Stakeholder Management as a Tool for the Implementation of Sustainable Supply Chains in SMEs in the German Food Industry

An analysis of drivers and barriers in a multi-stakeholder environment

Theresa Pöllinger Lina Schonebeck

Main field of study - Leadership and Organization Degree of Master of Arts (60 credits) with a Major in Leadership and Organization Master Thesis with a focus on Leadership and Organization for Sustainability (OL646E), 15 credits Spring 2020 Supervisor: Ju Liu

Abstract

The food industry represents one of the most promising business sectors for sustainable development comprising numerous environmental, social and economic challenges. The industry is fragmented into a multitude of organizations with particular supply chains based within a complex multi-stakeholder environment. Therefore, the organizational goal of creating a sustainable supply chain is experiencing increased attention within research. Even though previous literature has assessed the diverse drivers and barriers impacting sustainable supply chain management (SSCM), the theory of stakeholder management for SSCM has so far barely been recognized.

This paper aims to fill this research gap and establishes the connection between the concepts of stakeholder management and SSCM taking into consideration the implicated drivers and barriers. The assessment of prominent drivers and barriers as well as crucial stakeholder groups functions as a basis for the evaluation of possible stakeholder strategies suitable for SSCM. This research study is situated in the context of small and medium-sized enterprises (SMEs) in the German food industry. By conducting 13 semi-structured interviews with supply chain representatives this study follows a qualitative research approach. The data analysis reveals that SMEs in the German food industry face numerous obstacles in their attempt to implement sustainability within the supply chain. Moreover, it is apparent that current stakeholder strategies are insufficient in the context of supply chain sustainability. A closer network beyond business is considered the most effective strategic objective for the engagement with crucial stakeholder groups in order to enhance the drivers and reduce the impact of existing barriers. Consequently, this thesis provides a theoretical contribution by developing a deeper understanding of stakeholder management as a tool for increasing supply chain sustainability and further advances existing theory with the formation of a new analytical framework as well as the recognition of a novel stakeholder strategy.

Keywords: Sustainable supply chain management, Stakeholder management, Stakeholder strategy, Drivers and barriers, Small and medium-sized organizations, Food industry, Germany

Acknowledgements

We would like to thank all the people who supported us in creating this thesis. Your input, patience and positivity greatly contributed to this study.

Firstly, we would like to thank our supervisor Ju Liu who has supported our research with great knowledge, support and encouragement. We are very grateful for all the helpful feedback and guidance throughout the whole process.

Secondly, we would like to thank all our interviewees and participating organizations whose contribution and expertise was invaluable to conducting this research. We are appreciative of the time and effort they have decided to share with us.

Lastly, we are particularly thankful for the support and continuous encouragement of our families and friends during this challenging time.

Copies of relevant research materials as well as correspondence concerning the research study are available upon request.

The authors, Theresa Pöllinger and Lina Schonebeck

Table of Contents

1. Introduction 1 1.1. Importance of stakeholder management for sustainable supply chain management 1 1.2. SMEs in the German food industry 2 1.3. Research problem 3 1.4. Aim of the research 3 1.5. Research questions 4 1.6. Structure of the research 4

2. Theoretical background and analytical framework 5 2.1. Sustainable supply chain management 5 2.1.1 . Development of the concept 5 2.1.2 Definitions within supply chain theory 5 2.1.3 . Focus areas within sustainable supply chain management 6 2.2 Drivers and barriers for sustainable supply chain management 7 2.2.1. Drivers for sustainable supply chain management 8 2.2.2. Barriers for sustainable supply chain management 10 2.3. Stakeholder analysis and management 12 2.3.1. Development of the concept 12 2.3.2 Definitions within stakeholder theory 13 2.3.3 . Stakeholder identification and categorization 14 2.3.4 . Stakeholder management and engagement 15 2.3.5 . Stakeholder management towards sustainability 16 2.3.6 . Stakeholder management strategies 17 2.4. Connection between stakeholder management and sustainable supply chain management 18

3. Methodology 20 3.1 Research design and approach 20 3.2 Participant selection and data collection 20 3.3 Data analysis method 21 3.4 Reliability and validity 21 3.5 Ethical considerations 22 3.6 Limitations 22

4. Analysis 23 4.1 Current situation of SMEs in the German food industry 23 4.1.1 Characteristics of German SMEs 23 4.1.2 Challenges for SMEs within the German food industry 24 4.1.3 Sustainability trade-offs of SMEs within the German food industry 24

4.2 The role of sustainable supply chain management 24 4.2.1 Development of sustainable supply chain management 24 4.2.2 Priorities within sustainable supply chain management 24 4.2.3 Practices for sustainable supply chain management 24 4.3 Drivers and barriers for sustainable supply chain management 25 4.3.1 Ranking of the most important drivers 25 4.3.2 Ranking of the most important barriers 27 4.4 Stakeholder management as a tool for sustainable supply chain management 28 4.4.1 Stakeholder identification 28 4.4.2 Stakeholder categorization 28 4.4.3 Stakeholder assessment 29 4.4.4 Possible stakeholder strategies 33 4.4.5 Aspirations for future stakeholder management 33

5. Discussion 36 5.1 Crucial drivers and barriers for sustainable supply chain management 36 5.2 Crucial stakeholders of SMEs 38 5.3 Network beyond business for sustainable supply chain management 40 5.4 Contributions and recommendations for future research 41

6. Conclusion 43

List of References Appendices Appendix I: Literature review of internal and external drivers for SSCM Appendix II: Literature review of internal and external barriers for SSCM Appendix III: Internal and external stakeholders Appendix IV: Study participation request form Appendix V: Interview guide (English) Appendix VI: Original interview guide (German) Appendix VII: Coding of the analysis Appendix VIII: Interview summaries

List of Figures

Figure 1 Processes within the supply chain

Figure 2 Categorization of stakeholders

Figure 3 Stakeholder influence-interest matrix

Figure 4 Fusion of stakeholder strategies from previous literature

Figure 5 Visualization of the analytical framework of the research study

Figure 6 Ranking of most relevant drivers for sustainable supply chain management

Figure 7 Ranking of most relevant barriers for sustainable supply chain management

Figure 8 Influence-interest matrix of stakeholders for sustainable supply chain management

Figure 9 Overview of most relevant stakeholder for sustainable supply chain management

Figure 10 Driver-barrier matrix of most relevant stakeholder for sustainable supply chain management

List of Tables

Table 1 Internal and external drivers for sustainable supply chain management

Table 2 Internal and external barriers for sustainable supply chain management

Table 3 Overview of the research participants

List of Abbreviations

NGO Non-governmental organization SCOR Supply Chain Operations Reference SDG Sustainable Development Goal SME Small and medium-sized enterprises SSCM Sustainable supply chain management UN United Nations

1. Introduction

1.1 Importance of stakeholder management for sustainable supply chain management

Considering the fragile state of the earth’s environment in times of the present climate crisis and the alarming social and societal circumstances faced by numerous populations, the world is in the midst of a historical tipping point (IPCC, 2018). Especially organizations play a crucial role in driving sustainable change globally as they have a huge influence and impact on the environment as well as on the societal realities within countries (Cary, Bhaskaran, & Polonsky, 2007). The unsustainable rapid growth and development in business since the industrialization within Europe created long-term negative effects on the surrounding environment and its natural resources as well as on the involved societal actors (Li & Lin, 2015). After a widespread realization of the environmental and social impact of organizations (IPCC, 2018) and the understanding of the urgency to transform businesses, the world is now situated in times of corporate change towards sustainability.

The responsibility and necessity of organizations to drive sustainable change have been recognized by many institutions worldwide. In 2015, the United Nations developed the 17 Sustainable Development Goals (SDGs) as part of the Agenda 2030 as a shared blueprint for peace and prosperity for people and the planet in the future by for instance emphasizing sustainable Economic Growth and Decent Work for All (SDG 8), Sustainable Industrialization (SDG 9) and Responsible Production (SDG 12) (UN, 2015). Another initiative by the United Nations is the UN Global Compact formulated in 2000 which is a voluntary pact encouraging businesses worldwide to show commitment towards implementing sustainable responsible practices and to report on their implementation (UN, 2000). The ideal of reaching sustainability within the supply chain is in fact increasingly considered as an essential matter for doing business in the 21st century (Crum, Poist, Carter, & Easton, 2011).

Organizations have a tremendous responsibility and the sustainability of their supply chains has a prominent role within an organization since they encompass the holistic course of a product starting with the initiation of the product creation up until its final disposal (Seuring & Müller, 2008a). Consequently, the supply chain can be referred to as the core of an organization especially when thriving towards the sustainable development of a business and aspiring the implementation of corporate sustainable practices (Ni & Sun, 2019). Up to 90 percent of the impact on natural resources, including air, soil and land, and over 80 percent of greenhouse gas emissions for consumer goods products arise due to supply chain management activities (Bové & Swartz, 2016). Besides the environmental significance of the supply chain, only the additional inclusion of social concerns ensuring a humane and fair business practices constitute a fully sustainable supply chain (Shnayder, Rijnsoever, & Hekkert, 2016). Due to the environmental and social discussion of the supply chain mechanisms, the importance and applicability of sustainable supply chain management (SSCM) within businesses is crucial for the preservation of the earth’s environment (Bakos, Siu, Orengo, & Kasiri, 2020) and the provision of equity, fairness and humanity standards within business (Tipu & Fanatzy, 2018). Sustainable supply chain management refers to the handling of the products from sourcing to disposal always respecting the economic, environmental and social dimensions. Due to the crucial role and large impact of the supply chain within organizations corporate sustainability cannot be implemented regardless of supply chains.

As the world becomes increasingly complex in times of industrialization, globalization and digitalization, sustainable supply chains are even more important as companies need to assess their surroundings closely and need to engage with various actors (Corbett & Klassen, 2009). The inclusion and disregard of the multitude of involved interest groups, the so-called stakeholders, enable a clear focus and direction within the supply chain as multiple points of view are taken into

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consideration. There is a strong need for close collaboration with the different stakeholders, in order to achieve the implementation of sustainable practices within the supply chain (Seuring & Müller, 2008a). Taking multiple stakeholders into account does not solely provide advantages and could imply that clashing priorities hinder the development towards a sustainable supply chain. On the other hand, working together can also strengthen business relationships on a long-term basis, gives a sense of safety and security within the business world, enhances opportunities and potentially even lead to new ideas and innovations (Wolf, 2011). In order to reduce barriers and enhance drivers for the development of a sustainable supply chain, stakeholders need to be managed effectively which requires a profound stakeholder assessment and strategy development.

1.2 SMEs in the German food industry

German Economy

The German economy is a highly developed social market economy and serves as a promising and influential basis for sustainable transformation to take place. Germany can be regarded as the largest economy within Europe (Bundesregierung Deutschland, 2020b). Generally, the German economy is characterized by a rich background in traditional competencies, significant innovativeness, a strong production basis, regional strength of businesses and its geostrategic location in the center of the European Union (Simon, 2012). Especially prosperous, influential and innovative countries like Germany are relevant in acting as role models for other countries and its industries should become working examples for more companies within Europe and worldwide to imitate (World Bank, 2020). Germany is the sixth most progressive country according to the SDG Index of 2019 in its approach to reach the SDGs. Nevertheless, German businesses are still facing major challenges on the way to reaching Sustainable Production (SDG 12) and Climate Action (SDG 13) (UN, 2019) leaving unused potential for increased sustainable development of German businesses.

Food industry

The food industry and its production cycle are one of the business sectors with the most considerable potential for sustainable change (Boysen, Lucht, & Gerten, 2017). Despite the fact that worldwide up to one third of produced food items are not being eaten and end up in the waste disposal contributing to a huge amount of greenhouse gas emissions (Food and Agriculture Organization of the United Nations, 2019), the process of producing the food supply itself beforehand still lacks sufficient attention (Cary, Bhaskaran, & Polonsky, 2007). Worldwide hunger stems from an unequal distribution of food and purchasing power and unstable supply chains in the food industry (FSIN, 2020). Food supply chains face particular challenges such as fluctuating harvests due to the environmental impacts of climate change, seasonal variations, volatile commodity prices, impacts of political regulations as well as the problem of perishability and durability of food items. The German food industry is the fourth largest industry sector in Germany (BVE Deutschland, 2018) in which 60% are employed in small and medium-sized organizations (SMEs) (BVE Deutschland, 2018). Consequently, the food industry proves to be especially interesting for research due to its dynamic corporate environment (Brink, 2018), tremendous climate and social impact and promising potential for corporate sustainable change (Melkonyan, Krumme, Gruchmann, & De La Torre, 2017). Food is especially essential as it is a fundamental source of nutrition and therefore the source of life (Krishnan, Agarwal, Bajada, & Arshinder, 2020).

SMEs in Germany

The economic heart of Germany is the so-called Mittelstand referring to SMEs with under 250 employees and a yearly revenue of under 50 million euros (BVE Deutschland, 2020). Within the German economy, 99.6% of privately owned companies belong to the Mittelstand accounting for

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35% of Germany’s total revenue (BVE Deutschland, 2020). German SMEs are often called the Hidden Champions since they represent 1,000 of the overall 2,700 rather small-scale and unknown organizations worldwide that discovered a specific market niche in which they grew to become essential global leaders (BVE Deutschland, 2020). Yet, it is worth noticing that global players work together with a large network of suppliers themselves who on the other hand happen to be mostly SMEs as well (Gelinas & Bigras, 2004). Consequently, regardless the choice of company size, it is inevitable not to cross path of analyzing the environment of SMEs which is why a special emphasis on SMEs is put here (Ghadimi, Wang, & Lim, 2019). Considering the aforementioned arguments, it can be concluded that SMEs within the German food industry provide a promising scope for this research since they employ a high percentage of the German population and offer an immense potential for innovation.

1.3 Research problem

Although multiple studies exist in the field of SSCM, on drivers and barriers for SSCM and stakeholder management individually, research relating the topics with one another is far from being exhaustive. There is a multitude of scholars and research dedicated to the field of SSCM, but comprehensive studies within that area are yet to be found (Jalilian & Mirghafoori, 2020). On one hand, it appears to be less common to focus on the subject matter of sustainability within supply chain management holistically and addressing all of the three pillars of sustainability -the economy, environment and society- within supply chains equally (Johnsen, Miemczyk, & Macquet, 2012; Seuring, 2013). On the other hand, it is worth noticing that within organizations it is individuals who make decisions and especially supply chain managers have a high responsibility as their strategic choices are of great importance for the level of sustainability within the supply chain. There is a lack of studies on supply chain managers and how they eventually shape the final strategy alignment (Pagell & Wu, 2009). Therefore, following the call by Carter and Easton (2011), the individual was used as the level of analysis to gain a deeper understanding about the professional insights of supply chain managers and their effect on the supply chain strategy (Dubey, Gunasekaran, Childe, Padadopoulos, & Wamba, 2017; Crum, Poist, Carter, & Easton, 2011). Even though drivers and barriers for the implementation of sustainable business practices within the supply chain received profound research attention within the last decades, they are nevertheless lacking a hierarchical evaluation, the prioritization by supply chain managers as well as a differentiation of the overall multi-stakeholder environment within distinct business fields (Patel & Desai, 2019; Sarkis, 2006). Additionally, there is barely research discussing the tensions between the drivers and barriers of SSCM and their impact on further business actions such as strategy development within stakeholder management (Carter, Hatton, Wu, & Chen, 2019). Up until now, studies in the field of SSCM have often been conducted using a multi-industry design and missed out on focusing on one industry (Carter & Easton, 2011; Dubey et al., 2017) which is why this research focuses on the food industry specifically. Even though SMEs account for 70 percent of industrial pollution worldwide and make up a significant amount of businesses globally, sustainability research rather focuses on large enterprises so far (Brammer, Hoejmose, & Marchant, 2012; Revell, Stokes, & Chen, 2010). Therefore, this research study is dedicated to contribute to consolidate the understanding of the aforementioned theories within this specific context.

1.4 Aim of the research

This research first aims to combine sustainable supply chain management literature with the organizational theory of stakeholder management which is oftentimes neglected in previous SSCM literature (Dubey et al., 2017). It therefore contributes to existing theory by designing an analytical framework connecting both theories in order to develop a strategy to reach enhanced sustainability within the supply chain. This study provides additional in-depth knowledge on the connection between the internal and external drivers and barriers for sustainable supply chain practices within a multi-stakeholder environment faced by supply chain managers. Furthermore,

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this study contributes to present research by clarifying the relevance of certain stakeholders for sustainable supply chain practices of SMEs in the German food industry and providing two matrices visualizing the characteristics of individual stakeholders within the supply chain.

Secondly, this research study aspires to provide practical contributions alongside the theoretical value. By analysing the internal and external drivers and barriers for SSCM within SMEs of the German food industry, this research is able to showcase an explicit status quo of this industry. New models and guidelines for stakeholder management as a tool for SSCM are established for future practitioners. The combination of the two mentioned theoretical concepts for strategy development and the detailed research scope of SMEs within the food industry in Germany constitute the novelty and originality of this research.

1.5 Research questions

Based on the aim and purpose of the research study the following research questions will be investigated within the thesis:

RQ 1: What are the drivers and barriers for sustainable supply chain practices and how do supply chain managers assess their relevance within the multi-stakeholder environment?

RQ 2: How do supply chain managers assess the importance of involved stakeholders for sustainable supply chain practices?

RQ 3: Which stakeholder strategies are applied in order to enhance the drivers and reduce the barriers within a multi-stakeholder environment for sustainable supply chain management?

1.6 Structure of the research

The structure of this thesis is divided into six parts following the chronologic procedure of this study. Chapter 1 Introduction has built a contextual framework for the thesis and elaborated the thematic background of the discussed research topic, justified the importance of the topic area, the problem identification and its purpose and aim. The following Chapter 2 Theoretical background and analytical framework represents the theoretical foundation for the research paper and comprises relevant analytical concepts within the fields sustainable supply chain management and stakeholder management theory. Next, Chapter 3 Methodology presents the methodological approach as well as the choice of research method used for the study. Thereupon, Chapter 4 Analysis showcases the main findings of the research study providing the reader with a presentation of the data collected in the study. This is followed by Chapter 5 Discussion which includes an in-depth discussion of the key findings from the research study based on the theoretical and analytical framework from an elevated perspective. Lastly, Chapter 6 Conclusion offers a general summary exploring the study in relation to its designated purpose.

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2. Theoretical background and analytical framework

2.1 Sustainable supply chain management

2.1.1 Development of the concept

Supply chain management is a concept exists for numerous decades already, but only recently included sustainability. The concept emerged in the 1960s with the core topic of warehousing and transportation which then developed to a focus on total cost of ownership in the 1970s and to integrated logistics management in the 1980s (McKee & Ross, 2009). In the 1990s the term supply chain management was applied recognizing the importance of a strategic approach (McKee & Ross, 2009). In the 2000s, lean supply chain management evolved as the center of attention (McKee & Ross, 2009) gradually resulting into the emergence of SSCM over the years (Seuring & Müller, 2008a). The concept was approached through different perspectives, one of them being the environmental lens which derived from the aspiration of minimizing inefficiencies due to cost factors (Corbett & Klassen, 2009). Later, also the external circumstances of increasing resource depletion encouraged companies to overthink their resource use (Corbett & Klassen, 2009). Furthermore, SSCM developed from the sole focus on material products to an extension to services (Corbett & Klassen, 2009) and included the encouragement of outside actors in order to increase the sustainable development of the organization (Vachon & Klassen, 2009). Thus, the concept developed from an isolated operation within an organization with a focus on the economic and environmental factors to a concept which includes multiple internal and external stakeholders and considers the environmental and economic as well as the social dimension.

