How Organizations Measure the Impact of Sustainability?

Introduction

There is an increasing awareness in academia and business of the need for sustainable development to become a key part of supply chain management practices (Shukla, Deshmukh, & Kanda, 2010). Sustainability refers to an integration of social, environmental, and economic issues (Tsai & Hung, 2009). Adding the aspect of sustainability extends the approach of supply chain management from the basic APICS definition of synchronizing supply with demand to the concept of sustainable supply chain management (Pagell, Krumwiedi, & Sheu, 2007). The latter perspective, according to these authors, demands organizations to perform well not only on traditional indicators of profit and loss, but also on an expanded conceptualization of performance that takes into account environmental and social indicators. Supply chain management is commonly defined as the “strategic achievement and integration of an organization’s social, environmental, and economic goals through the systemic coordination of key inter-organizational business processes to improve the long-term economic performance of the individual company and its value network” (de Brito & van der Laan, 2010, p. 860).

Gunasekeran and Kobu (2007) observe that performance measures are essential for effectively managing an organization’s operations, particularly in an ever-competitive and continuously ever-changing global economy. These particular authors further assert that performance measures and metrics are important in supply chain management (SCM) since they not only facilitate the tracking of performance in a meaningful and consistent manner, but also provide a framework through which management can make the right decisions that would contribute towards the improvement of organizational competitiveness. Organizations are already making a transition from traditional, stand-alone performance measures to more sophisticated ways of measuring supply chain performance due to increased complexity stemming from globalization of the supply chain (Varma & Deshmukh, 2009). Furthermore, organizations are increasingly becoming subject to elevated scrutiny from customers and government organizations regarding their compliance with environmental and social responsibility of their supply chain operations (Pagell et al., 2007). Yet, despite increased pressure for organizations to implement sustainable practices and calls for transparency by the public and government agencies, limited research exists on how to incorporate environmental measures or metrics into the collection of traditional supply chain performance measures (Shaw, Grant, & Mangan, 2010).

In their research on petroleum supply chain performance measures, Varma and Deshmukh (2009) observed that organizations are finding that previous data collection methods are not providing them with the flexibility and detail they need nor are these methods sustainable to meet future reporting requirements. Primarily, organizations today require scalable, robust data collection methods that allow them to prepare accurate reports in a timely and cost-effective manner (Wallbank & Conceicao, 2008). As such, several different approaches and techniques exist from the introduction of Triple Bottom Line (TBL) by John Elkington in 1997 and the first release of the Sustainability Reporting Guidelines by the Global Reporting Initiative (GRI) in 2000, to the integration of green concepts to the Supply Chain Operations Reference (SCOR) model developed by the Supply Chain Council in 2008. This paper focuses on the barriers organization face with implementing sustainable development practices in supply chain operations through a comprehensive investigation of current implementation methods and sustainability reporting models. The aim of this qualitative case-based research is to provide best practices for practitioners to build upon and develop an innovative model which would integrate core elements from existing models and methods.

Statement of the Problem

Economic performance has traditionally, and continues to be, the foremost priority for organizations operating in the ever competitive and continuously shifting business environment of the 21st century (Herrera, 2010). Yet, environmental performance is becoming increasingly important for these organizations due to sustained pressures from a multiplicity of institutional players, including customers, government organizations, and competitive sources (Zhu & Sarkis, 2007). Extant research on sustainable supply chain demonstrates that incorporating sustainable practices in a firm’s supply chain brings long-term benefits such as enhanced reputation and confidence among consumers and communities, elevated competitiveness, better anticipation and management of operational risks, and improved efficiency and profitability (Tsai & Hung, 2009; Vachon, 2007). Many organizations have started considering and implementing sustainability approaches such as cleaner supply chain networks and environmental management systems in a bid to improve environmental, social and economic performance (Tsai & Hung, 2009).

To date, however, evidence regarding how to incorporate environmental measures into the collection of traditional supply chain performance measures remains primarily anecdotal (Shaw et al, 2010). Varma and Deshmukh reports that organizations are finding that previous data collection techniques are not providing them with the flexibility and detail they need to measure the environmental and social performance and effectiveness of their supply chain practices, nor are these methods sustainable to meet future reporting requirements. In a 2009 best practices study conducted by the Kanal Consulting Group with twenty-five leading corporations, representing over $800B dollars in market value, researchers found that sustainability in the supply chain was one of the major areas these organizations acknowledged as needing improvement (Kanal, 2009). Moreover, the impression persists in many organizations that implementing more sustainable processes and technologies will be costly (Varma & Deshmukh, 2009). The incapacity to rationalize cost of implementation of green initiatives is a foremost limitation on organizations seeking to implement sustainable development practices in their supply chains, according to The Green Supply Chain Study, a survey jointly sponsored by Computer Sciences Corporation (CSC), Manhattan Associates Inc., and IBM. The study findings found that close to two-thirds of participants sampled reported cost justification as one of the paramount hurdles their organizations face (Reed Business Information, 2008).

Failure to address these problems can give rise to significant strategic, reputational and operational implications that can threaten to undermine any potential economic gains made by domestic and international organizations. The proposed study, therefore, shall attempt to address these challenges by developing a framework that provides best practices in sustainable supply chain for practitioners to build upon, and also develop an innovative model that would integrate key social and environmental indicators in the measurement of the performance and effectiveness of sustainable supply chain practices. The outcomes of this research will be critical not only in addressing the various barriers that organizations face with implementing sustainable development practices in supply chain operations, but also in outlining best practices which organizations can use to incorporate social and environmental measures into the collection and measurement of traditional supply chain performance measures. Understanding these barriers and best practices in reporting and measuring sustainable supply chain practices is critical for organizations to strategically manage their environmental, social, economic and operational performance (King, 2011; Cokins, 2009).

