Transformational supply chains and the 'wicked problem' of sustainability: aligning knowledge, innovation, entrepreneurship, and leadership

Abstract

Supply chains are increasingly asked by consumers, policy makers, and other stakeholders to deliver product attributes that range far beyond the experience and search attributes of classical consumer demand. One name given these attributes is credence attributes (e.g. place-of-origin, organic, locally-grown). Sustainability as an attribute is an interesting emerging case. Sustainability is an example of a 'wicked problem': complex, ill-defined, messy and unsolvable in any traditional sense. Sustainability's lack of tractability raises the interesting question as to how a supply chain or network produces a thing that is beyond conventional notions of definition and structure. The paper develops a general framework for linking supply chain performance to types of knowledge and supply chain governance. The framework draws from knowledge management theory, the resource based theory of the firm, and transactions cost economics. Various types of knowledge are argued to have different levels of strategic value – explicit knowledge has limited strategic value, tacit knowledge has moderate strategic value, and new knowledge has high strategic value. Managing wicked problems requires a type of supply chain governance that creates new knowledge in the context of a broad stakeholder network. This type of governance is called transformational and is contrasted with exchange governance and learning governance. Once developed, the framework is applied to the wicked problem of sustainability, including a case study on one empirical structure being used to manage it. For supply chains and networks, future economic value is likely to demand delivery of more and more complex attributes that will take businesses increasingly into the realm of wicked problems.

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