How can low buying-power companies overcome power asymmetry by using supplier collaboration practices in the context of sustainability?

How can low buying-power companies

overcome power asymmetry by using supplier

collaboration practices in the context of

sustainability?

Author: Xin Jiang

Student number: S3118118

Supervisor: Dr. Stefano Fazi

Content

2.3 Power in supplier collaboration practices ... 10

2.4 Supplier collaboration practices with buyer-supplier power asymmetry ... 10

3. Methodology ... 12

3.1 Case selection ... 12

3.2 Data collection ... 14

3.3 Data analysis ... 16

4. Findings ... 18

4.1 Summary of the five buyer-supplier relationships ... 18

4.2 Non-mediate power facilitates supplier collaboration practices in SSCM ... 19

4.3 Mediate power facilitates supplier’s collaboration practices in SSCM ... 22

Abstract

1. Introduction

It is generally agreed that what makes a supplier powerful is the big scale of the supplier company or the irreplaceability of the supplier, because these suppliers would not be afraid to lose the partnership with its buyers. Powerful suppliers can be problematic for buying firms, as they could behave opportunistically and this may lead to trust issues and information sharing problems (Corsten & Felde, 2005; Ratnasingam, 2000). The opportunistic supplier could harm buying firms’ interests (Corsten & Felde, 2005; Ratnasingam, 2000).

Typically, for a weak buyer, it is more difficult to make powerful supplier to be sustainable in the context of sustainable supply chain management (SSCM), because achieving SSCM requires additional financial and technical investments (Ki Fiona Cheung & Rowlinson, 2011). Supplier collaboration, which emphasizes that buyers gain more knowledge through cooperating with their suppliers, is regarded as one of the most effective ways to improve supplier’s sustainability performance (Melander, 2017). However, if buyers lack power, the compliance of their suppliers cannot be assured (Touboulic, Chicksand, & Walker, 2014). Powerful suppliers are not afraid to lose the relationship with weak buyers. And hey are not willing to invest in additional resources and money, even though weaker buyers rely on contracts to constrains their suppliers. Therefore, this research aims to find out how such buyer-supplier power asymmetry can be mitigated to create effective supplier collaboration practices in the case of sustainable supply chain management.

According to previous research, there are two kinds of power, namely mediate power and non-mediate power (French, Raven, & Cartwright, 1959; Reimann & Ketchen Jr, 2017). Mediate power refers to the ability of a firm to reward or punish its business partners (Schleper, Blome, & Wuttke, 2017). “Powerful” usually reflects the high level of mediate power. Non-mediate power means the ability of a firm to influence its partners (Maloni & Benton, 2000). As penalty and contract regulations are inapplicable to manage powerful suppliers because buyers lack power surplus or are afraid of losing the business partner, non-mediate power should be taken into consideration to make supplier collaboration work for powerful suppliers. Therefore, in the case that mediate power is not applicable to manage powerful suppliers’ conducting of sustainability code, some non-mediate power should be considered as effective ways to make SSCM possible. With the mixed situation of current studies, an unresolved research question arises.

Research question:

How does buyer-supplier power asymmetry influence supplier collaboration practices of low- power buying firms for implementing sustainability in the supply chain?

The objective of this paper is to examine how supplier collaboration practices for SSCM are carried out under buyer-supplier power asymmetry and to further explore the effectiveness of these practices. An initial assumption we made is that low-power buying firms are those that have little mediate power over their suppliers. The research will be investigated by conducting multiple case studies. Managers or employees from purchasing department of five companies from three industries (i.e., food, chemistry, and medication) will be interviewed. We use interviews from different industries and different companies to ensure the validity of results. Furthermore, interviews will be taken from both buyer and supplier sides to provide a comprehensive and integrated understanding.

common interests and common goals with buying firms is an effective supplier collaboration practice as well.

2. Theoretical Background

This section will explain related terms in detail, such as supplier sustainability collaboration, power asymmetry, and different kinds of power: mediate power (i.e., reward power and coercive power) and non-mediate power (i.e., referent power, expert power, and legitimate power). By explaining different terms derived from existing studies, some interactions between power and supplier sustainability collaboration is provided. Specifically, we discuss how different powers stimulate supplier collaboration practices from the previous studies and then extend the existing research into sustainability. Also, what previous studies have not considered is pointed out. Considering the gap between the previous research and the paper, a theoretical framework (figure 1) can be proposed.

