Inside the world of stepsiblings: Linking global production networks to sustainable supply chain management

Yawar, Sadaat Ali; Seuring, Stefan Article — Published Version Inside the world of stepsiblings: Linking global production networks to sustainable supply chain management Business Strategy and the Environment Provided in Cooperation with: John Wiley & Sons Suggested Citation: Yawar, Sadaat Ali; Seuring, Stefan (2023) : Inside the world of stepsiblings: Linking global production networks to sustainable supply chain management, Business Strategy and the Environment, ISSN 1099-0836, Wiley, Hoboken, NJ, Vol. 33, Iss. 2, pp. 788-805, https://doi.org/10.1002/bse.3516 This Version is available at: https://hdl.handle.net/10419/294000 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by-nc/4.0/ RESEARCH ARTICLE Inside the world of stepsiblings: Linking global production networks to sustainable supply chain management Sadaat Ali Yawar 1 | Stefan Seuring 2 1 Newcastle Business School, Department of Marketing, Operations and Systems, Northumbria University, City Campus East, Newcastle upon Tyne, UK 2 Chair of Supply Chain Management, Faculty of Business and Economics, University of Kassel, Kassel, Germany Correspondence Stefan Seuring, Chair of Supply Chain Management, Faculty of Business and Economics, University of Kassel, Kleine Rosenstr. 1–3, 34117 Kassel, Germany Email: [email protected] Abstract The theoretical foundation of (sustainable) supply chain management (SSCM) is an issue of frequent debate. Integrating it with the Global Production Networks (GPN), which is a kind of stepsibling, can help expanding the theoretical foundations of SSCM. The purpose of this paper is to explore how the GPN approach links to SSCM in analysing and explaining interorganizational sustainability. This paper is conceptual. Five central GPN constructs are identified: (1) the emerging supply chain structures and sustainability; (2) the importance and relevance of embeddedness and governance; (3) power dynamics; (4) the stakeholder approach; (5) the sustainability dimensions and the implementation strategies. They are explained in detail and then contrasted with how the related topics are dealt within SSCM. The paper provides insights into the ongoing discussions in GPN and integrates the political economy debate into SSCM research. Findings reveal that GPN offers an alternative and yet complementary explanation about network and cluster formation in supply chains, the effect of embeddedness (geopolitical, social, and cultural) power relationships and governance mechanisms and their role in implementing ecological and social sustainability across the supply chains. The comparison of these complementary disciplines allows for the exchange of ideas between the SSCM and GPN approaches, thereby providing an enriched understanding for managing supply chain sustainability. The selective comparison of the SSCM and GPN constructs is the first of its kind and should trigger further research at this intersection. Five propositions capture core directions for future research. KEYWORDS global production networks, governance, stakeholder management, sustainable supply chain management, theory development Abbreviations: AI, Artificial intelligence; GPN, Global production networks; OBOR, One-belt-one-road initiative; SCM, Supply chain management; SSCM, Sustainable supply chain management; TBL, Triple bottom line; WCED, World commission on world development. Received: 17 November 2022 Revised: 14 May 2023 Accepted: 10 July 2023 DOI: 10.1002/bse.3516 This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes. © 2023 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd. 788 Bus Strat Env. 2024;33:788–805. wileyonlinelibrary.com/journal/bse 1|INTRODUCTION Individuals, organizations, and society constantly interact with the natural environment and address social obligations. Such relationships determine local and global sustainability endeavours. Business organizations due to the abundant resources at their disposal are an integral part of society and therefore play a particularly important role in addressing sustainability challenges. Further, firms increasingly operate in multiple settings, that is, under different political, social, and economic factors that extend beyond their specific geographical limits (Charpin et al., 2020). Besides, various legislative and cultural frameworks at the local and global levels influence the adoption of sustainability strategies in supply chains (Davarzani et al., 2015; Hendry et al., 2019; Muller et al., 2012). Political measures, such as stringent legal regulations for sustainability standards (Silvestre et al., 2020), have placed more responsibility on firms to adopt initiatives and strategies that enhance sustainability in their supply chains. Similarly, structural changes in global and regional trade economy as a part of new global political economy paradigm also influence the managing of sustainability in global supply chains (MacCarthy et al., 2016). Wieland (2021) argues that revisiting and contextualizing of political economic