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ENVIRONMENTAL SUSTAINABILITY AND THE SUPPLY CHAIN: IS COLLABORATION NECESSARY? Daniel J. Flint Regal Entertainment Group Professor of Business 314 Stokely Management Center University of Tennessee, Knoxville, TN 37996 [email protected] 865-974-8314

Paola Signori Associate Professor of Marketing Department of Business Administration University of Verona Via dell'Artigliere, 19 - 37129 Verona, Italy [email protected] + 39 045 8028492

ABSTRACT Purpose Explores what sustainability means to managers with findings calling into question whether collaboration with a firm’s upstream and downstream supply chain partners is part of that meaning or even a desired goal. Design/methodology/approach Inductive, theory-building grounded theory method augmented by phenomenological data collection and interpretations in the wine industry; in-depth interviews with 110 senior managers in the global wine industry representing 7 wine regions in 4 countries. Traditional interpretive trustworthiness criteria were used to ensure valid data were collected and the best interpretations developed. Findings Interpretations revealed an interesting view of what “collaborative” sustainability meant. Although some firms were collaborating with other organizations to improve sustainability, many were primarily focused on their own organizations. Sustainability was often perceived as being a personally driven and directed, project-based, environmentallyfocused, economically constrained journey that begins and sometimes remains selffocused, being different from industry norms, remaining skeptical, and only sometimes involves collaborating with supply chain partners. Research limitations/implications (if applicable) Contributes to the supply chain sustainability discourse by calling into question whether an organization always needs to collaborate with its supply chain partners in order to be environmentally sustainable. Presents trying to be sustainable as a journey that does not always have sustainable supply chain management (SSCM) or sustainable collaboration as a goal, especially for certain kinds of firms. Practical implications (if applicable)

Reveals the importance of understanding what sustainability means to business leaders of small to medium sized firms in hypercompetitive markets where products, in this case often seen as luxury goods, are not expected to be and in some cases desired not to reflect all sustainability efforts often espoused. Social implications (if applicable) Findings could influence social sustainability regulations by giving pause to certain standards while individual perspectives on sustainability are explored in greater depth. Original/value Stepping back to inductively re-examine the meaning of sustainability after a dozen years of research and normative advice on sustainable supply chain management (SSCM). Keywords: sustainability, phenomenology, inductive, sustainable supply chain management, collaborative sustainability

1. INTRODUCTION A great deal has been written about sustainable supply chain management (SSCM). This stream of research postulates and justifies the benefits and in some cases, costs, to creating sustainable supply chains and normative advice on its management, in particular, emphasizing enterprise collaboration (e.g., Carter and Rogers, 2008; Carter and Easton, 2011; Golicic and Smith, 2013). Despite the numerous definitions of SSCM, very little research seems to describe what sustainability actually means to business leaders who feel they are well aware of sustainability in their industries and whether or not supply chain collaboration is part of that meaning. Before advice can be provided to business leaders, it is necessary to know their perspectives on the topic, i.e., to know from where one is starting. This is part of a larger research project that had, as one of several, an objective of understanding what business leaders were trying to accomplish with any sustainability initiatives they had and how they were approaching those efforts. This discovery, processoriented view fit well within grounded theory’s qualitative methodological scope. However, being an inductive, theory-building project, on this topic it began with a broader, phenomenological question focused simply on what sustainability meant to each business leader. What we discovered in this part of the project is interesting and sheds some light on the progress and likelihood of SSCM adoption, why some businesses may not be pursuing what may seem an obvious practice of, and why some managers may not see striving toward a, sustainable supply chain in its entirety end-to-end as a goal, a reasonable possibility or even necessary. We respond to calls for further research into supply chain collaboration for sustainability were collaboration is traditionally assumed an absolute necessity (Blome et al., 2014). The rather surprising findings drove us to ask the question, can an organization act in an environmentally sustainable way without supply chain collaboration? Our field data suggest that an answer is to an extent at least. For larger organizations with global reach and significant impact environmentally, socially and financially, the triple bottom line focus of much SSCM research, our data suggest that possibly the answer is yes collaboration with sustainability oriented supply chain partners is needed. However, in most of the world the majority of businesses are small to medium sized organizations who lack influence over supply chain partners and to them, maybe sustainable collaboration is not always the goal, especially if it is viewed that some environmental sustainability initiatives may in fact reduce the consumer-perceived quality of the product. Our findings reveal that many leaders remain self-enterprise focused in their initiatives and only later in their journey toward trying to be sustainable, consider collaborating with supply chain partners, if they consider it at all.



