sustainable purchasing and supply chain management: the...

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*Corresponding author: E-mail: [email protected]

Advances in Research

14(5): 1-23, 2018; Article no.AIR.41246ISSN: 2348-0394, NLM ID: 101666096

Sustainable Purchasing and Supply ChainManagement: The Entrepreneurial Role of the

Purchasing Function

S. Agrogiannis1* and I. Kinias2

1Misum - Mistra Center for Sustainable Markets, Stockholm School of Economics, Sweden.2Department of Business Administration, University of the Aegean, Greece.

Authors’ contributions

This work was carried out in collaboration between the authors. Both authors SA and IK contributedequally to the paper. Authors SA and IK designed the study, managed the literature searches,

conducted the analysis and wrote the text. Both authors read and approved the final manuscript.

Article Information

DOI: 10.9734/AIR/2018/41246Editor(s):

(1) Simone Domenico Scagnelli, Department of Management, University of Torino, Italy.(2) Nazrul Islam, Department of Management, HRM and International Business, School of Business of Uttara University,

Bangladesh.Reviewers:

(1) Rubina Jabeen, Universiti Utara, Malaysia.(2) Lawrence Jekwu Okoye, University of Maiduguri, Nigeria.(3) Gerald Aranoff, Ariel University Center of Samaria, Israel.

Complete Peer review History: http://www.sciencedomain.org/review-history/24507

Received 11th February 2018Accepted 19th April 2018

Published 8th May 2018

ABSTRACT

Strengthening functional effectiveness and raising awareness of purchasing’s aggregate value-added to the firm's sustainability agenda, calls for expanding sensitivity and receptiveness to thechallenges it faces. This presupposes reconsidering the function's relationships within the companyand establishing its position on the interface of strategy and operations. However, and while priorresearch has underlined the growing importance of purchasing, little is known how the purchasingfunction can be recognised as an equal partner and what the necessary capabilities are. Heedingthe calls of both academics and practitioners for increasing understanding on purchasingsuccessfully tackling sustainable supply chain challenges, the paper adopts a theory buildingapproach to provide clarity with respect to various aspects of the concept of sustainable purchasingand deliver transferrable insight into the implementation process of integrating sustainabilityconcerns into purchasing practices. To this end, we build on prior work within the Dynamic

Review article

Agrogiannis and Kinias; AIR, 14(5): 1-23, 2018; Article no.AIR.41246

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Capabilities field of strategic management to utilise this theory as the main supportive pillar of ourresearch, in effect moving closer to the view of purchasing managers as entrepreneurs. Hence, thenovel framework that the study presents constitutes the basis for discussing both why and how thepurchasing function should become involved in sustainable supply chain management, thus lendingcredence to voices concerned over substantiating the function's indispensable role in thesustainability era. The paper’s conclusion delves into the nature and interrelationship of purchasingmanagers’ capabilities. This is explicated by justifying how they could disembark from a puretransactional approach and actively participate in the identification of challenges as well asopportunities and subsequently develop appropriate responses to accommodate more sustainablesupply chains. The verdict of viewing purchasing managers as business pioneers is furtherelaborated and coupled with the theoretical contributions, managerial implications and potentialavenues for future research. Overall, the paper lends credence to the argument that reapingbenefits through sustainability assumes purchasing’s strategic alignment through certaininteractions.

Keywords: Sustainability; purchasing; supply chain management; capabilities; entrepreneurship;strategy.

1. INTRODUCTION: PURCHASING ANDSUSTAINABLE SUPPLY CHAINMANAGEMENT

There is growing recognition that the purchasingfunction is worthy of a seat in the boardroom.Significant ‘heavy lifting’ in driving value andsupporting sustainability initiatives throughreducing sourcing uncertainty and increasingvisibility [1] as well as improving performance [2]falls on the shoulders of purchasing managers.Even though this new focus requires firms todevelop more comprehensive sourcing strategies[3] with simultaneous attention paid tosustainability [4], little is known on howcompanies combine diverse purchasing practicesin line with firm-specific sustainability challengesand contexts [5]. Specifically, and contrary to thelong acknowledgment of the importance of fitbetween sourcing and corporate strategy [6],there is a paucity of research tackling the role ofpurchasing towards sustainability on anorganisational level. As a result, the functionappears alienated from its wider value chain roleand still struggles to upgrade its perceivedcontribution [7].

Meanwhile, the function’s strategic importancemandates a better understanding of theseconnections as a means of overcoming thetheory–practice divide [8] and increasing itsacademic relevance and practical influence. Thisbecomes even more urgent as it is subject tomixed expectations: purchasing managers are tobalance between short-term needs of pricereductions and the longer-term additional costsand potential benefits of sustainability practices.

In this respect, the purchasing function’sinvolvement towards efficiency and effectivenessappears indispensable [9]. Moreover, it calls forelevating the professional status of the functionand increasing its ability of introducing andadvancing new practices [10].

Therefore, purchasing appears to be animportant organisational asset [11] currentlyunder pressure for value generation andappropriation [12]. This renders it vital toarticulate how corporate and purchasingstrategies are connected and how theoperational purchasing activities are furtherimplemented [13]. Specifically, purchasing isrelevant to cost optimisation, asset utilisation andvalue creation [14]. This potential can be realisedthrough the direct practices of purchasing assuch, or through the support to other functions.However, and according to Carr and Pearson’s[15] and Ellram and Carr’s [16] arguments,purchasing should be approached as a corestrategic function. Such an attempt presupposesthat it is viewed as a strategic resource bycombining various capabilities in support ofsustainability-related supply chain (SC)objectives.

Accorded such a strategic role, it becomespossible to leverage purchasing both for valuecreation and for sustainability ends. Conflictsbetween these strategic objectives may of coursestill arise, but by elevating purchasing to itsrightful place allows us to use it as a tool foroptimisation and problem solving at the level ofstrategy. For example, the CDP Global SupplyChain Report 2017, with its SC memberscollectively representing USD 2.7 trillion of


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procurement spend, has disclosed emissionsreductions resulting in associated cost savings ofUSD 12.4 billion while trying to deliver positiveimpact at a larger scale and speed in response tochallenges of climate change and resourcescarcity.

