Suppliers’ contribution to focal firm’s environmental practices: the mechanism of suppliers’ environmental management capabilities

Master thesis, MSc Supply Chain Management

Suppliers’ contribution to focal firm’s

environmental practices: the mechanism

of suppliers’ environmental

management capabilities

By Ioannis Papadopoulos – S3877701

E-mail : i.papadopoulos.1@student.rug.nl

Supervisors: dr. ir. Stefania Boscari & dr. Chengyong Xiao

Word count : 11,877

ABSTRACT

The negative impact of human activity on the environment is becoming unsustainable. Recent studies have shown that globally out of millions of enterprises, it is about 100 companies that are responsible for the 71% of anthropogenic greenhouse emissions. Due to pressures from society, companies nowadays account for the minimization of their environmental impact by engaging in several environmental practices not only internally, but also along their whole supply chain, adopting a more holistic approach to environmental sustainability. This paper intends to contribute to the efforts of improving environmental sustainability by examining how suppliers can contribute to environmental practices of focal firms. Prior research has shown that suppliers’ environmental management capabilities (EMC) can influence a focal firm’s environmental practices positively. Through a multiple case study between manufacturing firms and their immediate suppliers, this study examines in-depth how suppliers’ EMCs contribute to different environmental practices of the focal firm. The findings of the case analysis show that suppliers can contribute to the focal firm’s practices of using environmental friendly materials within the manufacturing process, CO2 emissions reduction, waste minimization, and the use of recycled materials within the production phase, through their ability to provide environmentally conscious products, instill environmental management to their upstream suppliers, sustain environmentally sound relationships with external stakeholders, as well as by closely cooperating with the focal firm to reduce firm’s negative environmental impact. The research propositions of this study provide useful managerial insights, contribute to Green Supply Chain Management (GSCM) literature and provide directions for further research.

TABLE OF CONTENTS

1. INTRODUCTION ... 6

2. THEORETICAL BACKGROUND & RESEARCH FRAMEWORK ... 9

2.1 Environmental sustainability in the supply chain ... 9

2.2 Environmental practices ... 10

2.3 The role of suppliers in the focal firm’s environmental programs... 13

2.4 Capabilities - A mechanism that leverages environmental practices ... 14

2.4.1 Impact of capabilities on environmental management ... 14

2.4.2 EMCs of suppliers ... 15 2.5 Research Framework ... 16

3. METHODOLOGY ... 18

3.4 Data coding and analysis ... 24

4. FINDINGS ... 26

4.1 Product EMC ... 26

4.2 Process EMC ... 27

4.3 Suppliers EMC ... 28

4.4 Relationship EMC ... 29

4.5 Inter-organizational cooperation EMC ... 30

4.6 Employees EMC ... 32

5. DISCUSSION... 33

5.1 Suppliers’ contribution to focal firm’s use of environmentally friendly materials through product EMC... 33

5.3 Suppliers’ contribution to focal firm’s use of environmentally friendly materials through

relationship EMC ... 36

5.4 Suppliers’ inter-organizational cooperation EMC ... 37

5.4.1 Contribution to focal firm’s CO2 emissions reduction ... 37

5.4.2 Contribution to focal firm’s waste minimization ... 37

5.4.3 Contribution to focal firm’s use of recycled materials ... 38

6. CONCLUSION ... 39

6.1 Theoretical contributions ... 39

6.2 Managerial implications ... 40

6.3 Limitations and further research ... 41

REFERENCES ... 42

APPENDICES ... 53

Appendix A - Overview of research project ... 53

Appendix B – Interview guide... 54

Appendix C – Interviewee consent form... 62

Appendix D – Coding tree ... 63

ABBREVIATIONS

GSCM : Green Supply Chain Management

EMCs :

SSCM : Sustainable Supply Chain Management NGO: Non-governmental organization

VOC : volatile organic compound RBV : Resource-Based View

RSPO

:

:

1. INTRODUCTION

The negative impact of human activity on the environment is becoming unsustainable. The fires in Australia in late 2019 and fires in large areas of the Amazon forest, considered as the lungs of the planet, resulted in massive destruction of forests and wildlife. Scientists regard this tragedy as an event that will make climate change irreversible (Asmelash, 2019). Moreover, over 600 wildfires destroyed more than 2.4 million acres of forest across Alaska, releasing megatons of carbon dioxide into the atmosphere (Fresco, 2019). The impact significantly raises global temperatures, adding to the impact of anthropogenic greenhouse emission in the atmosphere (Solomon et al., 2007). Recent studies have shown that globally out of millions of enterprises, it is about 100 companies that are responsible for 71% of those gases (“Sustainability for all,” 2019), mainly those companies operating in the manufacturing sector (Abdelaziz et al., 2011). As a result, social and political pressure has been rising to force companies to reduce their pollution of the natural environment (Gallego-Alvarez et al., 2017).

In the last decade, efforts have increased to ensure that economic growth is sustainable and environmentally sound. The introduction of the Green Supply Chain Management (GSCM) allows firms to improve their competitiveness through specialization and cooperation while enabling environmentally-sustainable growth (Kim et al., 2016). One example is the company Amazon (2019), which states that its updated sustainability strategy for 2025 on Sustainable Technology will minimize risks and create opportunities for all its stakeholders while reducing emissions by switching to renewable energy sources and reusing water. Another remarkable example is IBM, a leader in sustainability for decades. This company infused sustainability to its suppliers in ninety different countries by requiring them to have environmental management programs and publicly report their progress (AllBusiness, 2019). This example shows that firms understand the significance of adopting a more holistic approach towards environmental sustainability, which allows the realization of increased environmental benefits (Lu et al., 2009).

focal firm’s environmental and economic performance (Gimenez & Tachizawa, 2012). In this context, this research paper will address the following research question: “How can suppliers contribute to the focal firm’s environmental practices?”.

Many authors highlighted that, although an organization can work towards sustainability itself, the engagement of external stakeholders - such as suppliers and customers - in its environmental practices is required to achieve sufficient performance gains and mitigate any negative environmental impact (Golicic & Smith, 2013; Klassen & Whybark, 1999; Lund-Thomsen & Lindgreen, 2014; Preuss, 2005; Vachon & Klassen, 2006; Zhu et al., 2012). This paper focuses on suppliers since previous literature repetitively discusses their significant role in the focal firm’s environmental performance (Gualandris & Kalchschmidt, 2016; Paulraj, 2011; Sancha et al., 2016; Wu, 2013). Additionally, the findings of Vachon & Klassen (2008) demonstrated a trend towards broader benefits realized from collaborative green practices with suppliers rather than customers. Several examples of the suppliers’ contribution to focal firm’s environmental practices can be found in the literature. In the US automotive industry, an organization’s environmental collaboration with its suppliers led to the development of environmental-friendly solutions (Geffen & Rothenberg, 2000). Other examples include the partnerships of Boeing, Panasonic, Ford, and P&G with their suppliers to minimize their negative environmental impact and improve their sustainable performance (Paulraj et al., 2014). These findings are in line with the study of Darnall et al. (2008), who highlight that suppliers, except for creating value for an organization, they can also positively influence its total environmental impact.

insight on suppliers’ EMCs that are considered valuable for focal firm’s green practices, and on how suppliers’ EMCs contribute to different environmental practices of the focal firm.