Purpose of the Study

The purpose of the proposed qualitative case-based study is to address four interrelated issues related to the implementation of sustainable development practices in the supply chain. First, this study will explore and extrapolate various insights on how companies are reporting progress on sustainable development efforts and the techniques for addressing social and environmental issues in their organization. Second, the proposed research will investigate the Supply Chain Operations Reference (SCOR) model for supply chain management, GreenSCOR, a component of SCOR which incorporates sustainability references, and the triple bottom line (TBL) concept to determine if a correlation exists among key performance indicators (KPIs) in the models mentioned. Third, the proposed study will aim to determine if using leading sustainability management software with the capability to analyze definitive key performance indicators from models such as GreenSCOR can render transparent, comprehensive and current sustainability data in support of strategic green initiatives. The use of sustainability management software packages provide the organization with the capability to collect and analyze data related to quality, service, performance and sustainability, which could then be used to create sustainability intelligence and communicate the organization’s environmental achievements to stakeholders (Melville, 2010). Lastly, the proposed study will aim to establish a baseline framework on sustainability reporting techniques by examining the GRI-G3 framework (formerly Sustainability Reporting Guidelines).

Vachon (2007) reports that anecdotal evidence on the integration of sustainable development practices with elements of the triple bottom line, and if such integration improves business performance, remains relatively unclear and without theoretical foundations. By relying on the SCOR and TBL conceptual foundations, the proposed study will lay much focus on demonstrating how the integration of sustainable development practice with elements of the triple bottom line can improve business success. Specifically, the study will determine if incorporating aspects of the triple bottom line can positively impact individual elements of what has traditionally been referred to as non-financial performance; and in turn, how these elements can have an impact on the drivers of a successful transformation.

Research Questions

According to Shukla et al. (2010), sustainability has the potential to provide far reaching economic, social and environmental value for an organization willing to invest in transforming their business processes. A mounting number of organizations and scholars have extended sustainability objectives to more expansively deal with social, environmental and enduring economic stability concerns in the supply chain (Pullman, Maloni, & Carter, 2009). Vachon (2010) observes that the past couple of years have witnessed a surge in organizations endeavoring to build reputations as enviable corporate citizens’ alert to the need for elevated social and environmental performance. What started as a public relations or cost-savings venture is budding into a new paradigm as the marketplace demands heightened transparency, answerability, and traceability of sustainability practices and performance across the supply chain (Hespenheide, Pavlovsky, & McElroy, 2010). Based on grounded theory using case-related research, this qualitative study shall employ an inductive inquiry-based paradigm to address the following questions:

  • Q1. What are the issues that organizations currently face when implementing sustainable development in supply chain operations?
  • Q2. What elements/indicators would an innovative sustainability model include to enable organizations to measure transformation progress?
  • Q3. How does the integration of sustainable development practices with elements of the triple bottom line improve business success?

Definition of Key Terms

Carbon Footprint – Is the total amount of gaseous emissions released directly and indirectly to support human production or consumption activities (Carbon Footprint, 2011).

Corporate Social Responsibility (CSR) – Holme and Watts (2008) proposes that corporate social responsibility is the ongoing obligation by enterprises to not only behave ethically and contribute towards economic development, but also to elevate the quality of life of workers and their relations, the neighborhood, and society at large.

Global Reporting Initiative (GRI) – A network-based organization that initiated the most extensively used set of guiding principles for sustainability reporting (Global Reporting Initiative, 2011).

GreenSCOR model – An integrated green supply chain management tool that allows organizations to seamlessly manage their supply chain and environmental impacts, resulting in more efficient operations and lower costs (Wilkerson, 2008).

GRI-G3 Sustainability Reporting Guidelines – the guiding principles are the foundation of GRI’s Reporting Framework which offers guidance on how organizations can divulge their sustainability performance (Global Reporting Initiative, 2011).

Supply Chain Management (SCM) – Include all those actions and procedures related to the scheduling, harmonization, integration and management of frameworks that oversee the sourcing and procurement of products or raw materials, conversion, and logistical issues within and across enterprises. It also encompasses harmonization and partnership with channel associates, including suppliers, distributors, third-party service providers and customers (Vitasek, 2010).

Supply Chain Operations Reference Model (SCOR) – A process-oriented model designed by the Supply Chain Council with the objective of serving as the cross-sector standard diagnostic instrument for supply chain management across all industries, particularly in assisting organizations to address supply chain concerns and appraise performance. The model facilitates firms to address, improve and communicate the best practices in SCM within and between all interested parties (“SCOR,” 2011).

Sustainability – Implies the ability or capacity to sustain and maintain a process or activity at a desirable level of utility without compromising the ability or capacity of future generations to meet their needs via the same process or activity (Badiru, 2010). According to the author, sustainability denotes better resource utilization, sustainable improvements, safety guarantees, operational efficiency and process or activity effectiveness.

Triple Bottom Line – A notion employed to empirically relate the social and environmental impact of a company’s activities and processes to its economic performance with a view to demonstrate improvement in all three spheres. Evaluating the triple bottom line allows for better enlightenment in decision making particularly in regard to the relative cost and benefit of sustainability models (Keyes & Sykes, 2009).

Brief Review of the Literature

Prior to engaging in the sub-sections of the literature review on the various approaches for implementing sustainability practices in supply chain operations and how they relate to the triple bottom line concept, it is appropriate to provide a definition of basic terms. The Council of Supply Chain Management Professionals (CSCMP) defines SCM as the planning and administration of all actions and procedures concerned with sourcing and procurement, conversion and all logistics supervision issues incorporating supply and demand management within and across enterprises (Vitasek, 2010). According to the Dow Jones Sustainability Indexes (DSJI) released in 2010, corporate sustainability is a business strategy that generates long-term shareholder value by espousing prospects and managing risks drawing from economic, environmental and social developments (Dow Jones Sustainability Indexes, 2010). One central concept that is helping to operationalize sustainability is the triple bottom line approach, where stakeholders expect an organization to achieve minimum performance in the economic, environmental and social dimension (Dyllick & Hockberts, 2002). Thus, the triple bottom line is a concept employed to empirically relate the social and environmental impact of a company’s activities and processes to its economic performance with a view to demonstrate improvement in all three areas (Keyes & Sykes, 2009).