2.1.2 Definitions within supply chain theory

With the increasing role of sustainability within supply chains, multiple definitions of sustainable supply chain management emerged. There is a common understanding that businesses and organizations have a major negative impact on the environment and therefore play an important role in achieving worldwide sustainable development (Harris & Crane, 2002). Sustainability has become an ongoing rationale for doing business and can represent a competitive advantage for an organization (Galpin & Whittington, 2012) if it is implemented correctly and embedded across the whole organization (Haugh & Talwar, 2010). Thereby it is of great importance to not solely focus on one, but to include all three dimensions of sustainability, namely the economic, the environmental and the social pillar. However, in order to be able to maximize performance, the corporate sustainability strategy needs to be narrowed down into specific strategies for different departments (Wolf, 2011). The supply chain is therefore a relevant department for the implementation of sustainability due to its aforementioned potentially high negative impact on the environment (Wolf, 2011). According to Stavrulaki and Davis (2010), three main areas are most prominent regarding the supply chain such as network, management and processes components. Firstly, network relates to stakeholders involved in the supply chain. Secondly, management encompasses decisions and supply chain strategies mainly executed internally. Thirdly, processes refer to the production mechanisms and logistics, either internal or external to the focal firm depending on the specific organization. Additionally, the supply chain council invented the supply chain operations reference (SCOR) as a clear visualization of the whole course of a product within the supply chain (see Figure 1) (Association for Supply Chain Management, 2020).

Figure 1: SCOR Modell (Association for Supply Chain Management, 2020)

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The SCOR model entails the processes plan, source, make, deliver and return which represent the main operational processes in the supply chain. These processes entail the areas of product concepts, procurement, production, distribution and refunds. Hence, supply chains comprise a vast variety of practices and processes within organizations. This model provides a framework for the structural analysis of individual processes.

Numerous definitions of SSCM exist with different focal points. Carter and Rogers (2008) define SSCM as “the strategic, transparent integration of achievement of an organization's social, environmental, and economic goals in the systemic coordination of key interorganizational business processes for improving the long-term economic performance of the individual company and its supply chain” (p. 368). Seuring and Müller (2008a) on the other hand define SSCM as “the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development i.e., economic, environmental and social, into account which are derived from customer and stakeholder requirements” (p. 1700). Both definitions include the triple bottom line (Elkington, 1998) and business processes whereas the latter is more elaborate and includes stakeholders while the former primarily focuses on the economic performance.

Ahi and Searcy (2013) offer an even more elaborate definition of SSCM and define it as “the creation of coordinated supply chains through the voluntary integration of economic, environmental, and social considerations with key inter-organizational business systems designed to efficiently and effectively manage the material, information and capital flows associated with the procurement, production, and distribution of products or services in order to meet stakeholder requirements and improve the profitability, competitiveness, and resilience of the organization over the short- and long-term” (p. 339). This definition provides a comprehensive overview about SSCM and will therefore build the basis for this paper.

2.1.3 Focus areas within sustainable supply chain management

In general, the concept entails areas such as sustainable operations and risk management, sustainable supplier management and corporate social responsibility (Zimon, Tyan, & Sroufe, 2020). A sustainable supply chain considers all three pillars namely the environmental, the economic and the social dimension and in regard to the three dimensions more sustainable manufacturing practices (Sisco, Chorn, & Pruzan-Jorgensen, 2011). It is furthermore a concept which not only covers the three dimensions, but also moral, technical, legal and political aspects (Zimon, Tyan, & Sroufe, 2020). Sustainable supply chains fulfil the needs of the present and the future generations (Sisco, Chorn, & Pruzan-Jorgensen, 2011). One of the central aspects is moreover that sustainability within the supply chain mitigates risks (Roehrich, Grosvold, & Hoejmose, 2014; Wolf, 2011).

Areas within SSCM

Sustainable supply chain management covers different areas in which sustainability and supply chains come together beyond traditional supply chain management, namely in designing products, manufacturing by-products produced during product use, prolonging the product life cycle, and ensuring a recovery processes at the end of the product life (Matsumoto, Masui, Fukushige, & Kondoh, 2017). Further sustainable practices include fair labor conditions for suppliers but also employees to ensure ethical standards (Park-Poaps & Rees, 2010). Diversity within the whole range of stakeholders and within the supply chain is also crucial to ensure that different opinions are respected and represented (Worthington, 2009). Concerning operations, several different sustainable practices can be taken by companies. Sustainable processes comprise sourcing, production and transportation (Ivanov, Tsipoulanidis, & Schönberger, 2017). In specific, green logistics, green inventory management, green facility location, responsible purchasing, green technology choice and eco design are of importance (Bouchery, Corbett, Fransoo, & Tan, 2016). For the food industry, especially green logistics, eco design in terms of packaging and responsible

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purchasing play a crucial role. Green logistics is majorly concerned with reducing the negative environmental impact of transportation by reducing emissions, the amount of non-renewable energy and waste (Bouchery et al., 2016). Eco design is one approach to create products, packaging and processes to minimize waste and thus the negative impact on the environment. Related to packaging, products are designed which can be recycled by avoiding harmful substances and optimizing the lifetime of a product (Bouchery, Corbett, Fransoo, & Tan, 2016). Other priorities such as the quality should not be forfeited (Bouchery et al., 2016). Moreover, responsible purchasing becomes more important for supply chains nowadays as suppliers can represent a competitive advantage for companies. Thus, the supply chain comprises multiple areas and processes and involves various departments in an organization.

Purpose of SSCM

The purpose of a sustainable supply chain is the mitigation of risks which can occur in many different areas and in all three pillars of sustainability- the economic, environmental and social dimension. Examples for the economic pillar are that operational processes can be interrupted especially if many actors are involved and if the supply chain is spread globally (Seuring & Müller, 2008a). Regarding the environment, resource depletion and environmental degradation are among the most impactful risks (Förstl, Reuter, Hartmann, & Blome, 2010). Harmful pollutants and the extraction of raw materials can further display a risk to the environment (Vachon & Klassen, 2006). Depending on the product, waste and used products also put the environment at risk (Vachon & Klassen, 2006). In the context of social risks, child labor (Förstl, Reuter, Hartmann, & Blome, 2010), safety and human rights in general are the most prominent factors (Carter & Rogers, 2008). Sourcing in the developing world can also display a risk in different ways, mainly socially regarding working conditions and human rights (Pagell & Wu, 2009). All businesses encounter risks in its supply chain (Roehrich, Grosvold, & Hoejmose, 2014). However, some industries are more affected than others. Especially the textile industry and the food industry are exposed to risks (Roehrich, Grosvold, & Hoejmose, 2014). Therefore, the supply chains are interesting to assess which is done in this study. Several requirements need to be fulfilled when sustainability is integrated in the supply chain. The top management has to take a proactive role and has to understand that sustainability requires the commitment throughout the whole organization (Pagell & Wu, 2009).

To conclude, sustainable supply chain management displays a crucial topic for organizations on the way towards becoming more sustainable. Especially a close interaction with stakeholders is essential to mitigate risks and achieve synergies. When seen from a holistic perspective, a sustainable supply chain would at the minimum not harm the environment and could ideally ensure the possibility of doing business eternally (Pagell & Wu, 2009).

2.2 Drivers and barriers for sustainable supply chain management

Due to the multi-stakeholder environment of an organization (Sauer & Seuring, 2019) and the complexity of supply chains (Shibin, et al., 2017) organizations face several enablers and challenges in regards to the implementation of sustainable practices within their supply chains (Narimissa, Kangarani-Farahani, & Molla-Alizadeh-Zavardehi, 2020). The different associations of stakeholders share varying interests and priorities and therefore follow diverse objectives resulting in a multitude of drivers and barriers for SSCM (Rebs, Brandenburg, & Seuring, 2018). As the context of sustainability within the supply chain is complex and linked to multiple actors, various differing drivers and barriers, sometimes even conflicting one another, arise naturally (Zimon, Tyan, & Sroufe, 2020). The so-called drivers and barriers for sustainable practices within a supply chain can be divided into internal and external factors each (Hervani, Helms, & Sarkis, 2005, Freeman, 2010). Hervani, Helms and Sarkis (2005) have remarked that organizations have a multitude of drivers and barriers when it comes to SSCM comprising enablers and constraints from either inside or outside the organization. The awareness and knowledge of these factors

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allow a comprehensive analysis of the present organizational environment and empower sustainable supply chain management.

2.2.1 Drivers for sustainable supply chain management

On one hand, internal drivers involve stakeholders inside the organization such as the top and middle managers and employees as well as other organizational factors like organizational culture and sustainability commitment (Saeed & Kersten, 2019). On the other hand, external drivers include all stakeholders that impact organizational decisions from outside as for instance the government, customers, competing organizations or the society as a whole (Sajjad, Eweje, & Tappin, 2020). After a comprehensive literature review of research articles analyzing the drivers for SSCM (see Appendix I) the multitude of aspects were reduced to ten most essential internal and external drivers that will be discussed in the following chapter (see Table 1; for a more elaborate literature review see Appendix I).

Table 1: Internal and external drivers for sustainable supply chain management

Internal Drivers

Considering the internal drivers for sustainable supply chain management, it is at first beneficial for an organization if it is possible to easily align the topic of sustainability with the overall organizational strategy and objectives (Brindley & Oxborrow, 2014). Another promoting aspect for sustainability within the supply chain represents the organizational culture and values (Carter & Rogers, 2008). If an organization already has delicate responsible values and exercises considerate care towards its stakeholders, it is more natural for the company to evolve to the next step and act according to their beliefs within the supply chain (Morali & Searcy, 2013). Furthermore, the level of management commitment and proactivity is crucial for the success of the implementation of sustainable processes within the supply chain (Ansari & Kant, 2017). Additionally, the engagement of employees and their aspirations for long term responsible corporate actions have the power to initiate corporate change from the bottom-up and make company representatives more aware of social and environmental challenges in the organization (Ghazilla, Sakundarini, Abdul-Rashid, & Syakirah, 2015).

In order to implement new sustainable practices, initial investments are required, not only financially but also investments in personnel and technologies depending on the initial situation

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(Chkanikova & Mont, 2015). In case the organization already has working knowledge sharing platforms in place and works with an effective information and communication management, the adaptation to a more sustainable corporate everyday process is facilitated (Tachizawa & Wong, 2014). These costs that organizations are facing at the beginning of the implementation of sustainable supply chain practices, after a while resolve into long-term cost savings (Chkanikova & Mont, 2015) and even result in financial gains in the long run (Zailani, Jeyaraman, Vengadasan, & Premkumar, 2012). Also in the short term, costs can be saved due to reduced packaging, lower turnover costs and the reuse and recycling of products (Crum, Poist, Carter, & Easton, 2011).

Another significant aspect is that the newly and additional created value by making the product more socially as well as environmentally friendly (Gandhi, Thanki, & Thakkar, 2018) represents a profound competitive advantage towards other organizations with a less sustainable production process (Ansari & Kant, 2017). Moreover, the transformation towards sustainability within the supply chain enhances the image and the brand reputation of a firm (O'Connor, Parcha, & Tulibaski, 2017) increasingly attracting environmentally conscious customers (McKinnon, 2010). Customers are increasingly concerned about the lifecycle, quality and safety of their products especially within the food industry (Mattevi & Jones, 2016) and therefore the transparency of SSCM practices allows consumers to make a decision based on traceable performance measurements (Wolf, 2011).

External Drivers

Besides the internal drivers motivating an organization to implement sustainable supply chain management practices from the inside, there are also external drivers that influence the activities within an organization (Chen & Chen, 2019). The first category of external drivers for SSCM stems from the government and legal perspective (Hussain & Malik, 2020). Whether it is the regional, national, European or international government (Rebs, Brandenburg, Seuring & Stohler, 2018), legal authorities have the power to put regulations or restrictions into place limiting unsustainable corporate processes as well as nudging organizations with the help of incentives and rewards in order to guide towards sustainable change.

Furthermore, there are several factors within the market environment inspiring an organization to become increasingly sustainable (Zimon, Tyan, & Sroufe, 2020). Stakeholder demand and pressure for sustainable products have a remarkable impact on the future development of a product (Seuring, Brix-Asala, & Khalid, 2019). Additionally, the closer organizations work together with partners, industry initiatives and customers the greater and more detailed is the feedback from outside actors allowing the collection of information for self-reflection (Chen & Chen, 2019). It is either the peer pressure from other organizations (Ashton, Russell, & Futch, 2017) or from competitors (Dubey, Gunasekaran, & Childe, 2015) that motivates the firm to catch up in regard to sustainability procedures. Moreover, the overall sustainability awareness across the whole industry has a huge influence on every organization (Tachizawa & Wong, 2014).

The third category of external drivers for sustainable transformation within the supply chains of companies comes from a resource point of view (Mehdikhani & Valmohammadi, 2019). Not only the business and supply chain environments are ever-changing (Grimm, Hofstetter, & Sarkis, 2014), but also the natural environment is alternating (IPCC, 2018). Since there is a direct connection between the natural resources and the food industry, companies within this business sector are especially alarmed by scientific alerts in regard to resource security due to extreme weather conditions (Ray et al., 2019). Consequently, the challenging climate conditions function as a driver for sustainable business practices (Wei, 2018). As a result, an increasing amount of new innovations and inventions are trying to decrease the carbon footprint of the supply chains (Mehdikhani & Valmohammadi, 2019).

Due to the limitations in scope of this research paper, only the five most relevant drivers were used for the development of the later interview guide as well as the basis of the analysis (see

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Appendix V). The driver of laws and regulations was considered crucial since the governmental regulations design the legislative framework for business actions (Ansari & Kant, 2017). Moreover, the motivation to improve the image as well as to create a competitive advantage through SSCM represent significant internal drivers for an organization (Luthra et. al., 2016). Additionally, the overall industry environment (Chkanikova & Mont, 2015) and the stakeholder demand (Seuring & Müller, 2008b) are relevant external drivers impacting the realization of SSCM in SMEs. Due to the limited business size external influences are particularly relevant and impactful on the business development of SMEs.

2.2.2 Barriers for sustainable supply chain management

Despite numerous drivers which facilitate the implementation of sustainable practices within the supply chain, barriers constrain the implementation at the same time. Several barriers can be derived from the organization itself whereas others are rather external and involve outside stakeholders. This section is divided into internal and external barriers that occur regarding the implementation of SSCM as depicted in Table 2 below (for an overview of the elaborate literature review see Appendix II).

Internal Barriers

Organizations face multiple barriers within their own structures and capabilities. One major barrier which is especially prevalent in small and medium-sized organizations is the lack of resources (e.g., Lambrechts, Gelderman, Semeijn, & Verhoeven, 2019; Roehrich, Grosvold, & Hoejmose, 2013; Shibin et al., 2017) of different kinds. Therefore, SMEs likely find themselves in the position to make distinct choices related to sustainability (Bakos et al., 2020).

Organizations face manifold internal barriers, majorly regarding resources, knowledge and commitment. First, organizations usually face higher costs when implementing sustainable practices which can represent a decisive barrier (e.g., Al Zaabi, Al Dhaheri, & Diabat, 2013; Cucchiella, Koh, Walker, & Jones, 2012; Rossi, Colicchia, Cozzolino, & Christopher, 2013; Seuring & Müller, 2008a; Wolf, 2011). Second, only limited time is available for organizations. However, building enough capabilities and knowledge about sustainability requires a great time effort which several organizations encounter as a high barrier (Roehrich, Grosvold, & Hoejmose, 2013). A further restriction for organizations could be the limitations in human resources. There might be a lack of training opportunities for employees (Cucchiella et al., 2012) to achieve an adequate level of education and expertise in the field of sustainability. In some cases, additional employees might be needed to incorporate sustainability sufficiently in the supply chain which might not be possible for some organizations due to the implied costs (Roehrich, Grosvold, & Hoejmose, 2013; Wolf, 2011). Moreover, the employees might not be capable of implementing sustainability (Ghazilla et al., 2015) and might not have the knowledge and sufficient expertise (Chkanikova & Mont, 2015; Faroque, Zhang, & Liu, 2019). An implementation of sustainable practices within the supply chain might further be hindered by a lack of appropriate technologies (Faroque, Zhang, & Liu, 2019). Another hindering factor within organizations is the lack of governmental regulations and standards in which sustainability is incorporated (Rossi et al., 2013). The motivation to implement sustainability within the supply chain is further decreased by the lack of incentives and rewards internally or by legislative authorities (Luthra, Mangla, Xu, & Diabat, 2016). Despite the fact that departments or individual employees are not rewarded for sustainable decisions, there might be a lack of information and awareness for the topic of sustainability (Roehrich, Grosvold, & Hoejmose, 2013), a lack of coordination (Seuring & Müller, 2008a), insufficient communication (Seuring & Müller, 2008a) or a lack of transparency among different actors (Grimm et al., 2014). Since sustainability topics can be considered as highly complex, uncertainties and ambiguities might arise frequently (Seuring & Müller, 2008a). An important barrier for a sustainable supply chain is also the lack of corporate support in various different areas (Cucchiella et al., 2012) which might lead to a lack of commitment (Rossi et al., 2013). Lastly, conflicting priorities might occur for instance between short- and long-term goals either internal or

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external to the focal firm (Roehrich, Grosvold, & Hoejmose, 2013) representing one of the highest burdens for companies to implement sustainable practices.

External Barriers

In contrast to internal barriers, external barriers can be found on different levels. On the societal level, culture is ever-changing and the accordingly shifting value sets might prevent sustainability from being implemented if the society does not put a high value on sustainability (Abbasi & Nilsson, 2012). On the governmental level, a lack of sustainability standards and legislations can constrain the sustainable development within the supply chain (Al Zaabi, Al Dhaheri, & Diabat, 2013; Dey, Malesios, De, Chowdhury, & Abdelaziz, 2019; Ghadge, Dani, Ojha, & Caldwell, 2017; Seuring & Müller, 2008b; Cucchiella et al., 2012). Government decisions imply great consequences as they are especially powerful and have a high impact on operating organizations. Besides regulations and laws, the government oftentimes misses out showing sufficient initiative and leadership for the change towards a sustainable future (Chkanikova & Mont, 2015) by for instance including sustainability and in particular standards for SSCM on their political agenda (Seuring & Müller, 2008b). On the economic level, the changing environment and dynamics of the market can complicate the implementation, especially in the supply chain (Schaltegger, Burritt, Beske, & Seuring, 2014). The industry environment could also hinder the implementation (Roehrich, Grosvold, & Hoejmose, 2013) depending to a large extent on the kind of industry the organization is situated in (Rossi et al., 2013). If an industry does not encourage and promote sustainable practices, there is a lack of competitive pressures from other companies (Cucchiella et al., 2012), so companies are less likely to implement them as usually costs are also higher.

Closer to the company, various barriers regarding capabilities, transparency, culture and demand can be found. First, the suppliers might not have the capabilities to implement sustainability (Grimm et al., 2014). In order to implement long-term strategies such as sustainability within the supply chain, trust, transparency, information sharing and a close collaboration are requirements for a successful cooperation which in case it is missing, could represent an obstacle for the organization (Faroque, Zhang, & Liu, 2019; Grimm et al., 2014). A high commitment is necessary, so that the process is not further hindered (Cucchiella et al., 2012). Moreover, depending on the scope of the company and whether it operates locally or globally, culture and language barriers could occur (Grimm et al., 2014). On the customer level, there might be a lack of demand for sustainable practices or products, a lack of interest and a lack of awareness (Chkanikova & Mont, 2015; Seuring & Müller, 2008b). Not only might the customer be unaware, several customers are also not willing to pay a higher price for sustainable products which might hinder an organization to implement sustainability (Cucchiella et al., 2012).

An overall barrier which can be applied to different levels is an information uncertainty (Wu & Pagell, 2011) which organizations must deal with in times of globalization and digitalization. Another overall obstacle is a lack of involvement of external stakeholders (Ghazilla et al., 2015). Additionally, if sustainability is not monitored, whether on the organizational or stakeholder level, it is not clear for organizations to what extent sustainability is implemented and what is still required (Dey et al., 2019).

