a sustainable economy in Friesland. They introduced the ‘sustainable consumption and production program’ (In Dutch: ‘grondstoffenagenda’) as one of the programs which should contribute to this objective. The goal of this specific program is to facilitate projects in the province which contribute to a transition towards a more sustainable economy. Besides, the program should motivate and inspire the community and industry to act more sustainable. To realise these kinds of projects cooperation between organisations is necessary. To realise this, the province of Friesland applies a concept set up by Noorden Duurzaam1: Supply chain sustainability cooperation (SCSC).

SCSC can be defined as ‘an accessible collaboration to enhance sustainability of specific supply chains on a local level’. It is a small-scale cooperation between business in the physical supply chain as well as external organisations such as universities, local governments and parties primarily interested in contributing to a transition towards a sustainable economy (e.g. environmental groups). Subsequently, a snowball effect will occur; local initiatives may turn into regional initiatives and a sustainable innovation can be realised on a large scale. As well as in the province of Friesland, SCSCs are set up in other regions in the northern Netherlands. The initiator of these collaborations is Noorden Duurzaam. This research contains the investigation of SCSCs in Friesland, as well others SCSCs in the northern Netherlands. The main objective of this study is to answer the question: ‘Which

parameters determine the effectiveness of a supply chain sustainability cooperation?’.

This paper is organised as follows. At first, a theoretical framework with the parameters which influence inter-organisational cooperation as well as intra-inter-organisational cooperation is depicted. Secondly, several SCSCs are observed and the parameters which influence these SCSCs are described. Subsequently, the theory is integrated with the observations and initial connections between them are made. A synthesised conceptual model is developed containing those parameters which determine the effectiveness of a SCSC. Parameters and relations which are doubtful will be translated into hypothesis and tested by the Delphi method. This results in the model, which is shown at the end of this chapter. It contains the parameters which determine the effectivity of a SCSC. Moreover, the relationships between the parameters and the key parameter effective supply chain sustainability

cooperation are given.

The model can be divided in two subjects: on the left the parameters related to the category players are given. The right side shows the parameters which contribute to process/environment. By taking a closer look at the left-hand side, the model shows that the parameters common interest and interdependency awareness determine directly the effectivity of a SCSC. Related to common interest is the win-win principle; besides a common interest, also the cooperation should be beneficial for every organisation.

The right side of the model focusses on parameters concerning process and environment. The parameters

network design and network process have a central position on this side. The effectivity of a SCSC is directly

determined by the composition of the cooperation and (the order of) the several stages of the process.

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It is most likely that all parameters with regard to the environment (complexity of the environment, rate of change

of the environment and rate of institutionalisation) influence the effectivity of a SCSC. Although this is confirmed

by literature, the relationships cannot be verified in practice. Therefore, additional research is necessary to investigate the exact influence of these parameters.

The parameters facilitation and goal consensus claim a key position in the model. Facilitation focusses on the skills of a process facilitator. A distinction can be made into skills regarding process and content. Especially the former skills, managing group processes, are positively related to the effectivity of a SCSC. Skills regarding the latter, when the process facilitator has substantive knowledge of the sector and/or the involved organisations, contribute to the management of group processes and the effectivity of a SCSC. Goal consensus increases the effectivity of a SCSC, because the attendance of a specific goal makes it clear what the benefits are for the involved parties, which motivates organisations to join the collaboration.

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7 Deduction ... 48 7.1 Hypotheses ... 48 7.1.1 Facilitation... 49 7.1.2 Goal consensus ... 50 7.1.3 Network design ... 50 7.2 Conclusion ... 51 8 Testing ... 52 8.1 Delphi Method ... 52 8.1.1 Round 1: Questionnaire ... 53 8.1.2 Round 1: Results ... 53 8.1.3 Round 2: Questionnaire ... 58 8.1.4 Round 2: Results ... 59 8.2 Accept/reject hypotheses ... 61 9 Evaluation ... 62 10 Conclusion ... 64

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12.1 Articles ... 68 12.2 Books ... 69 12.3 Sites... 70 13 Appendices... 71 13.1 Appendix I: Stakeholders ... 71 13.1.1 ‘Stakeholders’ ... 71 13.1.2 Mapping stakeholders ... 71

13.2 Appendix II: Overview SCSCs ... 74

13.2.1 Concrete supply chain sustainability cooperation Groningen ... 74

13.2.2 Concrete supply chain sustainability cooperation A7 zone ... 74

13.2.3 Concrete supply chain sustainability cooperation Emmen ... 75

13.2.4 Paint supply chain sustainability cooperation (Groningen) ... 75

13.2.5 Paint supply chain sustainability cooperation (Smallingerland) ... 75

13.2.6 Supply chain sustainability cooperation in Hoogeveen (paint and bitumen) ... 76

13.2.7 Roof2Roof ... 76

13.2.8 Food supply chain sustainability cooperation ... 77

13.2.9 Closing the loops ... 77

13.3 Appendix III: Interviews ... 79

13.3.1 Peter Bootsma ... 80

13.3.2 Halbe Vogel ... 88

13.3.3 Dirkjan Bours ... 91

13.3.4 Marten Imelman ... 98

13.3.5 Henk-Jan Falkena ... 103

13.4 Appendix IV: Delphi methode ... 108

13.4.1 Ronde 1; vragenlijst ... 108

13.4.2 Ronde 1; Resultaten ... 112

13.4.3 Ronde 2; Vragenlijst ... 119

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1 Introduction

This research is focusing on Supply Chain Sustainability Cooperation (SCSC), a concept developed by CODIN (the precursor of Noorden Duurzaam). SCSC can be defined as ‘an accessible collaboration to enhance sustainability of specific supply chains on a local level’ (Bootsma, Bours and Meijles, 2013). The province of Friesland, the client of this research, uses SCSC for their sustainability goals.

The province aims to achieve a 16% share of its energy from renewable sources by 20202. Renewable energy offers an alternative to fossil fuels, and comes from resources which are continually replenished. Types of renewable energy which are used in Friesland are solar energy, wind power and biomass. Besides projects which focus on a substitution by renewable energy, a large sustainable profit can be gained by using second raw materials and thereby reducing the energy generally needed in the supply chain. In 2010 the province introduced the ‘waste action program’ (In Dutch: ‘AAP’), to look for opportunities to contribute to more sustainable raw materials management in Friesland. The successor of ‘AAP’ is the ‘sustainable consumption and production program’ (In Dutch: ‘grondstoffenagenda’). This program should realise ambitious sustainable goals concerning (second) raw materials and energy. In the long run, a closed-loop system should be realised and this is the major challenge for the province and its industry.

