NGOS’ INITIATIVES TO ENHANCE SOCIALSUSTAINABILITY IN THE SUPPLY CHAIN: POVERTYALLEVIATION THROUGH SUPPLIER DEVELOPMENT

PROGRAMS

JORGE A. RODR�IGUEZEscuela Superior Politecnica del Litoral

CRISTINA GIM�ENEZ THOMSEN AND DANIEL ARENASESADE - Ramon Lull University

MARK PAGELLUniversity College Dublin

This research studies how nongovernmental organizations (NGOs) canimplement supply-management practices for poverty alleviation. Theresearch inductively builds a theoretical framework from a nested casestudy, which includes one NGO and six firms implementing supplierdevelopment (SD) programs. The framework suggests a set of resourcesthat enhance the social sustainability of the supply chain without creatingtrade-offs between economic and social performance. This study hasimplications for decision-makers in firms and NGOs about the type ofresources they need to develop, and the characteristics they should seekwhen choosing partners for undertaking collaborative initiatives in socialsustainability.

Keywords: sustainability; partnering; supplier management; case studies

INTRODUCTIONDiscussions of sustainable supply-chain manage-

ment acknowledge that nongovernmental organiza-tions (NGOs) might participate in a supply chain. ButNGOs are typically identified as “nontraditional”members of the supply chain (e.g., Pagell & Wu,2009) and viewed as agents to help for-profit supplychains become more sustainable. Yet NGOs havegoals and supply chains of their own—something theprevious literature has generally not considered.Therefore, this research explores how NGOs use tradi-tional supply-chain management tools while collabo-rating with other chain members, includingimpoverished suppliers and for-profit buyers, toimprove the social and economic sustainability of allchain members.Social problems, such as poverty alleviation, sweat-

shops and child labor, negatively affect both the wel-fare of society and the productivity of firms in thesupply chain. These problems are complex because

their solution requires the involvement of govern-ments, the private sector, and civil society organiza-tions (Selsky & Parker, 2005). The private sector hasstruggled at leading these efforts (e.g., Lund-Thomsen& Lindgreen, 2014).For instance, in the apparel industry, firms that

source products from developing countries arerequired to adopt labor standards that promote socialjustice and human rights, and they have responded byjoining industry consortia and implementing supplieraudits and certifications (Mamic, 2005). However,these programs have been criticized for making supplychains less socially unsustainable, rather than moresocially sustainable (Pagell & Shevchenko, 2014) andthey did not prevent events such as the Rana Plazatragedy (Lund-Thomsen & Lindgreen, 2014).NGOs, working in the same space, can initiate pro-

jects that improve the social sustainability of supplychains and the communities where they operate(McDonald & Young, 2012). For instance, the Rain-

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forest Alliance has conducted projects to train and cer-tify poor producers to be incorporated into firms’ sup-ply chains that have resulted in reductions in childlabor and improvements in poor producers’ profitsand women’s access to labor opportunities (RainforestAlliance, 2014). Similarly, Solidaridad has undertakenprojects that have certified and incorporated poorfarmers into agricultural supply chains for commodi-ties such as livestock, cotton, soy, tea, and coffee (Sol-idaridad, 2014). NGOs and other not-for-profits arelikely to take a leading role in the creation of sociallysustainable supply chains.We know that NGOs are often better placed than

for-profits to address many issues of social sustainabil-ity, and we know that they manage their supplychains to do so. What motivates this study is how lit-tle we know about these phenomena. To begin to fillthis void and contribute to the socially sustainablesupply-chain literature, this paper explores how NGOsuse their supply chains to alleviate poverty. Theresearch answers the following research questions: (1)what resources do NGOs use when they undertakesupply-management practices for poverty alleviation?And (2) what firm resources do NGOs seek when theyundertake supply-management practices for povertyalleviation?We used a nested case study analysis to inductively

build a theoretical framework to answer these ques-tions. We purposefully chose to study a supplierdevelopment (SD) project conducted by a single NGOworking to alleviate poverty in Ecuador. We studiedsix SD programs conducted by the NGO that involvedsix buying firms and multiple suppliers. Focusing on asingle NGO working in a single country allowed us toisolate NGO-level variables and focus on the deploy-ment of resources in multiple supply chains.This research provides a framework that explains

how noneconomic actors use traditional supply man-agement practices to create innovative, socially sus-tainable supply chains in contexts with no foreseensynergies between social and economic performance.The framework posits that the NGO resources ofknowledge for localizing SD programs and a bridgingcapability are critical for designing and setting up theSD program. The NGO resources are complementedby the buying firm resources of knowledge transferroutines, logistical resources, and relational contract-ing based on procedural fairness that are critical tocarry out the transactions and protect the value in thebuyer–supplier relationship. NGO resources and buy-ing firm resources are intertemporal complements thatenhance a supply chain’s social sustainability.This research’s primary contribution comes from

identifying and conceptualizing the resources thatNGOs should develop themselves and acquire fromthe buying firms in order to set up SD programs to

alleviate poverty. The research also explains thedynamics across time between the identified resourcesand the SD programs.The research also makes a contribution to the wider

literature. By treating the NGO as the focal actor inthe network, rather than as a “nontraditional” chainmember, the research shows that traditional supply-chain management practices are successfully used bynot-for-profit organizations to improve the social sus-tainability of both the community and firms operatingin the community. In so doing, this research helps toopen a pathway to further understand organizationsand supply chains that have goals other than profitmaximization. Previous research suggests that theachievement of truly socially sustainable supply chainsentails the development of new practices and/or col-laboration with stakeholders in creative ways (Klassen& Vereecke, 2012; Margolis & Walsh, 2003). Thisresearch suggests that fully understanding these prac-tices and collaborations will require examining thesupply chains of both for-profit and not-for-profitsupply chains.The remainder of the paper is structured as follows.

First, we review the literature that shapes and explainsthe phenomenon of interest. Second, we describe andjustify our research method. Third, the analysis andresults are presented. Fourth, we return to the litera-ture and discuss the relevance of our findings. Finally,we present our conclusions.

LITERATURE REVIEWThe literature review is structured in two parts.

First, we describe how the topic of poverty allevia-tion fits into the literature on social sustainability.Second, we explore how business initiatives can beapplied for poverty alleviation and how NGOs canengage in supply-management practices to alleviatepoverty.

Social Sustainability and Poverty AlleviationA socially sustainable firm makes profits without

harming society (Carter & Rogers, 2008). The litera-ture classifies social practices as either internal orexternal. Internal practices include providing safe andhealthy working conditions and freedom of associa-tion for the firm’s workers (Gimenez, Sierra & Rodon,2012; Pullman, Maloni & Carter, 2009). External prac-tices aim to control supplier behaviors and to fostersocial equity along the supply chain. External practicesinclude auditing or certifying suppliers to avoid sweat-shops and child labor, participation in consumerassociations to promote customers’ well-being,and engagement with stakeholders to foster thedevelopment of local communities (Gimenez et al.,2012; Pullman et al., 2009).

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The literature has primarily focused on internalsocial practices (Miemczyk, Johnsen & Macquet,2012). This is likely due to the challenges of imple-menting external social practices. First, most externalsocial impacts extend beyond the responsibility of asingle organization or supply chain. For instance,child labor and poverty alleviation are global issuesthat extend beyond the boundary of a single corpora-tion, supply chain, or NGO; these issues pertain tothe entire society. Second, the pursuit of social sus-tainability can be detrimental to a firm’s economicperformance because it diverts resources that could beused to increase profits (Margolis & Walsh, 2003).Consequently, firms tend to implement socially sus-tainable practices that mitigate the negative effect oftheir operations instead of initiatives that build trulysocially sustainable supply chains (Pagell & Shev-chenko, 2014).Poverty alleviation is a social issue that firms tend

not to address. However, poverty alleviation is a criti-cal issue for firms that source products from develop-ing economies where poverty rates in rural areas canreach 70 percent of the population (WorldBank2011). Although there are cases in which individualfirms have led the implementation of initiatives forpoverty alleviation (e.g., Nestle and Unilever), thistype of initiative typically requires resources that anaverage firm would not possess (Kolk & Van Tulder,2006). NGOs as noneconomic actors are betterequipped and their missions are better aligned withsocial matters such as poverty alleviation. Therefore,NGOs are in a better position to undertake povertyalleviation efforts where the synergies with the supplychain’s economic performance are not evident (Mar-golis & Walsh, 2003).Operationalizations of being poor and impoverished

or at the bottom-of-the-pyramid (BOP) are oftenimprecise, which has led to scholars studying differentpopulations under the same rubric (Kolk, Rivera-San-tos & Rufin, 2014). In this research, BOP, poor, orimpoverished suppliers are suppliers from rural andurban populations who live on between $US2 and$US3 PPP-adjusted a day. An income of more than$US2 per day exceeds the threshold for extreme pov-erty (WorldBank, 2010), but it is still insufficient toafford all basic food needs, making this populationpoor.

