Managing Supplier Relationships : Performance, Social Sustainability, and Collective Action

Abstract

This dissertation explores how buying organizations manage supplier relationships, both individually and collectively, to promote social sustainability in global supply chains. While the environmental aspects of sustainability have received considerable attention, the social dimension remains less understood, particularly in terms of the relational and governance mechanisms through which it is promoted. As firms face growing expectations to ensure decent working conditions and respect for human rights across their supply chains, understanding how buyers influence and collaborate with suppliers is becoming increasingly critical. This dissertation addresses that need by examining the diffusion of social sustainability through the lenses of supplier relationship management (SRM) and business-driven initiatives (BDIs).

The dissertation is structured as an article-based thesis comprising three interrelated studies. The first study investigates how social capital—conceptualized through its structural, relational, and cognitive dimensions—shapes supplier engaged performance management practices. Drawing on survey data from 482 suppliers in manufacturing and service industries, the study indicates that different forms of social capital support different types of performance management, such as information sharing and the mature use of performance measurement. It further demonstrates that these practices can contribute to mutual benefits, including the achievement of preferred customer status. Importantly, the analysis highlights that the value of relational investments varies depending on whether a supplier is classified as key or non-key, suggesting that social capital operates in contingent and relationship-specific ways.

The second study presents a systematic literature review of 65 peer-reviewed articles focused on the challenges and mechanisms of social sustainability diffusion. The review identifies three core thematic clusters: (1) challenges to social sustainability implementation, (2) supplier governance mechanisms, and (3) emerging responses aimed at overcoming supplier governance limitations. A key finding is that traditional governance mechanisms—particularly audits and compliance-based approaches—are often insufficient to address deeper structural issues such as power asymmetries, resource constraints, and weak law enforcement in supplier local regions. While collaborative governance shows promise, its reach remains limited due to its intensive resource demands. The study offers a conceptual framework that maps SRM approaches to the challenges they aim to address and calls for more enabling, contextualized, and participatory forms of governance.

The third study investigates how buyers engage in collective action through BDIs to address shared sustainability risks. Based on secondary data from seven sectoral BDIs and semi-structured interviews with experts, the study develops a typology of practices and identifies the motivators, outcomes, and governance structures behind these initiatives. Business-driven initiatives are found to function as meta-organizations that combine compliance and collaborative mechanisms, co-ordinate supplier oversight, harmonize standards, and build learning infrastructures. They allow buyers to pool resources, amplify influence over shared suppliers, and respond more effectively to stakeholder expectations. The study positions BDIs as a distinct and underexplored form of collective governance with the potential to shift sustainability practices from firm-level to industry-level change.

Together, these three studies provide a multi-layered understanding of how buyers influence social sustainability in supply chains, from relational mechanisms at the dyadic level to collective action at the inter-organizational level. The dissertation contributes to theory by extending insights from social capital theory, sustainable supply chain management, and a practice-based view of meta-organizations and business coalitions for sustainability. It also contributes to practice by offering guidance on relational strategies for supplier engagement and the design of effective collective governance initiatives. By linking micro-level buyer–supplier interactions with macro-level industry co-ordination, the dissertation highlights the importance of aligning relational and collective mechanisms to accelerate the diffusion of social sustainability across global supply chains.