Figure 1 The theoretical framework

2.1 Supplier collaboration in SSCM

collaboration between buyers and suppliers is a necessity. Goodman, Korsunova, and Halme (2017) mentioned that a company cannot have all the sustainability-related knowledge on their own. Therefore, buyers need to collaborate with their suppliers to make sure their suppliers have gained sufficient information and known the importance of sustainability. SSCM is defined as “the strategic, transparent integration and achievement of an organization’s social, environmental, and economic goals in the systemic coordination of key inter-organizational business processes for improving the long-term economic performance of the individual company and its supply chains (Carter & Rogers, 2008, p. 368)”. According to this definition, different aspects (i.e., social, environmental, and economic) should be concerned when improving suppliers’ sustainability performance. Supplier collaboration strategies should be applied to enhance suppliers’ performance in social, environmental, and economic aspects.

Many previous studies have shown some supplier collaboration practices enhance suppliers’ sustainability performance, which include sharing information about sustainability-related issues (Kache & Seuring, 2014), investing in technology and measurement system and carrying out joint applied research (Fawcett, Magnan, & McCarter, 2008), conducting inter-organizational training and education projects (Sancha, Gimenez, & Sierra, 2016), and sharing benefits generated from improved sustainability performance (Lehoux, D’Amours, & Langevin, 2014). However, sustainability-related studies have taken buyer’s dominance for granted or not considered about the power imbalance between buyers and suppliers.

2.2 Power in BSR

A powerful supplier refers to the supplier that has resource and financial surplus over another party (Casciaro & Piskorski, 2005). In a buyer-supplier relationship, the powerful party provides resources and financial support as rewards to its partner or withdraws resources and financial support as a punishment to make its partner comply. If the resources that the company relies on are very important, then the resource provider would be extremely valuable (Nyaga et al., 2013).

There are two kinds of power in a buyer-supplier relationship: mediate power and non-mediate power (French et al., 1959; Reimann & Ketchen Jr, 2017). Mediate power includes reward power and coercive power (Schleper et al., 2017). A party with mediate power often uses the power intentionally to reward or punish another party to achieve its desired goal (Schleper et al., 2017). On the contrary, non-mediated power (i.e., expert power, referent power, and legitimate power) is unconsciously used by the power holder. Non-mediate power can mitigate opportunistic behaviours and lead to a sense of commitment (Jain, Khalil, Johnston, & Cheng, 2014). Specifically, expert power refers to the perception that a company’s expert knowledge is valuable to another company (Terpend & Ashenbaum, 2012). Legitimate power is the power that makes another firm feel obligated to be influenced by the company (Zimmer, Fröhling, & Schultmann, 2016). Referent power reflects the power of being a benchmark in the industry or being a reference model for other companies to learn (Nakano & Hirao, 2011). The difference between mediate power and non-mediate power is while mediate power affects other companies intentionally, non-mediate power is less manipulative and influences other firms indirectly.

2.3 Power in supplier collaboration practices

Reward power builds on giving motivations to suppliers while coercive power builds on the supplier’s concern of consequences if they fail to conduct regulations. As mentioned before, supplier collaboration emphasizes the interaction and information sharing between buyers and suppliers (Melander, 2017). A successful collaboration with a supplier should be based on trust (Touboulic & Walker, 2015). Buyers without mediate power surplus should take advantage of their non-mediate power. In fact, , non-mediate power could be more effective than mediate power to make suppliers behave sustainably.

By default, sustainability code and regulations are made by buyers in normal circumstances (Roloff, Aßländer, & Zamantili Nayir, 2015). During the process of forming a sustainability code of conduct (SCC), the expert power of a buyer is needed to stimulate sustainability implementation (Egels-Zandén & Lindholm, 2015). The buyer should have the specialized knowledge on producing products with the complying of SSCM code. A proper SCC is used as a benchmark to stimulate collaboration with suppliers to achieve sustainability.

2.4 Supplier collaboration practices with buyer-supplier power asymmetry

3. Methodology

This study aims to gain an in-depth understanding of power asymmetry’s influence on supplier collaboration for weak buyers to stimulate powerful suppliers’ sustainability. Therefore, an explorative study can be conducted to have a deep understanding of the phenomenon, and a qualitative research is recommended as well(Blumberg, Cooper, & Schindler, 2011; R. Yin, 2014). According to Yin (2014), the question can be addressed by using case studies, because a case study is an exploratory research method and is more suitable to explore a “how” question based on a real-life phenomenon. Case study allows researchers to collect data form both buyer and supplier sides to examine how power asymmetry influences supplier collaboration when stimulating powerful suppliers’ sustainability. Furthermore, inductive research could be done by an in-depth case study with interviews or a longitudinal field study (Handfield & Melnyk, 1998; Karlsson, 2016). We chose an in-depth case study with interviews due to time limitation (Handfield & Melnyk, 1998; Karlsson, 2016). This section will explain the specific steps relevant subjects of our method, i.e., the choice for the research method, the research setting and participants, case selection and description, data collection, and data analysis.