To achieve a transition towards a sustainable economy in Friesland, cooperation between the province and other organisation, like municipalities, businesses, institutions, and citizens, is essential. The concept of SCSC has already been used by the province of Friesland during the waste action program, with positive results. In particular, businesses are enthusiastic about this method of cooperation. Several innovative concepts, initiatives and projects have started which are promising to contribute to a transition towards a sustainable economy. Good examples are ‘fair fibers’3, ‘closing the loops’ and a cooperation in the chain, with the goal to preserve food efficiently and minimizing food waste.

Within the province of Friesland there are several opportunities for sustainability within a broad variety of supply chains. The province of Friesland is enthusiastic about the working method of SCSC: the involvement of all stakeholders; starting on local scale; limited participants, and quick results. However, a scientific research will be necessary to analyse the success of such a cooperation and map the factors which influence the effectivity of a SCSC.

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2 Research Proposal

2.1 Noorden Duurzaam

Noorden Duurzaam is an association for sustainable development in the northern Netherlands. The members of

this association are prepared to invest in sustainability, and consist of both organisations and individuals. Noorden

Duurzaam defines sustainability as: ‘the balance between social, economic and ecological development, here and

everywhere, now and later’ (Noorden Duurzaam, 2014). The establishment of this network began in the autumn of 2013, and the network is the successor of CODIN (Contactnet Duurzame Innovatie Noord Nederland – contact network for sustainable development in the northern Netherlands). At the present time, Noorden Duurzaam is busy extending its network and increasing its number of members. With all of the businesses, institutions, government organisations, networks and individuals, the association will be engaged to develop a new category of sustainability projects. The projects are broad and multi-disciplinary, as well as fast and efficient, and will encompass a large part of the region (Noorden Duurzaam, 2014). The network’s method shall be explained below, whereby working with different tables on diverse sustainability issues is discussed.

Within the network, four different types of tables are distinguished: sectors, chains, themes and governments/regions. Organisations and individuals can join the association and participate in the tables with which they have an affinity. This results in the ‘deepen-broaden-spread’ principle, which serves as a scaling engine. Within this principle, small, local initiatives will be effectively and quickly scaled up to regional initiatives. Creating a snowball effect is crucial here. The first stage is limited to one table. The members associated with one table will collaborate with each other to identify sustainability problems and select promising projects. After this initial analysis, the tables have to be interconnected. Members of other tables can join in on a chosen project if they are stakeholders or if they have an interest in it, so that a broad consensus is developed within the project. The project will then have to be scaled up, whereby the broad support is necessary to enable multiple institutions/businesses to come into contact with the project.

2.1.1 Supply chain sustainability cooperation

Although the network was established only recently and the number of members is growing, there is already some experience in the area of supply chain tables with the collaboration between organisations in the product chain. CODIN (the predecessor to Noorden Duurzaam) launched several initiatives in recent years with the goal of creating sustainability within the product chain. This supply chain sustainability cooperation (SCSC) is defined as: ‘an accessible collaboration to enhance sustainability of specific supply chains on a local level’ (Bootsma, Bours and Meijles, 2013).

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2.2 Main and sub-questions

This research is conducted on the basis of already existing SCSCs. When this is applied to the Noorden Duurzaam association, it zooms in on the first stage of the ‘deepen-broaden-spread’ principle with the focus on supply chain tables. The participants at these tables come from different (types of) organisations and therefore have different knowledge and experience, and will bring diverse interests to the table. However, the common goal is to increase the sustainability of the relevant supply chain and to take a joint step in the direction of a circular economy. In order to realise this together, the main question of this research must be answered:

Which parameters determine the effectiveness of a supply chain sustainability cooperation?

Taking these parameters into consideration will contribute to the effectiveness of the first stage of the ‘deepen-broaden-spread’ principle, and will show which characteristics the collaboration will have to fulfil in order to be effective. Although the main question specifically addresses SCSCs and thus focusing on chain tables, the parameters mentioned may also have an influence on the effectiveness of the other tables. In any case, the latter will not be included in this investigation.

In order to answer the main question, it must be divided into sub-questions. 2.2.1 Theory

Answering the main question starts with a literature review. This examines the parameters that influence cooperation between organisations. The literature review will not specifically address the parameters that influence SCSC, this happens only in practice when the various SCSCs are observed.

Cooperation between organisations is defined as inter-organisational cooperation, however the parameters that influence an intra-organisational cooperation will also be viewed; that is, collaboration within a single organisation. It may be mentioned that within the literature a clear distinction is made between these two types of collaboration, because the parameters that influence intra-organisational collaboration possibly also influence inter-organisational collaboration. Sub-questions (a) and (b) will provide an answer to the question of which parameters influence both types of cooperation, and are formulated as follows:

According to literature, which parameters influence inter-organisational cooperation? (a) According to literature, which parameters influence intra-organisational cooperation? (b)

2.2.2 Practice

The first two sub-questions are based on literature, which includes the parameters that influence the cooperation between organisations. In practice, the focus will be toward SCSC. To determine the parameters that influence the effective functioning of a SCSC various SCSCs will be observed. Within these observations the parameters that influence the SCSC are not immediately mentioned; rather, it is a description of current consultations. Next, these observations are integrated with the parameters mentioned in the theoretical framework. This is then no longer about parameters that influence cooperation between businesses, but more specifically the parameters that are influential to SCSC. The sub-question that pertains to this integration is as follows:

According to both literature and observations, which parameters influence a supply chain sustainability cooperation? (c)

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some parameters a testing phase will still be needed in order to actually determine whether the parameters with associated relationships within the model are correct. These parameters will be outlined by experts using the Delphi method. Eventually an answer can be found for the main question:

Which parameters determine the effectiveness of a supply chain sustainability cooperation?

These parameters will eventually be presented in a model in which the factor of effective supply chain sustainability cooperation represents the core, surrounded by the parameters that directly and/or indirectly influence the SCSC with their corresponding relationships.

