This document summarizes the key elements of supply chain management theory discussed in academic literature. It identifies three main components of SCM theory: description of concepts and scope, prescriptions for practice, and identification of trends. However, it finds that SCM theory remains fragmented and idealistic. A central challenge is the gap between the integrated, collaborative vision of SCM in theory versus the reality of practice where barriers exist. The document calls for further work to develop SCM as a discipline through more rigorous testing of theories against practice.

1. Supply chain management:
theory, practice and future
challenges
John Storey and Caroline Emberson
The Open University Business School, Milton Keynes, UK, and
Janet Godsell and Alan Harrison
Cranfield School of Management, Cranfield, UK
Abstract
Purpose – The purpose of this paper is to critically assess
current developments in the theory and
practice of supply management and through such an assessment
to identify barriers, possibilities and
key trends.
Design/methodology/approach – The paper is based on a three-
year detailed study of six supply
chains which encompassed 72 companies in Europe. The focal
firms in each instance were
sophisticated, blue-chip corporations operating on an
international scale. Managers across at least four
echelons of the supply chain were interviewed and the supply
chains were traced and observed.
Findings – The paper reveals that supply management is, at
best, still emergent in terms of both theory
and practice. Few practitioners were able – or even seriously
aspired – to extend their reach across the

2. supply chain in the manner prescribed in much modern theory.
The paper identifies the range of key
barriers and enablers to supply management and it concludes
with an assessment of the main trends.
Research limitations/implications – The research presents a
number of challenges to existing
thinking about supply strategy and supply chain management. It
reveals the substantial gaps between
theory and practice. A number of trends are identified which it
is argued may work in favour of better
prospects for SCM in the future and for the future of supply
management as a discipline.
Practical implications – A central challenge concerns who could
or should manage the supply
chain. Barriers to effective supply management are identified
and some practical steps to surmount
them are suggested.
Originality/value – The paper is original in the way in which it
draws on an extensive systematic
study to critically assess current theory and current
developments. The paper points the way for
theorists and practitioners to meet future challenges.
Keywords Supply chain management, Suppliers, Strategic
management
Paper type Research paper
Introduction
“Supply management” can be viewed as both an emergent field
of practice and an
emerging academic domain. Neither perspective is fully mature
but each has

3. considerable promise. The future progress of each will be
enhanced and indeed is
ultimately dependent upon the other. Hence, the purpose of this
paper is to take stock
of developments in theory and practice to date and to identify
barriers and possibilities.
Moreover, given the off-remarked acknowledgement of the
crucial importance of the
behavioural and people dimension but the relative neglect of
this in any substantive
form, we give special attention to this aspect. Supply (chain)
management is ultimately
about influencing behaviour in particular directions and in
particular ways. The
underlying logics, drivers, enablers and barriers merit and
require close attention.
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0144-3577.htm
IJOPM
26,7
754
International Journal of Operations &
Production Management
Vol. 26 No. 7, 2006
pp. 754-774
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570610672220

4. A number of analysts have already sought to comprehend and
substantially redraw
the boundaries of, and the essential nature of, this domain of
theorising and practice. For
example, in one of the more coherent and developed attempts at
a reconceptualisation,
Harland et al. (1999) present the case for a new expanded body
of knowledge and field of
practice which they suggest should be labelled “supply
strategy”. The rationale behind
this is the intent to improve upon the more limited concepts of
“operations management”
and “operations strategy”. They suggest that supply strategy can
embrace logistics,
operations management, purchasing and supply management,
industrial relationship
marketing and service management. But, they suggest it is not
just an aggregation of
these: the underpinning idea is to exploit “relational strategies”
in a holistic way.
When approached in such a way the field merges imperceptibly
into the strategic
management literature concerned with strategic partnerships
(Storey, 2002). Strategic
partnerships can be formed “horizontally” and “vertically” – the
latter being expressions
of supply or channel relationships. Closer bonds are:
. . . what separates partnerships from a more transaction based
set of exchanges which are
limited in scope and purpose (Mohr and Spekman, 1994, p.
140).
The essential point is to identify and describe a domain of

5. theory and practice where
there is potential for some additional gain by reconceptualising
it in a particular way.
The important idea captured at least in part by “supply strategy”
(or “strategic supply
management”) is that a mode of thinking and action which
encompasses, and seeks to
exploit, interlocking relationships could potentially be used as a
powerful lever for
competitive advantage (Ketchen and Giunipero, 2004).
Drawing upon an extensive three year research project which
involved a number of
supply chains encompassing a total of 72 companies in Europe,
we seek in this paper to
shed new light on the theory and practice of strategic supply
management. We will
argue that while there is an emerging body of theory which
ostensibly offers a relatively
coherent and compelling prescriptive narrative, predominant
practice is at considerable
odds with this conceptualisation. We will also reveal the
substantial reasons why such a
discrepancy exists and why it is likely to persist in most value
chains for some time to
come. It is certainly possible to find transient instances of
impressive practice; but we
maintain and show that these are vulnerable to erosion. Thus,
while the field of supply
(chain) management has promise in terms of its idealist allure,
in practice it will remain
under-developed unless new modes of skilful intervention are
developed.
If supply chain management is to mature as a discipline there
needs to be further

6. progress in clarifying its domain, its central problems, its core
components, its theories
and its theoretical map (Tranfield and Starkey, 1998; Croom and
Romano, 2000; Storey
et al., 2005). In addition, we need to attend to how this work in
theory-building can be
assisted by drawing on the study of practice. Under this latter
heading we include most
centrally how managers’ own cognitive maps, expectations and
goals are constituted
and what barriers stand in the way of the realisation of the
idealistic notions such as
“seamless end-to-end pipeline management” (Storey et al.,
2005). Thus, a further
refinement of the objectives of this paper can be stated thus to:
. identify and clarify the core conceptual building blocks of the
emergent
discipline;
. examine these conceptual building blocks in relation to
empirical data in order to
develop a view on the fit between theory and practice; and
Theory, practice
and challenges
755
. identify the future challenges that these revealed outcomes
pose for supply chain
management as both a practice and a discipline.
The paper is structured in four parts. The first summarises the

7. key elements in supply
chain management theory; the second explains the methods by
which we investigated
supply chains in practice; the third identifies some of the
crucial features of supply
chain management practice; and the fourth discusses the
implications of the
comparisons between theory and practice. In particular, this
final section identifies key
issues meriting special attention in the future.
The theory of supply management
It is apparent that much of the focus in the increasingly
voluminous literature on
supply strategy, operations strategy and supply chain
management is directed at
meaning making. Often this comprises assertions about what it
essentially “is”. The
precepts of SCM as currently portrayed are a mixture of three
elements: description,
prescription and the identification of alleged trends.
Description
Debates here relate to scope and focus. Some academics openly
declare that they use
the terms supply chain management and purchasing
“synonymously” (Stuart, 1997).
Pragmatically there may be much to commend this but the
identification with one
function and one process seems to miss much of the idea of
supply chain or network
management. Others evidently have a more expanded notion in
mind, for example, the
lean supply approach focused on the “purchasing activities of
vehicle assemblers and
the supply activities of the component (and component system)

8. manufacturers”
(Lamming, 1996, p. 183). Accordingly, Lamming argues, for the
merits of the broader
concept of “supply management”. Some purchasing specialists
see SCM as about
developing relations with suppliers (Giunipero and Brand,
1996), while others say that
good supplier management is not enough; there is an additional
requirement for a
wider, more integrated, all-encompassing perspective embracing
all processes from
sourcing through make and transportation and on to
merchandising to final customers
(Davis, 1993).
In the battle over definitions and descriptions, part of the
agenda is undoubtedly an
attempt to re-position functions and quasi-professions such as
operations management
and logistics. We return to this point later. Rather than try here
to determine the precise
construct, we acknowledge the value of adopting a
constructivist approach – that is
exploring how actors themselves engage in meaning-making.
Through this latter
approach we have the opportunity to explore how relevant
actors construe their prime
objectives, the scope of their activities, the allocation of
responsibilities, the barriers to
desired practice and the enablers. Accepting the value of this
approach does not deny
the contribution of theory and model-building of the kind more
conventionally found
within supply management.
Prescription

9. Problems arise when the shift from description to prescription is
relatively covert.
Beneficial attributes are often attributed to certain features. For
example, one definition
suggests that:
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756
. . . any chain or network connected through electronic means
can be considered virtual if it
facilitates efficient and effective flows of physical goods and
information in a seamless
fashion (Chandrashekar and Schary, 1999, p. 27).
Some prescriptions stem from observed superior practice in
particular domains.
The IMVP prescription deriving from Toyota and its suppliers
leading to the lean
production formula is arguably of this type. Another example
might be the prescription
for mass customisation and agility (Pine, 1993; Goldman et al.,
1995; Meier and
Humphreys, 1998).
Prescription can be valuable, but for the discipline to advance
there needs to be also
rigorous testing – and serious exploration of the causes of
failure.
Trends identification
The literature on supply chain management tends to move rather