This paper contributes to further development of existing literature through a case study research that examines how a focal firm’s environmental practices can be leveraged by its suppliers through suppliers’ EMCs. Thus, this paper will potentially address the identified gap in literature by examining this environmental interaction from the suppliers’ point of view. Additionally, since the majority of current literature examining the value of capabilities for the focal firm’s environmental programs focuses on the capabilities of the focal firm (Bowen et al., 2001, Hofmann et al., 2012, Liu et al., 2016, Parmigiani et al., 2011, Reuter et al., 2010), it is interesting to examine how capabilities of suppliers related to environmental management influence the focal firm’s environmental practices positively. The results are also going to provide insights regarding the environmental practices that the identified suppliers’ EMCs were found to impact the most. From a managerial perspective, these findings will motivate the engagement of the focal firm in environmental interaction with its suppliers, since they provide a clear indication on which and how suppliers’ EMCs leverage the focal firm’s environmental practices, while providing suppliers with directions for development of EMCs that are significant for minimizing both their customers’ and the entire supply chain’s environmental footprint.

2. THEORETICAL BACKGROUND & RESEARCH FRAMEWORK

This section first introduces the general concept of sustainability and environmental management, discussing the importance of considering multiple stakeholders in the supply chain when implementing environmental programs. Second, environmental practices, as identified from literature, are discussed in order to provide some indication on the environmental practices most commonly implemented by firms. Third, previous literature that highlights suppliers’ impactful role on the environmental practices of the focal firm is presented. Finally, the essence of suppliers’ EMCs is discussed as a mechanism that leverages environmental practices, and the research framework of this thesis is introduced.

2.1 Environmental sustainability in the supply chain

The term “sustainability” was first introduced in the well-known Brundtland Report (1987), where it was defined as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987, p. 8). The appearance and development of the term came due to the overriding need to study and identify the ways that humanity was treating the environment. In an effort to consider the role of organizations in the context of sustainability, Eklington (1998) defined organizational sustainability under the concept of the triple bottom line, suggesting that by considering the components of the natural environment, society, and economic performance, organizations can engage in activities that will affect both their profitability in the long-term and their impact on the natural environment and society positively.

suggests that by managing essential stakeholder relationships, organizations will themselves become more effective and sustainable. Thus, the focal firm’s interaction with both upstream and downstream stakeholders in the supply chain can yield more long-term sustainable benefits (Chen et al., 2017; Klassen & Whybark, 1999; Pagell & Wu, 2009).

This thesis focuses on the environmental (or natural) component of sustainability, due to the major importance of managing organizations’ environmental liabilities. It is evident from the literature that, either due to pressures from different stakeholders along the supply chain (government, consumers, NGO, etc.), as mentioned in some papers (Gualandris et al., 2015; Henriques & Sadorsky, 1999; Testa et al., 2018; Vachon & Klassen, 2006), or due to their own sustainable motives, organizations have already engaged in actions to minimize their negative environmental impact. In the broader literature stream on sustainability, earlier studies on environmental sustainability showed that firms strive to improve their environmental performance in their internal operations (Eltayeb & Zailani, 2009; King & Lenox, 2001; Klassen & Whybark, 1999; Melnyk et al., 2003; Min & Galle, 2001). However, more recent studies show that organizations have indeed realized that a more holistic approach is necessary for long-term environmental benefits, taking also into account the development of external environmental practices (Danese et al., 2018; Gimenez & Tachizawa, 2012; Glover et al., 2014; Golicic & Smith, 2013; Kytle & Ruggie, 2005; Vachon & Klassen, 2008; Zhu et al., 2012).

2.2 Environmental practices

Table 1

Environmental practices

Internal environmental management

Literature

improvements (Zhu & Sarkis, 2004)

Using environmentally friendly raw materials (Gonzalez, Sarkis, & Adenso-Diaz, 2008; Holt & Ghobadian, 2009; Rao & Holt, 2005) Reduction in raw material (i.e., the use of recycled

material) for product manufacturing (Gonzalez et al., 2008)

Designing products for disassembly (Gonzalez et al., 2008; Holt & Ghobadian, 2009; Zhu, Sarkis, & Lai, 2008a)

Internal recycling of materials within the production

phase (Vachon, 2007)

Minimizing waste (Paulraj, 2009; Rao & Holt, 2005)

Reducing energy consumption (Gonzalez et al., 2008; Holt & Ghobadian, 2009; Paulraj, 2009; Rao & Holt, 2005) Reusing/recycling materials and packaging

(Gonzalez et al., 2008; Holt & Ghobadian, 2009; Paulraj, 2009; Rao & Holt, 2005; Vachon, 2007)

Pollution prevention technologies (Klassen & Whybark, 1999) Environmental compliance and auditing programs (Zhu & Sarkis, 2004) CO2 emissions reduction (Memari et al., 2016)

External GSCM practices

Focal firm <-> First-tier suppliers

Providing design specification to suppliers that include environmental requirements for purchased item

(Zhu et al., 2008b; Zsidisin & Hendrick, 1998)

Communicating to suppliers environmental and/or ethical criteria for goods and services

(Holt & Ghobadian, 2009; Hu & Hsu, 2006; Zhu et al., 2008a)

Working with industry peers to standardize

requirements for suppliers and purchasing items (Hu & Hsu, 2006)

Using green purchasing or logistics guideline (Holt & Ghobadian, 2009; Hu & Hsu, 2006) Environmental audit for suppliers’ internal

management (Zsidisin & Hendrick, 1998)

Second-tier supplier evaluation of environmentally friendly practices

Table 1

Environmental practices (continued)

External GSCM practices

Literature

Focal firm <-> Fist-tier customers

Cooperation with customer for eco-design and

cleaner production (Zhu & Sarkis, 2004; Zhu et al., 2008a) Working with customers to change product

specification (Lippmann, 1999)

