Journal of Business Ethics (2019) 159:1089–1110

https://doi.org/10.1007/s10551-018-3835-0

ORIGINAL PAPER

Power and Diffusion of Sustainability in Supply Networks: Findings

from Four In‑Depth Case Studies
Osama A. Meqdadi1 · Thomas E. Johnsen2 · Rhona E. Johnsen3

Received: 21 November 2016 / Accepted: 8 March 2018 / Published online: 13 March 2018
© Springer Science+Business Media B.V., part of Springer Nature 2018

Abstract
This paper investigates how coercive and non-coercive power impacts on the successful diffusion of sustainability within
supply networks. The paper reports on four in-depth case studies of the development of sustainability initiatives, each case
based on data collection from focal companies and suppliers. The four case studies are based on 38 semi-structured interviews
in total and supported by secondary data. The case studies indicate that both coercive and non-coercive power impact suppli-
ers’ engagement in sustainability initiatives and its wider diffusion in supply networks. However, where the use of coercive
power facilitates diffusion to immediate suppliers, the use of non-coercive (reward and expert) power leads to sustainability
diffusion beyond the dyadic level into wider supply networks. The study provides rich insights into understanding sustain-
ability diffusion in supply networks and the perceptions of multiple supply network actors on the role of different types of
power on the diffusion process. We elaborate existing theory and formulate propositions to guide future research into the
role and coexistence of different types of power in diffusing sustainability in supply networks.

Keywords  Diffusion · Power · Supply network · Sustainability

Introduction Where past research in sustainable SCM (SSCM) to a

One of the current challenges of companies across sectors is
to ensure that their suppliers comply with their sustainable
standards and policies. Serious sustainability risks, such as
child labour, pollution, or health and safety issues, exist not
within the boundaries of a company but within its supply
chain and more often than not concern sub-tier suppliers.
Consequently, sustainability presents a real challenge to sup-
ply chain management (SCM) and requires supply chain-
wide changes (Krause et al. 2009).
* Osama A. Meqdadi
osama.meqdadi@esc‑rennes.com
Thomas E. Johnsen
thomaserik.johnsen@polimi.it
Rhona E. Johnsen
rjohnsen@audencia.com
1
ESC-Rennes School of Business, Rennes, France
2
Gianluca Spina Chair of Supply Chain Management, School
of Management, Politecnico di Milano, Via Lambruschini
4/b, Building 26/B, Office 1.52, 20156 Milan, Italy
3
Business and Society, Audencia Nantes School
of Management, Nantes, France
great extent focused on why companies should adopt sustain-
ability, research is increasingly examining how to implement
a sustainable supply chain (Pagell and Wu 2009). One key
question is about whether and how power should be used to
implement sustainability in a company’s supply chain. Some
research suggests that enforcement through coercive power
might backfire (Hausman and Johnston 2010) and could
make suppliers resist sustainability requirements imposed
by customers (Reuter et al. 2010). However, power can also
be applied in more subtle non-coercive ways, for example
through offering, or withholding, rewards (Etgar 1978;
Molm 1997). Although the role of power in SCM (Ireland
and Webb 2007) and the buyer–supplier relationship litera-
ture (e.g. Cox 2001, 2004) is well developed, little research
to date has examined the role of different forms of power
on the diffusion (Tate et al. 2013) or spreading (Havila and
Salmi 2000; Meqdadi et al. 2017) of sustainability across
supply chains.
Extant research has identified the need for focal compa-
nies to be in a position of power in order to successfully per-
suade suppliers to engage in sustainability initiatives (Hall
2000; Touboulic et al. 2014). However, little research has
empirically examined the impacts of power in its various

13
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1090
forms on sustainability diffusion in supply networks. Basi-
cally, power is about getting other actors to do something
they would not otherwise have done (Dahl 1961) and
exploiting a superior position for one’s own benefit. But,
power is often exercised “behind the scenes”; the exploita-
tion of power in an overtly coercive manner can be seen
as destructive and lead to more conflict (Etgar 1978), but
non-coercive use of power can be much more subtle and
less controversial. Companies may need to push suppliers to
engage in their sustainability initiatives but power exploita-
tion through coercion is a risky strategy (Molm 1997; Ire-
land and Webb 2007). In this paper, we therefore investigate
the following research question:
How does coercive and non-coercive power impact the
diffusion of sustainability within supply networks?
Investigating how coercive and non-coercive power impacts
the successful diffusion of sustainability within supply net-
works requires an understanding of connectivity amongst the
actors that make up the network (Tate et al. 2013). In pursu-
ing this aim, we therefore adopt the Industrial Marketing and
Purchasing (IMP) Interaction Approach (Håkansson 1982)
as a theoretical lens. We choose this particular perspective
because the IMP approach models dyadic relationships as
interconnected and embedded within wider industrial net-
works. Instead of assuming that suppliers are passive recipi-
ents of sustainability initiatives launched by other network
actors, the concept of interaction implies that the success
of any network change depends entirely on the actions and
reactions of suppliers. The interaction perspective is there-
fore suitable for researching how sustainability diffuses not
only from one company to its suppliers but also beyond into
wider supply networks.
In this paper, we investigate four in-depth case studies
where each focuses on sustainability initiatives being imple-
mented and diffused by a large company to its suppliers. We
investigate how focal companies use power in various forms
to try to enforce the adoption of these initiatives and how
suppliers perceive these initiatives and the methods used to
adopt sustainability. We seek to contribute to the existing
literature on SSCM and the IMP Interaction Approach and
provide managerial implications on the use of different types
of power to diffuse sustainability in supply networks. In the
next three sections, we briefly review the relevant literature,
defining SSCM and related concepts, building the argument
that diffusion of sustainability needs to be understood from a
supply network perspective and examining the role of power
on the diffusion of sustainability in supply networks.
13
O. A. Meqdadi et al.
Understanding Diffusion of Sustainability
from a Supply Network Perspective
One of the conceptual, and practical, consequences of
sustainability is that it emphasizes the need for interor-
ganizational collaboration (Carter and Rogers 2008) both
with traditional supply chain actors and stakeholders that
are not generally viewed as part of the supply chain, such
as non-governmental organizations (NGOs) (Seuring and
Müller 2008). Therefore, analysing SSCM phenomena
requires a focus on coordination and organization of activ-
ities amongst multiple supply chain actors. However, an
extensive review of the sustainable purchasing and supply
management literature by Miemczyk et al. (2012) found
that research rarely, in reality, focuses on the extended
supply chain but is limited to, at best, the dyadic level.
Consistent with the IMP perspective, we use the con-
cept of supply network (Gadde and Håkansson 2001) rather
than supply chain to capture the complexities of supply
structures (see also Choi et al. 2001). Conceptualizing sup-
ply chains as networks highlights the interconnectedness
of supply relationships and chains and provides a more
holistic perspective (Harland 1996; Carter et al. 2015).
In this paper, we study how sustainability initiatives
diffuse within supply networks (Delmas 2002; Tate et al.
2013). The concept of diffusion is used similarly to extend-
ing (Vachon and Klassen 2006) and spreading (Halinen
et al. 1999; Havila and Salmi 2000; Meqdadi et al. 2017).
Diffusion is often used in innovation theory (Rogers 2003)
to depict how innovations spread across successive adop-
ter categories. In line with Tate et al. (2013), we study
sustainability diffusion as the sustainability practices that
companies aim for their suppliers to adopt. Accordingly,
as illustrated in Fig. 1, sustainability diffusion refers to
the process by which sustainability initiatives or practices
spread to, and are adopted by, supply network actors from
one tier to the next.
Fig. 1  Diffusing sustainability in supply networks
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case…
Diffusing Sustainability in Supply Networks
Johnsen et  al. (2016) identify a prevalence of stake-
holder theory (e.g. Freeman 1984), institutional theory
(e.g. DiMaggio and Powell 1983) and resource-based
views (e.g. Wernerfelt 1984), in sustainable purchasing
and supply chain management research. In comparison,
the IMP Interaction Approach (Håkansson 1982) is a
rarely applied lens through which to analyse sustain-
ability within networks. Johnsen et al. (2016) argue that
while both stakeholder and institutional theories allow the
classification of actor types manifested through levels of
salience (legitimate, urgency and power) or institutional
logics (routines, rules, laws, conventions, paradigms and
so on), the mechanisms of interaction amongst actors are
largely ignored (Johnsen et al. 2016: 11). The original
IMP Interaction Model (Håkansson 1982) depicts a dyadic
relationship between a buying and a supplying firm, the
short-term interactions and the long-term adaptations and
institutionalization between the two actors. These pro-
cesses in turn take place within a relationship atmosphere,
described in terms of power/dependence, cooperation and
closeness. Later developments of the IMP model focus on
understanding dyadic relationships as part of industrial
networks using the concepts of embeddedness, intercon-
nectedness and interdependency (Håkansson and Snehota
1995). Embeddedness implies that a change induced by
one actor needs to be understood in the context of not
only directly connected actors, but also indirectly con-
nected actors. (In SCM terms, this equates to, typically, a
company’s first- and second-tier suppliers.) Interconnect-
edness and interdependence imply that a change in one
relationship may propagate to other parts of the network
and affect not only those involved in a single relation-
ship but also other actors connected to that relationship,
thereby creating a “domino effect” (Hertz 1998). Change
also triggers actions and reactions from other network
actors so represents an opportunity for some actors but
a threat to others. Each actor’s perception of a change
within a network determines its response as either pro-
moter or resistor of change (Håkansson and Ford 2002).
The IMP Interaction Approach therefore offers a useful
lens to understand not only interaction processes within
dyads but also the importance of network connectedness
and interdependence that help to understand how network
actors adapt and respond to change. We use the IMP Inter-
action Approach to study the diffusion of sustainability
as a process of change in supply networks through rela-
tionship interconnectedness, the role of relationships as
conduits in this process and different actor responses or
adaptations (Tate et al. 2013; Johnsen et al. 2016).
1091
The Role of Power in Sustainability Diffusion
Power enables an actor to get other actors to do something
that they would not otherwise have done (Dahl 1961; Haus-
man and Johnston 2010). The power-as-dependence per-
spective is pertinent to a buyer–supplier focus where the
dependence of one party to another is inversely linked to
its relationship power (Emerson 1962). In comparison, the
Interaction Model (Håkansson 1982) portrays power as an
attribute of dyadic relationships, which is affected by the
actions and interactions between actors, so power resides
not only within dyadic relationships, but also within the
network in which relationships are embedded. This implies
that power is contingent on the perception of actors and their
positions in the network (Meehan and Wright 2012).
Coercive power is often found in low-commitment or
adversarial relationships where one party is strongly depend-
ent on the other (Dwyer 1980; Ford et al. 2003). The use of
coercive power may reduce opportunities for cooperation in
relationships and create destructive conflicts between the
parties (Vaaland and Håkansson 2003). Antecedents in the
literature have examined more subtle and non-coercive ways
of exploiting a position of power (e.g. French and Raven
1959; Hunt and Nevin 1974; Dwyer 1980; Håkansson 1982;
Maloni and Benton 2000; Benton and Maloni 2005; Zhao
et al. 2008).
French and Raven (1959) developed a typology of power
distinguishing between coercive, expert, legitimate, referent
and reward power (see Table 1). Other researchers suggest
that power can be categorized simply into two categories:
coercive and non-coercive (Hunt and Nevin 1974; Hausman
and Johnston 2010). Some authors argue that, in reality, the
distinction between the five types is unclear (Hopkinson and
Blois 2014; Lacoste and Blois 2015). For example, coer-
cive and reward power may hold similar meaning as giv-
ing or withholding rewards can both be viewed as coercive
actions. Other authors suggest that coercive power can exist
under various levels of threats, legalistic pleas and promises
(Frazier and Summers 1986; Hausman and Johnston 2010).
This is also contested on the basis that legalistic pleas are
often associated with legitimate power, while giving prom-
ises can be considered as a form of reward power (Hopkin-
son and Blois 2014). Considering these varying typologies
and debates, we adopt the power base typologies by French
and Raven (1959) and Hunt and Nevin (1974) as shown in
Table 1.
Several studies have investigated the interaction of power
with other relationship characteristics (Zhao et al. 2008;
Jain et al. 2014). Jain et al. (2014) found that trust had a
negative relationship with coercive power but a positive rela-
tionship with non-coercive power. Similarly, Vaaland and
Håkansson (2003) found that reward, referent and expert
power enhanced cooperation and reduced conflict, while
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1092 O. A. Meqdadi et al.