3.1 Case selection

power and their suppliers. Therefore, the unit of analysis is the buyer-supplier dyad. The comparison between buyer-supplier dyads in different companies and different industries will be more convictive to show the result. Only the basic information of these companies will be provided on the request of companies for confidentiality, the interviewees will be anonymous. The interviews will be conducted in the food industry (focal company 1, focal company 2, and focal company 3), chemical fertilizer industry (focal company 4), and medical industry (focal company 5).

The number of employee and the annual turnover of a company are often used to distinguish between small and medium-sized enterprises (SMEs) and large companies. According to the European Commission (2015), SMEs are companies that have fewer than 500 employees and have an annual turnover between 2 and 50 million Euro. Based on the definition, the five focal companies can be categorized as SMEs and large companies respectively as shown in Table 3.1. As mentioned before, the suppliers’ power comes from resource surplus or financial surplus over buyers. The supplier’s power is assumed to comply with the supplier’s substitutability. In order to increase generalizability and augment external validity, suppliers with different characteristics are selected (Leonard-Barton, 1990).

Table 3.1 shows the focal companies’ basic information:

Case Company Industry Number of employees Company size Case 1 Focal company 1 Food 60 SME Case 2 Focal company 2 Food 200 SME Case 3 Focal company 3 Food More than 10000 Large company Case 4 Focal company 4 Chemical fertilizer 30 SME Case 5 Focal company 5 Medical 1000 Large company

The cases were selected for the following reasons.

processing companies is its main business. Sustainability is the most concerned issue for the focal company 1 to ensure food safety, eliminate environmental pollution, and avoid unethical behaviours in the supply chain. Focal company 2 mainly produces fresh juice and delivers its products all over China. It is necessary for the focal company 2 to ensure that the raw materials are organic, the producing process is ethical, and the transportation process is eco-friendly. Moreover, the juice package is required to be renewable, thus the package materials should be sustainable. Focal company 3 is a well-known restaurant. It has more than 200 branches in China. For a large company like this, sustainability not only focuses on the food itself but also focuses on other aspects of the company, such as tableware, package, office items, etc. Focal company 4 is from the chemical fertilizer industry. In such an industry with heavy environmental issues, reducing harmful impacts on the environment is a way to conduct sustainability practice. Suppliers of the focal company 4 are making a transformation that uses more eco-friendly materials. In the medical industry, suppliers’ sustainability certificate is needed when the collaboration happens. Trying to reduce optical pollution and recycle the plastic products coming from the daily process is the main sustainability concern.

3.2 Data collection

Interviewing and observing are two research methods to conduct this study. Five buyer-supplier relationship dyads were selected to explore. For each dyad, informants from both buyer and supplier are invited to participate to help us get a comprehensive understanding of the relationship. Note that the interview only aims at one supplier of the interviewed company. The interviewed companies are located in China. The companies are contacted via their websites, or are recommended by friends.

in Appendix A. Based on interviewees’ answers, the questions are more or less different to explore the phenomenon deeply.

The theoretical framework provides the basis for the interview questions. The interview protocol can be found in Appendix B. The interviews were recorded and transcribed not to lose valuable information with the permission of the participants. Participants were asked to check the transcripts and provide additional information after interviews. In addition, the participants and their provided information is confidential. In each company, one employee in the position of managing or purchasing will be asked, because s/he could offer comprehensive ideas of our interview.

In these semi-structured interviews, some pre-formulated questions are established. These are all open questions and new questions might emerge during the interview. We gathered rich data from people responsible for managing suppliers and purchasing, from strategic to more operational level.

Table 3.2 Basic information of interviews

Case Interviewee Working length in the company

Relationship length with the supplier

3.3 Data analysis

To ensure the quality of case study research, validity and reliability should be addressed (R. K.-z. Yin, 2003). In order to reduce observing bias and improve construct validity, , the interviewees will check their transcripts to ensure no misunderstanding and important message missing after transcribing the interview recording (Ellram, 1996; R. K.-z. Yin, 2003). Moreover, five dyads as multiple sources of evidence are applied to ensure the validity. Besides, internal validity and external validity are both considered. Internal validity is achieved by transcribing the interviews thoroughly while the external validity is achieved by framing the research based on prior literature and using multiple resources (cases) of interviews (Karlsson, 2016). The research’s generalizability is addressed by cross-case analysis. The cross-case patterns will be picked up from the cases (Karlsson, 2016). In terms of reliability, it is addressed by literal replication. The different stages of the research, such as setting up an interview protocol, recording, and transcript, are repeated in different cases.

