While the authors present interesting and useful points to introduce and define the concept of resilience, there is criticism that unfortunately theoretical justification is presented for very few of these studies (Ponomarov and Holcomb 2009). Similarly, there is a lack of theoretical justification pertaining to these studies addressing the importance of resilience for the sustainability of organizations and their supply chains. This study model is conceptualized based on the resource‐based view (RBV) and stakeholder theory. In supply chain literature, some studies (e.g. Ponomarov and Holcomb 2009; Blackhurst, Dunn, and Craighead 2011) use the RBV for explaining supply chain resilience (SCR) while de Brito, Carbone and Blanquart (2008), Carter and Rogers (2008), Carter and Easton (2011) and others use stakeholder theory to explain supply chain sustainability. The logic behind using the RBV and stakeholder theory in this research is presented below.
The resource‐based view (RBV) argues that firms achieve sustainable competitive advantages by deploying the bundle of resources and capabilities which are unique and internal to the firm (Wernerfelt 1984; Barney 1991; Grant 1991). Wernerfelt (1984) argues that “resource” means anything that can be considered as strength of the firm. It may be tangible such as financial reserves, plant and machinery, equipment, stocks of raw materials and other physical assets, or intangible such as brand names, in‐house knowledge of technology, skilled and trained human resources, managerial capabilities, organizational culture, social relationships, reputation, trade contracts, and effective and efficient processes, etc. (Wernerfelt 1984; Grant 1991; Barney 1991).
Furthermore, in an environment of uncertainty and disruptions, organizations can be successful in competition by effectively overcoming threats and uncertainties
(Wernerfelt 1984). Studies have shown that effective capabilities vary with market dynamism and the business environment (Eisenhardt and Martin 2000; Brush and Artz 1999). Researchers of the RBV advocate for including the ability of mitigating disruption and contingency as organizational resources and capabilities (Barney 2001; Priem and Butler 2001). Aragón‐Correa and Sharma (2003) in their “contingent resource‐based view (C‐RBV) of proactive corporate environmental strategy” argue that the organization’s proactive environmental attempt to mitigate environmental uncertainties and complexities is a valuable dynamic capability of a firm. They also argue that firms need to invest in achieving tangible and intangible resources for developing capabilities during uncertain business environments. Integrating the natural resource‐based view (N‐RBV) and stakeholder theory, Markley and Davis (2007) advocate the need for a capability to reduce the environmental uncertainties in the supply chain in order to reduce the negative environmental and social impact and to retain higher stakeholder value. This study presumes that this type of dynamic capability is needed for developing supply chain resilience (SCR) and sustainability to overcome these vulnerabilities. Therefore, the spirit of the RBV justifies the relationship between supply chain vulnerability (SCV) and SCR.
Stakeholder theory holds the idea that managers should make decisions considering the interest of and impact on all stakeholders. According to Freeman (1984), stakeholders are those who have an interest in the firm (either benefiting from or harmed by corporation actions). The task of management is to maintain a balance among the conflicting interests and claims of stakeholders (see Figure 2.3).
Figure 2.3: Contrasting interest of stakeholders Source: Donaldson and Preston (1995)
If a balance cannot be ensured, organizational sustainability will be questioned (Freeman 1984). Although there are conflicts of interest among the stakeholders with
the passage of time, the attention and interest of all stakeholders is converging towards the sustainability of the organization in terms of economic, social and environmental factors (Wheeler, Colbert, and Freeman 2003). Therefore, organizations try to maximize sustainability performance for a sustainable stakeholder relation (Perrini and Tencati, 2006). The stakeholders’ demand for sustainability has now surpassed the organizational boundary as they are increasingly concerned about the sustainability of whole supply chain (Seuring and Muller, 2008). Therefore, in order to develop a sustainable supply chain, organizations need to ensure economic, social and environmental expectations (Carter and Rogers, 2008) of the stakeholders throughout the SC network. Starkley and Madan (2001) focus on the strategic need of involving the stakeholders in the decision making process to ensure the relevance of the strategies and to meet the future challenges. According to Freeman (1984), with the passage of time organizations are experiencing different types of internal and external changes and challenges from different stakeholders. In such a situation organizations need the capacity to change of concept, strategy to respond to the environment in an inactive or reactive, proactive or interactive way for managing the situation (Freeman, 1984).