scenarios could serve as the starting point in understanding the reconfiguration of supply chain processes and structures. However, despite the growing importance of putting global socio-political economy debates at the forefront, it is interesting to note that many SSCM practitioners and researchers have often applied the triple-bottom-line (TBL) approach at the firm level to understand the essence of sustainable supply chain functions (Miemczyk & Luzzini, 2019). The often-conceived TBL approach does not provide detailed explanations on the management of sustainability in supply chains when the firms are operating in different cultural and territorial settings with diverse legal frameworks and dealing with multiple stakeholders (e.g., Matos et al., 2021). A reductionist view of the TBL is often adopted by focusing more on the “performance aspects” while seldom elaborating the underlying political, social, and economic factors (Jajja et al., 2019; Miemczyk & Luzzini, 2019) even though organizations and their supply chains are typically embedded in their global socio-political environments (Charpin et al., 2020; Wieland 2021). Similar arguments are made by Silva et al. (2022) that inclusion of elements related to governance and institutional contexts are important in a better understanding of managing sustainability in supply chains. Previous literature on sustainability discusses political dimension as an important element in managing an interactive relationship between the other three dimensions of sustainability (Wieland, 2021). For example, the global socio-political environment could be the determinant of sustainability governance that might influence the formulation and regulation of sustainability standards, ratification, and adherence to the international protocols on climate change and economic empowerment (Van Zeijl-Rozema et al., 2008). While these assertions are made in the sustainability literature, very little explanation within the SSCM literature is provided on how these factors influence the reconfiguration and therefore the organization and functioning of the sustainable supply chains. One way of explaining and enriching SSCM research and broaden its understanding is to apply perspectives from disciplines that engage in global political discussions and simultaneously have an emphasis on sustainability (MacCarthy et al., 2016). Global Production Networks (GPN) as a discipline emphasizes that geo-political and socio-economic scenarios are the key determinants of sustainability across the supply chains (Henderson et al., 2002). Political economy, which is mostly an outcome of cultural and historical norms, determines the legal framework for supply chain operations (Thürer et al., 2019). For example, it focuses on the role of nation states and international governing bodies and their effect on the adoption of sustainable strategies by the firms. Similarly, GPN also realizes cultural embeddedness and wider stakeholder engagement as essential elements explaining the sustainability in a wider network context (Coe et al., 2008a,2008b). Based on the above observations, we take the theoretical development on GPNs as a base to explain the interrelations between economic (firms) and noneconomic actors (other stakeholders) along the supply chains by considering the political, economic, and social factors. GPN emphasizes the political economy debates and has strong links to the sustainability discussion and mainly rests in the social development approach central to the original definitions given in the Brundtland report (1987) submitted to the World Commission on Environment and Development (WCED). As GPN looks at much the same issues as SSCM, they might be called stepsiblings, explaining similar phenomena from a different perspective. The metaphor of stepsibling reflects the level of proximity and complementarities as well as the distinctive nature of each discipline. Further, both GPN and SSCM disciplines exhibit traits similar to that of stepsiblings where each has its own unique identity and yet have different emphasis. In addition to the arguments presented above, there have been multiple calls within the SSCM discipline to apply theories originating from different disciplines, including organizational sciences, political economy, and sociology, to enrich the critical thinking and theoretical development of SSCM (Boons et al., 2012; Mathews et al., 2016). In response to these calls, we capture the underlying aspects of global political economy by building on the GPN approach, to broaden the theoretical basis of SSCM and contribute to its understanding by engaging in transdisciplinary research (Touboulic & Walker, 2015; Wieland, 2021). In doing so, we will answer the following research question: How do GPN (social, political, and economic) factors contribute to a better understanding of Sustainable Supply Chain Management (SSCM)? The main contribution of this paper is that it brings the global political economy discussions from GPN into SSCM and provides insights into theoretical and practical implications of using interdisciplinary discussions to enrich the field of SSCM. The article is conceptual and derives its arguments from an in-depth reading of the SSCM and GPN literature. Our article begins with an overview of the relevant concepts used in both the SSCM and GPN literature. Next, we introduce the theoretical approaches used by SSCM and GPN YAWAR and SEURING 789 scholars. The GPN and SSCM literature are subsequently elaborated, and it is followed by comparing them, which will form the core of the findings and discussion. Before we conclude, we will suggest some propositions for the future SSCM research. 