Out of the barriers identified in the literature review, five specifically important barriers for the research context were identified. For this study context, a lack of resources, limited information and expertise, a lack of commitment, a lack of incentives and rewards and conflicting priorities were considered to be the most important ones. As this study was conducted in SMEs a lack of resources and the closely linked limited information and expertise is apparent. Additionally, in SMEs actions of the company depend more on the commitment of individuals as they usually have a huge influence on the actions and practices of organizations. Due to limited resources, also incentives and rewards might be omitted. Lastly, SMEs are oftentimes still in the phase of establishment and need to generate profit to be able to survive on the market. However, the organizations who strive towards sustainability also aim to include environmental and social

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aspects which is why conflicting priorities as a barrier is of particular interest. These most crucial barriers were therefore assessed in more detail in the data collection (see Appendix II).

Table 2: Internal and external barriers for sustainable supply chain management

2.3 Stakeholder analysis and management

Considering the aforementioned arguments, the awareness and concerns for sustainable corporate practices within organizations increased significantly during recent years. Individuals from various parties are progressively longing for holistically sustainable procurement processes and trustworthy end products based on socially, economically and environmentally responsible supply chain performance (Carter & Rogers, 2008; Morana, 2013; Seuring, 2013). Consequently, the concept of sustainable development within the supply chain has become an essential topic for organizations of all industries and settings (Seuring, 2013; Schneider & Wallenburg, 2012) and has gained significant attention not only among corporations, but diverse parties in society (Seuring, 2013; Frostenson & Prenkert, 2014). In order to reach the sustainable development of the supply chain, it is necessary to take the various stakeholders of an organization into account. Thereby, the stakeholder perspective offers an optimal angle in order to understand the complex interactions between an organization, its numerous internal and external interest groups and their collective trade and value creation (Freeman, Harrison, & Zyglidopoulos, 2018).

2.3.1 Development of the concept

Stakeholder theory can be regarded as one of the main, eventually the most frequently used concept in social, environmental as well as sustainability management research (Frynas & Yamahaki, 2016; Montiel & Delgado-Ceballos, 2014). The analysis of stakeholders and resulting stakeholder management provide a basis for further research on sustainability management within the supply chain (Perez-Batres, Doh, Miller, & Pisani, 2012). The rise of the stakeholder theory started at an international memorandum in 1963 and from then on, was only given prominent attention again after the publication of Freeman’s revolutionary theories (Freeman, 1984).

A review of the stakeholder literature from the past decades reveals that many different versions of stakeholder theory have been developed. Due to the variety of theoretical concepts and perspectives on stakeholder theory subsequently, an increasing amount of empirical investigations has been conducted based on the underlying theory and models (Yang, Shen, Ho,

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Drew, & Chan, 2009). Moreover, there is a multitude of perspectives from which one can refer to the theory of stakeholder management (Co & Barro, 2009). Frooman (1999) on the other hand describes stakeholder management with the help of an only two-sided separation by being either moral or strategic. Moreover, one can also think of stakeholder management either as a resource dependency situation, a platform and opportunity for networking or a collaboration for moral and responsible business (Hart & Sharma, 2004).

2.3.2 Definitions within stakeholder theory

Stakeholder theories highlight the importance of organizations to consider the concerns of individuals or groups that are closely connected (Gibson, 2012). Therefore, organizations as a whole are expected to be responsible and accountable for their environmental and social impact in addition to just their shareholders (Hillmann & Keim, 2001).

Even though the concept of stakeholder management has grown into a central role in business, there is yet no common consensus as to what the concept of a stakeholder exactly means (Eskerod & Huemann, 2013; Littau, Jujagiri, & Adlbrecht, 2010; Mainardes, Alves, & Raposo, 2013). There is an abundance of published definitions of stakeholders suggested and whilst every concept is liable to be contested for research, it is problematic for both theoretical and empirical analysis (Freeman, Harrison, & Zyglidopoulos, 2018). The origin of the stakeholder concept lies in the business science literature (Freeman, 1984) and may be traced back to Adam Smith. Its modern utilization in management literature was introduced by the Stanford Research Institute, which rediscovered the term to generalize and expand the notion of the shareholders as the only group that management needed to be sensitive towards (Jongbloed, Ender, & Salerno, 2007). Within this perspective, Freeman (1984) argued that business organizations should be concerned about the interests of other groups as well when developing strategies (Mainardes et al., 2013). Freeman (1984) defined stakeholders as “those groups who can affect or are affected by the achievement of the firm's objectives” (Freeman, 1984, p. 49) or as “groups or individuals who have a valid interest or stake in the activities and outcomes of a firm and whom the firm relies on in order to achieve its objectives” (Freeman et al., 2018, p.15). Mitchell, Agle and Wood (1997) propose that stakeholders can be identified using the following three attributes: power to influence the firm, legitimacy of the relationship between stakeholder and the focal firm and the urgency of the stakeholder's claim on the firm. It is actually even more complex because in reality stakeholders interact with each other and the firm sits at the center of an interconnected value- creating network (Rowley, 1997). In addition, the ISO Standard 26000 about Social Responsibility specifies stakeholders in a similar, but more narrow definition as “individuals and groups who are depending on the firm in order to achieve their personal goals and on whom the firm is depending for its existence” (2010, p.2).

While the above-mentioned definitions only showcase a glimpse of the wide variety of definition approaches, this paper only uses one all-encompassing definition for stakeholders as a basis for the research study (Hörisch, Freeman, & Schaltegger, 2014). Keeping the variety and aspects of the most influential definitions in mind, the following definition captures the overall essence of the nature of stakeholders. This paper defines stakeholders as strategic business partners, business allies with mutual interest and influence in corporate success as well as powerful key actors that are affected by as well as impact other stakeholders themselves.

Stakeholder management can generally be described as the active and proactive management of various interest groups involved with the organization’s activities, the attempt to include the stakeholders into the organizational processes and decisions as well as the process of maintaining these relationships (GPM, 2015). Thereby, stakeholder management can be divided into the two main types of directions of either the focus on the organization’s welfare, the so-called organization-focussed stakeholder management or the concentration on a particular thematic problem namely the issue-focussed stakeholder management (Roloff, 2008). Specifically, issue- focussed stakeholder management is present in multi-stakeholder environments and allows the

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focal organization to work alongside other corporations in order to solve complex problems (Roloff, 2008). However, the two mentioned approaches tend to overlap and oftentimes complement each other. Besides the two types of stakeholder management directions, there are furthermore two types of concepts being strategic as well as normative stakeholder management (Stößlein, 2006; Brink, 2005). The strategic concept thereby focuses on the positive effects of the stakeholder management on the corporate performance and stakeholders themselves are instrumentalized and rather appreciated for their stakeholder value for the business (Stößlein, 2006; Brink, 2005). Normative stakeholder management on the other hand, draws on the ethical concerns of the organization and aims to achieve a compromise between differing competing stakeholder claims (Ulrich, 1998).

Additionally, stakeholder management comprises various processes described within the following chapters being stakeholder identification (Clarkson, 1995), categorization (Freeman, 2010), prioritization (Isaksson, 2019) and engagement (Starik, 1995) ideally following a clearly developed stakeholder strategy (Co, 2009). All in all, the individual definition of stakeholder management is dependent on the perspective of an organization regarding the relevance and legitimacy of the specific claims of stakeholders (Mitchell et al., 1997).Therefore, this paper defines stakeholder management as the proactive management of involved interest groups of an organization in order to solve complex problems on an organizational or societal level.

2.3.3 Stakeholder identification and categorization

The analysis of stakeholders involved and affected by an organization’s practices gives clarity over the multitude stakeholders maintaining distinct relationships and oftentimes share conflicting values and interests (Fritz, Rauter, Baumgartner, & Dentchev, 2018). The review of stakeholder categorization literature shows that there are multiple ways to categorize the identified stakeholders relevant for an organization (Shnayder et al., 2016). The first categorization relevant to this research is the one by Fritz and colleagues (2018) who suggest dividing the stakeholders of an organization into internal and external interest groups as visualized in Appendix III. Internal stakeholders are the closest to the organization directly working within the focal firm and knowing the deepest insights of the organization (Rogers & Wright, 1998).

In contrast, external stakeholder are the ones influencing the organization from outside such as shareholders, suppliers, investors, customers, competitors, company partners, industry associations, service providers, certification agencies, the overall society, media and publicity, non-governmental organizations (NGOs) academia, legal authorities of regional, national, European as well as international governments (Zhu & Sarkis, 2007). In the food industry, certification agencies like organic, cruelty free or fair-trade are especially important due to their impact on the first impression on the customer (Seuring, Brix-Asala, & Khalid, 2019). Moreover, the visualization adopted by Fritz and colleagues (2018) indicates the overarching importance of the environment as an external stakeholder, especially within the food industry as a source of natural resources for the products (Chkanikova & Mont, 2012).

Freeman (2010) on the other hand advises a further categorization of the stakeholders into primary and secondary stakeholders from inward out depending on their general significant weight to the organization (Gibson, 2012). Primary stakeholders include customers, employees, shareholders, investors as well as suppliers of tangible goods, services or of capital (Savage, Nix, Whithead, & Blair, 1991). Other common stakeholders of the next level between primary and secondary stakeholders vary in importance depending on the nature of the firm and its industry. Within the food industry especially, they often include competitors, company partners, industry associations or unions and food certification agencies (Schaltegger, Burritt, Beske, & Seuring, 2014). The further additional layer referred to as secondary stakeholders includes the broad society, media channels and publicity, consumer advocate groups, NGOs and academia (Savage et al., 1991). These additional stakeholders are called secondary because they do not contribute directly to the value-creating processes of the firm (Freeman et al., 2010). Nevertheless, this does not imply that

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they are not significant, but from a practical perspective, much of a manager’s time and attention should focus on the stakeholders who contribute most to the value the firm creates – the primary stakeholders (Freeman et al., 2018).

Moreover, the specific interest groups of an organization can be categorized into resource, market, regulatory and social aspects as depicted in Figure 2 below, connecting the findings of previous research. Considering the realization of a sustainable supply chain it is especially beneficial for an organization to focus on a specific selection of suitable suppliers and identify their background and overarching relevance to the organization (Liu, Xiao, Lu, Tsai, & Song, 2019). Thereby, resource stakeholders provide the organization with personnel, financial as well as knowledge resources such as employees, shareholders, suppliers and investors. Second, market shareholders are the group of individuals an organization interacts with within the market environment such as customers, competitors, company partners, industry associations or unions, as well as certification agencies (Hoffmann, 2000). Third, regulatory stakeholders are referring to legislative bodies such as regional, national, European or international governments. Fourth, the social stakeholders make up the society as a whole, media, NGOs as well as academia.

For the further use within this research study 17 different stakeholder groups were selected specifically relevant to organizations in the context of SMEs within the food industry. In addition to companies of other business sectors, the stakeholder group of certification agencies was added to the list as they are proven to be particularly important as providers of food certificates and labels.

Figure 2: Categorization of stakeholders

2.3.4 Stakeholder management and engagement

Stakeholder management has emerged as a core activity for creating corporate success especially in regard to sustainable practices within the supply chain (Aaltonen, 2010; Vaagaasar, Eskerod, & Nikolaisen, 2011). The engagement and impact of various stakeholders allows supply chain managers to gain outside knowledge and expertise and improve the overall outcome and success of the joint development of the supply chain (Fageha & Aibinu, 2016). Huemann and 15

colleagues (2016, pp. 24-27) point out the need to consider management “for” rather than “of” stakeholders. Generally speaking, stakeholder management was composed to clarify the interconnected problems of value creation in a turbulent world and simultaneously understanding the ethics of the capitalist system (Freeman et al., 2018). Stakeholder management is a fundamental part of stakeholder theory since it allows the theory to be put into action and use the theoretical insights for the organization’s as well as society’s benefit (Hörisch et al., 2014). Not only does a meaningful management of the various stakeholders of an organization enable a mutually beneficial long-term value creation, it also establishes a foundation for innovation. It also refers to the fundamental interconnectedness of corporate partners and emphasizes the inseparability of business and ethics (Freeman et al., 2018).

Regarding the engagement of stakeholders there are three core challenges that need to be taken into consideration (Starik, 1995). Firstly, it is crucial to anchor sustainability within the mindset of all stakeholders and make them aware of the topic. Secondly, the individual interests of the separate stakeholder groups need to be aligned with sustainability targets into a holistic corporate interest. Thirdly, nature and the environment are oftentimes regarded as the most powerful stakeholders of all which is why it is beneficial for corporate representatives to empower the civil society to be intermediaries between the environment and the business (Chkanikova & Mont, 2012). Waxenberger and Spence (2003) focus on three attributes that describe the dynamics among the interactions of stakeholders namely power, legitimacy as well as urgency. Furthermore, there are six success factors that are critical for a successful stakeholder management and consequently for a working implementation of sustainable practices within the supply chain evolving around the areas of management support, information input, stakeholder assessment, decision making, action and evaluation and sustainable support (Oppong, Chan, & Danosh, 2017). To conclude, stakeholder management ensures the inclusion of different points of view which results in a greater understanding of other perspectives and which, if applied holistically, leads to sustainability.

2.3.5 Stakeholder management towards sustainability

The relation and fit between stakeholder theory and sustainability management is essential for the corporate thrive towards the sustainable development of business and is investigated by many researchers (e.g., Sangle & Ram Babu, 2007; Wallis, 2006). Sustainability management is “the formulation, implementation, and evaluation of both environmental and socioeconomic sustainability-related decisions and actions” (Starik & Kanashiro, 2013, p. 12). In general, there are two main approaches to apply stakeholder theory in the context of sustainability such as considering nature and the environment as a stakeholder (Starik, 1995; Stead & Stead, 2000; Waddock, 2011) as well as alternatively considering human beings, groups and organizations who analyze and interpret the development in the environment (Freeman et al., 2000; Schaltegger et al., 2014).

From a practical point of view, it can be observed that organizations are either aware and proactive in transitioning towards a sustainable supply chain management and applying sustainable practices within the processes or are driven by the pressures from relevant external stakeholders related to sustainability (Agle, Mitchell, & Sonnenfeld, 1999; Jawahar & McLaughlin, 2001; Sangle & Ram Babu, 2007; Wallis, 2006). Therefore, it can also be argued that management must be able to identify the sustainability requirements demanded by the stakeholders and specific procurement strategies in response to stakeholder expectations and demands (Sajjad, Eweje, & Tappin, 2020). Using the Pareto principle, Isaksson (2019) suggests that the main stakeholders on a global level related to sustainability are climate, biodiversity and people. As environments and demands change continuously, an ongoing improvement in turn is necessary to meet new requirements (Corbett & Klassen, 2009). A closer collaboration with stakeholders results in a greater understanding of and knowledge about the supply chain partners and decreasing conflicts which all enhance the sustainability (Vachon & Klassen, 2006). Especially minimizing the number of suppliers and having a focused supply chain facilitates sustainability (Vachon & Klassen, 2006).

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Freeman, Harrison and Zyglidopoulos (2018) state that within the capitalist system stakeholders do not act in a moral vacuum but circle around values. On the basis of these values stakeholders collaborate with one another and form mutual interests collectively. Thereby, sustainability is required as one of the most important values within stakeholder management. Consequently, stakeholder management faces the following three challenges in its aspiration for sustainable development: First, it is crucial to anchor sustainability in the mindset of all stakeholders. The second challenge is to create a mutual understanding of the term sustainability and develop shared interests based on particular sustainability concerns of individual stakeholders. Third, there is an immense potential in empowering the immediate and oftentimes most influential stakeholders from civil society and appreciate their demands and aspirations in order to reach long lasting sustainable change (Freeman et al., 2018).

2.3.6 Stakeholder management strategies

After defining, categorizing, prioritizing and assessing the multiple stakeholders of an organization it is crucial to use the identified insights for the development of a suitable strategic management of each stakeholder. Regarding the strategies within stakeholder management, an abundant range of different methods can be found (Savage et al., 1991; Polonsky & Ottman, 1998; Harrison & St John, 1996; Bunn, Savage, & Hollway, 2002). Savage with colleagues (1991) categorized an organization’s interest groups into four sections of stakeholders depending on their potential for cooperation or threat to the organization with the use of the strategies collaborating, defending, involving and monitoring. Contrarily, Harrison and St John (1996) differentiate cooperative strategies regarding stakeholders between stakeholder management tactics in case external interest groups pose risks and threats and stakeholder partnering tactics depending on their characteristics. In addition, Mitchell, Agle and Wood (1997) invented the influence-interest matrix classifying the individual stakeholders according to their level of influence and interest on organizational decisions as depicted in Figure 3 that proves to be especially useful due to its practical applicability.

Figure 3: Stakeholder influence-interest matrix (Mitchell, Agle, & Wood, 1997)

Drawing from previous work, Polonsky and Ottman (1998) categorize stakeholders into five different groups according to their potential to influence or threaten the organization such as non- 17

supportive, supportive, marginal, mixed blessing as well as bridging stakeholders. From thereupon, the two researchers posit four basic stakeholder management strategies: adaptation, aggression, cooperation, and isolation within an expanded stakeholder strategy matrix. Furthermore, Bunn together with Savage and Hollway (2002) use qualitative research to illustrate six generic stakeholder management strategies: collaborate, defend, educate, involve, lead, and monitor.

Taking all the prior presented strategies into consideration and merging them into one all- encompassing strategy concept, nine different types of possible strategies are discovered. The strategy choices are isolation, defense, pressure, monitoring, following, education, involvement, leadership and cooperation (see Figure 4). The strategy of isolation implies that an organization aims to reduce the influence of other stakeholders by acting as independent as possible (Polonsky & Ottman, 1998). Similarly, a defensive strategy means that the company attempts to reduce its dependency on other stakeholders in order to mitigate detrimental stakeholder behaviors (Bunn et al., 2002). Pressuring on the contrary involves the attempt to change the stakeholders´ point of view and have an impact on them (Polonsky & Ottman, 1998). Monitoring as a strategy means that other stakeholders are observed and information is collected in order to have an overview which overlaps with other strategies to a certain extent. In the context of stakeholder strategies, following indicates that a company adapts to the stakeholders´ interests and does not impose any decisions on them, but rather changes own processes and decisions (Polonsky & Ottman, 1998). The strategy education is closely linked to communication which aims to influence stakeholders in their decision making by teaching them which is especially prominent in the NGO sector (Bunn et al., 2002). Involving stakeholders goes one step further and includes stakeholders in decisions (Bunn et al., 2002). The leadership strategy represents the counterpart to the strategy of following and refers to a company which has power over stakeholders and takes a central role in guiding stakeholder relationships (Bunn et al., 2002). The stakeholder strategy of collaboration focuses on working together in partnerships, on products or projects (Bunn et al., 2002) which displays the closest relationship from the nine identified strategies.

Depending on the chosen strategy for each individual stakeholder within the supply chain, varying focus, resources, time and attention will be allocated. These nine strategies will be used for the analysis of stakeholders within the research study as a basis in order to assess the presented and evaluated stakeholders of SMEs within the German food industry.

Figure 4: Fusion of stakeholder strategies from previous literature

Considering the aforementioned aspects of stakeholder theory and management it can be outlined that stakeholders are essential strategic partners of an organization as they inhabit a lot of interest in the wellbeing of an organization as well as power to push SSCM. Within stakeholder theory there are multiple ways to categorize, manage and engage stakeholders according to their specific characteristics which are worth taking into consideration. Consequently, there is a tremendous potential in the usage of stakeholder concepts for the sustainable development of multi- stakeholder environments such as supply chains.

