Suppliers' adoption of sustainable practices plays a critical role for global companies to improve environmental performance. Based on the absorptive capacity theory, this study empirically explores how suppliers' knowledge bases and power relationships influence their adoption of sustainability practices. A longitudinal case study with eight suppliers has been conducted. We find that the adoption of leading sustainable practices requires a supplier's good knowledge base whereas a supplier can adopt imitating and toddling sustainable practices even if it has a limited knowledge base. Both the power of internal sustainability teams and external buyers enhance the effects of suppliers' knowledge bases on the adoption of sustainable practices. Suppliers choose the strategy used in adopting sustainable practices according to the configuration of internal and external power. The results enhance the current understandings of the mechanisms through which knowledge bases and power relationships affect the adoption of sustainable practices. The findings can also help global companies improve the effectiveness of their supplier development efforts and enhance the environmental performance of supply chains.
- Sustainable supply chain management
- Supplier development
- Knowledge base
- Absorptive capacity
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Impact: Public Policy Impact, Environmental Impact, Societial Impact