Consistant with this it can be argued that supply chains need resilient approach to
meet the systainability challenges and to satisfy the requirements of the stakeholders.
Therefore, t
hrough the lenses of the resource‐based view (RBV) and stakeholder theory, it can be deduced that organizations and their supply chains need resilience capability in the changing environment to achieve long‐term sustainability. 2.16 SUMMARY This chapter presented the relevant literature of this research. The literature related to supply chain vulnerability (SCV), supply chain resilience (SCR) and sustainability has been reviewed. The critical analysis in each section addressed the gaps in the existing literature. An initial research model that describes the dimensions of constructs as well as the relationship between the constructs related to SCV, SCR and sustainability has been developed. The selected constructs in the model have been justified based on the concepts from the resource‐based view (RBV) and stakeholder theory. This analysis has shown that the resilience capability of a supply chain to mitigate vulnerabilities can be explained by the concept of the RBV. Sustainability, an outcome construct of SCR, can be explained by the stakeholder theory. Founded on the concepts of the RBV and stakeholder theory, the research model: supply chain sustainability and resilience extends the outcome perspective of the RBV which is a unique contribution of this research.
CHAPTER 3
RESEARCH METHODOLOGY
3.1 INTRODUCTIONThe previous chapter (Chapter 2) has formulated a preliminary research model of supply chain sustainability and resilience based on an extensive literature review. The aim of this chapter is to further elaborate on the nature of the research model identified in the previous chapter with epistemological views and to validate the conceptual propositions as discussed in section 2.13 and 2.14. An enquiry into the previous literature reveals that research in the area of supply chain resilience and risk management deploys quantitative methods (e.g. Braunscheidel and Suresh 2009; Colicchia, Dallaria, and Melacini 2010; Tomlin 2006) as well as qualitative methods (e.g. Jüttner and Maklan 2011; Blos et al., 2009; Blackhurst et al. 2005; Peck 2005; and others). Conceptual studies (e.g. Erol, Sauser, and Mansouri 2010; Ponomarov and Holcomb 2009; Christopher and Lee 2004; Christopher and Peck 2004; Sheffi and Rice 2005; Hamel and Välikangas 2003) and case study research (e.g. Norrman 2004; Oke and Gopalakrishnan 2009; Tuncel and Alpan 2010) are also prevalent in supply chain risk management (SCRM) literature. There is little mixed method research, a combination of qualitative and quantitative methods, available in supply chain literature. However, Pettit, Croxton and Fiksel (2013) conducted a mixed method research to measure supply chain resilience (SCR) and asserted the importance of qualitative study before undertaking the quantitative approach in the context of SCR to validate the study findings which was consistent with Greene, Caracelli and Graham (1989). Moreover, resilience is context‐specific (Luthar and Cicchetti 2000) which generates the need for qualitative study to identify relevant capabilities corresponding to the context‐specific vulnerabilities (Pettit, Croxton, and Fiksel 2013). In a similar spirit, qualitative field study is essential before undertaking quantitative survey research on supply chain sustainability and resilience in the context of the apparel industry of Bangladesh. Therefore, a combination of qualitative and quantitative methods research was used in this study to contextualise the preliminary research and to verify the causal relationships between different factors in the research model. For its philosophical foundation, this study embraces a positivist research philosophy and adopts the survey research approach for data collection in the quantitative phase.
The overall research design for this study is elaborated in this chapter. In the first section, the research paradigm corresponding to this study is explained which addresses the explanation of the research methods adopted in this study and the justification of those methods. The next section illustrates the research process for the qualitative field study followed by the quantitative study. The final section presents a summary of the chapter.