Recognising the benefits from such an integratedapproach though, does not amount to a recipefor implementation. Both sustainable purchasing(SP) and sustainable supply chain management(SSCM) can be approached in a variety of ways.Overall, sustainability and corporateresponsibility are inextricable parts of modernSCs [17]. Yet, little is known about the interactionof these corporate processes. This includes theircontribution towards effectiveness. Typicallythey have been treated in isolation as van Weeleand van Raaij [18, pp.: 63] maintain bysuggesting that “contemporary purchasing andsupply management research seems to reflectthese strategic priorities only to a limited extent’’– and this is true irrespective of whether apositive or normative approach is taken. Add tothis an as yet relatively superficial understandingof how SP and SSCM might contribute to valuecreation, and it follows that we need to considerthe options available. Although SSCM (and SPas a subset) has been subject to considerableattention during recent years, researchers claimthat the relationship between business strategyand SSCM remains largely unexplored [19-20].

The purpose of this paper is to address thisissue. It does so by considering how purchasingcapabilities can support SSCM practices.Towards this end, we conceive of procurementas the boundary-spanning function empoweringinternal and external alignment among partnersmutually dependent [21]. Within such a setting,purchasing managers are expected to serve thetwofold role of leadership and entrepreneurshipand combine current needs with futuredevelopments. Essentially, theirentrepreneurship role is directed towardsambidexterity by supporting new businessopportunities without undermining their existingoperations [22].

This work embraces a conceptual approach andabides by an abductive reasoning logic (Latin-based ducere meaning “to lead away”, henceprovide the most proper explanation) in order todevelop certain propositions that can be put toempirical test. The establishment of such aphilosophical standpoint serves as the necessarystep towards theory building [23] and the

derivation of theoretical propositions. Itconstitutes an alternative to theory constructioncompared to the one-sided treatments of eitherqualitative or quantitative analysis.

By doing so, the aim is twofold. First, we providea unifying framework coupling together a set ofprescriptive elements underlying the strategiccharacter of the purchasing function. Second, webring practical relevance to SP and SSCM inmore general by heeding the calls of [24] to resistthe umbrella concept trap, and instead of limitingourselves to merely higher level and genericexplanations, contextual and detailed accountsreceive priority. To these ends, we combineexisting theory along with the appropriate logicaldeduction and theoretical induction [25] in orderto clearly communicate the novelty andrespective contributions challenging the statusquo [26]. Such a treatment acknowledges theconstant interplay between deduction andinduction [27] and conceives of them as mirror ofone another [28]. Thus, instead of adopting apolarised stance through a sole approach, weside by Tukey’s [29, pp. 13-14] argument that “Itis far better (to offer) an approximate answer tothe right question, which is often vague, than anexact answer to the wrong question, which canalways be made (more) exact.’’

Following this line of reasoning, the paper notonly defines but also articulates the manner inwhich the various purchasing actions are orshould be deployed by purchasing managers.These components and projections in turn canbe made subject to empirical validation andmeasurement refinement in future studies [30].Thus, we follow Choi and Wacker’s [31]suggestions of theoretical integration as a meansof challenging existing conceptualisations ofpurchasing management and presenting asystematic view of relationships among certainvariables [32] through simplicity, fertility andsurprise [33].

The argumentation is structured as follows: in thefollowing section, we unveil the strategic natureof the purchasing function to pave the way for theimportance of purchasing capabilities and definethe research scope. We then continue makingconnections with entrepreneurship literature andidentify those purchasing capabilities vital toaccompany the function’s practical shift from atransactional and purely administrative role to anembedded, integrative and value-adding utility.Abiding by multidisciplinary reasoning as ameans of mapping the relevant relationships, our


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research propositions, as derived from a dynamiccapabilities (DCs) perspective and the treatmentof purchasing managers as entrepreneurs, arethen detailed. DCs essentially deal witheffectiveness, through innovation andimprovement, which constitutes the core notionof entrepreneurship [34]. The penultimate partfocuses on the theoretical and practicalimplications while the finding section proceedswith potential future research directions.

2. STRATEGY AND PURCHASING: TWOSIDES OF THE SAME COIN AND THECRUCIAL ROLE OF CAPABILITIES

The conceptualisation and development of aunifying framework of purchasing capabilities ismotivated by the following two reasons. First,there is an increasing acknowledgment of thecrucial role that the purchasing function can playin the realisation of business objectives and theoverall strategy. Second, successful SSCM iscontingent on how the purchasing functionconfigures and executes its role. To betterappreciate this argument, empirical patterns anddifferences in the function’s treatment withincurrent literature should be offered. This isnecessary to promote shared understanding andpinpoint the degrees of potential value capturedby the proper delineation of the purchasingmanagers’ scope of activities. The following sub-sections are targeted towards these directions,namely to first establish the business case of astrategic view on the purchasing function andthen explicate why it is important to capture therelevant SP dimensions.

2.1 Signs of Purchasing as a StrategicDriver

Engaging in SSCM practices presupposesmeaningful interactions within the firm andacross its SC on behalf of purchasing managers.Given this context, the function’s role isparticularly important and requires its ability tosupport these multidimensional practices and themanagement of relationships with a multitude ofpartners. Available literature dealing specificallywith this coupling of purchasing and the strategicperspective, even though limited, is quiteenlightening.

In a refocused approach on the issue of strategyand SCM, [35] showed the direct relationshipbetween the kind of strategy that the firm adoptsand the supplier management practices it

supports. In turn, [36] as well as [37] highlight theconsistency approach between strategy andSCM by proving that performance levels wereanalogue to the level of congruence betweenbusiness and purchasing practices. Given thatsustainability strategy applies to the SC level [38-39] and the direct relationship betweenoperations and purchasing [40-41] the argumentthat SP is highly strategic [42] is stronglysupported.

Such involvement can be effectuated either in amediating manner through specific actions [43] orin a moderating way by looking at the degree ofpurchasing’s incorporation into the company’sstrategic planning [44]. To accomplish this, activeinvolvement by the purchasing personnel iscrucial. This would allow for a strengthenedprocess- and product-based SC greening [45-46]where sourcing centricity acts as a determinantof enabling the conduct of purchasing through astrategic perspective [47].

Moreover, findings from studies on sustainabilitypractices adopting a configurational perspective[5,48-49] further support the idea of seriouslyconsidering various purchasing capabilities inimplementing environmental initiatives. Yet,whereas sustainability appears high on theagenda of practitioners worldwide and acrossdifferent industries, the question of how to createan effective purchasing function remainsunanswered.

