Institutional pressures and supplier involvement: a perspective on sustainability

Sustainability challenges are getting lot of attention in manufacturing sector and they usually require the use of institutional pressures. Firms in turn, respond to these pressures by instituting assessment and collaboration mechanisms for their suppliers who hold pivotal roles in their supply chains. This paper investigates the effectiveness of coercive pressures and mimetic pressures in implementing supplier assessment and supplier collaboration mechanisms by the firms. This research also uncovers the inter-relationship of the two mechanisms in the presence of these pressures. Data were collected from 97 manufacturing firms that outsource their supplies to different organizations across the world. Structural Equation Modelling is employed through the use of Smart-PLS. The results show a fully mediated relationship of coercive pressures with supplier collaboration through supplier assessment. This paper suggests important managerial implications for firms addressing supplier mechanisms for environmental purposes. This paper contributes to the existing literature of Institutional Theory within the domain of greening suppliers.