Sustainability, defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs (Bruntland Commission, 1987) has developed into a critical topic for both scholars and industry, contemporarily involves a triple bottom line perspective on the environmental, social and financial impact of organizations, has been applied to supply chain management and this area is rich enough to warrant research summarizing manuscripts (Ashby et al., 2012; Carter and Rogers, 2008; Sarkis, 2012; Seuring and Muller, 2008; Srivastava, 2007). In his literature synthesis, Sarkis (2012) in particular presented a boundaries and flow perspective on green supply chain management, by integrating numerous research streams spanning several decades of work examining the environmental aspects of sustainable supply chains.

Research in this space has wrestled with important issues and offers meaningful normative advice on what a SSCM ought to look like. For example, Carter and Rogers (2008) emphasizing the key concept of the triple bottom line of sustainability (environmental performance, social performance, and economic performance) suggested that best performance is found through the focus on all three, with solid environmental performance coming from a formal integrated and collaborative strategy. Carter and Easton (2011) later reviewed 20 years of research into environmental supply chain management, concluding that we still need to learn more and in particular, that SSCM needs further theory development. Golicic and Smith (2013) in their meta-analysis noted that studies into sustainable supply chain management emerged in force beginning around 2000 and that collectively, improving environmental supply chain practices has a positive impact on several performance outcomes. Some researchers have also compared SSCM definitions to numerous definitions of green supply chain management (GSCM) finding SSCM appearing to be an extension of GSCM in its tendency to focus predominantly on the environmental aspects of sustainability (Ahi and Searcy, 2013). As will be demonstrated by the findings here, participants in this study, when asked simply what sustainability meant to them, tended to focus on the environmental aspects but would actually contrast those initiatives with trying to remain financially sustainable. When it comes to collaboration, supply chain management is precisely about collaboration, so much so that it could be considered an axiom of the field. The extant literature consistently has demonstrated that collaboration improves efficiency and achievement of collective goals. One is left to conclude that the problem is not whether or not to collaborate, but rather how to best collaborate and on what issues. For example, collaborative planning and forecasting (CPFR) developed into a major research stream (Attaran and Attaran, 2007) as has supply chain information sharing (e.g., Cheung et al., 2011). And now, collaborative sustainability has emerged as a significant research focus (Blome et al., 2014). Stepping back to look at inter-organizational collaboration in general, we find that a collaborative focus among enterprises as opposed to a “main stream” individualistic, interpreted as “profit seeking,” focus has been cited as leading to a more ethical and sustainable ecosystem (Tencati and Zsolnai, 2012). Some research has opened the door to the concept of individualism and individual perspectives and the role they play in enterprise-wide strategies. For example, Cantor et al. (2013) note the importance of having individually committed managers as well as organizational level commitment to SSCM in order for strategies to succeed. However, others have gone further and emphasized the importance some business leaders place on maintaining their enterprise individualism versus moving entirely toward a collectivist strategy, as collaborative SCM might suggest (Cho et al., 2013). Bansal (2003) suggested that a major research gap exists in not understanding deeply enough the relationships between and impact of individual concerns and organizational values. At a general level, the extant literature review manuscripts indicate that we still have more to learn about SSCM (e.g., Schoenherr et al, 2012). In particular, Schoenherr et al (2012) suggested three research opportunities, two of which were (a) further identification of green purchasing and supply management practices, and (b) investigating the impact of sustainability and the triple-bottom-line on purchasing and supply management. This study fits within these two domains. By stopping to simply explore what sustainability meant to business leaders around the globe, we were able to construct a thicker description of sustainability as perceived by leaders managing it and the role collaboration and SCM played in their views. It was the lack of importance being placed on collaboration and the reasons behind it while at the same time being successful as businesses that suggested an interesting story.