Poverty Alleviation through SupplyManagement PracticesPeople at the BOP usually pay higher prices for the

goods and services they consume because they are iso-lated from main markets, suffer local monopolies,and lack the infrastructure to adequately storeproducts (Prahalad, 2004). Prahalad argues that firmsshould create innovative operations and business

models to allow these consumers to access bettergoods and services at a lower price. Firms wouldincrease their profits and the poor would increasetheir welfare, a win–win scenario. However, the poordo not improve their capability to generate rents bybuying cheaper products (Karnani, 2007) so it is sug-gested that a better mechanism for poverty alleviationis incorporating the poor as suppliers (Karnani, 2007;London, Anupindi & Sheth, 2010). Still, research hasfocused more on business initiatives where the poorare consumers (Kolk et al., 2014). Hence, Kolk et al.(2014) suggest that more research is needed about ini-tiatives that incorporate the poor as suppliers, andwhere other stakeholders such as governments, NGOs,and local SMEs also participate in the initiative.Firms can support poverty alleviation by incorporat-

ing poor producers into their supply chains (Karnani,2007; Sodhi & Tang, 2014). However, firms find itvery challenging to start such initiatives due to a lackof knowledge about the context of poor suppliers, thehigh transaction costs of doing business with poorsuppliers, and the potential conflict between alleviat-ing poverty and the firm’s economic performance(London et al., 2010; Margolis & Walsh, 2003).Therefore, these projects are better suited to NGOs’missions and knowledge. However, NGOs generallylack the capacity to place the products of poor suppli-ers into the market. In this context, NGOs and firmscan complement each other to undertake supply man-agement practices that incorporate poor suppliers intosupply chains.The collaboration between NGOs and firms has

been widely studied in the literature of cross-sectorpartnerships. One of the dominant logics in this liter-ature is that NGOs and firms have complementaryresources that enable the creation of social value (Sel-sky & Parker, 2005). This logic generally relies onboth the relational view and social capital theory(Hahn & Gold, 2014; Seitanidi, Koufopoulos & Pal-mer, 2010). The relational view was originally used toexplain how multiple firms working together couldachieve interorganizational competitive advantage(Dyer & Singh, 1998). More recently, the relationalview has been applied to explain how NGOs andfirms combine their resources to create new valuableresources for creating social value (Hahn & Gold,2014; Selsky & Parker, 2005). Social capital is the bro-kerage opportunities that an actor has in its social net-work (Burt, 2005). At the organizational level, socialcapital theory has been used to explain organizationalperformance and acquisition of resources throughsocial networks (Payne, Moore, Griffis & Autry, 2011).Similarly, in firm–NGO relationships, social capitaltheory suggests that NGOs will use their networkposition to scan and assess the resources that poten-tial partners could bring to a partnership (Seitanidi

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et al., 2010). Previous literature acknowledges thatfirms and NGOs could complement each other whenimplementing socially sustainable supply managementpractices, but how NGOs develop and implementsuch initiatives by cooperating with firms has beenunderstudied. This paper aims to fill this gap.

METHODOLOGYExisting theory in supply-chain management does

not provide clear guidelines about how supply man-agement practices can be implemented in the con-text of poverty alleviation. The participation ofNGOs in sustainable supply-chain initiatives forpoverty alleviation is a little-observed phenomenonthat we would expect to see more often in thefuture. Because case studies allow for the identifica-tion of key variables and their relationship, they aresuitable for studying an emergent phenomena indepth and are used in this research (Gibbert, Rui-grok & Wicki, 2008). The case study methodologyallowed us to build a thorough description of theunderlying reality of NGO poverty alleviation initia-tives in supply chains.

Case Selection and Research SettingThe selected case study was an international project

led by a multinational NGO with operations in LatinAmerica, Africa, and Asia whose focus was on povertyalleviation through the economic development andinclusion of the poor. The NGO received fundingfrom different institutions such as governmental agen-cies, development organizations, and multilateralbanks. The NGO had more than 15 years of experi-ence in projects aimed at the economic developmentand inclusion of the poor, but it had very little experi-ence of working with the private sector.The NGO’s first private sector alliance was con-

ducted with an international business council whichthe NGO approached with the aim of implementingbusiness initiatives to help the poor. As a result of thisalliance, the NGO implemented several pilot projectswith the private sector. One year later, a multilateralbank funded the NGO to implement a project to useSD programs to transfer best production practices topoor suppliers. That is the project studied in thispaper. This particular project was selected because itinvolved a single NGO and multiple buying firms; asuitable context to isolate NGO-level variables and tofocus exclusively on how the NGO deployed theirresources in multiple supply chains. Moreover, whilethe project operated in multiple countries, we alsoisolated institutional variables by only studying theSD programs implemented in Ecuador.The project involved nine business initiatives in

Ecuador. However, only seven of those initiatives were

SD programs. The remaining two initiatives wereaimed at developing distribution channels to deliverproducts for the poor. The seven SD programsentailed both successful and unsuccessful programs,buying firms from a variety of industries, and suppli-ers with diverse socioeconomic characteristics andproductivity challenges. Our final sample included sixof the seven SD programs. Thus, we used a nestedcase study design, where the unit of analysis was theSD program.To implement the SD programs, the NGO used its

contacts from the alliance with the international busi-ness council to attract firms. Firms were invited to par-ticipate in workshops to analyze their supply chainsand determine how to incorporate poor producers assuppliers. The ideal firm to participate in the SD pro-gram was a firm (1) with a supply network with ahigh concentration of poor suppliers; (2) willing toinvest money in SD programs with poor suppliers;and (3) willing to establish partnerships with poorsuppliers. Once the NGO and a particular buying firmhad agreed to work together, they defined the profileof the suppliers and the geographical regions. Next,the NGO visited the potential suppliers to understandtheir socioeconomic situation and any potential barri-ers to doing business with the buying firm, as well asto create ties with the leaders of each village. Then,the NGO worked with each buying firm in the designof the SD program to address the realities of suppliersfrom each geographical region. In some instances,such as corn and potato farming, the NGO and thebuying firm first ran pilot SD programs. Finally, theNGO and the buying firms launched a training pro-gram for each supply chain focused on improvingoperational efficiency and creating mechanisms tofacilitate transactions between the suppliers and thebuying firms.Previous BOP literature uses the terms poor consumers

and poor suppliers to describe the beneficiaries of BOPinitiatives (Kolk et al., 2014; London et al., 2010). Inour study, we consider two types of poor suppliers liv-ing on less than $US5 PPP-adjusted per day: farmerswith fewer than 5 hectares, and small family-ownedbusinesses that employed poor people (see Table 1).

Data CollectionWe created a case study protocol to guide the data

collection process and enhance the internal and con-struct validity of the study (Yin, 2013). Our researchis focused on identifying the resources needed fromboth the NGO and the buying firm for successfullyimplementing SD programs to alleviate poverty.Therefore, we designed the data collection in a waythat allowed us to build a valid and reliable descrip-tion of the process of SD implementation. The imple-mentation started when the NGO decided to

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TABLE 1

Sample Description

Unit ofAnalysis

Description of the SDProgram Poor Suppliers Buying Firm (BF)

Dairyfarming

The SD program involved afarmer-training program onmilk storage and grassfarming; and investmentsby the BF to createconsolidation centers. Theprogram included 1,085dairy farmers from 18cooperatives within 50 kmof BF’s production facilities.The total investment in theSD was $US128,000.

Dairy farmers had othersources of income besidesmilk (jobs in plantations andagricultural products); milkyields were low; farmers hadan average of seven cows inproduction; they had accessto school, hospitals, etc.; andthey also had a mediumdegree of bancarization.

The BF was a cheesemanufacturer thatsourced its milk frommedium dairy farmers(<20 hectares) andcooperatives of smallfarmers. It had $US17million in sales.

Metal scrapcollectors

The SD program involved atraining program for thecollection center managersand investment by the BFin the centers’ facilities.The program included 27scrap collection centers.The total investment in theSD was $US110,000.

Families living in urban areasengaged in the collectioncenter business. Scrap wastheir main source of income.The family had some accessto financial markets, healthinsurance, and children’seducation. Families possesseda few assets: pickups andsmall houses.

The BF was a steelmanufacturer of ribs,pipes, and decks. Itsourced scrap fromlocal collectors and to alesser extent, importedit; the BF had $US160million in sales.

Cornfarming

The SD program involvedtraining in farmingpractices, technicalassistance and the deliveryof seeds and farmingequipment by the BF. Theprogram included 650farmers with <5 hectareswithin 50 km of BF’sfacilities. The totalinvestment in the SD was$US400,000.

Corn farming was the mainsource of income; fewer than5 hectares of cultivable landper farmer; low yields perhectares (2 tons/hectares); noirrigation systems; one cycleof production per year duringthe rainy season; issuesaround property rights, tax IDand low bancarization.

The BF was a foodprocessor: the BF grewthe animal and sold theprocessed chicken,pork, beef, andseafood. It sourcedcorn mainly from localsuppliers; it had$US649 million in sales.

Carpentryworkshops

The SD program involved aworker-training programand the lease ofmanufacturing equipment.It included four workshopsof fewer than 15 workers.The total investment in theSD was $US65,000.

Workshops had low capitalendowments, low productquality and a high proportionof waste. Workers lived inurban areas with access tohospitals, schools, etc.; theymanufactured pieces, parts,and furniture for the BF.There was a low degree ofinformal operations.

The BF was a furnituremanufacturer and aretailer. It sold furniturefor living rooms, diningrooms and kitchencabinets. It had $US28million in sales.

(continued)

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cooperate with the buying firm and finished when thesuppliers delivered their products to the buying firm.The relational view and social capital theory wereused to guide the data collection on organizationalcharacteristics and interorganizational relationshipsduring the SD implementation.Data collection began in December 2011, and the

last interview was conducted in July 2013. One of theresearchers traveled to Ecuador to meet with repre-sentatives from the NGO and the buying firms. Fol-low-up interviews were arranged throughvideoconferences to obtain additional data. We inter-viewed 18 people and there were usually two roundsof interviews with each informant. The average inter-view length was 90 min (see Table 2). Interviewswere recorded and transcribed. In addition, we gath-ered reports and brochures as secondary data for ouranalysis. To evaluate the results of each SD program,we relied on third-party assessments rather thaninterviewing the buyers or suppliers. These assess-ments usually described the socioeconomic condi-tions, demographics, production practices, andbenefits achieved by the farmers and other suppliersafter the SD program.We took several measures to enhance the quality of

the collected data. First, data were gathered from mul-tiple sources. This led us to disregard the final (sev-enth) SD program, as we were not able to collect data

from the buying firm. Both primary and secondarydata gathered from the NGO strongly suggested thatthis instance did not add new theoretical insightsabout our units of analysis. Consequently, saturationwas reached with the sixth (of a possible seven)instance of observation. Second, the protocol targetedspecific aspects of the phenomenon and increased thereliability of recalling past events (Miller, Cardinal &Glick, 1997). Finally, we created a case study databaseusing NVivo software (QSR International, Victoria,Australia), which facilitated the retrieval of data dur-ing all stages of the coding and analysis (see Table 3for a detailed description).

