Cultural issues and supply chain sustainability of multinational companies

Since its foundation, the debate regarding corporate social responsibility (CSR) has been dominated by large companies (Carroll 1999) and strongly associated with MNCs’ global strategy and their international development (Carroll and Shabana 2010; Collier and Wanderley 2005). More recently, the literature has addressed the strategic role of suppliers in the achievement and development of MNCs’ goals and their responsibility mandate (Reuter et al. 2010). Hence, the importance of suppliers in the MNCs’ CSR policy planning and its key role in the supply chain (Andersen and Skjoett-Larsen 2009; Carter and Jennings 2004; Carter and Rogers 2005; Murphy and Poist 2002). Carter and Rogers (2008) have clearly demonstrated the triple bottom line of economic, environmental and social goals that lead supply relationships and the importance of suppliers in improving the long-term success of companies and their partners. Different authors (Krueger 2008; Preuss 2009; Wittstruck and Teuteberg 2012) have stressed ethical sourcing as a social feature of companies’ sustainability and suggested a definition of supply chain management sustainability (SSCM) that emphasizes this aspect in the supply chain; others (Leire and Mont 2010; Park-Poaps and Rees 2010) have focused on the strategic dimension of collaboration with supply partners by emphasizing the importance of integrating internal and external relationships for a more effective sustainability strategy.Some researchers (Pagell et al. 2010) have shifted their focus to the requirement for efficiency in managing sustainable flows, stating that this aspect is essential throughout the lifecycle of firms’ products or services. These studies have flourished mainly within the environmental literature considering that firms have control over environmental performance at each production stage, including the performance of their main suppliers (Pagell et al. 2010). Other researchers (Trent and Monczka 2003) have started to debate the effectiveness of the conventional command-and-control approach of MNCs to sustainable supply chain strategy. Studies from different authors have shown that major suppliers’ compliance could not be achieved by strengthening MNCs’ monitoring activities, which, on the contrary have often proven to be prejudicial to the so-called buyer–supplier relationship over time. Moreover, suppliers’ involvement and engagement have always been seen as crucial factors for successful MNC cooperation (Russo-Spena and De Chiara 2012; Wiemer and Plugge 2007), since they provide suppliers with the opportunity to demonstrate their contribution to and increase their commitment towards the sustainability goals of multinational companies (Fliess et al. 2007). Thus, MNCs best practice has generally focused on the development of CSR strategies in consultation with salient suppliers and other stakeholders. On the other hand, many other MNCs noncompliant behaviours (e.g. the Mattel case1) have resulted in poor CSR strategic planning due to underestimation of their partners’ cultural differences (Roloff and Aßländer 2010). MNCs operate through complex networks and globally dispersed units. This implies the need to find a balance between diverse stakeholders’ environments and to increase the ability to manage the diversity of values and social practices across countries (Husted and Allen 2008). At present, research has only marginally addressed the sociocultural issues involving MNCs’ business relations with host countries (Logsdon and Wood 2002; De Chiara and Russo Spena 2013). These studies focus on cultural conflicts,supporting the idea of MNCs using their power to improve the ethical standards of the host country that provides the market in which they operate (DeGeorge 1993; Parker 1996). If MNCs have the power to influence standards in the host country for the better, then they have an obligation to do so (Hamilton and Knouse 2001). A well-known branch of business research emphasizes how norms and cultural values can affect and determine partners’ behavioural patterns, their grouping attitudes and preferences (Hofstede 1980, 2001). More recently, studies on cross-cultural dynamics, especially the sociocultural factors in the supply chain management have been considered significantly important to understanding the nature and the extent of business relations (Cannon et al. 2010; Zhao et al. 2011). However, the nature of relationships between MNCs and different sociocultural business contexts still stand somewhere on the fringe in the contemporary discussion on CSR, although CSR itself seems to be a consequence of how this relationship is understood. The responsibility debate cannot be separate from questions of cultural meaning; thus, there is a need to provide a starting point for an in-depth analysis of business relationships in dispersed and differentiated contexts. To fill this gap, this chapter aims at deepening the role of cultural factors in the sustainability management of MNCs’ supply chain. In more depth, the study aims at identifying whether and to what extent the dimensions of culture are relevant in shaping MNCs’ supply sustainability practices. The analysis underlines the sustainability approach adopted by MNCs during their interaction with suppliers and provides an initial insight into sociocultural issues indicated in the literature, as being crucial for supply chain sustainable management. The rest of the chapter is organized as follows: The first part analyses the concept of culture in relation to the supply chain and the study of CSR; the second part mainly focuses on empirical research, reports findings, conclusions and discussions.