Panarchy theory: myth or reality? Empirical evidence of the socio-ecological nature of supply chains

Abstract

PurposeThis study builds on the panarchy theory by viewing the supply chain as a socio-ecological system and further expands it by considering the within-level linkages internal to the supply chain level. Three types of linkages are considered: the two cross-level linkages with the planetary and the political-economic levels and the supply chain within-level linkages. The research questions are addressed using the data gathered by the Carbon Disclosure Project within its Supply Chain Programme.Design/methodology/approachThis work aims to study, applying the lens of panarchy theory, how the planetary and the political-economic levels affect the supply chain within-level linkages for sustainability. Furthermore, the difference in how these cross-level linkages influence focal firms and first-tier suppliers is explored.FindingsThe results show that considering the planetary-supply chain linkage, climate change risk exposure is likelier to foster within-level linkages with buyers than with suppliers. Further, climate change mitigation investments have different roles in the different tiers: focal firms are pushed to strengthen the linkages with their suppliers when they lose efficacy in improving their carbon performance, whereas first-tier suppliers exploit investments to gain legitimacy. Discussing the political-economic level effect, perceptions from first-tier suppliers could be two-fold: they could perceive a mandating power mechanism or exploit policymakers’ knowledge to advance their capabilities.Originality/valueThe results contribute to the sustainable supply chain management literature by providing empirical evidence of the cross-level linkages theorised by the panarchy theory. Moreover, the concept of within-level linkages is proposed to apply the theory in this field.

Guest editorial: The 6th world conference on production and operations management

“…Sustainability and circular economy: There is a burgeoning need for research on sustainable P&OM practices and the transition towards a circular economy paradigm (Batista et al ., 2023). In this line, Madonna et al . (2023) show the complex interactions within supply chain actors and with external factors, suggesting the need of deeper analysis of specific linkages within supply chains, considering bidirectional linkages among different levels.…”

“…Sustainability and socio-ecological dynamics: Supply chains are complex socio-ecological systems characterized by interdependencies across multiple levels of analysis. Madonna et al .’s (2024) paper, entitled “Panarchy theory: myth or reality? Empirical evidence of the socio-ecological nature of supply chains”, applies the lens of panarchy theory to examine the dynamic interactions between the planetary, political-economic and supply chain levels.…”