2.4 Connection between stakeholder management and sustainable supply chain management

After having discussed the relevant theories of sustainable supply chain management, the drivers and barriers for SSCM and the theory of stakeholder management, the overall thematic connection between the three fields of topic can be drawn. The research study focuses on the German market economy and particularly on the economic sector of the German food industry. Moreover, the study concentrates on the analysis of organizations which can be categorized as small and

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medium- sized organizations. As a basis for the research study, the relation between the mentioned theoretical areas of research are visualized in an analytical theoretical framework as a clear presentation of the subject of study (see Figure 5). Since the supply chain is crucial to strengthen the sustainability efforts of an organization, the ultimate goal is to achieve a best possible sustainable supply chain with the help of a dedicated SSCM. Naturally, several drivers and barriers for SSCM occur within the multi-stakeholder environment of an organization. This research uses specifically the theory of stakeholder management as a tool to support and assist achieving a successful SSCM implementation. The stakeholder management starts by identifying, analyzing and categorizing the involved stakeholders of the supply chain according to their interest and influence on SSCM. After taking the drivers and barriers of the most relevant stakeholders into consideration, the individual stakeholders are categorized dependent on their relevance into different stakeholder groups with differing underlying stakeholder strategies indicating the way the organization deals with them. As a result of the strategic stakeholder approach, the drivers for SSCM are enhanced and the barriers are reduced indicated by the loop within the illustration leading to a successful sustainable supply chain implementation.

Figure 5: Visualization of the analytical framework of the research study 19

3. Methodology

3.1 Research design and approach

Existing theories build the basis for this research and are taken from the field of stakeholder management and sustainable supply chain management. For the literature review preferably recent and frequently cited literature on the respective topics was gathered. These theories are tested in a new context as they are both combined in this research. This study explores possible stakeholder management strategies which are applied in order to enhance the drivers and reduce the barriers related to the implementation of sustainability within the supply chain. A qualitative approach was chosen and primary data was collected for this research which displays an appropriate design for an exploratory purpose (6 & Bellamy, 2012). The insights of supply chain managers were necessary to answer the research questions which is why semi-structured interviews were a suitable method whereas a quantitative survey would not allow for further questions and in-depth assessments of the drivers, barriers and stakeholder management (6 & Bellamy, 2012).

3.2 Participant selection and data collection

For this research it was important to include companies that strive towards sustainability as companies which do not attempt to achieve corporate sustainability do not have experiences with the drivers and barriers regarding the implementation of SSCM. In particular brands and companies from the product range of the two biggest organic supermarket chains in Germany were assessed. The selection criteria for the interviewees were that they are employed in a small or medium-sized company in the food industry in Germany and that they are responsible for the company's respective supply chain. Suitable participants for this research were approached via LinkedIn, email or telephone using the German request form as depicted in Appendix IV. The interviews were conducted with practitioners who work in the supply chain department as experiences of supply chain practitioners with various stakeholders is of importance to explore effective stakeholder management strategies for SSCM. However, due to the small size of some companies, some interviews were carried out with the founders as they were the person responsible for the supply chain. Due to the current COVID-19 pandemic the interviews were all conducted online or via a telephone call. All in all, 13 interviews were conducted with overall 14 participants as one interview (Company B) was conducted with two interviewees. The interviews were between around 23 and 50 minutes long (see Table 3). The sample covers various products which range from oat products, plant-based milk, chocolate, coffee to beer, and frozen food. All of the companies in the sample claim the goal to become more sustainable to a certain extent.

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Table 3: Overview of the research participants

3.3 Data analysis method

The theories were operationalized in specific questions in the interview guideline (Appendix V and Appendix VI) which build the foundation for the semi-structured interviews. A thematic content analysis was conducted to evaluate the results of the data collection in order to ensure a structured overview of the different interview results (a summary of the interviews is presented in Appendix VII). The interviews were therefore coded individually. Codes were created for key phrases, words or topics that interviewees mentioned during the interviews. In the following, each code was allocated to an umbrella topic to structure the analysis (Silverman, 2015) (see Appendix VIII). As a next step, irrelevant topics and codes were deleted for the proceeding of the analysis. The particular umbrella topics were then analyzed. In order to determine an effective stakeholder strategy, stakeholders were assessed in the interest-influence matrix. Next, the most important stakeholders were identified to whom the respective drivers and barriers were allocated. Lastly, strategies according to the importance of the most crucial stakeholders were ascertained and a new stakeholder strategy was developed.

3.4 Reliability and validity

In this research special attention was drawn to ensuring high levels of reliability and validity. An interview guideline provided the ground for each interview which was conducted to ensure high reliability and limited deviation from the questions. During the data analysis, reliability was ensured

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as the interviews were analyzed by both authors separately to guarantee that the same conclusions are drawn. There is always a trade-off between the internal and the external validity (Burns & Burns, 2008). In this study, more focus was put on the internal validity as a specific region, a specific industry and a specific size of the company was chosen. This way, it was possible to infer conclusions in this context. Furthermore, a pre-test of the interview questions ensured that the questions were easy to understand for the participants. The external validity is limited due to a limited number of participants in the study. Due to the specific context, it is solely possible to generalize findings within this context. However, it is impossible to relate the findings to other sectors or countries.

3.5 Ethical considerations

There are several aspects related to ethics that need to be considered in research. Participants should not be harmed, should not be uninformed, their privacy should be respected and there should not be any deception (Bryman & Bell, 2011). In this particular research, these issues have been prevented by informing the participants about the purpose of the data collection in an introductory email which included an interview guideline already. The participation was further voluntary, so that every participant could have chosen not to participate. To ensure privacy and confidentiality, full anonymity was ensured to the participants which is why no company names and no names of the interviewees appear in the research and the anonymous transcripts are only provided in a separate document.

3.6 Limitations

Despite the effort to minimize issues with reliability, validity and ethics, some limitations need to be acknowledged. First, the sample size in this research is rather small. If a larger sample was included it would be possible to generalize the findings. Second, this study did not include objective measures. In the interview self-reported data was collected which is highly subjective. However, for this research the experience and opinion of the supply chain responsible was important which is why the qualitative approach was chosen. According to Vachon and Klassen (2006), the inclusion of a knowledgeable interviewee additionally mitigates the risk of a common method variance.

Furthermore, several biases need to be acknowledged regarding the research. First, a sampling bias (Burns & Burns, 2008) could have occured as majorly companies from the product range of an organic supermarket were chosen which might bias the sample towards companies that put a special emphasis on the environment. Second, a selection bias might have influenced the research (Burns & Burns, 2008). As participants were approached through opportunity sampling and convenience sampling, this might have excluded companies that are not as proactive as the ones which showed interest in contributing to the research. Third, respondent effects might have biased the research (Burns & Burns, 2008). Sustainability is a sensitive topic and could likely lead to a social desirability bias when answers are given because the respondent perceives them as socially desirable which might not reflect the reality. However, this bias was mitigated through objective questions and questions for specific examples to ensure that reality is reflected. A pretest of the interview guideline was furthermore conducted to increase the objectiveness of the study. Recommendations on how these limitations and biases can further be mitigated will further be thematized in the discussion.

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4. Analysis1

4.1 Current situation of SMEs in the German food industry

4.1.1 Characteristics of German SMEs

Since the research participants find themselves as part of solemnly the German Mittelstand, there are some benefits and challenges impacting the companies´ actions in regard to their business size. The benefits recognized in the interviews vary primarily regarding the flexibility in their actions (J), particularly in regard to the opportunities in flexible product design (K) or the promptness of adaptation to changing market developments (J). It also appears that SMEs are less profit-driven (A, J, L) and less dependent on the margin than big firms (L), have more options and possibilities to act (G, M) and oftentimes act with higher repartee (L) than concerns.

On the other hand, SMEs also face several challenges due to their limited company size such as the lack of resources. These include limited financial resources (A, K) alongside a limited purchasing power (C, J, M), purchase quantity (C, J, M) surrounded in a price war environment (B, D, F, L). Moreover, the personnel resources (C, I, M) come into play as well as a lack of experience (L) and professionality (L). Moreover, even though SMEs oftentimes are driven by the best intentions in regard to sustainability, they are missing influence (B, L, M) and power (C) within the industry and therefore cannot get the attention (B) and enforcement (L) in order to achieve the impact that they are longing for. Consequently, SMEs oftentimes find themselves in situations in which they are bounded by their limited design possibilities (M) as well as their vote on new laws and regulations (C). Hence, SMEs are repeatedly highly dependent on the collaboration with other companies and stakeholders (B).

4.1.2 Challenges for SMEs within the German food industry In order to present the research context fully, the explicit circumstances within the German food industry are necessary to be discussed. There was a multitude of challenges stated by the interviewees that are particularly apparent in the German food industry. The first threat impacting the food industry is climate change (J, M) and the environmental influences (L) on the availability of resources (C, D, I, J, L) and food security (J). Further, the food industry is influenced by the seasonality of agriculture (D) as well as variations of quality (D) from year to year that impose an additional risk (A, E, H). Another aspect is the highly competitive business environment within the food industry impacted by distinct consumer demands (I), highly competing purchase power confrontations (C, J, M), cost pressure (F) and the dilemma of choice in which type of retail market to pose one’s products (I). Considering specific industry sectors, the organic farming sector is growing (J, L) alongside a shrinking meat industry (H). Moreover, the German government is lacking clear and strict laws regarding sustainable supply chain measures (H) and only hides the dilemma of true-cost pricing (E, M) with subsidizing the majority of German farmers (M).

4.1.3 Sustainability trade-offs of SMEs within the German food industry

Due to conflicting priorities interviewees have to make compromises related to sustainability in the supply chain. Several interviewees mentioned trade-offs between the pillars of sustainability as major compromises they have to make (A, C, D, I, J, L). Larger retailers are for instance favored over small retailers which displays a trade-off between the economic and social dimension (A). Other interviewees highlighted difficult decisions regarding stakeholders, resources and political decisions. Emphasis was also put on stakeholders in regard to whether it is better to have many stakeholders to diversify and minimize risks or to solely have a few stakeholders and a closer collaboration (C). Resources also displayed a high importance during the interviews. The limited

1 In order to facilitate the readability of the thesis, the references of the interviews were abbreviated in the continuous text and solely the letter belonging to the individual interviews (see Chapter 3.2, Table 3) are mentioned. 23

availability of several resources reduced the opportunities for choosing the most sustainable product (J). Further compromises had to be made regarding the product such as a less environmentally friendly packaging to ensure durability and quality (D). Another conflict companies find themselves in is to exclude sugar from the product, but facing limited possibilities with the recipe and the taste (J). Compromises also arise due to limited regional availability of products that have a certain certification which is why other products are sourced (K) or some products are sourced from further away (B, G, M, I). This is why a compromise also has to be made between regionality, the price and the quality of the product (B). The topic of certification is another compromise area that the participating companies faced. In one case, certificates were sometimes given to organizations for their climate compensation (D) actions instead of supporting firms to find solutions to the cause of the emissions and helping them with financial resources (F) to implement them. SMEs in the food industry thus face various challenges and several difficult decisions. The implementation of sustainability can therefore be hindered in the organizations.

4.2 The role of sustainable supply chain management

All participants in this research work for organizations that claim to have the goal to become (more) sustainable, so all included organizations put a particular emphasis on environmental and social aspects. However, due to a different age of the companies and different product ranges, the development, priorities and sustainable practices differ between the organizations.

For most interviewees sustainability is one of the major topics as it represents the core goal (I, J), core idea (B, E), the motto (A), the reason for existence of the business (J) or is included in the philosophy (C). Some of the organizations make the claim to be pioneers (C, I, J, L, M) and have a huge impact on the industry (C, D, I, J, M) which is supported by a strong company culture (A). The importance of sustainability in the supply chain was furthermore stressed by interviewee A who stated that sustainability is integrated in all processes. This view was complemented with the mentioned crucial role of sustainability in measures and goals (M), the organization's strategy (C, M) and planning (M). Lastly, a more pragmatic view was highlighted in that everything the organizations do must be suitable for their grandchildren (F, M) and that sustainability is the only way forward to be successful in the future and to be crisis-resilient (D, H, I, L).

4.2.1 Development of sustainable supply chain management

During the data collection it became apparent that the respective supply chains of the organizations are in different stages and developed differently. Some supply chains can be considered reactive, so that actions solely take place if an urgent problem or pressure from outside occurs (A, H). Other supply chains can be considered more proactive (B, C, D, F, I, J, L, M) as they have a clear vision (L), the ambition to make a huge impact (C, D, J) and the willingness to gain attention (J). Some stated that a sustainable supply chain implies a process over time (G, I). The change towards a sustainable supply chain can result from different initiators. Most interviewees stated that either the CEO (C, E, F, G, H, I, L, M), the family business owners (C, M) or internal employees (A, B, C, D, I, J) drive sustainability in the supply chain. Others made the distinction that mostly the younger generation in the organization pushes sustainability (C, H, M).

4.2.2 Priorities within sustainable supply chain management

As the organizations involved in this research differ regarding their products and focus, they have different priorities in the supply chain as well. The collaboration with stakeholders was a notable aspect mentioned by the interviewees. Especially long-standing partners (B, E, F, M), direct contact with stakeholders (M) and jointly developing ideas (F, H) were the focal points. Furthermore, the quality (C, B, D, E, F, I, J, L, M), functionality (E) and the packaging (B, C, D, H, K) of the product were key topics in the supply chain of the included organizations. This aspect is closely linked to the factor that the product needs to be attractive for the consumer (L) by for

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instance having new products in the assortment to meet the customer demands (H). Additionally, the product should always be available to the consumer (E).

One of the key elements of supply chains are the resources without which supply chain processes would be impossible. This was also stressed by the interviewees who saw a particular importance of the raw material security (C, L, M). In order to minimize a negative environmental impact, regionality (C, E, G, I, K, M), a minimized waste of the resources (A, E, K, L) and sustainable raw materials and ingredients (G, I, L) were also preferred by multiple interviewees. Regarding resources, certifications played a major role in most of the organizations (B, C, D, E, G, H, I, J, K, L, M). Among others, especially the organic (B, C, D, E, G, H, I, J, K, L, M), vegan (B, E, G, L) and fair-trade (C, K, L) certifications were apparent. As all of the companies are SMEs, some emphasized the importance to grow (D, J) to ensure a larger impact and to receive more attention (D, J).

Besides the previous priorities, all interviewees acknowledged the three pillars of sustainability within the supply chain to a certain extent. Regarding the supply chain, the social dimension in general (C, I, F, J, L, M) and particularly in terms of working conditions (M), nutrition (B, G, I, M) and health (B, C, F, H, I, K) were considered. The environmental dimension was regarded in terms of CO₂ emissions and the carbon footprint (C, D, G, I, J, K, L, M) and nature and natural resources (F, M). The economic dimension was mentioned in terms of the price of the product and the profitability of the organization (D, F, I, M).

4.2.3 Practices within sustainable supply chain management

Several operational sustainable practices were applied by the organizations. Packaging was a major subject of discussion (B, C, D, F, G, H, K). Next, logistics played a crucial role especially for the organizations with products from abroad and overseas such as coffee and chocolate (B, C, F). However, some interviewees stated that even though their product is regional, they sometimes have to source spices and other ingredients of the product from abroad (G, I, M). Another sustainable measure is to eliminate intermediaries in the supply chain and enable direct trade, so that for instance a better salary can be paid to the farmers (F). In addition to the mentioned sustainable practices, the topic of transparency (A, D, I, J, L, M), traceability (B, H), control and check mechanisms (I, J) was highlighted during the conversations. In the opinion of the interviewees this ensures that a sustainable collaboration with other stakeholders is facilitated.

4.3 Drivers and barriers for sustainable supply chain management

4.3.1 Ranking of the most important drivers

Organizations face several drivers and barriers within a multi-stakeholder environment impacting the implementation of a sustainable supply chain. Within the literature research five drivers were identified as most essential and therefore included within the interview guideline for the interview participants to assess their relevance and rank according to their influence towards SSCM as illustrated in Figure 6.

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Figure 6: Ranking of most relevant drivers for sustainable supply chain management

The first substantial driver for SSCM is stakeholder demand (A, B, C, D, E, F, G, H, I) describing the expectations of customers (A, B, C, D, E, F, G, H, I), employees (C, D, I, J, L) and the society (I) towards the organization and its products on the one hand, as well as the pressure from society (I) as a whole or from NGOs (C).

One of the interviewees highlighted the explicit importance of consumers by saying:

“If the markets are changing, then it is in fact due to consumer pressure. The consumers have more power than one would think.” - Company H

The majority of interview participants rated the impact of stakeholder demand from various sides as one of the most influential drivers for SSCM activities (A, B, E, F, G, H, I, J, L, M). The second critical driver of this study is the competitive advantage (A, B, C, D, E, F, G, H, I, K, M) gained by including sustainability as a central topic within the supply chain which was classified as medium impactful for a development towards a sustainable supply chain. One study participant noted:

“Economic benefits and ideally social advantages should result from an environmental focus, but it oftentimes requires endurance and long-term commitment.” - Company M

The third driver for sustainable supply chain practices is the opportunity to improve the image and perception of the organization (B, C, D, E, F, G, H) which was estimated as a particularly influential driver as third priority. The fourth driver is referring to the surrounding industry environment on the supply chain of the organization in general (A, B, C, F, G, J, M). The industry environment of an organization encompasses different influential actors such as partners (C, D, E, F, I, L, M), suppliers (B, G, H, I), retail markets (D, J) as well as certification authorities (D, K) responsible for labeling (D, K) which the interviewees estimated not as the most impactful driver category. The fifth main driver category for SSCM is referring to laws and regulations (B, C, D, F, K, M) enforced by governmental authorities on either a regional (K, M), national (C, G, H, K, M), European (C, E, F, G, H, M) or international level (B, F, G, H, M) which was ranked as quite important drivers

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among the interview participants. In addition to the five main drivers determined through the literature review, two additional drivers were discovered within the research study. One being the self-expectation (I, J) of an organization as for instance a pioneer (C, I, J, L, M) within the sector to thrive towards sustainability. Some interview participants view themselves as

“pioneers, as role model, as driving power, as first mover within the industry sector” - Company J

Lastly, the corporate belief that a sustainable future is going to become reality (L) is crucial to develop commitment and great ambition for sustainable change.

4.3.2 Ranking of the most important barriers

Alongside the drivers, there are also several barriers within a multi-stakeholder environment of an organization impacting the realization of a sustainable supply chain (see Figure 7). In contrast to drivers, barriers limit the implementation of sustainability within the supply chain. In this research, the lack of resources was by far the most crucial barrier in the eyes of the interviewees (A, B, C, H, I, J, K, L). Resources encompass the scarcity of raw materials (C, D, E, I, K), resources in the upstream supply chain (M), a limited product selection (K) and the location which limits the access to resources (K). On the other hand, time can be considered a resource and was raised during the interviews in the context of the relatively long amortization time of sustainable practices and investments (L, M). Closely related to this is the barrier of costs (A, B, D, F, H, K) and higher prices of the products (D). Other interviewees stressed that the companies lack human resources to increase the implementation of sustainable practices (C, I, M). This aspect is also related to a lack of information and expertise within the organizations. This topic includes a lack of information (A, B, D, F, G, H, I, J, M), a lack of expertise (A, B, C, D, F, H, M) and a lack of transparency (B, G, J). According to the results of the data collection, this barrier displays the second most important barrier (A, B, D, G, I). As a third barrier, the lack of incentives and rewards were discussed by the interviewees (B, C, E, F, L, M). On the overall fourth rank, conflicting priorities (B, C, D, F, I, J) including compromises (D), and aim conflicts for stakeholders (I) were seen. The lack of commitment was ranked as one of the least influencing factor (B, D, G) or was not considered a barrier at all (A, C, E, H, J, K, L).

