Power in Sustainable Supply Chains

Why Power Matters in Sustainability

Achieving sustainability is no longer a choice for businesses; it's a necessity. A company's true environmental and social impact lies not just within its own operations, but spread across its global supply chain. Sustainable Supply Chain Management (SSCM) seeks to address these impacts, but its success hinges on the ability to influence independent suppliers. This is where power becomes the critical factor. Power dynamics determine whether sustainability initiatives are adopted, ignored, or merely met with minimum compliance. This dashboard explores the complex role power plays in either enabling or hindering the diffusion of sustainability along supply chains.

The Power Matrix: Who Holds the Leverage?

The relationship between a buyer and a supplier can be categorized into four distinct power positions. Click on a quadrant to explore how each dynamic affects the spread of sustainability.

Buyer Dominance
Interdependence
Independence
Supplier Dominance
Buyer Power
Supplier Power
High
Low
Low
High

Select a Quadrant

Explore the dynamics by clicking on one of the four power positions in the matrix.

The Bases of Power: How is Influence Exercised?

The *way* power is used is just as crucial as the power balance itself. Power can be exercised through direct, top-down control or through more subtle, collaborative influence.

Mediated ("Hard") Power

Non-Mediated ("Soft") Power

The Impact on Social Sustainability

Power dynamics are not just theoretical; they have profound, real-world consequences for people. Social sustainability—which includes fair wages, safe working conditions, and fundamental labor rights—is directly impacted by how power is used within the supply chain. The pressure exerted by powerful buyers often cascades down to the most vulnerable workers.

The Negative Impact: A "Race to the Bottom"

When a dominant buyer uses coercive power to aggressively drive down prices, suppliers are often forced to cut costs. These cuts rarely come from profits; they come from worker wages, safety investments, and benefits. This creates a "race to the bottom," where social standards deteriorate as suppliers compete on price alone, leading to poor labor conditions hidden deep within the supply chain.

The Positive Impact: Fostering Shared Value

Conversely, when buyers use collaborative forms of power like expert and reward power, they can foster a more positive dynamic. By providing support, sharing knowledge, and offering better terms for ethical performance, buyers empower suppliers to invest in their workforce. This approach builds a more resilient, ethical supply chain where improvements in social sustainability create shared value for all parties.

How Pressure Cascades Through Tiers

Focal Company
(High Power)
↓
Tier 1 Supplier
(Absorbs Pressure)
↓
Lower-Tier Suppliers
(Most Impact on Workers)

Key Findings & Future Directions

Core Insights from the Research
  • Buyer Dominance is a Double-Edged Sword: It's effective for initiating sustainability compliance but can backfire if used too aggressively, damaging relationships and hindering long-term progress.
  • Supplier Dominance is a Major Hurdle: When suppliers hold power, it is extremely difficult for buyers to push for sustainability improvements.
  • The Multi-Tier Challenge is Real: A company's power diminishes rapidly further up the supply chain. Sustainability initiatives often fail to reach the lower-tier suppliers where many problems originate.
  • "Soft" Power Fosters Deeper Change: While "hard" coercive power can force compliance, relational approaches using expert and referent power are more effective for building long-term capability and commitment.

Future Research Directions
  • Explore power dynamics beyond the direct buyer-supplier dyad into complex, multi-tier supply networks.
  • Investigate how sustainability can be advanced in challenging contexts of supplier dominance and independence.
  • Study cases where non-coercive "soft" power fails to understand its limitations.
  • Re-conceptualize power in SSCM to move beyond a purely economic logic and better incorporate social and environmental dependencies.

RDT & Modern Slavery

An Interactive Guide to Searcy et al.'s Research

Why is Modern Slavery So Hard to Find?

Modern slavery is often hidden deep within complex, global supply chains, making it invisible to companies and consumers. The paper by Searcy et al. explores why this problem is too big for any single organization to solve alone and introduces a powerful theory to explain the solution: collaboration.

The Theory: Resource Dependence (RDT)

RDT's core idea is simple: no organization is an island. To survive and succeed, they all need critical resources from their environment. When it comes to a complex issue like modern slavery, these resources are not just money or materials—they include things like local knowledge, trust, and specialized skills.

The paper argues that since these vital resources are held by different actors (companies, NGOs, auditors, tech providers), they become mutually dependent. Their only path to success is to collaborate and pool their unique strengths.

🏢

Corporation

+
🤝

NGO

+
💻

Tech Provider

↓
Effective Action on Modern Slavery

The 5 Essential Resources for Success

According to the research, identifying modern slavery depends on leveraging five key resources. Click on each card to learn more.

