The implementation of socially sustainable supply chain management in the UK manufacturing sector: a social capital perspective

Abstract

A major challenge for supply chain managers is how to manage sourcing relationships to ensure reliable and predictable actions of existing suppliers. The extant research into sustainable supply chain management (SSCM) has suggested the transactional (e.g. monitoring and auditing) and collaboration (e.g. supplier development) as the main two approaches by which buyers can sustain an acceptable level of suppliers’ internal social performance. A successful implementation of such approaches, and hence improving suppliers’ social performance, often requires a level of cooperation that can be difficult to establish, particularly on the part of suppliers. Despite the recent proliferation of SSCM research, little efforts have been devoted to exploring the factors that increase the effectiveness of the two approaches. This research aims to examine the individual and combined effect of socially sustainable transactional practices (SSTPs) and socially sustainable collaboration practices (SSCPs) on supplier’s internal social performance and buyer’s operational performance. The study also sets out to examine the moderating effects of social capital dimensions (i.e. relational, cognitive and structural) on the relationships among SSTPs, SSCPs and supplier’s internal social performance. A mail survey was administered to 1,250 stratified randomly selected large manufacturing companies operating in the UK. An analysis of 119 responses using Partial Least Squares Structural Equation modelling (PLS-SEM) revealed that SSTPs are ineffective in driving supplier’s internal social performance, whilst SSCPs are more effective. Moreover, although the interaction effect of SSTPs and SSCPs is non-significant, the data suggested that the simultaneous implementation can be detrimental to supplier’s internal social performance. Furthermore, social capital dimensions were found to play different roles on the implementation of SSTPs and SSCPs. Relational capital plays a unique role by increasing the effectiveness of both SSTPs and SSCPs, while cognitive capital is critical for SSCPs, and structural capital is vital for SSTPs. This study contributes to SSCM literature by exclusively focusing on the social dimension of sustainability, examining the joint implementation of SSTPs and SSCPs and featuring the centrality of social capital in the implementation of SSCM practices. The study sets a foundation for new research avenues in the SSCM context and provides a set of managerial implications that support informed decision-making by supply chain managers.