Table 1  Typologies of power in relationships (adopted from Hunt and Nevin 1974)

Power type Definition

Coercive power “Putting direct pressure on the target to perform a specific behavior or set of behaviors, with adverse consequences of
noncompliance stressed and mediated by the source” (Frazier and Rody 1991). “The expectation on the part of P that he
will be punished by O if he fails to conform to the influence attempt” (French and Raven 1959)
Non-coercive power
 Expert “A company’s willingness to accept ‘fact’ based on [its] prior evaluation of the credibility of the company supplying that
information” (Håkansson 1982) or “channel members’ perception of the leader as having a special knowledge which
could help the channel” (Etgar 1978)
 Legitimate “Recognition of channel members that the channel leader has a ‘right’ to make specific decisions and expect compliance
with regard to these decisions” (Etgar 1978) or has the right to prescribe behaviour for him (French and Raven 1959).
 Referent “The value which one party places on association with another because of its wish to learn from and act similarly to the
other” (Håkansson 1982, p. 30). A party desires to join another party and seeing him as a model to be emulated (Etgar
1978; Raven 2008)
 Reward “The belief by a channel follower that the channel leader can mediate rewards because the leader has or is believed to have
access to some resources that the follower values” (Etgar 1978). The ability of a company to directly affect the rewards
gained by another company (French and Raven 1959)

coercive power induced negative effects. Other researchers
also identify the importance of non-coercive power, such as
expert and reward, in enhancing cooperation in relationships
(Walker and Preuss 2008; Nyaga et al. 2010; Touboulic and
Walker 2015). Thus, various forms of non-coercive power
can enhance trust and may not be detrimental to cooperation.
Power has been shown to enable a company to impose
sustainability requirements on suppliers (Green et al. 1998;
Hall 2000; Amaeshi et al. 2008). However, opinions and
results differ on how to best exploit power with some studies
reporting on drawbacks of using power, as coercive power
may result in “passivity” behaviour and reduce cooperation
(Fadeeva 2004; Nyaga et al. 2013). Wycherley (1999) indi-
cates that too much pressure from a company on its suppliers
to achieve environmental improvement may be perceived by
suppliers as a “political act.”
Touboulic et al. (2014) found that the level of power
imbalance affects the level of suppliers’ compliance and
engagement in sustainability, where the more power the
company has, the more suppliers comply with sustainability
requirements. Thus, if a company is in a position of power,
it is more likely that it can coerce suppliers to comply with
its sustainability requirements (Hoejmose et al. 2014), as
long as suppliers are willing and able to meet its demands,
although suppliers may resist adopting sustainability
requirements if they feel that these are imposed on them by
their customers (Reuter et al. 2010). Furthermore, the influ-
ence of a powerful company in implementing sustainability
beyond its direct suppliers may be limited and a power shift
towards greater interdependence in a customer–supplier rela-
tionship may take place when a customer relies on its suppli-
ers’ resources to improve its sustainability (Touboulic et al.
2014). Amaeshi et al. (2008) suggest that pressure to imple-
ment sustainability should be confined to direct suppliers,
where the ripple effect can assist in passing the company’s
request for implementing sustainability to other tiers of sup-
pliers. Conversely, Spence and Bourlakis (2009) contend
that power balance rather than coercive power is required
to achieve better results in sustainability implementation,
but this does not then address the real challenge of how to
persuade suppliers to adopt sustainability initiatives if it is
not in their interest to do so.
Clearly, power is neither a simple construct nor an easily
calculable variable (Green et al. 1998). Several authors call
for further studies on the role of power in implementing
sustainability: Boons et al. (2012) indicate the need to inves-
tigate the role of power in driving the sustainability agenda
and diffusing this agenda in the supply chain; Boyd et al.
(2007) recommend conducting research on how sustainabil-
ity can be established and implemented when power asym-
metry exists between a customer and its suppliers; Pullman
et al. (2009) call for research on imbalances in supply chains
and their impact on implementing sustainability.
The use of power to enforce sustainability in supply net-
works presents a dilemma. On the one hand, Pagell et al.
(2010) argue that when changing the focus from general
SCM to SSCM, it is no longer appropriate for dominant
buyers to exploit their power over dependent suppliers as
they might have done in other circumstances because power
exploitation is intrinsically seen as unethical and therefore
non-sustainable (Jones et al. 2007). On the other hand, with-
out using some degree of power companies may not be able
to persuade suppliers to adopt sustainability, thus presenting
companies with a dilemma; sustainability presents a critical
risk for companies that requires them to exercise control, e.g.
through monitoring (Vachon and Klassen 2006) rather than
relying purely on collaboration and trust. Thus, the question
of power exploitation is complex and lessons from general
SCM research cannot automatically be transferred to studies
on sustainability in supply networks.