💰

Financing

🌍

Access

🔬

Skills

🏛️

Legitimacy

💡

Technology

The Framework for Action: A Step-by-Step Guide

The paper's final framework shows how these ideas connect. Use the controls below to walk through the model and see how collaboration leads to the identification of modern slavery.

CONDITIONS-FOCUSED DOMAIN
Cross-Boundary Interactions
Contextual Embeddedness
↑ ↓
Modern Slavery Posture
Collaboration Scope
CONTRACTS-FOCUSED DOMAIN

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Appended content from Phase2 2

AI & Power in the Supply Chain

A New Era of Social Sustainability Through the Lens of Resource Dependence Theory

A Paradigm Shift in Progress

AI-powered technologies are not just optimising logistics; they are fundamentally reshaping the social fabric of global supply chains. This analysis explores these shifts through Resource Dependence Theory (RDT), which posits that power is derived from the control over critical resources. As AI becomes a new, pivotal resource, it creates new dependencies and alters the balance of power among all stakeholders.

Surveillance vs. Empowerment

The "Dark Side": Control & Surveillance

AI monitoring tools risk becoming instruments of control, increasing surveillance and potentially penalizing workers. Technologies can be used to hide labor issues or persecute whistleblowers, creating a culture of fear.

Claim: AI hotlines empower workers to report issues.

(Hover to see the risk)

Risk: Data is used to identify and suppress "problematic" individuals, undermining trust and true empowerment.

The Potential: Transparency & Agency

When used collaboratively, AI can reduce the "psychological distance" between abused workers and decision-makers, making their experiences visible. It can also locate risks deep in the supply chain and improve well-being by automating tedious tasks.

"By pushing data collection to the lowest tiers, AI can shine a light on previously invisible risks, offering a chance for pre-emptive action rather than reactive crisis management."

RDT Insight: This dynamic represents a struggle over the critical resource of information. When management monopolizes AI-generated data, their power over workers increases. When data is transparent and accessible to third parties (like unions or auditors), it can empower workers and hold firms accountable.

New Alliances, New Power Brokers

Social sustainability is too complex for one actor to solve alone. This necessitates collaboration between firms, NGOs, and auditors, creating new power dynamics centered on resources, data, and legitimacy.

Data as the New Currency of Power

Control over the collection, interpretation, and sharing of data is a crucial new dimension of power. A lack of trust over data ownership and privacy can undermine monitoring efforts, as workers may refuse to participate if they fear their information is not protected.

Power in Governance

In voluntary schemes like certifications, powerful corporate interests can dilute standards. Involving policymakers and a wider range of stakeholders is crucial to create robust, meaningful social sustainability standards that are not beholden to industry pressure.

RDT Insight: AI technology providers and data auditors emerge as new, powerful actors. They control access to the critical resources of validated data and legitimacy. Firms become dependent on them to prove their sustainability credentials to the market and consumers.

Shifting Control and Responsibility

AI shifts power between downstream buyers and upstream suppliers, driven by the increasing importance of brand reputation and the concept of extended responsibility.

Extended Producer Responsibility & "Supply Chain Contamination"

The risk that a supplier's irresponsibility could damage a buyer's brand is a powerful motivator. This sense of "contamination" drives buyers to exert greater control over their entire supply chain, no matter how distant the supplier.

Tier 3 Supplier
Violation
→
Tier 1 Supplier
Contamination
→
Global Brand
Reputational Damage

To mitigate these risks, buyers impose more rigorous, often AI-monitored, contractual terms on suppliers. This effectively shifts the burden of compliance upstream and increases the buyer's direct control.

RDT Insight: This is a classic RDT scenario. The buyer mitigates its dependence on the supplier's good behavior by increasing its control. The buyer leverages its control over the critical resources of market access and brand reputation to impose its will on suppliers, who become more dependent.

The Changing Face of Labor

The adoption of AI creates new power structures within a firm by changing the nature of work and the demand for specific skills.

Labor Replacement & Skill Shifts

AI and robotics continue the trend of replacing human labor in routine and non-creative tasks, impacting traditional employment relationships and displacing some segments of the workforce.

The Rise of the "Techno-Elite"

Successful AI adoption requires employees with specialized skills (e.g., advanced coding, data science). This elevates the influence and power of these highly skilled employees, as the organization becomes increasingly dependent on their expertise.

RDT Insight: The critical internal resource becomes specialized human capital. Individuals and departments possessing these scarce skills become more central and powerful, altering internal organizational politics and creating new dependencies within the firm itself.

Beyond Technological Determinism

It is crucial to avoid a purely technology-focused view. The impact of AI is not pre-ordained. The ultimate outcome hinges on human agency and conscious choices regarding governance, organizational culture, and data privacy.

As AI becomes embedded in our supply chains, what choices will we make to ensure technology serves ethical standards and societal well-being?