In the coding process, the interviewees’ answers were imported. The interviews were recorded and transcribed. Then important messages providing information of non-mediate power of stimulating suppliers’ sustainability by supplier collaboration were highlighted to have further categorized (R. Yin, 2014). After analyzing, conceptualizing and categorizing the important messages, the categories were connected to supplier collaboration practices. Then in next process of coding, the categories were summarized to provide insights of power asymmetry. Analyzing the coding outcome can help us understand the differences and similarities between the dyads. Thus the cross-case analysis was performed (Karlsson, 2016). The cross-case analysis results could enhance the generalizability of conclusions (Karlsson, 2016). The first order codes are supplier collaboration practices. According to interviewees’ answers, supplier collaboration practices that buyers used to overcome power asymmetry regarding sustainability were derived. For example, in case three, the purchasing manager from B3 stated that “We have come up with the need for healthy

we ask for it but also they have considered the market trending. We shared what we know and ask suppliers to be sustainable. By doing so, we are helping them to survive to some extent.” B3 mentioned that information sharing and the pressure of market

4. Findings

This section explains how the low power buyers stimulate supplier’s sustainability using supplier collaboration practices to overcome power asymmetry.

4.1 Summary of the five buyer-supplier relationships

This part gives a summary of five buyer-supplier relationships being studied.

In case one, dyadic data has been collected. Interview information from the buyer and one of its key suppliers is available for analysis. The buyer (B1) is an SME in food industry and mainly makes fast-food sandwiches and deliver the sandwiches to convenient stores such as 7-11. The supplier (S1) that we interviewed mainly serves food condiment to B1. The power asymmetry comes from the company size. S1 is a large company while B1 is an SME. Thus, the companies’ scales and annual incomes cause power asymmetry between B1 and S1.

In case two, the buyer (B2) mainly produces fresh orange juice and delivers the juice all over China. For B2, it is necessary to ensure that the raw materials are organic, the producing process is ethical, and the transportation process is eco-friendly, as we mentioned before. B2 is an SME as well. Its fruit supplier (S2) owns a large scale of farm and has many customers. The supplier S2 has the power surplus over B2 because the supplier is irreplaceable.

In case three, the buyer (B3) is a well-known chain restaurant in China. The chain restaurant has more than 200 branches and is a large company which is located in Beijing. B3’s sustainability is not only reflected on food itself but also on other aspects, such as tableware, package, and office items. The supplier (S3) is B3’stableware supplier. B3 needs its tableware supplier has a safety certification to make sure tableware used is safe to customers. S3 is the only qualified supplier in Beijing. B3’s high dependence on S3 allows S3 to have power surplus.

unique technic is needed, which makes S4 has greater power.

In case five, the buyer (B5) is a large hospital located in Beijing. B5 mainly focuses on reducing the light pollution that comes from LED. As a big hospital, LED is eagerly needed to make it easier for patients to being aware of different departments at night in case of emergencies. To reduce the side effect of LED such as light pollution, the hospital asks its LED supplier to customize the LED products. Not all the LED suppliers own the technology, which makes the supplier S5 have the power surplus over the hospital.

From the above summary, we can see that the suppliers are in a dominant position in the relationships. The suppliers have a power surplus over buyers because of multiple reasons across different cases. To overcome the power surplus, buyers implement some strategies to encourage their suppliers to cooperate with them and to be sustainable. Next sections will explain how different types of power facilitate suppliers’ collaboration practices in SSCM.

4.2 Non-mediate power facilitates supplier collaboration practices in SSCM

This part explains that how referent power, expert power, and legitimate power facilitates supplier collaboration practices in SSCM. All the three kinds of power are shown to be effective to push suppliers behaving sustainably.

4.2.1 Referent power

Powerful suppliers are willing to respect buyers who have significant referent power and obey their sustainability code. Different interviewees showed their ways to enhance buyers’ referent power perceived by powerful suppliers. In general, there are two ways to improve buyers’ referent power.