10. imperceptibly between
description, prescription and trend identification. Key trends
which have been identified
include, most notably, “cooperation” rather than competition, a
shift from the
“antagonistic” model to a collaborative model (Matthyssens and
Van den Bulte, 1994;
Carr, 1999), the increasing use of supplier-evaluation tools
(Carr, 1999), a trend towards
supplier management, and so on. While the alleged trends may
be similar, different kinds
of assessments are sometimes made. Some authors suggest an
irresistible trend while
others note the relatively limited take up to date (Skjoett-
Larsen, 1999; Kemppainen and
Vepsalainen, 2003).
Another facet of the trends dimension is the concern with the
“impacts” of SCM on
various functions such as purchasing (Andersen and Rask, 2003;
Wisner and Tan, 2000),
the impacts on suppliers required by retailers to replenish stock
based on actual sales
(Abernathy et al. 2000), and the increasing use of tools and
techniques such as “Quick
Response” (QR) and “Efficient Consumer Response” (ECR). A
trend, possibly mainly
restricted to the auto industry, is towards a pattern of
differentiation in the supply chain
with, for example, a few “system integrators” at first tier supply
level (Senter and Flynn,
1999).
While most trend analysis implies progress – for example, Hines
et al. (2004) –
Fisher (1997) claims that despite all the technology and the new

11. techniques, supply
chain performance in many instances has “never been worse”.
The reason, he suggests,
is that managers lack a framework for determining which
methods are appropriate.
This implies the need for managers to adopt far more of a
contingent rather than a
“best practice” approach. It further suggests a need to fit supply
chain characteristics
to product strategy. Similarly, partnership may not always be
the right approach in
every circumstance (Lambert et al. 1996).
The underlying claimed “trend” is that supply management
consciousness is
accelerating up the corporate agenda and there does appear to be
some evidence for
this. For example, many companies have appointed supply chain
directors and there
has been talk of competition between supply chains rather than
simply competition
between individual firms (Christopher, 1998). Perhaps even
more prevalent has been
the trend towards the conscious examination and rationalisation
of supplier networks
and the development of “collaborative” or “partnership”
relationships between buyers
and suppliers (Balakrishan, 2004). Such initiatives have come to
be seen as of strategic
significance by general managers rather than simply tactical
gains by functional
specialists (Storey, 2002).
Theory, practice
and challenges

12. 757
But these examples point to a problem for supply management
as a potential
discipline. There is already a reasonably well-developed field
concerned with
buyer-supplier behaviour (or purchasing) and this has its own
set of core concerns.
Many of these concerns relate to the choice of supplier,
managing relationships with
suppliers and so on (Monczka and Petersen, 1998). But this sub-
field rarely attends to the
wider vision of the supply chain management concept with its
notions of end-to-end
pipeline management and the seamless, efficient, flow of
information and
materials/products through the whole network or chain – from
source, through make,
and on to delivery to the end customer. Thus, while there are
certainly overlaps between
the dyadic buyer-supplier behaviour domain and the supply
chain (or network) concept
there are also some substantial points of difference.
So, in the light of the discussion so far, where does the
emergent discipline of supply
(chain) management stand today? Academic disciplines
normally have core sets of
concerns or problems, but the variability and uncertainty within
supply management
of its core concerns is one of the problems it faces (Ho, 2002).
Our review of the literature on supply chain management
suggests that the field is

13. characterised by idealism and fragmentation. It uses
overlapping terminology which is
in turn drawn from multiple-disciplinary bases. Croom and
Romano (2000) show how
11 different subject literatures – including, for example,
purchasing, logistics,
marketing and organisational behaviour – have contributed to
the supply chain
domain. Despite recent attempts to map the terrain (Chen and
Paulraj, 2004; Giannakis
and Croom, 2004; Mills et al., 2004), the field remains
disparate. None the less, when
comparisons are made across the literatures there are some basic
shared “visions”
which help form an underpinning “big idea” – or a number of
interlocking big ideas
which help constitute and describe supply chain management. In
Table I, we draw
upon a wide literature in order to enumerate and categorise
these core ideas.
This dichotomous representation suggests of course a rather
stark set of
alternatives. It nonetheless represents widely held assumptions
about the “paradigm
shift” to partnering, strategies of co-operation, and SCM.
The unit of analysis itself – the supply “chain” – is itself a
matter of some
contention. Sometimes the internal supply chain is seen as a
suitable arena;
alternatively the dyadic relation between buyer-supplier is the
unit of analysis, or a
chain or a wider network. Then, within the confines of any of
these, intervention may
be directed at efficiency improvements of existing processes,

14. the redesign of interfaces,
or (more rarely one assumes) radical restructuring of the supply
chain components
(De Treville et al., 2004). Critiques of the discipline of supply
chain management
suggest that it is atheoretical and relies too much on
prescription and description
(Cox, 1999; Croom and Romano, 2000).
As Table I suggests, there are a number of interlocking ideas
and propositions
which constitute the theory and prescription of supply
management. The central
underpinning ideas relate to alignment and integration. Whether
sub-components or
services are made or bought, the prescription is that the
interface between each
value-add phase should be subject to careful planning and
management. Other
important related concepts include core competences, supplier
segmentation, strategic
purchasing and supplier integration (alignment; supply-base
management, and
reduced supplier base). Other fundamental ideas include win-
win relations between
partners in the chain, goal congruence, avoidance of
opportunistic behaviour, supplier
IJOPM
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758
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38. o
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47. t
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Table I.
Core concepts
Theory, practice
and challenges
759

48. development, strategic alliances, variants of vendor managed
inventory (VMI), and the
sharing of risks and rewards. Beyond these core concepts, there
are some points of
difference depending on the particular approach to supply chain
management that is
proselytised.
Make or buy is a crucial preconditioning decision which
determines the need for the
amount of external relationship management. How much
difference it really makes
whether the supply chain extends across different ownership
structures rather than a
single vertically integrated organisation is a moot point and is
yet to be subject to
sufficient systematic empirical investigation. It would be fair to
contend that the
question of where to locate the decoupling points in order to
address issues of
replenishment exists relatively independently of the ownership
make/buy decision. The
whole issue of relationship development across partners is
however highly connected
with the nature of the independent units. But again, the precise
nature of the practical
managerial challenge to forging win-win collaborative
partnerships across the supply
chain irrespective of whether the partners are officially internal
or external to the focal
organisation is itself also relatively under-explored. Some
analysts focus entirely on
internal tensions, for example, between the marketing and
logistics functions (Ellinger,
2000), while others ignore this and focus only on the external
(Cox, 1999).

49. Much of the theory in supply management is based on idealised
schemas of optimal
routes and quantities for demand fulfilment when considered
from a whole-network or
chain perspective. These idealised schemas may vary in detail
when advanced by
various proponents but there are a number of relatively common
elements. These
common elements are constituted by a number of technical
possibilities. Table II
summarises the characteristics underpinning the ideally
managed supply chain.
Nestled beneath the dominant big idea of supply chain
management as a whole
(i.e. the notion of an aligned and possibly integrated network of
processes from end
customer to source and design of product and service) are a
number of sub-theories.
These include for example lean (Womack et al., 1990), agile
(Goldman et al. 1995) and
market segmentation (Gattorna, 1998). The latter leads to the
concept of a
differentiated approach to supply chain provision (Fisher,
1997). These ideas have
fuelled recent development (Cigolini et al., 2004; Lee, 2002;
Randall et al., 2003) and
critique (David et al., 2002).
Usually remaining implicit in the core component ideas shown
in Tables I and II
and in the sub-theories are a number of issues and activities.
These can be understood
1 Seamless flow from initial source(s) to final customer

50. 2 Demand-led supply chain (only produce what is pulled
through)
3 Shared information across the whole chain (end to end
pipeline visibility)
4 Collaboration and partnership (mutual gains and added value
for all; win-win; joint learning
and joint design and development)
5 IT enabled
6 All products direct to shelf
7 Batch/ pack size configured to rate of sale
8 Customer responsive
9 Agile and lean
10 Mass customisation
11 Market segmentation
Table II.
Idealised supply
management
characteristics
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760
as a series of mainly unanswered and yet crucial questions: who
is responsible for
“managing” these activities? Just because supply chains may
exist it does not
necessarily follow that they are actually managed. Even if they
are managed in parts, it
does not necessarily mean that they are managed across the

51. whole spectrum. How do
the actors reach-through the various echelons in order to
achieve the desired aligned
goals? What levers do they pull? What barriers do they
encounter and how do they
seek to overcome these? These particular questions are
especially pertinent given that,
as has already been noted, most definitions of the field are
based on metaphors
(pipelines, chains, networks) rather than “objective entities”
(Saunders, 1994).
Managing objective entities is difficult enough, but how do
managers cope with and
engage with the metaphorical forms? These, and similar
questions, which have so far
been massively neglected in the literature to date, formed the
heart of our empirical
research project.
Researching current supply practice
As we said at the outset, one of our central objectives was to
examine the theory and
practice of supply chain management. Hence, to complement the
summary of supply
chain theory in the previous section we set out to compare that
with contemporary
practice. In order to map current practice we designed a large
study which explored a
range of supply chains across multiple echelons. Notably, in the
core part of the
study we delved into the supply chain management practices of
six “blue chip” firms
(and their suppliers and customers), which we will refer to as
Pharmaco,
Householdproductsco, 4PLDrinks, TelevisionCo, ElectronicsCo
and 4PL Electronics.