Sustainability Reporting

Shukla et al. (2010) acknowledge that sustainability reporting includes a wide variety of organizational initiatives dealing with issues in environmental impact appraising, pollution avoidance, community development programs and fair trade practices. According to Christen, Shepherd, Meyer, Jawardane, and Fairweather (2006), “sustainability reporting is not just a communication tool, but becomes a part of a process to improve the sustainability of an organization” (p. 331). Sustainability reporting, which encompasses terms such as corporate social responsibility (CSR), environmental reporting and triple bottom line (Badiru, 2010), demonstrates the ever-mounting demand by stakeholders for more transparency and traceability (Shukla et al., 2010). As confirmation of this inclination, the Institute of Management Accountants (IMA) reported an impressive growth in professionally managed assets that have a social responsibility orientation, with socially responsible investments in the U.S. growing from six hundred thirty-nine billion dollars in 1995 to more than two trillion dollars in 2005 (Institute of Management Accounting, 2008). There are no policies obliging U.S. organizations to present sustainability reports, nevertheless evidence demonstrates the trend to present these disclosures is increasing (Borkowski, Welsh, & Wentzel, 2010).

Tate, Ellram, and Kirchoff (2010) initiated a study to investigate how organizations present CSR reports and what these reports indicate about the organizations publishing them. They surmised that organizations fit somewhere along a continuum, with respect to their social and environmental approaches, ranging from resistant to self-protective to searching for value and competitive advantage. According to Tate et al. (2010), the continuum perception envisages that organizations will realize potential gain from espousing more positive social and environmental strategies and these organizations will ultimately advance toward the value and competitive advantage stage.

Of concern to scholars and practitioners is how the declarations in CSR reports contrast with the concrete corporate commitment in the equivalent spheres of reported activity. The study further insinuated that absence of CSR reporting guidelines led to significant variety and uncertainty in the substance of the reports compared for analysis. Research, for instance, revealed one reason for the differences in report substance is that few incentives exist to divulge negative information and, consequently, organizations are inclined to remove or reduce this type of information since the major inspiration for publishing CSR reports is to benefit from an improved corporate image (Tate et al., 2010).

To address this disparity, Isaksson and Steimle (2009) conducted a study on the GRI-G3 guidelines for sustainability reporting from the data of five different companies within the same industry. The study also considered and critically reviewed the triple bottom line concept and the topic of eco-efficiency launched by the World Business Council for Sustainable Development (WBCSD) in an effort to find common recommendations of how to measure sustainable development and sustainability in order to determine elements stakeholders would expect to find in a sustainability report (Isaksson & Steimle, 2009). The research concluded with a focus on the GRI-G3 guidelines to find out to what extent this method really addresses the sustainability performance of participating organizations.

In contrast to the research conducted by Tate et al. (2010), the study by Isaksson and Steimle (2009) did not find that organizations eventually grow into a commitment toward sustainability merely through procedural reporting of these initiatives. Instead, the results concluded through market-relevance that social reporting has a very low relevance in developing regions due to lack of customer focus. Isaksson and Steimle’s (2009) research found that for the low-income customer the most important concern regarding corporate performance is price. Concerning the environmental indicators in CSR reports, results of their research indicated that most companies report both level of commitment and progress toward achieving sustainability initiatives, however they do not compare level or progress to industry benchmarks such as those available from CSRHub. According to Gunasekaran and Kobu (2007), benchmarks provide sustainability and corporate social responsibility (CSR) ratings on some of the world’s largest publicly traded companies. In the absence of this data, it becomes very difficult for the reader to know how a particular company compares with another.

Supply Chain Sustainability

Tate et al. (2010) discussed ten themes which emerged from the data in their research that, when viewed through the lens of the triple bottom line concept, reveal the intersection and integration of environmental, social and economic performance. All the themes associated with one of the triad spheres of sustainability (economic, environmental or social) in SCM and the organization’s CSR report consequently mirrored the amount of relative influence that each theme has on the enterprise (Tate et al., 2010). The framework developed by Carter and Rogers (2008) for applying the triple-bottom line in defining sustainable supply chain practices present overbearing evidence that enterprises should integrate long-term sustainability approaches with vision right through the supply chain to generate competitive advantage. Furthermore, the development of long-term strategy for the performance of the enterprise supports the acceptance that short-range economic benefits are not sufficient if the enterprise wants to remain viable and realize sustainable growth (Dyllick & Hockberts, 2002).

The overall finding of the research conducted by Tate et al. (2010) was that the role of supply chain management spans across all aspects of sustainable practices among companies that develop progressive corporate social and environmental strategies. It was clear from the research findings that organizations rely heavily on supply chain management to achieve their sustainability goals. Tate et al. (2010) believed researchers could generalize future study results, based on the data they reviewed from the corporate CSR reports, to discover new insights into the role of supply chain management in sustainability at large corporations. In contrast, Zhu, Sarkis, and Lai (2008) found that the adoption of these practices tends to vary due to extant issues facing major industrial sectors thereby reducing the generalizability of the results. The study cited differing drivers and pressures in each industrial sector as a leading cause of the variances in the adoption levels of sustainable supply chain management practices. Zhu et al. (2008) acknowledged that the same premise is true for the incorporation of potential improvements that companies can make to mitigate the causes that inhibit program adoption.