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Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case…
Figure 2 shows our conceptual framework, which depicts
the main theoretical constructs on which our study builds.
Firstly, this captures the focus on sustainability diffusion
from focal company to first-tier and thence to second-tier
suppliers and eventually across the wider supply network.
Secondly, the framework shows our focus on the impact of
the different types of power on the diffusion process.
Methodology
Case studies have traditionally been seen as a research strat-
egy that aims for theory development (Eisenhardt 1989;
Eisenhardt and Graebner 2007). However, it has recently
been argued (Ketokivi and Choi 2014) that case studies
should not be restricted to develop but also to elaborate the-
ory (Voss et al. 2002). Our case studies are, therefore, not
based on constructs deduced from theory (Eisenhardt 1989).
Instead, we have followed an abductive process (Dubois and
Gadde 2002) characterized by systematic combining of the-
ory and empirical data at different stages of the research pro-
cess. Seeking to elaborate our understanding of how power
may impact the diffusion of sustainability in supply networks
naturally lends itself to a case study approach, especially to
understand the subtle workings of power from the perspec-
tives of different supply network actors.
Aiming to capture different supply network actor per-
ceptions of power, we adopted a moderate construction-
ist stance, which is based on the premise that there can be
“multiple constructed, community-bounded realities of the
studied case” where it is possible to have “specific local,
personal, and community forms of knowledge” (Järvensivu
Fig. 2  Conceptual framework for researching the impact of power on sustainability diffusion in supply networks
1093
and Törnroos 2010). We used this approach to uncover the
real use of power, as companies do not readily admit to
exploiting power or being exploited. We adopted multiple
in-depth case studies to discern the similarities and contrasts
amongst the case studies. This research strategy enabled us
to reveal how companies implement different sustainability
initiatives and the positive and negative impacts of different
types of power on engaging suppliers in these initiatives.
Multiple case studies provided us with the ability to observe
the patterns of relationships amongst the constructs within
and across different cases (Eisenhardt and Graebner 2007).
Case Study Selection
We conducted four in-depth case studies within different yet
comparable industries to avoid making the study industry-
specific while ensuring some consistency in context, thereby
producing similar results (Eisenhardt and Graebner 2007).
Heeding Ketokivi and Choi’s (2014) duality criterion, we
decided on four case studies to strike a balance between
situational grounding and theoretical generality. Ensuring
similar characteristics in the four cases was important in
enabling meaningful case comparison. Each of our cases
focuses on a focal company and selected suppliers, but the
unit of analysis is a set of sustainability initiatives launched
by the focal company and involving a set of suppliers. We
sought European companies that are leaders in their indus-
tries and listed on sustainability indices, such as the Dow
Jones Sustainability Index (DJSI). The focal companies had
to have current sustainability initiatives and be sufficiently
large to diffuse these to suppliers. These criteria helped
us to ensure consistency and reduce extraneous variation
13

1094 O. A. Meqdadi et al.

(Eisenhardt 1989). Thus, we developed a list of potential

Vachon and Klassen (2006), Tate et al. (2013), Wilhelm et al. (2016),
French and Raven (1959), Hunt and Nevin (1974), Frazier and Sum-
mers (1986), Maloni and Benton (2000), Payan and Nevin (2006),
companies from secondary sources of information, such as

Etgar (1978), Wilkinson (1979), Maloni and Benton (2000), Raven

French and Raven (1959), Etgar (1978), Raven (2008), Zhao et al.

Grimm et al. (2014), Wilhelm et al. (2016), Meqdadi et al. (2017)

Wilkinson (1979), Maloni and Benton (2000), Zhao et al. (2008),
company websites, annual reports, presentation materials

Wilkinson (1979), Maloni and Benton (2000), Payan and Nevin

and press reports to refine our list.
We eventually secured the acceptance of four compa-

(2008), Zhao et al. (2008), Lacoste and Blois (2015)

nies: “MP” (pharmaceutical and medical products); “ER”

Zhao et al. (2008), Hopkinson and Blois (2014)

(precious metal manufacturing and recycling) (ER); “PP”
(painting and coating products); and “SP” (specialty poly-

(2006), Raven (2008), Zhao et al. (2008)

mers). Based in Europe, these all have international supply
networks. The names of the companies and suppliers are
disguised as we promised anonymity in order not to limit
their wish to speak openly. Tables 3, 5, 7 and 9 provide

Lacoste and Blois (2015)

information on the focal companies and suppliers, indicating

Meqdadi et al. (2017)

focal company sustainability activities and programmes and
how these fulfilled our selection criteria.

Data Collection

Literature

(2008)
An interview protocol assisted us in conducting all inter-
views in a systematic way (Stuart et al. 2002). This was
based on major categories related to power types and sus-

First-tier supplier adopts sustainability practices and activities initi-

Supplier perceives that focal company possesses superior and valu-

Supplier associates with the focal company to utilize its image and
able knowledge that is deemed important for supplier to improve
Focal company communicates to supplier that it will impose sanc-

business increase or continuity to supplier in case of meeting its

Supplier believes the focal company has the right to launch initia-
Supplier believes that focal company has an influence on its deci-

Sustainability diffusion from first tier to second tier Second-tier supplier adopts sustainability practices and activities
Focal company makes promises of providing advantages such as
tainability diffusion: see Table 2.
Our primary source of information was based on inter-
views with multiple informants at the focal companies and
suppliers. The nature of interview questions was open- tions if supplier does not comply with its requirements
ended, allowing interviewees to elaborate on important
points. Follow-up questions were asked to tease out further
details especially where interviewees seemed reluctant to

tives and to be adopted by other actors

elaborate without probing. The interview questions were
sent in advance to the interviewees; this enabled the inter-
viewees to prepare materials, such as annual sustainability

initiated by first-tier supplier

ated by the focal company
reports, PowerPoint presentations, life cycle analysis (LCA)
reputation in the market
reports and codes of conduct.
Although in some focal companies there was a central
its performance

sustainability (or CSR) department, sustainability also requirements

sion making

required the involvement of other departments. Thus, we

Explanation

conducted interviews with interviewees from departments

Table 2  Categories related to interview protocol development

such as procurement, R&D, SCM, environmental, health and

safety (EHS), production, logistics, sales and marketing as
well as top management. From there, we asked the focal
companies to refer us to suppliers who participated in their
Sustainability diffusion from focal company to

sustainability initiatives.
We conducted 38 interviews in total, including multiple
interviews within focal companies. In order to overcome
any difficulties in conducting interviews with second-tier
suppliers, our interview protocol included questions to the
suppliers pertinent to their practices and initiatives for dif-
fusing sustainability to sub-tier suppliers. On the suppliers’
first-tier supplier

side, we interviewed key informants, who were responsible

Legitimate power
Coercive power

Referent power

Reward power

for implementing the sustainability initiatives of the focal

Expert power

companies, and we conducted multiple interviews with sup-

Category

pliers when additional data were needed. Accordingly, we

conducted 22 and 16 interviews at the focal companies and

13
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case… 1095

Table 3  MP and suppliers involved in MP’s sustainability initiatives

Company: MP Product/service Sustainability initiatives Location

Size: large Medical products (a) Code of conduct Europe

Sales: > €10 bill
Sustainability Index: DJSI
Supplier
(b) Carbon disclosure project
(c) LEED certification
(d) Sustainability auditing by third party
(e) Onsite visits to suppliers to provide training and education
(f) Educational toolkits: sustainability ladder, hygienic and HSE best practices
(g) Sustainability rewards and incentives to suppliers
(h) Engage with other pharmaceutical companies to improve sustainability across
industry
Product/service Company–supplier relationship Supplier engagement in initiatives Location

MP-Sup1 (size: large) Active ingredients Partnership (> 10 years) a + b + d + e + f + g + h India
MP-Sup2 (size: medium) Active ingredients Close Relationship (> 5 years) a + c + d + e + f + g + h USA
MP-Sup3 (size: large) Active ingredients Partnership (> 10 years) a + b + d + e + f + g + h China
MP-Sup4 (size: large) Active ingredients Transactional (> 20 years) a + d Europe

suppliers, respectively. The average interview duration was
1 h although a few interviews exceeded 2 h. All the focal
companies were visited to conduct the interviews face-to-
face and to better understand the physical environment. Out
of the 16 interviews with suppliers, 4 suppliers were visited
physically, while 12 suppliers were interviewed by telephone
due to difficulty in travelling and meeting in person, as in
the case of suppliers located in Asia and the USA. All inter-
views were conducted in English, digitally recorded and
transcribed manually immediately after each interview.
Data Analysis
detect similarities and differences between the cases (Miles
and Huberman 1994). The validity of our research was
achieved through collecting data from multiple interview-
ees and secondary sources (Eisenhardt 1989). The reliability
was enhanced through independent coding and by return-
ing summary reports to the focal companies to validate our
interpretations of the findings (Stuart et al. 2002). Follow-up
interviews were conducted with the focal companies to dis-
cuss these reports and clarify the findings. Similarly, follow-
up emails or telephone calls were conducted with suppliers
where possible to obtain additional information or to clarify
areas of ambiguity.

The data coding process was conducted manually and initi-

ated once the data collection was completed in each case
study, following Miles and Huberman (1994). We began by
reading the interview transcripts and grouping sentences and
paragraphs and giving each group a code. Next we linked the
codes to the constructs of the study, such as types of sustain-
ability initiative, various forms of power and sustainability
diffusion to first- and second-tier suppliers (see Fig. 2 and
Table 2). Therefore, the coding process was grounded in the
qualitative data but taking into consideration key concepts
from the literature (Ketokivi and Choi 2014). The coding
process was carried out by two of the authors who inde-
pendently coded the data; several meetings and discussions
were held to agree on interpretations, to validate codes and
to link codes to categories. The process reduced the bias in
the coding process and helped to ensure inter-rater reliability
(Voss et al. 2002).
The analysis process was conducted on two levels (Miles
and Huberman 1994): within case and across case. Within-
case analysis was concerned with revealing how power in its
various forms impacted sustainability diffusion in each case
study and subsequently cross-case analysis, which aimed to
Within‑Case Analysis
In this section, we provide some brief background on the
focal companies in each case and an overview of how differ-
ent forms of power impacted the diffusion of sustainability
in their supply networks.
Case Study One: Sustainability Diffusion in the MP
Supply Network
MP belongs to a group of pharmaceutical companies head-
quartered in the USA. It was not so much regulations or
pressure from NGOs but instead internal factors that drove
the company to implement sustainability:
It is already 70 years and our credo is telling you that
we have to work on sustainability and the three pillars
are in there. (MP—Sr. Principal Product Stewardship)
MP launched a range of initiatives to improve the sustain-
ability performance of its suppliers some of which were
based on stipulating that suppliers have systems in place

