Framework of Stakeholder Reactions on Sustainability Risk Mitigation Practices and Sustainability Performance in Supply Chains

Abstract

Stakeholder expectations and interest in supply chain (SC) sustainability is increasing and hence, environmental and social performance of upstream suppliers may cause sustainability risks for a focal company. Different stakeholders weight environmental and social aspects of sustainability differently and also, adequate level of sustainability is viewed differently in the sense, how far beyond legal requirements a company should extend its sustainability demands for the suppliers. Respectively, stakeholders' reactions to the investments in sustainable supply chain management (SSCM) may vary. Therefore, companies need to balance between the key stakeholders' interests and appropriate sustainability practices in mitigating sustainability risks from suppliers and avoiding losses from various stakeholders' reactions, which may affect the business performance. Also for further research, this paper develops a conceptual framework of how sustainability performance of a focal company and its SC may influence stakeholder reactions. With regards to SSCM, it suggests making a difference between the plain compliance with the law and market-driven sustainability practices beyond legislation.

The degree of stakeholder influences and risks in sustainable supply chains: a systematic literature review

“…Overall, most stakeholders want companies to operate in a sustainable fashion, as well as to ensure the measures they have taken assure their suppliers' sustainable process. Hence, to drive this 'value,' organisations are taking into consideration the relevance of stakeholders in terms of their influence over company operations, the urgency of their requests, and the legitimacy it provides the business (Multaharju, 2016), while making allowances for social, environmental, and economic concerns of their SC operations, considered to be the Triple Bottom Line (Elkington, 1997).…”

“…Nevertheless, with a wide literature review in accordance with stakeholder theory principles, considered to be the most challenging paradigm for measuring sustainability (Khosravi and Izbirak, 2019), the identification of stakeholders is considered a vital step not just to preserve company reputation, but also to better understand and engage stakeholders in the implementation of more sustainable SCs (Wolf, 2014). Sustainability in SCs is largely carried out through the adoption of sustainable practices rather than traditional methods (Multaharju, 2016). From a supply chain perspective, this identification starts at the level of a product or service, rather than at the level of an organisation or issue, as most conventional techniques do (Fritz et al, 2018).…”

“…This study posits that the extent to which the adoption of sustainable supply chain practices occurs in developing countries are relatively low in comparison to developed countries. To illustrate, from poor nations, the use of underage and forced labour is being scrutinized, particularly in sourcing (Multaharju, 2016). Further, some of these barriers in developed countries (such as UAE) include poor infrastructure, stakeholder disparity, organisational culture, uncertainty, and poor coordination (Hussain et al, 2019), all of which underline the necessity for adequate administration, policy support, and supply chain standards to enhance cooperation between stakeholders and make them capable of addressing uncertainty when they need to so.…”

“…As a result, sustainability has grown in importance over time, directing initiatives to maximize internal and external stakeholder value. Consequently, numerous literary works have approached stakeholder theory identifying pressure areas for possible research development, and the constantly changing 21 st -century environment and ever-changing policies and practices have become drivers that make organisations continuously seek value and sustainability for stakeholders in supply chains (Multaharju, 2016). To further drive this "value," organisations are taking into consideration social, environmental, and economic concerns of their supply chain operations, considered the Triple Bottom Line (TBL) (Elkington, 1997), and for this study the definition of sustainability.…”

Key Components and Critical Success Factors for Project Management Success: A Literature Review

“…In fact, poor stakeholder involvement has been identified as one major reason for project failures in developing countries since their behaviour impact schedules, attention to cost control and environmental due to poor decision making (Davis, 2014;Eyiah-Botwe, 2015). Hence, it is paramount for management to sustain stakeholder management (Multaharju, 2016) by making sure that all stakeholders collaborate in the project for project management success (Bond-Barnard et al, 2018).…”