In Table 2.1 the main question and sub-questions as described previously are presented once again, along with the chapter in which an answer is provided for the question concerned.

Main research question and sub-questions Chapter

Which parameters determine the effectiveness of a supply chain sustainability cooperation?

Conclusion

(a) According to literature, which parameters influence inter-organisational cooperation?

Theoretical framework (b) According to literature, which parameters influence intra-organisational

cooperation?

Theoretical framework (c) According to both literature and observations, which parameters

influence a supply chain sustainability cooperation?

Induction

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3 Methodology

This investigation is conducted on the basis of the empirical cycle of De Groot (1961). Empirical science can be defined as ‘to systematically describe, organise, record, understand, clarify the phenomena that arise through experience processes; in order to predict new phenomena with the intention of controlling, or influencing it, using this predictability’ (De Groot, 1994). Analysing the parameters that are important for the effective functioning of the SCSC can be considered as an exploratory study. An exploratory study is characterised as a theory-oriented investigation; from empiricism to theory. The starting point is the existing literature, which will be integrated with observations. If necessary, findings in practice are translated into hypotheses. These

hypotheses are then tested, from which a generally applied theory will emerge. De Groot’s (1961) empirical cycle is a suitable method for conducting an explorative study; a number of SCSCs are already active, which means that these experiences can be observed. Then, the parameters that influence the effectiveness of the SCSC can be observed, and if any parameters are in doubt they will be tested to determine whether they have a real impact on the effectiveness of the cooperation.

3.1 Empirical cycle

The empirical cycle from De Groot (1961) consists of five phases successively: observation, induction, deduction, testing and evaluation. Prior to these five phases, this study begins with the theoretical framework. Here it is made clear what has already been described in the literature regarding cooperation, for the case of collaboration between different organisations as well as collaboration between individuals from different disciplines within one organisation. Answers are provided for the sub-questions (a) and (b), followed by a graphic representation of the influencing parameters of cooperation between organisations.

The research structure is displayed in Figure 3.1, whereby the empirical cycle is shown in green and the remaining chapters are added in brown. As can be seen, the chapter format for this thesis is laid out according to the phases of the empirical cycle.

Theoretical Framework (4)

Deduction (7) Observation (5)

Induction (6) Testing (8) Evalutation (9)

Conclusion (10)

Recommendations for further research (11)

Figure 3.1 - Research structure

The five phases are described in the following sections, with an indication of the aim and method for each phase. 3.1.1 Observation

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SCSC. The observations stand apart from the literature section and thus no comparison will be made with the parameters mentioned in the theoretical framework. The integration of these only occurs in the induction phase. A selection is made for which SCSCs are to be studied in this phase. This involves the SCSCs initiated through

CODIN and/or whereby a process facilitator is appointed by CODIN. The stages in which these consultations take

place are different, as are the location and sector. As a result, the consultations can be properly compared and the differences are observed. Furthermore, there are still a number of SCSCs to be studied that contribute to the sustainability of the Province of Friesland. This area was chosen because the location of the Friesland province provided a good perspective on the progress of these consultations and the results achieved. Eventually, a selection of 10 SCSCs was made, namely:

 Concrete Supply Chain Sustainability Cooperation Groningen  Concrete Supply Chain Sustainability Cooperation A7-zone  Concrete Supply Chain Sustainability Cooperation Emmen  Paint Supply Chain Sustainability Cooperation Groningen  Paint Supply Chain Sustainability Cooperation Smallingerland  Paint Supply Chain Sustainability Cooperation Hoogeveen  Bitumen Supply Chain Sustainability Cooperation Hoogeveen

 Bitumen Supply Chain Sustainability Cooperation Groningen (Roof2roof)  Food Supply Chain Sustainability Cooperation Friesland

 Closing the Loops

The observation phase is identified by De Groot (1994) as ‘the gathering and grouping of empirical factual material’. The methods used for analysing these cooperations are interviews, attending consultations and studying reports of (completed) SCSCS. Below is a brief description of why these methods were chosen:

 Interviews with process facilitators. The purpose of these interviews is to gain insight into the process of

a SCSC. This clarifies the role of the process facilitator and how the cooperation will begin. Furthermore, the process facilitators are asked what they consider to be important parameters for an effective collaboration.

 Attending SCSC meetings. This method of eliciting information is important because this is when the

participants in the consultation can be observed. Their behaviour can be clearly seen in these situations, and thus what they consider to be important to include in such consultations. In addition, the role of the process facilitator can be observed, as well as the interaction between the parties.

 Reports. A few SCSCs have already been (partially) completed, after which a final report was prepared.

Information can be gained from these reports about the process of the consultation with the associated results.

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3.1.2 Induction

Induction is defined by Bouter, van Dongen and Zielhuis (2005) as ‘the process of going from concrete, particular observations to a more abstract, generally applicable picture of the reality’. This is where the theory (chapter 4) is integrated with practice (chapter 5) and generalised conjectures are drawn. Although generalised conjectures are drawn in the induction phase, the psychological induction process takes place almost entirely within the observation phase (De Groot, 1994). The process taken to achieve these conjectures is an iterative one between the literature and the observations. On the one hand, observations from practice can be intentionally solicited from a theoretical base; the findings in literature would be compared and tested. On the other hand, possible parameters that are described in the literature can be solicited from specific observations within the various SCSCs. At the end of this chapter, a synthesised conceptual model is developed. Apart from the parameters that, without certainty, may influence the effectiveness of the SCSC, the parameters that are confirmed with certainty to have an influence on the SCSC are shown, as this is well established from both the literature as well as the observations. The induction phase concludes with the synthesised conceptual model whereby an answer is also given to the sub-question (c).

3.1.3 Deduction

After the general conjectures are established, these must be tested. ‘This process of going from abstract theory to testing one or more hypotheses is known as deduction’ (Bouter, van Dongen and Zielhuis, 2005). The hypothesis is an assumption that needs to be proven. Once it is tested, the hypothesis can be accepted or rejected. The hypotheses that are to be tested are those relationships within the synthesised conceptual model for which doubt exists regarding whether or not the SCSC actually depends on the parameters mentioned. De Groot (1994) uses the term ‘hypothesis’ to mean something that ‘is formulated, or can be, from which special effects and in particular concrete, verifiable predictions can be drawn, and can be tested’.