52. These cases were selected on the basis that, according to
information in the public
domain, these players were likely to exhibit leading-edge sector
practice. A summary
of the six case environments is shown in Table III.
Pharmaco is a large manufacturer and retailer of
pharmaceuticals and related
healthcare products; HouseholdproductsCo is a manufacturer of
a range of skincare
and beauty products; 4PL Drinks is a division of a global
logistics corporation which
specialises in third and fourth party logistics in partnership with
a number of alcoholic
and non-alcoholic drinks manufacturers; TelevisionCo designs
and makes a whole
range of domestic electrical goods including televisions of both
high and low
specification; ElectronicsCo designs and supplies sophisticated
telecommunications
network equipment; and 4PL Electronics is a joint venture
between a major logistics
provider and a computer equipment manufacturer. As the sales
figures in the third
column of Table III reveal, these were all substantial
businesses. The companies listed
in the fourth column indicate the number of supply chain
partners that were also
researched. The final column shows the number of interviews
conducted in each case.
Company Sector Sales Companies Interviews
Pharmaco Process £4.3 bn 4 29
HouseholdproductsCo Process £115 m 6 48
4PL Drinks Transport £30 m 6 31

53. TelevisionCo Electronics $2.4 bn 8 27
ElectronicsCo Electronics $4.1 bn 2 40
4PL Electronics Transport $1.7 bn 6 19
Table III.
Summary of the six case
environments
Theory, practice
and challenges
761
Interviewees were selected according to the key supply chain
processes they managed
in each of the firms. We were primarily interested in the
evidence provided by directors
and middle managers covering all supply processes (plan,
source, make and deliver).
Interviews were conducted in the UK, Ireland, the Netherlands,
Germany and Italy.
The duration of each interview was usually between one and a
half hours to two hours.
All interviews were recorded and transcribed. Some key
informants were interviewed
on multiple occasions. We undertook extensive site tours and
collected large amounts
of documentary materials relevant to SCM. The project
commenced in 2001 and
continued into 2004. The scope of the six supply chains that we
studied was plotted,
based on an adapted version of the New and Payne (1995)
supply chain taxonomy.

54. This is shown in Figure 1.
From this body of research we have started to compile a picture
of current supply chain
practice, and have identified a number of organisational and
behavioural barriers to the
realisation of the more idealistic depictions of the “seamless,
end to end” chain that should be
responding to customer demand. Despite the considerable
interest among practitioners in
the idea of supply chain management – and this interest was
certainly found among many
of our respondents – its practice usually differs markedly from
the idealised prescriptions
identified in the previous section. The research into practice
also helped us identify the
nature of the more significant (real-life) trends in supply chain
management today.
We interrogated supply chain practice through a series of four
fundamental questions:
(1) Who was “managing the supply chain” in practice? (That is,
which individuals
or groups are actually engaged in such practice?)
(2) What type of “supply chain” activities were they managing?
(3) What were the key enablers and inhibitors to this process?
(4) What external factors were driving the strategic imperative
of supply chain
management?
Figure 1.
Scope of the six supply

55. chains studied
Miners / raw
material extractors
Raw material
manufacturers
Component
manufacturers
Final product
manufacturers
Consolidators Retailers
Physical distribution
& warehousing
Recycling
Final consumer
ElectronicsCo
supply chain
HouseholdproductsCo supply chain
4PL drinks supply chain
4PL electronics supply chain
PharmaCo supply chainTelevisionC supply chain
IJOPM
26,7

56. 762
This kind of dual theoretical and empirical approach is in tune
with the point made by
Croom and Romano (2000, p. 75) that:
. . . the inductive-deductive dichotomy is best addressed
through the constant reflection of
empirical against theoretical studies.
Results: supply chain practice(s)
The description of results is structured into four-sections, each
one capturing the
findings from one of the fundamental questions used for
exploring the supply chain.
Who is “Managing” the supply chain?
The holistic concept of “seamless, end to end” supply
management – as distinct from a
series of units or functions engaging in sub-optimal behaviour –
is clearly laudable.
However, it implies some considerable effort to reach through
the supply chain: upstream
beyond the first tier suppliers, and downstream beyond a focal
firm’s customers – the
so-called “arcs of integration” (Frohlich and Westbrook, 2001).
Alternatively, it would
require an unusual degree of co-ordination between tiers. Rarely
asked by the proponents
of such “integrated” supply chains is who precisely is meant to
be doing this “managing”?
In practice we found very few instances where any such active
agent could be identified.
The modal pattern was a number of practitioners who sought to

57. manage parts of the
supply chain. These parts were normally circumscribed by
legacy practice and also by the
expectations of other senior colleagues who defended “their”
functional areas of
responsibility. As the results in Table IV demonstrate, it was
still more common to have a
logistics director than a supply chain director – usually with a
focus on outbound logistics.
With the shift to outsourcing there had been a significant
reduction in the scale and
scope of in-house manufacturing facilities. Where these
remained, the procurement of
parts was predominantly a procurement and/or purchasing
function responsibility, the
exception being TelevisionCo, where supplier base management
had been recently
integrated into their already cross-functional, market-orientated
supply teams.
Manufacturing and assembly operations were managed by
separate manufacturing
functions. Normally, even people with the title “Supply Chain
Director” did not actually
manage the whole chain nor did they usually expect, or seek, to
do so. They were
confined to inward or outward logistics. In manufacturing their
writ rarely extended to
production planning and in retail they were usually not able to
interfere too strongly in
the affairs of the trading directors.
Supply chain theory would suggest that the supply chain should
be managed from
end-to-end. Our research found very few examples of this but it
did illuminate the barriers

58. to its achievement in practice. There were one or two instances
where very senior directors
carrying multiple responsibilities were able to transgress these
norms but these were
exceptional. Even where 3PL or 4PL companies were hired to
take charge of supply chain
management they tended to restrict their activities – or have
them restricted – to limited
segments of the chain. Even the tightly-coupled logistical
operations between 4PLCo
Electronics and their customer did not include the provision of
information about products
in the process of manufacture – the first alert was given when a
product was ready to be
shipped from the factory gate. Management of the supply chain
was analogous to a relay
race, with responsibility being passed from one company of
actors to another, as
illustrated by the array of management mechanisms found.
Theory, practice
and challenges
763
C
o
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p
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101. ea
r
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102. n
a
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a
d
b
ee
n
a
ss
ig
n
ed
b
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th
e
cu
st
o
m
er
Table IV.
Supply chain

104. “management”
mechanisms
IJOPM
26,7
764
Scope of managed supply chain activities
Reaching out across the supply chain and “interfering” in
suppliers’ operations was
still relatively unusual. Exceptions related to major third party
or sector-level
initiatives such as ECR in supermarket retailing – though even
these appeared to be
limited to a focus on a few strategically significant first tier
suppliers. The assumption
in some of the literature that supply chains are managed by
powerful customers who
influence suppliers to conform may be broadly correct in the
motor industry where
there are a few international large assemblers, but it is a
generalisation that does not
apply in many other sectors. Indeed, in many instances the
reverse may hold true
(Bates and Slack, 1998). Even “in-sector” ECR generalisability
is problematical. For
example, our case research revealed clear “push backs” even
from the champions of
ECR: powerful brand holders sometimes resisted customer-led
attempts at supply
chain management.
Despite this evident lack of holistic SCM, we did find evidence

105. of internally-focused
integration attempts, particularly within globally dispersed
supply chains. Such efforts
tended both to simplify control, whilst reducing costs and cycle
times within internal
logistics activities. For example, TelevisionCo had embargoed
any more than two
cross-continent airfreight moves during component
manufacturing operations which
were distributed around the globe.
Attempts to improve internal functional co-ordination ranged
from the appointment
of senior managers with designated responsibilities to the
nomination of operational
individuals with specific accountability for selected boundary-
spanning activities.
Between these extremes, the institution of formal cross-
functional teams was used by
some to improve pipeline integration.
In certain cases, sophisticated key performance indicators
(KPIs) were agreed and
monitored between SC partners. Often in the form of balanced
scorecards, these measures
were weighted to drive SC practice in a particular direction.
Customer-orientated measures
were balanced against internal priorities. The weaknesses of
such formalised performance
measurement systems were compensated for by pragmatic
exception policies.
Both ElectronicsCo and TelevisionCo produced (among other
things) two major
different products: on the one hand, “off-the-shelf” products,
and on the other “fully