The red thread reverberating this strand of workviews strategic objectives as dependent upon theconnection with the upstream and downstreamSC environment. Against this background, thepurchasing function serves as the maininteractive ‘agent’ that needs to possess thosecore capabilities leveraging business vision andcompetiveness. Its strategic contribution runsthrough a continuum from a less sophisticated toa more advanced posture: from serving as aresidual competent function to realising a fullystrategic role where its secondary support to firmtargets and its complementarity to other functionsgive place to a truly core competence withunique skills supporting certain practices [50].

This developmental trajectory of the purchasingfunction’s capabilities and strategic relevance isalso captured through the different maturitymodels indicative of the function’s posture andsupport towards organisational issues. In areview of the relevant literature, [10] unveils thepositive relationship between the advancement


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of purchasing practices and the ensuing firmfinancial performance due to increased capacityof the function to introduce and further developbest practices. This insight is highly topical to thecurrent paper since it not only strengthens Balset al.’s [12] argument about internal and externalcontingencies influencing the function’s positionand configuration but also clearly reveals a directrelationship between organisational purchasingprocesses and firm performance. Consequently,it puts the function’s role centre stage on thediscussion within SSCM and business strategy.

The main assumption supporting this argumentrests upon the manner in which purchasing isinvolved or should be engaged in actions toeffectively orchestrate firm resources [51]. Froman internal perspective it is justified through theachievement of integrative advantage [52]wherein joint development of new materials,resources and processes is at the frontline [53-54]. Yet, these aspects receive not only internal(intra-organisational) but also external (inter-organisational) focus where sustainability relatedSC continuity induces mutual benefits for allinvolved parties [55] through actionsconcentrating on the integration of sustainabilityconsiderations into different functions, practicesand wider stakeholder groups [56].

As becomes obvious, relegating purchasing to aperipheral, secondary activity primarilyconcerned with routine transactions representsan opportunity foregone. On the contrary, thedecisive role of purchasing capabilities should begranted recognition since intra- and inter-organisational resources could be leveraged tofurther supply chain management (SCM)actions [57].

Indeed, recent evidence highlights the function’sdecisive role in accessing, acquiring and furtherextending sustainability-related knowledge [58-59]. Still, the corresponding processes leading tosuch an outcome are still unclear [60]. This alsolimits our understanding on how suppliersbecome acknowledged as strategically importantin the first place as well as the actions grantingcredit to the purchasing department’s influence[61].

Consequently, the current picture as maintainedby the wider SC literature is fairly oversimplified[62]. Hence, business leaders are still uncertainabout the implications for the purchasing functionand how to effectively mainstream sustainability-related decisions into purchasing management

[5-63]. It is therefore of no surprise that in real-life practice, apart from a few exceptions,application of SP remains on rather low levelsand this could be attributed to a lack of thefunction’s systematic integration into the overallsustainability strategy and its current insufficientcapabilities [48].

In order to overcome current deficiencies andincrease precision while widening the solutionspace available for purchasing managers whendealing with issues of sustainability within thewider SC context, value-adding practices shouldcome into the spotlight along with their criticalcombinations. This is made explicit in thefollowing subsection, where clarity is providedwith respect to the various entrepreneurial rolesthat could be ascertained to the purchasingfunction. Such a treatment will enable the studyof purchasing management to receive a broaderscope of reference directly attached to the overallbusiness strategy. On one hand, this allows forfocusing on new questions instead of tacklingfamiliar ones. In pursuit of answering how tocreate a truly sustainable SC we focus on what isdifferent towards this effort [64] in terms of thepurchasing function’s contribution and itsevolutionary character within the SSCM setting.On the other hand, strategic concerns ensuingfrom business and SC transformation are infusedin the treatment of the function’s dynamic role[65].

2.2 The Entrepreneurial PurchasingFunction and its Manager(s)

Market pressures and internal enablers arepresent when shifting attention to the strategicperspective of the purchasing function. Undersuch circumstances, firms are adept at alteringproducts and processes, investing in newtechnologies and developing new managementskills. To achieve this, there is a need to askwhat kind of capabilities the purchasing functionneeds to possess and what the means arethrough which these managers will achieveto differentiate their focal firms (and theirrespective SCs) from competition. A usefulstarting point refers to the seminal work ofSchumpeter who defines the entrepreneur asthe person occupied with implementingnew combinations of resources to satisfyconsumer desires [66]. Given that thisprocess signals market opportunities [67] thatpresuppose appropriate entrepreneurialresponses [68], it becomes apparent that the


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purchasing function’s contribution towardsentrepreneurship is topical.

This entrepreneurial role manifests in differentforms. Drawing on the seminal work of Knight[69] and the distinction between risk anduncertainty, entrepreneurs tackle issues of both(a) unknown outcomes whose odds of happeningcan be measured or learned (i.e. risk), and (b)events that presuppose an initial comprehensionin order to effectively develop alternatives andsubsequent handling (i.e. uncertainty).Essentially, purchasing managers serve asentrepreneurs, who deal with both succeeding inreaching satisfactory performance andexploiting opportunities by undertaking relevantventures [70].

Following Flynn et al.’s [71] line of reasoning, weparallel issues that entrepreneurs are confrontedwith, on macro-level uncertainty as well as meso-and micro- levels of risk. Hence, the notion of‘unknown’ encompasses a multilevel meaningsituated on individual, group, functional andorganisational levels in the wider SC context [62].This environmental uncertainty is highly critical inachieving firm survival [72] through foreseeingpositive and/or negative effects and instigatingthe appropriate responses [73] affecting alsodifferent tasks with varying degrees ofinterdependence [74]. Within such a setting, therole of agency and choice, the nature of theorganisational environment and the relationshipsbetween organisational agents and the externalenvironment are fundamental [75-76]. Tounderstand the impact of non-economicobjectives, a sorting of their possible constraints(i.e. trade-offs, win-win) on economic goals andassessment of their impact on firm priorities [77]should take place.