3.1. Research Design and Data Collection This research is guided by a grounded theory tradition (Glaser 1992; Glaser and Strauss 1967; Mello and Flint, 2009; Strauss 1987) augmented by phenomenological interviews and interpretations (Thompson et al., 1989) as part of a large, multi-year, multi-region project examining contemporary marketing and business practices in the wine industry. Data collection methods included formal semi-structured in-depth interviews with 110 senior managers guided by an interview guide. Formal semi-structured interviews ranged between one and two hours and were primarily conducted in English, using an interview guide which provided topics about which to converse but not specific questions as in a survey. The regions include the United States, Australia, New Zealand, and Italy (see Appendix). Leaders from these well-known wine regions were experienced, articulate and willing participants, representing young and established, as well as large and small wineries. Participants were selected through purposive and theoretical sampling whereby the emergent concepts and frameworks indicated the kinds of leaders with whom we needed to meet next. This paper reports on phenomenological interpretations of the data, specifically describing the lived meaning of being sustainable. Our research was in part designed to begin to answer the question “What does it mean to collaborate within the supply chain for sustainability?” However, we elected to get at the answer by drawing on a phenomenological approach. We specifically and initially explored an answer to the more basic question “What does sustainability mean to business leaders?” Without knowing what sustainability means to leaders managing it, normative advice will be ill-informed. No research to date has explored this concept in this context. It is very critical to note that by asking what sustainability meant and not specifically asking about collaboration for sustainability and supply chain first, we were able to discover openly and in an unprompted manner whether collaboration with the supply chain was indeed an aspect of their views of sustainability at all. Eventually conversations worked their way toward the supply chain role when in most cases, collaboration concepts failed to emerge. However, even when the topic was introduced, leaders’ perspectives, consistent across most interviews, revealed important and interesting insights. We chose to explore this phenomenon within the global wine industry for a number of reasons. The global wine industry has many complex supply chains that span the globe and have not escaped the pressures to be more sustainable in its practices. At the same time, this industry is extremely competitive, with rivalries intensifying each year as new entrants vie for market share and entrenched enterprises try to maintain or grow theirs, exhibiting many characteristics of a mature industry (Porter, 2008). There now exist tens of thousands of wine producers around the world. The industry has been plagued by overcapacity since the mid 1990s (Hussain et al., 2007), a driving force behind the hyper-competition we see. In some ways, the wine industry represents a “perfectly competitive” industry (Porter, 1979), which tends to lead to low profitability and survival rates for many firms. The state of the industry has driven many to adopt short-term tactics in order to survive (Stelzer, 2010). As opposed to being considered a niche industry as it was in the past, the wine industry is now being viewed as one indistinguishable from any other highly competitive global industry (Anderson, 2003). So sustainability is a concern in this industry like many others, but progress seems a bit behind other industries. We did not find much literature examining SSCM in the wine industry, which led us to question whether this was because it did not exist in this context or because the context had been overlooked by researchers despite the size, importance of the industry and the clear applicability of SSCM to the industry. This research project does build on previous explorations we came across of sustainability in the wine industry such as Flint

and Golicic (2009), but that work was focused on the use of sustainability as a marketing differential advantage in the New Zealand wine industry. Our research here differs in that it represents a significantly larger, global database, and hones in on the extent (or lack thereof) of supply chain collaboration within sustainability efforts.

3.2. Interpretations Interpretations followed classic ground-up, open coding of verbatim interview transcripts in line with well-established phenomenological guidelines (Thompson, 1997; Thompson et al., 1989) as well as coding of collected artifacts, documents and images. Grounded theory is a qualitative tradition for building theory about social processes actors follow to solve problems in their everyday lives, like trying to be sustainable. Phenomenology works well within grounded theory as a way of extracting and capturing the meanings of those experiences. Both rely on open coding at the word, phrase and sentence meaning-unit level to build themes and concepts from interview text. As a process view and consistent with grounded theory as a method, we discovered what it meant to leaders “trying to be sustainable”. As a phenomenological view, we discovered what “the essence of sustainability” meant. Hundreds of open codes were collapsed into concepts that became themes and aspects of the frameworks we present here describing the essence of what sustainability meant to business leaders within wineries. As is common in qualitative research, we present data from a subset of the entire sample. These participants articulated most clearly the central concepts described in this paper. Findings represent results from numerous interpretative group analysis stages among the team of researchers, all experienced inductive and naturalistic methodologists, seeking the best interpretations of what managers across the entire sample were trying to describe of their everyday experiences. Traditional interpretive project trustworthiness criteria were used to ensure valid data were collected and the best interpretations were developed. These criteria included ensuring credibility, transferability, dependability, confirmability and integrity (Lincoln and Guba, 1985)..



Findings are based on both what managers did say as well as what they did not say. Even when the topic of working with supply chain partners was introduced to the conversation when it failed to emerge unprompted, we discovered a rather surprising finding that collaboration was not only not always, nor often, a critical aspect of being sustainable in the participants’ perspectives, but was not part of the vision, goals or objectives of being sustainable. Furthermore, sustainability was seen primarily in terms of its environmental dimensions and in many cases efforts to move toward environmental sustainability may in fact detract from consumers’ product quality perceptions. The essence of environmental sustainability for business leaders as determined by our interpretations can be described this way: being sustainable is a leader driven and directed, project-based, environmentally-focused, economically constrained journey that begins and sometimes remains self-focused, being different from the industry, remaining skeptical, and only sometimes involves collaborating with supply chain partners. The next section describes this view through the lenses of a sample of the study’s participants, i.e., the ones representing various aspects most clearly. That section is followed by an overall description pulling these concepts together.