Figure 7: Ranking of most relevant barriers for sustainable supply chain management

Beside the five aforementioned barriers which were included in the interview guide, other factors were put forward by the interviewees. Firstly, a lack of consumer demand (J) including a missing 27

readiness (F, L) and commitment (F) was highlighted. Secondly, omitted laws and regulations were perceived as a hindering factor (J). One interviewee expressed her aspirations for the supply chain by stating:

“I wish that there would in any case be a law [...] for a transparent supply chain.” - Company C

Secondly, various interviewees experienced a limited offer of technological and practical solutions for their problems which comprise packaging (H, J) and in particular plastic (D) and recycling (D), limited alternatives regarding transportation (F), the quality (D) and the durability (D, L) of the product. Fourthly, the limited influence of small and medium-sized companies due to their size was brought up as a barrier for the implementation of sustainable practices in the supply chain (F) particularly on a political level such as the formulation of new legislative standards (C). Finally, high trade expectations hinder companies as they cannot meet the expectations of perfection (A) without the consideration of human mistakes (H) and the possibilities and opportunities for improvement (A).

4.4 Stakeholder management as a tool for sustainable supply chain management

For the realization of sustainable supply chain management, a comprehensive and thoughtful stakeholder management is crucial as a tool to enhance the aforementioned drivers and minimize the occurring barriers. The division of stakeholder management includes several processes such as stakeholder analysis including stakeholder identification, stakeholder categorization and stakeholder assessment as well as stakeholder strategy development for SSCM.

4.4.1 Stakeholder identification

In addition to theories, the research participants from practice also described that stakeholder analysis covers the processes of stakeholder identification (J, M), stakeholder categorization (J) as well as stakeholder assessment and ranking (C, J, M). Within the literature research of Chapter 2.3.3, 17 types of stakeholders were identified as relevant for a corporate environment as well as supply chain management activities.

4.4.2 Stakeholder categorization

After the stakeholder identification, the discovered stakeholder groups were categorized into four categories according to their thematic focus and their relevance for the individual organization as mentioned by the interviewees (Hoffmann, 2000). The first category group presents resource stakeholders referring to employees (B, E, H, J, L), shareholders (M) such as company owners (M), suppliers (A, B, C, D, G, H, I, J, K, L, M), production firms (B, G, J, K) and warehouses (A, K) as well as investors (L, M) of the organization. Equally important to the above-mentioned resource stakeholders, the environment (J) and nature (J) were pointed out specifically by one research participant. Further, the second stakeholder group describes market stakeholders comprising consumers (A, B, C, D, E G, I, J, K, L, M), competing organizations (C, D, I, L, M), partner companies (A, C, D, E, I, L, M), industry associations (B, C, D, I, J, K, L) and certification agencies (D, J, M). On top of the main market stakeholders included into the interview guideline, the study participants highlighted the importance and influence of retail markets (F, J, K) in driving sustainable change. In addition, the third stakeholder category of regulative stakeholders represents all governmental institutions from the regional (M), the national (C, H, L, M), European (E, F, H, L, M) up to the international level (M). Lastly, the fourth stakeholder classification entails all of the social as well as societal stakeholders external to the organization such as the overall society itself (C, D, E, J, L, M), NGOs (C, E, F, J, L, M), media and publicity (D, F, L, M), academia (C, M), science (C, F) and researching technology solutions (E, F).

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4.4.3 Stakeholder assessment

Following the stakeholder identification and categorization, it is valuable for the effectiveness of the subsequent stakeholder management activities to assess the stakeholders by ranking them according to their relevance as well as to class them within an influence-interest matrix (Mitchell, Agle & Wood, 1997).

Figure 8: Influence-interest matrix of stakeholders for sustainable supply chain management

The results from the rankings of the study participants as illustrated in Figure 8 show evidence that suppliers play a significant role within an organization and its supply chain as the majority of interviewed companies closely collaborate with their suppliers and production firms (B, C, D, G, H, I, J, K, L, M). Secondly, the consumers (A, B, C, D, I, J, K, L, M) play a crucial role for a multitude of interview participants as they hold the final purchase power (B, C, K, L, M) and are extremely beneficial for companies when managed closely (A, B, C, D, E, G, I, K, L, M). Thirdly, most of the interviewees put a particular emphasis on the partner organizations which they collaborate with (A, C, D, E, F, G, I, J, L, M) as well as the industry associations they find themselves part of (C, D, H, I, J, K, L, M).

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“It would be beneficial of course if everyone worked together more closely, more goal-oriented and more proactively within the industry [...] to be able to achieve more.” - Company C

The fifth stakeholder group of shareholders was not mentioned as often compared to others, but categorized as especially relevant (L, M) as the commitment of for instance company owners or family business representatives are vital for SSCM. Moreover, employees as the sixth stakeholder category were mentioned often during the interviews (B, E, H, J, L, M). They are considered main stakeholders as their daily work and impulses drive corporate sustainable change, either as a employed or even an owning part of the organization (L). The seventh stakeholder group quite relevant to the interview participants was the retail market (A, F, J, K) due to their influence on which products are included into the range of the stores (D, J, L). Furthermore, the eighth most important stakeholder is the government particularly the national administration (C, H, L, M) and the European Union (E, F, H, L, M), either for monitoring (H) or close collaboration (F, L). The society as the ninth stakeholder division is also ranked relatively high by the study participants (C, D, E, J, L, M) as new societal trends (M) form collective sustainable action. The tenth stakeholder class represents NGOs (C, E, F, J, L, M) which serve as means of pressure (J, L) as well as partnering bodies (F, L) to companies. On a superordinate level, the last stakeholder within SSCM is the environment and nature (J) which is only mentioned by one interviewee but serves as a foundation for the food industry to operate. As the environment is oftentimes neglected as a key stakeholder one interviewee explicitly pointed out:

“Sustainability is the key issue and core mission of our age. [...] Therefore, everybody should care about how to work alongside nature instead of against it. In fact, the goal is not to thrive for sustainability alone and maintaining the status quo but achieving a regenerative state.” - Company J

An overview of the eleven most relevant stakeholders for SSCM is illustrated in the following Figure 9 underneath.

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Figure 9: Overview of most relevant stakeholders for sustainable supply chain management

Additionally, representing the loop within our research study as indicated in Chapter 2.4 the identified stakeholders proven to be most important for SSCM of SMEs within the German food industry were collected and thus their explicit drivers and barriers recurrently mapped out in depth within the driver-barrier matrix of primary Stakeholders (see Figure 10). This matrix serves as a basis and all-inclusive overview for the development of specific strategies towards each stakeholder group. Within the matrix below, the individual stakeholders are ranked according to the results of the study regarding their level of influence and interest.

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Figure 10: Driver-barrier matrix of most relevant stakeholders for sustainable supply chain management

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4.4.4 Possible stakeholder strategies

Subsequent to the stakeholder analysis and stakeholder assessment, a defined stakeholder strategy follows thereupon. The study showed different kinds of development directions for the emergence of stakeholder strategies. Some interviewees mentioned a gradual evolution of strategic concepts towards stakeholders over time (L, M) or a historical development (I), whereas others emphasized human intuition (M) as the foundation for instance for stakeholder selection choices (J, M). Within the interviews several reasons for the use of stakeholder strategies appeared such as its use for risk management (M) or reinforcement of corporate resilience (M) as well as the practice of purposeful diversification of stakeholders (M).

Several different possible strategies were acknowledged by the interviewees. A defensive strategy towards external stakeholders was discussed as a reaction to offensive and corporately harmful NGO campaigns (L). Moreover, pressuring stakeholders was stated by a few interviewees for instance as pioneer organizations are putting pressure on the overall industry and the companies within the industry sector (A, C, F, I, J, H, L, M) towards sustainable development. Besides pressuring, also monitoring others was acknowledged by a few study participants as some organizations request detailed documents of stakeholders (H, I, J, L, M) which is sometimes not even possible due to limited resources and a leap of faith is required (L). As another strategy, educating the stakeholders of an organization proved to be particularly relevant as many interviewees talked about educative initiatives (E, F, J, L) as well as training programs (H). A strategy that goes deeper than the aforementioned strategies was also highlighted which involves other stakeholders in supply chain practices such as suppliers through negotiations (I) or supplier relationships (C, I) as well as consumers through surveys (B, F), tastings (B, E) or feedback opportunities (B, G, L, M). A further strategy implied leadership which means actively managing (M) and supporting (M) stakeholders in order to impact (C, D, I, J, M) them as for instance pioneers in the field. Additionally, collaborations (B, E, F, G, H, J, L, M) and partnerships (E, F, J, M) stood out since almost all of the interviewees described the particular importance of cooperation (B, F, G, H, I, M), business relationships (J), information (F, G, H) and idea exchange (B, G, H, J) , dialogue (M) and direct contact (B, F, M). Consequently, companies have applied new approaches such as promoting employees as business owners (L) or founding stakeholder circles (M) and supply chain communities (M). A few interview participants highlighted the fruitfulness and value of the strategy of building a network beyond business (H, J) especially within the field of SSCM.

All in all, the interviewees emphasized the importance of setting up specific and ambitious goals (J, M) for stakeholder management, strengthening the sustainable consciousness with each touch point (J), building relationships on the basis of understanding (M) and leap of faith (L).

4.4.5 Aspirations for future stakeholder management

In addition to the identified possible strategy options, another more comprehensive strategy seemed to be required to achieve the aspired level of sustainability in the supply chain. Another way of doing business such as the common good economy (M), future-oriented working (M) or a circular economy (F, G) were further aspired. It was moreover stated that profit (M) and margin (L) need to be ensured but should rather not be the main focus. Related to the social pillar, the compliance with human rights was stated as a wish (B, C, E, L). Regarding the environmental pillar, interviewees majorly aspired an increase of ecological agriculture (I, K, L, M) and the protection of nature in harmony with agriculture (M). Due to climate change, the interviewees worried about resources (K, M), resource availability (K) for instance regarding regional sourcing (K) and resource security (C) and about whether they could reach the expected production volumes (L).

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One of the most apparent aspirations was a paradigm shift regarding different aspects. Especially the need of sensitizing the market (C, F) and a rethink within the society was stressed (A, E, F, K, L), one of them being the motto that less is more regarding consumption habits (K). The interviewees wish for more consciousness and mindfulness (F, J, K, L, M), shared values (G), more realistic expectations from customers (A, B, I, L), a more critical mindset of the consumer (H) and in consequence a different consumer behavior (H, I, K, M). Referring to this, one interviewee noted:

“Moreover, I would prefer if consumers lived the romantic sentiment thoroughly and did not load their groceries from the weekly shopping trip to the organic market into a SUV.” - Company G

A rethink is not solely expected from the customers, but also from governments which could enforce laws (C, G, M) and decrease bureaucracy to enable small organizations to work more efficiently (K), increase pressure to act (C) and the impact towards sustainable change (C). A closer connection and relationship between organizations and the political level was desired (J). Moreover, governments could terminate subsidies for certain products and apply a true-cost pricing which would guide the customer to make more environmentally friendly choices (E, M).

The interviewees aspire various different aspects for the future. One interviewee especially highlighted the importance of an effective stakeholder management in the future:

“I believe that the future of doing sustainable business is engaging in a stakeholder dialogue.” - Company M

Overall, interviewees aspired another way of working together. In their opinion, working together should be based on goal orientation (J, M), more risk taking (L), collaboration (C, G, K, M), transparency (C, D, I, J, L, M) authenticity (F, L, M), credibility (B, I, M) and trust (B, C). Identifying stakeholders and their according influence is perceived as crucial to determine how negative effects can be mitigated and how relationships can be strengthened to achieve a positive contribution (J). Collaborations with stakeholders should take place on eye level (L) and be based on partnership instead of a focus on competition (J). Humans should be the focus which was stressed by one interviewee in particular:

“My philosophy is that business is made with humans” - Company F

Narrowed down, this means that for instance suppliers are supported in times of crop failures (K) which would create solidarity between the stakeholders. This was especially emphasized by one interviewee:

“We do not put pressure on companies [...] as this is not our philosophy. We would like to rather be supportive for our suppliers as these are then stable partnerships for the long term.” - Company M

Another interviewee stressed that SMEs are dependent on other stakeholders:

“We have to work hand in hand as others have competences that we do not have.” - Company L

In a similar way, another interviewee highlighted the increased impact if stakeholders work together:

“We try to join forces with other companies to become a larger group and to convey our values beyond our products.” - Company I

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Through the cooperation with other stakeholders new knowledge can be build up (C, D) and new ideas can be generated (F, H, J) as the network can go beyond business (H). One interviewee particularly aspired a platform on which stakeholders can exchange relevant information (D). In one case, various stakeholders ranging from customers and shareholders to suppliers were brought together in a stakeholder circle (M). Stakeholders should thus join forces and work together for the overarching goal of sustainability (J). A more intense collaboration could ensure a stable supply chain which makes it resilient for the future (M) and also for crises (I, M).

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5. Discussion

This chapter provides a broader scope of the issues and the empirical findings related to the theoretical background and analytical framework. Three notable topic areas derived from the research that serve as an oversight to the analysis. These themes stood out either due to frequent recurrence or novelty in their approach, and thus are the most relevant to discuss in relation to our research study, namely: the most relevant drivers and barriers for SSCM within a multi- stakeholder environment; the most relevant stakeholders for SSCM; and lastly, the most effective stakeholder strategy for SSCM.

5.1 Crucial drivers and barriers for sustainable supply chain management Firstly, as indicated in the analysis there are several drivers and barriers impacting SSCM of organizations. Starting with a general literature review as illustrated in Appendix I, a multitude of drivers and barriers could be identified. It appears that SMEs of the German food industry have particular drivers for SSCM that are similar and others less relevant compared to the general findings from the literature review. As anticipated, the most remarkable driver mentioned in the research study was stakeholder demand aligning with the literature findings since it is mostly the call of the overall surrounding stakeholders that motivate organizational change towards sustainability (Kannan, 2018; Brindley & Oxborrow, 2014; Seuring & Müller, 2008b). The driver of competitive advantage was noted as the second most significant driver within the study confirming with the literature. It is not only the altruistic sustainability mindset of supply chain representatives itself, but the necessity to differentiate one’s product design from the ones of competing organizations and stand out on the market leading to SSCM (Vargas, Mantilla, & de Sousa Jabbour, 2018; Cantele & Zardini, 2018; Ansari & Kant, 2017). Competitive advantage is thereby a relative cost benefit as well as differentiation factor obtained through the implementation of a sustainable supply chain (Cambra-Fierro & Ruiz Benitez, 2011). Additionally to the previous point, the study results for the third most relevant driver namely image improvement confirm the theoretical findings as the perceived alignment of business with social and environmental concerns is a rather profit-based motivation causing a significant shift in consumers’ purchase choices (Shnayder et al., 2016). Furthermore, this research study provides additional support for insights into the influence of the industry environment as well as the overall norms, trends, attitudes and developments within the industry which shape the involved organizations (Chkanikova & Mont, 2015; Tachizawa & Wong, 2014; Roehrich, Grosvold, Hoejmose, 2014). Moreover, there was evidence in literature and in this research of the impact of laws and regulations by the government as an important driver for SSCM as legislations dedicated to ensure sustainability considerations are impacting the business environment and practices substantially (Hussain & Malik, 2020; Chkanikova & Mont, 2015; Luhra et. al., 2015).

In addition to the earlier findings from the literature review, new drivers arose from the empirical findings of the research study as well. The driver of a high self-expectation got introduced within the research study as an intrinsic motivation of supply chain managers to strive for a sustainable supply chain. There were multiple organizations within this study representing pioneers within their niche in the food industry who oftentimes created new business models and founded start-ups to incorporate their personal motivations and values within the business field (Williams & Schaefer, 2013). In many cases, it is the top management itself introducing sustainability requests for the supply chain and allocating special resources and support tools (Vargas, Mantilla, & de Sousa Jabbour, 2018). This driver serves as an addition to previous literature as it is barely represented in earlier research studies about this specific field of SSCM (Lalwani, Nunes, Chicksand, & Boojihawon, 2018). Another newly mentioned driver introduced in this research study was the belief in a sustainable future as a basis for the drive towards a sustainable supply chain and SSCM

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activities. This aspect was not mentioned in the context of SSCM before since sustainable businesses and alternative business models require an appropriate belief and value system (Hiwaki, 2015) to create “self-preserving, self-organizing and self-evolving human qualities and capacities for Sustainable Development” (Peccei, 1982).

Besides the aforementioned drivers, a multitude of barriers also come into place regarding SSCM, some similar to the ones referred to in literature whereas others are contradictory or can be considered as new compared to previous literature in this field. The first barrier unsurprisingly mentioned the most by the research participants was the lack of resources (Lambrechts, Gelderman, Semejn, & Verhoeven, 2019) confirming previous literature that sustainability initiatives require additional resources in general for tracing, documentation and research purposes (Ghazilla et al., 2015) and particularly SMEs are oftentimes struggling with this in terms of their lack of financial resources (Farooque, Zhang, & Liu, 2019), personnel (Lambrechts, Gelderman, Semeijn, & Verhoeven, 2019; Wolf, 2011) or capacity (Roehrich, Grosvold, & Hoejmose, 2013). In the context of SMEs, especially new start-ups, being quite young and inexperienced as well, a lack of information (Roehrich, Growvol, & Hoejmose, 2013), expertise and experience (Caldera et al., 2019) is hindering the implementation of SSCM confirming previous literature. Additionally, many study participants perceived a lack of governmental incentives and rewards for sustainable and transparent supply chains of organizations as the present subsidies of the German government for organic farming or regional initiatives are perceived as not sufficient and accessible enough as well as no solution to the underlying problems (Bundesregierung Deutschland, 2020a). Conflicting priorities have also been proven to be a barrier as stated in the literature (Roehrich, Grosvold, & Hoejmose, 2013). Some participants addressed the barrier of consumer demand as a crucial barrier since the consumer has the final purchase power and therefore holds a lot of influence in promoting or boycotting certain products which is in line with previous research (Carter & Rogers, 2008; Vachon & Klassen, 2006). Moreover, another barrier specifically pointed out by various research participants already apparent in research was the lack of governmental regulations for SSCM as present standards are missing clarity, persistence, holism and a forward perspective (Bundesregierung Deutschland, 2020c). Therefore, a new supply chain initiative was founded in 2013 demanding a comprehensive supply chain law (Initiative Lieferkettengesetz, 2020). Lastly, in accord with past research, a lack of technological and practical solutions for the realization of a holistically sustainable supply chain for instance in the areas of transportation (Beamon, 2008) or sustainable packaging materials for long lasting durability of food products (Mangla, Govindan, & Luthra, 2017). In contradiction with earlier findings (Ansari & Kant, 2017; Hamann, Smith, Tashman, & Marshall, 2016), the barrier of lack of commitment was not present in this research as sustainability is a topic in which a high intrinsic motivation is usually apparent and most of the study participants are employed in rather sustainable companies already where commitment is not a barrier anymore.

Two novel barriers were identified in this research. Firstly, a limited influence seems to be a particularly important barrier for SMEs due to limited resources (e.g., Ghazilla et al., 2015; Roehrich, Grosvold, & Hoejmose, 2014). As other studies did not focus specifically on SMEs, this was less stressed in literature. Especially the aspect that SMEs do not have a vote within surveys regarding new legislative ideas (EU Guiding Principles, 2019) was highlighted in this research. Secondly, high trade expectations are also present barriers in the research study even though it was not particularly noted in previous literature. These expectations refer to unrealistic requirements that external stakeholders claim of SMEs that are oftentimes not realistic to fulfill.

Finally, the research findings revealed that the majority of the supporting and hindering factors are dependent on the specific product type and might not only be distinguishable regarding the

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industry sector, organizational size or the geographic, social and political environment of the organization.