2|LINKING SSCM TO GPNS As a starting point, we provide an overview of the disciplines and outline the present understanding of sustainability issues. After that, we discuss the existing literature linking GPN and SSCM and provide insights into the ongoing sustainability debate. SSCM is about managing all the direct and indirect links between the organizations meaning that different functional areas within and across the organizations and their respective stakeholders form network-like structures enabling the efficient flow of information, judicious use of materials, resources, and finances and creating better societies thereby contributing to sustainable development. It is critical to understand that networks are typically embedded and operate in a complex global socio-political and economic environment. Therefore, the governance of network structures requires an understanding of the global political economy scenarios as they provide a latent explanation about managing sustainability across the supply chains. For example, sourcing strategies are influenced by labour and environmental laws originating in different geographical regions. Similarly, supply chain scenarios, especially the realignment and adjustment of suppliers and focal firms to form supply networks, are impacted by the political environments where nation states are working around trade policies and agreements that would impact the functioning of the supply chains. The emergence of new logistical corridors in the form of one-belt one-road initiative (OBOR); operationalization of silk route and the increased protectionist policies, emergence of artificial intelligence (AI) revolution that are driven by global political economic factors are all expected to change the ways supply chains will adopt and implement sustainability (Boons et al., 2012; Seuring, Brandenburg, et al., 2022; Thürer et al., 2019). A closer observation at the SSCM literature indicates that some aspects central to sustainability are discussed while other aspects such as global political scenarios receive little attention. Evidence of this can further be shown by comparing the GPN approach to SSCM. The GPN approach, which has its origin in the academic disciplines of global political economy and economic geography, offers a broad understanding of sustainability in production-related contexts (Coe et al., 2008a,2008b). The GPN approach has extended the literature on global commodity and value chains, which was previously dominated by intrafirm governance structures (Gereffi & Lee, 2012; Yeung & Coe, 2014). According to Yeung and Coe (2014, p. 4), GPNs are about interconnections between economic and noneconomic actors coordinated by a global lead firm to produce goods and services across multiple geographic locations for worldwide markets. Elaborating further, they argue that the broader inclusion of stakeholders in GPNs explains the development of countries and even regions. This explanation overlaps with the key elements of SSCM, as both disciplines emphasize the relationships between interorganizational actors, focus on focal firms, and pay particular attention to stakeholders' concerns regarding sustainability. However, the extant GPN literature emphasizes the role of governance structures, as well as spatial, social, and cultural embeddedness, and provides detailed insights into the role of new supply chain entities, such as networks and clusters, which are linked to the sustainability debate (Coe et al., 2008a,2008b; Coe & Hess, 2013). Moreover, the GPN approach provides detailed explanations of the power relationships between the supply chain members in networks resulting from stakeholder interactions (Coe et al., 2004). This explains the formation and functioning of supply chain and network structures that are focused on the role of businesses as agents of local and global developmental (Bush et al., 2015; Coe et al., 2004). Thus, GPN is about managing complex interactions and systems involving broader stakeholders to produce and distribute goods while aiming for regional and local development that includes activities such as improving the local livelihoods, infrastructure development, and creating jobs, whereas SSCM is also linked to minimizing the adverse environmental and social impacts while improving the economic performance of diverse stakeholders across the supply chains. Therefore, while SSCM and GPN adopt different routes towards sustainability, they also exhibit complementarity to a great extent allowing the integration of more classical aspects discussed in supply chains to the changing global socio-political and economic factors. 