To reduce variances and address program adoption issues, organizations can utilize the GreenSCOR model which incorporates environmental elements in the latest version (9.0) of the original SCOR model, developed by the Supply Chain Council. The GreenSCOR model allows companies to more successfully incorporate environmental management with supply chain management by underlining best practices for each process and availing a clear set of measures (Vachon, 2007). Research conducted by Teuteberg and Wittstruck (2010) revealed that while no reference model for sustainable supply chain management is in existence to-date, the GreenSCOR model is particularly useful as a closely-related concept of sustainable supply chain management to base new specific reference models on in the future. The GreenSCOR model also contains best practices for software features and technology development as well as organizational structuring to support supply chain sustainability practices. The implementation of reference models is helpful because they accelerate the realization of organizational concepts and software implementation, and these models also contribute to the minimization of risks (Teuteberg & Wittstruck, 2010).

Triple Bottom Line

Christen et al. (2006) acknowledge that “the triple bottom line provides both a model for understanding sustainability and a system of performance measurement, accounting, auditing and reporting” (p. 331). While citing the Global Reporting Initiative (2002), the researchers suggest that it is generally acceptable to view the triple bottom line through the lens of the economic, social and environmental aspects of business performance. Elkington (1998) (cited in Christen et al., 2006) referred to the three aspects as the delivery of environmental quality, social equity and economic success by organizations, implying that most triple bottom line literature depicts sustainability as the intersection rather than the integration of social, economic and environmental interests and initiatives (Gibson, 2006). Although the triple bottom line is largely viewed as a metric by which organizations can measure their contribution to sustainable development, Christen et al. (2006) caution that the three components should neither be viewed in isolation nor should their broad nature be diluted or, even worse, lost in a constricted indicator definition process that loses sight of the integrated and all encompassing scope of sustainability.

It has been noted through research that many organizations approach sustainability assessments by addressing the social, economic and environmental considerations separately and later struggle with how to integrate the separate findings, resulting in the absence of integrative data and authority (Christen et al.; Gibson, 2006). As postulated by Christen et al. (2006), organizations tend to neglect the interdependence of these factors. For this reason, research conducted by Gibson (2006) found that organizations should design their triple bottom line framework to ensure that all members of the organization are aware of the interrelation of the separate elements which will, in turn, ensure mutual gains in all areas. Results of this research demonstrated that this concept is crucial for progress toward a more viable future for the organization (Gibson, 2006).

In contributing to the triple bottom line research, Vanclay (2004) acknowledges that an integrative approach to triple bottom line implies that the concept functions more as an accounting method rather than a way of thinking about corporate social responsibility since the accounting requirements necessary to determine mutual gains indicate there is a preoccupation with identifying measurement indicators, which often have not proved adequate. As a result, according to Vanclay (2004), organizations that use the three pillar approach, also referred as the triple bottom line, inadvertently end up implementing this as a framework for accounting and reporting rather than a method for identifying the social impacts of the organization on the environment. In equal measure, “while the economic and environmental indicators are relatively easy to identify, select and measure, the social indicators are not” (Vanclay, 2004, p. 265). Consequently, organizations have been faced with a flurry of panic about what the social triple bottom line markers might be.

To remedy these perceived limitations of the triple bottom line, Vanclay (2004) advises that organizations should focus on the things that count, not the things that can be counted. To support this presupposition, the researcher explains concepts such as the social impact assessment (SIA), which includes a process for identifying, analyzing, monitoring, and managing the future consequences of a current or proposed action, and considers issues such as pathologies of development, goals of development, and processes of development. Holistically, the triple bottom line concept measures the result of current actions to indicate progress toward sustainability-oriented goals (Gibson, 2006).

To summarize, organizations can improve the effectiveness of the triple bottom line concept by broadening its definition and applying impact assessment methods (Vanclay, 2004). This particular researcher acknowledges that the incorporation of measurement elements from the triple bottom line with elements of monitoring and analysis from social impact assessment methods can improve the effectiveness of the three pillar approach. The synthesis of processes for measuring, analyzing, monitoring and managing the intended and unintended social consequences of organizational policies, programs, plans and projects can bring about a more sustainable and equitable human environment (Vanclay, 2004).

Summary

Research literature demonstrates an increase in the occurrence of the intersection between supply chain management and sustainable development (sustainability) over the years; however, the number of related publications is still limited. It is important to define the boundaries which delimitated the search for related papers for this literature review. In this context, three separate categories of literature exist to support the basic elements of this qualitative study. It was necessary to gather information on sustainability reporting to support the research on specific indicators each organization uses to provide evidence of their sustainability efforts. This information will facilitate a portion of the cross-case analysis to determine if there are common indicators among the selected organizations. It was necessary to conduct an investigation on supply chain sustainability strategies to support research on which model organizations selected and the various themes that govern how organizations approach sustainability implementations to achieve sustainable growth. This data will identify which factors influence model selection and whether the use of a specific model governs the outcome of sustainability implementations. The final topic area of investigation into the triple bottom line and related methods was necessary to prove the existence of a gap in current practical application of the concepts, thereby validating the problem statement.

Research Method

Design

This study shall utilize qualitative case-based research methods in the establishment, testing and expansion of theories on this topic since research in this area is novel and underdeveloped in extant literature. According to Patton and Appelbaum (2003), case studies are suitable in this situation because they present the “opportunity for a holistic view of a process” (p.63). This proposal incorporates a grounded theory approach (Glaser & Strauss, 1967) to explore issues regarding the integration of sustainable development in the supply chain in each of the cases. According to Goldkuhl and Cronholm (2010), “grounded theory (GT) is in many fields an established approach for empirically based theory development (p. 188). Using the grounded theory approach, the research plan includes the examination of a large number of cases related to sustainable development in supply chain with a view to inductively systematize, analyze and abstract empirical data into categories and theoretical constructs that can then be used to provide explanations to the key research questions. Hanley-Maxwell, Ibrahim, and Skivington (2007) acknowledge “in grounded theory research, theory emerges through constant reciprocal interactions among information gathering, theoretical analysis, and interpretations” (p. 107). This approach will therefore provide the researcher with a framework for discovering new ideas, concepts and relations among various categories and properties by building on evidence seen for the phenomenon across various situations (Goldkuhl & Cronholm, 2010). Yin (2003) (cited in Narasimhan, Narayanan, & Srinivasam, 2010) argued that grounded theory “lets the theory emerge from the analysis of the data rather than impose pre-existing theories” (p. 385).