3.1.4 Testing

This phase clearly determines whether the parameters mentioned in the deduction phase definitely influence the effectiveness of the SCSC. The hypotheses that are drawn can be tested and then either accepted or rejected. This testing will be done using the Delphi method.

Delphi method

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Dalkey and Helmer (1963) classified the three basic elements of the Delphi method:

 Each expert receives the same questionnaire containing the same possible answers.

 The researcher catalogues and orders the opinions that are formulated and these are reported back to the experts.

 The communication is characterised by anonymity, whereby the experts can fully express their opinions. Essential to the value and quality of the Delphi method is the composition of the panel (Van Dijk and Landsheer, 2011). Kieft (2011) proposes four requirements for the participants. The opinions of the participants must be obtained anonymously; the participants must be capable of clearly articulating their opinions; the experts must have sufficient expertise on the subject matter; and several different groups of relevant experts should be present.

In conclusion, it should be noted that the subjectivity of the process facilitator, in this case the researcher, could play a significant role. The information that is provided to the experts, as well as the feedback from the opinions expressed by the panel members can have a very suggestive effect. The researcher is in fact responsible for the selection of information, which should be objective and comprehensive. Any preference introduced by the researcher should be prevented.

After the Delphi method is executed, the results are then analysed and conclusions must be drawn regarding the hypotheses. This phase then concludes with the acceptance or rejection of the various hypotheses.

3.1.5 Evaluation

The final phase of the empirical cycle is evaluation. The results that are obtained using the Delphi method must be assessed in this phase. De Groot (1994) uses the evaluation phase ‘for determining the value of the outcomes in a wider context’. The conclusions with regard to the hypotheses are therefore already drawn and in this phase the evaluation of these results takes place.

After De Groot’s empirical cycle is completed and the results are known, the conclusion will include the answer to the main research question: Which parameters determine the effectiveness of a supply chain sustainability

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4 Theoretical framework

Within this theoretical framework, the parameters that affect the cooperation between organisations, arising from the literature, will be identified. The concept of SCSC won’t be discussed in this theoretical framework; this term will be discussed in chapter ‘Observation’. This broad approach is chosen to make sure no parameters will be forgotten.

This chapter starts with stressing the need for sustainability and the cooperation this requires. Then supply chain collaboration, as defined in the literature, is viewed more closely. As a result, the position of this supply chain collaboration towards cooperation in general can be determined. This definition differs from the one the association Noorden Duurzaam applies: SCSC.

Next, the success parameters of cooperation between organisations will be identified. A distinction is made between inter-and intra-organisational collaboration. Although SCSC is an inter-organisational cooperation, also the parameters that affect intra-organisational collaboration will be examined. As stated by Kaats, Van Klaveren and Opheij (2005), intra-organisational is not about cooperation between organisations, but about cooperation between individuals in departments, teams or projects. This is relevant because within inter-organisational collaboration the organisations are represented by individuals; it ultimately comes down to cooperation between people. Therefore, it is remarkable that in current literature on inter-organisational cooperation, little attention is paid to parameters that affect intra-organisational collaboration. In section 4.4.1 the differences between inter-and intra-organisational collaboration will be identified. Subsequently, the sub-questions a inter-and b will be answered.

According to literature, which parameters influence inter-organisational cooperation? (a) According to literature, which parameters influence intra-organisational cooperation? (b)

To provide some structure in the sub-questions, the parameters are divided into three categories: players, process and environment. Subsequently, the parameters will be displayed graphically, in order to expose the direct and indirect dependency. Two different models will be used for this display.

4.1 Sustainability

Since the 1990s, due to increasing globalisation, the scale, scope, and impact of production processes has changed. This growth is a consequence of rapid increase in population; technological change; an increase in consumerism; and the expanding Asian economies (Biddle, 2011). As a result of this, the society became aware of the limits of the environmental resources and the need to produce sustainable. Sustainability is a broad interpreted notion. The concept is described by the World of Commission on Environment and Development as: ‘the needs of the present without comprising the ability of future generation to meet their own needs’ (World commission on environment and development, 1987).

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Freeman (2003) conclude: ‘Turning a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth’.

4.1.1 Cooperation

Although firms can achieve individual solutions to sustainability issues, they are unlikely to take satisfactory steps for the whole supply chain (Hall, Matos and Silvestre, 2012). Krause, Vachon and Klassen (2009) go even further; they argue that companies are no more sustainable than their suppliers. This notion is confirmed by De Man and Burns (2006) as well as by Koplin, Seuring and Mesterharm (2007): suppliers are responsible for organisations upstream in the supply chain, since customer organisations judge the product on the basis of the whole chain and not only on the added value of their company to the product. In order to be attractive on the sales market and to have a good reputation, organisations (at the end of the chain) are driven to develop strategies to ensure that organisations in earlier stages of the supply chain are sustainable.

The statements above can be summarized by saying that organisations need each other to be more sustainable; cooperation is necessary. De Man and Burns (2006) set out two reasons why the number of partnerships increase in relation to a sustainable product chain. Firstly, companies want to focus on their core business and therefore, all other activities are outsourced. Globalization and specialization play a major role in this regard. Secondly, companies fear their reputation with respect to corporate social responsibility. Consumers judge companies increasingly on the total product and not only on the added value of the company who sells it. Examples are Nike and Unilever, who are held responsible for respectively child labour and the destruction of the rainforests. Fearne, Martinez and Dent (2012) rightly state that ‘supply chains, rather than firms, are held accountable for a product or service's external impact’.

4.2 Supply chain collaboration

The previous section has shown that organisations need each other to become more sustainable. Different companies within a chain have to collaborate to deliver sustainable products or services. Although this theoretical framework does not highlight specific supply chain collaboration, it will briefly elucidate what is meant with this below.

4.2.1 Definitions

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primary process. It may concern cooperation on horizontal level, but also the involvement of actors who rely on this knowledge, such as educational institutions or the government.

4.3 Stakeholders

As discussed above, the various participants in a partnership have a crucial role to play. Within the SCSC is chosen to invite participants who represent one of the six sections. It concerns sections within the physical supply chain (supply, demand, and recycling), as well as sections that can be defined externally (local government, universities and transition). The influence of these participants on the cooperation, is reflected in the parameters, which will be discussed in the sub-questions a and b. However, in appendix 13.1 the role of stakeholders will be viewed more closely and how to deal with the various stakeholders. The parameters that are important for the effective functioning of SCSC shall indirectly influence the choice of the participants.