4.1. The Meaning of “Collaborative” Sustainability This section describes interpretations of our data relying on insights from a sample of the full set of participants. This is consistent with a typical reliance on a subset of passages to represent a theme or concept in qualitative studies. However, as opposed to the traditional way of presenting the concepts and constructs each supported by numerous passages from multiple participant interviews, we have elected here to showcase multiple concepts together by participant to demonstrate the interconnectivity of the concepts, drawing on the precedence set in the consumer behavior literature (see Thompson et al., 1990). This approach enables the gestalt or more holistic human experience to be reflected through the lens of each participant without deconstructing the human being into a framework in a reductionist style. These are merely exemplars from many that could be shared on every theme. Carol: a personal leader vision; in a collaborative region but going alone Sustainability initiatives in the wine industry are more prevalent in Oregon than many other regions, and as such its meaning is rather detailed for Carol, who views other wineries in her region as both competitors and collaborators. It’s a little tricky because the Oregon wine industry is extremely collaborative. So we are all working together while competing, which always makes things really interesting. We see as our main competitors nationally, other Oregon wineries who have comparable production and distribution to be competitors for shelf placements. And we also see as our competitors, maybe smaller producers who are also on the leading edge of sustainability practices. So it’s both a market share and a media share competition. And in Oregon there are many associations, many of which are focused on sustainability initiatives in the region. Well we have a group called the Oregon Wine Board, and it was actually created by the industry. They voted to self-impose taxes that would fund this organization called the Oregon Wine Board. It’s also related to the Oregon Wine Growers Association, and they provide market research as well as marketing tools for the entire industry. So for example, the Oregon Wine Board recently created a program called Oregon Certified Sustainable Wine – OCSW… there are so many… Sustainability is a huge focus in Oregon and there are so many different certifications. You have LIVE (Low Input Viticulture and Enology), Salmon Safe, organic, biodynamic, food alliance, you know, on and on. And everyone’s carrying these logos on their back labels and it starts to look a bit like a race car, and the consumer has no idea what it means. And so OCSW has created an umbrella program to encompass all of those certification programs. …So it’s kind of blurring those lines between sustainable versus organic, and saying this is an ethically produced wine that you as a consumer can count on. And that’s gotten huge media attention, and it’s entirely through the Wine Board. To Carol, certification and the regional initiatives would raise the national and global awareness of the ethical, natural and sustainable approach of Oregon wineries, which was predicted to help sales of individual wineries. Sustainability meant numerous projects from growing, to wine production, to bottling, to carbon neutral programs. Yet at the same time, Carol never mentioned specific purchasing-specific supplier or business customer relationships focused on collaboration on these initiatives; all of her efforts were primarily winery-focused. Additionally, the number of wineries pursuing specific “large” initiatives, such as “completely zeroing out your carbon footprint in 18 months”, was small (e.g. 30) by comparison, highlighting this group working on these projects as different from the rest of the industry even within this region. And many of those initiatives stalled due to financial and

human costs associated with them, emphasizing the project-driven nature of sustainability and the economic constraints of “moving forward” along the journey toward being sustainable. Further highlighting this project-driven journey meaning were Carol’s impassioned stories around having “looked at wind and solar…[but that] we are just not willing to invest in right now”. Sustainability means a personal leader vision to Carol who stated multiple times that “most of the motivation is provided by [owner]…I won't invest my time in something that’s going to be rejected out of hand [by the owner]”.. Dante: frustrated and skeptical; self-focused Let’s contrast Carol in Oregon with Dante in Italy, who was quite successful, concerned about economic sustainability as in the long family lineage of the winery continuing, and highly skeptical of all of the attention being given to sustainability. I don't know what sustainability is. What is sustainability? Tell me! Because I want to know, nobody has ever explained it to me because every time they try to explain it to me I found it ridiculous…To me it seems like you look for the sustainability of your environment right, so you don't spoil your environment. So what do you have to do in order not to spoil your environment, I mean that's the thing I want to know, you don't use what? You don’t do what? To Dante, wine is an agricultural product and as such, he asks himself the rhetorical question would not good stewards take care of the environment naturally? The entire conversation around sustainability and organic appeared to be simply about marketing to him. So I believe before we can put this name on the market just in order to try to sell more or be more expensive they should go into the market, the consumers, in order to know what is organic, what it really is and why make organic different from normal products. To me organic and sustainability is just another way to sell. Despite this skeptical view, Dante believed that the only way to make wine is in a sustainable way but many of the initiatives being proposed do not seem to look at very long-term sustainability; they are short-term oriented. Sometimes they talk about a new form of energy, photo sonic, solar, blah, blah, I believe in those, we don't have it because we should not build a huge platform of those photo tech systems here, we cannot install any of those things. But people think about today but what about tomorrow, what about 20 years time, what are we going to do with those panels made out of PVC? The same with nuclear, nuclear is good but after 50 years what are they going to do with all those nuclear things? So you're sustainable today, but tomorrow? So even though Dante did not appear to support sustainability in its industry manifestation, he believed in his philosophical viewpoint that caring for the environment is the right thing to do. In many situations, financial sustainability of the winery meant finding lowest cost options in the supply chain to Dante, such as low cost transportation. His focus was on his own organization, remaining skeptical of sustainability and all of the initiatives, and cynical about many “relationships” with downstream organizations due to the power their large size commanded, resulting in his brands not getting much attention from them. He felt extremely sustainable in his operations, but did not believe in the industry initiatives, working with supply chain partners to move forward on them, and made many decisions based on cost in order to ensure economic sustainability. David: in his DNA; self-focused

