How Small and Medium Enterprises in North Carolina Respond to Supply Chain Pressure for Sustainable Practices

Abstract

More companies are beginning to manage the environmental impacts of their supply chain in addition to their own operations. Supply chain pressure has been shown to be generally effective at increasing practices with lower environmental practices (sustainable practices) in suppliers. However, questions have been raised about exactly how small and medium-sized enterprises (SMEs) in supply chains respond to pressure from business customers for sustainable practices and what factors influence their response. This study develops a framework for understanding what factors influence how SMEs respond to a variety of drivers of sustainability, which is then adapted to guide an empirical study of how SMEs respond to supply chain pressure for sustainable practices. A survey of 100 companies across North Carolina found suppliers generally comply with or exceed requirements from business customers. The role of supply chain pressure in suppliers' decisions to exceed requirements needs further research. The study also found evidence that supply chain pressure can act as a ceiling on what practices companies adopt by causing suppliers to abandon practices that exceeded customer requirements and were not recognized or rewarded. Care needs to be taken in designing supply chain management strategies to avoid supply chain pressure being counterproductive at increasing proactive SME sustainability.