4.4 Success parameters of cooperation

In the literature, a distinction can be made between cooperation between organisations (inter-organisational cooperation) and cooperation within organisations (intra-organisational cooperation) (Dozy, 2011). Inter-organisational cooperation focuses beyond the boundaries of an organisation and includes the relationship with other organisations in the environment. Hence, SCSC is an example of this form of cooperation. The literature makes a clear difference between the parameters that affect inter-organisational cooperation and the parameters that affect intra-organisational cooperation. As stated in the introduction of this chapter, the parameters that have an impact on the cooperation within an organisation may also affect the co-operation between organisations. After all, in collaboration between organisations it is also about the interaction between the participating individuals.

4.4.1 Inter-organisational versus intra-organisational cooperation

In order to give an answer to the sub-questions a and b, the differences between the two forms of cooperation should be clearly formulated. Dozy (2011) indicates the specific characteristics of inter-organisational cooperation compared to intra-organisational. She identifies three distinct differences. In the first place, the absence of a centre of power. None of the participating parties has the authority to make decisions or to force other parties to do so. Agreements are most of the time made at the strategic level (the 'what'). 'How' these agreements are being made is for account of all the various organisations.

A second difference between and intra-organisational cooperation is that the interests within inter-organisational organisations are only partial the same. The main goal of the individual participants within intra-organisational cooperation is the common interest of the entire organisation. The interest of the department is subordinate to the interest of the organisation. Those interests are more comprehensive within an inter-organisational cooperation. It is important for the cooperation that the individual interest of the participants do not 'win' from the common interest of the partnership. In other words, a win-win situation must be strived for. Several authors refer to the win-win principle.

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the benefit of all?’. It can be concluded that besides the goal of the network, the solutions should be beneficial for all the stakeholders separately; a win-win situation is necessary.

This win-win paradigm is defined by Plaza-Úbeda et al. (2009) as: ‘environmental investments can be profitable to the firm and beneficial to the environment’. The authors describe that most environmental technologies are unprofitable because the costs of producing goods will increase. However, they see other long-term (indirect financial) benefits for organisations of these investments: competitive advantage over its rivals; enhanced cooperation with stakeholders; and favourable regulatory treatment.

Finally, Provan and Kenis (2008) confirm this win-win principle. For realising network effectiveness, the individual organisations should benefit as well. Although companies in the network are competitive in economic businesses, cooperation could be necessary to face social and environmental issues.

Besides the lack of a centre of power and the fact that interests not fully overlap, Dozy (2011) indicates a third difference. This difference relates to the fact that collaborating organisations have different values and goals. Regarding the SCSCthis difference can be seen for example in the fact that the parties in the physical supply chain usually have a clear financial gain, contrary to governments and environmental organisations. The latter often aim to contribute towards a more sustainable society. The difference in objectives also brings a difference in values; what ideals are desirable?.

These three characteristics of inter-organisational collaboration create organisations with conflicting natures. The cooperation won’t be smooth, when organisations have divergent interests, goals and values. After all, no organisation has the ability to impose action on other organisations. Mijs (1987) has named beside a lack of a strong authority (as mentioned by Dozy, 2011) the mix of cooperation and conflict.

Besides this contradiction, an inter-organisational cooperation is also characterized by permissiveness. This has to do with the frequency of the meetings, the priority given to a problem or the extent to which there is uncertainty about the objectives of the collaboration' (Dozy 2011). With regard to the frequency of the meetings, annoyance may rise when parties are poorly prepared or just do not show up. In addition, constantly catching up participants who have missed an appointment may cause irritation. With regard to the priority, more urgency will logically lead to more commitment and more motivation to cooperate.

Dozy (2011) states that participants in intra-organisational collaboration can more easily use the exit option than parties in inter-organisational cooperation. The following example is given: when intra-organisational collaboration is not progressing satisfactorily, bosses or employees can choose the exit-option; the latter may resign or gets fired. Dozy (2011) points out that in inter-organisational cooperation it is harder for parties, i.e., the organisations involved, to say: ‘I do not participate anymore’ or ‘you cannot participate anymore’. To reach their objectives the organisations are interdependent. While achieving the sustainability goal, however, this comparison doesn't always hold up. Reason is that participants of an SCSC generally do not consider the SCSC's objective a sheer necessity, but merely a good alternative. This means that the exit-option for organisations is indeed an possibility.

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aware of their interdependence. And finally functional integration focuses on the delimitation of the coordination between the organisations .

Metcalfe has a lot of similarities with Benson (1975), who also distinguishes four dimensions: Ideological consensus, domain consensus, coordination of activities and positive mutual appreciation. Benson (1975) assumes that there is a positive relationship between the degree of integration in one dimension compared to integration in the other dimensions. However, the social integration is restricted by the individual interest of participating organisations, mainly in the fields of money and legitimacy. Money is spending on resources and labour which are provided by an organisation. Legitimacy refers to the recognizing of the domain agreements. The differences between inter- and intra-organisational cooperation are now well known. Next, the parameters which affect both types of cooperation will be discussed, according to the literature, so that sub-questions a and b will be answered.

4.4.2 Categories

The parameters which affect the cooperation are also mutually dependent which leads to a very complex model. In order to make this complexity somewhat clear the various parameters will be divided into several categories. Kaats and Opheij (2012) identify three categories that are important to understand a situation. ‘It is important to obtain clarity in the participants of the cooperation, in the manner in which the process takes shape and gets substance and in the environmental parameters’. By way of conclusion, the parameters that affect cooperation could respectively be divided into players, process and environment.

Players can be distinguished in participating organisations and participating persons. Participating individuals play

their part in intra-organisational cooperation, which will be discussed in sub question b. With regard to the participating organisations the focus will lay on ‘their interaction, how they relate to each other, how they treat each other and how all this affects their mutual cooperation’. (Kaats and Opheij, 2012). The second category is

process, which concerns the ‘phasing and controlling of the process’. Relevant is how decisions are made and by

whom. And what is the nature of the cooperation? Finally, the third category is environment, i.e. the context of the cooperation. It is important to understand the environment and to consider how it affects the collaboration. After all, ‘an issue does not 'suddenly just appear'; it has to do with the environment’ (Kaats and Opheij, 2012). The reason for cooperation often has his origin in the environment; deriving from a social or political pressure or from the market in which organisations operate. In the former case, it possibly concerns sustainability issues or new legislation that must be met. In the second case, examples may be reduction in costs or innovation.