Thinking about the environment was in David’s DNA, it was how he looked at the world in his Australian winery. I’ve got a permaculture background in terms of my upbringing, my mother was one of the first permaculture students at [university] and so everything was clean and green right from the start. So there’s been no herbicide used in the vineyard, no pesticides, no chemical fertilizers, and that sort of thing, a lot of sweat has been used. To David, it was just how you did things. But to him it meant being different from the industry norm. And yet, he did not seek out organically grown grapes from growers nor collaborative relationships. So even though organic was in his blood, he did not collaborate with suppliers on sustainability for the grapes. Instead, he soon simply decided to grow his own grapes in a form of vertical integration. Sustainability to David meant following the “old methods”, natural methods, not being certified. Similarly, even though some of the other products David sold were also organically produced, he specifically stated that in exploring different bottle suppliers he was not looking at any of their sustainability efforts or looking to collaborate, but was rather using quality and cost as selection criteria. He too saw himself as different within the industry and even from his neighbors based on his production methods, which he saw as more sustainable. Sustainable meant producing wine in traditional ways that consume less energy, use less commercial equipment and chemicals but takes more time. He felt relatively self-reliant and his efforts were self-focused. Francesco and Francesca: sustainable culture and downstream educator To Francesco and Francesca, heading a globally successful winery in Italy, sustainability, organic and biodynamic initiatives were often about marketing and they should not be. Furthermore, they were skeptical of the benefits that would be provided of any technology or chemical change either toward or away from anything supposedly in the sustainability direction. My own personal opinion I think all those issues should be government related, I think there are issues which are very much related to the consumer [health] and in a sense it shouldn't be a marketing issue. Whatever is going to go to us the marketing is gonna be a complete failure…organic or non-organic is much more of an important issue related to the health of the consumer…for us the first issue would be before changing, before taking a short cut, before using technology or chemistry in order to change a process we really have to take an account if it's a real advantage or not. Like those who simply follow old, natural ways of agriculture, they do not understand the interest in “changing” to be organic or sustainable throughout the supply chain. They feel that this is how it has always been and should be done. Thus, they are skeptical of new initiatives and claims that would encourage or even force them to change processes that they felt have been organic right from the start. The way Amarone Classico is made it is completely organic, actually it's even more than organic, it’s a wine that comes out after eight years completely, the only thing we have to do is look at the wine, nothing is put in, the whole process is based not on forcing the wine, but waiting for the wine…we do believe that we are coming from something which was by definition organic so agriculture of 150 years ago it wasn't an issue whether to be organic or not. So we're coming from that… Like other Italian participants, sustainability meant frustration with the lack of standards, lack of certification processes coupled with skepticism about whether these would even really produce a recommended process that would be an improvement over what they are already doing. Downstream collaboration did not mean working on projects but rather educating

