The impact of buying power on corporate sustainability - The mediating role of suppliers’ traceability data

Abstract

Companies are pressured by regulatory authorities, consumers and other stakeholders to improve their environmental performance. Within globalized supply chains, corporate sustainability performance is inevitably influenced by the behaviour of suppliers. Gathering reliable traceability data from suppliers (e.g. regarding raw materials) is an important, yet difficult issue to contribute to (measuring) environmental sustainability. Most studies overlook the importance of sharing traceability data, and lack a holistic approach to the environmental, social and economic dimensions of sustainability. Our study sets focus on whether traceability data exchange within the dyadic relationship between the focal firm (buyer) and its major suppliers positively correlates with the environmental, social and economic dimensions of sustainability. Furthermore, we investigate the effects of reward and coercive power use on traceability data and on corporate sustainability dimensions. The findings of a survey among 136 purchasing professionals in the manufacturing industry confirm the positive effect of sharing traceability data on the buyer's corporate sustainability performance. The use of reward power encourages suppliers to share traceability data, while coercive power does not influence on information sharing. Within buyer-supplier relationships, buyers should be aware of the importance of reward power in the process of traceability information sharing.

Keywords

• Corporate sustainability
• Traceability data
• Buying power
• Information sharing