Environment has a mutually dependent relationship with the category players as well as the category process. The

environment can be decisive for the initiative to cooperate and this determines which players have an interest in participating. In addition, the environment affects how the process will look like. Conversely, it can be said that both the players and the process guide the cooperation issue. However, the impact of the context on the players and the process is bigger than the other way round, because the environment is more established.

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4.4.3 Inter-organisational cooperation

Within this section, the parameters will be indicated that affect the cooperation between organisations. So sub-question a will be answered:

According to literature, which parameters influence inter-organisational cooperation? (a)

As mentioned in section 4.4.1, at this level of cooperation there is not a centre of power. In addition, the interests, the values and the goals of the organisations are divided.

To answer this sub-question multiple articles and books are consulted. Since the various parameters are often (mutual) interdependent, it is difficult to describe the individual parameters. The various parameters will be contained fat in the text and they will be displayed per category (players, process and environment). Due to this the consistency between the parameters can be described. As a starting point for each category Dozy (2011) will be used. Subsequently, other sources will be cited to confirm, complete or possibly disprove the parameters and relations.

Players

Firstly, the category players will be described with subsequently the related parameters. Within this sub-question the player as organisation will be discussed, not as a person. This section starts with the parameters related to the dependency of participants. Then, the importance of a win-win situation is discussed, where both parties individually as well as the entire partnership should benefit.

Dependency

The awareness that the parties are interdependent, can be seen as the most important parameter that increases the chances of a successful cooperation (Dozy, 2011). Two different types can be distinguished: symbiotic

dependency and competitive dependency. Symbiotic dependence means that two or more organisations cannot

acquire the necessary resources on their own, or they cannot realize their goals independently (Dozy, 2011). This often means that ‘the output of one organisation is the input of the other organisation' (Lammers, Mijs and Van Noort, 2000). This dependence can clearly be seen in a production chain, in which several organisations add value to products. Competition dependency occurs when two or more organisations have the same dependency on resources, as they serve the same market or provide the same services. As a result, the profit of one party, entails the loss of another party (Dozy, 2011).

The same distinction is also made in Samen slimmer in ketens: competenties in supply chain management als

concurrentiefactor voor Nederlandse bedrijven (2004), an advisory report from the Advisory Council for Science

and Technology Policy (in Dutch: Adviesraad voor Wetenschap en Technologiebeleid, AWT). In this report, the dependency is translated to a collaboration which can be horizontally and vertically. Horizontal cooperation takes place between companies with the same position in the supply chain. The companies in vertical cooperation in contrast, are complementary, they have a different position at the (supply) chain (AWT, 2004).

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Horizontal cooperation can contribute to sustainability within an entire supply chain, but may be very sensitive to competition. This distinction should be made transparent for the different organisations to avoid tensions. The fact that organisations are dependent on each other, either horizontally or vertically, does not necessarily lead to cooperation (Mijs 1987). Lammers, Mijs and Van Noort (2000) mention that awareness of this dependency is the key. They identify three parameters: domain consensus, social trust formation and external pressure.

Domain consensus can be defined as ‘recognition and endorsement from the concerning parties of the

interdependence’. The expectations from the various parties have to be clear. Dozy (2011) uses a similar definition: ‘sufficient clarity and agreement on the tasks of all organisations at the table’. Finally, the definition of Mijs (1987) may be referred to: ‘agreement on the role and scope of the organisations’. The point is that the expectations from the various parties should be aligned and realistic. After all, expectations are often based on prejudices.

The second parameter is called social trust formation. Mijs (1987) defines this as ‘the fact that the representatives of the organisations recognize and respect each other as partners and adhere to the same standards in the mutual social traffic’. Within inter-organisational cooperation, the various organisations often have different standards and values, which complicates social trust formation. However, this parameter, in the remainder named trust, will also be discussed in the section ‘Win-win situation’ and the section ‘Network governance’.

Finally, Lammers, Mijs and Van Noort (2000) identify external pressure. Mijs (1987) refers to financial institutions and other actors in the environment, which have essential resources at their disposal. This parameter will be discussed later, in the category environment.

Win-win situation

In section 4.4.1 the difference between inter-and intra-organisational cooperation is discussed. In this context, the win-win principle is also mentioned (Sol, Beers and Wals, 2013; Plaza-Ubeda et al, 2009; Provan and Kenis, 2008). This means that the participants also have an individual (organisational) interest in the partnership. The report Samen slimmer in ketens (AWT, 2004) has given some thought to a problem regarding friction points. There are parties in the supply chain which have an interest in friction points in the chain, because the removal of these frictions is their source of income. Therefore, it is difficult for all parties to rise above the level of optimization of the individual links in the chain (AWT, 2004). If the goal of the collaboration is to become more sustainable in the chain, to make a joint step towards a circular economy, there may be disrupting parties in the field.

When inviting participants in a cooperation it is important to consider which parties should be invited. After all, his so-called ‘friction parties’ have their own interest, which is contrary to the common interest. Hence, a win-win situation is almost impossible. In addition, crucial parties for a change in the chain with an opposite interest must be compensated. Achieving a win-win principle for all stakeholders is not always possible, so this ideal has to be tempered. Not inviting the ‘friction parties' or (financial) compensation for those parties offers a solution to pursue a common interest. Ultimately, it can be concluded that the cooperation can only be a success in case all parties have an individual advantage (Kaats, Van Klaveren and Opheij, 2005).

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initiatives. To achieve a win-win situation, the parties have to pursue investments which will result in benefits for all individual parties as well the entire supply chain. This can only be successful on conditions that investments and revenues are divided and that parties trust each other (AWT, 2004). If you collaborate you want to rely on the honesty and integrity of your partners. In essence, the parties show themselves trustworthy, so mutual trust can be met (Kaats, Van Klaveren and Opheij, 2005).