2.1 |Identifying core GPN constructs As a starting point, a vast number of publications that focused on theory development aspects in SSCM were scanned thoroughly to identify the major research areas that required attention from the researchers. Some of the papers that were scanned in the process of identification are listed in Table 1, while this can offer only a selection of related publications and much of this is based on conceptual reasoning by working with both the concepts. The size of the body of literature on the single topics contrasts with the overlap among the field. Searching “Web of Science”and “Scopus,”we used “sustainable supply chain”and “global production network”as keywords that resulted in the identification of only one paper at the intersection (Boström et al., 2015). To the best of our knowledge, we are not aware of a paper comparing SSCM and GPN concepts to each other, justifying the approach taken here. It is important to note that we do not adopt a systematic literature review and therefore analysis presented is based on the review of selected papers in the field of SSCM, which could be considered as a limitation of this paper. While undertaking the review, we were deeply involved with the process of disciplined imagination, which is one of the accepted methods of theory construction in the business and organization management fields (e.g., Cornelissen, 2006; Weick, 1989). Disciplined imagination is a combination of deductive reasoning based on literature reading and inductive reasoning that is rooted in intuitive thinking. Such thorough reading and logical 790 YAWAR and SEURING TABLE 1 Details and definitions of the key criteria. Criterion Explanation Key concepts Definition References from SSCM References from GPN The emerging supply chain structures and sustainability Details the role supply chain structures like clusters and networks and their impact on sustainability Networks and clusters and other emerging supply chain structures Networks: structures with multiple links wherein numerous exchanges and the circular flow of materials among different internal and external stakeholders in the supply chains take place Clusters: geographically concentrated and highly interconnected setup of firms belonging to a particular sector or group of industries that achieve joint advantages (Barrientos et al., 2011; DeWitt et al., 2006; Gereffi & Lee, 2016) Young and Kielkiewicz-Young (2001), Alvarez et al. (2010), Miemczyk et al. (2012), Carter et al. (2015), Bush et al. (2015), Wilhelm et al. (2016) Sauer and Seuring (2018), Bellamy et al. (2020), Saunders et al. (2019), Sarkis et al. (2019) Coe et al. (2004), Nadvi (2008), Rutherford and Holmes (2008), Henderson and Nadvi (2011), Barrientos (2013), Coe and Hess (2013), Azmeh and Nadvi (2013) Boström et al. (2015), Bush et al. (2015) The importance and relevance of embeddedness and governance Emphasizes the importance of considering different forms of embeddedness in dealing with sustainability issues. Interorganizational governance structures are mostly emphasized. Societal (cultural and social), territorial and network embeddedness, governance within and among the supply chains Embeddedness: is the behaviour or functioning of firms, depending on the regulatory frameworks, cultural settings, and sociopolitical conditions under which they operate (Tate et al., 2013) Governance: refer to mechanisms that result from the interactions within and between firms and institutions (Humphrey & Schmitz, 2001; Gereffi et al., 2005; Gimenez & Sierra, 2013) Alvarez et al. (2010), Fabbe- Costes et al. (2011), Tate et al. (2013), Gimenez and Tachizawa (2012), Barrientos (2013), Wu and Pullman (2015), Touboulic et al. (2014), Xia et al. (2019), Zhou et al. (2020), Charpin et al. (2020), Grabs and Carodenuto (2021) Hess and Coe (2006), Coe et al. (2004), Sturgeon et al. (2008), Kelly (2013), Kelly (2013), Gereffi et al. (2005), Boons et al. (2012), Coe et al. (2008a,2008b), Coe and Hess (2013), Vermeulen (2015), Boström et al. (2015); Beyers and Heinrichs (2020). Power dynamics Discusses the relationships between and among firms and their external and internal stakeholders Power relationships between and among the supply chains Power dynamics: are the various forms and level of power between firms and their stakeholders that influence sustainability phenomenon (Cox, 1999; Cox et al., 2004; Hoejmose et al., 2013; Kähkönen, 2014) Maloni and Benton (2000); Cox et al. (2004), Alvarez et al. (2010), Touboulic et al. (2014), Touboulic and Walker (2015), Meqdadi et al. (2017,2019), McLoughln and Meehan (2021) Gereffi et al. (2001), Henderson et al. (2002), Hess and Yeung (2006), Barrientos and Smith (2007), Coe et al. (2008a,2008b), Boons et al. (2012), Barrientos (2013), Coe and Hess (2013), Boström et al. (2015). (Continues) YAWAR and SEURING 791 reasoning allow the researchers to select the relevant concepts and draw related constructs from the respective disciplines to propose