Planning vehicle routes for reduced environmental impacts

(Holt & Ghobadian, 2009; Paulraj, 2009; Zhu et al., 2008a)

Cooperation with customers for green packaging (Rao & Holt, 2005; Routroy, 2009; Zhu & Sarkis, 2004; Zhu et al., 2008a, 2008b)

Reverse logistics

(Hu & Hsu, 2006; Lippmann, 1999; Rao & Holt, 2005; Rogers & Tibben-lembke, 2001; Routroy, 2009; Vachon, 2007; Zhu et al., 2007)

Investment recovery

Investment recovery (sale) of excess

inventories/materials (Zsidisin & Hendrick, 1998)

Sale of excess capital equipment (Zhu et al., 2008b; Zsidisin & Hendrick, 1998)

Sale of scrap and used materials Eco-design

Design of products for reduced consumption of

material/energy (Zsidisin & Hendrick, 1998) Design of products for reuse, recycle, recovery of

material, component parts

Design of products to avoid or reduce use of hazardous of products and/or their manufacturing process

environmental management (Vachon & Klassen, 2006). Additionally, Bowen et al. (2001) mention green supply activities such as cooperative recycling and packaging, waste reduction incentives, and environmental data gathering about products, processes, or vendors. It is evident from the above that the integration of suppliers in a firm’s environmental practices has been examined in the literature regarding initiatives and actions to improve environmental performance from the firm’s point of view. However, there is little evidence examining this environmental interaction from the suppliers’ point of view, and more specifically, how suppliers contribute to the focal firm’s environmental practices.

2.3 The role of suppliers in the focal firm’s environmental programs

The previous section showed that focal firms have already engaged in several environmental practices while trying to integrate suppliers wherever possible. But why are suppliers relevant? Rao & Holt (2005) highlight in their study that customers and other stakeholders that put pressure on firms related to environmental concerns do not distinguish responsibilities between the focal firm and its suppliers. Hence, even if the negative environmental impact is caused due to suppliers’ environmental liabilities, stakeholders will probably also blame the focal firm. This indicates that a focal firm’s environmental sustainability is dependent on its supply base (Krause et al., 2009).

There is much evidence in the SSCM literature suggesting that suppliers can positively influence the environmental performance of the focal firm (Gold et al., 2010; Gualandris & Kalchschmidt, 2016; Paulraj, 2011; Sancha et al., 2016). For example, Vachon & Klassen (2008)show that collaboration with primary suppliers for environmental purposes was linked to improved environmental performance as well as manufacturing performance (specifically in quality, delivery, and flexibility). Additionally, Gimenez & Tachizawa (2012)identified that both supplier assessment and collaboration had a positive impact on environmental performance, while it was explicitly remarked that assessment itself is not enough.

All the aforementioned studies prove that there are potential benefits for the focal firm when considering its suppliers in its environmental programs, benefits that facilitate the effectiveness and can leverage focal firm’s environmental practices. However, there is little information in the literature on the mechanisms by which suppliers leverage the effectiveness of focal firm’s environmental practices.

2.4 Capabilities - A mechanism that leverages environmental practices

2.4.1 Impact of capabilities on environmental management

Whereas some scholars consider capabilities as part of resources, others have sought to differentiate between resources and capabilities (Amit & Schoemaker, 1993; Grant, 1996; Lu, 2007). Makadok (2001, p.388) defines capability as a “firm’s capacity to deploy resources, usually in combination, using organizational processes, to affect a desired end”. The Resource-Based View (RBV) literature has noted that firms need to possess appropriate resources and capabilities in order to implement their strategies and achieve competitive advantage (Barney, 1991; Wernerfelt, 1984). Madhok and Tallman (1998) further suggest that for a unique competitive advantage, complementary resources and capabilities should be combined across the firm boundaries. In line with this, Srai and Gregory (2008) claim that due to the great boundary spanning activities and the difficulty of managing highly complex supply networks, supply chain capabilities may also reside across the firm’s boundaries. This statement is supported by Yang et al. (2007), who state in their article that some manufacturers have taken advantage of their immediate suppliers’ capabilities and technology during the product design stage. Consequently, it is clear that capabilities that can improve a firm’s overall performance reside along the firm’s supply chain.

programs depends on, and can be leveraged by capabilities at both organizational and supply chain levels.

2.4.2 EMCs of suppliers

There is some limited literature that investigates which and how suppliers’ capabilities can improve the environmental practices of the focal firm. Most papers appear to discuss capabilities from the buying firm’s point of view. For example, they examine the capabilities of the buying firm that can facilitate and motivate the firm to become “greener” (Hofmann et al., 2012; Parmigiani et al., 2011). Additionally, studies that incorporate capabilities with the supplier aspect still focus on the capabilities of the buying firm and their influence on firm’s environmental programs. In particular, they focus on supplier appraisal capabilities of the focal firm that lead to green design (Liu et al., 2016), supply management capabilities of the focal firm that can facilitate the implementation of green supply (Bowen et al., 2001; Reuter et al., 2010), and on how accurate suppliers’ environmental management capabilities evaluation can improve firm’s environmental performance (Kim et al., 2016). Some studies emphasize the importance of capabilities of different actors in the supply chain. Specifically, these studies examine the focal firm’s understanding of stakeholders’ capabilities in the supply chain (Vachon & Klassen, 2006), suppliers’ relation-specific capabilities that indirectly improves focal firm’s sustainability in general (Gualandris & Kalchschmidt, 2016), and also how buyer’s green supply chain management can enable improvement of suppliers’ EMCs (Lee & Klassen, 2008). Only a few articles discuss the impact of suppliers’ capabilities on the focal firm’s environmental practices. Wilhelm et al., (2016) found in their seven-cases research analysis that sustainability management capabilities of suppliers determined the buying firm’s decision to extend its environmental practices to their sub-suppliers. However, neither they discuss these suppliers’ capabilities extensively, nor they examine if these capabilities improved the focal firm’s environmental practices. Wong et al. (2012) proved that suppliers’ EMCs, such as management of environmental impacts through provision on environmentally conscious products (Lee & Klassen, 2008), strengthen the focal firm’s green operations that aim at pollution reduction. Still, they examine these capabilities as moderators and not how suppliers’ EMCs directly impact these practices.

direction in defining EMCs as provided by the aforementioned authors.

Table 2

Environmental Management Capabilities

EMC

Definition

Literature

1.Product EMC

Ability to provide environmentally conscious products to the customer through environmental practices.

Lee & Klassen (2008)

2.Process EMC Ability to sustain cleaner production and processes

that meet or exceed buyer's expectations. Lee & Klassen (2008)

3.Suppliers EMC Ability to motivate suppliers to be environmentally

responsible and to reduce the environmental burdens. Lee & Klassen (2008)

4.Relationship EMC

Ability to sustain environmentally sound relationships with external stakeholders through various communication methods.