106. customised systems”. Off-the-shelf products tended to be high
volume, low variety and
low value items that would flow through the logistics
infrastructure (including a range
of distribution channels) to the end customer. Fully customised
systems, on the other
hand, were very high value, highly customised systems made
and, in the case of
ElectronicsCo installed, to specific customer requirements.
ElectronicsCo employed
project managers to ensure that the systems were installed to
customer requirements
both in terms of specification and time-line, and they even set-
up dedicated warehouses
around the world to facilitate installation as required. The scope
was similar for
Householdproductsco supplying washing and bathing products
to a wide range of
retail customers. However, the main difference here was that
Householdproductsco did
not have contact with the end consumer. The narrowest (though
paradoxically the
most clearly “managed”) scope was the 4PLElectronics supply
chain. The scope was
limited to the outbound logistical operations of their close
partner in Europe. This 4PL
joint venture company did not even have information about
products in the process of
manufacture – their first alert was when a product was ready to
be shipped from
the factory gate. In consequence of the typically constrained
scope of intervention
Theory, practice
and challenges

107. 765
the notion of “seamless end-to-end pipeline management” was
far beyond actual
practice – and indeed some distance even beyond aspirations.
Enablers and inhibitors
The research found that a number of factors can either serve to
enable or inhibit supply
chain management depending on the context and the way in
which the factor is utilised.
The case research identified three core enablers and inhibitors,
the understanding of
which is central to turning supply chain rhetoric into reality.
These are: transparency
of information and knowledge; supply chain behaviour; and
performance
measurement. The results in relation to each are considered in
turn.
Transparency of information and knowledge. Most of our cases
illustrated a move
away from forward prediction based on short-term, EPOS data.
Rather, consolidated
analysis of base trends over the medium-to-long term were used
to provide
forward-looking forecasts. These were then overlaid with
promotional activities, an
approach adopted, for example, by a shared customer of
Householdproductsco and 4PL
Drinks.
When judged in these terms we found, at best, pockets of good
practice rather than

108. whole-firm exemplars. Rich information was largely found to be
restricted to
specifically identified users in particular relational contexts.
For example, extended
collaborative planning, forecasting and replenishment practices
had been instigated
with one internal customer within one of the market-orientated
supply teams at
TelevisionCo. Even where this occurred, the persistence of such
privileged
arrangements was vulnerable to erosion, revision and
withdrawal. In another case, a
supplier to Householdproductsco had championed a Supplier
Managed Inventory
system with their major customer. Replenishment activities
were driven by customer
production schedules. The customer, however, seemed keener to
abandon the system
than work through emergent issues.
A further forecasting refinement was attempted by one
upstream, component
supplier. An application was introduced to amalgamate
component sales’ forecasts at
system-level. This provided a more accurate prediction of future
sales, since aggregated
data could be compared against external market trends. The
impetus behind this project
was customers’ tendency to over-forecast their requirements to
secure supply in this
rapidly growing marketplace, when they knew manufacturing
capacity was scarce.
Supply chain behaviour. Predominantly, traditional inter and
intra-organisational
boundaries remain mainly intact. Dyadic buyer-supplier

109. relationships remained the
mainstay of supply interactions. These were supplemented by a
variety of support
roles – whether replenishment or product development-
focussed.
Clear power differentials existed within buying decision-making
units, particularly
within retail organisations. There was substantial evidence of
attempts to divorce
traditional elements of buyer-supplier negotiation from
“collaborative” activities.
Customer-focussed key-account management structures had
evolved to “face up” to
major customers.
However, such so-called “man-to-man marking” on the
customer side, often led to
greater intra-organisational complexity. The most complex
network of supply
relationships we studied was found within TelevisionCo.
Twenty-six parallel business
line teams were responsible for executing order fulfilment
activities for their respective
markets. Each of these cross-functional management teams was
responsible for
IJOPM
26,7
766
the sourcing, capacity planning and operational control of
technologically similar

110. semiconductor products through a common configuration of
manufacturing and test
operations. However, managing the intra-relationships between
these organisational
units and an externally-facing sales organisation (to provide a
single point of customer
contact) raised internal co-ordination challenges.
Where boundary-spanning specialist “in-plants” where used,
these tended to be in
“adjoining” organisations (i.e. supplier-customer). There was a
wide variety of roles,
from project analysts working on information system co-
developments and data
analysts handling promotional evaluations, to goods despatch
handlers and specialist
merchandisers. Whilst the employing companies’ declared clear
benefits from these
interactions, the scope of individual roles was often constrained
and precarious.
Promotional activities, increasingly common within UK
multiple retailers, created
additional challenges. These planned events commonly
generated an uplift from base
demand of 70-100 per cent. Such demand stimulation required
cohesive supply chain
planning if on-shelf availability was to be sustained. However,
such was the cut and
thrust of commercial competition that promotions were
frequently not pre-announced
to branded suppliers for fear of a competitor seizing the
initiative. Instead, regional
safety stocks were held in an attempt to underpin supply
continuity.

111. Performance measurement. The predominant method of
performance measurement
was the use of KPIs that cascaded down from top level business
objectives and
measures, through the organisation into a series of functional
measures. The
alternative method found in just two cases was the use of a
balanced score card (BSC),
which, in the case of 4PL Co Electronics, was sophisticated.
The main results in
relation to performance measurement used in SCM are shown in
Table V.
However, even the BSC was cascaded down from business
objectives to functional
objectives. Pharmaco made a conscious effort to try and keep
the BSC for different
activities at the “highest” level possible. For instance, the BSC
for distribution was for
an entire region and not at individual Regional Distribution
Centre (RDC) level.
However, the management at the RDC found it to be an
inadequate tool for managing
the operation of the RDC and the regional manager in
conjunction with the RDC
managers were in the process of developing a hybrid system that
measured both RDC
and regional performance. Furthermore, the cascade, whilst
seeming to be eminently
sensible in linking metrics, has the pitfall that the sum of the
parts does not equate to
the whole. All too often, metrics pursued at a functional level
for the benefit of
functional targets, jeopardised the performance of the supply
chain as a totality. A good
example was found in 4PLCo Electronics. The performance

112. measurement system
employed in this supply chain was exemplary in many respects.
Metrics were collected
at all stages in the supply chain – daily, weekly, monthly and
quarterly – and were
actively reviewed through telephone calls, face-to-face meetings
and business review
meetings. The format and content was identical across the
supply chain and the
measures were used to drive performance improvement and also
reward. And with
reward, here-in lies the danger. There has been a shift over the
last ten years or so
towards metrics that are specific, measurable, achievable,
realistic and timely
(SMART). This has led managers (particularly middle
managers) to expect targets that
are wholly within their span of control. This in turn leads to
functionally driven
behaviour. 4PL Electronics had measures that showed that they
consistently achieved
their 3-day delivery target. However, in reality, for the sample
studied, the large
Theory, practice
and challenges
767
C
o
m
p

113. a
n
y
T
y
p
e
o
f
m
et
ri
c
sy
st
em
C
o
n
si
st
en
t
a
p

114. p
li
ca
ti
o
n
a
cr
o
ss
th
e
S
C
R
ev
ie
w
p
er
io
d
P
h

115. a
rm
a
co
B
S
C
u
se
d
a
cr
o
ss
th
e
b
u
si
n
es
s
N
ee

116. d
fo
r
re
v
ie
w
a
ff
ec
ti
n
g
co
n
si
st
en
cy
o
f
u
sa
g

117. e
In
te
rn
a
l
ec
h
el
o
n
s
M
o
n
th
ly
H
o
u
se
h
o
ld
p

118. ro
d
u
ct
sc
o
C
a
sc
a
d
e
o
f
K
P
Is
N
o
M
o
n
th
ly

119. 4
P
L
D
ri
n
k
s
V
a
ri
o
u
s,
cu
st
o
m
er
-s
p
ec
ifi
c
se

120. rv
ic
e
le
v
el
a
rr
a
n
g
em
en
ts
N
o
A
s
sp
ec
ifi
ed
b
y

121. th
e
cu
st
o
m
er
T
el
ev
is
io
n
C
o
B
a
la
n
ce
d
sc
o
re

122. ca
rd
w
it
h
in
ea
ch
b
u
si
n
es
s
li
n
e
li
n
k
ed
to
d
iv

123. is
io
n
a
l
st
ra
te
g
y
a
n
d
ta
rg
et
s
Y
es
,
fo
r
ce
rt
a

124. in
k
ey
m
ea
su
re
s
W
ee
k
ly
,
m
o
n
th
ly
,
q
u
a
rt
er
ly

125. E
le
ct
ro
n
ic
sC
o
C
a
sc
a
d
e
o
f
K
P
Is
Y
es
,
fo
r

126. m
ea
su
re
s
co
-o
rd
in
a
te
d
b
y
4
P
L
W
ee
k
ly
,
m
o
n

127. th
ly
,
q
u
a
rt
er
ly
4
P
L
C
o
E
le
ct
ro
n
ic
s
C
u
st
o

128. m
er
d
ev
el
o
p
ed
th
ei
r
o
w
n
m
et
ri
c
sy
st
em
th
a
t

129. w
a
s
a
d
ev
el
o
p
ed
v
er
si
o
n
o
f
th
e
B
S
C
Y
es
,

130. h
ig
h
ly
co
-o
rd
in
a
te
d
b
y
4
P
L
D
a
il
y
,
w
ee
k

131. ly
,
m
o
n
th
ly
,
q
u
a
rt
er
ly
Table V.
Performance
measurement
characteristics
IJOPM
26,7
768
majority of orders were delivered after the date the customer
had originally requested,
and on average they were 16 days late. 4PL Electronics were