One of the main purposes of the study is to generate a valuable, valid and reliable theory on corporate sustainable development initiatives that organizations implement to transform their supply chain-related business processes. Goldkuhl and Cronholm (2010) observe that the grounded theory approach enables researchers to develop a new theory from raw data by grounding the theory in empirical data, implying that there is a good traceability between the empirical data, categories and theory. As such, the study shall utilize collective or multiple case studies for purposes of understanding the similarities and differences of various sustainability models used by the sampled organizations. In collective or multiple case studies, Hanley-Maxwell et al. (2007) argue that “the case is of secondary importance because it is the vehicle for understanding another interest” (p. 107).

Population and Sample

Organizations selected in the 2011 Fortune 500 annual list will be pursued for the purpose of collecting data. Inclusion into the study population will however, be based on the presence of an established sustainability program within the firm, size of the organization, position of the company in the supply chain and sector of operation. A Google search on the companies’ official websites will be used to establish the presence of sustainability programs, size, position, and sector of operation of the organizations. Twelve case studies will be selected from the study population using the theoretical sampling strategy. According to Stake (2000), theoretical sampling will enable the selection of samples that are usually theory driven in addition to necessitating the development of interpretive theories from the emerging data. Consequently, theoretical sampling will also enhance the researcher’s capacity to select information-rich case studies for in-depth study and analysis to answer the central issues being studied (Hanley-Maxwell et al., 2007).

Data Collection

Data for the proposed study will be collected using three methods. This is in line with the observation made by Casey and Houghton (2010), that “the use of multiple data collection methods and multiple sources provides a more convincing and accurate case study” (p. 46). First, documentary evidence, in the form of supply chain sustainability and corporate social responsibility (CSR) reports, blueprints and plans, will be examined to establish the underlying commitment demonstrated by the sampled case organizations to their supply chain sustainability programs. Documentary evidence will also be used to investigate if the sampled case organizations have adopted the SCOR model for supply chain management, GreenSCOR and the triple bottom line concept, and how these models affects business performance. According to Casey and Houghton (2010), documentary evidence generates information which is not only stable in the sense that it can be reviewed repeatedly, but it is also unobtrusive in the sense that this information (data) is not created as a result of the case study. Data collected using documentary evidence is also exact and has broad coverage (Naslund, Kale, & Paulraj, 2010).

Second, interviews will be conducted with the corporate managers of the sampled organizations with the purpose of elucidating data on the challenges and successes of their supply chain sustainability programs, how they report progress on sustainable developments efforts and the techniques for addressing social and environmental issues in their organization. The use of sustainability management software by the sampled case organizations and how such software improves sustainability reporting will also be subjected to scrutiny through the interview process. Alternately, project managers from the partner organizations that conducted the supply chain management implementations will be sought out for interviews in the event that corporate managers are not available during the research process. According to Casey and Houghton (2010), interviews not only allow the researcher to interpret the significance of observations made during the course of data collection, but they also allow participants to comprehensively discuss their experiences.

Lastly, the researcher will utilize observations so as to have an in-depth understanding of what is happening in the sustainability programs of the sampled case organizations. As such, the research will have the opportunity to describe the “inside” of the sustainability programs from the insider’s standpoint (Casey & Houghton, 2010; Naslund et al., 2010). Observations will also allow the researcher the opportunity to spot similarities and differences of sustainability models adopted by the sampled organizations.

Data Analysis

Once the participant interviews are transcribed, the researcher shall immerse herself in the data to gain detailed insights into the phenomena under examination (challenges and successes of sustainability programs in supply chain; how progress is reported), develop a data coding system and, lastly, link codes or units of data to develop overarching categories or thematic inductions that can lead to the development of theory. According to Smith and Firth (2011), such an analytical framework will adequately serve the interests of this research because it “systematically and explicitly applies the principles of undertaking qualitative analysis to a series of interconnected stages that guide the process” (p. 54).

Field notes arising from observations will first be open-coded to select and emphasize data that are important enough to record. According to Kawulich (2005), open-coding focuses the analysis on the data, enabling the researcher to weed out superfluous information that may be of no relevance to the phenomena under investigation. Developed in 1998 by Strauss and Corbin, conceptual ordering will then be employed to organize “data into categories according to their properties and dimensions…and then [use] description to further elucidate those categories” (Mello & Flint, 2009, p. 116). The dimensions, according to Strauss and Corbin, will enable the researcher to distinguish items between and within categories and thus show deviation or dissimilarity along the range. Consequently, this will be critical in enabling the researcher to have an in-depth understanding of what is happening in the sustainability programs and models of the selected case organizations and in theory development.

Data arising from documentary evidence will be subjected to qualitative content analysis. Hsieh and Shannon (2005) (cited in Zhang & Wildemuth, n.d.) describe qualitative content analysis as “a research method for the subjective interpretation of the content of text data through the systematic classification process of coding and identifying themes or patterns” (p. 1). Triangulation and data reduction techniques will also be applied to make sense of the data and identify fundamental consistencies and meanings. This will allow the researcher to understand the reality of various sustainability models used by the case organizations and their antecedent-consequent patterns in a subjective but scientific manner (Zhang & Wildemuth, n.d.).