Firstly, automation development could help buyers to gain powerful suppliers’ respect and make powerful suppliers to be sustainability initiatively. “B1’s productive process

transformation as well (S1)”. The automation development could be seen as the

buying company’s past achievement, which pushes its suppliers to make some change. “As a small-to-medium company, automation process was be seen as an unnecessary

investment. But it turns out a wise revolution. We not only saved human workforce by using machine, but also motivated our partners and suppliers to invest in these technologies (B1).” The automation’s past achievement in sustainability of the buyer

encourages its supplier to have some technology investment, hence automation development is a useful way to enhance supplier sustainability collaboration.

Secondly, a buying company’s good reputation in sustainability could encourage its suppliers to be sustainable as well. “Considering our achievement of sustainability

influence, our company is the leader in the industry. We have accepted many interviews from different media. These interviews are free advertisements for us. People would like to buy our juice because our juice is reliable and healthy in their minds. To maintain the benefits from our good reputation, our supplier has to behave our sustainability code because the benefits will also go for our supplier (B2).” A

good reputation is better than most of the commercial advertisements. The Supplier’s willingness to cooperative with a buying company’s sustainability code not only allow it to share buying company’s benefit, but also increases chances of cooperating with other companies because of reputation benefit. “A good reputation makes our

company a benchmark in the industry. The government would like to give us some allowance to assist the sustainability achievement. The government’s support is an essential reason that our suppliers are willing to be sustainable as well (B3).”

To conclude, automation development and a good reputation make suppliers have a sense of obligation to act sustainably, because the buying firms with technologies and good reputation are often seen as a benchmark in the industry. Suppliers could know the positive result of sustainability in advance. Investing in technologies is usually a way to achieve automation. A good reputation helps buying firms to share benefits that generated from improved sustainability performance unconsciously. Therefore, referent power could enhance supplier collaboration practices and make suppliers willing to be sustainable.

The results of interviews showed that the influence of expert power on sustainability collaboration in supply chain management is highly positive. Expert power could come from the buying firm itself and other institutions as well.

In case 4, B4 is a fertilizer company requiring its supplier to use recycled package materials. The packages’ productive process needs to comply with the sustainability code as well. To make sure that the supplier is qualified, B4 sent its senior employee to conduct training and educational projects in the supplier’s company. “Sustainability-related information sharing is very important in the training projects.

We are experienced in this area. So the supplier would like to accept the training and educational projects regularly (B4).”

Other institutions’ expert power could also be a source of buying firm’s expert power. In case one, a third-party audition is a way to borrow other’s expert power. As a food brand mainly relies on “sustainable and healthy” concept, B1 needs to make sure that its suppliers also comply sustainability issues. Therefore, a certificate to prove that the supplier is qualified is needed. B1 has outsourced the audition process to an authority institution. After the audition process, if the supplier is qualified, the institution would give a certificate. In this way, B1 could cooperate with the supplier. “We audit our

suppliers though an independent authority institution, by using their sustainability knowledge (B1).”

In a nutshell, expert power doesn’t need buying firms to have extremely high level of expert knowledge. It can also borrow from other institutions. Expert power could make companies share sustainability-related information and knowledge. It could also make companies to conduct inter-organizational training and educational projects. 4.2.3 Legitimate power

A buying firm’s legitimate power would make its supplier to feel obligated to be influenced. The interviewees’ responses showed that legitimate power would overcome power asymmetry by establishing common interests and common goals. Sustainability code could often have economic benefits for a buying firm and its supplier. “We ask our suppliers to decrease their package to reduce waste and only

because they can reduce costs as well. (B3)” The supplier is willing to comply with

the sustainability code because they can save costs and human workforce. “If our

supplier is willing to cooperate with us to do sustainability development, we could be more competitive in the whole market in the long run. Survived companies will make more money in the future (B2).” Being sustainable could make common interests for

buyers and suppliers.

Similar to common interests, a common goal is another reason that enable legitimated power to overcome power asymmetry. “Food safety is the common goal between

suppliers and us all the time (B1).” The common goal such as food safety or owning a

larger market share helps enhance suppliers’ sustainability consciousness.

Common interests and common goals give suppliers a sense of obligation that they should act sustainably just like their buyers.

4.3 Mediate power facilitates supplier’s collaboration practices in SSCM

Compared to non-mediate power, mediate power seems to influence suppliers’ willingness to be sustainable more directly, since suppliers would have rewards or punishments as a result. For weak buyers, they also have some ways to make reward power and coercive power work.