Lee & Klassen (2008)

5.Inter-organizational cooperation EMC

Ability to cooperate with the manufacturer to reduce environmental impact.

Wong et al. (2012), Zhu et al. (2005)

6.Employees EMC

Ability to provide green education and training to enhance the employees’ awareness of the needs of green activities.

Kim et al. (2016), Yang et al. (2013)

2.5 Research Framework

The studies mentioned in section 2.4.1 provided interesting insights into the importance of capabilities in the context of environmental management. Moreover, the study of Wong et al. (2012) showed that suppliers’ EMCs could constitute the mechanism by which a focal firm’s environmental practices can be leveraged. Nevertheless, there is little discussion on the environmental practices of the focal firm that suppliers’ EMCs have been noticed to contribute, and how suppliers’ EMCs contribute to their effectiveness.

FIGURE 1

Conceptual framework

5. Inter-organizational cooperation EMC 6. Employees EMC Suppliers’ contribution Focal firm’s environmental practices through

3. METHODOLOGY

3.1 Research Design/Method

The majority of the articles mentioned in the theoretical background section that discuss the impact of suppliers on focal firm’s environmental practices (e.g., Luzzini et al., 2015; Paulraj, 2011; Rao & Holt, 2005; Sancha et al., 2016; Vachon & Klassen, 2008; Wong et al., 2012; Zhu & Sarkis, 2004; Zhu et al., 2012) use surveys, or econometric modeling on secondary data collected by surveys, as methods to test their developed hypotheses. Chen et al. (2017) also found in their literature review paper, that survey and mathematical modeling are the most frequently used methodologies in the research stream of supply chain collaboration for sustainability. However, these methods are limited to testing only if there is a significant relationship between variables and if this relationship is positive or negative. Thus, to further explore the way by which suppliers can contribute to focal firms’ environmental practices, a case study was selected as the empirical method of this research to enrich existing literature with a research method that provides more in-depth insights by nature (Yin, 2014). This approach fulfills the needs of an exploratory study since this paper aims to theory building (Gerring, 2004) by providing suggestions on how suppliers’ EMCs can contribute to the focal firm’s environmental practices. More specifically, a multiple case study analysis was conducted to provide a stronger base for theory building and explanation (Yin, 2009).

Since each supplier of the focal firm’s supply base offers different services or products, it is assumed that they also contribute to the firm’s environmental practices in different ways. Thus, each supplier’s contribution to the focal firm’s environmental practices was examined individually, instead of investigating the contribution of the firm’s supply base as a whole. Hence, the unit of analysis is each different focal firm-supplier dyad. In that way, the acquisition of broader insights was avoided, and the opportunity to analyze more in-depth the contribution of suppliers to certain environmental practices was facilitated. Lastly, to avoid broad conceptualization of suppliers’ EMCs, namely identifying many EMCs but with less argumentation on their contribution to certain environmental practices, during the data collection, I focused on investigating suppliers’ contribution through their actions regarding the EMCs presented in table 2.

3.2 Case Selection

majority of manufacturing firms worldwide were forced to engage in a variety of environmental practices to reduce their negative environmental impact. Therefore, three manufacturing firms with environmental programs on their agendas were considered to provide potentially useful insights for the purpose of this thesis. Additionally, to ensure that the selected firms have suppliers with a critical role to firms’ environmental programs, each focal firm’s sustainability report was examined to ensure that there were sections discussing suppliers’ engagement in firm’s environmental sustainability. To further ensure that the focal firms would provide data valuable for this research, an overview of the research project was sent to the managers via email or explained to them over the phone, to facilitate their better understanding on the topic to which they were invited to contribute (see appendix A). The selection of suppliers for each manufacturing firm was made by asking before or during the interview, which are the two suppliers with the highest contribution to the firm’s environmental programs. Hence, by having two suppliers per focal firm, six different cases were examined. The number is considered adequate by Eisenhardt (1989), who states that there is no ideal number of cases, but a number between four and ten generally works. Six cases allow to implement a cross-case analysis (Perry, 1998), and thus increase the external validity of data (Yin, 2009).

Two focal firms were decided to be in the food manufacturing industry and one in the plastics manufacturing industry. Food waste contributes to environmental pollution as well as to the degradation of natural resources, threatening food security (Foley et al., 2011). As mentioned by Mirabella et al. (2014), 39% of food waste in developed countries is produced by the food manufacturing industry itself. Consequently, the food industry is under pressure to be environmentally friendly, alongside with new challenges for sustainable production and challenges related to energy consumption (Glover et al., 2014). Thus, food manufacturers were considered appropriate for the purpose of this research.

Recent studies report that plastic is considered by many firms as a more sustainable solution within the infrastructure space (De la Fuente et al., 2016). On the other hand, due to the public’s negative perception of the use of plastics, firms try to reduce their plastic waste by engaging in circular plastics supply chains (Nasir et al., 2017). Consequently, these firms interact with several stakeholders in their supply chain to reduce the supply chain’s environmental impact. Hence, firms operating in this field were considered suitable in providing fruitful insights on how their suppliers can contribute to the reduction of firms’ negative environmental footprint.

comparing results within the same type and between different types of industries. Hence, similar insights are expected within the same type of industry (literal replication), whereas more variant results are expected between the two industries (theoretical replication). By using replication logic in our case selection, the external validity of our data is increased (Yin, 2009). An overview of the cases is provided in table 3.

Table 3

Overview of cases

Case Supplier Type of

supplier Turnover (2018) (in millions €) Focal Firm Industry Turnover (2018) (in millions €) 1 SA1 Oil 103,000 A Food Manufacturing 400 2 SA2 Packaging 8,900 3 SB1 Logistics 24.3 B Food Manufacturing 610.6 4 SB2 Production equipment 5 5 SC1 Polymers 8,337 C Plastics Manufacturing 1,300 6 SC2 Recycled PWC 27.2

3.3 Data collection

Interviews were conducted by three students, all participating in the broader thesis project that examines the impact of suppliers on the focal firm’s environmental programs. The three researchers attended all interviews in order to reduce bias, except for three interviews due to overlapping schedules. The involvement of different researchers concerns for investigator triangulation (Denzin, 1984). Before the start of the interviews, an interview guide was commonly developed by all three researchers. The first half of the guide included more general questions that were relevant to all three master-thesis projects, and the second half introduced the theses’ specific questions of each researcher. In order to identify and adapt points that needed to be re-examined and rephrased for clarity, a pilot interview took place before the data collection. The questions of the interview guide had to be adjusted differently between the focal firm and its supplier. Thus two different interview guides were developed (appendix B). Before each interview, the interview guide was delivered to the interviewees, in order to familiarize themselves with the theses-specific topics that the researchers were trying to examine. It was also explicitly highlighted to them that the interview guide was not meant to force a Q&A session, but it aimed at guiding the discussion.