It is imperative to mention that the study shall employ a framework derived from the various sustainability measurement models for inductively deriving dimensions and categories, and apply them in the content analysis (Krippendorff, 2004). This will allow the researcher to spot similarities and differences of sustainability models in comparison to more traditional supply chain management practices. The proposed analytical framework consists of a matrix of sustainable development uncertainties based on the economic, social and environmental sustainability elements of the triple bottom line concept (Elkington, 1997) and the framework for evaluating innovations developed by Hall and Martin (2005) consisting of technological, commercial and organizational uncertainties concerned with economic performance, and social uncertainties concerned with environmental and social impacts. Using cross-case comparison, this study will treat each case as a source of data. The research analysis will build a conceptually-ordered display of the cases, and include the creation of a case-ordered display to rank each case. Using a conceptually-ordered and case-ordered cross reference will reveal data patterns within each group as well as across groups (Shank, 2006). According to Stake (2000), cross-case analysis is particularly important in assisting the researcher to know whether differences in the use of various sustainability models impact the outcomes experienced by the sampled organizations.

While sustainable development models offer opportunities for improvement for organizations and their stakeholders interested in implementing programs for improvement, sustainable development initiatives can only be beneficial if the transformation includes an integrated approach which incorporates social, ecological and economic perspectives (Tsai & Hung, 2009). Critical issues exist with regard to adequate policies and frameworks to integrate sustainable development measures with the triple bottom line (Christen et al., 2006). Researchers must determine if enthusiasm for supply chain sustainability practices with a triple bottom line focus be actualized into common regulated policies and procedures. Another critical issue is whether the organizations can really benefit from adding triple bottom line elements to their sustainable development initiatives. Organizations must determine if profits are more important than benevolence. The organization must also determine how to share the benefits derived from sustainable development practices with their employees, the surrounding communities and stakeholders (Shukla et al., 2010).

Summary

Using case study methods and theoretical sampling, this research study shall examine ways to enhance perceptions of how companies are working through their sustainability issues. In analyzing supply chain sustainability policies and strategies, researchers can determine how organizations are implementing sustainable development practices in their supply chains and how specific strategies work to improve business success. Through content analysis, this study will also provide information for researchers to determine if these strategies enable organizations to measure the impact of sustainable development efforts and create the ability for the organization to measure just how effectively the transformation is proceeding. By linking corporate sustainability strategies and green supply chain practices together, researchers can highlight and discuss the gaps between sustainability concepts and operational practices.

With regard to future research, it is conceivable that the results of this study will provide an approach and best practices to guide practitioners for proposing a contemporary, innovative measurement model. This model ought to incorporate the intangible aspects of the triple bottom line into sustainable development initiatives to conclusively measure transformation progress so organizations struggling with justification can report on their efforts to stakeholders. Researchers must stimulate this integration between sustainability concepts and the triple bottom line, otherwise, the analysis of sustainability issues in supply chain management research will remain a topic for special-interest groups instead of an integral part of mainstream research and application.

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Appendix

Annotated Bibliography

Supply Chain Sustainability

Blanchard, D. (2010). Supply chain management best practices (2nd ed.). Hoboken, New Jersey: John Wiley and Sons, Inc

The book begins with an introduction to supply chain management and the ubiquitous implications of having poor practices. The text also provides an overview of the major areas of the Supply Chain Operations Reference-model (SCOR), a process reference model designed to facilitate effective communication among supply chain partners, and its application within supply chain processes. Chapter sixteen includes an introduction to the concept of green supply chains with regard to the green movement. Simply stated, organizations need to take a pragmatic approach to green initiatives, and recognize the certainty of federally mandated regulations.

Crandall, R. E., Crandall, W. R., & Chen, C. C. (2009). Principles of supply chain management (1st ed.). Boca Raton, FL: CRC Press

This reference provides an explanation of the logic behind why supply chain management is essential for business success. The text includes an examination of how supply chains are evolving and the potential future developments that may occur in the area of supply chain management. Organizations must take a balanced look at the supply chain by focusing on the customer and working backwards from the point of distribution all the way back to the point of origin. A description of the forward supply chain and the reverse supply chain along with a review of contemporary sustainability concepts including triple bottom line provides supplemental background knowledge for researchers. In the end, organizations must emphasize the need for coordinated changes in technology, infrastructure, and cultures among supply chain members.

Emmett, S., & Sood, V. (2010). Green supply chains: An action manifesto (1st ed.). Cornwall, UK: John Wiley & Sons, Ltd

This book provides a strategic overview and actionable plan for the implementation of sustainable development practices in supply chain operations. The text addressed five fundamental questions regarding the tangible and intangible benefits of moving towards a greener supply chain, the direct and indirect costs associated with sustainability efforts, and how organizations can communicate and measure organizational progress towards a more sustainable supply chain to key stakeholders. There is also a list of barriers organizations should expect to encounter during implementation and methods for overcoming these barriers.

Hervani, A. A., Helms, M. M., & Sarkis, J. (2005). Performance measurement for green supply chain management. Benchmarking, 12(4), 330-352

An introduction and an overview of the difficulties related to environmental supply chain management performance measurement such as non-standardized data, poor technological integration and a lack of metrics will provide a proper baseline to categorize the issues that organizations face in justifying the cost of such efforts. Green supply chain performance measurement (GSCM/PM) is necessary in an enterprise for regulatory, marketing and competitive reasons. The basic purposes for implementing this type of tool include external reporting requirements, and internal controls and analysis since these are the fundamental issues that drive internal frameworks for business performance management overall. The text identifies metrics and measures to incorporate in environment management systems (GSCM) and concludes with a discussion on management and research issues related to the management of sustainable supply chain systems.

Lee, C., & Chen, S. (2010). Selecting the most feasible strategy for green supply-chain management. The Business Review, Cambridge, 14(2), 141-146

This article explains the reasons why businesses facing deteriorating environmental issues have to adopt new management models throughout all aspects of their business activities. The purpose of the study conducted on businesses in Taiwan was to analyze the external conditions related to green supply chain management. The study utilizes a SWOT method to create a solid framework for assessing potential external opportunities and threats, while probing for internal strengths and weaknesses with respect to the implementation of sustainable development within the supply chain. The premise of the study was to encourage Taiwanese business owners to consciously adopt green supply chain management practices that will enable them to remain competitive in a greener global economy.