132. only measured on the part
of the supply chain they were in control of and not on what the
customer actually
wanted.
Drivers
Supply chain management is becoming of increasing strategic
importance, and the
fieldwork concurred with the literature in identifying
globalisation, outsourcing and
fragmentation as three major drivers. Evidence to support each
of these drivers is
summarised in Table VI which shows that, for all cases,
evidence of each practice was
found to a greater or lesser extent.
However, an additional driver was also uncovered that did not
feature so
predominantly in the literature – market polarisation. It could
be argued that this
potentially has the most significant effect of all. For Pharmaco,
Householdproductsco
and TelevisionCo the mid-high markets that they traditionally
served have
disappeared and been replaced by a polarised high-end/low-end
market profile.
ElectronicsCo has such a broad range of products that these
naturally fall into polar
extremes of the volume: variety continuum yet the supply chain
strategy used to
deliver these products is not significantly different. This has
serious implications for
supply chain management.
Challenges for SC management and future prospects
The challenges facing SCM as theory and practice stem from

133. their interplay and
misalignment. The research reported here reveals the substantial
gaps between theory
and practice. One central challenge is to the very idea of
“managing” the supply chain.
Who could and should have this responsibility? Arguably one
ideal would be a separate
function independent of the existing array of functions which
are partially but not fully
involved. Such a developed function might act as the arbitrator
of supply and demand. A
number of our respondents envisaged that this development
could be supported by the
maturation of the 4PL concept. Alternatively, some
commentators suggest the need to
redefine the purchasing role (Mehra and Inman, 2004). A
related challenge is to increase
the scope of SCM involvement – the “arc of integration”
(Frohlich and Westbrook, 2001).
This can only be achieved if the enablers identified above are
harnessed more effectively
– the greater transparency of information and knowledge, the
formation of appropriate
relationships, and the design and use of appropriate
measurements.
So what are the prospects for the future of SCM? There do
appear to be some trends
working in favour of a higher profile and a more developed role
for supply
management. But we suggest they fall well short of the more
full-blown claims of many
of the advocates. We suggest that business models and supply
chain practices are
changing in tandem. The most important elements are as
follows.

134. First, supply chain management can be seen as part of a wider
set of trends
involving outsourcing, cross-boundary working, new
organisational forms
characterised by flattened hierarchies, teams, empowerment and
so on rather than
rigid command and control (Ruigrok et al., 1999). These trends
present an opportunity
for the development of SCM.
Second, the trend towards outsourcing and the increasing
importance of intangibles
heightens the need for, and the potential of, supply chain
management. As contract
Theory, practice
and challenges
769
C
o
m
p
a
n
y
G
lo
b

135. a
li
sa
ti
o
n
O
u
ts
o
u
rc
in
g
F
ra
g
m
en
ta
ti
o
n
M

136. a
rk
et
p
o
la
ri
sa
ti
o
n
P
h
a
rm
a
co
R
ef
o
cu
se
d
re
ta

137. il
o
p
er
a
ti
o
n
s
in
U
K
b
u
t
in
cr
ea
si
n
g
ly
so
u

138. rc
in
g
fr
o
m
a
b
ro
a
d
C
lo
su
re
o
f
in
te
rn
a
l
m
a
n

139. u
fa
ct
u
ri
n
g
fa
ci
li
ti
es
a
n
d
p
ro
d
u
ct
s
in
cr
ea

140. si
n
g
ly
so
u
rc
ed
ex
te
rn
a
ll
y
S
K
U
p
ro
li
fe
ra
ti
o
n

141. A
im
fo
r
m
id
-h
ig
h
en
d
o
f
m
a
rk
et
.
U
n
d
er
co
m

142. p
et
it
io
n
fr
o
m
lo
w
co
st
co
m
p
et
it
io
n
,
e.
g
.
si

143. m
il
a
r
C
h
ri
st
m
a
s
g
if
t
a
t
si
g
n
ifi
ca
n
tl
y
lo

144. w
er
p
ri
ce
H
o
u
se
h
o
ld
p
ro
d
u
ct
sc
o
D
ev
el
o
p

145. m
en
t
o
f
g
lo
b
a
l
b
ra
n
d
s.
S
o
u
rc
e
m
a
n
y
co

146. m
m
o
d
it
y
b
a
se
in
g
re
d
ie
n
ts
fr
o
m
a
b
ro
a
d
S

147. u
b
-c
o
n
tr
a
ct
th
e
m
a
n
u
fa
ct
u
re
o
f
so
m
e
p
ro

148. d
u
ct
s
S
K
U
p
ro
li
fe
ra
ti
o
n
H
is
to
ri
ca
l
m
id
d

149. le
m
a
rk
et
d
is
a
p
p
ea
re
d
.
A
im
in
g
fo
r
m
id
-h
ig
h

150. en
d
m
a
rk
et
4
P
L
D
ri
n
k
s
G
lo
b
a
l
lo
ca
ti
o
n
w

151. a
s
a
d
is
ti
n
ct
iv
e
p
ro
d
u
ct
fe
a
tu
re
,
in
st
ri
n

152. si
c
to
cu
st
o
m
er
v
a
lu
e
O
u
ts
o
u
rc
in
g
w
a
s
u
se

153. d
ju
d
ic
io
u
sl
y
fo
r
a
w
id
e
v
a
ri
et
y
o
f
re
a
so

154. n
s:
to
b
a
la
n
ce
u
n
ce
rt
a
in
d
em
a
n
d
,
to
p
ro
m

155. o
te
re
g
io
n
fl
ex
ib
il
it
y
;
to
re
d
u
ce
co
st
s
C
u
st

156. o
m
er
-s
p
ec
ifi
c
p
a
ck
a
g
in
g
,
ex
cl
u
si
v
e
p
ro
d

157. u
ct
s;
sp
ec
ifi
c
tr
a
n
si
t
o
r
m
er
ch
a
n
d
is
in
g
p

158. a
ck
co
n
fi
g
u
ra
ti
o
n
s
In
cr
ea
si
n
g
si
g
n
ifi
ca
n

159. ce
o
f
U
K
g
ro
ce
ry
m
a
rk
et
sh
a
re
s,
w
h
en
co
m
p
a
re

160. d
to
tr
a
d
it
io
n
a
l
o
ff
-t
ra
d
e
m
a
rk
et
p
la
ce
.
C

161. a
te
g
o
ry
co
m
p
et
it
io
n
fo
r
m
er
ch
a
n
d
is
in
g
sp
a

162. ce
T
el
ev
is
io
n
C
o
G
lo
b
a
l
su
p
p
ly
ch
a
in
d
ev
el
o

163. p
ed
to
m
in
im
is
e
m
a
n
u
fa
ct
u
ri
n
g
/a
ss
em
b
ly
co

164. st
S
tr
a
te
g
ic
a
ll
y
u
se
o
u
ts
o
u
rc
in
g
to
p
ro
v
id

165. e
a
d
d
it
io
n
a
l
fl
ex
ib
il
it
y
a
n
d
se
cu
ri
ty
S
K

166. U
p
ro
li
fe
ra
ti
o
n
S
h
o
rt
en
in
g
li
fe
cy
cl
es
M
a
tu
re

167. m
a
rk
et
fr
a
g
m
en
te
d
in
to
h
ig
h
a
n
d
lo
w
en
d
.

168. U
se
d
to
se
rv
e
m
id
d
le
.
G
ro
w
th
m
a
rk
et
s
tu
rb
u
le

169. n
t,
u
n
ce
rt
a
in
a
n
d
w
it
h
ra
p
id
te
ch
n
o
lo
g
ic

170. a
l
co
n
v
er
g
en
ce
E
le
ct
ro
n
ic
sC
o
G
lo
b
a
l
su
p

171. p
ly
ch
a
in
w
it
h
re
g
io
n
a
l
d
is
tr
ib
u
ti
o
n
O
u

172. ts
o
u
rc
e
a
ll
n
o
n
-c
o
re
a
ct
iv
it
ie
s
in
cl
u
d
in
g

173. lo
g
is
ti
cs
S
K
U
p
ro
li
fe
ra
ti
o
n
C
u
st
o
m
is
ed
sy
st

174. em
s
a
n
d
m
er
ch
a
n
d
is
ed
p
ro
d
u
ct
s
a
re
a
t
ex

175. tr
em
es
o
f
v
o
lu
m
e:
v
a
ri
et
y
co
n
ti
n
u
u
m
4
P
L

176. E
le
ct
ro
n
ic
s
G
lo
b
a
l
in
b
o
u
n
d
,
re
g
io
n
a
l

177. o
u
tb
o
u
n
d
A
s
a
4
P
L
a
re
d
u
ty
b
o
u
n
d
to
o

178. u
ts
o
u
rc
e
so
m
e
3
P
L
a
ct
iv
it
ie
s
In
cr
ea
si
n
g
re

179. q
u
ir
em
en
t
fo
r
cu
st
o
m
is
ed
se
rv
ic
es
D
u
e
to
li
m

180. it
ed
sc
o
p
e
o
f
m
a
n
y
su
p
p
ly
ch
a
in
s
d
if
fi
cu
lt

181. to
o
p
er
a
te
a
t
h
ig
h
-e
n
d
a
n
d
a
d
d
v
a
lu
e
Table VI.