Data CodingData coding identified the level of poverty allevia-

tion and the resources used and sought by the NGOin each instance of observation. The data to be codedwere mostly qualitative and came from primary andsecondary sources. Primary data included the tran-scripts from the recorded interviews, presentations byrepresentatives of both the NGO and buying firms,and the researcher’s field notes. Secondary data camefrom reports, brochures, and quantitative third-partyassessments of each of the six individual SD pro-grams. Two researchers initially coded the data inde-pendently. When there were disagreements betweenthese two researchers, they were solved through sense-

TABLE 1 (continued)

Unit ofAnalysis

Description of the SDProgram Poor Suppliers Buying Firm (BF)

Palm treefarming

The NGO approached theBF almost at the end of theproject. The SD programincluded the supply-marketresearch and supplierselection. The projecttiming constrained theimplementation of thetraining program. The totalinvestment in the SD was$US18,000.

80 percent of farmers had aland area of <5 hectares; andfor 40 percent of them, thepalm tree was the mainsource of income; there wasirrigation and access to roads;farmers owned the land buthad some issues with tax ID;high bancarization.

The BF was a palm oilprocessor. It exportedthe oil or distributed itlocally. It had $US77million in sales.

Potatofarming

The SD program entailed atraining program in farmingbest practices and thedelivery of certified seeds.It included 300 farmers insix cooperatives. Theimplementation of the SDprogram was delegated toa trader. The totalinvestment in the SD was$US92,000.

Potato farming was the primaryeconomic activity; the landarea was smaller than5 hectares; the yields werelow; the cooperatives had anirrigation infrastructure andwere close to main roads; notax ID; there were issues withland property rights; lowbancarization.

The BF was a nationalchain of supermarkets.It had $US1,400 millionin sales.

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making workshops led by a third researcher. At theseworkshops, three members of the research team dis-cussed each disagreement until a consensus wasreached.

Coding of Poverty Alleviation. People with bettercapabilities and lower transaction costs have moreeconomic and social opportunities (Ansari, Munir &Gregg, 2012; London et al., 2010). Hence, we concep-tualize poverty alleviation through two dimensions:the development of suppliers’ capabilities and thereduction in transaction costs in the buyer–supplierrelationship.The development of capabilities was operationalized

through operational efficiency because it is a measureof the suppliers’ capabilities to better run their busi-nesses. For the agribusiness instances, we used incomeand yield because they are indicators of how wellfarmers manage their crops. Workers were the targetsin the carpentry workshop, so we used income andthe level of waste reduction (less waste would meanthat workers are more efficient in the use of materials)as a proxy of operational efficiency. For metal scrapcollectors, we used the reported family incomebecause indicators of their costs and level of produc-tivity were not available (see Table 4).Transaction costs are defined as the sum of coordi-

nation costs and transaction risks (Williamson, 1981).

Coordination costs refer to the costs of exchanginginformation and utilizing it in the decision process,whereas transaction risks refer to the probability thatthe other parties in the transaction will avoid theiragreed-upon responsibilities (Williamson, 1981).Coordination cost reduction was measured qualita-tively by assessing the barriers or inhibitors to con-ducting a transaction. For instance, indicators ofdecreased barriers included whether the supplier hadopened a bank account, obtained a tax ID, or devel-oped mechanisms to deliver the output. To measuretransaction risk reduction, we assessed the suppliers’commitment to the buyer–supplier relationship basedon whether the suppliers remained in the relationshipafter the NGO project was over and the suppliers’expectations about the relationship in the future (seeTable 4).In summary, we coded poverty alleviation as high

when the suppliers improved their operationalefficiency and reduced their coordination costs andtransaction risks. We conceptualized poverty allevia-tion as medium when operational efficiency wasimproved but either coordination costs or transactionrisks were not reduced. Finally, poverty alleviationwas low when operational efficiency did not improveand neither coordination costs nor transaction risksdecreased.

TABLE 2

Informants per Instance of Observation

No Informant Instance of Observation

1 General manager Buying firm Dairy farming2 Manager SD program Buying firm Dairy farming3 NGO Advisor 1 NGO Dairy farming; Corn farming4 Recycling division director Buying firm Metal scrap collector5 NGO advisor 2 NGO Metal scrap collector;

Carpentry workshops6 CSR director Buying firm Corn farming7 Purchasing manager Buying firm Corn farming8 Business unit director Buying firm Corn farming9 Supervisor SD program Buying firm Corn farming

10 Plant manager Buying firm Carpentry workshops11 Quality control manager Buying firm Carpentry workshops12 General manager Buying firm Palm tree farming13 NGO advisor 3 NGO Palm tree farming;

Potato farming14 General manager trader

companyBuying firm-related part

Potato farming

15 NGO advisor 4 NGO Potato farming16 Regional director NGO Cross-instances view17 Regional subdirector NGO Cross-instances view18 Business council manager Business council

(NGO-related part)Cross-instances view

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Coding of Resources. We defined resources as allassets, capabilities, processes, information, and knowl-edge controlled by an organization (Barney, 1991).Resources are embedded in processes and routines(Eisenhardt & Martin, 2000). To disentangleresources from the processes and routines of theNGO’s project, we wrote thick descriptions for eachinstance of SD based on the coded data. Then, thedescriptions were summarized into chronologicaltimelines of events and actions for each SD program(see Figure 1). The resulting sequence was presentedto the NGO’s representatives in order to check itsvalidity.The final timeline was categorized into three stages:

the NGO initiating the project, the SD implementa-tion, and the buying firm–suppliers’ initial transaction(see Table 5). Then, the whole database of interviews,reports, presentations, field notes, and so on was clas-

sified into these three stages. For instance, the tran-scribed interview of the CSR director of the CornFarming case was analyzed and every answer relatedto how they met the NGO, how the conversationswere conducted, and what made them enter the pro-ject was categorized into the project’s initiation stage.Similarly, every answer on who within the buyingfirm was delegated to run the project, the challengesduring the implementation, the criteria for the selec-tion of farmers, and the planning and execution ofthe SD program were categorized into the SD imple-mentation stage. We followed this procedure for everydocument in the database in every instance of SD.After that, we elaborated a list of resources/codes fromthe literature on SD programs and supply manage-ment to facilitate the identification of assets, capabili-ties, information, and knowledge that the NGO andthe buying firm contributed during the project (Miles

TABLE 3

Synthesis of Research Design Aspects

Test Case Study Tactic Brief Description

Construct validity • Multiple sources ofevidence

• Chain of evidence

• Preliminary results werediscussed with keyinformants

• The operationalization and measures of our concepts(e.g., poverty alleviation, transaction costs, relationalcapital) followed established measures in prior research.

• The interpretations of concepts and patterns werebased on triangulated data.

• Cross-instance interviews were performed to enhancethe data interpretation.

Internal validity • Pattern matching

• Addressed rivalexplanations

• Interpretation of concepts and patterns were contrastedacross instances and against rival explanations.

External validity • Use of theory

• Replication logic• Analytic generalization: the emerged concepts and

patterns shed light on theoretical aspects of thenoneconomic stakeholders’ impact on sociallysustainable supply chains.

• Our interpretations were based on instances of diversetheoretical properties: different firm sizes, industry,supply chains.

Reliability • Case study protocol

• Case study database

• Data coded andinterpreted by severalresearchers

• The procedure of data collection was guided by aprotocol, and data were analyzed and stored in aNVivo database.

• One of the authors coded the data. Then, it waschecked by a second one. Finally, sense-making workshops among three researchers were used to clarifydivergent interpretations and reach consensus.

• Instances’ timelines were presented to NGO’srepresentatives.

Source: Yin (2013).

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& Huberman, 1994). Through this mechanism, weobserved the resources from both the NGO and thebuying firm that emerged in each stage of the projectand in each instance of observation (see Table 6).

Data AnalysisThe design is a nested series of instances of SD per-

formed by a single NGO. Analysis started by address-ing each instance, which is analogous to within-case

TABLE 4

Outcomes of the SD Programs

Unit of Analysis Poverty Alleviation Outcomes

Dairy farming Overall outcome: High poverty alleviationOperational efficiency: In average, farmers increased their productivity from 4.7L/cow/day to 5.9 L/cow/day; and their annual income from 1,951 to 3,058 USDadjusted per inflation.

Coordination costs: The cooperatives constituted consolidation centers;cooperatives were legally constituted (i.e., they had tax IDs and a formalstructure).

Transaction risk: The relationship with the buying firm was strengthened; it startedwith four cooperatives and grew to 18; the buying firm increased the volumepurchased from cooperatives (reaching a 45 percent of the total supply of milk).

Metal scrapcollectors

Overall outcome: High poverty alleviation.Operational efficiency: On average, the annual income of the enterprise increasedfrom $US5,563 to $US17,168 adjusted per inflation.

Coordination costs: The centers obtained environmental certifications. In additionto that permit, the businesses were within the formal economy.

Transaction risks: Buying firm increased the number of collection centers (17–27).The SD program was established within buying firm’s purchasing practices andbecame something regular.

Corn farming Overall outcome: High poverty alleviation.Operational efficiency: On average, farmers increased their yield from 2 tons/hectares to 7 tons/hectares; and their annual income from $US678 to $US2,163adjusted for inflation.

Coordination costs: They were lowered; all farmers had a savings account,legalized their land property rights, and obtained a tax ID.

Transaction risks: The farmers kept the relationship with buying firm; the programwas replicated to other regions and more farmers were added.

Carpentryworkshops

Overall outcome: Medium poverty alleviation.Operational efficiency: Reduction in 55 percent of waste of materials; the annualaverage salary of workers increased from $US2,450 to $US2,789 adjusted forinflation.

Coordination costs: The degree of informal operations was already low.Transaction risks: Risks were not avoided; three workshops ended the relationshipwith buying firm.

Palmtree farming

Overall outcome: No results. The buying firm entered the project few monthsbefore its closing date. The process reached stage t, where both buying firm andNGO designed the SD program. The SD program was not implemented duringthe NGO project, but it set the ground for a firm-led SD program. However,there were no results about that initiative at the time of data collection.