Sisco, C., Chorn, B., & Pruzan-Jorgensen, P. M. (2010). Supply chain sustainability: A practical guide for continuous improvement (Consumer Guide BSR No. 789211). Web.

In this guidebook contains baseline definitions and practical steps that organizations can take toward managing the social, environmental and economic impacts of their business practices within the supply chain. Unlike other methods, the steps described in the guide are not linear. The intent is to present complimentary actions organizations can take in order to achieve long-term environmental, social and economic value for all stakeholders involved in bringing products and services to market via sustainable supply chain practices. The process of learning how organizations create value will enable analysts to study the output of these practices and develop a sustainable model for measurement and reporting using a combination of available methods. Understanding the practices and principles associated with sustainable supply chains could provide the basis for accurate and honest reporting practices.

SustainAbility, UNEP and UNGC. (2008). Unchaining value: Innovative approaches to sustainable supply (OCLC Number: 506224699). Web.

This publication addresses the ways to increase practical know-how with regard to sustainability and extend the levels of innovation and collaboration across and between supply chains. The text includes ways to discover and unfetter value areas throughout the supply chain. This information is useful in matching the “unchained” value areas with currently available metrics using the G3 Framework and GreenSCOR predictors for measuring success of supply chain sustainability efforts. This report also considers the wider context of the value of supply chain activity to include the end-use customer and a range of other stakeholders, such as communities and governments. The purpose of the study was to discover and analyze the overlapping zone between supply chain and value chain, and convey information from both concepts to add new dimensions that draw the areas closer together.

Triple Bottom Line

Cokins, G. (2009). Measuring the new triple bottom line. Financial Executive, 25(9), 37-39

This article describes the evolving responsibilities of a Chief Financial Officer (CFO) with regard to corporate sustainability and greening initiatives. An explanation of how sustainable development initiatives will extend the responsibilities of the CFO from exclusively reporting on the financial health of the organization to collecting and validating non-financial and non-operational information is helpful for understanding the changing roles within the organization. CFOs must take the important step to shift from a cost focus to a value-creation focus. Environmental reporting will include measurements of key success areas, weaknesses, operational and organizational risks and their influence on fiscal performance The CFO should help build a knowledge base that can calculate company performance from unstructured environmental, climate and social parameters. This knowledge will support the organization in making innovative decisions based on progressive information.

Gibson, R. B. (2006). Beyond the pillars: Sustainability assessment as a framework for effective integration of social, economic and ecological considerations in significant decision-making. Journal of Environmental Assessment Policy and Management, 8(3), 259-280

Sustainability is an essentially integrative concept. As such, the author found it reasonable to assume that the design of sustainability assessment should include an integrative process and framework for decision-making. The reason for this is many organizations approach sustainability assessments by addressing the social, economic and ecological considerations separately and subsequently struggle with how to integrate the separate findings. The text presents the notion that the three pillars or triple bottom line approach is limiting in the fact that it appears to place an emphasis on balancing and making trade-offs, rather than focusing attention on the achievement of multiple, mutually reinforcing gains.

Keyes, B. A., & Sykes, B. (2009). Sustainability’s triple bottom line. Chief Executive, 243, 43-50

The text offers the definition of the triple bottom line as a concept used to quantitatively relate the social and environmental impact of an organization’s activities to its economic performance in order to show improvement in all three areas. Organizations should use the measurements of the triple bottom line as a method to establish a baseline of current performance which, in turn, allows for better decision making regarding the relative cost and benefit of sustainability efforts. With this type of accounting tool, the means of financing green initiatives becomes easier to justify.

Sherman, W. R. (2010). Measuring and communicating the value created by an organization. American Journal of Business Education, 3(5), 87-98

The article presents examples of how to use accounting to measure the various types of value created by an organization. Experts often refer to accounting as the language of business due to its ability to communicate various dimensions of the performance of an organization. However, there is the question of whether or not an organization considers its social and environmental performance as creating value if the organization does not, or is not required to, measure and communicate these statistics. The test presents triple bottom line reporting as a means to fill the void in financial reporting by explicitly considering not only the economic performance of a firm but also environmental and social performance of the organization.

Tate, W. L., Ellram, L. M., & Kirchoff, J. F. (2010). Corporate social responsibility reports: A thematic analysis related to supply chain management. Journal of Supply Chain Management, 46(1), 19-44

This study examines annual corporate social responsibility (CSR) reports from one hundred different companies in varying business sectors. Organizations were selected by using an iterative sampling approach until it appeared the database contained a fair distribution of companies actively engaged in sustainable supply chain management practices. The intent of the study was to determine how supply chain strategies factor into the triple bottom line of organizations recognized the researchers as socially and environmentally responsible global organizations. Results of the study showed that the supply chain management (SCM) component of an organization participates in environmental sustainability activities, through careful selection of suppliers, materials, technologies and transportation modes, more than any other corporate function.

Taylor, S. (2006). The Triple Bottom Line: Cultivating sustainable business practices in corporate America. Texas Magazine. Web.

The triple bottom line is a means of focusing not only on financial results but on social and environmental outcomes as well, to ensure the actions of the organization live up to the expectations of all stakeholders, including shareholders, the community, the environment, employees, customers and suppliers. This article contains information on discovering the universal standards for measuring these actions since CSR reports, while helpful, are not currently standardized. Organizations can use the Global Reporting Initiative (GRI) as a guideline for reporting and measuring CSR practices. Organizations can also look to the International Organization for Standardization (ISO) for guidance. The ISO developed a voluntary social responsibility benchmark intended to assist organizations on how to address and measure their CSR approaches while respecting cultural, societal, environmental and legal differences, and economic development conditions. This article offers organizations practical CSR guidance, while providing guidance on how to increase transparency to customers and stakeholders.