4.3.1 Coercive power

Previous studies show that coercive power comes from a powerful party. In this research, responses from interviewees showed that a weak buyer could also have coercive power, but in a soft way. In case 1, B1’s condiment is not hard to acquired. “We select qualified suppliers, reduce the number of suppliers, and only cooperate

with key suppliers who meets our sustainability code (B1).” For B1, key supplier

selection would be a way to show coercive power.

the sustainability code. However, showing tolerance is a way to show willingness to cooperate. It is also a way to develop a closer relationship. As responses in case one: “If our suppliers followed our sustainable productive process but didn't meet our

expectation, we can ‘pretend’ that they have made some sincere troubles for us, but we still would like to cooperate with them, and we would like to provide another training program (B1).” The coerciveness of tolerance comes from suppliers must

take the consequences of not acting the sustainability code. “They have to take the

consequence if they fail to meet our sustainability code, such as paying the compensation and being exposed. If we find that they didn't meet the sustainability code in our checking process, we will show some tolerance and monitor them to do some modification (B4).” In other words, weak buyers could borrow coercive power

from external environment, because the consequence that suppliers should take is from external environment, instead from the buyer.

4.3.2 Reward power

In case one, S1 is powerful because S1 is a large company while B1 is an SME. S1 would not be afraid to lose a partner like B1. For B1, rewards to S1 seems to be unnecessary, because B1 would not pay a large amount of money to reward S1’s compliance of sustainability code. “We sometimes increase our order quantity from

qualified supplier, which is a kind of reward (B1).” In case one, increasing order

quantity is a reward instead of giving money. As dyadic data was collected from case one, S1’s attitude confirmed that weak buyers’ reward is not expected. “We won't

expect reward from the buyer, because meeting the sustainability code that we agreed before is our duty and obligation to follow the agreement (S1)”.

Similar to case one, case five also shows reward power in another way rather than paying money. “We will increase our order quantity from high-credit suppliers, and

recommend the suppliers to our partners. It can be seen as a kind of reward (B5).”

In case two, reward power is expected to be borrowed from the government. “The

5. Discussion

5.1 Discussion on findings

This research explores how weak buyers overcome power-surplus to stimulate powerful suppliers’ sustainability behaviour. In this research, suppliers’ power-surplus comes from resource surplus or financial surplus over buyers. Although a supplier is powerful in these aspects, buyers could overcome the power asymmetry by using mediate power and non-mediate power.

5.1.1 The role of mediate power in supplier sustainability collaboration

Casciaro and Piskorski (2005) agreed that suppliers’ mediate power surplus over buyers makes the supplier powerful. In their research, they assumed that a weak party does not have mediate power. Casciaro and Piskorski (2005) ignored that weak buyers could have mediate power. Our study elaborated that although weak buyers’ mediate power could be very limited, their mediate power could make powerful suppliers to comply with their sustainability code. Weak buyers can show their coercive power by using key supplier selection/reduction strategy. Terminating the collaboration relationship with suppliers that fail to meet sustainability code, buyers could choose suppliers who have realized the importance of acting sustainably initiatively. These suppliers could become buyers’ key cooperative partners.

Apart from this, weak buyers could borrow coercive power from external environment such as social media, government, and public pressure. Suppliers would take risks of not being sustainability. In this case, to keep a close relationship, it is safe for buyers to show tolerance if the supplier did not act as a buyer’s expectation. Weak buyers’ reward power can be shown in other ways rather than just giving money, such as increasing the order quantity and recommending the supplier to other partners. Similar to coercive power, weak buyers could also borrow reward power from external environment such as the government.

supplier’s sustainability. Here comes our proposition 1:

Proposition 1: When facing powerful suppliers, buying firms could have mediate power, and the mediate power could be borrowed from external environment.

5.1.2 The role of non-mediate power in supplier sustainability collaboration

a. Expert power

Powerful suppliers’ perception of expert power could come from shared information and training project. In line with Zhu, Sarkis, and Lai (2007)’s research, buying companies’ expert power could generate more trust and buyers’ sustainability-related professionalism perceived by suppliers. The trust and sustainability-related professionalism could trigger suppliers’ motivation to carry out in-depth sustainability collaboration. Besides, expert power from a third party could also enhance powerful suppliers’ sustainability performance.

Proposition 2: Expert power that facilitate powerful suppliers to be sustainable does not need to come from a buying firm itself. It could come from other institutions.

b. Referent power

The finding of the research highlights the positive relationship between buying companies’ referent power and the development of supplier sustainability collaboration. In this research, two ways of supplier collaboration practices are found to be effective to enhance a weak buyer’s referent power, namely automation development and building a good reputation in the industry. Based on Fawcett et al. (2008)’s study, this research elaborates that buyers’ investment in technology and measurement system could overcome power asymmetry to make suppliers willing to conduct sustainability code. Because even though suppliers are powerful regarding resources and financial resources, they would like to seek a benchmark in the industry to see how to have a better performance. Buyers’ achievement in technology investment gives suppliers confidence. Suppliers believe that such an investment is worth doing. To conclude, buyers’ sustainability achievement in technology investment would make powerful suppliers’ imitation in doing that.

level of buyer’s referent power, thereby facilitating powerful suppliers to be sustainable.

