Moving from Sustainable Supply Chain Design to Shared Value Chain Design: Lessons from Emerging Market Social Businesses

The purpose of the seminar is to highlight the opportunity that lies in connecting sustainable supply chain management and the shared value concept. It specifically centers on the conceptual and practical challenge how to integrate triple bottom line (TBL; including economic, social and environmental) sustainability into global supply chains. In supply chain design the classic economic perspective still dominates, although the idea of the TBL has become well accepted. In sustainable supply chain management (SSCM) research the economic and environmental dimensions have been studied however the social dimension has been suggested as an area for further research (Wu and Pagell, 2011). This research suggests that taking a value chain perspective during conception and design of the business model, integrating a broad stakeholder base and designing beyond the usual physical supply and/or demand chains will help to achieve TBL sustainability goals. Specifically, it builds on previous research that has suggested that value chains should create shared value (Porter and Kramer, 2006, 2011), and tackles the translation of shared value into concrete chain designs. The context of this research is the for-profit social business specifically working in emerging market communities that are facing severe economic, social and environmental constraints. Because of the importance of addressing the needs of a variety of stakeholders to focus simultaneously on all TBL dimensions, this research uses stakeholder and social identity theory as theoretical foundations. Case studies of social businesses in Haiti funded by the Germany-based investor company Yunus Social Business (YSB) are presented. Three basic value chain designs are extracted that focus on both TBL outputs and outcomes. For SSCM research this illustrates the importance of differentiating between sustainable outputs versus outcomes, as well as designing both primary and support chains (recently forwarded as a theory of supply chain by Carter, Rogers and Choi, 2015), and extending the approach to shared value chain design. Practically speaking, it is expected that by 2020 about 500 billion USD will be allocated to impact investing initiatives (World Economic Forum, 2013) making the diffusion of knowledge regarding these three basic value chain designs important to facilitate these investing initiatives.