5.2 Crucial stakeholders of SMEs Many of the research findings were in line with previous literature regarding the relevance of certain stakeholders for SSCM. As anticipated, the most frequently mentioned stakeholder category for SSCM are suppliers as they are the producer and provider of raw materials for the organization and their tiers as well as their subordinate levels within the whole value chain account for the carbon footprint of the organization (Grimm et al., 2014). Secondly, the results for the next most important stakeholder category showed the importance of consumers and thereby supports the literature saying there is a need to rethink the power of consumers and their purchase decisions (Carter & Rogers, 2008; Vachon & Klassen, 2006). It is apparent that consumers are becoming increasingly critical about the sustainability of business practices and make their purchase decisions more mindfully and consciously (Luthra et. al., 2016), yet an intention-behavior gap is still preventing the consumers from making full use of their purchase votes (Frank & Brock, 2018). Thirdly, as proposed in literature the influence of and cooperation with partner organizations can be mutually beneficial for organizations, in particular for SMEs as they are in most cases missing experience and certain resources (Kobarg, Welpe, Stumpf-Wollersheim, & Schlägel, 2020). The mentioned partner organizations can be found in any stakeholder category such as suppliers or even competing organizations as the joint intention for sustainable corporate change has the power to unite organizations. Fourthly, the results of the research lend support to the idea that industry associations have a major impact on the SSCM of an organization (Marshall, Coleman, & Reason, 2011). Even though some of the interviewed organizations argued that they would not find themselves in a stable business stage to take part in industry associations. However, many others do get involved in associations and benefit from the active exchange as also stated in literature (Wakabayashi & Arimura, 2016); especially SMEs profit from the shared knowledge and even material resources offered within the industry environment. The fifth most mentioned stakeholder category were the shareholders of the organizations represented by for instance the company owners or family business owners. Since many of the German SMEs are family businesses, there is a particular longing for long-term corporate survival (Bakoğlu & Yıldırım, 2016), a prominent motivation for regional production and job security (Basco, 2015) as well as a high set of social and environmental values to sustain the regional infrastructure (Astrachan, Binz Astrachan, Campopiano, & Bau, 2020). As the sixth most relevant stakeholder, the results for employees matched with previous literature as it is the employed working force who not seldomly chose a career path intentionally enhancing SSCM based on their personal motivation (Williams & Schaefer, 2013). The employees further represent the source of knowledge and experience for SSCM and act as the executing actors for SSCM (Ghazilla et al., 2015). The findings about the seventh most mentioned stakeholder for SSCM support previous literature since the government is significantly important as a role model (Chkanikova & Mont, 2015), legislative orientation basis (Luthra et. al., 2016; Griffin et al., 2014) as well as a provider of incentives and rewards for SSCM activities (Ashton, Russell, & Futch, 2017). The German government is lacking a clear pursuit of the self-imposed sustainability goals of the Agenda 2030 (UN, 2015) or the Global Compact (UN, 2020) and leave unused potential for the enforcement of social and environmental actions. The last stakeholder for SSCM aligning with the results of the literature is the society and its tremendous impact on the SSCM of organizations (Ghazilla et al., 2015; Schaltegger, Burrit, Beske, & Seuring, 2014). New trends or movements such as Fridays for Future initiated by the climate activist Greta Thunberg (Fridays for Future, 2020) as well as the increase of individuals choosing a vegan or vegetarian diet (Chai, van der Voort, Grofelnik, Eliasdottir, Kloss, & Perez-Cueto, 2019) influence the individual organizations within the food industry and drive a change of product design as well as production in a long-term (Bouchery,

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Corbett, Fransoo, & Tan, 2017). Yet, as interviews showed, the role of society on SSCM is sometimes not as important as anticipated since many companies acting as pioneers within their field are even ahead of society’s sustainability considerations (Henriques & Sadorsky, 1999).

Some of the stakeholders identified in literature did not have as much influence on the participating organizations as previously assumed in literature. First, competing organizations (Schaltegger, Burrit, Beske, & Seuring, 2014) were not assessed as crucial stakeholders. One of the underlying reasons could be that several of the interviewed organizations are pioneers in certain sustainability aspects which is why there is no or only limited competition in the specific area the organizations find themselves in. Additionally, most of the organizations monitor other companies, but are proactive and have high standards and own requirements which is why products from competitors do not influence their own actions and products to a large extent (Henriques & Sadorsky, 1999). With their own high standards and expectations, the interviewed companies surpass others. Second, investors (Zhu & Sarkis, 2007) were not perceived as an important stakeholder as most of the organizations did not have investors potentially due to their small size. Some of the companies carefully chose their investors, so that they have shared values and solely few compromises had to be made which might be facilitated in the future as Ryan and Schneider (2003) conclude that shareholders and investors nowadays do not simply focus on the economic aspects, but also consider social aspects. If investors share the same values, the influence is minor as the company itself would already act according to these values. Third, certification agencies (Seuring et al., 2019) were in fact considered, but were not object of close collaboration. The organizations strive to achieve the requirements of various labels, but do not have the possibility to work together with or influence certification agencies as the requirements are set and fixed. Fourth, academia and the media (Savage et al., 1991) played secondary roles. SMEs do not receive a lot of media attention and do not work closely with academia which could potentially be the case due to their small size. Thus, there is still a huge potential for collaborations. However, working together would require more resources such as time, personnel or financial resources which are all limited in SMEs (Lambrechts, Gelderman, Semejn, & Verhoeven, 2019).

The findings of this research show that two stakeholders received more attention than previous research shows, namely the retail market and the environment (Chkanikova & Mont, 2012). The importance and influence of the retail market could stem from the small company size as SMEs oftentimes endeavor to be profitable and need to meet the standards the retail market provides and do not have the power to negotiate. The environment has previously been acknowledged in literature (Starik, 1995; Stead & Stead, 2000; Waddock, 2011). Nevertheless, research findings show that a more central role was attributed to the environment for instance regarding resources. The environment does not simply represent limits to possibilities but needs to be regenerated. The research findings show that special attention was drawn to not only avoiding harm to the environment, but to giving something back and in this case achieving a regenerative agriculture which is considered a sustainable agriculture for the future (Rhodes, 2017).

Underlying assumptions of this research were that multiple drivers and barriers arise due to the size of the company and the industry. However, the data shows that numerous drivers and barriers and also the stakeholders are dependent on the product itself as this implies difficulties with sourcing from abroad such as regarding coffee and cocoa, laws and regulations for instance regarding hemp and the availability of resources. All in all, there are several crucial stakeholders that need to be considered to achieve a sustainable supply chain. Some discrepancies between the literature and this research occur due to circumstances in the specific context of German SMEs in the food industry.

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5.3 Network beyond business for sustainable supply chain management Considering the stakeholder strategies, there were some differences and some similarities between the literature and the findings from this study. Out of the nine strategy options identified from the literature (see Chapter 2.3.6), four stakeholder strategies were considered crucial, namely the strategies of education, involvement, leadership and collaboration (Bunn et al., 2002). Some organizations saw their role in sensitizing the market and educating consumers in a first step. Moreover, involving stakeholders was seen as an expedient way of dealing with stakeholders as organizations and especially SMEs depend on them. Besides these two strategies, a leadership role was taken by several organizations. As they are recognized as pioneers, they lead the relationships with stakeholders as they give instructions and formulate requirements for SSCM for others. Lastly, collaboration was highlighted in this research as an effective stakeholder strategy. It is a way to get insights and consider different perspectives and points of view (Bunn et al., 2002). Several strategies appear to be less relevant in the context of sustainable practices within the supply chain, particularly the strategies of pressure, monitoring and following (Polonsky & Ottman, 1998). Two different directions of pressure are possible. On one hand pressure from outside stemming from customers, NGOs. the retail market or the society in general can occur which pushes the focal company to implement sustainability within supply chains (e.g., Beske, 2012; Carter & Rogers, 2008; Seuring & Müller, 2008b). On the other hand, the pioneer companies themselves can put pressure on stakeholders such as the industry or governments. One of several attempts to influence laws and regulations is the petition by one pioneer company to disclose the CO₂ impact of each product on the packaging (Sendner, 2019). Likewise, monitoring was recognized as a necessary condition to meet laws and regulations within the organization as well as to track the activities outside the focal firm (Ghadimi, Wang, & Lim, 2019). Monitoring suppliers helps to check whether they act within the self-imposed guidelines throughout the multi-tier supply chain. Additionally, observing competitors is crucial to understand the competitive environment of the industry. Moreover, monitoring academia for new technological solutions as well as media and society for present trends aids in predicting market forecasts. However, it was not considered a main stakeholder strategy but rather a complementary stakeholder strategy. Additionally, the strategy of following stakeholders was not apparent in this research as some of the organizations are pioneers in the industry regarding their sustainability and sustainable supply chain which is why they would rather be followed and represent a role model than vice versa (Henriques & Sadorsky, 1999). Two stakeholder strategies seem to be outdated in the context of sustainability, namely the strategies of isolation and defense. When striving towards a sustainable supply chain and thus an improved environmental performance, it seems impossible and inappropriate to see a company in isolation (Henriques & Sadorsky, 1999). The strategy of isolation (Polonsky & Ottman, 1998) hence did not play a role for the interviewees. Also, the defense strategy (Bunn et al., 2002) is obsolete as it implies that an organization attempts to reduce its dependency on stakeholders which is practically impossible when considering sustainability (Henriques & Sadorsky, 1999). These stakeholder strategies thus seem to be in opposition to an effective collaboration towards sustainability within the supply chain. Next to the strategy options that were recognized in earlier research, a more comprehensive and inclusive stakeholder strategy was aspired entailing new approaches such as co-creation (Kazadi, Lievens, & Mahr, 2016) and a shared responsibility such as in terms of employees as owners of the company (O´Boyle, Patel, & Gonzalez-Mulé, 2016). The new approach combines existing elements of previous stakeholder strategies but goes a step further and even beyond pure business operations. The idea of creating a network based on companionship, trust, support and mutual exchange beyond business was stressed. Particularly one organization of the participating organizations in this study took a remarkable proactive stand in that they invite various

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stakeholders to a stakeholder circle to identify future challenges and work together to find solutions. Moreover, the focus in some of the interviewed organizations shifted from competition towards working together for an overarching goal to achieve sustainability.

With the new strategy approach of a network beyond business several of the identified drivers can be enhanced and barriers can be reduced. In the case of the network beyond business, stakeholder demands can be understood better and a deeper relationship emerges. The strong focus on support and working together stresses that stakeholders should rather be seen as co- creators for sustainability than competitors (Kazadi, Lievens, & Mahr, 2016). Therefore, a competitive advantage might not be a necessary focus for stakeholder cooperation towards sustainable supply chains. Various barriers can furthermore be reduced through the network beyond business. The lack of knowledge can be mitigated through network meetings, knowledge platforms, sharing information and experience on different business cases and continuous long- term exchange. As mentioned during the interviews, ideas can be generated together to find solutions to arising problems which reduces the barrier of lack of technological solutions. Knowledge is exchanged and involved parties get to know outside perspectives from other stakeholders which educates and enables them to understand conflicting priorities and potentially change their demands and expectations (Savage et al., 2010). Together, also a larger impact can be achieved to enforce laws and regulations such as the true cost pricing instead of governmental subsidies. Subsidies address the issue that numerous farmers could not survive without them. However, as they do not tackle the root causes this displays a vicious cycle (Riedl, 2007). The subsidies distort the market by creating cheap prices (Wise, 2010) which lead the consumer into a wrong direction away from sustainable products. True-cost pricing alleviates the barrier of limited influence. Overall, the network beyond business provides a novel way of stakeholder management and a collaboration towards sustainable supply chains.

5.4 Contributions and recommendations for future research Theoretical contributions This research entails several theoretical contributions. According to Carter and Easton (2011) there is only limited research focusing on one industry in the area of SSCM. Hence, this thesis provides an extension of research on drivers and barriers within SSCM for one specific industry, namely the food industry. Moreover, existing research regarding drivers and barriers in the context of SSCM is herein combined with theories from stakeholder management which adds to current research. Furthermore, stakeholder strategy approaches were identified and combined to a new stakeholder strategy which contributes to current theories. Overall, this study advances theory in multiple aspects ranging from the one-industry design, deep insights into drivers and barriers within SSCM and an identified novel strategy approach to stakeholders. Practical contributions Besides theoretical contributions, this research further offers several practical contributions. Nowadays companies are part of a complex interlinked business net and are dependent on numerous actors (Gibson, 2012). Consequently, stakeholders play a crucial role for businesses due to their immense influence, especially within the present circumstances of globalization, digitalization and the continuous technological progress (Mainardes et al., 2013). This research showed that working together with stakeholders does not solely imply making compromises but can imply several advantages that are determining for the future success of organizations. This study depicts an assessment of drivers and barriers in the particular context of the food industry in Germany with a specific focus on SMEs. Furthermore, it offers insights into which stakeholders play a significant role to realize a sustainable supply chain. In this vein, challenges are presented serving as an overview possibly relevant for policy makers in the food sector. Additionally, the study shows drivers and barriers for particular stakeholders which facilitates the comprehension

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of different perspectives and points of view for practitioners. Moreover, new guidelines for stakeholder management as a tool for SSCM are established for future practitioners. Putting it all together, this study provides a guideline for practitioners which stakeholders they should focus on to enhance drivers and reduce barriers for the implementation of sustainability within the supply chain. Recommendations for future research This research entails some limitations and does not provide an exhaustive study on the topic of drivers and barriers for sustainable supply chain practices and stakeholder management. In order to mitigate the aforementioned limitations, future research could include a larger and broader sample, as well as study participants with more diverse sustainability levels in order to be able to generalize the findings (Carter & Rogers, 2008). Additionally, the inclusion of objective measures such as a research supplemented with a document analysis could increase the objectivity of the results compared to self-reported data. This study follows a qualitative approach to gain deep insights into the view of supply chain managers on the respective aspects. Future research could attempt to verify the results of this study in a quantitative study based on surveys and analysis methods such as the structural equation modelling (Patel & Desai, 2019). In this study, the assumption was made that drivers and barriers in the field of SSCM depend on the size of the company and the industry. However, other aspects might influence the implementation of sustainability within the supply chain as well. In fact, this study rather serves as a starting point for future research in this field. Future studies differentiating between the distinct product types could be of value to draw specific conclusions as this research revealed several differences between product groups. Future research could further explore other influential factors such as the cultural context as culture has a big influence on sustainable values (Cox, Friedman, & Tribunella, 2011). Moreover, this study could be replicated in another industry, another country or in companies of a different size to compare the findings. Another interesting avenue for future research could be to include different stakeholder perspectives instead of the supply chain manager view. Overall, in line with Bendell, Collins and Roper (2010), more research is needed in the field of stakeholder strategies that go beyond collaboration.

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6. Conclusion

A great deal of attention in research is devoted to sustainable supply chain management and the related drivers and barriers. However, past research has overlooked the opportunities of stakeholder management theory to complement SSCM literature. Hence, this study is among the first to our knowledge to combine the two theories. This study reveals that the stakeholder demand is the most important driver for SMEs in the German food industry. Drivers which were not yet mentioned in research were identified such as the self-expectation of an organization and the belief in a sustainable future. Regarding the barriers, a lack of resources is the most significant one in this context. One apparent contradiction with previous research was found regarding the lack of commitment which was not as seen as a relevant barrier. Novel barriers were the limited influence in terms of not having a say as a SME and high expectations from different stakeholders, among others the company itself.

The assessment of stakeholders showed that the importance of certain stakeholders differed between the organizations. However, a clear trend can be observed in that suppliers and consumers seem to be among the most important stakeholders overall. Among others, one interesting finding was that the environment was often not considered a stakeholder and has oftentimes been neglected. Furthermore, the potential for an increased collaboration between diverse stakeholders by establishing platforms, sharing resources and knowledge and engaging in industry associations was highlighted in the data. One opportunity which the focus on sustainability within the organizations provides is the uniting aspect of the topic. Companies reported that they usually work in a competitive environment. However, when it comes to sustainability, collaborations and partnerships arise more often and offer an opportunity to join forces to achieve a common goal.

The research shows that a new strategy approach is necessary which some of the participants already applied. However, in the analysis it also became apparent that the majority of interviewees did not follow a strategic stakeholder strategy and solely few interviewees established specific strategies for certain stakeholder groups. This emphasizes the undiscovered potential of establishing a profound stakeholder strategy to implement SSCM. By considering the most relevant stakeholders for the new strategy approach determined in the analysis, a more effective SSCM can be established. The new strategy approach referred to as network beyond business is an especially useful tool for SMEs as they are to a large extent dependent on stakeholders due to limited resources. For the future, a paradigm shift and a collaboration beyond business is necessary to achieve a sustainable supply chain which reaches beyond profit aspirations and ensures a sustainable future.

All in all, this study advances existing theory in the area of SSCM and stakeholder management and offers a guideline for practitioners which includes potential drivers and barriers for the implementation of sustainability in the supply chain in this particular context and how to deal with certain stakeholders in order to enhance the drivers and reduce the barriers. The presented research provides a few avenues for future research which could be conducted in another industry to gain insights and being able to compare the industries. Another possibility for future research would be to follow a quantitative approach to verify the results.