distributors and customers “on what we are doing,” trying to influence how their wine was sold further on down the channel and getting attention from important customers. Ken: sustainable purist; self-focused Where Francesco claimed that wine is a “cultural product” in a highly fragmented industry, Ken from a high-end California winery saw wine as a luxury good and very much like the consumer packaged goods industry in its intense fragmentation, making it difficult to set standards for things like sustainability. Ken described the competing motivations between trying to keep abreast of changes in market conditions and demands and even being asked by leaders of his own organization to respond to some, such as increased demand for some labels, without any regard for the natural, sustainable growing and production processes. … everybody is under such pressure to have quarterly returns, you know they take demand up, they take demand down, and you know we got these grapes two years ago and now you’re telling me that the demand changes, I don’t care if the demand changes. If we sell out that’s a good thing, we’re making a lot more [profit]. So they always want that 10% growth every year and my push back was I can give you 10% on price increase, I can give you 10% on decreasing the discounting you’re doing and selling more direct to consumer and more through our more profitable channels but not by making more wine. There’s no more, there’s no more grapes of that quality again, don’t come and tell me to make 10% more. Ken described how he coped with this tension between trying to survive as a company financially and trying to be environmentally sustainable by changing jobs and going to work for an organization that saw these in alignment, that was already certified organic, rather than one that was struggling with trying to become certified and not really dealing with the competing market pressures very well. Ken was a self-described “purist” focused on high-end quality, organic processes, and traditions that “represent this beautiful balance and terrific expression of this land”. And yet, his projects were self-organizationally focused and did not involve much in the way of supply chain collaboration on sustainability. Max: in his philosophy; an internal orientation Max had recently bought one of the “oldest organic vineyards in Western Australia”. However, when he acquired it, it had not been managed entirely organically and so in projectform, he planned to “expand on the organic side, and not only organic wine but organic in other ways”. These plans included hydropnic greenhouses, moving toward biodynamic processes that involved sheep, and other projects. But these plans were economically constrained: We’ve got ambitious plans for the wine, I’ve kind of put them on hold this year because with the economic situation the way it is, basically I think it’s a waste of time to put a lot of money into a vineyard at the moment One of the “problems” was that despite the vineyard being organic and having more potential, the winemaker did not use organic processes, which not only was frustrating, it limited Max’s ability to promote the organic aspects of the vineyard and winery. This winery represented one of only 5 in its region of Western Australia that was organic, which meant to Max that he was different, but he learned that he was different through an acculturation process. So his journey into trying to be sustainable involved learning what that meant to his neighbors as well and their general lack of desire to collaborate, manage other organizations, and integrate. No there’s not [an association for the organic wineries] and interestingly enough I was even thinking of putting one together when I found out there wasn’t an association

because I kind of know them to talk to them, but I soon discovered that people in the organic industry have got one thing in trait and that’s kind of that they like to be left alone and they like to do their own thing. … organic people aren’t like that [being in commerce organizations]. They aren’t so much interested in the business side of things as the lifestyle side of things and the associations tend to be more interested in commerce. Max liked “doing things” and “not BS’ing” people, revealing a derogatory view of what marketing does. Through his conversations, despite his intense sustainability projects, he indicated that he had not thought of looking into the sustainability of transportation or distributor process aspects of his wine distribution. He was early in his journey but had plans that indicated he would continue beyond his own vineyard – eventually. But he saw sustainability specifically as different from organic, the “side [he] was most interested in”. He was very skeptical of us as humans being able to really save the resources we’re headed toward depleting on the planet, including within the wine industry. He purchased the winery because being organic was in his blood, “it’s my philosophy”. Paulo, Ivan and Giuliano: in their DNA; the right way to do things; collaboration is an opportunity This view of it being “the right way to do things” was expressed in numerous participant interviews, reflecting a sustainability orientation. Paulo and Ivan of a large Italian winery group stated that “it’s the right thing to do not from a marketing perspective”. In terms of projects, they wanted to produce a “sustainability protocol” that would be followed. But Ivan stated that “when you speak of sustainability it is an individual [perspective]” suggesting that it is self-driven and every one has a different perspective on what it means. However, this protocol would be driven down to transportation and logistics. Their company purchased grapes from growers, so vineyards were suppliers. … we are working to create a protocol and certification protocol for logistics and transportation, we are trying to, we are at the beginning. We have a group of firms and now we are trying, logistics firms are not so ready …so it's difficult. …we have a very special relationship with our suppliers: to participate and collaborate with them, supplying services, working closely with them in the vineyards and to change their attitudes to produce quality. And we recognize a premium price for quality! This is a project started 3 years ago. Now the relationship is not to supply more wine, but improve quality together… To represent the journey, project-based thinking, and extensiveness of their reach up and down the supply chain, Paulo at one point and then Giuliano at a subsequent follow-up meeting, stated the following: They say that today [our firm] does not speak about sustainability… it's not related to something specific like saying I don't use chemicals inside my vineyards. I think the [firm] has to work all the structures of the production and try to focus on every single step. So don't use chemicals but at the same time say I want to use a bottle that is a lighter bottle than I used before. Also if I use paper I will try also to focus there but also structure and try to start the old production in order to find the place where you can change, you can be better than in the past and we can say that we are more ready for what the customer on the market wants. The new director Giuliano later stated: We consider sustainability as an opportunity, for both sides (producers and customers). We want to be leaders to improve “a good way” in production and for the market. The

