Sustainable Business in Practice: Analyzing the Role of Sustainability on SME’s Supplier Collaboration in the Textile Supply Chain

Marie Bagge Peuliche

Student thesis: Master thesis


Purpose: The purpose of the study is to investigate if SMEs have a particular way of collaborating with their suppliers when they engage in sustainable development. The starting point is relational enablers and barriers, but complementary findings and other theories will be discussed as well. Research Design: Using personal interviews to investigate an empirical case study of a supply chain of SME companies in the textile industry. Danish circular fashion brand (VIGGA) is sourcing through a Danish company (Sourcing House), which is working with a supplier in India (Jaya Prabha). Findings: Overall the framework does not apply to the case companies studied here. They are all small companies with too few resources to work in such a formal and structured way. However, parts of the framework can be related to their activities. All of the companies have invested a vast amount of time to support the collaboration and create a highly trust based relationship and therefore the primary governance mechanism is informal and based on goodwill. One of the companies also uses audits and third party certifications as a more formal governance mechanism and as a tool to keep control with both close and distant suppliers, thus applying mixed governance mechanisms. The institutional environment makes it possible to get financial support from government and funds, which is viewed as an indirect financial investment to support collaboration. In relation to complementary research and other theories all three founders are policy entrepreneurs and have strong values, which are more important than economic growth and these value become the foundation of their companies and their approach to supplier collaboration. Finally Sourcing House has been very focused on the process of making their suppliers more sustainable and not so much on the goal itself. They have been focusing mostly on social responsibility, but also the environment and by doing that the economy slowly comes along as well. Managerial and theoretical implications: The process approach taken by Sourcing House might be interesting for management to apply and for academics to research further as it potentially could be developed into guidelines on how to develop sustainable supply chains. The original terminology used by Dyer & Singh (1998) is more applicable to this study, but the ‘lack of enablers’ identified by Touboulic & Walker (2015) is relevant and I suggest a contribution to theory by adding ‘lack of asset inter-connectedness’ and ‘lack of resource indivisibility’ as hindering factors for collaboration. Originality: It is unique to have studied an actual chain of three companies working together and not only a dyadic buyer/supplier relationship. 2 C

EducationsMSc in Supply Chain Management , (Graduate Programme) Final Thesis
Publication date2016
Number of pages87