Given that entrepreneurship is often equated withindividual agency and the role of theentrepreneurial manager, we shortly clarify theessence of our entrepreneurial approach. Thisoperational conceptualisation is much in need inorder to better comprehend the purchasingfunction’s organisational position and potential.First, entrepreneurship depicts the levels ofinnovation, risk tolerance and proactivity of agiven firm strategy [78-79]. Second, opportunityrecognition and exploitation constitute coreentrepreneurial issues [80] raising challenges[81] and enacting certain responses tosustainability issues [82-83] against abackground of various uncertainties [73].Following this line of reasoning, we conceive of

organisational purchasing practices asreminiscent of the range of entrepreneurialinitiatives undertaken by the firm in light of itscompetitive strategy.

Specifically, and due to the long lasting dividebetween dispositional [84] and behavioural [85-86] entrepreneurial action, it is imperative toovercome conceptual ambiguities and advance aconstructive synthesis of these discretestandpoints. Whereas “behaviour is the centraland essential element of the entrepreneurialprocess” [87, pp.: 8], the ability to sustain andexhibit, under a time-contingent perspective,stable patterns of actions [88] is what definesEO: behaviour constitutes a central element ofentrepreneurial processes and such a posture isperceived as a defining firm attribute [89-90].This bodes well with the strategic perspectiveunderpinning entrepreneurial efforts, where anorganisation-wide co-ordination, planning andexecution take place for competitive ventures[91]. To achieve complementarity (i.e. toenhance the understanding of the purchasingfunction’s entrepreneurial action on anorganisational level) the paper inserts the DC’sperspective, as elaborated below, sinceentrepreneurial firms seize various types ofopportunities and their capabilities are conceivedof as a vital means for performance [92] throughspecific practices.

The foregone discussion makes clearthat sustainability constitutes a sole issueof strategy and elevates the purchasingmanager’s role into a core organisationalconcern. Whereas the majority of scholarlywork in SP supports the top-down translation ofstrategic objectives into procurement strategiesand operationalisation of supplier selectioncriteria implemented by the purchasing function[93], less or more unstable business contextsinduce considerable changes in competitiveconditions.

Consequently, complexity and the correspondingstrategic ambiguity will interfere with supplierselection criteria [61]. Purchasing managers areexpected to deal with supplier sustainability risksin a dynamically changing environment [94]mainly shaped by different stakeholderpreferences [95] and their interplay with the firm’ssustainability related uncertainty tolerance [1]. Itbecomes therefore apparent, that the role ofpurchasing needs to be apprehended against asetting where resources are utilised incongruence with a delicate and balanced


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deployment between the firm’s internal andexternal environment.

Τhis in turn poses challenges to the purchasing’srole concerning the respective sustainabilityassessment and performance criteria it shouldaddress. Οn one hand, cross-functionalcollaboration is necessary to reduce impacts andachieve goals effectively [96-97] whereas on theother hand elaboration encounters conflicts onwhat is deemed relevant in formulating andimplementing supplier criteria [98]. Moreover, itfurthers the need of opening the ‘black-box’ inhow sustainability related criteria are formulatedsince little has been achieved [99]. Such a view,recognises sourcing centricity as a maindeterminant of enabling strategic purchasing [47]and calls for viewing holistically the purchasingfunction’s practices, which provide the necessaryintermediary linkage between the strategic andoperational business levels.

3. THEORETICAL FRAMEWORK

To demonstrate the relevance of disequilibriumprocesses when combining resources throughproper managerial choices [100] and the need toinsert a time-contingent view on how resourcesand competences follow a developmentaltrajectory and translate into certain organisationalpractices, the paper sides by the tenets of theDCs view. Capabilities are viewed as asummative collection of specific abilities andpatterned learned behaviours (i.e. competences)that support organisational practices. Such aview, embraces purchasing capabilities as thoseorganisational practices reflective of thefunction’s organisational-level interaction withconstituent parts. Such a focus also makes auseful step in understanding the role ofentrepreneurial managers [34] since it effectivelyconsiders environmental uncertainty and change[101]. Through this choice we propose that thesuccessful possession and development ofcertain organisational capabilities enables the SPfunction to contribute towards desirablesustainability-related performance.

The DCs view captures the twofold facet of thepurchasing function’s mission. Strategy is noteffectuated in a vacuum from the wider externalsurrounding. At the same time though, it unfoldsthrough meaningful operationalisation. Yet,treating purchasing’s role as an add-on activityrisks running contrary to calls of strategiccorporate responsibility due to its disconnectionfrom the firm’s upstream and downstream

environment. In such a scenario, businessstrategy as a competitive plan with defined high-level goals runs the risk of failure caused byinappropriate operational components and/orineffective deployment of intra- and inter-organisational relationships. Thus, DCs assist inexplaining the relationship between managerialdecisions and strategic change [102]. Againstthis background, the purchasing function’s role ishighly critical with the potential of heeding thecalls for greater strategic alignment and makingKraljic’s [103] influential assertion and paper titlethat “Purchasing must become supplymanagement” timelier than ever. Overall,sustainability is

inherently integrative and brings the entire SCperformance to the forth [104].

The micro-foundations of DCs are broken downinto three main clusters: (1) identification,development and assessment of technologicaland wider stakeholder opportunities in relation tocustomer needs and business responsibilities(sensing), (2) mobilisation of resources toaddress needs/opportunities through viablebusiness solutions, (3) reconfiguration of theorganisational entity through resourcerecombinations into structures that could exploitthe aforementioned opportunities [105]. In Figure1 below, these capabilities are operationalisedthrough certain SP practices, hence frame therole of the purchasing manager through anentrepreneurial and highly dynamic perspective.

Initially, as explicated in Figure 1, we summariseour conceptual framework of DCs throughdepicting certain categories and theiraccompanying dimensions.

In the following subsections, we substantiate ourtheoretical contribution through a two-stepprocess. First, and as summarised in Figure 1,we classify certain purchasing capabilitiesaccording to their integration role within SSCM.This allows us not only to provide a systematicoverview of the different areas that purchasingcapabilities emerge. It also facilitatescomprehension and critical comparison with andextension of previous research in SP and SSCM[5-106-107]. Second, such an approach supportsa nuanced view on how to define and implementSP capabilities in a systematic manner with highawareness of business opportunities, thusincreasing their academic and managerialrelevance and substantiating them into concreteoperational treatments.