Potatofarming

Overall outcome: No poverty alleviation.Operational efficiency: Farmers did not improve their yields after the SD program.Coordination costs: Coordination costs remained high after the SD program: therewas an absence of consolidation centers and formalization of operations.

Transaction risk: Risks were not avoided. Few farmers delivered their productionto the firms providing the SD. The buying firm–supplier relationship could not besustained and it ended after the SD program.

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analysis. This was followed by determining the pat-terns across instances, which is equivalent to cross-case analysis. The purpose of the within-case analysiswas twofold: to deeply understand the underlyingresearch phenomenon, and to build an explanation ofhow poverty was alleviated, or not, in each instanceof SD. The purpose of the cross-case analysis was tocompare and contrast the explanations of eachinstance in order to establish a replicated pattern ofhow poverty was alleviated across the SD programs(Yin, 2013).Much like the coding, data analysis was initially per-

formed by two researchers with disagreements beingworked out through workshops led by a thirdresearcher. The end result for each instance was asummary of the data that led us conclude whetherpoverty was alleviated or not, the timeline of activitiesand events for the specific SD project, a list of theresources supplied by the NGO and buying firmlinked to the timeline’s stages, and working proposi-tions about the potential relationships between theresources and the poverty alleviation outcomes in thatspecific instance of SD (Yin, 2013).Next, the cross-case analysis entailed comparisons of

timelines, resources, and patterns of resource deploy-ment across the six SD instances. The analysis startedwith classifying the resources deployed or sought bythe NGO according to their utilization in each stageof the timeline. Then, we analyzed the commonresources among the instances of poverty alleviation.

We followed a replication logic, where we kept thepattern that was consistently replicated across theinstances of SD that were successful at poverty allevia-tion. Next, this replicated pattern was compared withthe results of the instances of SD that did not lead topoverty alleviation, and we kept the resources that dis-criminated between the two outcomes. Finally, we com-pared the resulting framework with alternativeexplanations of poverty alleviation identified in the lit-erature (this is further explained in the following sec-tion). This analytic strategy allowed us to build atheoretical framework of the resources that enhance theimplementation of SD programs for poverty alleviation.

RESULTSThis section is structured in three parts. First, the

resources provided by the NGO are described, thenthe resources provided by the firm are described, andfinally alternative explanations for the phenomenonstudied are addressed.

Resources Provided by the NGOThe resources described in this section emerged dur-

ing the initiation stage (stage t) of the project time-line. The NGO provided these resources during thenegotiation and they were instrumental in influencingmanagers to participate in the project. These resourcesare (1) knowledge for localizing the SD programs and(2) the NGO’s bridging capability.

FIGURE 1Illustration of Case Timeline (Dairy Farming Case)

1. Setting the objectivesThe NGO and the buying firm operationalized the objectives of the SD into improving yield and quality of the milk

2. Selecting the suppliersThe NGO identified farmers’ co-ops from 50 Km from buying firm plants. The buying firm asked for and supported the co-ops to formalize their operations; quality-based pricing

3. Designing the training programNGO and buying firm agreed on the topics for training program; NGO set up the training program

4. Trial and adjustment of the program

Two adjustments were made: More than expected co-ops were incorporated. Credits for co-ops'equipment were added

5. Implementing the SD programFormalization of coops. Training program (buying firm-NGO); technical assistance (BF); farmers’ visits to other exploitations (BF); credits for equipment (BF)

6. Delivering the productsQuality based pricing; cooperative

consolidated the production; buying firm send a truck to pick up milk

7. Paying to producersEvery 15 days the buying firm pay off based on the quality of the milk, and the average daily price

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Knowledge for Localizing SD Programs. To reducetransaction costs and operational inefficiencies, theyfirst need to be identified. The NGO had more than15 years of experience in implementing projects withpoor farmers in a variety of supply chains, such ascocoa, dairy, and tropical fruits. The NGO knew thecontext where the suppliers were embedded and howthey operated giving the NGO a deep understandingof the poor farmers’ reality. The NGO’s knowledgewas instrumental in poverty alleviation because itenabled both (1) targeting the specific problems thatwere affecting poor suppliers’ operational efficiencyand (2) identifying the suppliers’ transaction risks. Weconceptualize and refer to this knowledge as theNGO’s SD localization knowledge, which refers to theapplication of the NGO’s experience in developingprojects with poor suppliers and supply-marketknowledge in adapting each SD program to the indi-vidual supplier’s reality (see Table 7).Localizing an SD program entails designing and

implementing it in a way that couples with theidiosyncrasies of poor suppliers. Firms could have theproduction and technology required to make farmersmore productive, but they would not know how totransfer them to suppliers (see the following quote).For instance, the NGO knew that farmers tended tooveruse pesticides and herbicides and suggestedaddressing this issue during the training program. Fur-thermore, the NGO knew how suppliers carried outtransactions and advised buying firms to take actionsto mitigate factors such as informal money lending orlack of a tax ID. The buying firm’s technological capa-bilities were not sufficient for poverty alleviation. TheNGO’s localized knowledge contributed to the SDprograms, enhancing the suppliers’ operational effi-ciency and reducing transaction risks.

Mostly the company has the knowledge . . . I thinkthe company does have the technological knowl-

edge on best practices, input production, increasingquality of production, and increasing volumes.They would know that. However, they wouldn’tknow how to bring that to small producers andlow-income communities. I think this was one ofthe roles of the NGO, to make sure that the com-pany actually contacted small producers and trans-ferred their knowledge when small producersneeded it. (NGO regional director)

NGO’s Bridging Capability. In addition to localiz-ing the SD program, the NGO was a bridge toresources for the poor suppliers and the buyingfirms. We observed two mechanisms by which theNGO bridged resources: (1) bridging between buy-ing firms and sources for funding; and (2) creat-ing/strengthening ties between poor suppliers andbuying firms.The buying firms’ managers considered investing in

SD programs for poverty alleviation as too risky. Asone of the managers noted, the financial resourcesfrom the multilateral bank made the risk more bear-able: “We are a small company, so we didn’t have theresources to train 200 or 300 farmers. The advantagewith the NGO was the economic resources that wecould access for accelerating the training program”(SD program leader—Dairy farming instance). Due toits experience in fundraising, the NGO had ties—net-work resources—that were used to obtain the financ-ing to implement the SD programs. The NGO was abridge between the buying firms and sources of fund-ing.Furthermore, the NGO created or strengthened the

ties between poor suppliers and the buying firms. Forinstance, the NGO visited the potato farmers’ village,established links with their leaders, and put them incontact with the buying firm. The NGO took similaractions in the case of palm tree farming. We observedthat this NGO capability was also applied to strength-

TABLE 5

Description of the Stages Where Observed Resources Emerged

Stage Description

Stage t: NGOinitiates the project

It started when the NGO approached the buying firms; entailing the negotiationbetween them, the commitment of the buying firms, the approach of the NGOto the suppliers; and it finished when both the NGO and the firms designed theSD program.

Stage t + 1: SDimplementation

It started when the training program was implemented; it entailed the interactionbetween the NGO, the buying firms, and the suppliers during the trainingprogram; and it finished when the training programs were over.

Stage t + 2: Buyingfirms–suppliers’initial transaction

It started when the suppliers delivered the first production lot/order to thebuying firm. In the instances of dairy farming, carpentry workshops, and metalscrap collectors this stage overlapped with stage t+1. This stage either endedwhen the suppliers quit the relationship or has continued to the present.

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TABLE 6

Resources/Codes Identified across Instances and Along the Project

Stage t: NGO Initiatesthe Project Stage t + 1: SD Implementation

Stage t + 2: BuyingFirm–suppliers’ Initial

Transaction

Dairyfarming

NGO: Ability-based trust,boundary spanning,social capital, access tofunding, supportBF adaptation, businessperspective, supplyintelligence

BF: Dependence on item,competitive priority,corporate values

NGO: Collaboration commitmentBF: Buyer–supplier socialization,production know-how, experiencein SD, internal integration,interorganizational trust, strategicpurchasing, technical assistance,transfer know-how, topmanagement support, experienceon collaborative relationship

BF: Long-termorientation, positiveattitude to supplier,commitment withsuppliers,transparency,logistics, quality-based purchasing,fairness, supplier’sproximity, quickpayment system

Metalscrapcollectors

NGO: Boundaryspanning, social capital,business perspective

BF: Dependence on item,slack, competitivepriority, power

NGO: Collaboration commitmentBF: Buyer–supplier socialization,experience in SD, internalintegration, strategic purchasing,investment in suppliers’ assets, topmanagement support, experienceon collaborative relationship

BF: Long-termorientation, positiveattitude to supplier,commitment withsuppliers,transparency,logistics, fairness

Cornfarming

NGO: Boundaryspanning, social capital,support BF adaptation,business perspective,supply intelligence

BF: Dependence on item,slack, competitivepriority, CSR, corporatevalues, power

NGO: Collaboration commitmentBF: Buyer–supplier socialization,production know-how, experiencein SD, internal integration,interorganizational trust, strategicpurchasing, technical assistance,transfer know-how, topmanagement support, experienceon collaborative relationship

BF: Long-termorientation, positiveattitude to supplier,commitment withsuppliers,transparency,logistics, fairness,supplier’s proximity

Carpentryworkshops

NGO: Boundaryspanning, social capital,access to funding,supportBF adaptation, businessperspective

BF: Outsource, power

NGO: Collaboration commitmentBF: production know-how, assets-lease, internal integration,interorganizational trust,investment in suppliers’ assets, topmanagement support

BF: Commitment withsuppliers, quality-based purchasing,supplier’s proximity,transparency

Palmtreefarming

NGO: Boundaryspanning, social capital,access to funding,business perspective,supply intelligence

BF: Dependence on item,power

NGO: Collaboration commitmentBF: Top management support

BF did not reach thisstage

Potatofarming

NGO: Boundaryspanning, social capital,support BF adaptation,business perspective,supply intelligence

BF: Slack, CSR, power

NGO: Collaboration commitmentBF: Internal integration,interorganizational trust, delivery ofseeds, strategic purchasing, topmanagement support

BF: Logisticsdeficiencies, quality-based purchasing

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TABLE 7

Resources for the Implementation of SD Programs

Resources Definition Exemplar Quotes

NGOs knowledgefor localizing SDprograms (stage t)

This refers to theapplication of theNGO’s experience indeveloping projectswith poor suppliers;and knowledgeabout the supplymarket to adapt SDprograms for copingwith suppliers’reality.