13

1096
for managing sustainability and are willing to participate in
sustainability audits conducted by a third party. MP interacts
closely with its suppliers and provides training and educa-
tion on sustainability issues, such as health, safety, environ-
ment (HSE) and hygienic practices. Suppliers with poor sus-
tainability performance are given 2 years to reach the level
required by MP according to its “sustainability ladder.” For
certain suppliers, MP conducts onsite visits where MP and
suppliers work together to resolve sustainability problems.
MP has designed a system to reward suppliers with high
sustainability performance. The sustainability initiatives of
MP and supplier engagement in these are shown in Table 3.
MP Power Impact on Sustainability Diffusion at Dyadic
Level
As a leading pharmaceutical company, MP has a dominant
position in relation to the four suppliers included in our
case, not least due to MP’s significant proportion of these
suppliers’ turnover. Our findings revealed that MP exerted
direct pressure on suppliers to participate in its sustainability
audits, to comply with its requirements during onsite visits
and to reach a certain level on the “sustainability ladder.”
MP declared that it would cease to deal with suppliers that
did not improve their sustainability performance within a
given period of time:
We say if you don’t do this, sorry we cannot order your
product because the minimum requirements are not
met and you don’t protect your people and it doesn’t
cost you money for the minimum things to do that.
(MP—Global Sustainability Director)
The interviewed suppliers all indicated that they were aware
of the importance of sustainability to MP and its minimum
requirements that could lead to termination of future busi-
ness in case of non-compliance with MP’s sustainability
requirements. Subjected to this pressure, the four suppliers
all participated in MP sustainability initiatives:
It is done in many ways, there is going to be the for-
mal one, where they did tell us: there is going to be
requirements for sustainability in order to continue as
an external manufacturer for their company, look if
you want to continue this you will adopt these pro-
grams. (MP-Sup2)
Furthermore, different forms of non-coercive power were
clearly in evidence. MP designed a system to reward sup-
pliers who attained high scores in the sustainability scoring
system. MP indicated that rewards would motivate suppliers
to go beyond the threshold stipulated in its various sustain-
ability initiatives. For example, suppliers with high sustain-
ability scores would receive medals that entitled them to
13
O. A. Meqdadi et al.
special treatment from MP’s purchasing function and the
possibility of winning more business:
We said okay if they would do these things and how far
they are sustainable then we have to reward them and
we were thinking we can give them sort of medals. It’s
a sort of levels like bronze, silver and gold and if you
get that medal it’s connected to what you do around
EHS and sustainability and gives you advantages if
you are selling things to us. So get better prices or eas-
ier connections. (MP—Global Sustainability Director)
MP-Sup1, MP-Sup2 and MP-Sup3 indicated that the MP’s
reward system motivated them to achieve higher scores in
the sustainability audits in order to improve their relation-
ships with MP or to win medals to secure more business.
Due to its project-based business with MP the reward system
had no impact on MP-Sup4.
MP-Sup1, MP-Sup2 and MP-Sup3 all benefited from the
sustainability expertise of MP in building their own sustain-
ability systems and in implementing best practices in indus-
trial hygiene and HSE. For example, MP-Sup3 was engaged
in a carbon disclosure project with the help of MP, while
MP-Sup1 and MP-Sup2 benefited from MP’s sustainability
expertise in building sustainability management systems.
Although MP’s sustainability expertise had no influence on
the more independent MP-Sup4, which had its own system
through its parent company, on the whole MP’s expert power
positively influenced supplier participation in sustainability.
This was echoed by MP-Sup1:
Most of the information has come from MP about
safety, quality and other aspects are implemented in
the company and also extended to our other units. And
here we are continuously monitoring sustainability and
see that these things are maintained and improvement
also in progress. With the help of MP they gave us
good amount of information to sustain this and also to
grow. (MP-Sup1)
MP-Sup1, MP-Sup2 and MP-Sup3 shared the view that as
they met the sustainability requirements of MP they could
build an image in the market as preferred suppliers to MP.
However, such referent power did not appear to influence
MP-Sup4, which did not perceive any particular commercial
benefits from associating with MP. Finally, legitimate power
was evident in all suppliers apart from MP-Sup4 through
MP’s position and reputation as a sustainability leader in the
pharmaceutical industry:
We do believe that MP has a strong sustainability posi-
tion in the pharmaceutical industry. I think there is a
role for MP beyond the current efforts. They had a
symposium on sustainability that was focused on sus-
tainability in supply chain. They talked about some
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case… 1097

best practices. I think MP has a facilitating role in

Sustainability did not diffuse

first- and second-tier sup-
assisting us and going now in our journey toward sus-

Sustainability diffusion in

MP relied on suppliers to

to second-tier suppliers
diffuse sustainability in

Sustainability diffused to
tainability maturity. (MP-Sup2)

their supply network

supply network
Sustainability Diffusion Beyond Dyadic Level

Network level

Dyadic level
pliers
The analysis indicates that MP’s initiatives positively
impacted the sustainability performance of suppliers,
except the relatively independent MP-Sup4 who engaged in

MP seen as sustainability
only two initiatives (Table 3). All the other suppliers con-

No perceived benefits from MP not seen as sustain-

MP is a sustainability
veyed MP’s sustainability requirements to their own sup-
pliers, using the sustainability tools and initiatives that MP

ability leader
passed to them. MP-Sup1, for example, communicated HSE

High impact

High impact
Legitimate

No impact
requirements to its suppliers, training suppliers to enhance

leader

leader
their sustainability understanding, sending questionnaires to
gather information on its suppliers’ sustainability perfor-
mance and in some cases visiting these to recommend how

Share sustainability exper- Supplier association with

to improve sustainability.

Built sustainability system Build market image as a

preferred MP supplier
MP allows supplier to

associating with MP
MP-Sup2 utilized the “sustainability ladder” contents

attract customers
to communicate HSE requirements, especially to over-
seas suppliers. MP-Sup3 utilized the tools obtained from

High impact

High impact

No impact
MP to improve sustainability of its suppliers, providing

Referent
training sessions and technical support to its suppliers to
ensure compliance with MP’s sustainability requirements.
In contrast, MP-Sup4 just conformed to MP’s sustainability

Pre-existing internal sys-

tem to manage sustain-
requirements and did not pass MP’s requirements to its own

with MP assistance
suppliers.

tise with suppliers

In sum, we found evidence that MP-Sup1, MP-Sup2 and
MP-Sup3 diffused MP’s sustainability requirements to their
High impact

High impact

No impact
suppliers, while sustainability implementation at MP-Sup4

ability
Expert

remained confined to a dyadic level (see Table 4).

Company/supplier Impact of power types on diffusing sustainability to suppliers

Case Study Two: Sustainability Diffusion in the ER

Relationship is project-
Supply Network
Being a preferred MP
Sustainability reward

ER is a diverse business focusing on materials technol-

High impact

High impact

ogy and recycling. The company operates internationally

No impact
supplier
system
Reward

based

and is considered one of the largest players in the global

Table 4  MP’s power impact on sustainability diffusion

market for manufacturing of precious and specialty metals.

ER has a long history in sustainability applications, such
as manufacturing of rechargeable batteries and catalysts for
mum business require-
mum business require-

mum business require-

Sustainability is a mini-
Sustainability is a mini-

Sustainability is a mini-

the automotive industry and constructed one of the largest

facilities in the world for precious metals recycling. ER was
influenced mainly by two factors when deciding to engage
High impact

High impact

High impact

in sustainability: to gain economic benefits from developing

Coercive

sustainability applications and to respond to NGO pressure.

ment
ment

ment

As expressed by one interviewee:

For me the most important factor is that we have seen
sustainability can grow our business. We can do things
in a sustainable way and we can also create new busi-
MP-Sup1
MP-Sup2
MP-Sup3

MP-Sup4

ness. (ER—Vice President Purchasing & Transporta-

MP

tion)