The researchers decided to conduct interviews with one procurement and one sustainability manager from each focal firm, since procurement managers are responsible for dealing with suppliers and the sustainability department accounts for the firm’s environmental footprint. Hence, interviews were conducted together with these managers within each focal firm, and also with one manager from each of the suppliers’ company who cooperates with the focal firm. In that way, we examined the contribution of suppliers that managers within each focal firm value the most for their environmental practices, and if suppliers have similar or additional suggestions. The participation of interviewees with different responsibilities contributes to data-source triangulation (Yin, 2009). An overview of all interviews is provided in Table 4.

TABLE 4

Overview of

interviews

Case Firm #Interviewee Role Interview

approach Interview Duration (min) Transcript length (pages) 1&2 FFA 1 Sustainability

Manager Face to Face 45 11

2 Procurement

Manager Face to Face 72 14

SA1 3 Account

Manager Face to Face 55 11

SA2 4 5 Account Manager Marketing Director Phone call 68 14 3&4 FFB 6 Sustainability

Director Phone call 60 13

7 Procurement

Manager Face to Face 45 11

SB1 8 General Manager Face to Face 60 20

SB2 9 General Director Face to Face 63 14

5&6 FFC 10 Global Sustainability Director Phone call 30 6 11 Category Leader

Raw Materials Phone call 52 12

SC1 12 Key Customer

Leader Phone call 70 14

SC2 13 General Manager Face to Face 53 11

3.3.2 Secondary data

information during the interview by adjusting the questions based on each firm’s environmental programs.

TABLE 5

Secondary data

Company Document Number of pages

FFA Notes from Sustainability report 2018 (FFA-SUS_REP) 4

SA1

Notes from Sustainability report 2018 (SA1-SUS_REP) 4 Suppliers Code of Conduct (SA1-CoC) 2 Palm Oil Policy 2019 (SA1-POP) 6

SA2

Notes from Sustainability report 2018 (SA2-SUS_REP)

10 FSC Certification System (FSC_REP)

7

FFB Notes from annual report 2017-2018 (FFB-AN_REP) 1

SB1 - -

SB2 Notes from website (SB2-WEB) 2

FFC Notes from CSR report 2014 (FFC-CSR_REP) 5

SC1

Combined annual report 2018 (SC1-AN_REP) 5

Notes from website (SC1-WEB) 2

3.4 Data coding and analysis

4. FINDINGS

In this section, the findings from the data analysis across the seven cases are synthesized. Since this paper examines the contribution of suppliers through suppliers’ EMCs to the focal firm’s environmental practices, the results are presented according to each EMC of suppliers as emerged from the data analysis. In this way, a clear linkage between the collected data and this research’s theoretical framework is achieved. Environmental practices of the focal firms to which suppliers’ EMCs were found to contribute are discussed together with each suppliers’ EMC.

4.1 Product EMC

In focal firms’ efforts to use only environmentally friendly materials within the manufacturing process, suppliers were found to contribute by providing materials produced with minimized environmental footprint throughout the entire supply chain. Suppliers provide their customers with sustainable-certified raw materials, increase traceability of products’ footprint along the supply chain, and provide materials that were produced using recycled and easily recyclable inputs instead of virgin resources.

Similar was the case with the second supplier of FFA. SA2 provides paper-based packaging solutions to FFA, which are environmentally certified. SA2 guarantees traceability throughout the entire supply chain of its products through Chain of Custody certification [SA2-SUS_REP]. SA2 achieves that through FSC certification. Namely, all materials in SA2’s supply chain are produced under FSC standards. Furthermore, an advantage of providing only paper-based corrugated boxes to FFA is that boxes are made from both a recycled and easily recyclable material. SA2 owns mills where they collect, process, and recycle different kinds of paper waste and use it to produce their products. “[…]For every thousand kilos of preselected material that comes into our mills, only one kilo we cannot rework”[IN5]. Since corrugated boxes are from 100% natural material, recyclability is facilitated. “If boxes go into a recycling scheme, they are recycled up to nine or ten times to make new paper and new corrugated boxes[…]”[IN5]. Hence, FFA reduces its environmental footprint by using boxes that are both environmentally-certified and produced by recycled and easily recyclable raw materials.

Supplier SC1 of FFC was also found to provide materials with reduced environmental footprint. Due to global environmental pressures related to plastic wastes, SC1 came up with projects to increase recycling within the supply chain, and more specifically to increase the recycled content in the production of polymers. SC1 owns two plants in Germany and Austria where post-consumer plastics are collected and recycled, and then virgin feedstock is substituted with recycled one for the production of polymers [SC1-AN_REP]. The manager of FFC states: “We have products where we can have packaging materials taken out of circulation and used to produce polymers, which are put in our products for a lifetime of 50 years”[IN11]. Thus, FFC minimizes its environmental footprint by purchasing polymers produced by recycled instead of virgin feedstock.

4.2 Process EMC

in Rotterdam and you can transport them or ship them from Rotterdam to our facilities by truck or also barge. CO2 is less by barge, so that’s what we offer to our customers”. Apart from that, by managing to deliver only full truckloads and by optimizing the planned trips, SB1 manages to reduce CO2 emissions through reduction of shipments and traveled kilometers.

4.3 Suppliers EMC

In most of the cases, suppliers were found to interact with their immediate and upper-tier suppliers in their supply chain in order to adopt a holistic approach in minimizing the environmental footprint of their products and processes. This interaction with upstream suppliers positively influences focal firms’ efforts to use environmentally friendly materials within the production process, and partially in CO2 emissions reduction.

In order to increase traceability, for a fully sustainable palm oil chain, already since the earliest upstream stages, SA1 continuously assesses, supports, develops, and collaborates with upstream suppliers in different parts of the world to help them comply with its sustainability policy rules. Some examples of SA1’s activities related to suppliers range from data collection from suppliers’ plantations, implementation of grievance processes, and provision of guidelines related to 100% alignment with Non Deforestation, No Peat, No Exploitation policy (NDPE) [SA1-SUS_REP]. As the account manager of SA1 informed us, SA1 also teaches smallholders around the world and provides them with knowledge on how they should operate in the most sustainable and environmental-friendly way.

