The role of power in cascading sustainability in multi-tier supply chains: a systematic literature review

The increased attention to sustainability compliance of global businesses has led Sustainable Supply Chain Management (SSCM) to become of pivotal importance. Nowadays, consumers are more conscious about sustainability issues and tend to hold large companies accountable for unsustainable and unethical behaviour. Nonetheless, in today’s global and fragmented multi-tier supply chains, managing lower-tier suppliers poses critical challenges. This systematic literature review investigates how sustainability initiatives can be diffused in multi-tier supply chains. In particular, the thesis explores the role of power sources and power dynamics in cascading sustainability practices throughout a multi-tier supply chain, an area that remains under-researched in SSCM literature. The reviewed literature is framed around five classifications: (1) supply chain extent; (2) governance mechanisms; (3) types of power; (4) sources and dynamics of power; and (5) active and passive firms. The findings suggest that power plays an important role in sustainability diffusion: indeed, buyer power is crucial to ensure suppliers’ sustainability compliance. Among different types of power, coercive power is needed to spread sustainability, but non-coercive power may be more effective in the long term if lower tiers are to be reached. In particular, the role of non-coercive power should be further researched as it is not fully explored in the literature. Moreover, also power dynamics in buyer-supplier relationships can have an impact, depending on whether power sources favour the buyer or the supplier. This work identifies several power sources that can help or hinder sustainability compliance. Power sources that foster the ability of a firm to diffuse sustainability initiatives to lower tiers are almost not present in the literature, hence highlighting another research gap. Power is also found to influence the adoption of different governance mechanisms to manage suppliers. Nonetheless, power and governance mechanisms are mostly studied separately, and their correlation is missing in the papers analysed. Lastly, the exploration of active and passive firms in diffusing sustainability initiatives is a new development from this review, as it has yet to be fully examined in the existing literature. Therefore, this systematic literature review synthetizes the existing literature and represents a novel contribution, as it provides a comprehensive overview of the role of power in cascading sustainability initiatives from different perspectives and identifies the main research gaps related to this topic. Despite the growing trend in research related to power in MT-SSCM, the identified research gaps suggest that there is room for further and more focused exploration of this field.