Purpose-Firms are increasingly being pressured by the public, regulators and customers to ensure that their suppliers behave in a socially and ecologically sound manner. Yet, the complexity and risks embedded in many supply chains makes this challenging, with monitoring practices offering one means to attenuate supply sustainability risk. Drawing on agency theory, this research examines the relationship between sustainability and operations risk, supplier sustainability monitoring practices, supply improvement initiatives and firm performance. Design/methodology/approach-This research uses data from a survey and archival sources from a sample of large U.S. firms to empirically examine the relationship between sustainability and operations risk, supplier sustainability monitoring practices, supply improvement initiatives and firm performance. Findings-Findings indicate that higher levels of perceived sustainability risk is related to greater monitoring of supplier sustainability practices by focal firms. Perceptions of higher operations risk are indirectly related to greater social monitoring through investment in supply improvement initiatives. Monitoring of supplier sustainability practices is also found to have a positive effect on focal firm performance. Practical implications-Findings suggest that managers process operations risks and sustainability risks independently. Greater sustainability risk leads to increased sustainability monitoring, while greater operations risk leads to increased investment in supply improvement initiatives, which in turn leads to increased social monitoring. The research also indicates that behavior-oriented approaches, such as monitoring of supplier environmental and social practices,

Socially responsible practices (SRP) of firms have evolved into an important area of research in operations management; however, it remains challenging to identify specific scales that capture multiple dimensions of such social practices. In this exploratory study, we use stakeholder theory to develop new multi-item measurement scales linked to multiple groups (i.e. internal, supplier, customer and community stakeholders). Furthermore, we empirically test a higher-order multidimensional construct that collectively assesses the socially responsible practices of a firm. Using these stakeholder-derived constructs as taxons in a cluster analysis, we identify important patterns in the way that multiple groups of stakeholders are engaged. Finally, we demonstrate that the set of social practices are complementary and concentrating on one group can yield spillover effects to other specific stakeholder groups.

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PurposePressured by various stakeholder groups to improve the sustainability performance of their emerging economy suppliers, multinational firms continue to expand their supplier monitoring. Leveraging the strategy literature on alliances and the buyer-supplier relationship management literature, the authors propose that a buyer firm's efforts to proactively develop cultural sensitivity and operations cognizance to understand the operational culture and routines of its suppliers can ameliorate some shortcomings of supplier monitoring, thereby improving the performance of the buyer firm.Design/methodology/approachUsing primary survey data from a sample of US manufacturing firms, combined with secondary data of supplier monitoring and financial performance, this research examines the relationship between supplier monitoring, cultural sensitivity, operations cognizance, and buyer firm performance.FindingsSupplier monitoring was associated with positive but diminishing returns for financial and sustainability performance for the buyer. Second, increasing cultural sensitivity and operations cognizance for suppliers in emerging economies were associated with improved buyer performance. Finally, the synergistic use of supplier monitoring and operations cognizance was associated with improved buyer firm financial performance.Originality/valueWhile the buyer-supplier relationship literature has mainly treated organizational differences between dyadic supply chain partners as exogenous to the context in which their relationship evolves, the authors posit that buyer firms' efforts to understand such differences can affect the value of buyer-directed interactions, such as supplier monitoring. This research adds to the theoretical understanding of the process of developing relational mechanisms with emerging economy suppliers. In particular, efforts of buyer firms to better understand the operational culture and routines of their suppliers can complement monitoring and are associated with a positive impact on performance.

PurposeAs large multinational firms are increasingly tasked with developing sustainable supply chains, their role in improving the sustainability performance of their suppliers is critical. This paper examines the dual role of a buyer firm, as a customer and as an important stakeholder, and identifies several attributes of the buyer firm and the dyadic relationship that could help improve the sustainability performance of suppliers.Design/methodology/approachA dyadic multi-year dataset is created using financial and customer data from the Compustat database and sustainability data from MSCI ESG ratings database. The hypotheses are tested using econometric panel data techniques.FindingsThe findings indicate that a buyer's legitimacy is a key factor that affects supplier's sustainability performance. The effect of legitimacy is much higher when the buyer and supplier firms have an aligned focus on similar sustainability dimensions. The market power of the buyer also increases the effect of legitimacy, though power without legitimacy is not effective.Originality/valueThe study expands the understanding of how buyer firms can influence suppliers on sustainability by highlighting the key role played by legitimacy and aligned focus and the supporting role of market power. The study contributes to both the stakeholder salience literature and the buyer–supplier relationship literature by showing evidence for complementarity between market power and legitimacy. Buyer firms can use the results of the study to focus their efforts on suppliers where a significant improvement in sustainability can be expected.