Similarly, the packaging supplier of FFA sets clear environmental guidelines and standards to which their suppliers should adhere. In order to achieve a Chain of Custody, SA2 monitors the upstream suppliers, from the forest until the production of boxes, and has been committed to a complete certified sourcing and manufacturing chain. “During 2018 we audited 73 suppliers through our seven pillar sustainable sourcing audit program”[SA2-SUS_REP]. Apart from supplier monitoring, SA2 shares its sustainability knowledge with suppliers and collaborates with them to help them participate in the development of forest certification as members of FSC and PEFC (Programme of the Endorsement of Forest Certification).

the end of the production line. SC1 together with its partner, examined if they can use this oil within their polymers’ production, which was eventually achieved. By producing polymers whilst using oil waste, instead of exploiting virgin oil, SC1 delivers products to FFC with reduced environmental footprint.

Lastly, interaction between the focal firm’s supplier and second-tier suppliers was also found to contribute to the reduction of CO2 emissions. SB1 cooperates with other, bigger logistics companies in transferring FFB’s products to several countries. In order to ensure that the products of FFB are transferred in the most environmental-friendly way, SB1 requires that its suppliers only use trucks with Euro 6 motors for FFB’s products.

4.4 Relationship EMC

Suppliers’ environmental interaction with different stakeholders within their supply chain was found to generate environmental benefits for FFA, regarding the use of environmentally friendly materials within focal firm’s production process, and partially to waste minimization. Either during events with environmental character, or through interaction with different environmental bodies due to suppliers’ own goals in creating a more sustainable supply chain, suppliers influence focal firm’s environmental practices positively. More specifically, SA1 by participating in multi-stakeholder landscape programs works together with several external stakeholders - local governments, NGOs, academia, producers, and smallholders - to increase transparency and improve processes, aiming to create a more sustainable palm supply chain. The contribution of these interactions to FFA is illustrated in the following statement: “[…]eventually FFA relies on that because they are part of the supply chain, right? They are in the end of our supply chain”[IN3]. Hence, SA1 through interaction with stakeholders within their network, facilitates the provision of palm oil to FFA with minimal environmental-sustainable footprint.

environmental network helped FFA to reduce its environmental impact, he replied: “they are cutting potatoes, and when you cut potatoes, starch is getting out of it. They wanted to do something because it was a complete waste. They now send it to a partner of ours, which is a company that sells starch.[…] So something that was waste for FFA was turned into sales by using our connection”. Therefore, apart from leveraging the use of environmentally friendly inputs through provision of information on environmental trends and solutions, SA2’s environmental network can also contribute to focal firm’s waste minimization.

4.5 Inter-organizational cooperation EMC

In most cases, suppliers’ close cooperation with the focal firm, which was aiming at dealing with environmental issues, contributed to several environmental practices of the focal firm. The environmental practices that were found to be positively influenced by this cooperation range from waste minimization, reduction of CO2 emissions, and the use of recycled materials for product manufacturing.

In case 4, environmental cooperation between FFB and a membrane-based equipment provider was driven by FFB’s urgency to reduce its production waste. FFB produces potato starch. Since 80% of a potato is water, FFB had a lot of waste going into the channels, waste in the shape of foam. The reason for the foam was a protein within the water. Thus, after a lot of research and experiments on FFB’s production lines, the two parties developed a new special membrane that filters the protein out of the water. The water is then forwarded in another machine where water is processed and turned to clear drinking water that FFB could reuse in its manufacturing process instead of disposing it to the channels. From this environmental cooperation, FFB minimized its waste by 90%.

resist where the hard work takes place, and otherwise, the boxes are designed only for the final markets”[IN5]. Thus, SA2, by closely cooperating with FFA, manages to contribute to FFA’s minimization of food waste.

In addition to waste minimization, inter-organizational cooperation between SA2 and FFA to produce fit-for-purpose boxes yield environmental benefits related to CO2 reduction. SA2 cooperates with FFA during the manufacturing process by adjusting the boxes based on the characteristics of each batch. The marketing director of SA2 highlights: “not every potato is the same and not all French fries have the same characteristics. So they are longer, they are thinner[…]”. The outcome of not adjusting the boxes based on the aforementioned characteristics is that the boxes end up with headspace. “If you take headspace out of the box you can store one extra box on the pallet, otherwise you ship less volume”[…][IN5]. Hence, if FFA transfers less volume, it needs to increase its fleet and shipments, resulting in the increase of CO2 emissions.“[…]the impact of that goes a million times a year[…]So one centimeter can have a huge impact on CO2 emissions reduction” [IN5].

Concerning the CO2 emissions reduction, SB1 also cooperated in the past with FFB on an issue related to packaging. FFB was facing issues with one of its former logistics suppliers, namely damages during the delivery of products through air transport. Due to that, FFB was forced to re-ship products, which was not only expensive but also aggravating for FFB’s footprint related to CO2 emissions. SB1 and FFB, after regular meetings, came up with an idea to replace current packaging with a carton-based solution. In that way, the problem was resolved, the shipments were significantly decreased, which led to reduction of CO2 emissions. Apart from that, SB1 cooperates with the focal firm via common IT platforms. Through common interfaces, they plan orders upfront, they keep track of scheduled deliveries, and in that way they reduce the number of mistakes, because everything is checked in the system. “Less mistakes lead to less shipments, so less traveled kilometers”[IN8].

pyrolysis and this means you get your old plastics and you break them down to the individual polymers[…]and then you make new plastics out of that”[IN12].

SC2 is a plastic waste collector that recycles PVC that can be used for the production of FFC’s pipes. “We sort out plastics, in the case of FFC we did that with PVC, and then we developed a way of grinding, washing, micronizing, powdering the materials. And then we saw if FFC can use them in their pipes”[IN13]. SC2 and FFB had meetings to improve the quality of recycled PVC in FFB’s plastic pipes. They commonly developed a new quality that meets the standards of pipes, using a lab extruder, which is called impurity counter. The two parties also examine the possibility of recycling the end-product, when its usage is no longer feasible, and bring it back into circulation to produce the same product again.