In line with Barrientos and de la Mota (2016)’s research, low-power buying companies’ good reputation in sustainability field could make powerful suppliers have a sense of identification. This identification could make suppliers willing to seek a closer buyer-supplier relationship and motivate relevant in-depth collaboration (Maloni & Benton, 2000). If buyers have a good sustainability reputation in the industry, it is easy for suppliers to see the bright part to be sustainable. A buyer’s good reputation in sustainability would make powerful suppliers have greater willingness to cooperate with the buyer. Because a good reputation means more resources and more competitive. It will be easier to survive in the industry if the company have a good reputation. Here comes another proposition:

Proposition 3b: Buyer companies’ good reputation could enhance the level of buyers’ referent power, thereby facilitating powerful suppliers to be sustainable.

c. Legitimate power

Buyer’s legitimate power could make suppliers have a sense of obligation to be influenced regarding sustainability. For buyers, create common interests and common goals with power suppliers is a way to create a win-win situation. Since sustainability practices are not always money-consuming issues, common interests and common goals could be other kinds of means instead of money sharing, such as having government’s support or having a better reputation, etc. Buyers’ behaviours of sharing benefits could reduce powerful suppliers’ resistance towards being sustainability. The benefit sharing could also help buyers to have a better inter-organizational relationship with powerful suppliers (Brandenburg, Hahn, & Rebs, 2018).

Proposition 4: Buying firms’ legitimate power comes from the suppliers’ perception of common interests and common goals between buying firms.

5.2 Contribution to theory

Based on the previous research (Ke, Liu, Wei, Gu, & Chen, 2009), this study explores the ways for buying companies to overcome power asymmetry to achieve their powerful suppliers’ sustainability. This research advances SSCM theory by elaborating how weak buying companies use their mediate power and non-mediate power to facilitate supplier sustainability collaboration and provides a fresh perspective for buying firms to improve their SSCM effect in a power asymmetry context.

Since in previous SSCM studies which based on power asymmetry, buyers are always the power holder. Previous studies mainly focus on how powerful buyers stimulate their low-power suppliers’ sustainability performance (e.g. Lee & Klassen, 2008; Touboulic et al., 2014). This research fills this gap. Elaborating low-power buying firms can overcome power asymmetry in SSCM by using mediate power and non-mediate power, this research demonstrates that weak buying companies could have stable and in-depth sustainability collaboration relationships with powerful suppliers.

Previous studies which focus on power asymmetry believe that the weaker party does not have mediate power (e.g. Pullmanet al, 2010, Yu, 2016). This research points out that although weak buyers’ mediate power is limited, it’s still useful to overcome the power asymmetry to promote powerful suppliers’ sustainability process.

5.3 Managerial implication

because suppliers’ sustainability performance would have a direct influence on buyers. Only if persuade suppliers to have a good sustainability performance, weak buyers could have a better development in the future.

Secondly, beside simulating powerful suppliers’ sustainability, this research provides multiple ways to have a better relationship with suppliers at the same time. The supplier collaboration practices aim to build trust and intimate relationships between buyers and suppliers. A good relationship is a foundation to have a further collaboration. Close relationships between buyers and suppliers could result in better development.

5.4 Limitations

There are four main limitations in this research. Firstly, we have gained dyadic data from only one in five cases due to the limitation of time and resources. Other interviews were only conducted from the buyers’ perspective. Data collected from both buyer and supplier sides could be more complete and reliable. Besides, suppliers are direct recipients to perceive the effectiveness of buying companies’ power. Therefore, it is important to have suppliers’ opinion in this research. With suppliers’ responses, the research could have more comprehensive findings. Further research could collect dyadic data to have a deeper study.

Secondly, all five cases were chosen from Chinese enterprises. Thus, the results may be affected by regional reasons. There are very different situations in different countries, regarding government policies, economic environment, sustainability concepts, etc. Future research could choose cases from different countries.

Thirdly, this research was conducted in three different industries and three of five cases are from food industry. Since different industries may have different notions to be sustainable and different sustainability measurement, the results of this research could be limited. I would like to suggest further research only focus on one industry or choose different industries and compare their sustainability performance.

6. Conclusions

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Appendix A.

