Sustainable supply chain management – the influence of local stakeholder expectations in China’s agri-food industry

Abstract

Multinational food processing corporations are facing rapid growth in emerging markets like China and a concurrent need for sustainable supply chain management (SSCM). These firms attempt to address supply risk and threat to the triple bottom line (TBL) through managing suppliers and inputs, and at the same time need to overcome the uncertainty raised by the unfamiliar host environment. An exploratory qualitative case study of two multinational food processing corporations in China, finds their SSCM practices are impacted by the nature of the raw material inputs as well as local stakeholder expectations. In particular, government policy and media attention seems to influence the direction and choice of SSCM activities engaged in by the focal firms. Furthermore, the discussion also suggests a possible permanent effect may occur as stakeholder expectations and host country institutions evolve. The implication of this study is that food processors preparing to enter emerging markets should be aware that local stakeholder expectations may affect operations significantly more than previously expected. As such, these firms need to carefully evaluate their operations in the host market and seek balance between SSCM practices and local stakeholder expectations. This study extends existing research on SSCM, exploring practices among the agri-food industry in a developing economy, and points out a theoretical extension to the existing sustainable purchasing portfolio matrix.

Sustainable supply chain management in developing countries: An analysis of the literature

“…The suggested process is to use assessment as a first step to identify breaches in operational practices and then to implement improvement plans through collaboration (Gimenez and Tachizawa, 2012). This process varies according to the expectations of local stakeholders and market dynamics which affects the level of the buyer's engagement with suppliers (Kao et al, 2012). Some companies decide to establish direct contact with suppliers through internal policies or codes of conduct, while other companies engage with NGOs to deliver initiatives.…”

“…Falsification of documents for audits and illegal payments to the local government or certification bodies. Johnson, 2004;Kao, 2012;Sen, 2009;Soundararajan, 2016;Turker, 2014;Zailani, 2012 Third party certification Set of standards to meet in terms of environmental or social management that is audited and validated by a third independent party. Blowfield, 2000;Blowfield, 2003;Dolan, 2008;Lund-Tomsen, 2010;Morris, 2004 Industry standard Best practices promoted by industry associations.…”

Sustainable business practices and challenges in Asia: a systematic review

“…However, China could increase productivity and ensure food security through sustainable practices by training them and also with better agriculture practices (Cui et al , 2018; Tang et al , 2013). China has accordingly expanded greenhouse vegetable production and sustainable agri food processing, and such approaches appear to work well in the region (Yang et al , 2016; Kao et al , 2012).…”

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

“…Research in managing stakeholders' influences and risks in sustainable supply chains has only just begun; in fact, according to Kao et al (2012), previous SSCM research has generally been multi-sector focused, and so its relevance lies in bridging the gap in the consideration of multiple stakeholder interests in SC decisions to improve sustainability performance, while managing SC risks. As sustainability increases in importance, many companies are shifting from profit maximization to incorporating sustainable practices in their activities.…”