13

1098
The company launched two sustainability initiatives: a sus-
tainable procurement charter, which required all suppliers
to sign and abide with all its contents, and a project to audit
supplier sustainability performance through a third party
(see Table 5).
ER Power Impact on Sustainability Diffusion at Dyadic Level
The purpose of ER’s initiatives was not to exclude suppliers
but rather to work jointly with these to improve their sustain-
ability performance. However, there was a clear message
from ER to suppliers, threatening with business termina-
tion in case suppliers did not comply with its sustainability
requirements:
What is crucial; our objective is not to exclude sup-
pliers. Our objective is to assess the sustainability of
suppliers and discuss how they can improve and if we
feel they don’t want to improve then we will take the
measure to exclude them. (ER—Vice President Pur-
chasing & Transportation)
Suppliers were approached formally by ER’s procurement
department. Our interviews with the four suppliers ER-Sup1,
ER-Sup2, ER-Sup3 and ER-Sup4 confirmed the impact of
ER’s coercive power:
They didn’t say it in words but you could read it
between the lines: it is quite important for us to fill
this questionnaire if you still want to have a good rela-
tionship. (ER-Sup1)
ER had no programme to reward suppliers for their sustain-
ability performance or incentives such as increased busi-
ness. ER-Sup1, ER-Sup3 and ER-Sup4 did not perceive any
business advantages from their engagement in ER’s sustain-
ability initiatives, so reward power had no apparent impact.
ER promised ER-Sup2 an increase in business given the
high sustainability risk due to the nature of the chemicals
Table 5  ER and suppliers involved in ER’s sustainability initiatives
Company: ER Product/service
Sales: > €10 bill Precious metals production and recycling (a) Sustainable procurement charter con-
Size: large
Sustainability Index: global 100 most sus-
tainable corporations
Supplier Product/service
ER-Sup1 (size: large) Cork materials
ER-Sup2 (size: medium) Solvents
ER-Sup3 (size: large) Travelling management
ER-Sup4 (size: medium) Mobility solutions
13
O. A. Meqdadi et al.
it provided. ER perceived it as essential to incentivize this
supplier to improve its sustainability performance.
Expert power had no impact on supplier engagement: ER
explained that it did not have the resources to provide assis-
tance to suppliers. All suppliers confirmed that they received
no assistance from ER in the form of training or information.
Instead, ER nominated a third party to conduct sustainability
audits on its behalf:
I think this is one of the main goals and challenges in
the future for our department to step away from the
risk approach and go to added-value approach to really
work with our suppliers where we can bring added-
value. But we need the resources. (ER—Group Pro-
curement and Logistics Manager)
ER believed that being an industry sustainability leader
would help suppliers to build a reputation as sustainable
suppliers to ER and then attract more customers. However,
such referent power had no apparent impact as the suppliers
indicated that ER’s sustainability programs were limited to
merely signing its sustainability charter or complying with
the sustainability audit. Still, ER indicated that being a sus-
tainability leader and ranked highly on the “Global 100 Most
Sustainable Corporations in the World” index entitled the
company to launch initiatives to improve its suppliers’ sus-
tainability performance. However, only ER-Sup2 shared this
view, while ER-Sup1, ER-Sup3 and ER-Sup4 all indicated
that they did not perceive a legitimate role of ER affecting
their engagement in sustainability.
Sustainability Diffusion Beyond Dyadic Level
ER indicated that its main concern was to focus on diffus-
ing its sustainability requirements to first-tier suppliers and
make sure these posed no sustainability risks. ER launched
only two initiatives to achieve these objectives by asking
suppliers to sign its sustainable procurement charter and
Sustainability initiatives Location
Europe
taining sustainability principles of the
company
(b) Sustainability evaluation of suppliers
through online questionnaire by third
party
Company–supplier relationship Suppliers engagement Location
in initiatives
Transactional relationship (> 7 years) a + b Europe
Close relationship (> 25 years) a + b Europe
Close relationship (> 7 years) a Europe
Close relationship (> 5 years) a Europe
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case… 1099

attain a certain score on the sustainability audit. The sup-

ER focused on sustainabil-
pliers pointed out that their engagement in the two sustain-

Sustainability diffusion in

ity diffusion to first-tier

diffuse to second-tier

diffuse to second-tier
ability initiatives occurred mainly under direct pressure from

ER not seen as sustainabil- Sustainability did not

Sustainability did not

ER. ER neither assisted suppliers to enhance their sustain-

supply network
ability capabilities nor provided benefits for their engage-

Dyadic level

Dyadic level
ment in sustainability. Therefore, the suppliers did not exert

suppliers

suppliers
suppliers
efforts to diffuse ER’s sustainability requirements beyond
their borders to the supply network:
So far no consideration of sustainability in suppliers’

ER seen as sustainability
evaluation. We haven’t engaged with certain suppliers

ER is a sustainability
to improve their sustainability performance or share
our knowledge with them. (ER-Sup2)

High impact
High impact

ity leader
Legitimate
Table 6 summarizes the ER case findings.

No impact

leader
leader
Case Study Three: Sustainability Diffusion in the PP
Supply Network

Supplier association with

No market benefits from

No market benefits from

ER allows supplier to

associating with ER

associating with ER
PP is a global chemical company specialized in coating and

attract customers
painting products that operates in several markets in Asia,
Europe and the USA. Aiming to grow in emerging mar-

High impact

No impact

No impact
kets such as China, India and Brazil, PP needed to build a

Referent
sustainable supply network. In addition, the company saw
an opportunity to differentiate itself in the market through
developing sustainable products and building an image as a

expertise and resources

expertise and resources

expertise and resources

“green” company. PP launched several initiatives to improve

Lack of sustainability

Lack of sustainability

Lack of sustainability
suppliers’ sustainability, such as asking suppliers to comply
with its code of conduct; conducting onsite visits to sup-
pliers to educate them on sustainability and co-developing

No impact
No impact

No impact
sustainable chemical products based on utilizing renewable

by ER

by ER
Expert

materials as substitute to petro-based materials (see Table 7).

Company/supplier Impact of power types on diffusing sustainability to suppliers

PP Power Impact on Sustainability Diffusion at Dyadic Level

Table 6  ER’s power impact on sustainability diffusion in ER supply network

Enhance relationship with

No rewards or incentives
No sustainability reward

Various forms of power impacted the diffusion of PP’s sus-

for sustainability

tainability initiatives not least PP’s message to suppliers that

they had to comply with its sustainability requirements to
Low impact
No impact

No impact

avoid being phased out. PP-Sup1 and PP-Sup2 were aware

system
Reward

that PP was aiming to build a sustainable supply network and

ER

that it was essential to engage in its sustainability initiatives:

PP depends on local suppliers to keep a certain mar-
mum business require-
mum business require-

mum business require-

Sustainability is a mini-
Sustainability is a mini-

Sustainability is a mini-

gin and they need suppliers who don’t jeopardize their

image and reputation. They need suppliers who are
ready to follow their sustainability programs and if
High impact
High impact

High impact

not, sure they will move away and go for somebody

Coercive

ment

ment

ment

else. (PP-Sup2)
PP-Sup3 was not subjected to direct pressure from PP,
explaining that both companies were equivalent in size and
PP was not considered a prime customer; being relatively
independent it did not sign the code of conduct or participate
ER-Sup1
ER-Sup3
ER-Sup4

ER-Sup2

in PP’s site visits. Our findings further revealed how various

forms of non-coercive power affected supplier engagement.
ER

13

1100
Table 7  PP and suppliers involved in PP’s sustainability initiatives
Company: PP Product/service
Size: large Painting and coating products (a) Code of conduct
Sales: (billion €) > 10 (b) Onsite visits to educate and train suppliers on sustainability
Sustainability Index: DJSI (c) Engage with suppliers in projects for developing sustainable
products (bio-based chemical products)
Supplier Product/service
PP-Sup1 (size: large) Chemical
PP-Sup2 (size: large) Chemical
PP-Sup3 (size: large) Chemical
Although PP had no programme to reward suppliers for sus-
tainability performance, the company explained to suppliers
that sustainability would result in increased business. The
three suppliers shared the opinion that their engagement
with PP’s sustainability initiatives would benefit them:
Let us put it differently, the main challenge is that eve-
ryone wants to have sustainable solutions unless it has
more cost associated with it. There should be a busi-
ness case and that’s a main challenge. In our engage-
ment with PP we saw some benefits to be realized in
the future. (PP-Sup3)
Similarly, expert power positively impacted suppliers’
engagement. PP approached suppliers by offering to share its
knowledge and expertise. For example, PP conducted visits
to supplier premises and provided intensive training on HSE
issues. The three suppliers appreciated the sustainability
expertise of PP: PP-Sup3 explained that PP’s sustainability
expertise in developing sustainable products had been instru-
mental for qualifying its renewable materials and comply-
ing with governmental regulations. PP’s strategy centred on
developing an image and reputation as a “green” company
so PP focused on improving its suppliers’ sustainability per-
formance and developing sustainable products, pointing out
that this image would greatly benefit suppliers by allowing
them to attract other customers. The three suppliers agreed
that their association with PP and its sustainability initiatives
would differentiate them in the market as “green” suppliers:
It has a positive effect. I think the main problem is that
PP doesn’t want to increase the price … so it might be
a problem but we follow them and respect this strategy
and we agree with them since this will distinguish us
in the market and be attractive to customers. (PP-Sup1)
PP’s recognition in the chemical industry as a sustainabil-
ity leader through its consistently high ranking on the Dow
Jones Sustainability Index meant that PP-Sup1 and PP-
Sup2 thought that PP was entitled to launch such initiatives
and coach suppliers towards building a sustainable supply
13
O. A. Meqdadi et al.
Sustainability initiatives Location
Europe and USA
Company–supplier relationship Suppliers engagement in Location
initiatives
Partnership (> 15 years) a + b + c South Korea
Partnership (> 10 years) a + b + c Taiwan
Transactional (> 20 years) c Europe
network. PP-Sup3 was not affected by this legitimate power
due to its independent position.
Sustainability Diffusion Beyond Dyadic Level
PP launched sustainability initiatives to diffuse sustainabil-
ity to first-tier suppliers but did not intervene directly with
second-tier suppliers, instead relying on first-tier suppliers
to further diffuse its sustainability requirements to sub-tier
suppliers. PP-Sup1 communicated PP’s requirements for
sustainable product development, asking its suppliers to
supply only bio-based materials and sent questionnaires to
its suppliers to gather sustainability information and at the
same time included sustainability in its purchasing policy.
Similarly, PP-Sup2 passed PP’s sustainability requirements
to its suppliers:
We are trying to replace current petroleum-based raw
materials with bio-based. So we passed PP’s require-
ments to our suppliers to make the whole supply chain
responsive to sustainability. (PP-Sup2)
PP-Sup3 approached suppliers asking for their cooperation
to implement PP’s sustainable product development initia-
tive. In addition, PP-Sup3 conducted supplier sustainability
audits and enquired about their ­CO2 emission levels in order
to reduce C­ O2 emission throughout PP’s supply network.
Table 8 summarizes the findings.
Case Study Four: Sustainability Diffusion in the SP
Supply Network
SP is amongst the ten largest chemical companies in the
world, manufacturing products such as polymers used in
chemical, pharmaceutical, automotive and construction
industries. SP has a strong reputation for its environmen-
tal standards, in particular in relation to C ­ O2 emissions
from its production process. The company explained that
the driving factors for launching initiatives to improve sup-
plier sustainability were mainly internal factors, such as the
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case… 1101