182. Evidence of SC drivers
IJOPM
26,7
770
manufacturing becomes the norm so the value added role of
brand owners who have
valued relations with customers are recognised as having
important intangible assets
and skills.
Third, the trend towards fragmentation and variety in product
and service offerings
necessitates greater thought and skill in managing decoupling
points and
postponement of final product composition. Hence, the drivers
impelling attention to
crucial issues of alignment are certainly present but this does
not mean that the task is
given to supply chain specialists. This indeed appears to be the
source of much
confusion; simply because there is an apparent need for
someone to take a helicopter
view of the whole terrain does not mean that this happens in
practice. There are
undoubtedly issues of professional status and standing intruding
here. In most firms
the supply chain function (in whatever guise it happens to
adopt) rarely has the
political standing to allow it take command of these critical
strategic issues.

183. Fourth, globalisation necessitates greater attention to logistics
and to other
component elements of supply chain management. The same
arguments noted above
in relation to fragmentation also recur here. The need is evident;
the power to respond
is problematic and uncertain. The dispersion of nodes in the
supply chain across the
continents offers new business opportunities to freight handling
companies and third
party logistics providers. But these interventions cannot be
described as constituting
“supply chain management” in the holistic senses described in
the early part of this
paper. There are wider forces at play – outsourcing, global
sourcing, volatile customer
demand, heightened competition, shorter product life cycles,
and customisation. Then
there is the shift to virtuality – leased merge centres, contract
manufacturers,
innovators who market a concept and have others make it and so
on. The pretence that
“supply chain management” is a mode of intervention or a self
contained discipline
which is effectively grappling with these forces is an
exaggeration. This is not an arena
where a neatly managed activity is underway. That said, the
change of mindset
triggered by the constellation of forces as described in this
paper and elsewhere could
provide the opportunity for sophisticated and capable managers
to engage in practices
which approximate to the vision as described above. There
could be a
professionalisation opportunity here, or at least a pathway for
further occupational

184. development.
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192. 99.
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Corresponding author
Professor John Storey can be contacted at: [email protected]
IJOPM
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An empirical examination of the
relationship between business
strategy and socially responsible
supply chain management
Stefan Hoejmose
School of Management, University of Bath, Bath, UK
Stephen Brammer
Warwick Business School, Coventry, UK, and

193. Andrew Millington
School of Management, University of Bath, Bath, UK
Abstract
Purpose – This paper aims to explore the effect of business
strategy on socially responsible supply
chain management (SR-SCM).
Design/methodology/approach – This study draws on data from
178 UK-based companies, and
340 buyer-supplier relationships. A novel data collection
approach is used, which minimizes social
desirability and common methods bias, to capture socially
responsible supply chain management.
The data are analysed through a set of OLS regressions.
Findings – Business strategies significantly influence socially
responsible supply chain
management. Low-cost producers largely neglect their social
responsibilities in the supply chain.
In contrast, firms pursuing differentiation strategies are
considerably more engaged with these issues,
partly because they have better supply chain processes.
Practical implications – Practitioners should carefully consider
the fit between strategic position
and level of engagement with SR-SCM, since our results
emphasise the relationship between SR-SCM
and business strategy. Proactive engagement with SR-SCM,
however, also implies sound supply chain
processes, which must also be aligned with business strategy.
Policy-makers should consider the low
engagement with SR-SCM of low-cost producers and the
implications for SR-SCM in cost sensitive and

194. competitive global markets.
Originality/value – This is the first systematic cross-sectional
study of the relationship between
business strategy and socially responsible supply chain
management (SR-SCM). These results suggest
that there is a clear relationship between the strategic position
of the firm and their SR-SCM practices.
These results contribute to the on-going debate on relationships
between strategy and supply chain
management, and the emerging debate on the relationships
between strategy and SR-SCM.
Keywords Business strategy, Supply chain, Social
responsibility, Supply chain management,
United Kingdom
Paper type Research paper
1. Introduction
Recent work has identified a clear relationship between
business strategy and supply
chain practices (González-Benito, 2010; Cousins, 2005) and
there is considerable
evidence that firm success is dependent on the match between
supply chain practices
and business strategy (Baier et al., 2008; Tamas, 2000).
However, while earlier studies
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0144-3577.htm
Received 26 September 2011
Revised 1 June 2012

195. 4 September 2012
Accepted 16 November 2012
International Journal of Operations &
Production Management
Vol. 33 No. 5, 2013
pp. 589-621
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443571311322733
Business
strategy and
SR-SCM
589
suggest that social responsibility may be closely related with
the firm’s business
strategy (McWilliams and Siegel, 2001; Van De Ven and
Jeurissen, 2005), relatively
little is known about the relationship between business strategy
and responsible
supply chain management (Preuss, 2009; Park and Dickson,
2008). Firms are coming
under increasing pressure from a wide range of stakeholders,
including regulators,
customers, shareholders and NGOs to implement responsible
supply chain practices

196. (Andersen and Skjoett-Larsen, 2009; Ciliberti et al., 2009;
Pedersen, 2009). Nonetheless,
recent evidence suggests that competitive and cost pressures are
forcing firms to
pursue low-cost strategies with potentially negative
consequences for their socially
responsible behaviour (Barrientos and Smith, 2007). This study
investigates the
relationship between business strategy and SR-SCM, within an
empirical study which
examines both the direct relationship between business strategy
and SR-SCM,
and the extent to which SR-SCM is mediated by the relationship
between business
strategy and supply chain processes.
Earlier studies have highlighted the role of business strategy in
shaping both
firm- and supply-level activities (Ward et al., 1996). Business
strategy should therefore
be considered a starting point for the assessment of capabilities
needed by suppliers
(Watts et al., 1995), and practitioners should establish supply
chain activities that
reflect business strategy (Cox, 1999). Empirical evidence has
also shown that business
strategies shape attitudes, engagement, type and level of
cooperation with suppliers
(Cousins, 2005; Narasimhan and Carter, 1998). This suggests
that business strategy
has a fundamental role in shaping a firm’s investment in supply
chain partners,
which in turn has been associated with improved social
responsibility (Carter, 2005;
Koplin et al., 2007; Spence and Bourlakis, 2009). As such, SR-
SCM may also reflect

197. overall supply chain sophistication, which may itself be
influenced by the firm’s
business strategy.
Although responsible supply chain management has been
subject to considerable
research in recent years (Awaysheh and Klassen, 2010; Lee and
Kim, 2009; Svensson, 2007),
the relationship between business strategy and SR-SCM remains
largely unexplored.
Recent studies have shown that responsible supply chain
practices are driven by top
management support (Park and Stoel, 2005), organisational
values (Carter and Jennings,
2002), regulation (Walker and Brammer, 2009), customer
expectations (Carter and
Jennings, 2004), and a desire to reduce risk (Welford and Frost,
2006). Others have viewed
SR-SCM through a specific conceptual lens, such as power-
dependency (Millington, 2008),
complexity theory (Matos and Hall, 2007), institutional theory
(Darnall and Edwards,
2006), and stakeholder theory (De Bakker and Nijhof, 2002;
Maignan et al., 2002). While
some authors have mentioned the linkage between firm strategy
and responsible supply
chain management (Preuss, 2009; Cruz and Boehe, 2008) the
quantitative literature is
restricted to a single study of the apparel and footwear industry
that focuses on the
implications of strategy for the relationship between partnership
behaviour and fair
labour management. The results provide tentative support for a
relationship between
strategy and fair labour management (Park and Dickson, 2008).