Process

The second category to discuss is process. Points of focus are the phasing and control of the partnership. The control will depend on the participating parties and the broader context in which the process occurs. Kaats, Van Klaveren and Opheij (2005) rightly mention that building a cooperative relationship is not only about completing tasks, it also requires a good process management. Too little attention to the relationship is the most important failure parameter within partnerships.

For the network process it is important to realize the differences between inter-and intra-organisational collaboration because this requires additional coordination. Dozy (2011) highlights that coordination is not the same as power. Coordination is all about giving direction to the process, i.e. monitoring the progress and solving conflicts. Since an inter-organisational cooperation is lacking a centre of power, having authority is crucial. This authority could be based on expertise, skills, experience or competences related to the process. However, this authority may also be based on personal charisma. Dozy (2011) assumes that coordination is regulated by the participants themselves internally. The advisory report of the AWT (2004) mentions the benefit of involving an external party in this coordination process. The report has made the relation with trust and a fair win-win situation. A neutral party can play a main role in building trust and creating awareness.

Network governance

Provan and Kenis (2008) identify four types of governance, where they zoom in on network governance, the other three forms of governance are market, organisation and cooperation. Market and organisation, are respectively based on the market principle and the hierarchical principle. The third form, cooperation, is based on negotiation and confidence. Network governance is based on the principle of collaborative behaviour and the fact that the organisations in the network are equally concerned about their own fate and success as that of other organisations. This form can be related to the win-win principle, with the focus on the common interest once again.

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Network governance

Shared governance Lead organisation Network administrative

organisation (NAO) Visualisation

Principle No administrative entity, governed by the network participants themselves.

Administrative entity (and network manager), this is an important network organisation, with also an interest in the primary process.

An assigned and separate administrative entity, set up specifically to govern the network and its activities.

Parameters which affect the effectivity

Trust High Low Moderate

Number of

participants

Few Moderate Moderate to many

Goal Consensus High Moderately low Moderately high

Need for

network level competencies

Low Moderate High

As shown in Table 4.1, not all three forms have an entity, i.e. a network leader who facilitates the activities of the participants in order to meet the goals of the network. In addition, this network leader can be either one of the participants or be appointed externally.

The simplest form of network governance is the self-regulating network: the organisations jointly take decisions and manage the process their selves. There is no separate administrative entity. Benefits of this partnership are a high degree of participation and involvement. In contrast, the form can be inefficient, since everyone communicates with everyone about everything. This means that finding consensus can be difficult. In addition, there is not a clear face for the external representation.

The other two forms have a clear entity which coordinates and manages the collaboration. With respect to the ‘lead organisation’ network, this function is held by one of the participants. ‘Essential to the functioning of this model is the efficiency and legitimacy of the network leader’ (Provan and Kenis, 2008). Here the other participants should not be dominated, as this can lead to resistance and resentment. Furthermore, the risk exists that the leader takes on many network tasks himself, which can lead to more focus from the other participants to their own interest. As a result, the collective (network) goals can be neglected.

The ‘network administrative organisation’ (NAO) uses a separate external entity. This entity has the specific task to manage the network and to coordinate activities. The difference with the ‘lead organisation’ network is that this leader is not one of the parties who is also active in the primary process. The leader can make independent decisions, because he has no separate interest in the primary process.

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The determination of the most appropriate form depends on the situation. Provan and Kenis (2008) have shown that there are four parameters which determine whether a certain network design is effective. It concerns: 1. The degree of trust in the network

2. The size of the network in terms of network members (number of participants) 3. Goal consensus among the members of the network

4. The need for network level competences

It is important to mention that above parameters do not affect the cooperation directly. They decide whether a chosen form of governance can be effective, which is shown in Table 4.1.

The first parameter, trust, has been mentioned in the last category as a parameter that affects interdependency awareness. Trust can be defined as: ‘the willingness to accept vulnerability based on positive expectations about another’s intentions and behaviours’ (McEvily, Perrone and Zaheer, 2003). Provan and Kenis (2008) state that existing literature emphasise on trust within a one-on-one relationship and more or less about trust within a network. Their follow-up question is therefore: ‘Is it important for the success of the network that everyone on the network trusts each other, or is it sufficient that the trust is limited to some specific relationships? '.

Provan and Kenis (2008) argue that the extent and distribution of trust in a network determine which governance is effective in controlling the network. Table 4.1 shows the degree of trust in relation with the governance form. The table makes clear that trust between all parties is less important in case of an entity. Especially when it comes to an external entity. It is however important that the leader has a (dyadic) relation of trust with some of the participants.

The second parameter tells us the number of participants in the network. With an increase in the number of participants, the number of relationships within the network grows exponentially. By keeping the number of network members relatively low, the coordination is still relatively easy. There is a chance though that major parties are absent from the meeting. The participation of all the parties has two sides: decisions can be made fast and on the basis of much information, but the coordination of the network is more difficult. Table 4.1 shows that when the number of participants is low, the network can be self-regulatory. Should the number of participants increase, an entity will be required.

The parameter goal consensus has already been discussed in relation with the win-win principle. The overall conclusion from the organisational sciences is that if there is a certain degree of goal consensus, it improves the functioning of organisations or organisational associations. However, a network can still be effective with a low goal consensus. Having said that, a minimum goal consensus is required as a basis for cooperation. At a low goal consensus, an entity is necessary to prevent disagreement and conflicts. In case of disagreement, a leader has to anticipate by translating the objectives of the network to the goals of the individual organisations. The role of an entity in this, will be essential. Mijs (1987) goes even further by stating that ‘cooperation also can be reached without consensus’. The essential requirement for this is that all parties benefit from the collaboration.

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Process facilitator

With regard to the management of the process, the role of the process facilitator will be described more specifically. Provan and Kenis (2008) state that a process facilitator ‘must recognize and respond to three basic tensions, or contradictory logics, that are inherent in network governance. Although these tensions apply to all three forms of governance, the unique properties of each form means that they differ with respect to which side of each tension is most likely. How these tensions are managed will be critical for network effectiveness.’ It concerns the following three tensions:

 Efficiency vs. inclusiveness. When more organisations are involved in the network decision process, this leads

to a process which is more time consuming and resource-intensive.

 Internal vs. external legitimacy. A tension between focus on building internal network interactions or building

the credibility of the network to outsiders.