Table 8  PP’s power impact on sustainability diffusion in PP supply network

Company/supplier Impact of power types on diffusing sustainability to suppliers Sustainability
diffusion in supply
Coercive Reward Expert Referent Legitimate network

PP High impact High impact High impact High impact High impact PP relied on sup-
Sustainability Promise for more Share sustainability Supplier asso- PP is a sustainabil- pliers to diffuse
is a minimum business volume expertise with ciation with PP ity leader sustainability
business suppliers allows supplier in the supply
requirement to attract other network
customers
PP-Sup1 High impact High impact High impact High impact High impact Network level
PP-Sup2 Sustainability Promise for more Improved sustain- Build market image PP seen as a sus- Sustainability
is a minimum business volume ability knowledge as “green” sup- tainability leader diffused to first-
business and expertise plier and second-tier
requirement suppliers
PP-Sup3 No impact High impact High impact High impact No impact Network level
Power balance Promise for more Improved sustain- Build market image PP seen as a sus- Sustainability
business volume ability knowledge as “green” sup- tainability leader diffused to first-
and expertise plier (power balance) and second-tier
suppliers

sustainability culture that prevailed within the company, top
management support for implementing sustainability and the
economic benefits from developing sustainable application.
In launching sustainability initiatives, the company requests
suppliers to sign a code of conduct and report on their ­CO2
emission levels. The company’s attempt to develop sustain-
able products based on utilizing renewable materials instead
of petro-based materials represented a main sustainability
initiative that SP launched across its supply network. The
sustainability initiatives of SP and supplier engagement are
shown in Table 9.
SP Power Impact on Sustainability Diffusion at Dyadic Level
The perceptions of the impact of coercive power on supplier
engagement in SP’s sustainability initiatives varied greatly.
SP explained that it had weak power over suppliers due to
the supplier’s size or the nature of materials they supplied
to SP. For example, SP used renewable materials, which
were considered by some suppliers as by-products, which
in some cases represented less than 10 per cent of the sup-
pliers’ turnover. Thus, SP had low bargaining power over
many of its suppliers, which was reflected by the equally
large company SP-Sup1; this supplier refused SP’s request
to participate in a sustainability initiative launched by SP
and other large chemical companies that aimed to standard-
ize sustainability audit processes. This supplier explained
that its well-established system was designed to comply with
European directives for producing biodiesel materials. In
contrast, SP-Sup2 and SP-Sup3 indicated that SP was an
important customer and they were aware that sustainability
was a minimum requirement for conducting business with
SP. Hence, coercive power was found to influence these two
suppliers:
We talked about sustainability because SP is focusing
on this they are concerned on environment and those
things. They made it clear from the beginning that sus-
tainability is a precondition for conducting business.
(SP-Sup2)

Table 9  SP and suppliers involved in SP’s sustainability initiatives

Company: SP Product/service Sustainability initiatives of the company Location

Size: large Specialty Polymers (a) Code of conduct Europe

Sales: (billion €) > 10 (b) Develop sustainable products (bio-based chemical products)
Sustainability Index: DJSI (c) Conduct education to suppliers—LCA reporting and ­CO2 reduction
Supplier Product/service Company–supplier relationship Suppliers engagement in Location
initiatives

SP-Sup1 (size: large) Chemical Partnership (> 18 years) b Europe

SP-Sup2 (size: large) Chemical Partnership (> 5 years) a + b + c Argentina
SP-Sup3 (size: large) Chemical Partnership (> 5 years) a + b + c Thailand

13

1102
SP had no formal system to reward suppliers for sustain-
ability. It explained to suppliers that their engagement would
benefit them through, e.g. business volume increases and
the three suppliers echoed this. SP-Sup1 explained that SP
was a prime customer for its by-products, representing more
than 40 per cent of its by-product turnover. Similarly, SP-
Sup2 and SP-Sup3 were export-oriented and considered SP
a strategic customer; they perceived that their engagement
in sustainability would enhance their relationships with SP
and increase their market share especially after SP built new
factories in Asia:
[SP] are strategic for us. They are by far the number
one client for our by-products. They are the only client
that we have such long-term contracts as we have five
years contract. (SP-Sup1)
Despite its perception of limited power over suppliers, SP
relied on exchanging its sustainability expertise with sup-
pliers to engage them in its sustainability initiatives. For
example, SP visited SP-Sup2 and SP-Sup3, which appreci-
ated the sustainability knowledge of SP, explaining that it
helped them to conduct LCA and reduce C ­ O2 emissions. In
contrast, SP-Sup1 was not influenced by SP’s expert power
as the supplier independently established a system to man-
age sustainability and conform to European directives for
producing biodiesel material:
Referent power had no apparent influence on suppliers’
engagement: the suppliers perceived no benefits from asso-
ciating with SP and building a reputation in the market as
“green” suppliers. As they operated in a commodity market
the main focus was on price. Similarly, legitimate power
had no apparent impact on suppliers’ engagement in SP’s
sustainability initiatives. SP explained that the company had
a long history of implementing sustainability; however, due
to its limited power over suppliers SP did not perceive a
legitimate role in convincing suppliers to adopt its sustain-
ability programmes. This perception was shared by the three
suppliers:
We have low influence to be fair we are a bit far from
the source and a bit far from the end users, we are just
in the middle, in both ways you have to go step by step
along the supply chain. (SP—Senior Business Devel-
opment Manager)
Sustainability Diffusion Beyond Dyadic Level
SP exerted little effort to reach second-tier suppliers, rely-
ing on first-tier suppliers to ensure that its sustainability
requirements reached the second tier and beyond. SP-Sup1
designed a reward system to give a premium to suppliers
who complied with its sustainability requirements and also
diffused SP’s sustainability requirements to cooperatives
13
O. A. Meqdadi et al.
(second-tier suppliers) and farmers (third-tier suppliers). For
example, SP-Sup1 had a dedicated team who visited coop-
eratives and farmers to train them on sustainability practices
related to agriculture, nominating a third party to conduct
sustainability audits:
Our sustainability system covers everything, the farm-
ers, cooperatives and our processes. 3% of the farm-
ers are audited ever year that’s huge its thousands of
audits. Thousands of farmers are audited every year for
sustainability. (SP-Sup1)
Thus, the sustainability requirements of SP diffused to sec-
ond- and third-tier suppliers through SP-Sup1. Likewise, SP-
Sup2 implemented sustainability activities to diffuse SP’s
sustainability requirements to its suppliers. For example,
SP-Sup2 provided funding projects to suppliers to improve
sustainability and conducted sustainability audits of its sup-
pliers. SP-Sup3 further asked its suppliers to comply with
certain regulations and standards, including ISO14001,
OHSAS 18001 and ISCC (International Sustainability and
Carbon Certification) in order to provide sustainable materi-
als to SP (see Table 10).
Cross‑Case Analysis
Overall, our findings show that power influenced, in various
guises and often subtly, the diffusion of the focal companies’
sustainability initiatives. Table 11 provides an overview of
the cross-case findings.
Impact of Coercive Power on Sustainability Diffusion
The impact of coercive power on suppliers was evident in all
four case studies. The focal companies exerted direct pres-
sures on suppliers by stipulating that sustainability was a
minimum requirement for conducting business. The suppli-
ers were aware that they would face adverse consequences
if they failed to comply with these requirements. The case
of the ER supply network stood out from the other cases: in
this case, coercive power was the only influencing power
type, while in the other cases coercive power was combined
with non-coercive power. Relying purely on coercive power,
ER’s code of conduct and sustainability audit diffused to
the first tier but no further, thus contrasting with the other
cases where sustainability initiatives diffused into the wider
supply networks.
Impact of Reward Power on Sustainability Diffusion
MP, PP and SP all provided incentives for their suppliers
when they engaged in sustainability although MP was the
only company to design a sustainability-focused reward
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case… 1103

system. Although PP and SP had no reward systems in place,

first-and second-tier sup-

they explicitly informed suppliers of benefits in the form of

first-, second- and third-

Sustainability diffusion in

diffuse sustainability in

Sustainability diffused to

Sustainability diffused to
SP relied on suppliers to
increased business. ER provided no incentives to suppliers
and the suppliers saw no benefits from adopting ER’s sus-

supply network
supply network tainability initiatives. Our analysis shows that reward power

tier suppliers
Network level

Network level
played a positive facilitation role in diffusing sustainability
beyond the first tier into the wider supply network. This was

pliers
evidenced most strongly in the SP case where one supplier
(SP-Sup1) designed a reward system to diffuse SP’s sustain-
ability requirements to cooperatives (second-tier suppliers)
SP has no legitimate role