198. This study investigates the direct and indirect impact of strategy
on the
implementation of SR-SCM processes. Following existing
research in the field
(Cousins, 2005; Van De Ven and Jeurissen, 2005), we capture
business strategy through
Porter’s (1980) generic strategies. We focus on SR-SCM,
because relatively little is known
about the nature and extent of engagement with social issues in
the supply chain,
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590
and because social issues represent a significant threat and
opportunity from both a
firm (Phillips and Caldwell, 2005) and supply chain (Carter,
2005) perspective.
The definition and composition of SR-SCM has been
extensively discussed in the
literature (Awaysheh and Klassen, 2010; Klassen and Vereecke,
2012). Consistent
with earlier studies we define SR-SCM as the integration of
social issues within the
supply chain (Carter and Rogers, 2008) and suggest that it is
concerned with those
issues, which lie within the “control of operations and supply
chain managers”
(Awaysheh and Klassen, 2010, p. 1248). The focus of SR-SCM
is, therefore, on social
issues in the workplace (e.g. working conditions, human rights,

199. safety and diversity)
rather than the external manifestations of social responsibility
(e.g. philanthropy,
community involvement) which lie within broader definitions of
corporate social
responsibility (Dahlsrud, 2008). As such, our central concern is
with the processes
through which buyers manage socially responsible supply chain
performance, rather
than the measurement of social performance in suppliers.
Klassen and Vereecke (2012)
suggest that “process” is concerned not only with the social
issues that are addressed
but crucially with how they are addressed (Klassen and
Vereecke, 2012). In the context
of our research, “process” captures the extent to which buyers
implement and engage
with SR-SCM practices (Lee, 2010), while also emphasising
their commitment to such
practices and processes (Pedersen, 2009; Pedersen and
Andersen, 2006).
This study is based on a cross-sectional analysis of 340 buyer-
supplier relationships
drawn from semi-structured interviews with 178 UK-based
companies. Both the head of
procurement and a procurement manager with responsibility for
particular supply chain
relationships were interviewed, in order to minimise common
methods bias, and we also
develop and adapt a novel data collection approach (Bloom and
Van Reenen, 2007) in
order to capture SR-SCM processes in the buyer and reduce
social desirability bias.
Our study makes three contributions to the literature. This is the

200. first systematic
study of the relationship between business strategy and SR-
SCM. We investigate the
relationship between business strategy and SR-SCM, drawing on
earlier studies of the
relationship between business strategy and supply chain
management (Cousins, 2005),
and contribute to a growing literature on the relationship
between strategy and
corporate social responsibility (Burke and Logsdon, 1996;
Porter and Kramer, 2006;
Van De Ven and Jeurissen, 2005). Second, we distinguish
between the direct effect of
business strategy on SR-SCM, where SR-SCM is undertaken as
a direct consequence
of business strategy, and the indirect effect, which flows from
the relationship between
business strategy and the sophistication of supply chain
practices in the firm.
This allows us to investigate the extent to which the
implementation of SR-SCM is
dependent on the presence of pre-existing supply chain
processes and structures, which
may be dependent on the broad strategic position of the
company. Third, we focus on
the practice and implementation of SR-SCM within a broad
cross-sectional sample.
Thereby complementing earlier studies, which have often
focused on policy rather than
implementation (Pedersen and Andersen, 2006; Preuss, 2009;
Winstanley et al., 2002)
and are largely restricted to firm and industry case studies (Park
and Dickson, 2008).
The paper is structured as follows: the next section provides the
reader with

201. a literature review covering the role of business strategy and its
influence on both
supply chain management and social responsibility. We then
develop a set of testable
hypotheses drawn from earlier conceptual and empirical
literature. Following on
from this, we present our methodology, which incorporates both
qualitative and
Business
strategy and
SR-SCM
591
quantitative methods in order to reduce social desirability and
common methods bias.
Next we present our statistical analysis, before we initiate a
discussion of our findings
and their implications for researchers, practitioners and policy-
makers.
2. Theoretical background
A growing body of literature has noted the relationship between
supply chain practices
and business strategy (Cousins, 2005). As such, it is clear that
the supply chain function
cannot be viewed in isolation from the firm and its competitive
advantage (Knudsen, 2003,
p. 720; Watts et al., 1995). This, in turn, suggests that
organisational goals guide supply
chain practices (Power, 2005), and that the two must be
coordinated (Tamas, 2000).

202. Narasimhan and Carter (1998) argue that supply chain strategy
must support product
and market characteristics, in order for firms to achieve
competitive advantages.
They observe that firms, whose competitive position is
differentiation/customisation, tend
to prioritise suppliers who are characterised by product
innovation, technological
leadership, total quality management and internal organisational
integration. In contrast,
firms pursuing traditional and manufacturing-oriented strategies
(low-cost) prioritise
rapid volume change, fast delivery, low prices and external
organisational integration
(Narasimhan and Carter, 1998). Similarly, Cousins (2005)
suggests that cost-focused firms
generally consider the role of the supply chain function to be
one of cost reduction, whereas
firms pursuing differentiation strategies view supply chain
management as a central
function of the firm. As a consequence, firms pursing
differentiation strategies engage
more actively with their suppliers and develop highly
collaborative relationships with
them, in order to align customer requirements and develop joint
market strategies
(Cousins, 2005). Baier et al. (2008) find that firms that focus on
innovation emphasise
supplier management, talent management, integration and core
processes, compared to
low-cost firms who prioritise information and knowledge
management, rather than
cross-functional collaboration. Furthermore, Baier et al. (2008)
show that if there are
inconsistencies between specific business strategies and supply
chain practices, firms will

203. consistently underperform. Such findings support earlier work
by González-Benito (2007)
who argues that the fit between business strategy and
purchasing strategy significantly
moderates the relationship between purchasing efficacy, as
measured by the fit between
purchasing strategy and capabilities, and firm performance. As
such, empirical research
suggests that business strategies are associated with distinctive
supply chain practices,
where the engagement with suppliers appears to be stronger and
deeper when the firm
pursues differentiation strategies. In these cases, focal firms
invest and develop suppliers
in order to improve their effectiveness and to gain potential
collaborative advantages.
In contrast, low-cost producers emphasise the supply chain as a
source of cost savings and
invest less in supplier development.
Earlier literature has also emphasised the link between business
strategy and
corporate social responsibility (Porter and Kramer, 2011;
Lamberti and Lettieri, 2009).
Recent work suggests that corporate social responsibility may
be an important
component of business strategy and that the benefits of CSR
may be influenced
by the alignment between business strategy and CSR strategy.
Thus, in the first case,
socially responsive activities have been used to signal a positive
corporate image
(McWilliams and Siegel, 2001; Bagnoli and Watts, 2003),
enhance corporate reputation
(Brammer and Millington, 2005; Fombrun and Shanley, 1990);
and influence consumer

204. choices and purchasing intentions (Siegel and Vitaliano, 2007;
Mohr and Webb, 2005).
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592
While, in the second case, recent conceptual studies suggest that
the alignment of
socially responsible activities, with business strategy, will
enhance the strategic
benefits of CSR (Sirsly and Lamertz, 2008; McElhaney, 2009;
McManus, 2008).
Although the relationship between business strategy and SR-
SCM remains relatively
under researched (Gallear et al., 2012), SR-SCM forms the basis
of a significant emerging
literature. While earlier, largely case based studies, focused on
social performance in
suppliers (Egel-Zanden, 2007; Yu, 2008), and the consequences
of irresponsible social
practices for buyers (Roberts, 2003; Phillips and Caldwell,
2005), recent research is
increasingly concerned with the processes through which buyers
manage social issues in
the supply chain, rather than the social performance of suppliers
(Awaysheh and
Klassen, 2010; Klassen and Vereecke, 2012). This “process”
literature has provided
considerable insight into the role of capabilities (Klassen and
Vereecke, 2012), barriers
and enablers (Faisal, 2010; Walker et al., 2008; Walker and

205. Jones, 2012),
supply chain structure (Awaysheh and Klassen, 2010), inter-
organizational resources
(Gold et al., 2010), and third-party certification standards
(Ciliberti et al., 2009; Lee and
Kim, 2009). Other work has investigated inter-buyer
cooperation (Lu et al., 2012) and the
impact of institutional factors on the adoption of socially
responsible supply chain
practices (Park-Poaps and Rees, 2010). With respect to the
relationship between business
strategy and SR-SCM recent work has acknowledged that SR-
SCM may form
a component of business strategy, since socially responsible
supply chain performance
may be expected to influence reputation, image, consumer
choices and stakeholder
management (Tate et al., 2010). Similarly, Carter and Rogers
(2008) suggest that socially
responsible supply chain issues must be interwoven with the
strategy of the firm. Boehe
and Cruz (2010) further argue that if firms intend to use social
responsibility as
a differentiator, they must ensure that such issues apply to the
supply chain, in order to
both protect and enhance corporate image and reputation.
Finally, recent studies
have also argued that engagement with SR-SCM may be
contingent upon the firm’s
business strategy (Park and Dickson, 2008; Lim and Phillips,
2008), because different
priorities and incentives influence the propensity to invest in
socially responsible
practices (Van De Ven and Jeurissen, 2005).
3. Conceptual framework and hypotheses

206. This study is concerned with the buyer’s SR-SCM processes,
and we view the level of
implementation and engagement with SR-SCM as being
contingent upon a firm’s
business strategy. In this context, business strategy is concerned
with the positioning of
the firm to achieve a competitive advantage over competitors
(Dess et al., 1995; Schendel
and Hofer, 1979). In this section we start by presenting our
conceptual model, which
shows the direct and indirect effects of business strategy on SR-
SCM, and then develop
a set of testable hypotheses that relates the different types of
business strategy
to expected level of SR-SCM engagement.
Our conceptual framework (Figure 1) draws upon previous work
in both the supply
chain and social responsibility literature. From the supply chain
literature, we draw on
the work of Cousins (2005), but also the work of González-
Benito (2007) and
Narasimhan and Carter (1998). These studies have two common
features with this
paper. On the one hand, they explicitly relate business strategy,
in particular
differentiation and low-cost, to supply chain activities. On the
other hand, they clearly
acknowledge that supply chain activities are contingent upon
business strategy and
Business
strategy and
SR-SCM