The company has the technological knowledge,background and staff for doing this [the SD program].I think in terms of knowledge transfer, the knowledgeinput from the NGO was to make sure that the existingknowledge of the company was actually put in use forthe producers in low-income communities. (NGOdirector for Latin America)

. . .we accepted and began to work on a project in whichwe had the corn know-how, and they [the NGO]supported us in the aspects of setting the trainingtopics, how to gather the farmers for the trainingprogram, and how to work with them in general. (CSRdirector—Corn farming instance)

NGO bridgingcapability (stage t)

This refers to theNGO’s ability toapply its networkresources andknowledge aboutpoor suppliers tojoin previousdisconnected actorsand to strengthenthe relationshipbetween the buyingfirm and poorsuppliers.

The advantage of the NGO was their support in gettingeconomic resources. This helped us to accelerate theprocess of training our suppliers. Additionally, theyhelped us to get other type of resources forimplementing best practices with the farmers. (ManagerSD development—Dairy farming instance)

We gave advice to the companies. We connect them withsources of funding, donations, multilateral banks,development banks for the business initiatives. (NGOregional subdirector)

Organizationalroutines totransfer know-how(stage t + 1)

This refers to buyingfirm’s organizationalprocesses to transferknow-how. Itincludes technicalassistance tosuppliers; suppliers’visits to buying firm’sfacilities; andsuppliers’ events.

We organize several events a year in one of ourplantations. One of the main events is the golden ear,where we set up demonstrative plots so the farmerscould see, ask questions and learn farming bestpractices. In those events, we also teach them ourtechnological packages, which include nutrition, andreproduction materials. At the end of the event wedeliver prizes for the farmers with the highest yields.(Supervisor SD program—Corn farming instance)

Our job is not to buy scrap; our real deal is to supportthe consolidators. My business is not to buy tons fromthe consolidators; my focus is to see what they need; tounderstand why they are collecting fewer tons; and inthe case of any incidence I sent my supervisors to thezone to understand what’s happening in the market.(Recycling division director—Metal scrap collectorsinstance)

Through September 2012, there are 33 demonstrativefarms in 15 cooperatives. The company offers direct andindirect support to 1,085 farmers and has selected agroup of farmers for a guided visit and training abroad.(Extract from a company report—Dairy farming instance)

(continued)

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ening existing ties between the buying firms and thepoor suppliers. For example, in the corn farming case,the NGO set up a mechanism so the buying firmcould strengthen their relationships with poor farm-ers. Similar actions were implemented by the NGO inthe case of the carpentry workshops and dairy farm-ing.Consequently, the NGO consistently applied the

bridging resource to implement the SD programs forpoverty alleviation. We conceptualize this resource asa capability because it reflects a set of the NGO’s orga-nizational processes that utilize its knowledge of poorvillages to join disconnected parties and to strengthenweak connections between parties. We call thisresource a bridging capability.This bridging capability reduced the buying firms’

transaction costs when dealing with poor suppliers(see Table 7). First, the buying firms were connectedwith sources of funding reducing the cost of coordi-nating the training programs (see the followingquote). Second, the bridge between buying firms andpoor suppliers reduced the coordination costs ofsearching for each other in order to undertake a coop-erative buyer–supplier relationship.

I think we brought certain things to the table thatthey didn’t have that were very specific to our back-ground as a development organization. I think forsome companies this was the fact that we broughtthe multilateral bank that was able to providesome seed funding. These were not large amountsbut were often enough to boost the companyupward to the side of wanting to do this project.(NGO regional director)

Resources Provided by the FirmsThe NGO contributed both knowledge for localizing

SD programs and the bridging capability to all of theinstances. Yet the results across the six instances were notthe same. The buying firm-related resources were alsoneeded to reduce poverty. The buying firm-relatedresources were conditional to the NGO’s resources. Man-agers decided to invest in the project only after theybecame aware of the funding from the multilateral bankand/or the business case for the project was made. Thissection presents those buying firms-related resources thatenhanced the SD program outcomes. These resourcesemerged in stages t + 1 and t + 2.

TABLE 7 (continued)

Resources Definition Exemplar Quotes

Logistical resourcesin the buyer–supplierrelationship (staget + 2)

This refers to thelogistics assets andinfrastructure of thebuyer–supplierrelationship thatease the delivery ofproducts to thebuying firm and thepayment tosuppliers; it includeswarehousing,informationtechnology andbuying firmassistance.

The transaction with the cooperatives work in this way:every farmer carries the milk to the cooperative’sconsolidation center. Then, we go with our trucks andpick it up from every center and carry it to our plant.(Manager SD program—Dairy farming instance)

In the business of potato farming, it was very difficult toconsolidate the production in one place. The tradercoordinated a date for sending a truck and picking upthe cooperative’s production. In this case, thecooperatives didn’t have warehouses. We thought atsome point to support the creation of a warehousewithin the cooperative but there weren’t the minimumproduction volume to make it work. (NGO advisor—Potato farming instance)

Relationalcontracting basedon proceduralfairness (stage t +2)

This refers to therelational attribute ofthe buying firm todisplay transparent,ethical, unbiasedand representativedeals to suppliers; itentails an open andtransparent processof delivery, and anunbiased pricing forthe products.

We manage a quality-based pricing system in order todetermine a fair price. We consider the fat, protein,CCS, UFC, the milk temperature, which allow us to payfair prices and higher than the industry average. (Extractfrom a Sustainable report—Dairy farming instance)

We offer technical assistance throughout the whole year,we guarantee the purchase of all their productionvolume according to the official price. (Purchasingmanager—Corn farming instance)

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Knowledge Transfer Routines. In all six instances,the SD program included a training program toimprove the operational capabilities of the poor sup-pliers. One of the conditions of the multilateral bankfor funding the project was that a third party had toimplement the training program. This did not meanthat the NGO and the buying firms’ personnel couldnot be involved in the training program. However,the funding could not be used to remunerate the buy-ing firms’ personnel. In every instance, the NGO andthe buying firm decided the topics to include in thetraining program and selected a suitable third party torun it. The use of third-party providers caused tensionwithin the buying firms for corn farmers, dairy farm-ers, and metal scrap collectors, because these buyingfirms already had routines to transfer productionknow-how to their suppliers, and they would havepreferred to spend the money on their own resources.However, the NGO and the buying firms found waysto complement the third-party training program withthe buying firms’ routines.The training programs included field activities and

workshops. For instance, corn farmers had trainingsessions on farming best practices, dairy farmers weretrained about animal reproduction, milking routinesand grass farming, and potato farmers received fieldtraining on best practices in soil preparation, andcrop management (see Table 7). Furthermore, for themetal scrap collectors and corn and dairy farmers, thetraining was reinforced through additional supplymanagement practices of the buying firms such asassessment and technical assistance. The assistancethe corn farmers received included technical visitsfrom the buying firm personnel and the provision ofcertified seeds, production inputs, and light equip-ment for cropping. The buying firm also arrangedevents for the corn farmers where they could observebest farming practices and interact with other farmers(see Table 7).The complementary nature of these practices became

evident when we contrasted the cases of corn farming,dairy farming, and metal scrap collectors against car-pentry workshops and potato farming. The buyingfirms in the first group of instances (corn farming,dairy farming, and metal scrap collectors) had a set oforganizational processes that supported the transfer ofknowledge of production know-how. Conversely, buy-ing firms in the second group of instances (carpentryworkshops and potato farming) did not have suchprocesses. The buying firms in the first group ofinstances had better results in terms of the suppliers’operational efficiency suggesting a pattern betweenthese organizational processes and suppliers’ opera-tional efficiency.For example, in the case of dairy farming, the buy-

ing firm had a technical assistance program, where

veterinarians conducted regularly scheduled visits tothe farmers to assist them with animal reproductionand health-related problems. In the case of metalscrap collectors, the buying firm had industrial mar-keting routines which provided the collectors withmarket information so they could offer better dealsand increase their collected volume of scrap. However,in the second group of instances, buying firms hadscarce resources and they relied on ad hoc visits orunstructured mechanisms, where a community leaderwas delegated to follow up the training program. Thelack of organizational follow-up processes in theseinstances impeded the momentum for improving sup-pliers’ operational efficiency.The routines described above are similar to the activ-

ities defined in the SD literature as operational knowl-edge transfer activities (Modi & Mabert, 2007), butthe activities in our data are not strictly operational.Consequently, we use a broader label and name themknowledge transfer routines. We conceptualize thisresource as an organizational routine because the buy-ing firms that possessed these resources were able todeploy them repeatedly to consistently improve sup-pliers’ operational efficiency (see Table 8). Thisresource emerged during the SD implementation(stage t + 1) of the timeline, often during the suppli-ers’ training program. Knowledge transfer routineswere associated with the improvement of suppliers’operational efficiency.However, we observed that the buying firms with

knowledge transfer routines had either limited accessto suppliers or the scope of their practices alone wasinsufficient for the suppliers’ reality. In someinstances, buying firms were able to implement SDprograms with a few farmers’ cooperatives but thatwould have not been enough for their sourcing needs.In other instances (e.g., metal scrap collectors), theycould only partially address the suppliers’ problems.Consequently, even in the instances where buyingfirms had knowledge transfer routines, the NGO’sresources were required because they amplified thebuying firms’ routines by including more suppliersand/or broadening their scope. Therefore, we con-clude that knowledge transfer routines complementthe NGO’s resources and enhance suppliers’ opera-tional efficiency.