SP has no legitimate role

leader but has limited
power over suppliers

and farmers (third-tier suppliers), despite the fact that SP

SP is a sustainability

over suppliers exerted little pressure on the supplier to do so.

over suppliers
Low impact
Legitimate

Impact of Expert Power on Sustainability Diffusion

No impact

No impact

With the exception of ER, all the focal companies possessed

knowledge and expertise that encouraged suppliers to adopt
sustainability. This ranged from assisting suppliers in devel-
price is a top business

price is a top business

price is a top business

Share sustainability exper- Commodity market and

Commodity market and

Commodity market and

oping sustainability management systems to building special

manufacturing knowledge. Suppliers appreciated the focal
companies’ sustainability knowledge, helping them to initi-
No impact

No impact

No impact

ate activities to improve sustainability performance of their

priority

priority

priority
Referent

own suppliers: expert power thus positively facilitated sus-

tainability diffusion beyond the first tier.
established sustainability

Impact of Referent Power on Sustainability

Improved sustainability
performance with the

Diffusion
tise with suppliers

Supplier has a well-

Referent power represented the benefits that suppliers

High impact

High impact

help of SP
No impact

might reap from associating with focal companies. This

system
Expert

was observed within MP and PP supplier relationships:

Company/supplier Impact of power types on diffusing sustainability to suppliers

both companies had strong reputations as sustainability lead-

Table 10  SP’s power impact on sustainability diffusion in SP supply network

ers and their suppliers expressed desires to engage in their

More business volume for

sustainability initiatives to build their own green image. In

More business volume

More business volume

sustainable suppliers

comparison, suppliers of ER perceived no such advantage of

engaging in ER’s sustainability initiatives. Likewise, there
was no apparent impact in the SP case, which was attributed
High impact

High impact

High impact
from SP

from SP

to the price-focused competition in the market, but this did

Reward

not prevent sustainability from diffusing into its wider sup-

ply network. On its own, it seems referent power was insuf-
ficient to diffuse sustainability into supply networks.
Limited power over sup-

Sustainability is a mini-
mum requirement for
conducting business

Impact of Legitimate Power on Sustainability

Diffusion
Power balance

High impact
No impact

No impact
Coercive

The four focal companies are leaders in their industries and

pliers

our expectations were that this would give legitimacy to their

sustainability initiatives. Our findings indicated the impact
of legitimate power in two case studies: MP and PP. Most
of the suppliers of both MP and PP believed that the focal
companies were entitled to launch initiatives that would
SP-Sup1

SP-Sup2
SP-Sup3

improve sustainability. Again, ER stood out: ER believed it

had a leading role in improving sustainability in its supply
SP

13

1104 O. A. Meqdadi et al.

Table 11  Impact of power types on diffusing sustainability across cases

Case studies Impact of power types on diffusing sustainability to suppliers Sustainability diffusion at dyadic and
supply network levels
Coercive power Reward power Expert power Referent power Legitimate power

MP—suppliers High impact High impact High impact High impact High impact Sustainability diffused beyond first-tier
suppliers
ER—suppliers High impact No impact No impact No impact No impact No sustainability diffusion beyond first-
tier suppliers
PP—suppliers High impact High impact High impact High impact High impact Sustainability diffused beyond first-tier
suppliers
sp—suppliers High impact High impact High impact No impact No impact Sustainability diffused beyond first-tier
suppliers

network but, in general, the suppliers did not share this view.
Likewise, despite SP’s sustainability leadership the suppliers
did not perceive a legitimate role of SP in setting a path to
suppliers for improving sustainability. The lack of perceived
legitimacy of ER and SP appeared to be connected with their
less dominating supply network positions. Similar to referent
power, legitimate power seemed to impact sustainability dif-
fusion in the MP and PP supply networks; in the case of SP,
sustainability diffused to a network level although legitimate
power was not observed.
The Relative Importance of Power on Sustainability
Diffusion: Interaction Perspective
Overall, our findings indicated that exerting coercive power
without the existence of other types of power facilitated
sustainability diffusion at dyadic level. In particular, reward
and expert power appeared to facilitate sustainability diffu-
sion beyond the dyad into networks; referent and legitimate
power were also in evidence in some cases but appeared to
play relatively minor roles. Therefore, our analysis suggests
that it is the coexistence of non-coercive power types that
explains the diffusion of sustainability beyond the first tier
into supply networks.
Figure 3 maps our analysis on the conceptual framework
shown earlier. The diffusion of sustainability took place
through interconnected network relationships acting as
conduits and, as indicated most obviously in the ER case,
loosely connected relationships due to supplier independ-
ence prevented a smooth diffusion process; the conduit
between the network actors was weak due to the lack of col-
laboration. The analysis shows that sustainability diffusion

Fig. 3  Conceptual framework: impact of power on sustainability diffusion in supply networks

13
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case…
did not happen without suppliers being willing to adopt the
initiatives launched by their customers, i.e. the focal com-
panies. Some promoted diffusion, while others resisted. The
focal companies did put pressure on suppliers: the cases have
demonstrated how various forms of power can influence the
diffusion process. Where coercive power played a major
role in diffusing sustainability to direct suppliers, i.e. at the
dyadic level, it was instead non-coercive power—in particu-
lar reward and expert power—that helped to diffuse sustain-
ability into wider supply networks. In Fig. 3, we illustrate
the relative importance of power types through the different
sizes of the circles, highlighting the coexistence amongst
these.
Discussion of Findings
Our study investigates the impact of different forms of power
on sustainability diffusion within supply networks. Coercive
power was observed in all four cases, but the ways of wield-
ing coercive power generally did not involve overt threats but
were handled with a degree of subtlety by focal companies
across the cases. Suppliers showed dissatisfaction with focal
companies exerting direct pressure on them for engaging in
sustainability. This approach led suppliers to comply with
the focal companies’ sustainability requirements but not to
diffuse requirements backward to sub-tier suppliers. This
was evident in the ER supply network which stood out as
the case where, in contrast to other cases, coercive power
was used by ER to influence suppliers’ engagement in sus-
tainability without using any non-coercive power: diffu-
sion of sustainability was limited to the dyadic level. The
imbalanced power between ER and its suppliers was key to
ER’s reliance on coercive power, which is consistent with
Touboulic et al. (2014) and Hoejmose et al. (2014). This
also confirms Reuter et al.’s (2010) finding that suppliers
may resist sustainability requirements if they feel these
are imposed on them by their customers: suppliers can act
as resistors or promoters of change (Håkansson and Ford
2002). In line with other research, our cases suggest that
coercive power may have a negative impact on collaborative
relationships (Wycherley 1999; Maloni and Benton 2000;
Fadeeva 2004; Zhao et al. 2008; Nyaga et al. 2013). From
an interaction perspective (Håkansson and Snehota 1995),
this implies that relationships may fail to act as conduits to
the rest of the network. Therefore, we propose:
Proposition 1  Exerting coercive power without the coex-
istence of non-coercive power facilitates sustainability dif-
fusion at dyadic level.
Proposition 2  Exerting coercive power without the coex-
istence of non-coercive power undermines collaborative
1105
relationships and therefore hinders sustainability diffusion
at supply network level.
Apart from the ER case, all the cases provided examples
of different types of non-coercive power being utilized to
diffuse sustainability within supply networks. The find-
ings indicate that reward and expert power had a positive
impact on diffusing sustainability at supply network level.
Existence of incentives and sustainability knowledge and
skills gained from the focal companies encouraged the
suppliers to diffuse sustainability beyond their borders.
This finding is consistent with Vaaland and Håkansson
(2003), Zhao et al. (2008) and Nyaga et al. (2013), who
indicate that expert and reward power positively impact
on relationships and can enhance cooperation amongst
the actors. Similarly, Benton and Maloni (2005) empha-
size that using reward and expert power can lead to posi-
tive outcomes in relationships and can be utilized as an
alternative to coercive power. The exchange of informa-
tion and sharing of rewards are considered as prerequisite
for enhancing collaboration in relationships (Nyaga et al.
2010). Our findings suggest that expert and reward power
can lead to improvement in collaborative relationships and
enhance sustainability between companies and suppliers.
Therefore, we suggest:
Proposition 3  Exerting reward and expert power positively
impacts diffusion of sustainability at supply network level.
Proposition 4  Exerting reward and expert power improves
collaborative buyer–supplier relationships and enhances sus-
tainability implementation.
Referent and legitimate power were exercised in two
cases (MP and PP). Referent power appeared to positively
impact on sustainability diffusion in supply networks where
suppliers aimed to build “green” profiles and advance to a
preferred supplier status. This is consistent with previous
studies that point to the positive impact of referent power
on supplier relationships (Benton and Maloni 2005; Zhao
et al. 2008; Nyaga et al. 2013). These two cases (MP and
PP) also showed examples of the use of legitimate power as
the suppliers believed that the leading positions of the focal
companies gave them the right to make supply network deci-
sions that the suppliers had to accept. This in turn appeared
to induce a positive impact on the diffusion of sustainability
in the supply networks of MP and PP. Referent and legiti-
mate power were not exercised in the SP case study and still
sustainability diffused at supply network level. This finding,
then, suggests that exerting referent and legitimate power
might not facilitate diffusion of sustainability in supply net-
works. Therefore, our findings are inconclusive concerning
the impact of referent and legitimate power on diffusing
13