4.6 Employees EMC

5. DISCUSSION

The findings in section 4 provide significant insights for research and managerial practice by presenting the different ways by which suppliers contribute to focal firms’ environmental practices. More specifically, suppliers’ contribution through suppliers’ EMCs was explicitly reported as identified from the data analysis, along with the environmental practices of the focal firm that were positively influenced by each suppliers’ EMC. An overview of how the different EMCs of suppliers and environmental practices of focal firms’ were found to be related is provided in figure 2 (see appendix E for clarification on which cases support each relationship). It is worth noting that not all the investigated suppliers’ EMCs were found to have an influential role in focal firm’s environmental practices across the cases. For instance, suppliers’ ability to provide green education and training to enhance their employees’ performance on the requirements of focal firm’s environmental practices (i.e., employees EMC) was identified only in case 3. Similarly, suppliers’ process EMC was found to contribute to firm’s environmental practices only in case 3. Additionally, even though most of suppliers’ EMCs were identified as valuable in more than one case, their contribution to certain environmental practices was not always validated across cases. For example, the contribution of suppliers’ relationship EMC to focal firm’s waste minimization was identified only in case 2, whereas its contribution to the focal firm’s use of environmentally friendly materials was found both in cases 1 and 2. Thus, for developing the research propositions of this thesis, to ensure stronger evidence for generalization of findings (Karlsson, 2016), I only consider those EMCs of suppliers identified in more than one case and their contribution to those environmental practices that were found to be positively influenced by this EMC in more than one case, namely contributions 1,2,3,6,7, and 8 from figure 2. Each of the following sections is developed to discuss the contribution of each EMC of suppliers to the respective environmental practice of the focal firm.

5.1 Suppliers’ contribution to focal firm’s use of environmentally friendly materials

through product EMC

FIGURE 2

Overview of findings

PROPOSITION 1a: Suppliers contribute to the focal firm’s use of environmentally friendly materials through product EMC by increasing traceability of materials’ footprint throughout the entire supply chain via product sustainability-certification.

Additionally, the provision of environmentally conscious products was related to the recycled content and recyclability of the products. Leonas (2017) states that using recycled content in manufacturing aligns with the larger movement towards a more circular economy. Moreover, several scholars highlight that the development of easily recyclable products positively contributes to waste minimization (Conroy et al., 2006; Kriwet et al., 1995; Ljungberg, 2007). However, it has not yet been discussed, and it is interesting to see how suppliers’ initiative to engage in a circular economy can also reduce the focal firm’s environmental footprint. My findings contribute to this gap in knowledge by showing that the negative environmental impact of the sourced materials is minimized by suppliers through substitution of products made from recycled materials, but also by providing products that leverage recyclability after the use of the end-product. These findings hold the following proposition:

PROPOSITION 1b: Suppliers contribute to the focal firm’s use of environmentally friendly materials through product EMC by substituting virgin with recycled inputs in the production of the sourced products and by providing materials that leverage recyclability of the end-product.

5.2 Suppliers’ contribution to focal firm’s use of environmentally friendly materials

through suppliers EMC

see that the ability of focal firm’ immediate suppliers to instill environmental management to their own suppliers leverages focal firm’s own environmental goals. Thus, I propose that:

PROPOSITION 2: Suppliers contribute to the focal firm’s use of environmentally friendly materials through suppliers EMC by instilling environmental management to upstream suppliers via environmental guidelines, assessments, improvements plans, and by collaborating with them to ensure the minimum environmental footprint in all stages of materials’ supply chain.

5.3 Suppliers’ contribution to focal firm’s use of environmentally friendly materials

through relationship EMC

Suppliers’ environmental relationships with various stakeholders within their supply chain were found to positively influence focal firm’s use of environmentally friendly inputs (contribution 3 in figure 2). Stakeholder theory (Freeman, 1984), as well as other scholars (Chen et al., 2017; Pagell & Wu, 2009), have stressed that managing essential stakeholder relationships, both in the upstream and the downstream stages of the supply chain, can yield long-term sustainable results. Gualandris and Kalchschmidt (2016) extend this notion to suppliers by showing that suppliers’ development of relation-specific capabilities improves manufacturing firms’ sustainability. However, no literature was found to provide evidence on how suppliers’ environmental relationships with external partners contribute to focal firm’s environmental practices. I found that suppliers, due to their own sustainability commitments, interact with stakeholders within their environmental network during environmental programs or events to create a fully sustainable supply chain and to provide their customers with information on environmental trends and environmental-friendly solutions. Hence, it is interesting to see that by using their own environmental network, suppliers leverage focal firm’s use of environmental-conscious products in a direct and indirect way, namely by working with their environmental partners by themselves to ensure an end-to-end sustainable supply chain, and by bringing together their partners and the focal firm to increase firm’s awareness on environmental trends and solutions related to the sourced materials. According to this evidence, the following propositions are developed:

PROPOSITION 3b: Suppliers indirectly contribute to the focal firm’s use of environmentally friendly materials through relationship EMC by using their own environmental network to increase focal firm’s awareness on environmental trends and solutions related to the sourced products.

5.4 Suppliers’ inter-organizational cooperation EMC

One of the most essential contributions of suppliers, identified in almost all cases, was suppliers’ ability to work in close cooperation with the focal firm to reduce focal firm’s negative environmental impact. These findings come with no surprise since in section 2.3, the environmental benefits that can be extracted by firm’s engagement in environmental cooperation with its immediate suppliers were thoroughly discussed (Den Hond, 1996; Geffen & Rothenberg, 2000; Vachon & Klassen, 2008). Nevertheless, my findings provide interesting insights by focusing more on how the suppliers contribute to this environmental collaboration, as well as on the practices they contribute to. More specifically, suppliers’ inter-organizational cooperation EMC was found to positively influence focal firm’s CO2 emission reduction, waste minimization, and the use of recycled materials within the manufacturing process.

5.4.1 Contribution to focal firm’s CO2 emissions reduction

Environmental cooperation with suppliers seems to be particularly fruitful in levering focal firm’s efforts to minimize its CO2 footprint (contribution 6 in figure 2). These findings are in line with the findings of Tidy et al. (2016), who conclude that through suppliers’ engagement, firms could achieve carbon emissions reduction. My findings enrich GSCM literature examining this stream of buyer-supplier collaboration since they provide concrete examples of how inter-organizational cooperation EMC of suppliers leads to environmental benefits regarding focal firm’s CO2 reduction. Through optimized and eco-logistical operations, namely by delivering in full truckloads and by creating “free-error” processes that minimize that total traveled kilometres, suppliers, together with the focal firm, eventually manage to decrease focal firm’s CO2 footprint caused by transportation. This leads to the following proposition:

PROPOSITION 4a: Suppliers contribute to the focal firm’s CO2 emissions reduction through inter-organizational cooperation EMC by working with the focal firm to develop optimized and eco-friendly logistical operations.

