Buyers Beware: The Effect of the Type of Support Buyers Provide to Suppliers and Their Product Mix Strategy on Supply Chain Sustainability
To improve their sustainability performance, firms are increasingly looking beyond their own internal operations towards managing their overall supply chain’s sustainability. In this study, we experimentally examine the joint effect of type of support buyers provide to their suppliers (tier-1 suppliers) and buyers’ sustainability product mix strategy on the extent to which tier-1 suppliers monitor the sustainability practices of their own suppliers (tier-2 supplies). We hypothesize and find that when buyers consistently integrate sustainable products into all of their product mix, tier-1 suppliers will monitor tier-2 suppliers to a greater extent when buyers subsidize tier-1 suppliers’ sustainability costs (direct support) than when buyers pay them a price premium (indirect support). In contrast, when buyers sell a mix of sustainable (at a premium) and conventional products, tier-1 suppliers monitor tier-2 suppliers more when buyers provide indirect support than direct support. Our findings show that buyers’ choice of supplier support and buyers’ product mix decisions can have important spillover effects on the sustainability performance further up the supply chain.
Mandy Cheng
Mandy Cheng joined the school in 1998. Prior to her appointment Mandy worked as an accountant with BHP. Her research interests include strategic performance management systems such as the balanced scorecard, capital investment decisions, incentive and compensation scheme designs, the use of accounting information in negotiations, and Integrated Reporting. She is a Fellow of CPA Australia (FCPA) and the Academy of Social Sciences in Australia (FASSA).
Mandy's current editorial roles include: Editor of Journal of Management Accounting Research and Accounting and Finance, and editorial board member of Accounting, Organization and Society, Management Accounting Research, and Australian Journal of Management. She has previously been an Associate Editor of Behavioral Research in Accounting (2011-2013) and the international member at-large of the American Accounting Association Council (2019-2021), executive member of AFAANZ Management Accounting Special Interest Group (2017-2023) and a Director of AFAANZ (Accounting and Finance Association of Australia and New Zealand, 2011-2014). Mandy is also a member of Professional Education Advisory Committee of CPA Australia.
Mandy regularly presents at international and national accounting conferences, and has publications in leading accounting A* journals (ABDC ranked) including The Accounting Review, Accounting, Organizations and Society, Contemporary Accounting Research, Management Accounting Research, and Auditing – a Journal of Practice and Theory. Her successful external grants include ARC Discovery and Linkage grants. She is a co-organizer of the Global Management Accounting Research Symposium - an annual conference hosted by UNSW, Michigan State University and Copenhagen Business School.