creative and innovative theoretical frameworks and concepts. We make implicit assumptions about managing a complex phenomenon such as sustainability in a supply chain context, and drawing from multiple disciplines, we adopted what Jaakkola (2020) calls theory synthesis approach, which brings conceptual integration across multiple literature streams and suggests propositions that can be tested in further studies. Below is a brief explanation on the selection of the constructs that is grounded in the literature intersecting GPN and SSCM. Boström et al. (2015) point to the relevance of (1) supply chain structures and (2) the interrelation with governance and (3) power in chains and networks. This is further linked to (4) the stakeholder approach and (5) implementation issues, thereby already providing reference of all five core constructs used later for the analysis. All the criteria are much used in related GPN and SSCM literature, such as the papers listed in Table 1, and this is also a general observation across both the disciplines (Seuring Aman, et al., 2022). For example, the stakeholder approach and implementation of sustainability strategies emerged more commonly in SSCM articles (Meixell & Luoma, 2015; Siems & Seuring, 2021; Siems et al., 2023), whereas the emergence of supply chain structures and power dynamics emerged from traditional SCM literature (Cox, 1999; McLoughln & Meehan, 2021). Some articles such as Thürer et al. (2019), New (1997), and Charpin et al. (2020) highlight the importance of economic and socio-political contexts while discussing sustainability in supply chains, while this is much more pronounced and evident on the GPN side (Bush et al., 2015). Similarly, Gereffi and Lee (2012,2016) explain governance and upgrading scenarios in global supply chains by linking it to GPN, where Beyers and Heinrichs (2020) link this to the SSCM side. They point to different modes of governance and related implementation of respective structures in supply chains. The stakeholder context is mentioned in both approaches, so some relevant literature is available from both disciplines (see Table 1). Siems et al. (2023) provide a review at the SSCM intersection, pointing to different roles stakeholders can take. Similar observations are made in GPN literature where broader stakeholder involvement, network formation, power dynamics within the value chain, and governance are predominantly mentioned to deal with the local and regional developments thereby bringing the social sustainability concept that includes the regional and local development distinctly into the debate (Chung Yeung, 2009; Horner, 2017; Neilson et al., 2014). A brief explanation and definition of the individual criterion is provided in Table 1, where the extraction of the constructs and key references is also listed. Each criterion and its relevance to SSCM and GPN will be explained in subsequent paragraphs. It is worth mentioning that the criteria are discriminant, each explaining a different concept. However, it should be emphasized that these are not isolated constructs; instead, they are interrelated and help to paint a sufficiently holistic picture of the interorganizational sustainability debate: 1. The emerging supply chain structures and sustainability, 2. The importance and relevance of embeddedness and governance, TABLE 1 (Continued) Criterion Explanation Key concepts Definition References from SSCM References from GPN The stakeholder approach Argues for the inclusion of broader stakeholders to manage sustainability issues across supply chains Collaborative approaches Stakeholder approach: engagement of wider stakeholders and adoption of collaborative approaches to managing sustainability in supply chains (Meixell & Luoma, 2015) Alvarez et al. (2010), Meixell and Luoma (2015), Rodriguez et al., 2016, Silvestre (2015); Andersson et al. (2022), Fontana and Pisalyaput (2022), Norris et al. (2021) Coe et al. (2004), Sturgeon et al. (2008), Nadvi (2008), Coe et al. (2008a), Stewart et al. (2009), Gereffi and Lee (2012). The sustainability dimensions and the implementation strategies Treatment of sustainability dimension and the different strategic orientations to implement sustainability Three dimensions of sustainability (economic, environmental, and social) The implementation of sustainability strategies: the treatment of dimensions related to sustainability and the corresponding corporate strategies that firms adopt to implement them in supply chains (Seuring & Müller, 2008) Pagell and Wu (2009), Gualandris et al. (2015), Vermeulen (2015), Yawar and Seuring (2018). Coe et al. (2004), Coe et al. (2004), Sturgeon et al. (2008) Coe and Hess (2013), Yeung and Coe (2014), Azmeh and Nadvi (2013), Boström et al., 2015; Beyers and Heinrichs (2020) 792 YAWAR and SEURING 3. Power dynamics, 4. The stakeholder approach, 5. The sustainability dimensions and the implementation strategies. Based on the discussion provided above, the position of five GPN constructs in SSCM setting is illustrated in Figure 1. This figure reflects the disciplined imagination approach adopted in this paper that allowed us to bring the core constructs of complementary disciplines such as SSCM and GPN into one conceptual framework. The figure shows the positioning of GPN within an SSCM setting indicating that discussions based on global political economy in GPN can provide a broader understanding of managing sustainability in supply chains. 