5.4.2 Contribution to focal firm’s waste minimization

focal firm’s supply chain to minimize waste was only found to be extensively discussed by Dainty and Brooke (2004). However, interesting insights in literature on the mechanisms by which suppliers contribute to focal firm’s waste minimization are yet to be identified. My study contributes to this underdeveloped part of literature by showing that suppliers, by cooperating with the focal firm, are able to develop eco-friendly production solutions to adjust their own production to the specific products’ requirements, in order to avoid damages that would cause waste along the supply chain. Moreover, suppliers’ eco-friendly production solutions manage to minimize waste directly within the focal firm’s production process. Hence, it is proposed that:

PROPOSITION 4b: Suppliers contribute to the focal firm’s waste minimization through inter-organizational cooperation EMC by developing eco-friendly production solutions for both their own and the focal firm’s product manufacturing.

5.4.3 Contribution to focal firm’s use of recycled materials

Benefits were also evident from this environmental cooperation in the use of recycled instead of virgin materials within the focal firm’s production (contribution 8 in figure 2). Suppliers through pilot projects and discussions with the focal firm specify requirements in terms of quality of the recycled inputs by looking at standards and rules that the end-products have to comply with. They also work together on new solutions, such as breaking the end product down to the initial raw materials after its use and take it back into circulation. Regarding the circulation of products, Nasir et al. (2017) proves that a circular supply chain exhibits lower environmental impact. Additionally, Andersen (2007) states that a circular economy generates benefits for the environment by minimizing the use of virgin materials for economic activity. Although some scholars have discussed the interaction among stakeholders in the supply chain as a prerequisite towards the development of a circular economy (Staicu & Pop, 2018; Zhu et al., 2011), no explicit discussion was found regarding suppliers’ contribution to this accomplishment. My findings provide interesting insight on this matter by showing how suppliers’ inter-organizational cooperation EMC helps the focal firm to increase circularity in its manufacturing process. Consequently, it is proposed that:

6. CONCLUSION

6.1 Theoretical contributions

Following previous research discussing suppliers’ impact on the focal firm’s environmental sustainability (Gimenez & Tachizawa, 2012; Gold et al., 2010; Gualandris & Kalchschmidt, 2016; Sancha et al., 2019) the aim of this study was to enrich GSCM literature by providing insights on the mechanisms through which suppliers contribute to focal firm’s environmental practices. Several scholars were found to highlight the value of certain capabilities on environmental management (e.g., Bowen et al., 2001; Christmann, 2000; Liu et al., 2016; Wong et al., 2012). Still, most of these scholars sought to focus on those capabilities from the focal firm’s point of view. Drawing on the findings of Wong et al. (2012), my focus was to provide more elaboration on which and how EMCs of suppliers can leverage certain environmental practices of the focal firm. By adopting EMCs identified in literature, a conceptual framework was developed to guide the empirical part of this research, in order to examine the contribution of suppliers to focal firm’s environmental practices through suppliers’ EMCs presented in table 2. By analyzing primary data collected from semi-structured interviews, as well as secondary data, this stream of literature was enriched with insights explaining how suppliers’ EMCs positively influence focal firm’s practices of using environmentally friendly materials within the manufacturing process, CO2 emissions reduction, waste minimization, and use of recycled materials for product manufacturing.

First, my findings show that suppliers’ product EMC positively influences the use of environmentally friendly materials in the focal firm’s production by increasing traceability via product certification. Apart from providing useful insights concerning the aforementioned research gap, these insights extend the findings of previous scholars (Aguilar & Vlosky, 2007; Del Savio & Schmietow, 2013; Kumar et al., 2017) by showing that traceability in the supply chain is increased by sustainability-certification initiatives of focal firm’s suppliers. Additionally, suppliers’ product EMC leads to the provision of both recycled and easily recyclable materials due to suppliers’ initiative to increase product circulation. Thus, my findings enrich the research on Cleaner Production that discusses the concept of a circular economy by showing that suppliers’ own motives towards circulation of products further contribute to a focal firm’s efforts of using environmentally conscious materials.

performance (Golicic & Smith, 2013; Lund-Thomsen & Lindgreen, 2014; Zhu et al., 2012), no previous study was found to provide evidence on how suppliers’ environmental interactions with different stakeholders contribute to the focal firm’s environmental practices. My findings provide interesting insights on this matter, by showing that suppliers contribute to focal firm’s use of environmentally friendly materials through relationship EMC and suppliers EMC by ensuring that knowledge on environmental trends and solutions is shared among all actors in the supply chain and that all external stakeholders are committed to creating an end-to-end sustainable supply chain.

Lastly, following previous literature on providing examples of environmental benefits obtained from buyer-supplier environmental collaboration (Den Hond, 1996; Geffen & Rothenberg, 2000; Vachon & Klassen, 2008), the findings of this study provide further insights by showing how suppliers’ inter-organizational cooperation EMC leverages certain environmental practices of the focal firm. More specifically, suppliers’ inter-organizational cooperation EMC contributes to focal firm’s CO2 emissions reduction through the development of optimized and eco-friendly logistical processes. In addition, benefits are obtained regarding focal firm’s waste minimization through suppliers’ ability to cooperate with the focal firm to develop eco-friendly production solutions. Finally, the focal firm’s use of recycled materials for product manufacturing seems to be leveraged by suppliers’ inter-organizational cooperation EMC, since it leads to the development of high-quality recycled inputs and facilitates the circulation of the focal firm’s end-products.

6.2 Managerial implications

6.3 Limitations and further research

This study is not without limitations. First, limitations exist regarding the generalization of results. Although the propositions of this thesis were developed by validating the findings at least across two cases, the validation was made on an aggregate level of analysis, namely between the suppliers’ EMCs and environmental practices identified across cases. Yet, in order to provide stronger evidence for theory building, the way by which each suppliers’ EMC contributes to different, as well as similar environmental practices, should be validated in a lower level of information, clearly suggesting not only that one EMC contributes to the same practice in more than one case but also contributes in the same way. From another perspective, the small number of cases might also be the reason for limited evidence on findings that were relevant in one case, but they could not be generalized due to failure to validate across-cases (e.g., process and employee EMCs). Second, all the primary data was collected based on average one-hour interviews. Almost all interviewees were consistently highlighting that within a one-hour interview, it is impossible to provide all the detailed information and sufficiently in-depth insights on how suppliers contribute to focal firm’s environmental practices. Even though I tried to provide more information by analyzing relevant secondary data from each company, it might be necessary to spend even days within suppliers’ companies for conducting interviews with more than one managers and to facilitate more observations as well. Thus, future research should include longitudinal designs to provide conclusive evidence of my research framework. Lastly, the cases were only within two different industries. Thus, it cannot be confirmed that studies in different industries will yield the same results regarding suppliers’ EMCs and their influence on the identified environmental practices of the focal firm.