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Fig. 1. Model of SP’s DCs

3.1 Sensing

From an entrepreneurial perspective,organisational entities are proactivelyengaging in producing new commercialofferings ahead of competition. Entrepreneurialorientation is a growth strategy [108]encompassing the entry into new markets or theintroduction of new products to existing markets[79]. To this end, managers need to identify thecircumstances in favour of sustainability andutilise different environmental strategies inpursuit of establishing a competitive advantagethrough product- and process- baseddifferentiation [109]. These concerns areextended by adding social evaluations as wellthrough process- and market- based criteria[110]. In this view, purchasers’ respectivesustainability efforts constitute a strongantecedent of SC activities through defining theoverall firm direction and providing guidance andsupport of corresponding activities [111] toachieve congruence with customer needs andmultiple stakeholders [112]. Critical in developingsuccessful business offerings is market sensingcapability; to be aware of prevailing andforthcoming market conditions and forecastingcustomer responses [113].

This underlying opportunity identification is inparallel with the expectations posed onpurchasing managers as part of their skills andduties [114]. Purchasing managers need to bealert to capture potential alterations and newdevelopments in supply markets and includethem in their interaction with decision makers[115] through assuming responsibility forgathering relevant information [116]. In thisrespect, the role of purchasing management inscreening and selecting potential partners fromthe supply market is not merely confined to theoperational perspective. Central towards thisdirection is purchasing’s market intelligencecapability. This can be viewed also as a widerSSCM capability where firms try to assess and ifnecessary integrate knowledge of SC partners[117].

Moreover organisations can never be tooinformed if they want to prevent risks; they needto demonstrate they have acted responsibly incase risks are exposed. Companies with highlyrecognisable brands do not risk damaging theirname by their supplier’ practices [118] and thisposes implications on supplier selection as wellas products and materials. Supplier performancetransforms into a decisive critical success factor


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in the effort of focal firms to safeguardthemselves from reputational damages [119-120]. Simply put, reactions supersede pureoperational risks and concern sustainability-related issues within the wider SC context thatmaterialise through stakeholders who holdcompanies responsible for environmental andsocial issues [121-122-123]. To this end,purchasing managers fulfil their entrepreneurialrole not only through market intelligence, but alsothrough identifying, developing and utilisingrelevant stakeholder expertise towardsinstigating proper supplier sustainabilitymanagement.

As such, sustainability-related issue identificationand subsequent development of workingoperationalisations pertains to the appropriatemix of stakeholder inclusion and utilisation oftheir expertise. This process induces predictionsabout the external environment’s future statesthrough a mixed form of justified and creativeintuition [124]. To this end, stakeholders playcollaborative and proactive roles [125] pendingon their relational and technical capabilities [106]as well as the firm’s mode of engagement withexternal sustainability complexity [126-127] thatin turn shapes the options of responsibilityinvestments to be viewed as potential attempts toobtain necessary stakeholder resources [128].The purchasing function’s role effectuatesthrough a systemic orientation by means ofpredicting events, understanding valuepropositions and adjusting processes whilestressing the broader picture of activities and theexternal supply market’s ability to contribute [21].

Given the preceding discussion, we posit that:

Proposition 1: Market intelligence andsustainable supplier accountability capabilitiesconstitute two different facets of SP’s sensingcapabilities.

3.2 Seizing

Both timing and content of managerial decisionsare vital in providing direction for value creationefforts [129]. From an initial sub-part ofoperations management to recent appreciationas an independent and competent function [130],purchasing is recognized as influential through itsinvolvement in the strategic outline process[114]. If purchasing receives proper acceptanceand back-up by top management through thededication of time, resources and efforts indeveloping respective suppliers it will serve its

role as a strategic partner [131]. Not only froma mere focus on cost negotiations but alsofrom a longer term perspective whereshared knowledge and networks ofcompetences regain primacy [132] throughdifferent ‘modes of engagement’ with respect tosupplier sustainability practices [133-134]. Sucha realisation takes place through the influence oforganisational cultural settings responsible forSP activities [135-63] by instigating properemployee behaviour towards SSCMobjectives [42] and establishing a foundationalstrategically-oriented mind-set for sustainabilityobjectives [55].

This reasoning is attributed to Teece et al.’s [131,pp.: 521] assertion of “quickly accomplishingreconfiguration and transformation ahead ofcompetitors.’’ As such, purchasing managersbecome trusted advisors and establish strongrelationships with internal stakeholders. Throughknowledge acquisition of stakeholder needs, thepurchasing function juxtaposes theserequirements against the wider market conditionsand eventually delivers accountability throughsetting appropriate supply management goals[21].

To this end, the purchasing function justifies itsboundary-spanning role and becomesparticularly effective in implementingenvironmental programs internally and withrespective suppliers [136] as well as advancingthe social dimension of suppliers’ operations[137]. This role is further strengthened in theevent of these managers enjoying wideracceptance, as explicated through political skills,signalling a simultaneous understanding of intra-organisational social dynamics and functionalneeds [138]. The eventual outcome ofsuccessfully practicing these skills is to increasethe function’s legitimacy within the organisationand elevate its role into a core strategic facilitatorfor the entire SC [139] able of contributing bothinternally to the focal firm and on a supplier level[2].

In light of the above, we conceive of thepurchasing function’s influence capabilities as apre-requisite of succeeding in making timely andmarket informed decisions to achieve strategicobjectives. Thus, our corresponding propositionsare formulated in the following lines:

Proposition 2a: Management influencecapabilities are an explicit form of SP’s seizingcapabilities.


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Considering the setting described above,experience to foster intra-organisational cross-functional co-operation is deemed necessary [97]amongst other qualifications. As a consequence,involving SP into strategy formulation contributesto greater internal integration. This integrationtakes place towards satisfying customers’requirements [140] and includes the utilisationand collaboration of various internal and external(to the focal firm) resources in pursuit ofachieving the environmental performance of theSC as a whole [107].

Specifically, integration with other internalfunctions tackles both product and processinnovations. New product innovations, like thoserelated to environmental sustainability,presuppose internal collaboration amongdifferent departments such as marketing, R&Dand operations [141]. In the same vein, processrelated sustainability expectations posed on thefirm by external stakeholders as well ascustomers encourage integration with themarketing function to secure appropriateresponses [142].

