Sustainable procurement in upstream supply chain activities



Céline Cheval-Calvel

Dr. DBA, Business Science Institute

(Thesis supervised by Prof. Olivier Lavastre)

 

Introduction


Swiss luxury watch and jewellery Houses are under increasing public pressure to implement more responsible practices. As a result, they are now seeking to deploy Sustainable Purchasing (SP) practices to be more transparent in the sourcing of rare materials, such as gold, precious stones, wood, animal materials (leather, scales) or vegetable materials (mother-of-pearl). How do Upstream Supply Chains (USCs) disseminate the CSR initiatives promoted by their management to their suppliers through Responsible Purchasing (RP)?


The terms Corporate Social Responsibility (CSR) and Sustainable Development (SD) have become commonplace, however their understanding by the actors of these organisations diverges and varies even in their implementation, which this research proposes to analyse.


Research Impact(s)


There is still a long way to go before the Swiss watch and jewellery sector's procurement practices actually become responsible. But it is possible to change the situation through an intelligible and constructive conversation between company buyers and their suppliers.

First of all, there exists true mimetic isomorphism in the watchmaking and jewellery sector: the methods deployed in RP approaches are identical, regardless of the Houses (diffusion of contractual compliance) and the suppliers to whom they are addressed.


This practice reflects a certain form of commercial hypocrisy when an organisation does not have clearly defined objectives or strategic orientations. A responsible purchasing approach initiated by a company is supposed to deliver and embody an institutional message of its social responsibility to its suppliers. However, all too often, there is a contradiction between decisions (ideological sphere of ideas) and actions (sphere of the system of actions or implementation of processes) which results in a fundamental lack of understanding of the concepts and therefore of the implementation of the approaches.


Secondly, the concepts and practices of responsible purchasing are understood differently by buyers and suppliers. Commercial hypocrisy is clearly felt by suppliers, for example through the contractual compliance demanded by buyers, as it reflects approaches devoid of any dialogue or feedback that run counter to the very spirit of so-called messianic approaches.


We therefore recommend training and raising awareness among all upstream supply chain actors about responsible purchasing, its benefits, approaches, instruments and challenges; we also recommend: (a) for buyers, deploying relationship-based and personalised approaches for each type of supplier (depending on the size of the supplier and its activity), and (b) for suppliers, sharing their current and future CSR initiatives, promoting transparent and collaborative relationships and finally breaking down the coercive compliance injunctions imposed by their customers.


Research Foundations


Our research is built on the foundation of neo-institutional theory (DiMaggio and Powell, 1983) and on the effects of mimetic isomorphism in our field of study (the Swiss luxury watch and jewellery sector), as well as on the still highly topical shift from organisational hypocrisy (theorised by Nils Brunsson, 1985, 1989 and 2002) to commercial hypocrisy in buyer-supplier responsible purchasing approaches. These theories are complemented by the concepts of Purchasing Social Responsibility from Carter and Jennings (2002; 2004), notably on the way in which purchasing managers get involved in the responsible management of their supply chain by disseminating their responsible purchasing approaches according to a 'messianic' mode as evoked by Quairel (2007).


Research Methodology


Between October 2020 and May 2021, more than 55 interviews were carried out with buyers from watchmaking companies and their Swiss watch suppliers in the same dyad. The objective was to (1) find out how the Upstream Supply Chain management players (buyer, purchasing director and supply chain manager) of the watchmaking companies appropriate the orientations infused by their general management by transforming them into responsible purchasing approaches, (2) how they disseminate these orientations to their suppliers by deploying ad hoc tools and methodology, and (3) how the suppliers react to and perceive such approaches.


Further reading…


BRUNSSON, N. (1985). The irrational organization. John Wiley & Sons.

BRUNSSON, N. (1989). The organization of hypocrisy: Talk, decisions and actions in organizations. John Wiley & Sons.

BRUNSSON, N. (2002). The organization of hypocrisy, 2nd edition, Copenhague, Copenhagen Business School Press, 242 p.

CARTER, Craig R. et JENNINGS, M.M. (2002). “Social responsibility and supply chain relationships”. Transportation Research Part E: Logistics and Transportation Review, 38(1), 37-52.

CARTER, Craig R. et JENNINGS, M M. (2004). “The role of purchasing in corporate social responsibility: a structural equation analysis”. Journal of Business Logistics, 25(1), 145-186.

DI MAGGIO, P. J., & POWELL, W. W. (1983). “The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields”. American sociological review, 147-160.

QUAIREL, F., & AUBERGER, M. N. (2007). « La diffusion de la RSE par la relation fournisseurs : injonctions paradoxales ou partenariat de progrès ? », Revue internationale PME, 20(3-4), 69-94.


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