Logistical Resources in the Buying Firm–SupplierRelationship. Once the training program was imple-mented, the management of high numbers of low-volume transactions was a key issue in all instances.Purchasing 100 tons from one supplier is not thesame as purchasing one ton from 100 suppliers; thebuying firm receives 100 smaller batches and makes100 payments. In successful instances, this situationwas addressed in the SD implementation and transac-tions stages (stages t + 1 and t + 2) either through

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TABLE8

SynthesisofConstructsperCase

Instance

s/Constructs

NGO’s

Knowledge

forLoca

lizingSD

Programs

NGO’s

Bridging

Capability

Knowledge

TransferRoutines

Logistica

lReso

urcesin

the

BuyingFirm–

Supplier

Relationsh

ip

Relational

Contracting

Base

don

Proce

dural

Fairness

Poverty

Alleviation

Dairy

farm

ing

TheNGO

provided

supply-m

arket

analysisto

identify

cooperative

saroundbuying

firm

s’facilities.

Theyalso

supportedthe

buyingfirm

toset

theco

nditionsfor

selecting

cooperative

s.

TheNGO

connectedthe

buyingfirm

sto

multilateralbanks;

this

tiewasfurther

exp

loitedto

get

refundable

credits

forfarm

ers;

support

strengtheningties

betw

eenthe

farm

ers

andthe

buyingfirm

.

Thebuyingfirm

hadatech

nical

assistance

program

where

farm

ers

were

trainedon

enhancingthe

qualityofthe

milk,grass

farm

ing;anda

inve

stment

program

on

cooperative

s’facilities.

Thebuyingfirm

hadestablished

milk

runswith

standardized

proce

duresfor

colle

ctingthe

product

and

assessingthe

qualitypriorits

loadonthe

truck.

Transp

arentand

unbiased

mech

anisms

fordelivery:

open,quality-

basedpricing;

paym

enton

time;open

communication

withfarm

ers.

High

Metalscrap

colle

ctors

TheNGO

guided

thebuyingfirm

toaddress

the

socioeco

nomic

asp

ectsthatwere

affecting

supplie

rs’

operational

efficiency.

TheNGO

connectedthe

buyingfirm

tomultilateralbank

tofundthe

trainingprogram.

Thebuyingfirm

hadregular

supplie

rs’eve

nts

andhada

reve

rse

marketing

program

tosupport

colle

ctors.

Inve

stmentin

truck

scales,

platform

sto

facilitate

the

handlin

gof

scrap.

Exa

ct-w

eight

pricing;

market-wise

price

s.

High

Corn

farm

ing

TheNGO

advised

thebuyingfirm

on

how

toapproach

poorfarm

ers,and

how

toadapt

theirkn

owledge

transferroutines

TheNGO

connectedthe

buyingfirm

with

thefarm

ers;and

bridgedthe

buyingfirm

with

multilateralbank.

Thebuyingfirm

hadstandardized

proce

duresto

deliverseeds

andsm

all

equipmentto

farm

ers;

Warehousesclose

tofarm

ers;ERP

systemsto

coordinate

paym

ents

tosupplie

rs.

Theprice

and

theco

nditions

forproduction

delivery

were

basedonthe

Agricu

ltural

High

(continued

)

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TABLE8

(continued)

Instance

s/Constructs

NGO’s

Knowledge

forLoca

lizingSD

Programs

NGO’s

Bridging

Capability

Knowledge

TransferRoutines

Logistica

lReso

urcesin

the

BuyingFirm–

Supplier

Relationsh

ip

Relational

Contracting

Base

don

Proce

dural

Fairness

Poverty

Alleviation

forhundredsof

farm

ers:they

appointedfarm

ers

leaders

within

each

village.

supplie

rs’eve

nts;

farm

ers’visits

tobuyingfirm

’sagricu

ltural

facilities.

Ministry

regulations.

Carpentry

workshops

TheNGO

guided

thebuyingfirm

toaddress

the

socioeco

nomic

asp

ectsthatwere

affecting

supplie

rs’

operational

efficiency.

TheNGO

connectedthe

buyingfirm

tomultilateralbanks.

Bare

interaction;

buyingfirm

had

nonesystematic

activityon

knowledge

transfer.

Nologistical

challe

nges.

There

were

few

supplie

rsselected(four

workshops);and

theywere

close

tothebuying

firm

’sfactories.

Openand

transp

arent

paym

entand

production-

delivery

conditions.

Medium

Palm

tree

farm

ing

TheNGO

provided

supply-m

arket

analysisto

identify

farm

ers’

cooperative

s.

TheNGO

connectedfirm

swithco

operative

sandmultilateral

bank.

Notapplicable.TheNGO

project’s

deadlin

eim

pededthe

implementationoftheSD

program.

Noresults

Potato

farm

ing

TheNGO

provided

supply-m

arket

analysisto

identify

cooperative

saroundbuying

firm

’sfacilities.

Theyalso

supportedbuying

firm

sto

selecting

cooperative

s.

TheNGO

connectedthe

buyingfirm

tomultilateralbanks;

andto

supplie

rs.

Bare

interaction

withfarm

ers;no

established

mech

anismsto

transfer

knowledgeto

farm

ers.

Absence

of

warehouse,

conso

lidation

centers

orany

logistical

reso

urce;slow

paym

ent

proce

ss.

Lack

of

transp

arency

intransm

itting

price

sinform

ationto

farm

ers.There

wasalso

unce

rtainty

aboutthe

rejectionof

defectsper

lot.

NO

pove

rty

alle

viation

July 2016

NGOS and Supply-Chain Social Sustainability

99

adapting existing or investing in new logisticalresources.For instance, the dairy farming buying firm had estab-

lished routes for picking up milk from cooperatives in a50 km radius around their plants. The new dairy farmscould easily be added to existing routes. Additionally,the buying firm also invested to create or enhance con-solidation centers (i.e., tanks or laboratories) where thebuying firm would send their trucks every two days topick up the consolidated milk.In the case of corn farming, the buying firm had a

warehouse close to the poor farmers’ region and eachfarmer was within 50 km of the warehouse. Moreover,the buying firm allied with a local bank to open aspecial account for the corn farmers to ease payments.In the case of the metal scrap collectors, the buyingfirm invested in truck-weighing scales and trailer plat-forms at each supplier to facilitate the handling ofscrap and the delivery to the buying firm’s productionfacilities (see Table 7). On the other hand, the buyingfirm in the potato farming instance did not invest inlogistical resources. The company lacked warehouses,information systems, or any other asset that could beadapted to collect or receive the production from sup-pliers, or to make prompt payments to suppliers.Because the cooperatives also lacked warehouses, thebuying firm coordinated with a cooperative’s represen-tative to send a truck to collect the production of thevillage. However, farmers had different harvestingtimes, so when the truck arrived, it could only beloaded with a few farmers’ production, not filling thetruck. Finally, farmers had to wait 15 days after deliv-ery to receive payment when their peers who sold tolocal intermediaries received payment at time of deliv-ery.Warehouses, information technology systems, and

transportation are logistical resources provided by thebuying firm that supported the buying firm–supplierrelationships. Previous research defines these resourcesas logistics-related assets (Olavarrieta & Ellinger,1997). We follow this logic and define logisticalresources as assets, infrastructure, and informationtechnologies that facilitate production or delivery tothe buying firm and payment to poor suppliers (seeTable 7).Coordination costs were critical at both the SD

implementation (t + 1) and the buying firm–supplierstransaction (t + 2). The NGO bridging capability wasinstrumental for initiating the project, but this capa-bility did not enhance the transaction between buyingfirms and suppliers, which takes place in stage t + 2.It was only when the buying firms contributed logisti-cal resources to the buying firm–supplier relationshipthat the coordination costs were reduced to a pointwhere transactions were beneficial for both buyingfirms and suppliers. Consequently, poverty alleviation

was dependent on these logistical resources becausethey reduced the coordination costs.

Relational Contracting Based on Procedural Fair-ness. The NGO and the buying firms mitigated certaintransaction risks during the SD implementation byselecting suppliers with property rights, updated taxIDs, or environmental licenses. However, the weak-nesses of supply-market institutions offered littleenforceability of suppliers’ commitments to providetheir production to the buying firms. Moreover, theNGO could not advocate for exclusive buying firm–supplier relationships, because the terms of the multi-lateral funding ensured that poor suppliers were freeto sell their production to anyone. In this context,earning the commitment of the suppliers was criticalfor the buying firms.To build a strong relationship with poor suppliers,

it was necessary to overcome two main challenges.The first challenge was related to the previous treat-ment of suppliers, who were mostly minorities orpeople who traditionally had been excluded from eco-nomic activities and subject to discrimination or hadreceived unfair treatment. The presence of the NGOensured fair, inclusive, and respectful treatment of thesuppliers. Although managers were warmer in someinstances than in others, the overall treatment to sup-pliers was appropriate.Although the NGO presence helped to create stron-

ger relationships, there was still a second challenge:suppliers perceived the processes of the transactionsto be unfair. Some settings lacked an open, unbiasedmechanism to determine the weight of the batchdelivered by the suppliers or a clear and understand-able pricing mechanism for the products. The fairnessof the transaction needed to be addressed by the buy-ing firms.The lack of fairness resulted from the absence of

resources to make the transaction unbiased, transpar-ent, and representative for both the buying firms andsuppliers, rather than because managers aimed to takeadvantage of suppliers. For example, in the case ofpotato farming, suppliers delivered the product with-out knowing how much they would be paid. Theyknew the price only after the product was delivered tothe truck of the buying firm. Sometimes the price wasfavorable, but at other times the buying firm’s pricewas lower than that offered in alternative markets.Furthermore, suppliers did not know in advance thepercentage of the batch that would conform to thequality standards. This was the opposite of the case ofdairy farmers where the buying firm established aclear and open mechanism for pricing the milk. Theprice was fixed according to the official price pub-lished by the Ministry of Agriculture and the buyingfirm had a quality-based premium that allowed farm-ers to receive an additional 2–3 cents per litter. Fur-

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thermore, farmers could also see how much milk theywere delivering and they knew in advance the parame-ters for rejecting poor-quality batches (see Table 8 formore illustrations). Table 8 shows that the buyingfirms that managed their transactions in a procedu-rally fair manner were also the buying firms to whichsuppliers were more committed.Previous research describes buyer–supplier relation-

ships as procedurally fair when procedures and crite-ria for decisions are unbiased, representative,transparent, correctable, and ethical (Luo, 2008). Theobserved buying firm–supplier relationships that weresuccessful in achieving poverty alleviation were alsoprocedurally fair. For instance, the criteria for pricingand rejecting batches were tangible and verifiable sothat suppliers could easily determine the condition oftheir products and how much they would receive forthem. Furthermore, as formal written contracts areuseless in these supply markets, buying firms gov-erned the relationship through relational agreementsbased exclusively on trusting that both parties wouldcomply with what was agreed. Consequently, the gov-ernance in highly committed relationships was rela-tional and based on procedural fairness. Weconsidered procedural fairness as a resource becauseit is a behavioral trait displayed in the buying firm–supplier relationship.