Moreover, green process enhancements, suchas eco-innovations, always rest upon the leandictate that promotes continuous improvements[82] and in turn put additional demands onmaterials purchased. This forms a complexprocess that requires cross-disciplinarycollaboration and significant changes in currentprocesses [143]. In this manner, sharedresources as well as technological and socialinteraction materialise on environmentalmanagement practices [144] and socially-related upgrades on buyer-supplier relationships[145].

In these instances, purchasing’s intra-organisational integration capability isindispensable in supporting its managementinfluence capabilities and facilitating overallsustainability ends. This allows for theincorporation of divergent and sometimescontrasting ideas from different functions byenabling a shared vision and supporting jointdesign of new and more environmentally friendlyproducts and processes [146]. It also supportssocial performance through the development ofthe appropriate capabilities [147]. As such, ournext proposition is as follows:

Proposition 2b: Intra-organisational integrationcapabilities constitute a type of SP’s seizingcapabilities.

3.3 Reconfiguring

Purchasing managers interact with suppliers toembed new knowledge into operationalcapabilities. Their decisions play an importantrole in ensuring sustainability performanceacross the SC [148]. Central in this effort is thepractice of supplier collaboration anddevelopment through resource support, technicalassistance, guidance and training [107, 149-151]towards proceeding with new product as well aspackaging developments, solving quality relatedissues and jointly preparing future developmentplans [47] as well as sustainable technologies[152] on environmental and social objectives[142, 153]. These actions lead to theestablishment of relationship-specific and path-dependent capabilities hard to imitate [154-155].Furthermore, such support is viewed as a vitalpredecessor of sustainability upgrade insuppliers’ business practices [156] while meetingthe short- and long- term supply needs for thefocal firm [157] and avoiding potentialsustainability risks [94].

This type of capabilities is paramount inextending environmental and socialconsiderations to the supplier side throughcollaboration and learning [8, 61] and improvingoperational performance [158]. The nature ofsupplier development capabilities is congruentwith the precondition of first integrating partnerfirms’ valuable resources and then utilising formsof collaboration [159]. In more general, itpinpoints towards the evolutionary view ofsustainability practises and their advancementthrough learning [160].

In this manner, resource recombinations arerealised and the focal firm’s capacity topurposefully extend, modify or even create newresource base(s) [161] as witnessed throughsupplier development efforts is vital towards bothin acknowledging the inter-organisational aspectof DCs and their relational character [162] and atcreating value [163] through offering ‘new waysof doing things’ with respect to SSCM issues.These capabilities, touching on bothenvironmental and social issues, tackle bothprocess- and market- based initiatives withsuppliers [110] and their extent andspecialisation (e.g. environmental perspective)depends on product criticality and relationalcharacteristics [137].

These new offerings result in environmental andsocial market-based practices [164] as a


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practical expression of the notion of newness.Hence, innovativeness (e.g. new processes, newsupply factors and altered offerings) constitutesan inextricable component of supplierdevelopment capabilities in pursuit of enablingand motivating behaviours necessary forbreakthroughs [165]. This view coincides withHartmann et al.’s [166, pp.: 25] thirdinterpretation as “focus on innovative tasks”.Briefly put, purchasing innovation capability willprovide with the necessary expertise for thedevelopment of new products and processesthrough appropriate knowledge accumulationand generation [167]. This innovation capabilityconstitutes part of the knowledge mechanisms ofabsorptive and desorptive capacity recentlyoutlined by [58] towards developingsustainability-related SC responses and is closerto what Argyris and Schön [168] call ‘’single’’ and“double’’ loop learning.

Concluding with the preceding discussion, wedevelop our two last propositions as follows:

Proposition 3a: Supplier developmentcapabilities are part of SP’s reconfiguringcapabilities.Proposition 3b: Purchasing innovationcapabilities are part of SP’s reconfiguringcapabilities.

4. SP DCs RELATIONSHIPS ANDCONTEXUAL FACTORS

The purpose of SP’s DCs is to improve thesustainability performance of the firm and its SCconstituents. Their dynamic characterpresupposes that these changes will take placewithin a given time and through the interactionsargued above. This progress in terms ofsustainability performance is affected by certaincontextual factors acting as an enabler or barrierthat either assist or obstruct the translation of thepurchasing’s function DCs into certain outcomes.Accordingly, this paper tackles two contextualfactors to provide clarity into the nature ofpurchasers’ DCs interactions and theircontribution to SSCM performance.

4.1. Risk Intolerance

Intra-organisational integration purchasingcapabilities leading to proper operational SSCMare contingent on the firm’s overall uncertaintytolerance. In a recent study [1] the treatment ofdifferent operational sustainability SC risksdepends on the firm’s risk intolerance and the

higher the uncertainty involved the more relevantinformation is needed. According to the study,certain purchasing mechanisms are applied inorder to respond to the external environment andeffectively tackle the ensuing sustainabilityuncertainty. Consequently, sustainability riskcosts for the firm are further exacerbated by itsrisk vulnerability [169] as explicated throughdifferent stakeholder demands [106].

As an immediate outcome, buyer-supplierrelationships are altered as well as respectiveproducts. This in turn implies that the purchasingfunction will possess a stronger position incontributing to the strategic objectives in terms ofa sustainable competitive advantage by meansof sustainability knowledge and the mobilisationof valuable external resources, the developmentof a critical supplier network and the criticalability to innovate in terms of sustainability.

Hence, our next proposition is as follows:

Proposition 4: The higher the risk intolerance ofthe focal firm, the less strong the presence of itsSP’s DCs is.

4.2 Downstream Market Position

Given the fact that the more downstream thefocal firm is the less diverse the stakeholderdemands are [170-171] due to reduced visibilityboundaries [62] and increased sustainabilitycontrol [123]. This renders possible for the firm toreap more benefits by adhering to responsiblepractices through a wider spectrum of available‘business-case’-related benefits due to its moremature green SC practices [172] and sociallyresponsible supplier engagement improvingquality of outputs and finally enhancing costperformance [173]. However, given the fact thatthe purchasing function follows a developmentaltrajectory [139] and higher maturity indicates theapplication of available best practices [174], wemaintain that:

Proposition 5: The more downstream the focalfirm is, the stronger the development of its SP’sDCs is.