 Flexibility vs. stability. Flexibility is important to respond to the dynamic environment. However stability is

necessary to develop consistent response to stakeholders and for maintaining legitimacy.

Environment

The third category where several parameters will be mentioned is environment. Dozy (2011) identifies external pressure as one of the parameters affecting work together. The government can be seen as driver of cooperation ‘through regulation, subsidy provisions or agreements’. In addition, a social problem that leads to great dissatisfaction among the population can create a sense of urgency. The parameter external pressure can therefore be translated into social pressure, since the pressure to become more sustainable originates largely from the society, possibly via the government. In case, collaboration is not initiated by the participating organisations, this can also have negative consequences for the success of the collaboration. Dozy (2011) refers to this as a form of 'ceremonial conformity', which means that there is cooperation on paper, but with few results. The interests, goals and/or values of the different organisations are so diverse that irreconcilable contradictions exist.

Another parameter which can also be seen as part of the environment is the duration of the cooperation. When a cooperation longer exists, this may apply to both a network as well as a one-to-one relationship, the chance of institutionalization increases. This means that a clear division of tasks and roles develops (structure), while the respective values show a certain degree of convergence (Dozy, 2011). As long as this institutionalization is absent, the success depends heavily on people, which makes the network immediately vulnerable. The disadvantage of this institutionalization is that the network loses its flexibility: the threshold for new participants to join may be too large or cooperation is no longer the instrument to reach a goal, but the goal itself.

The role of the environment is in this regard important for two reasons. The network can first of all operate in a stable/predictable or in a dynamic and turbulent environment (rate of change of the environment). Secondly, the complexity of the environment differs, with regard to (technological) knowledge (complexity of the environment). When the environment is dynamic, an inter-organisational network has to be flexible. An

institutionalized network can lead to a lack of flexibility and will only function within a stable, uncomplicated environment

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4.4.4 Intra-organisationele samenwerking

This sub-question discusses the parameters which affect intra-organisational cooperation. With that sub-question b will be answered:

According to literature, which parameters influence intra-organisational cooperation? (b)

The parameters into sub-question a have been subdivided into three categories. This paragraph though has only to deal with the category players, i.e. the participating persons.

Players

Robbins and Judge (2008) outline in their book essentials of organizational behaviour ‘the foundation of group behaviour’. They argue that ‘work groups have several properties, like roles, norms, status, group size and the

degree of group cohesiveness’. These properties shape the behaviour of members and make it possible to

explain and predict a large portion of individual behaviour within the group, as well as the performance of the group itself.

All members of a group have a specific role in the meetings, which correlate with expectations about their performance. However, everyone has multiple roles to fulfil and, as a result, different expectations to meet. This can be a problem when these expectations conflict with each other. This can lead within a meeting to a ‘role-conflict’ at the participants, since they want to meet various expectations. In addition, this ‘role ‘role-conflict’ can arise between the expectations/objectives of a participant and the expectations of the group. In conclusion, too many conflicting expectations can disrupt and/or delay the cooperation. This is the interest of the parameter role. The second parameter affecting cooperation within an organisation is indicated by Robbins and Judge (2008) as

norms. Within sub-question a, this parameter is already mentioned in conjunction with social trust formation.

Norms are of great interest: ‘norms tell members what they ought and ought not to do in specific circumstances’ (Robbins and Judge, 2008). Although norms clarify the group process, there are also some disadvantages with respect to the behaviour of individuals, i.e., norms formulated by the group can also contain don'ts. This may become a restrictive corset. In addition, individuals want to belong to groups, in order to feel accepted. As a result, the behaviour and actions of individuals must adapt to the norms that apply within a group, whether by peer pressure or not. (Robbins and Judge, 2008).

Within an intra-organisational collaboration, the differences with respect to status are more evident than within an inter-organisational cooperation. The status of a person within a group has three origins (Robbins and Judge, 2008): ‘The power a person has over others; a person's ability to contribute to a group's goals; an individual's personal characteristics.’ The first origin is defined in the organisational structure. The second can be established within the organisation, but is also possible in the case of a collaboration between organisations, where 'person' may be translated into 'organisation'. The third though is personal and therefore applicable to both intra-and inter-organisational cooperation. A status hierarchy within a group has an effect on group norms and group interaction: ‘high-status members of groups are given more freedom to deviate from norms than other group members'. In addition, ‘high-status people are better to resist conformity pressure than their lower-status peers’ (Robbins and Judge, 2008). The adverse consequence with regard to the group interaction would be that low-status members will be less creative and therefore less active.

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completing tasks and individuals perform better in smaller groups (Robbins and Judge, 2008). Hence, a quick decision-making process requires a small group. The need for administrative efficiency is low and the process is less time consuming and resource intensive. However, large groups are better in problem solving (Robbins and Judge, 2008). When more organisations are involved in the network, they gain more information and input for (possible) sustainability solutions. A small group is defined as a group of approximately seven members; larger groups have twelve or more members.

A problem with an increasing amount of participants in the network is that only a few participants do most of the work (Provan and Kenis, 2008). In the early stage after the network has been formed, the involved organisations are enthusiastic and motivated about the cooperation and the goal of the network. However, when the network demands more work and energy in next stages, a few organisations have to do most of the work. This will lead to less enthusiasm right across the network and a shift towards greater centralization of governance within those organisations (Provan and Kenis, 2008). Robbins and Judge (2008) address another phenomenon as a consequence of a larger group size, which is called social loafing. This is ‘the tendency that individuals put in less effort when working collectively than when working individually’. I.e., the productivity of the group will be less than the sum of all individuals. For an effective cooperation, it is important that all participants understand their joint responsibility, besides their individual responsibility.

The final parameter that affects intra-organisational cooperation is the degree of group cohesiveness. Cohesiveness can be defined as ‘the degree to which members are attracted to each other and motivated to stay in the group’ (Robbins and Judge, 2008). The relationship between cohesiveness and productivity depends on the performance-related norms of the group. When the performance-related norms are high (e.g., high output of quality work), a cohesive group is needed. Contrary, when the performance norms are low, productivity will also be low in a cohesive group.

With answering sub-questions a and b the parameters may be integrated and be displayed graphically.

The success parameters of Supply Chain Sustainability Cooperation