1106
sustainability in supply networks and we therefore formulate
two alternative propositions:
Proposition 5a  Exerting referent and legitimate power
facilitates the diffusion of sustainability in supply networks.
Proposition 5b  Exerting referent and legitimate power
does not facilitate the diffusion of sustainability in supply
networks.
Theoretical Contributions
Contributions to Sustainable Supply Chain
Management and Power Theory
Our study contributes to SSCM literature through respond-
ing to several calls for empirically examining how sustain-
ability can be implemented and diffused within supply net-
works (Leek 2012; Tate et al. 2013) and, in particular, the
impact of power on sustainability diffusion (Green et al.
1998; Boyd et al. 2007; Pullman et al. 2009; Boons et al.
2012). Previous studies in SSCM tend to focus solely on
power in coercive form and its impact on supplier involve-
ment in sustainability (Hall 2000; Touboulic et al. 2014).
In comparison, little research in SSCM has focused on the
impact of different forms of coercive and non-coercive
power on diffusion of sustainability into supply networks.
Our study advances existing SSCM theory by analysing
the impact of coercive and non-coercive power on diffusing
sustainability in supply networks. Existing studies have iden-
tified the impact of coercive power on engaging suppliers in
sustainability (Amaeshi et al. 2008; Touboulic et al. 2014).
We have formulated a set of propositions to suggest that non-
coercive power plays a more important role than coercive
power in diffusing sustainability beyond dyads into wider
supply networks. In particular, we propose that expert and
reward power facilitate supply network diffusion, whereas
exerting solely coercive power does not facilitate successful
diffusion beyond the dyadic level.
Contributions to Industrial Marketing
and Purchasing Theory
Few studies within the IMP tradition to date have stud-
ied sustainability diffusion in supply networks (Johnsen
et al. 2016). By adopting the IMP Interaction perspective
(Håkansson 1982; Håkansson and Snehota 1995), we uncov-
ered very different perceptions of focal companies and their
suppliers towards the impact of power on sustainability dif-
fusion. Our findings show that the use of non-coercive power
may help to foster collaborative relationships, which enable
these to function as conduits, through which sustainability
13
O. A. Meqdadi et al.
requirements are passed across supply network tiers. In con-
trast to much SSCM research that tends to view suppliers
as passive implementers of focal company commands, this
reinforces the IMP emphasis on understanding the enabling
and constraining role of different actors in implementing
network change (Harrison and Easton 2002; Håkansson and
Ford 2002; Öberg et al. 2012).
Our paper contributes to the IMP Interaction theory by
providing insights into how the diffusion of sustainability
within networks depends on interaction between network
actors (Öberg et al. 2012). The Interaction Model portrays
power as part of the relationship atmosphere between two
dyadic actors (Håkansson 1982). Our study adds to the
understanding of power dynamics within dyads in the con-
text of sustainability implementation. We have developed
propositions regarding the negative impact of coercive
power on collaborative relationships (Proposition 2) which
in turn hinders sustainability diffusion beyond the dyadic
level. In contrast, we also propose that non-coercive power
can facilitate buyer–supplier collaboration (Proposition 4)
and enhance sustainability diffusion at supply network level.
Building on our findings and existing IMP-related contribu-
tions (Öberg et al. 2012; Tate et al. 2013), we suggest that
more intensive interaction between network actors is key
to increasing relationship interconnectedness which in turn
facilitates sustainability diffusion.
Contributions to Corporate Sustainability Theory
Although the focus of our paper is on supply networks rather
than single firms, it is pertinent to consider the implica-
tions of our study for individual firms including what this
means for corporate sustainability. Our study demonstrates
the important role of power and how it might be used to
enforce or encourage sustainability implementation within
and across firms. How power is deployed may in turn be
a critical consideration for the reputation and acceptance
of corporate sustainability initiatives. Firms that can show
evidence and visibility of using non-coercive forms of power
in implementing sustainability initiatives may enhance the
acceptance and legitimacy of their initiatives and reduce the
likelihood of misunderstandings, resistance or tensions from
stakeholders in the initiatives. In other words, a smoother
and more inclusive path to corporate sustainability devel-
opment may be achievable through careful consideration of
how power is wielded and how initiatives are positioned
and communicated to stakeholders. Propositions 3–5 can
be useful for researchers to investigate how non-coercive
power types, specifically referent and legitimate power, can
be deployed by companies to enhance their legitimacy when
launching sustainability initiatives with actors such as sup-
pliers and enhance sustainability implementation across sup-
ply networks.
Power and Diffusion of Sustainability in Supply Networks: Findings from Four In‑Depth Case…
Implications for Sustainable Supply
Networks Practice
Our findings highlight the impact of positive and poten-
tially negative uses of power in diffusing sustainability
within supply networks. We agree with Pagell et al. (2010)
that power exploitation through, for example, sanctions
and punishments to engage suppliers in sustainability can
be seen as unethical. Our findings show that exploitation of
(coercive) power may also simply be ineffective, as it will
only lead to diffusion to direct suppliers. However, there is
a range of other subtler non-coercive ways in which com-
panies can—and should—exert pressure on suppliers and
they need to pursue non-coercive power types for engaging
suppliers in sustainability. For example, providing sup-
pliers with rewards, training, education and support can
pose indirect pressure on suppliers and motivate them to
adopt sustainability and diffuse it into the supply network.
Figure 4 shows how companies can usefully apply a range
of different strategies to diffuse sustainability to suppliers
and beyond into wider supply networks.
Companies may face situations where they are less
powerful than suppliers or they are in interdependent/
independent positions. In this case, due to the limited
impact of coercive power, it is especially important to use
non-coercive power to engage suppliers in sustainability
initiatives. For example, offering rewards to suppliers as a
Fig. 4  Using power to diffuse sustainability in supply networks
1107
compensation for adopting sustainability and convincing
suppliers to associate with the company’s sustainability
initiatives in order to build an image that may differentiate
suppliers in the market.
Conclusion
This study relied on findings from four in-depth case studies
to reveal the impact of power on sustainability diffusion in
supply networks. As power works subtly between companies
and suppliers, the study provided insights into the impact
of power in its various guises on sustainability diffusion in
supply networks. Thus, this study provided a more nuanced
perspective to the prevailing SSCM studies that focus on
coercive power.
Our study shows that the use of non-coercive power
can facilitate sustainability diffusion to supply networks,
whereas relying only on coercive power may hinder and
therefore confine sustainability diffusion to the dyadic level.
We have proposed that the coexistence of non-coercive types
of power may induce a positive impact on collaborative
buyer–supplier relationship, which can therefore act as a
conduit for diffusing sustainability within supply networks.
Hence, suppliers can act as promoters instead of resistors
when companies implement sustainability initiatives in their
supply networks.
13

1108
We relied on an interaction perspective to study net-
work connectivity within dyadic supplier relationships and
wider supply networks. This analysis revealed the work-
ings and impacts of coercive and non-coercive power on
sustainability diffusion in supply networks. The study con-
tributes to the IMP Interaction Approach and SSCM litera-
ture by providing insights into the application of various
types of power to facilitate sustainability diffusion in sup-
ply networks. The intention is that our study will pave the
way for future studies to consider sustainability diffusion
at a network level rather than at the firm or dyadic levels.
Our study also demonstrates the importance of collect-
ing data from multiple supply network actors. The cases
highlight how this is instrumental in revealing discrepan-
cies in the perceptions of the focal companies and their
suppliers especially on the use and impact of power. For
example, suppliers are much more perceptive and sensitive
to coercive power than the focal companies. Therefore, our
findings indicate the importance of collecting supply net-
work-wide data for studies into subtle and sensitive issues,
such as power, and support the application of in-depth case
study methods to reveal supply network phenomena.
Although in most of the data collection for this research
we were able to gather insights from the focal companies
and direct suppliers on sustainability implementation in
second-tier suppliers and beyond, we acknowledge that
a limitation of this research as interviewing more tiers
of suppliers would cast further insights into the impact
of power on sustainability diffusion in supply networks.
For example, investigating a triadic relationship (com-
pany–first-tier supplier–second-tier supplier) could pro-
vide different scenarios on how coercive and non-coer-
cive power may impact sustainability diffusion in supply
networks. Therefore, we advocate that future researchers
conduct in-depth case studies that involve multiple tiers
to investigate the impact of non-coercive power on sus-
tainability diffusion. We also suggest that future research
investigates the interaction between different forms of
power on sustainability diffusion to discover whether some
types of power reinforce each other or whether they induce
conflicts and negative impacts on sustainability diffusion.
Finally, we urge other researchers to further our research
using the IMP Interaction Approach to study, for example,
the processes of adaptation and institutionalization that
occur between actors and how this might facilitate diffu-
sion of sustainability within supply networks.
Compliance with Ethical Standards  interfirm relationships in industrial product channels. Journal of
Conflict of interest  The authors declare that they have no conflict of
interest.
Ethical Approval  This article does not contain any studies with human
participants or animals performed by any of the authors.
13
O. A. Meqdadi et al.
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