Impact of supply network structure on firm level and network level environmental performance

Guide(s)

Diatha, Krishna Sundar

Department

Production and Operations Management

Area

Production and Operations Management

University

Indian Institute of Management Bangalore

Place

Bangalore

Publication Date

3-31-2019

Year Awarded

March 2019

Year Completed

March 2019

Year Registered

June 2013

Abstract

The discussion on environmental sustainability has occupied the centre stage for managers and policy makers. Decades of research in this domain has shown that production processes are one of the major drivers of greenhouse gas emission. However, with value chain dispersed globally, managing supply chain to achieve true environmental sustainability remains a distant dream for most managers and policy makers. While there are multiple studies that has looked into this aspect, most studies conceptualize buyer-supplier relationship as simple linear relationship without recognizing the interdependencies in the chain. Consequently, the existing literature has failed to appreciate the nuances associated with multi-tier network structure and firm’s GHG emission. Probably because of this reason, despite decades of research on sustainability, there is lack of consensus among managersand academics to deal with the issues of environmental sustainability. The conventional doctrine of sustainability is also challenged by the fact that there is growing realization among policy makes that firm’s own emission is just the tip of the iceberg. To achieve true sustainability a firm must go beyond its direct emission and must be able to curtain the emission of the entire network. However, lack of availability of data has presented significant challenge for academic researchers to carry out empirical study and provide practitioners with any credible solutions. This work is aimed at overcoming such limitations by delving into role of multi-tier buyer-supplier network in reducing both firm’s own emission and emission of the network. We overcome the challenge of construction of a multi-tier network by collecting data from secondary sources. The multi-tier nature of our network not only looks at firm’s direct suppliers but also incorporates suppliers’ suppliers and customers. Therefore, we not only look at firms contractual relationships but also focus on non-contractual relationships as well. This makes our study more meaningful as it captures the intricacies of the supply chain. Our primary thrust is on GHG emission. In Essay I we focus on role of three important network characteristics density, betweenness centralization and average clustering co-efficient and its relationship with focal firm’s GHG emission. The objective of this essay is to develop a more robust understanding of multi tier network structure and GHG emission. We also focus on moderating role of average path length in our study. We find that for some network characteristics there is a linear relationship between network structure and GHG emission whereas for others there is curvilinear relationship. Again, direction of relationships is also different. While, density has an U shaped relationship, betweenness centralization has positive average clustering co-efficient has negative relationship with GHG emission. We collected data from 330 firms and from 28 different countries and tested our proposed model. Hence, for the first time in literature, we are able to unearth the role of buyer-supplier network structure in reducing GHG emission. Essay II extends the findings of Essay I and focuses on emission of the entire network. While conversation in academia as well as industry has revolved around going beyond firm’s own emission, no empirical work exist in this domain. We overcome this shortcoming of existing research by focusing on the relationship between cohesiveness, centralization and modularity and GHG emission of the entire network. We find that while centralization and modularity have positive effect on GHG emission, cohesiveness has a negative relationship with network emission. Therefore, this essay for the first time focuses on network structure environmental performance at a network level. While doing so, for the first time in literature, we are able to show empirically the relationship between buyer-supplier network structure and environmental performance of both focal firm as well as entire buyer supplier network. This research not only helps us to resolve multiple paradoxes but also helps us to provide a generalizable framework which is valuable for both academic research and practice.

Pagination

142p.

Copyright

Indian Institute of Management Bangalore

Document Type

Dissertation

DAC Chairperson

Diatha, Krishna Sundar

DAC Members

Verma, Nishanth; Pallathitta, Rejie George; Jayaram, Jayanth

Type of Degree

Ph.D.

Relation

DIS-IIMB-FPM-P19-01

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