Background questionnaire

General information collected before interview

1. General information of the interviewee


1. Interviewee’s name:

2. Position: (job name and department name):


3. Work experience in current position (how many years?):


4. Company’s name:


6. Main business:


2. General information about a supplier the company depend on

significantly

1. What is traded in this relationship:


2. Length of contract / when the first contract was closed (years,

months):


3. Amount of trade/contract size (estimation, in euro’s):

4. Regarding this relationship and contract: how difficult would it be to

switch to an alternative supplier?

Appendix B.

Interview Protocol
Introduction to interview:


Thank you for accepting this interview. We highly appreciate that you

are willing to participate in my research. The interview takes about 60

minutes.
Everything that we use from this interview will be

anonymised and there is no option to trace data back to you or your

company.

Is it OK if I record the interview?

Is it OK if we use the interview data for our research?

1. Sustainability implementation experience

2. Have you been recognized by any sustainability association (i.e.

Sustainable energy association) or ranked high in authoritative

sustainability rankings (i.e. Dow Jones Sustainability Index)?

3. What sustainability regulations do you implemented and for how

long?

4. How do you apply sustainability knowledge in sustainability

practices? And how do you use them to influence your supplier’s

behaviour?

5. Is there any code of conducts related to sustainability issues you

enacted with your supplier? Can you give an example?

6. What attitude do you think your supplier have towards sustainability

implementation? (How do you motivate them? please give an example)

7. Do you ever help your supplier to achieve a better sustainability

performance? Through what way? Can you give some examples?

8. Do you have any supplier collaboration measures with regard to

sustainability issues? Why you use these measures? Can you give some

examples?

Appendix C.

Examples of coding tree

Data Reduction (First order coding)

Supplier collaboration practices (Descriptive coding) Power (Second order coding) Type of power (Third order coding) We select qualified suppliers, reduce

the number of supplier, only

cooperate with key suppliers that meets the sustainability code (B1). If our suppliers fail to meet the sustainability code that ensures qualified products, or our suppliers produce products without following the standard process or inspection, or our suppliers add unsafe and forbidden materials into our products, we will never cooperate with them. If our suppliers followed our produce process but didn't meet our expectation, we can give them another chance and provide training program, because the safety of our products can be ensured (B1).

tolerance, conducting inter-organizational

training program

We will let our supplier to take the consequence if they fail to meet our sustainability code, such as paying the compensation and being exposed. If we find that they didn't meet the sustainability code in our checking process, we will show some tolerance and monitor them to do some modification (B4).

tolerance

If we fail to meet the sustainability code and made some trouble, our buyer will cancel this order,

interrupt our relationship, ask us for compensation, and ask the legal process (S1); The supplier's

opportunistic behaviour will make a

very bad reputation of them, other companies won't cooperate with the supplier as well (B2).

We sometimes increase our order quantity from qualified supplier, it's a kind of reward (B1); We will increase our order quantity from high-credit suppliers, and

recommend them to our partners. It can be seen a kind of reward (B5).

sharing benefits

reward power We won't expect reward from the

buyer, because meet the

sustainability code that we agreed before is our duty and obligation to follow the agreement (S1).

supplier wouldn't expect reward

The government would provide sufficient allowance to encourage farmers to plant high-quality

oranges. With the governance's help, it will be easilier for us to gain organic oranges (B2).

reward according to policy

B1 has a very high level of

automation, they are leaders in this industry. The automation is different from a traditional manufacturer mode, which could reduce

unnecessary waste. B1 could lead the industry progress (S1). As an small-to-medium company, automation process was be seen as

an unnecessary investment, but it turns out a wise revolution. We not only saved human workforce by using machine, but also motivated our partners and suppliers invest in these technologies (B1).

Considering our achievement of sustainability influence, our company is the leader in the industry. We have accepted many interviews from different kinds of media, these interviews are free advertisements for us. People would like to buy our juice because they think our just is reliable and healthy. To maintain the benefits from our good reputation, our supplier has to behave our sustainability code because the benefits will also go for our supplier (B2)

A good reputation makes our company a benchmark in the

industry, the government would like to give us some allowance to assist the sustainability achievement. The government support is an essential reason that our suppliers willing to be sustainable as well (B3)

Good reputation in sustainable development

Audit our suppliers though another authority institution, by using their sustainability knowledge （B1）.

Third party audition

We ask our suppliers to reduce their package to reduce waste, only ensure the basic transportation. Our suppliers would like to meet the requirement, because they can reduce costs as well. (B3)

common interests

legitimate power Food safety is the common goal

between suppliers and us in a long run. (B1)