Exploring Alternative ExplanationsAn alternative explanation would be that poverty

alleviation was achieved in the instances where suppli-ers initially had higher incomes and lower transactioncosts, which would mean that the theoretical frame-work would only apply for the least poor suppliersstudied. Before the SD program, farmers in the agri-cultural instances were poorer and had higher transac-tion costs than suppliers in the nonagriculturalinstances. Nevertheless, the results show that povertyalleviation was achieved in both agricultural andnonagricultural situations, suggesting the findings arerobust to a range of initial poverty conditions. Fur-thermore, we checked the national production trendsfor the various crops and observed that the slope ofgrowth was higher for the farmers involved in the SDprograms than the country’s average. This allows us todiscard an exogenous shock that improved the coun-try’s overall production as an explanation for theresults.Additionally, buying firms might have cooperated

with the NGO mainly to obtain the legitimacy bene-fits that such a partnership offers without actuallytightly coupling their resources with the NGO’s(Meyer & Rowan, 1977). If this was the case, then thebuying firm’s resources should be sufficient to achievethe synergy between economic and social performancein the context of poverty alleviation. In the metal

scrap collector instance, the buying firm had devel-oped suppliers without the intermediation of theNGO. However, the NGO still contributed to broad-ening the scope of the assistance to these suppliers,which enhanced the social sustainability of the supplychain. In this instance, the NGO’s resources were lesssynergy sensitive, illustrating that buying firms can tosome extent achieve synergy between social and eco-nomic performance. Unilever and Nestle have beenable to achieve similar synergies (Nespresso, 2014;Unilever, 2014). However, in the other instanceswhere poverty was also alleviated, the buying firmperceived the SD program as too risky and costly todo on its own. The buying firms in these instancesonly engaged in SD after the NGO contributed itsresources, and synergy was only achieved after bothentities had contributed resources. This indicates thatthe complementarity between the NGO’s and the buy-ing firms’ resources might be contingent on other fac-tors such as perceived legitimacy benefits. This is alimitation of the study that future research shouldtake into account.

DISCUSSIONThe resources identified in this research indicate the

role that both NGOs and buying firms have in theprocess of incorporating poor suppliers into supplychains. The NGO resources were critical for designingand setting up the SD program to meet the needs ofthe supply-market reality. The buying firm resourceswere critical to carry out the transaction and protectthe value created in the buyer–supplier relationship.The resources provided by each organization serve dif-ferent purposes at different stages of the process; theyare intertemporal complements that enhance povertyalleviation through supply management initiatives(see Figure 2).This research provides a framework that explains

how noneconomic actors contribute to the creationof innovative, socially sustainable supply chainsusing traditional supply management practices. Previ-ous literature has either suggested that firms mustdevelop relational capabilities to manage stakeholderpressures (Klassen & Vereecke, 2012; Matos & Sil-vestre, 2013) or that collaboration with nontradi-tional members such as NGOs might be a keycomponent of sustainable supply chains (Pagell &Wu, 2009). However, the literature has not contem-plated the possibility that nontraditional chain mem-bers could be actively engaged in sustainable supply-chain projects themselves. This research contributesby identifying and conceptualizing the resources thatallow NGOs to design and set up SD programs thatalleviate poverty. Hence, we put forward the follow-ing propositions:

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Proposition 1: NGOs enhance the operational effi-ciency and reduce the transaction risks of poor suppli-ers through their SD localization knowledge.

Proposition 2: NGOs reduce the coordination costs oftransacting with poor suppliers through their bridgingcapability, which connects suppliers with buying firms,and buying firms with funding sources.

The idea that NGOs span holes in the supply net-works of developing economies has been acknowl-edged in previous research (Hahn & Gold, 2014). Forinstance, scholars from business and society definebridging organizations as those which extend tiesamong organizations from different domains andallow the coordination of collective actions to copewith social problems that go beyond the scope of singleorganizations (Brown, 1991; Westley & Vredenburg,1991). This type of organizational form emerges eitheras a joint effort of a set of organizations or as the roleadopted by a specific organization (Arenas, Sanchez &Murphy, 2013; Westley & Vredenburg, 1991). Similarly,social network scholars use the term tertius iungens(i.e., the third who joins) to describe a strategic andbehavioral orientation toward connecting members ofa given social network (Obstfeld, 2005). In both cases,these conceptualizations depict the bridging phe-nomenon as something that an organization with cer-tain structural network properties such as betweenness,

centrality, or a node bridging a structural hole does.Our conceptualization of bridging capability adds pre-cision to the understanding of this phenomenon.Prior research on SD programs was instrumental

for our interpretation process as our coding/resourcelist was built on this literature. Supplier developmentprograms are supply management practices that areusually studied within the realm of lean supply man-agement, quality management, or continuousimprovement programs (Modi & Mabert, 2007). Typ-ically, the main objective of these practices isimproving the production performance and qualityof suppliers (Krause, Handfield & Tyler, 2007). Addi-tionally, SD programs have also been studied asmechanisms to expand sustainability practices alongthe supply chain (Gimenez & Tachizawa, 2012).Although the relational aspects of the SD programssuch as relational social capital and relational normsof governance have been found as suitable mecha-nisms to govern transactions (Krause et al., 2007),this type of practice had not been studied from theperspective of NGOs, nor had its impact on socialoutcomes been assessed. Our results contribute tothe SD literature, suggesting how SD programs canbe deployed by NGOs for poverty alleviation pur-poses.Our theoretical framework depicts the relationship

between SD programs and poverty alleviation

FIGURE 2Theoretical Framework of the Resources for Implementing SD Programs for Poverty Alleviation

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(Figure 2). First, managers committed their resources tothe project only after they realized the contribution ofthe NGO. Thus, the commitment of the NGO’sresources lead to the commitment of a buying firm’sresources. Second, both the NGO and the buying firmcreated a third element—the SD program—which wasdesigned to enhance the operational efficiency andreduce the transaction costs of poor suppliers. How-ever, this third element was effective only when it wasimplemented jointly with the NGO and buying firm’sresources (see Figure 2). This suggests that the effective-ness of this type of project rests on the complementaryeffect between these NGO and buying firm resources.This complementary effect entails a dynamic relation-ship between the NGO’s resources, the buying firm’sresources, and the SD program. Therefore, enhancingpoverty alleviation is about the dynamics between (1)the NGO’s knowledge to localize the SD program andits bridging capability; (2) the buying firms’ knowledgetransfer routines, logistical resources, and relationalcontracting based on procedural fairness; and (3) theSD program. Based on these arguments, we develop thefollowing propositions:

Proposition 3: Operational improvement of poor sup-pliers is achieved when a buying firm’s knowledgetransfer routines interact with the SD program and theNGO’s SD localization knowledge.

Proposition 4: Coordination costs of transacting withpoor suppliers are reduced when a buying firm’s logisticalresources interact with the SD program and the NGO’sbridging capability.

Proposition 5: Transaction risks with poor suppliersare reduced when a buying firm’s contracting based onprocedural fairness interacts with the SD program andthe NGO’s SD localization knowledge.

Previous research suggests that the supply-chainmanagement field would benefit from studies address-ing how partnerships create extended value in the sup-ply chain (Priem & Swink, 2012). Resource-basedtheories are used in supply-chain research to explainhow firms leverage their internal and supply-chainresources to achieve competitive advantage (Barney,2012; Hult, Ketchen, Cavusgil & Calantone, 2006;Crook & Esper, 2014). Our paper describes “how”and “why” NGOs use their own resources and lever-age a firm’s resources to enhance social sustainabilityin the supply chain. The logic of resource-based theo-ries also works in a broader sense of value creation,including how noneconomic actors identify, orches-trate, and allocate resources to achieve their organiza-tional goals. Consequently, our research alsocontributes to the supply-chain management literatureby addressing how partnerships create extended value.

The identification of these resources has two mainimplications for the literature on cross-sector partner-ships and BOP. First, our research incorporates thesuggestions made by previous research (Ansari et al.,2012; Kolk et al., 2014; Sodhi & Tang, 2014) and pro-poses a theoretical framework of the resources used toundertake supply management practices for povertyalleviation. We contribute by specifying how NGO-ledinitiatives can create business models in which poorsuppliers are integrated into supply chains. Second,previous research has suggested that business relation-ships in this context should be managed throughinformal mechanisms of socialization and social capi-tal (Hahn & Gold, 2014). Our research adds precisionby indicating that relational forms of governancebased on procedural fairness contribute to reducingthe transaction risks in buyer–supplier relationships.