last change for us will be to better communicate this policy. We used to practice this strategy, without communicating it to the market. To Paulo and leaders at this organization, sustainability meant projects methodically pursued such as new processes that use less water while keeping an eye on future market demands for certain changes. For example, on organic and biodynamic, “We respect these techniques, but we are not doing it. We are studying them. We think there is a future market for this kind of production…but I don’t think it will be a total new business changing the traditional one”. They, like Carol, and others like them saw an integrated balance between sustainability projects and market demand, saw this as most likely the way business should be done and coordinating with supply chain partners as critical. Other Participants – Innovation and nature lovers Our data interpretations of the remainder of the 110 interview participant descriptions and other data follow these lines. They spoke of “carbon audits,” “pilot programs,” and “solar projects,” being personally driven as well as large retail customer driven (Ben and Jerry), ”eventually” (journey metaphor) collaborating with other wineries (Scott and Linda), but absent desires to collaborate with supply chain partners, shifting from “commercial” aspects of sustainability and to the “production aspects of the agriculture” (Antonio), and a rare few working on end-to-end sustainability projects such as carbon footprint after having successfully worked on their own vineyard (Adam). Building on these ground-level, participant-by-participant interpretations the next sections pull the data together to summarize our interpretations. 4.2.

Dealing with Competing Motivations

Being environmentally sustainable did not necessarily always mean increased chances of financial sustainability for study participants. Looking at interpretations across all of our study participants many of who were leading small to medium sized wineries in an industry often portrayed as luxury, some environmental sustainability initiatives were extremely costly, time consuming and actually contrary to what the market was demanding (see Fig. 4.1) Participants explained that demand was low for wine produced organically (a subset of sustainable operations), or wine produced from biodynamic processes (different from organic and also a subset of environmental sustainability). Furthermore, numerous participants themselves were skeptical of the quality of products produced in this way. For example, some perceptions perceived that consumers felt organic wine was of an inferior quality. On the broader topic of sustainability initiatives, screw top closure mechanisms, considered to be a more sustainable solution to cork, was consistently associated with lower quality wines, and lighter bottles were not appropriate for high quality wines despite the positive environmental effects. For a product almost always positioned on quality as a base line attribute, this is problematic. Additionally, over-capacity in the wine industry globally combined with numerous new entrants placed pressures on leaders to simply focus on cost minimization and consistent quality, detracting from costly sustainability-related projects. These perceptions were survival motivations. Conversely, there existed sustainability motivations. For some participants a sustainability orientation was in their blood, i.e., it was in their DNA, and simply part of their vision from the start. These participants were sometimes driven toward sustainable measures despite the lack of market demand. They and others were also driven toward initiatives through a variety of industry associations and certification bodies or regulations. For example, Oregon had many certification or assessment organizations and industry associations driving the region to work towards sustainability. Similarly, New Zealand was developing several. At the same

time, Italy had few sustainability-focused associations and to some participants this meant frustration. They actually desired associations who could offer standards. Without standards efforts were highly varied, inconsistent and in some cases non-existent. Finally, some participants fought against these sustainability pressures that sometimes came from larger, more powerful downstream customers such as distributors and retailers. Participants seemed to have been trying to reconcile these competing motivations through a variety of approaches. For example, some attempted to stimulate demand for sustainability initiatives and sustainably produced wine at the consumer as well as the immediate distribution channel partner levels by highlighting the product and or cost related benefits of sustainability. Alternatively, some participants would focus on the long-term cost reduction impact of some initiatives justifying the immediate investments in sustainability projects.

Figure 4.1 Dealing with competing motivations



This section examines the findings from a broader perspective. First we discuss how our findings seem to emerge in the way they do because of the orientations participants had. Second, we explain how the concepts discussed in the Findings section represent the places at which participants were on their respective sustainability journeys, also possibly explaining why some were more prone to collaborative sustainability than others. 5.1.

Theoretical implications: Sustainable SCM Meaning Depends on One’s Orientation

How sustainable supply chain management (SSCM) was viewed by our study participants depended on ones’ starting point. If one begins with a supply chain management (SCM) orientation one asks questions like “How does sustainability fit, get done, get improved?” This is a common orientation of SSCM scholars, managers with a SCM orientation, and us

initially as well. However, if one begins with a sustainability orientation one asks questions like “How does SCM fit into this view? Does it? Is it relevant? Does it help or actually hurt?” This wound up being the predominant orientation of our study participants but was only revealed due to our approach of stepping back to explore what sustainability meant in any form. It may be that being motivated to collaborate due to one’s own limited resources, as a resource based view (RBV) might suggest, could move a sustainability oriented enterprise more toward SSCM as it embraces a SCM orientation as well. Conversely, being forced to be environmentally sustainable may move a SCM oriented enterprise toward SSCM as it embraces a sustainability orientation as well through its collaboration with sustainabilityoriented firms. Our data suggests this in fact is starting to happen with a few wineries. But the business press also provides examples of how the power of one organization, such as Walmart in 2014, and the need to collaborate with them, can force an entire supply chain to move toward environmental sustainability but only when a leader personally drives it (Clancy, 2014). 5.2.