207. 593
that there needs to be an alignment between the two in order to
maximise competitive
performance. From the social responsibility literature, we draw
on the work of Burke
and Logsdon (1996), Dentchev (2004), McWilliams and Siegel
(2001), Van De Ven
and Jeurissen (2005) and Porter and Kramer (2006, 2011), who
argue: first, that social
responsibility and social initiatives can be a source of
competitive and first-mover
advantage (Sirsly and Lamertz, 2008); and second, that business
strategy and firm
positioning influence the propensity of firms to engage in
socially responsible and
discretionary activities.
In order to understand the role of business strategy on SR-SCM,
we draw on the
work of Porter’s (1980) generic strategies, and explicitly
analyse how low-cost
(cost leader), innovation (differentiation), and niche (focus)
influence SR-SCM. We use
Porter’s generic strategies because they are based on cross-
industry observations and
have been subject to significant empirical testing (Dess et al.,
1995; Miller and Dess,
1993). In this paper, we argue that a low-cost strategy is
negatively related to SR-SCM
(Park and Dickson, 2008; Lim and Phillips, 2008). In contrast, a
differentiation
(innovation) strategy is positively related to SR-SCM
(McWilliams and Siegel, 2001;

208. Van De Ven and Jeurissen, 2005). We also argue that a niche
strategy is negatively
related to SR-SCM given its narrow market scope (Pedersen,
2009).
Given this body of literature, our conceptual framework (Figure
1) suggests that
business strategy influences social responsibility in the supply
chain through a direct
relationship between business strategy and SR-SCM. At the
same time, our framework
indicates that this relationship may be mediated by the level of
supply chain
sophistication, where business strategy influences a firm’s
attitudes and investment
in the supply chain, which in turn influences SR-SCM.
4. Hypothesis development
The direct effect of business strategy on SR-SCM
Following the work of Van De Ven and Jeurissen (2005), we
argue that low-cost
producers neglect SR-SCM because it is costly and not core to
their business strategy.
We then argue that firms that pursue differentiation strategies
implement and
develop SR-SCM practices in order to protect their reputation,
improve stakeholder
relations, and enhance their risk management strategies (Husted
and Allen, 2001;
McWilliams and Siegel, 2001).
Furberg and Schullström (2008) argue that many firms refrain
from investing
in social responsibility because it is costly. This is echoed by
Van De Ven and Jeurissen
(2005), who argue that when the market environment is fierce,

209. firms tend to pursue
Figure 1.
SUPPLY CHAIN
PROCESS
SOPHISTICATION
H5
H1, H2, H3
H4
BUSINESS STRATEGY
SOCIALLY
RESPONSIBLE SUPPLY
CHAIN MANAGEMENT
IJOPM
33,5
594
low-cost strategies. Under such conditions firms will have “no
financial room to bear
the costs” associated with social responsibility engagement, as
it will result in “costs
structurally higher than those of competitors” (p. 306). This in
turn has implications
for the involvement with SR-SCM of low-cost producers, who
seek to exploit all sources

210. of cost advantage and tend not to engage in discretionary
activities.
Evidence from the US apparel and footwear industry has also
shown that firms that
focus on price “have lower degrees of two-way communication,
conflict resolution, and
shared responsibility for resolving labor issues with their
suppliers” (Park and Dickson,
2008, p. 52). Park and Dickson (2008) suggest that this may
either be because low-cost
producers are less concerned with social responsibility or
because they actively exploit
labour in search of low prices. Therefore, low-cost firms are
unlikely to manage labour
issues properly in the supply chain as this would increase costs.
Such findings have also
been found in the UK, where the NGO “Labour Behind the
Label” (2006) reviewed five
low-cost retailers, and noted that their supply chains were
characterised by pressure to
lower prices and increase flexibility. This study also revealed
that low-cost retailers often
have “fickle” relationships with suppliers and a tendency to
change suppliers frequently,
while also making them bid against one another. This “reduce
the incentive for suppliers
to make real efforts to comply” with retailers’ codes of conduct
(Labour Behind the Label,
2006, p. 37). Similarly, the UK’s Competition Commission
(2000) investigated the
behaviour of supermarkets and their relationship with suppliers.
Their findings indicated
that some of the largest supermarkets in the UK, many of which
pursue low-cost
strategies, exploit suppliers and, as a result of their power over

211. suppliers, often force them
to bear cost increases in the supply chain. There is, therefore,
evidence to indicate that
social responsibility is not only neglected in low-cost sourcing
contexts (Andersen and
Skjoett-Larsen, 2009; Boyd et al., 2007; Gugler and Shi, 2009;
Hughes, 2011), but that
implementing social requirements is problematic for many
businesses because they
operate in highly competitive environments, where the focus is
on price (Barrientos and
Smith, 2007) and where such pressures suppress a collaborative
buyer-supplier approach
to social responsibility (Lim and Phillips, 2008). This suggests
that firms that pursue
low-cost strategies neglect SR-SCM. Therefore, it is
hypothesised that:
H1. A low-cost strategy will be negatively related with SR-
SCM.
SR-SCM may be used as a mechanism that supports a
differentiation strategy, or as
a differentiation strategy per se. In this paper our focus is on
the former rather than
the latter. Earlier studies suggest that social responsibility can
contribute to a credible
image (McWilliams and Siegel, 2001), and an improved
corporate reputation
(Husted and Allen, 2007; Waldman et al., 2006). Because
credibility and reputation are
important to firms with differentiation strategies, as they often
produce branded goods,
it has been suggested that a stronger engagement with social
responsibility enables
these firms to manage exposure to risk (Fan, 2005; Power,

212. 2005), such as negative
media attention and consumer boycotts (Fan, 2005; Van De Ven
and Jeurissen, 2005).
Indeed, firms that pursue differentiation strategies will often
use socially responsible
activities, along with other marketing activities, such as
advertising, as a signalling
tool (McWilliams and Siegel, 2001). Van De Ven and Jeurissen
(2005) argue that firms
that pursue differentiation strategies will engage more
proactively with social
responsibility, compared to low-cost producers. They argue that
for firms pursuing
differentiation strategies, the role of social responsibility is not
only to prevent or limit
Business
strategy and
SR-SCM
595
negative media and consumer attention, but also to complement
existing business
strategy, by improving product image, signalling quality and
trustworthiness
(McWilliams and Siegel, 2001; Van De Ven and Jeurissen,
2005). Therefore, from
a market-based perspective, social responsibility can add value
to the firm’s existing
activities, and help enhance its differentiation strategy, which
may allow the firm to
charge a premium for its products (Avram and Kahne, 2008).

213. Focusing specifically on SR-SCM, Cruz and Boehe (2008) note
how social
responsibility in the supply chain is increasingly being used as a
product
differentiation strategy, but that its success relies on the
promotion of activities and
recognition by consumers. Similarly, it also appears that
managers make an explicit
link between SR-SCM and business strategy because, as Preuss
(2009) reports, the most
common instrumental justification for adopting an ethical
sourcing code is with
reference to a differentiation strategy or reputational gains.
Crane (2001) and Palazzo
and Basu (2007) also note the potential for enhancing products
market positioning
through the use of social responsibility and SR-SCM. Taken
together, this suggests
that firms that pursue differentiation strategies will proactively
engage in SR-SCM,
and therefore we hypothesis:
H2. A differentiation strategy will be positively related with
SR-SCM.
For firms that operate in narrow markets and pursue a niche
strategy, engagement
with social responsibility has remained relatively unexplored,
and their engagement is
somewhat uncertain (Van De Ven and Jeurissen, 2005; Weitzner
and Darroch, 2010).
Similarly, the supply chain literature has often ignored how
niche firms develop supply
chain strategies (Baier et al., 2008; Cousins, 2005), and it is
therefore problematic to

214. propose a specific relationship between niche strategy and SR-
SCM. On the one hand,
their SR-SCM may be highly proactive if they are targeting a
socially conscious
consumer group (Weitzner and Darroch, 2010); while on the
other, SR-SCM may
be something that is not a part of the firm’s strategy (Weitzner
and Darroch, 2010).
Weitzner and Darroch (2010) note the difficulties in positioning
niche firms in a socially
responsible context, as there are many niche strategies, and
there will inevitably be
conflicts between some of them. However, niche strategies are
often associated with
relatively high cost structures (Galbraith and Schendel, 1983),
with informal and
reactive decision making processes (Miller and Toulouse,
1986). As such, it may be
argued that the typical niche firms do not have the necessary
resources, or expertise, to
implement SR-SCM, which often requires formal processes and
a proactive approach.
It may therefore be suggested that firms pursuing niche
strategies, as with small and
medium sized companies, will find it difficult to fully engage
with the SR-SCM concept
and face a set of unique challenges when attempting to
implement them in their supply
chains (Ciliberti et al., 2008; Russo and Perrini, 2010).
Therefore, the narrower the
market the less we should expect firm to invest in SR-SCM
(Pedersen, 2009) and hence
it is hypothesised that:
H3. A niche strategy will be negatively related with SR-SCM.