4.3 Buyer-supplier Dependency andCapabilities’ Potential

Utilising the emerging conceptual model of [175]to assess purchasing’s options in suppliersustainability risk management under shifting


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contingencies, SP’s role is more topical than everconsidering the fact that supplier sustainabilityrisk management capabilities depend on thecapacity built through their initial configurationsand their gradually broader scope of application[94]. This is due to a vicious cycle betweencontinuous growth of compliant supply baseenabling goal setting and arm-length’srelationships and supplier developmentinitiatives towards new sustainability knowledgedesorption [58].

In case the buying firm dominates the respectiverelationship, [175] supports two alternatives: ifsupplier sustainability risk is high thencollaborative approaches are favoured whereasmonitoring is more apposite when risk is low. Inthe former case, clan control mechanisms areapplied aiming at developing commitment andrelevant skills whereas in the latter casemonitoring based control is deemed appropriate[176]. In the event of supplier dominance, theauthors maintain that the focal firm’s purchasingfunction admits its lock-in and therefore acceptsthe sustainability risk ensuing form the supplier.

The above discussion draws a distinctionbetween the breadth and scope on one hand and

the ease on the other hand of sustainabilityissues established and applied from thepurchasing function in supplier managementpractices [48]. Following this line of reasoning,scale and scope of activities increase bothcontrol and co-ordination costs with the formerrelationship being stronger. High sustainabilityrisks presuppose a need of dealing with issuesat stake. Relying solely on monitoring andcontrol is insufficient due to costs and limitedcapacity of influencing desired outcomes. On theother hand, a mere adherence to behaviour-based control limits viability potential due to highco-ordination costs. Both alternatives rely on theability to specify expectations a priori anddetermine ex post if they are met [177]. From adynamic perspective and time contingent view, amixture of approaches i.e. behavioural- andoutput- as outcome control and input- as clancontrol mechanisms is needed [178]. In bothinstances and within the buyer-supplierrelationship, purchasing managers arechallenged with applying their respectiveexpertise through screening supply marketavailability as well as relevant stakeholders forany potentially justified sustainability claims thatshould be introduced to supplier sustainabilityrelated practices.

Fig. 2. Contextual model of SP’S DCs


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Proposition 6a: The higher the sustainability riskof the supplier in a buyer dominance situation,the stronger the influence of purchasing’s marketintelligence as well as sustainable supplieraccountability on supplier developmentcapabilities.

Proposition 6b: The higher the sustainabilityrisk of the supplier in a supplier dominancesituation, the weaker the influence ofpurchasing’s market intelligence capabilities andsustainable supplier accountability on supplierdevelopment capabilities.

Concluding with the conceptual and theoreticalbackground and combining the contextual effectson the purchasing function’s DCs, we insert Fig,2 depicting a higher-order (in comparison to Fig.1) model with respect to SP’s potentialcontribution in SSCM.

5. DISCUSSION

Given the ever-increasing pressure on thepurchasing function to prove strategic andmeaningfully contribute to the overall businessobjectives, the paucity of studies shedding lighton the respective necessary intra- and inter-organisational capabilities remains surprising. Atthe same time, sustainability has entered thecontemporary agenda as a promising avenue formaking SCs greener and more socially just. Thecurrent paper makes the basic point that SSCMrarely rises from applying the same modes ofoperations. This in turn accentuates the need ofcoupling SP practices with the overall businessstrategy. Such a lens is required in order todiscern new possibilities and enrich purchasingmanagers’ attempts to look beyond traditionalapproaches and better comprehend new sourcesof sustainability-related risks and opportunities.

In order to address this need, the study proposesa theoretically grounded conceptual modellinking two foundational business cornerstones:strategy(1) and operations management(2). Wepropose a framework that allows us to assesswhether business strategy is supported by thecorresponding SSCM practices and the role thatthe purchasing function might have in achievingsustainability goals. Drawing from the DCs view,we have argued that the purchasing function andits managers are expected to act asentrepreneurs, thus need to possess a multitudeof competencies as a prerequisite forsuccessful interaction within and across firmboundaries.

Having said this, the paper also acknowledgesthat the clear-cut distinction between operationaland dynamic capabilities is infeasible. To thisend, we concur with [161] maintaining thatseparating these is fruitless and what needs tobe done is to consciously accept the relativeimportance of the observed granularity levels; inthe very end, this constitutes an issue of the“time frame of consideration” (p.: 1249). Ourtheoretical propositions echo this concern andthe current paper supports the view thatcapabilities need to secure for both present andfuture states through achieving a series ofadvantages over time [129]. Despite the fact thatDCs are built on “…two contradictory notions oflogic at the same time: reliable replication andcontinuous change – two dimensions that hardlymix” [179, pp.: 922-923] this work serves as aconceptual platform for SP. However, the specificcapabilities dealt with throughout the paper, havea more ‘change-inducing’ and ‘dynamic’connotation in comparison to other types of lowerlevel and operational capabilities. Even thoughdiscussion and debate continue about the natureand type of DCs, we abide by Helfat and Winter’s[162] argument and conceptualise a meaningfuland firm-relevant framework.

The current paper depicts a first step towardsoutlining a holistic background for the function’sstrategic relevance and the areas of expertisewhere purchasing capabilities are developed anddeployed. To this end, the function’s skillsprofiling [180] and weighted importance couldalso be investigated and receive attention for anypotential extension of the sustainability agendafor purchasing. It also provides a baseline inopening the discussions about the purchasingfunction’s role and how to further elevate it.

5.1 Conceptual Implications

The conceptual model presented in Fig. 1delineates purchasing capabilities into distinctiveareas of competencies spanning variousbusiness practices. As such, we come forth withdifferent SP ‘modes of engagement’ in light ofSSCM. The literature of SSCM has mainly takenfor granted these capabilities and has insteadfocused on the different supplier sustainabilitypractices utilised through the purchasing function[133]. Our approach is aligned with addressingthe concerns of [99] on offering conceptualelaboration of the purchasing function’s role in,amongst other, developing green criteria. Weview this by tackling the different facets of SSCMas outcomes of SP capabilities.


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Furthermore, we treat the role of the purchasingmanager as that of an entrepreneur confrontedwith a multitude of challenges. Sustainabilitypractices are treated as an extension of the roleof the entrepreneur for opportunity identificationand exploitation [17, 67-68]. In doing so, we alsoopen up the agenda of SSCM literature andmake it more lenient towards managementinnovation and entrepreneurship literature(s).This practically entails a seamless integration ofmultiple levels of business thinking and actions,therefore heeds the calls for embracing a multi-level approach in SSCM research [181].