CONCLUSIONSThis research provides evidence of the resources

applied by NGOs to implement programs thatenhance the supply chain’s social sustainability with-out creating trade-offs between social and economicoutcomes. It has also identified the buying firmresources that complement the NGO in the process.Accordingly, based on our results managers will needto take into account the following when consideringsuch partnerships. First, engage with partners who canconnect the firm with a pool of resources that it can-not presently access. Second, resources will need adap-tation to the local context before undertaking anysupply management initiative with poor suppliers.Third, invest in knowledge transfer routines and logis-tical resources in order to successfully integrate poorsuppliers. Finally, govern buyer–supplier relationshipsthrough relational mechanisms based on proceduralfairness.This research is not free of limitations. Our research

design included a multinational NGO, six buyingfirms, and suppliers operating in the same country.This increases our framework’s internal validity, but italso weakens the generalizability of the results. Futureresearch examining different NGOs or countries couldadd the “when” and “where” to our theoretical frame-work. Furthermore, our results should be tested in alarger empirical setting; future researchers shouldundertake field experiments in which the variablesobserved in this study would be measured quantita-tively. These limitations also constitute specific oppor-tunities for broadening our knowledge about thetopic. We end this research with the presentation offour lines of future inquiry that can be pursued afterthis research: NGO-related, buying firm-related, sup-ply-related, and context-related lines of research.

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NGO-Related Future ResearchThe results suggest two main paths for future

research on the supply chains of NGOs and othernonprofits. First, future research should build directlyon this study. The antecedents, evolution, and out-comes of the bridging capability are topics thatdeserve more attention. Prior to quantitative measure-ment of this construct, more exploratory research isneeded to better understand its underlying dimen-sions. Future research should address questions suchas how this capability is developed and what contex-tual factors trigger the development of such capability.The second pathway for future research is much

broader. The research helps to lay the foundation forfuture research on the supply chains of organizationsthat do not have profit maximization as their pri-mary motivation. This research shows that NGOs canmake use of traditional supply-chain managementpractices. However, it is likely that because NGOshave different orientations, they would use otherpractices or have different outcomes from previouslyidentified practices. Future research needs to explorethis possibility. And in so doing, it is possible thatpractices that are used by NGOs and the like couldalso be used by for profits to help them become sus-tainable. The study of the supply chains of these“nontraditional” supply-chain members is then anarea that deserves study on its own and which mightalso contribute to making traditional for-profit sup-ply chains sustainable.

Buying Firm-Related Future ResearchThe focal organization of this research is the NGO,

and our main focus is on poverty alleviation. Never-theless, buying firms are profit-driven organizationsand the poverty alleviation projects they engage inhave to be business-sound. The analysis offers somequalitative insights about the benefits of poverty alle-viation for the buying firms. In the successfulinstances of poverty alleviation, buying firmsincreased both the number of poor suppliers usedand the volume purchased from these suppliers. Thisreduced their lead times and increased their controlover the supply network. Still, future research shouldanalyze the specific mechanisms of value capture forbuying firms from this type of initiative.To achieve social sustainability, buying firms use

both financial and intangible resources, such as orga-nizational capabilities and knowledge, to complementNGOs resources. However, this research did notaddress the conditions under which these resourcescould be combined. For instance, there might be insti-tutional forces, firm–NGO cultural differences, orinconsistencies in organizational structures that needto be addressed. Future research should also study the

contingencies that allow the combination of resourcesbetween these organizations.

Supply-Related Future ResearchIn most instances, the NGO project entailed the

disintermediation of traders in the supply chain. Thiscould be interpreted as a zero sum game, where thebenefits of the poor suppliers are losses for the tra-ders eliminated. From the data collected, we specu-late that the organizations directly and negativelyaffected by these projects were international traders.Ecuador is a country with a production deficit in theproducts considered. Therefore, what the buyingfirms now buy from local poor suppliers is likely nolonger bought from these traders who sourced inter-nationally. Future research should analyze the neteffect of this type of initiative on the whole supplynetwork.Moreover, the use of SD programs for poverty allevi-

ation opens the door to explore other supply-chainpractices that can be adapted for social issues. Forinstance, future research might study how ERP sys-tems or any other IT-enabled coordination systemcould enhance the supply chain’s social sustainability.Information technology could improve the trans-parency and openness of the processes, which couldenable procedural fairness in buyer–supplier relation-ships.Finally, an unavoidable question is what happens to

poor suppliers after the NGO initiative ends. Ourresearch suggests that relational contracting capabili-ties based on procedural fairness are associated withreduced transaction risks. This implicitly suggests thatthese firm capabilities are the basis of long-term rela-tionships. However, it is unknown whether poor sup-pliers are better off under long-term relationshipswith the buying firm or whether their new capabilitieswould be better off in the market. Future researchshould address this issue via longitudinal studies inwhich suppliers can be traced.

Context-Related Future ResearchTwo issues in the regulatory environment of Ecuado-

rian agricultural supply chains, which are common inLatin American economies (Romig, 2011), mightaffect the generalizability of the results: government-price fixing and international trade barriers such asquotas and tariffs. On the one hand, trade barriers areadded to the costs of importing raw materials and putpressure on local producers to develop local suppliers.On the other hand, government-price fixing fostersthe emergence of black markets led by traders whogenerally offer lower prices than the fixed price, whichdiscourages managers from undertaking long-termagreements with suppliers. Our results are embeddedwithin this tension and it is unknown what the buy-

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ing firms would have done if this tension was not pre-sent. Consequently, future research should considerthe tension between government-price fixing and traderegulation on the decision of managers to engage insupply-chain projects with poor suppliers.Finally, based on the 2014 corruption index of

Transparency International, Ecuador is slightly morecorrupt than the global and Latin American mediancountry. Ecuador has a score of 33, the global medianis 38, and the Latin American median is 36 (Trans-parency-International, 2015). Although corruptionincreases the costs of doing business (Yermo & Schor-eder, 2014), the lack of institutions is the major bar-rier to implementing projects that incorporate poorsuppliers into supply chains (De Soto, 2000). Corrup-tion-associated costs are general to all business activi-ties and not specific to businesses with poor suppliers.Previous studies on BOP initiatives have labeled thelack of institutions as institutional voids (Parmigiani& Rivera-Santos, 2015). Parmigiani and Rivera-San-tos (2015) have suggested that managers should findmechanisms to fill these voids. They also suggestedthat alliances between the private sector, public orga-nizations, and NGOs are a mechanism to cope withthem. Consequently, an interesting future line ofresearch is the interaction between the resourcesidentified in this research and the environmentaldynamics of institutional voids.

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Jorge Andres Rodriguez (Ph.D. Candidate, ESADE -Ramon Lull University) is an Assistant Professor ofOperations Management at the Escuela SuperiorPolitecnica del Litoral Graduate School of Manage-ment. His research interests include sustainable supplychain management, stakeholder relationships in thecontext of supply chains, and knowledge transfer inbuyer-supplier relationships. Mr. Rodriguez is cur-rently working on a research project that aims to testthe causal relationship between sustainable sourcingpractices and smallholder farmers’ life conditions.

Cristina Gimenez Thomsen (Ph.D., Universitat deBarcelona) is Professor of Operations Managementand Vice Dean of Faculty at ESADE – Ramon LlullUniversity. Her areas of interest are supply chain man-agement, integration processes and sustainable opera-tions. She has published over 30 articles in specializedjournals on these subjects and presented papers atnational and international conferences. Her recentpapers have been published in the Journal of SupplyChain Management, International Journal of Operationsand Production Management, Journal of Operations Man-agement, International Journal of Production Economics,and IEEE Transactions on Engineering Management,among others. Cristina has teaching experience both

in operations management and supply chain manage-ment in undergraduate, graduate, and in-companycourses.

Daniel Arenas (Ph.D., University of Chicago) is anAssociate Professor and Chair of the Department ofSocial Sciences at ESADE - Ramon Llull University.His research interests include NGO-business collabo-ration and conflict, stakeholder theory, and the politi-cal role of the firm. His work has been published inBusiness Ethics Quarterly, Business & Society, Journal ofBusiness Ethics and Business Ethics: A European Review.He is currently working on the EUInnovate project,funded by the EU FP7 Framework.

Mark Pagell (Ph.D., Michigan State University) isProfessor of Sustainable Supply Chain Managementand Chair in Global Leadership at the University Col-lege Dublin Michael Smurfit Graduate School of Busi-ness. Dr. Pagell does research on topics such assustainable supply chain management, humanresource issues including employee safety in opera-tional environments, and operational responses toenvironmental uncertainty. Dr. Pagell has publishedover 60 peer reviewed journal articles in a number ofpremier outlets including: Production and OperationsManagement, Journal of Supply Chain Management, Jour-nal of Operations Management, and Sloan ManagementReview. Dr. Pagell’s research has won a number ofawards including an Emerald Citation of ExcellenceAward (2013), best papers published in the Journal ofSupply Chain Management (2009), International Journalof Operations and Production Management (2005) andJournal of Operations Management (2002) as well asbest Operations Management paper at the Academy ofManagement meetings in 2001 and 2003 and bestpaper in the Sustainability track at the DecisionSciences meetings in 2008 and 2011.

APPENDIXCase Study Protocol

RESEARCH PURPOSEThe aim of research of this project is to study the

development of buyer–supplier relationships in con-texts of poverty alleviation through partnershipsbetween firms and NGOs. Specifically, the researchquestions we would answer are as follows: how firmsand NGOs cooperate to develop SD programs forpoverty alleviation? What resources do enable thedevelopment of such cooperation and such pro-grams?

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CONCEPTUAL FRAMEWORK• Relational view

• Social capital theory

THEMES TO GATHER INFORMATIONABOUT

Antecedents of the NGO• Activities of the NGO prior the project

• Connections of the NGO and previous allies

Complementary resources• The role of the NGO during the creation of value

in the project

• Reasons for the firm to join the program

• Cultural, values, visions about the cooperationwith the firm (and the NGO)

• Coordination and follow-up of the project

• CSR (if any) policy of the firm

• Purchasing practices of the firm related to the cate-gory of products in question or similar suppliers

Social capital• Trust and mutual understanding between the firm

and NGO

• Communication channels between the firms andNGOs

• Connections developed along the initiative

About the initiative• Challenges and barriers for implementation

• Total cost

• Total material purchased

• Length of the initiative

• Transaction costs avoided

• Operational results of the suppliers

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