Vanclay, F. (2004). Triple bottom line and impact assessment: How do TBL, EIA, SIA, SEA and EMS relate to each other? Journal of Environmental Assessment Policy and Management, 6(3), 265-288

Experts argue that organizations using the concept of triple bottom line, meant to be a way of thinking and a heuristic, are more preoccupied with identifying indicators, which are often not adequate for reporting performance. However, the intent of the triple bottom line is more a way of thinking about corporate social responsibility, not a method of accounting; the triple bottom line is a philosophy, not a set of accounts. The use of impact assessment techniques offers a more integrated approach to identifying the future consequences of a current or proposed action. Organizations can achieve a complete understanding of all the impacts of their business activities through a comprehensive and integrated assessment.

Sustainability Reporting

Ballou, B., Heitger, D. L., Landes, C. E. (2006). The future of corporate sustainability reporting. Journal of Accountancy, 202(6), 65-74

Organizations are starting to recognize the need to create transparent reports that provide accurate and reliable data, as well as a fair picture of overall performance across the triple bottom line. However, most organizations prepare their sustainability reports based predominantly on internal guidelines. As such, an opportunity may exist for these organizations to use the G3 Framework, a prevailing CSR regulation developed by the Global Reporting Initiative (GRI), as a reference. This open framework provides organizations with flexible options to apply the GRI guidelines in the different operational areas of the organization with varying degrees of stringency. The purpose of the framework is to provide external assurances and lend credibility to the data collected for sustainability and CSR reports.

Borkowski, S. C., Welsh, M. J., & Wentzel, K. (2010, September). Johnson & Johnson: A model for sustainability reporting. Strategic Finance, 29-37

The purpose of this case study was to provide a framework for sustainability reporting that increases both value and transparency for other organizations to model. Results of the study revealed that there are no regulations requiring U.S. companies to provide stand-alone sustainability reports, however the trend to provide these disclosures is definitely growing. As such, for sustainability reporting to be truly beneficial to the company, the organization needs to drive the data by what it wants to measure and manage, as well as by what external stakeholders demand.

Gray, R. (2006, Special Issue). Does sustainability reporting improve corporate behavior?: Wrong question? Right time? Accounting and Business Research, 36, 65-88

The purpose of this article is to introduce and analyze the meaning of sustainability reporting. The article provides an examination of the implications and potential lessons learned from corporate self-reporting regarding social, environmental and sustainability. A review of the considerable body of research into the relationships between social and environmental performance, and disclosure and financial performance revealed an upward trend toward widespread reporting since its inception in the early 1990s. Similarly, there is evidence of an evolution in the quality of reporting and the focus of the reports from pure environmental reporting, through forms of selective social responsibility reporting into an increasing recognition of triple bottom line reporting.

Hubbard, G. (2009). Measuring organizational performance: Beyond the triple bottom line. Business Strategy and the Environment, 18(1), 177-191. 

This study analyzed how organizations are attempting to measure sustainability in practice, noting a wide variety and complexity of current approaches that exists which limits the usefulness of current proposed processes. Practitioners should use these limitations to consider conceptual alternatives to measuring sustainability and incorporate research insights into the development of new methods for reporting non-financial information. The text outlines a conceptually-based model for measuring organizational performance, capturing the social and environmental performance of an organization. This data is useful for creating a Sustainable Balanced Scorecard (SBSC). Organizations can translate the more complex data using the Organizational Sustainable Performance Index (OSPI) which is a single indicator, to communicate organizational performance in simple terms to non-expert, yet critical, stakeholders.

Technology

Enviance. (2011). Supply chain environmentalism: Using environmental ERP to manage environmental impact for competitive advantage and profit (White Paper). Web.

Supply Chain Environmentalism is a dynamic new approach that will allow companies to improve their competitiveness by optimizing their ability to identify and reduce the financial impact of environmental impacts throughout the supply chain. Experts at Enviance examined the Supply Chain Environmentalism phenomenon and described the technology required to practice this new form of competition. A new variety of system, called an Environmental ERP, provides the required financial analysis while simultaneously leveraging the data, task management and reporting management power of a traditional environmental management information system. Environmental ERP systems must be capable of analyzing the financial impacts of various environmental factors and expressing these impacts in terms of their cost to the organization and the effect on profitability. The system must also provide visualization capability that allows the financial team to quickly identify the environmental factors that are most likely to have near term adverse effect on costs and profitability. Enviance experts advised that organizations need this type of end-to-end analysis to identify and reduce supply chain cost that may ultimately increase product costs.

Paramanathan, S., Farrukh, C., Phaal, R., & Probert, D. (2004). Implementing industrial sustainability: The research issues in technology management. R&D Management, 34(5), 527-537

This research reports reveals that there is a need to develop new methods for technology assessment which integrates the concept of triple bottom line accountability to include the wider set of values that underpin the concepts of sustainability. Findings were based on the fact that organizations typically build the business case for implementation on individual conviction or motivational case examples, rather than using solid theory associated frameworks, guidelines and tools to establish a judicious case for improvement. Without quantitative data it is difficult to convince traditional managers of the benefits of implementing sustainability. Results of the study confirmed that improved methods for implementing sustainable practices and systems designed to benchmark business processes with leading edge technology, in the context of sustainable environmental and social performance indicators, are necessary to ensure a successful transformation.

SAP AG. (2007). Supply chain collaboration: The key to success in a global economy (White Paper SAP AG No. 50 085 225 (07/07)). Web.

This white paper discusses the concept of adaptive design in supply chain management to facilitate transparency and visibility into all levels of the supply chain. Effective supply chain metrics and collaboration go hand in hand. Capturing and evaluating meaningful performance measures can help organizations align activities across the entire supply chain to obtain a competitive advantage. Almost every industry is experimenting with collaboration techniques along the supply chain, creatively adapting the concept to fit specific needs. By deploying collaborative technologies to support internal and external processes, the organization can assure its stakeholders that it will continually meet agreed-upon strategies, goals, and commitments, despite constant changes in the environment.