Piggy in the Middle: How Direct Customer Power Affects First-Tier Suppliers’ Adoption of Socially Responsible Procurement Practices and Performance
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Companies are faced with a choice of which type of power to use in their efforts to persuade their first-tier suppliers to adopt socially responsible procurement practices with key second-tier suppliers. However, we know little about how first-tier suppliers will react to different types of power and which are most effective in encouraging the adoption of socially responsible procurement practices. We are also ignorant of the impact of these practices on first-tier suppliers’ performance. This paper uses bases of power theory to examine the impact of buyer companies’ power usage (non-mediated and mediated) on first-tier suppliers’ adoption of socially responsible procurement practices (process-based and market-based) with their own (second-tier) suppliers. We surveyed managers responsible for sustainable supply chain management in 156 firms and analyzed the results using structural equation modeling. Our findings show that non-mediated power use (expert and referent) influences the adoption of process-based and market-based practices, while mediated power use (coercion, legitimacy, and reward) has no significant impact on the adoption of either type of practice. Additionally, we find that the adoption of market-based socially responsible procurement practices leads to enhanced performance for first-tier suppliers who adopt these practices with their second-tier suppliers.
KeywordsSustainable supply chain Power Socially responsible procurement practices Performance
This study was funded by the Irish Research Council for Humanities and Social Sciences (IRCHSS).
Compliance with Ethical Standards
Conflict of interest
The authors of the paper declare they have no conflict of interest.
This study has been approved by our institution’s ethics committee and has been performed in accordance with the ethical standards laid down in the 1964 Declaration of Helsinki.
All participants gave their informed consent prior to their inclusion in the study.
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