Managerial implications: Sustainability as a Journey

Participants reflected the journey aspect of environmental sustainability by the way they described initiatives and education unfolding over time. They used terms to describe where they “were in the past,” “where we are now,” and “where we want to go in the future”. They would use phrases such as “we’re not there yet,” “where we want to go next is…,” “we’re looking at xyz next…” In almost every case, participants described most of their efforts in terms of their own organization and their own operations. They were very self-focused. If they did not own the vineyard(s) from which they obtained grapes, that would be the first supply chain partner about whom they discussed sustainability initiatives and mainly in terms of vineyard management (e.g., fertilizers, pesticides, then maybe vine trimming and mowing operations). Next on their journey they would describe energy consumption related projects, then growers, distributors and so forth. The managerial implication is that for small to medium sized enterprises, leaders are likely to be highly self-focused initially. As such, supply chain partners wishing to collaborate on sustainability will need to be very convincing to these firms of the benefits of doing so. Similarly, these smaller firms may want to stop and contemplate the potential gains from collaboration if they lack resources for sustainability or want to have a greater impact, an approach that may not come naturally to them.



Environmental sustainability only sometimes means supply chain collaboration even for leaders who see themselves as highly sustainable in all three dimensions, i.e., environmental, social and economic. It can mean a journey that is personal leader driven, project-based, sometimes economically constrained, often self-focused while at other times supply chain focused to varying degrees. Managers have orientations such as a supply chain orientation (Min and Mentzer, 2007; Omar et al., 2012a; 2012b) or a sustainability orientation as depicted in its various forms in this study and this orientation will impact a manager’s perspective on what SSCM is. These interpretations suggest that providing normative advice on SSCM may be difficult if not inappropriate and ill-informed, at least for small to medium-sized firms in both a luxury and agricultural product category where they have little power to influence supply chain partners while at the same time have a perspective that they know best what “sustainability” means being so connected to the soil. Our competing motivations finding is consistent with Bansal’s (2003) finding that sometimes individual manager’s perceptions and motivations differ from the organization’s. In our case,

individual leader’s motivations sometimes differed from those held by regional associations or market forces, and as such, restrain their motivations to collaborate. 6.1.

Varying Characteristics of Leaders’ Perspectives

Pulling together the concepts that emerged from the data interpretations and described individually numerous times in the Findings section, we can depict individual leaders, and by extension of them as key informants, their enterprises, as possessing certain characteristics. As we have seen, some are skeptical about sustainability initiatives while others are skeptical about the need for collaboration. This skepticism likely impacts collaboration perspectives. Some have a very self-oriented view while others have a more collaborative orientation. Some see motivations to be sustainable as competing with those for survival and wonder about the role supply chain collaboration could play in either. In some cases, one of the motivations (i.e., for environmental sustainability or for financial sustainability) takes a higher priority over the other, also likely impacting collaboration perspectives. Finally, some participants seem to find alignment in trying to be sustainable, trying to survive financially and relying on collaborative relationships to achieve both in a true SSCM view. The journeying theme suggests that leaders can change their views over time, indicating that there is possibly a trajectory for what collaborative sustainability means for leaders that could be mapped. This may or may not be related to organizational size and scale. Our findings are consistent with recent research that explores the real impact of the theoretically ideal SSCM guidelines (Blome at al., 2014). Furthermore, Blome et al. (2014) concluded, like our study participants demonstrated, that firms should first work on their own internal sustainability practices first before working on collaboration. 6.2.

Limitations and Future Research

Findings may be limited to the theoretically driven participant sample and the industry within which the data were collected. Therefore, future research ought to continue to explore and (in)validate findings here. Specifically, do leaders in other industries also find competing motivations between trying to be environmentally sustainable and financially sustainable? In what ways to they resolve this conflict? Is supply chain collaboration sometimes discarded as a means toward facilitating environmental sustainability for the organization, financial sustainability or both in other industries? Are the findings here generalizable across the wine industry and other industries? Are these findings depictions of small to medium size enterprises within fragmented markets primarily? Are the characteristics such as skepticism, sustainability orientations and supply chain orientations important for understanding propensities to collaborate on sustainability and how do these perceptions change over time?

APPENDIX SAMPLE OVERVIEW (110) (descriptors of each provided upon request) Country United States Australia Italy New Zealand

Regions Napa/Sonoma Oregon/Washington Barossa Valley Margaret River Veneto Tuscany Marlborough

No. of interviews 20 18 11 19 18 13 11

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