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Appendix

Appendix I: Literature review of internal and external drivers for SSCM

Author Internal Drivers External Drivers

Ansari & Kant, 2017 Competitive advantage Government regulations Commitment of organization and top Collaboration with partners management Information sharing within industry Information sharing Customer pressure Transparency within organization Innovations regarding supply chain process Environmental management

Ashton, Russell, & Futch, Informal pressure through government incentives and support 2017 programs Mimetic pressure through peer learning via industry associations

Attaran & Attaran, 2007 Collaborative planning, forecasting, replenishment

Beamon, 2005 Engineering ethics

Beske, 2012 Consumers’ impacts on product features Customers’ pressures for sustainability

Beske & Seuring, 2014 Dedication to TBL and SCM Supply chain partner development Supply chain partner selection Long term relationship with partners Pressure groups Communication within organization Customer demand for food safety and quality Standardization, certification and monitoring Constant changing surroundings in economy and society aid Pressure from environment (f.e. climate crisis, deforestation..) Willingness and capability for learning Pressure due to social hazards (f.e. child labour..) Sufficient stakeholder management New innovations Integrated life cycle management Department of risk management Vision for continuity within organization Proactivity for sustainability within supply chain Organization's experience Supply chain capabilities Mutual development and coevolving with partners Knowledge management Bourlakis, 2009 Performance assessment

Buyukozkan & Cifci, 2013 Forecast accuracy Sustainable supply chains of suppliers Lifecycle management Collaboration with partners Supplier management Green innovations Usage of effective systems and tools Environmental management system Environmental activity capability Employee practices Outsourcing Stakeholder monitoring and maintenance

Brindley & Oxborrow, 2014 Alignment of marketing with SSCM Local resource availability Lean management Resource efficiency Consideration for seasonal demand fluctuations

XIII

Cantele, & Zardini, 2018 Competitive advantage

Carter & Rogers, 2008 Potential economic advantages Pressures from consumer groups Higher economic performance Increasing demand to consider stakeholders Proactively shaping future regulations

Cervellon, & Wernerfeldt, Knowledge diffusion Public awareness about sustainability 2012

Chacón Vargas, Moreno Middle and top management support Environmental collaboration with customers Mantilla, & de Sousa Jabbour, Health and safety at work 2018 Commitment of firm to community Competitive advantage

Chen, 2005 Environmental audit and standardization management systems such as ISO 14000 Eco-management and the European Union Audit scheme

Childerhouse et al., 2002 Customers as the focal point of supply chains

Ching, & Moreira, 2014 Standardization Traceability Lean management Internal collaboration

Chkanikova, & Mont, 2015 Costs savings associated with operational Existing and expected national and international regulations and material efficiencies Customer demand and expectations Industrial norms Brand and reputation of organization (standards and voluntary industry agreements) Food scares Risk of negative publicity Scientific alerts Increased investor appeal NGOs campaign Competitors strategies

Crum, Poist, Carter, & Sustainable organizational strategy Easton, 2011 Risk management Organizational culture Transparency

Cuerva, Triguero-Cano, & Financial gains Government regulations Córcoles, 2014 Availability of resources

Curkovic, & Sroufe, 2011 Environmental audit and standardization management systems such as ISO 14000 Eco-management and the European Union Audit scheme

Darnall et al., 2008 Environmental management system of firm

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Diabat, et al., 2014 Employment stability Community economic welfare Health and safety issues Government regulations Hazard management in organization Hazard management in national economy Customer satisfaction Long-term environmental cost Economic input to infrastructural development Improvement of product characteristics

Dubey, et al., 2015 Competitive advantage over competitors Coordination among supply chain partners Protecting the natural environment Alignment with organizational mission Transparency

Dubey, Gunasekaran, Childe, Supply chain collaboration Institutional pressure Papadopoulos, & Wamba, Environmental management Public awareness 2017 Alignment with management strategies Information management Sustainable corporate strategy Organizational culture

Faisal, 2010 Information sharing Customer concern for sustainability Strategic planning for SSCM Collaborative relationships Top management commitment Regulatory framework Awareness Supportive supply chain partners Availability to funds

Ferreira, et al., 2015 Return on investment planning practices External planning practices Internal environmental planning practices

Foerstl et al., 2010 Performance assessment

Gandhi, Thanki, & Thakkar, Managers' environmental responsibility 2018

Garcia et al., 2017 Globalization Increase in raw material prices

Geffen, & Rothenberg, 2000 Promotion of innovative technologies

Georgiadis, & Besiou, 2008 Legislation from governing bodies Customer and stakeholder requirements

Gold et al., 2010b Legislation from governing bodies Customer and stakeholder requirements

Goldbach et al., 2003 Strong coordination of different partners Government encouragement and incentives

Giunipero et al., 2006 Strong strategic collaboration Strategic cost reduction

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Ghazilla et al., 2015 Organizational culture and commitment Compulsory regulations by local or national government Owner’s values Financial incentives or penalties Employee aspirations Compulsory or voluntary CSR Organizational capabilities and awareness Commitment from various stakeholders Good community New market opportunities Good employee relations Competitive pressures Availability of comprehensive training/ Industrial initiatives education Support from external stakeholders Information availability B2B pressure from larger organizations Professional network Public awareness Trust Customer demand and collaboration Cost reduction Socio cultural responsibility Competitiveness High commitment of various stakeholder Advice from Image improvement stakeholders Willingness to increase product quality Business performance commitment

Gopalakrishnan, Yusuf, Dedicated department for sustainability, Government legislations Musa, Abubakar, & Amursa, Organizational culture External support factors 2012 Employee involvement Supplier management Key performance indicators in the supply chain

Griffin et al., 2014 Impact of government acts

Grimm et al., 2014 Trust between focal firm and direct supplier Direct suppliers buyer power Trust between direct supplier and sub- Direct suppliers' willingness to disclose sub-suppliers supplier Low risk of supplier by-passing Sub-supplier's capability to Focal firms' buyer-power comply with requested sustainability standards Geographical Committed long-term relationship between and cultural distance between supply-chain-partners direct supplier and sub-supplier Supply-know-how of focal firm Involvement of direct supplier Perceived value of direct supplier Perceived value of sub-supplier

Hall, & Matos, 2010 Providing entrepreneurial opportunities in SSCM

Hamann, Smith, Tashman, & Managers' environmental responsibility Marshall, 2016 Managers' commitments to sustainability Organizations' cultures

Hazza, & Daud, 2018 Managers' environmental responsibility

Harms, et al., 2013 Regional commitment Regionality of organization Local solidarity of organization

Hussein, & Malik, 2020 Understanding Awareness of gains and cost savings Sustainability awareness Collaborative interactions between tiers of supply chain within different industries Distributed responsibility within supply chain Enhanced information and technology sharing Similarity of supply and distribution technologies with suppliers Structural flexibility Compliance with environmental regulations

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Jabbour et al., 2015b Environmental training Performance evaluation and rewards based on environmental criteria Environmental team work Environmental empowerment of employees Employees engagement Environmental organizational culture Support from senior management Environmental organizational learning

Jabbour, & Jabbour, 2016 Internal environmental management Cooperation with customers Investment recovery

Ji, et al., 2014 Demand forecast accuracy Alignment with third party logistics providers Adopting cross-docking networks

Kleindorfer et al., 2005 Environmental audit and standardization management systems such as ISO 14000, Eco-management and the European Union Audit scheme

Koplin et al., 2007 Policy implications of government Trade agreements

Kumar, & Yamaoka, 2007 Tax exemption or relaxation for reverse logistics and for recycled product exports

Lambert, 2008 Organizational culture Corporate strategy and commitment

Lee, 2011 Inter-organizational supply chain collaboration

Lichtenstein, 2006 Possibility to align SSCM strategy with corporate strategy

Loke, Khalizani, Rohati, & Social responsibility Sayaka, 2014 Pro-environmental organizational culture Organizational support

Luthra et. al., 2015 Internal environment agreements Central government legislations Technology transfer between suppliers State government legislations Top management initiation and commitment Non- government organizations Supportive company policies towards SSCM Involvement of suppliers and vendors Information technology enablement Training programs of suppliers and vendors Supply chain Information quality and sharing members' awareness/ literacy Role of employees towards SSCM adoption Awareness level of customers Proper workplace management Support from customers Economic interests Encouragement from customers High cost for disposal of hazardous Societal issues materials Scarcity of natural resources Firms' competitiveness Enhanced brand image

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Marshall, et al., 2015 Environmental supply chain monitoring, Environmental new product/ process development

Mc Kinon, 2010 Financial benefits Company image Improvement of environment

Mello, & Stank, 2005 Cultural change in organizations Change in top management Private sustainable engagement of employees Risk mindset

Niknamfar et al., 2018 Compliance with regulation Environmental regulation

O'connor, Parcha, & Corporate social responsibility Tulibaski, 2017 Economic advantage Legal compliance Branding and image

Oglethorpe, & Heron, 2010 Environmental audit and standardization management systems such as ISO 14000, Eco-management and the European Union Audit scheme

Ortasm et al., 2014 Long term financial benefits

Raar, 2015 Collaboration Continuous innovation and innovative vision

Roehrich, Grosvold, Risk exposure Industry and supplier base Hoejmose, 2013 Market position Cost pressures Timeframe

Ross et al., 2012 Infrastructure development of a country

Seuring & Müller, 2008a Communication, monitoring, evaluation and Demand from customers of focal company Sanctions reporting systems

Seuring & Müller, 2008b Company proactivity for sustainable Pressures from stakeholders development Competitive advantage

Sigala, 2008 Public awareness

Shokri et al., 2014 Role and importance of cooperation among stakeholders Environmental certification and government rules and policies

Stiller, & Gold, 2014 Supply base continuity Reward and incentive system Decommodization Novel supplier development Transparency and traceability

Tachizawa, & Yew Wong, Contingency variables such as power, 2014 dependency, distance, industry and knowledge resources

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Tencati, et al., 2010 Corporate social responsibility

Triguero, Moreno-Mondéjar, Close collaboration with institutions, & Davia, 2013 colleges, government and supply partners Organizational support

Tur-Porcar, Roig-Tierno, & Behavioral factors or habits Mestre, 2018 Human relation factors Business factors

Vachon & Klassen, 2006 Growing demands from customer segments for more environmentally friendly practices Sustainability concern of the whole country

Walker, & Jones, 2012 Top management commitment Government policy Employee involvement Pressure from competitors, customers and investors Organizational culture Influence of NGOs Alignment of company strategy Company SSCM strategy Firm’s competitiveness Reputational and environmental risk Quality assessment

Wiese et al., 2012 Retailer pressure

Williams, & Schaefer, 2013 Fit between personal and professional values Personal responsibility

Wittstruck, & Teuteberg, Top management support Pressure from competitors 2012b Provision of information Common sustainability strategy with partners, Information sharing Suitable technology infrastructure Mutual learning with partners

Wolf, 2011 Leadership commitment Customers’ demand for sustainability and transparency Organizational structure Pressure from other stakeholder groups Interaction with stakeholders and NGOs Supplier selection strategy Supplier relationship management Supplier performance measurement

Zailani et al., 2012 Long term financial benefits

Zhu et al., 2013 Environmental management Cooperation with external customers

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Appendix II: Literature review of internal and external barriers for SSCM

Author Internal Barriers External Barriers

Abbasi, & Nilsson, 2012 Initial cost Cultural changes Uncertainties Limiting mindset Complexity Operationalization

Cost of sustainability and economic conditions Lack of sustainability standards and appropriate Lack of clarity regarding sustainability regulations Al Zaabi, Al Dhaheri, & Diabat, 2013 Misalignment of short-term and long-term strategic goals Lack of effective evaluation measures about sustainability Lack of training and education about sustainability Complexity Inadequate facility for new adoptions Lack of IT implementation Inadequate industrial self-regulation Lack of top management commitment

Beamon (2008) Lack of technological and logistics integration

Beske, & Seuring, 2014 Constant changing surroundings in economy Supply chain being a dynamic business field

Caldera et al., 2019 Unorganized management Lack of awareness, education, and expertise

Carter, & Dresner, 2001 Lack of corporate strategy Lack of management involvement

Chkanikova, & Mont, 2015 Lack of financial resources Lack of governmental leadership Conflict of interests between product Lack of governmental initiative sustainability policy and free trade provisions Customer confusion Lack of knowledge and expertise Lack of availability of supply Lack of power over supplies Lack of consumer awareness Complexity of supply chain configuration Lack of interest about sustainability Higher prices of sustainable products Tradition of established supplier relationship Lack of scientific framework to identify the most profound sustainability impacts

Clelland et al., 2000 Lack of clean process technologies

Dey, Malesios, De, Chowdhury, & Lack of government regulation Abdelaziz, 2019 Lack of monitoring

Farooque, Zhang, & Liu, 2019 Lack of financial resources Weak environmental regulations and Limited expertise, technology, and information enforcement Misaligned organizational culture and Lack of market pressure and preference management Uncertainty about beliefs Lack of collaboration and support of supply chain actors

Ghadge et al., 2017 Lack of appropriate logistics Poor market structure Rough distribution process Underdeveloped environmental legislation Unorganized return management

XX

Ghazilla et al., 2015 Weak organizational structure Lack of involvement of external stakeholders Lack of empowerment and involvement to support Society with low green attitudes Delay of high internal policies Lack of green awareness of customers Management resistance Weak public pressure Difficulties in transforming positive attitudes Lack of environmental enforcement Owner-manager leadership issues Lack of support and guidance from regulatory Restrictive organizational policies towards authorities product and process stewardship Lack of training and consultancy High hesitation and no risk mindset No financial incentives and policies Limited resources to adopt new practices Lack of implementation guidelines Underdeveloped organizational cultures Poor supplier awareness and commitment Improper communication structures Disbelief in benefits Lack in technical expertise and knowledge Lack of management and time for implementation Difficulties in information management Weak market position Procedures primarily aimed at large companies Lack of influence in regard to strategic adaptation competence against changes in SMEs Lack of market preferences and demands Nature of business leading towards low sustainability Lack of impact awareness Inadequate self-regulations Lack of effective measures Lack of experienced verifiers Lack of legitimacy Less competitiveness Inadequate design, testing development department Lack of new technology, materials Lack of additional infrastructure Unavailability of alternative solutions Complexity of supply chain Lack of flexibility Lack of innovation capabilities Lack of technological and human capabilities High initial capital cost Limited financial resources

Grimm et al., 2014 Lack of financial resources Lack of supplier competencies Lack of competencies and skills Lack of commitment and trust between supply Lack of personnel commitment chain partners Lack of information and transparency within Lack of information and transparency of partners organization Cultural and language differences between partners

Hughes, 2005 Lack of employee and management involvement, Organizational culture

Lambrechts, Gelderman, Semeijn, & Lack of resources and individual competence Verhoeven, 2019

Luthra et al., 2016 Lack of rewards and promotions

Mangla, Govindan, & Luthra, 2017 Lack of methods, tools, and techniques

Rekik, & Bergeron, 2017 Businesses' cultures

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Roehrich, Grosvold, & Hoejmose, Lack of information Contextual setting (legislation, industry 2013 environment) Limited resources

Conflicting priorities

Lack of know-how and capabilities

Building up capabilities is time- and resource- intense

Usually no rewards for sustainable practices

Rossi,S.,Colicchia,C., Cozzolino,A., Initial costs Industry specific barriers & Christopher, M. (2013) Lack of legitimacy Poor commitment Lack of company regulations

Seuring & Müller, 2008a Initial costs Lack of coordination Complexity of supply chain Insufficient or missing communication

Seuring & Müller, 2008b Lack of final customer demand for sustainable products and services Government regulations Lack of political agenda setting

Silajdži c et al., 2015 Pressure of surviving their business is main priority

Lack of management commitment Lack of regulation and competitive pressures Cost Consumer desire for lower prices Cucchiella, Koh, Walker, & Jones, Commitment to traditional methods Poor supplier commitment 2012 Lack of training opportunities Less regulated industries Lack of understanding Lack of corporate structures and processes

Wolf, 2011 Cost intensity Requirement of large sum of investment in HR, time, technologies, expert know-how Misleading goal setting Limited communication between functions Limited availability of data and information on sustainability Lack of additional human resources Limited integration of supply chain partners

Wu, & Pagell, 2011 Information uncertainty

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Appendix III: Internal and external stakeholders

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Appendix IV: Study participation request form (German)

AUFRUF Z UR TEILNAHME AN STUDIE

SUPPLY CHA I N M ANA GEMENT

LEBENSMIT TELBRANCHE I MIT TELSTAND I GERM ANY

Sind Sie Supply Unterstützen Sie uns bei unserer Masterarbeit Studie mit einem Chain Manager/in Gespräch über Ihre Erfahrungen und und möchten bei Probleme im Supply Chain Manage- ment. Alle Informationen über Sie einer Studie und Ihr Unternehmen bleiben selbst- helfen? verständlich anonym.cccccccccccccc Arbeiten Sie als Supply Chain Kontaktieren Sie Manager/in in einem mittelstän- dischen Unternehmen innerhalb der uns gerne per Lebensmittelbranche und haben Zeit E-Mail. für ein 20 - 40 minütiges Interview [email protected] zwischen dem 15. April und 15. Mai?c- SCHONEBECK.LI N A @GM AIL.COM cccccccccccccccccc

LINA SCHONEBECK & THERESA PÖLLINGER

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Appendix V: Interview guide (English)

XXV

Appendix VI: Original interview guide (German)

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Appendix VII: Interview summaries

Interview summaries of companies A-E

Theme Company A Company B Company C

Organization's − one of the three main values − health and nutrition in the foreground − Present sustainability structure with social and perspective on − integrated in the company − packaging was one of the first steps environmental aspects sustainability − there is a sustainability team − cooperative in South America to source − Sustainability strategy with goals and measures − company provides resources sustainably − Sustainability in main corporate philosophy − sustainability central element − Integration of sustainability in everyday business with − freedom to act for the employees indirect influence − a few funds for innovative products − Always new sustainable ideas coming − willingness to be credible − Reduction of corporate negative environmental impact − Internal (employees) and external communication (reporting) is key − Focal topics: Transparency, mobility, purchasing, health, climate neutrality, packaging − Regional projects − Close collaboration with production − Family business: Support by managing director since change of generations − Pioneer in fair-trade and ecologic chocolate − 100% organic products

Personal − intrinsic motivation − came to the company because of the motivation − studied sustainability as well product − want to combat food waste − learns more and more on the way − employees very conscious

Priorities in − supply chain department still − price not that important − Main priority since 2014: supply chain quite young − quality important Only sustainable certified cacao (fair-trade, UTZ, Bio, − reactive: only act if there is a − trade-off between sustainability and Naturland / bio and/or fair-trade) problem quality − Second most priority: Good long-term relationship with − all three main values need to be − vegan suppliers (close contact, cooperation, regional) considered − organic − Goal: As direct and regional suppliers as possible, but still − focus is on providing the product − transparency being not too dependent of suppliers to the client in the most − personal mission / conviction − More suppliers for each section as buffer and security sustainable way criterium − sustainability as a brand value − ambition to achieve the best

Ranking: 1) Influence of the industry 1) Demand of customers/ stakeholders 1) Consumer demand Drivers for 2) Demand of stakeholders 2) Competitive advantage 2) Demand from NGOs SSCM 3) Competitive advantage 3) Image improvement 3) Competitive advantage 4) Influence of the industry 4) Image Laws not that important as they fulfil 5) Laws and regulations 5) Laws and guidelines them in any case 6) Influence industry environment

Ranking: 1) Lack of resources (financial) 1) Lack of information and expertise 1) Lack of resources (financial) Barriers for 2) Lack of expertise and information 2) Lack of resources 2) Lack of resources (personnel) SSCM 3) High trade expectations 3) Economic incentives 3) Lack of incentives and rewards 4) Conflicting priorities 4) Conflicting priorities 5) Commitment

Challenges of − company does what it can but − capacity is limited − Sustainability as additional efforts (documentation) for SMEs sometimes − hard to get information departments − resources limit them because − not only dependent on the size of the − Lack of resources (personell, time) they have to consider profit company but also on the product − Bigger enterprises: More purchase power, more influence on market, power on guideline making − SME: Less power for driving change, EU only asks companies over 500 employees within new surveys about sustainable supply chain − SME: Opportunity to join industry association (gets increasingly complicated to build)

Characteristics − higher risk because products are of the food perishable industry

Ranking: − transport companies (partners) − employees in the organization 1) Consumer Stakeholders − end customer (supermarket) − end customer 2) Supplier − stock market − commerce (industry) 3) NGOs − production (commitment highly important) 4) National government − laws not very important 5) Society 6) Academia 7) Industry associations 8) Competing organizations 9) Partner organizations

XXVII

Theme Company A Company B Company C

Stakeholder − there are specific supplier criteria − strategic decisions made by the company − No stakeholder categorization yet strategy among which they are selected − input from the commerce − Stakeholder assessment − surveys and tastings for customers − Essentiality analysis of stakeholders based on thematic − conversations with other companies focus − feedback is highly valued − Development of stakeholder management indirectly and based on feeling − More potential for stakeholder management − Potential with competing/partner firms: Collaboration for transparent supply chains, human rights, complaint mechanisms, fair price structuring (not allowed by law) − Lot of work is done multiple times in different firms − Having no collaboration in specific fields is so established, hard to change

Additional − difficult to be on the big market − money (customer does not have hurdles − expectations high (perfection is unlimited expected) − willingness to pay money) − standards of the customers are − transparency high -> difficult to keep up as a small company − Difficult decisions: if there are bottlenecks, larger customers are favored -> socially not respectful -> but otherwise not profitable

Compromises in − few compromises as product is − trade-offs between regional product − Sustainability <> Cheap product prices SSCM well established and is produced sourcing, price and the quality − Consumer behavior <> Consumer attitude and perception since 30 years (perception, attitude, behavior gap) − High amount of suppliers (raw material access security) <> Less suppliers (close direct contact) − Social <> environmental values

Wishes for the − understanding of customers that a − New law for mandatory transparency within supply chain future company cannot be perfect and more safety for compliance for social and environmental concerns − New laws from Germany influence EU influence worldwide − More governmental pressure, awareness and responsibility about topic − Helpdesk of the national sustainability action plan for information − More trust within supply chain possible, no monitoring needed − Alignment of all three sustainability pillars within business − More goal orientation and collaboration within industry sector

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Interview summaries of companies F-I