Last but not least, we conceive of the focal firmand its SC function as an outcome of ongoingresource interactions. Central to this realisation,is the possession, reconfiguration and utilisationof those critical capabilities as a means ofachieving sustainability outcomes. As such, weadopt an integrative approach, namely external,internal and supplier-focused. Thus, wesympathise with [182] and their concerns aboutincreasing our understanding of how differentdimensions of SSCM interact and support eachother in pursuit of sustainability objectives.Furthermore, we elaborate on the differentintegration dimensions and how SP contributestowards SSCM performance. In doing so, wealso heed the calls of other researchers [141] inoutlining potential mechanisms (through thepurchasing function) underlining howachievements are contingent on interactivecapability elements. This latter point, is furtherdeveloped through the elaboration onspecific contextual characteristics and their effecton SP.

A conceptual implication deriving from thecurrent work and presenting itself as a promisingfuture research avenue relates to thedevelopment of an appropriate measurementscale. As has been widely argued throughout thiswork, SP is not confined within organisationalboundaries. On the contrary, it takes placeacross the SC. Consequently, SP has rendereditself a valuable means of securing competitiveadvantage and improving sustainabilityperformance. In order to further appreciate ameaningful alignment between strategic prioritiesand the operational context, we need to developand validate the different purchasing dimensionsfor SP. We have proposed SP capabilities to bea multi-dimensional concept, hence viewed themthrough a holistic organisation- and SC-wideperspective.

To further link SP with other organisational andSC processes, it is necessary to obtain aparsimonious measurement instrument so as tosubsequently incorporate more contingencyconstructs into SP research and SSCMperformance. Such an accompanying scalealong with more in-depth contextualisation wouldprovide empirical evidence on themultidimensional role of SP and tangible resultsfor making purchasing decisions within anuncertain, time-constrained and highly dynamiccontext that purchasing managers oftenencounter.

In the current writings, we have focused on themoderating effects of risk intolerance, SCposition and power dependency. However, wemake no stringent claims that these are the onlysignificant contingencies. For example, theeffects of the external environment and theensuing firm responses to deal withenvironmental uncertainty [106,126] also posechallenges on the firm’s responses to effectivelytackle cognitive and relational complexities,hence provide potential areas of considerationfor the purchasing function’s role and itscontribution. This could in turn be furtherextended and coupled with the configurationalapproach [5] aimed at developing certain SPprofiles contingent on different contextual factorssince it represents a particularly useful approachin case that relationships among variablebecome too complex to be modelled withconventional cause-effect models [183].

Moreover, and as an extension of the purchasingfunction’s responsiveness to uncertainty and theexternal environment, a promising avenue wouldbe to more explicitly incorporate the behaviouralperspective into SP decisions. Whereas ourframework tackles this issue through the powerinterdependencies across the various levels ofpurchasing decisions, researchers are welladvised to deal with different modes of intuitionand how these affects procedural rationality. Forexample, purchasing managers engaging indecision making with external-internal-supplierstakeholders might display different biases andexercise varying, in terms of proceduralrationality, decisions. Even though the outcomesof these interactions will depend on powerpolitics, an issue that is also more or less impliedand highlighted in this paper, we deem it usefulto obtain insight in this under-researched fieldand further complement emerging efforts [184-185].


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5.2 Managerial Implications

Managerial implications derived from this study,are twofold.

First, we develop a solid business case for SPtowards achieving sustainability-related goals.We have identified the mediating paths thatcompany executives and purchasing managersshould consider in pursuit of serving strategicobjectives. This could in turn allow for managerialdecision-making. Even though sustainability callsfor purchasing to become strategic and serve theoverall business objectives, we explicitlydemonstrate how fostering purchasing andSSCM practices, which are actually to theinterest of the focal firm, requires awareness ofpath dependencies within and across theorganisation. This could prove particularlyvaluable considering the lack of steeringframeworks for SP decisions. Despite the factthat ecologically friendly SC commitment makessense, managers in general encounter anabsence of guidelines on how to start greeningtheir SC efforts [186].

Second, we highlight the necessary skills forpurchasing managers in order to serve SSCMaims. Amongst other, and following a similar lineof reasoning with previous literature [114], werefer to the entrepreneurial mindset ofpurchasing and the integrative capabilitiesspanning the external environment, areas ofinter-functional collaboration and buyer-supplierrelationships. To this end, we disengage from amere view of purchasing managers as solelyinterested in cost reductions and instead focuson their ability to appear as value promoters oftheir firms [169]. Supplementary to this, we takea stance towards viewing purchasing as part ofthe overall technical complexity thatcharacterises sustainability decisions accordingto which organisational expertise and support isrequired [187]. Thus, we are of the opinion thatmanagers could derive inspiration by treatingpurchasing capabilities as part of the overallorganisational capabilities necessary for thestrategic orientation of the firm.

6. CONCLUSIONS

In the current work, we have presented aconceptualisation of the role of SP in SSCMperformance. We have done so by applying thelens of DCs. We acknowledge that one of theshortcomings of current SSCM (and SP)literature rests upon the lack of detailed

theoretical dictates to explain why and how thepurchasing function could serve SSCMobjectives or sustainability more generally. Toaddress this problem, we have coupled thestrategic and operational dimensions of SCs. Inparticular, we answer the questions of how andwhy SP could contribute to sustainability-focuseddevelopment. This means that we have broughtinto the spotlight the ‘black-box’ of the focal firm’sinternal environment and purchasing actions thatfacilitate its sustainability practices. As animmediate consequence, we elaborate on thetheoretical and practical implications by makingconnections to applicable insight. The papercontributes to sustainable purchasingmanagement practice through offering a detailedframework for effective decision making andproviding the basis to capture progress insustainable SCs. In this respect, we relateeffective business performance through certaininteractions. Furthermore, we suggest potentialavenues for future research both in terms ofbroadening and supplementing SP and indealing with some implications emanating fromour conceptual framework such asconceptualisation and measurement.

COMPETING INTERESTS

Authors have declared that no competinginterests exist.

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