Sustainable supply chain management - the influence of local stakeholder expectations in China's agri-food industry

Abstract

Multinational food processing corporations are facing rapid growth in emerging markets like China and a concurrent need for sustainable supply chain management (SSCM). These firms attempt to address supply risk and threat to the triple bottom line through managing suppliers and inputs, and at the same time need to overcome the uncertainty raised by the unfamiliar host environment. An exploratory qualitative case study of two multinational food processing corporations in China finds their SSCM practices are impacted by the nature of the raw material inputs as well as local stakeholder expectations. In particular, government policy and media attention seems to influence the direction and choice of SSCM activities engaged in by the focal firms. Furthermore, the discussion also suggests a possible permanent effect may occur as stakeholder expectations and host country institutions evolve. The implication of this study is that food processors preparing to enter emerging markets should be aware that local stakeholder expectations may affect operations significantly more than previously expected. As such, these firms need to carefully evaluate their operations in the host market and seek balance between SSCM practices and local stakeholder expectations. This study extends existing research on SSCM, exploring practices among the agri-food industry in a developing economy, and points out a theoretical extension to the existing sustainable purchasing portfolio matrix.