Theme Company F Company G Company H Company I

Organization's − social aspect − raw material is already − view on sustainability differs − Ecologic food pioneers since the 70ies perspective on − sustainability means that it is sustainable between generations − Very active in the ecologic food industry sustainability "suitable for the grandchildren" − CO2 is captured − important topic in the company sector − nature − there is a pressure to be more − Growth from to a company with 90 − direct trade sustainable from outside employees − packaging one of the topics − Own brand and production for other companies − Product was side tool for driving sustainable change within business and moving organic farming forwards − Present alignment of economic, environmental and social sustainability − Inclusion of employees' sustainable perspective − 100% organic products − Inclusion of sustainability throughout departments (primarily production, quality, marketing, sales)

Personal − wanted to do something − interested in nutrition − intrinsic motivation − Continuous improvement within company motivation meaningful − especially healthy, conscious − influenced by media − Crucial for corporate economic success − wanted to use his skills for and regional − cares for the environment now and in future something food important for him − True origin, quality, taste and good nutrition/health of products − Winner of the crises > customers eat more at home and are more aware about product origin

Priorities in − first the social responsibility − high pressure from the world − Organic − Number 1: Regionality (until end of the supply chain was in the foreground for leader − new products in the product range year 100% regional) marketing, later the quality − political decisions have a huge − traceability of the product − Cooperation with regional farmers (long was put in the foreground influence − pressure in the industry (in a term contracts, stable prices, direct − Priorities: − competition is skewed positive sense) to become more contact) - quality because of legislation sustainable − Some spices are not yet accessible in - direct trade − people became more open − pressure from customers Germany, besides 100% regional already - packaging and tolerant towards the − Sustainability as continuous process - certificates product − Conflicting priorities, negotiations, - cycles: does not want to − transparency for the customer present monitoring mechanisms continue − Priorities: − Environmental standards are satisfactory, to buy certificates but would - organic more focus on social sustainability like to capture the CO2 which - regional is used in the project itself - not the price is decisive

− there are no more environmentally friendly means of transporting the product overseas − consciousness of the people is necessary, so that they are willing to pay a higher price − readiness of the customer

Ranking: 1) Laws and regulations 1) Image improvement 1) Competitive advantage 1) Self expectation as pioneer Drivers for 2) Demand of stakeholders 1) Demand of stakeholders 2) Demand of stakeholders 2) Stakeholder demand (supplier) SSCM 3) Image improvement 2) Competitive advantage 3) Image improvement (consequence 3) Competing organizations (industry) 4) Competitive advantage 2) Influence of the industry of the first two) 4) Stakeholder demand (consumer) 5) Influence of the industry 5) Stakeholder demand (employees) > laws and regulation is not a >incentives and conflicting priorities 6) Stakeholder demand (society) driver not a 7) Competitive advantage driver

Ranking: 1) Lack of commitment 1) Lack of information 1) Lack of resources (costs) 1) Lack of resources (access and amount Barriers for (customers) (for the customer) - the others are not seen as barriers of raw materials, suitable climate, origin - SSCM 2) Lack of incentives 2) lack of laws and regulations personnel, capacity) 3) Conflicting priorities 3) commitment only partly a 2) Lack of information and expertise 4) Lack of expertise and barrier (consumer side and organization side) information 4) lack of resources no barrier 3) Conflicting priorities 5) Lack of resources 5) lack of incentives no barrier

Challenges of − does not see particular − also sees positive aspects as − Lack of resources (raw materials) SMEs challenges they can do business − Lack of resources (personnel, capacity, − thinks it is all dependent on the differently than bigger knowledge) mentality companies − they can cooperate with private labels

XXIX

Theme Company F Company G Company H Company I

Characteristics − there is a high cost pressure in − internal goals important − it is important to protect the product − Question to place products in organic of the food the − certifications − food law is quite strict retail markets and/or in conventional industry food industry − supplier retail markets − associations, cooperatives − Growing sales number of organic − network products within conventional retail − politicians markets

Ranking: 1) regulative (European Union) 1) producers of the raw material 1) laws and regulations 1) Industry associations Stakeholders side processes/ supporting: 2) employees 2) Interest associations 2) market 3) suppliers 3) Partner organizations 3) employees 4) network / associations 4) Supplier 4) partner organizations (NGOs) 5) Consumer 5) media (blog) 6) Competing organizations 6) research

Stakeholder − partner (same values, close − feedback from customers − regular exchange with suppliers − Development over time throughout strategy contact) − cooperation with industry − document everything for laws company history − sensitize the market association − intense conversations among − co-creation with organization − co-creation for new products employees − street food festivals − close collaboration with − training for staff − surveys for customers supplier − no exchange with competitors due − communication (blog) to cartels − close exchange with networks about trends − co-creation

Additional − only limited influence on − Difficult decisions: hurdles transportation Alignment of economic, environmental − no alternatives and social within business − Doing things completely different then everybody else − Viewing sustainability with a lightness to it, not only admonishing others − Living sustainable change internally in order to be able to expect it from others

Compromises − CO2 certificates in SSCM -> it does not solve the problem, it is only a way to make it a little bit better

Wishes for the − change of awareness that not - shared values - consumers are more critical than − Convincing customers to look closer, future price is the most important - closed loops (cradle-to-cradle) they awareness, heighten their requirements factor, but social responsibility, - more initiative from the have been before − Alignment of customer attitude with quality and others legislation - it is going into the right direction consumption behavior (behavior gap) -> that customers make a - more consciousness from the − Growth of organic farming good choice customer − More transparency − More focus on health aspect of organic food

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Interview summaries of companies J-M

Theme Company J Company K Company L Company M

Organization's − Sustainability as a process − Sustainability as main driver of − Importance of 3 Pillars within − Department Sustainability perspective on − Sustainability the overall reason company sustainability management (3 employees) sustainability for company existence 100% organic products Need for alignment of 3 pillars within > Procurement, quality, stakeholder − Each decision is made under − Packaging/package free aspect business management, environment, quality sustainability concerns also main interest of company 2 of 3 brands 100% vegan (Ice − Managing director is head of − Purpose is not profit, it is more − Sustainability as process within cream, tea) sustainability department means to establish more company All 3 brands are 100% organic − Started with new generation in 1970s sustainability within the industry certified due to resource safety reasons − Contribute to reconstruction of − Priority 1: Economic sustainability > 100% organic products, quality, taste natural resources (Start-up) − Long-term partner ships, supply chain − Goal: Influence on the market − Priority 2: Environmental & Social relationships > stable prices, contracts and awareness for the topic sustainability included meanwhile − Importance of all 3 pillars of − We see us as pioneer, first − Organic products > 25-30% more sustainability so-called mover, role model, driver for the expensive than conventional "Enkeltauglichkeit" industry > Target small specific target group − Sustainability followed within corporate − 1 Employee responsible for goals, strategies and measures sustainability matters > Dismissed (costs) > No sustainability team but everywhere included in business − Limitation: Organic & vegan without food additives > Taste & product design − All 3 brands include social sustainability > 1% for the planet

Personal − Sustainability is core task of our − Leaving earth similar or better − Economic motivation (Job security, − Highly motivated motivation generation than how we found it corporate success) > working with managing director and − Realization of need for − Leaving resources for next − Environmental motivation (Climate support sustainable change in times of generations change, nature, resource > doing one's bit for sustainable climate change Minimization of climate footprint management) change > career choice − Awareness, carefulness − Former way of thinking not > working in a family business − Less is more appropriate anymore > fun to have support and commitment − Resource wastefulness − Need to look at whole value chain for sustainable topics creation > wish and demand of consumers and > from start until disposal > all the industry byproducts > Refuse, reuse, recycle Priorities in − Priority 1: Nature − Priority 1: − Sustainability − 2 Supply Chains: 1 national, 1 supply chain − Priority 2: social and societal Organic products (Climate - − Responsibility international aspects as basis and tool to Health reasons) − Vision for the future − For national supply chain: reach number 1 − Priority 2: Regionality − Organic production 1989 Organification of company − Growth of regional organic − Product quality > Foundation of own organic supply − Priority 1 in detail: farming in Bavaria − Fairtrade, work conditions chain community Labels and certifications beyond − Length of supply chain "Liefergemeinschaft für ökologische regular guidelines − Attractiveness of products and Braurohstoffe" − Restrictions within supply chain sustainability concerns > Direct cooperation with suppliers stricter than organic and − CO2 carbon footprint until now 170 suppliers Demeter labels − Transparency − Industry association certification − Verifying mechanisms to check − AMA Verband suppliers - data transparency − Now: Attempt to make international − Goal: Influence on the market supply chain national as well > Build another supply chain community for other product type > Process to engage new suppliers − Integration of social sustainability as well > Naturland Fair certificate, regionality

Ranking: 1) Self expectation as pioneer 1) Competitive advantage 1) Belief that the future market longs 1) Laws and regulations Drivers for 2) Influence industry environment 2) Stakeholder demand (consumer) for sustainable products 2) Demand of stakeholders (consumers) SSCM 3) Stakeholder demand (whole 2) Self expectation as pioneer 3) Competitive advantage salers) 3) Stakeholder demand (employees) 4) Image 4) Law and regulations 4) Stakeholder demand (consumer) 5) Influence of industry environment 5) Certification agencies

Ranking: 1) Technological solutions 1) Lack of resources / products 1) More laws and regulations 1) Lack of rewards and incentives Barriers for (packaging) (Location of organization) 2) Lack of resources (financial) 2) Lack of law and regulations (only SSCM 2) Lack of Resources 2) Lack of product choices (Amount 3) Lack of technological solutions subsides) 3) Lack of laws and regulations accessible wholesalers) (packaging) 3) Lack of commitment (in the industry) 4) Conflicting priorities 4) Lack of endurance for financial 4) Lack of expertise and information (in 5) Lack of consumer demand benefit (incentive) the industry, lobbyism) 5) Lack of awareness (consumer) 5) Lack of resources (personnel, financial, upstream supply chain suppliers) 6) Conflicting priorities 7) Lack of endurance to see results and profit

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Theme Company J Company K Company L Company M

Challenges of − Mittelstand is often evaluated by − Lack of competence and experience − Less personnel for sustainability than SMEs employee number and not profit − Lack of professionality bigger organizations (manpower) − Employee count is small − Lack of resources (time, personnel) − Less influence on the market than − But this company is one of the − High price pressure (less purchase bigger organizations biggest organic firms in power) − Much influence on direct suppliers and Germany − SME > more flexibility, faster partners − SME > More flexibility, less reactions, less profit pressure − Much freedom of design resources for new projects − Big firm > not flexible, slow reactions, high profit pressure

Characteristics − Climate change > 8-10 years − Raw material accessibility − Extremely small prices for food of the food left for massive change to − Dependence on environmental products in Germany industry happen influences − Organic for prices more real, but still − Harvests are going down > Risk − Organic > High raw material scarcity not completely real of not being able to produce (high demand) − Most of the farmers would not survive staple foods − Raw material contracts: without subsidies from the government − Resource scarcity > price management problem within − Consumers would not pay real prices − Food safety and security industry for food products − Growth of organic farming in > purchase volume, purchase power − Climate change > environmental Germany hazards, less harvests − Move towards not sustainable >> Vicious cycle but regenerative eco-system

Ranking: 1) Nature/Environment 1) Consumer 1) Employees ("Owner") 1) Company owner (family business) Stakeholders 2) Employees 2) Wholesaler (Retail) 2) Investors 2) Shareholders 3) Suppliers 3) Industry associations 3) Suppliers 3) Suppliers 4) Retail markets 4) Supplier & Producers 4) Partner organizations 4) Government 5) Production 5) Consumers 5) Partner organizations 6) Industry associations 6) Industry associations 6) Investors 7) NGOs 7) Competing organizations 7) Service suppliers 8) Society / Consumer 8) Government 9) Certification agencies 9) NGOs 1) Certification agencies 10) Media 2) Consumer 11) Society 3) Competing organizations

1) Regional government 2) National government 3) EU 4) International government

1) Society 2) NGOs 3) Media 4) Academia

Stakeholder − 1 Main Stakeholder − Employees = Owners − Direct contact with suppliers > Partner strategy Identification − Supplier = Partners (Collaboration - & collaboration Society, consumers, retail Co-creation) − Stakeholder assessment & strategy: markets > Leap of faith − Stakeholder identification − 2 Resource distribution − Consumer (Education) − Dialogue according to firm strategy and > Information, Feedback − Active leadership philosophy, categorization, − Investors > As less influence as − Annual goals with certain stakeholder assessment possible management > Partner firms, strong − Strategy: − Measures associations for the goal beyond Detailed strategy for certain − Lack of professionality business stakeholders from beginning on − Stakeholder community meetings > Supplier selection: New − Other stakeholders strategy over annually "Stakeholderkreis" suppliers with same goal / old time − Feedback, understanding, resilience, suppliers to drive change support, influence, risk management, > Supply chain structuring diversification, regionality − Stakeholder strategy: − Common good economy Influence everyone who has points of contact with us through partnership and strong relationships, build awareness − Sustainability as a central point for every decision and partner/supplier/stakeholder choice

Additional hurdles

Compromises − No compromises with taste and − Amount of raw materials <> − High demand for organic raw in SSCM quality of products Choices for preferred materials <> Scarcity − No compromises with harmful sustainable certified products substances in products − Location of company / Needed − Compromises: products <> Availability of Assess to sustainable materials regional products <> Desire for more sustainable options Healthy products without sugar <> Options within recipes and taste Low price of product <> Political price increases

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Theme Company J Company K Company L Company M

Wishes for the − Broad and holistic awareness of − More awareness and − Product durability - Minimum − Political commitment: Regulations future environmental topics carefulness for sustainability durability of products − Not working against but together of − No more need for justifications − Conscious purchase decisions > Egoism and unreflected environmental protection and and persuasive efforts for good health expectations for durability of agriculture − Awareness within society and − Stopped industrial farming consumers, wholesalers − More collaboration business > Change is possible − Increase of regional organic > Risk aversion − Working against climate change and − Wish: All products are farms > No taking advantage of new environmental depletion sustainably produced − Easier and better collaboration technologies − Self-responsibility of consumers with farmers − Food waste 30% − Awareness − Better accessibility of organic − Lack of Production flexibility due to − Future oriented business products to consumers profit greed > high production − Less food waste − Less bureaucracy for organic volumes − Global food security farmers

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Appendix VIII: Coding of the analysis

Umbrella topic Sub-topics Codes

SMEs

Benefits Flexibility • Switch to new products • Meat industry shrinking

Repartee • Repartee

Small size • Profit • Quantity

Other possibilities than large ones • Possibilities

Challenges Costs • Price • Profitability • Margin • Price performance

Limited impact • Impact • Power • Attention • Enforcement • Purchase • Suppliers • Laws/ regulations • Design possibilities

Young company • Experience • Professionality

Dependent on collaboration • Dependence

Food industry Increased risk • Quality • Increased risk

Nature • Environmental influences • Climate change • Seasonality

Resources • Resource availability • Food security

Regenerative • Regenerative

Strong competition • Consumer demand • Purchase quantity • Cost pressure • Decision in which market to sell • Price stability

Organic agriculture • Organic agriculture

Strict laws • Strict laws

Influence of government • True-cost pricing • Subsidies

Meat industry shrinking • Meat industry

Difficult decisions for SMEs Trade-offs between pillars • Trade-off

Stakeholders • Stakeholder

Product • Resources vs. opportunities • Packaging vs. durability • Health vs. taste

Location • Location vs. local availability • Regionality vs. price and quality • Low price vs. politics

Certification • CO2 certificates vs. solution to problems • Compensation vs. attempt for sustainability

Sustainability Role • Core goal • Core idea • Motto • Reason for existence • Included in philosophy • Integrated in all processes • Company culture • Included in measures • Included in goals • Included in strategy • Included in planning • “suitable for grandchildren”

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Umbrella topic Sub-topics Codes

• Resilience • Only way forward

Claim • Pioneers • Huge impact on industry

Sustainable Supply Chain

Development Process of improvement • Process

Reactive • Reactive

Proactive • Proactive

Vision • Vision

Impact • Impact

Attention • Attention

CEO • CEO

Young generation • Generation

Employees • Employees

Family business • Family business

Pressure from outside • Pressure from outside

Priorities Price • Price

Quality • Quality

Functionality • Functionality

Taste • Taste

Social aspect • Working conditions

Environment • CO2 • Nature • Footprint

Certification • Organic • Vegan • Fairtrade

Attractiveness of the product for the • Attractiveness customer New product range • Product range

Availability of the product • Availability of the product

Health • Health • Nutrition • Ingredients

Growth • Growth

Attention • Attention

Resources • Availability • Resource security • Raw material security • Regionality • Waste of resources • Sustainable raw material

Work • Long-standing partners • Direct contact with stakeholders • Jointly developing ideas

Practices Packaging • Packaging

Logistics • Logistics

Direct trade • Direct trade

Transparency • Transparency • Traceability

Check mechanisms • Check mechanisms

Drivers Competitive advantage • Competitive advantage • Image

Standards • Expectations • Stakeholder demand • Consciousness

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Umbrella topic Sub-topics Codes

Impact of the industry • Partner • Suppliers • Retail assortment • Certification • Labels

Regulative • Government • Laws • Regulations

Self-claim • Pioneer

Belief in sustainable future • Belief in sustainable future

Pressure from outside • Society • Trade • NGOs

Barriers Lack of resources • Time, time until it is beneficial • Costs, price, minimum purchase • Resource scarcity • Human resources • Resources, upstream supply chain • Lack of products, limited product selection, origin, location

Lack of exertise and information • Transparency

Lack of commitment • Commitment

Lack of incentives and rewards • Incentives and rewards

Conflicting priorities • Compromises • Aim conflicts for stakeholder

Lack of laws and regulations • Laws • Regulations

Lack of technological solutions • Packaging • Plastic • Recycling • Limited opportunities/ alternatives (transport) • Quality • Durability

Lack of consumer demand • Readiness

Limited influence • Influence

High expectations • Trade • Consumers • Opportunities for improvement • Human mistakes

Stakeholder management

Stakeholder analysis Nature • Nature • Environment

Internal • Employees • Shareholders • Company owners • Suppliers • Production • Warehouse • Service provider • Investors

Market • Partner organizations • Competitors • Consumers • Certification agencies/ labels • Industry associations • Industry representatives • Wholesaler/ retail market

Regulative • Regional • National • European • International government

Social • Media • Society • NGOs • Science • Technology

Stakeholder strategy Emergence • Historical • Intuition • Process over time • Different emergence for different stakeholder groups

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Umbrella topic Sub-topics Codes

Important to consider regarding • Consciousness strategies • Understanding • Goal-oriented working • Specific and ambitious goals Leap of faith

Reasons for stakeholder strategies Risk management • Resilience • Diversification

Strategies • Pressure • Monitoring • Education (educational work, trainings) • Involvement (negotiations, supplier relationships, tastings, feedback, surveys) • Leadership (active control, support, impact, pioneer) • Collaboration (partnership, cooperation, collaboration, relationships, exchange, dialogue, direct contact, idea exchange)

New strategy approach • Co-creation • Employee as owner • Stakeholder circle

Processes • Stakeholder identification • Stakeholder selection • Supplier criteria • Selection of resources

Aspirations for future stakeholder Common good economy • Common good economy management Future-oriented working • Future-oriented working

Circular economy • Circular economy

Money • Profit • Margin

Work • Goal orientation • Risk taking • Collaboration • Transparency • Authenticity • Credibility • Trust

Positive contribution • Positive contribution

Eye level • Eye level

Partnership • Partnership

Support • Support

New ideas • New ideas

Beyond business • Beyond business

Exchange of information • Exchange of information

Stakeholder circle • Stakeholder circle

Join forces • Join forces

resilience • Resilience

Knowledge exchange • Knowledge exchange

Human rights • Human rights

Pressure, impact • Pressure • Impact

Harmony • Ecological agriculture • Protection of nature

Rethink • Shared values • Mindfulness • Society • Expectations • Consumer behavior • Responsibility • Less is more • Consciousness • Flexibility

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