Buying firms must pay increased attention to supply chain sustainability issues as they might be held responsible by stakeholders for non-sustainable supply chain activities. Frequently, sustainability problems occur upstream at the sub-supplier level. Building on the literature on multi-tier supply chains (MSCs), we investigated the strategies of buying firms in the food, apparel, packaging, and consumer electronics industries to manage the sustainability of second-tier suppliers and beyond. In particular, we analyzed seven cases of global MSCs and found four different characteristic MSC types-open, closed, third party, and "don't bother".We identified three main factors-supply chain complexity, the sustainability management capabilities of the first tier supplier, and the type of sustainability in focus (i.e., environmental or social sustainability)-that determine when and how buying firms actually extend their sustainability strategies to their sub-suppliers.

An instrumental perspective still dominates research on sustainable supply chain management (SSCM). As an alternative, this study presents a paradox perspective and argues that sustainability and other business aims are not always compatible, particularly in an emerging market context. Often, paradoxical tensions originate in conflicts between the socioeconomic environment of emerging market suppliers and their Western customers’ demands for both cost competitiveness and sustainability. We argue that Western buying firms can play a key role in moderating such tensions, as experienced by emerging market suppliers. Specifically, we explore how purchasing and sustainability managers within buying firms make sense of and respond to paradoxical tensions in SSCM. We conduct an in‐depth case study of a Western multinational company that sources substantially from Chinese suppliers. While we found strong evidence for a persisting instrumental perspective in the sensemaking and practices of purchasing and sustainability managers, we also observed an alternative response, primarily by sustainability managers that we labeled as “contextualizing.” Contextualizing can alleviate the tensions otherwise present in SSCM by making sustainability standards more workable in an emerging market context, and it can help individual managers to move toward paradoxical sensemaking. We outline the value of paradoxical sensemaking in bringing about changes toward “true sustainability” in SSCM.

There has been considerable debate on and research efforts into the question as to if, and if so when, improving corporate sustainability performance is not only beneficial for social and environmental wellbeing but also for the financial wellbeing of a firm. So far, the literature has reported mixed results on the relationship between corporate sustainability and financial performance. Drawing on instrumental stakeholder theory, we develop a focal hypothesis arguing that the financial effect of corporate sustainability performance is negatively impacted by country-level sustainability performance because stakeholders will take a firm's sustainability improvement for granted in countries with good social and environmental performance. We test this focal hypothesis in a cross-country setting drawing on the 6th International Manufacturing Strategy Survey. The current study supplements these data with secondary data drawn from the Human Development Index and the Environmental Performance Index. The results support our hypothesis that firms in countries with higher levels of sustainability performance generally find it more difficult to capitalize on corporate sustainability performance than do their counterparts in countries with relatively low levels of sustainability performance. This outcome helps to explain the mixed findings in the literature. Moreover, our study suggests that sustainability management can be a source of competitive advantage for firms located in emerging and developing countries, where in general the level of sustainability performance is relatively low.

This study unpacks the environmental and social dimensions of supplier responsibility and links each dimension to distinct drivers. Using stakeholder theory and the relational view, we distinguish between two main drivers: stakeholder pressures (i.e., from regulatory agencies, buying firms, and nongovernmental organizations) and relational mechanisms offered by multinational companies (MNCs) (i.e., lean trainings and relational capital). We used a multi‐method research design to study how these drivers uniquely influence supplier responsibility in an emerging‐country context. An in‐depth case study with Philips Lighting and 10 of its Chinese suppliers reveals causal inferences that link stakeholder and relational drivers with each responsibility dimension (environmental vs. social). Audit and survey data from Philips Lighting's 134 Chinese suppliers, complemented with four archival databases, bolster these inferences. Overall, the results show that supplier environmental responsibility can be fostered through both stakeholder pressures and relational drivers; whereas, supplier social responsibility is much harder to address. The integrated methods offer a fuller, more comprehensive understanding of the specifics of supplier responsibility in China and also provide recommendations for MNCs that seek to improve it.