3|LINKING THE SSCM AND GPN CONSTRUCTS In the following paragraphs, we present the discussions occurring in the respective disciplines and show the possible areas in GPN that can be integrated into SSCM research. While doing so, we continuously show that below chosen constructs from SSCM and GPN exhibit the characteristics of “stepsiblings”indicating a strong resemblance to each other while also expressing their individual dominant and recessive traits like the principles of genetics where one trait in a family member could show dominance whereas the same trait can be recessive and can get expressed much later in other members. 3.1 |The emerging supply chain structures and sustainability 3.1.1 | Explanation The composition of supply chains (i.e., the number of tiers) and the links between them, which include horizontal and vertical information and product flows, resulting in a chain or network structure ultimately determines organizational practices and their impact on operational performance (Bush et al., 2015; Vurro et al., 2009). The emergence of new structures, such as clusters and networks, has a significant impact on the sustainability initiatives that are adopted along the supply chain (Miemczyk et al., 2012). Supply chain structures were taken as the starting point of the discussion, as they are typically composed of actors who are individually and collectively responsible for the implementation of sustainability strategies (Carter et al., 2015; Fabbe-Costes et al., 2011). 3.1.2 | The SSCM approach SSCM has traditionally taken the dyad or triad of organizations as the unit of analysis (McLoughln & Meehan, 2021; Miemczyk et al., 2012). However, little attention has been paid to the end-to-end supply chain network, although it represents the most comprehensive understanding of a global supply chain (Bush et al., 2015; McLoughln & Meehan, 2021; Sauer & Seuring, 2018). A network perspective is particularly relevant, as it facilitates understanding of the behaviours of the various actors that constitute the supply chain (Alvarez et al., 2010). Early definitions of SCM and SSCM have incorporated the network as an integral component (Miemczyk et al., 2012); however, SSCM has typically avoided analysis of the broader network (Carter et al., 2015). Vurro et al. (2009) emphasize the influence of dominant focal firms on supplier networks in determining the models of supply chain governance, which, in turn, shape sustainable value chains. However, a broader network perspective, such as in a GPN that includes the stakeholders of an ultimate network, such as the state and its related entities, nongovernmental organizations (NGOs), and civil society actors, is rarely taken in SSCM studies, with Rodriguez et al. (2016) being an example that puts them to the centre of the analysis. In particular, the interdependencies and interactions between the internal and external networks that shape the sustainability strategies of firms are seldom investigated. Among the exceptions are the studies by Young and Kielkiewicz- Young (2001) and Alvarez et al. (2010), who explicitly take networks as the unit of analysis. Their analyses revealed that supplier networks are essential constituents of SSCM. Alvarez et al. (2010) emphasize the vital role of external stakeholders in understanding the governance mechanisms that drive sustainability management within and across networks. Furthermore, they noted that firms increasingly target environmental issues, rarely address societal or ethical issues in their networks, and closely work with their suppliers by sharing knowledge and adopting other collaborative approaches to improve sustainability and competitiveness across the supply chain. More recently, Meqdadi et al. (2017,2019), Saunders et al. (2019), McLoughln and Meehan (2021), and Andersson et al. (2022) have also FIGURE 1 Illustrating the position of the five GPN constructs in a supply chain setting. YAWAR and SEURING 793 used the supplier network as the unit of analysis when examining the diffusion of sustainability practices across the buyer–supplier networks. However, these studies report the viewpoint of focal firms and their extended suppliers and exclude other actors in the networks that influence sustainability. Similarly, the emergence of industrial clusters and their impact on sustainability have often been neglected in SSCM literature. DeWitt et al. (2006) argue that the interconnectedness of clusters in a particular sector or group improve the possibility of achieving joint advantages. These advantages include an improved flow of information and products, as well as an increased level of coordination and dependence and the diffusion of innovation among firms. Therefore, focal firms in clusters can expect performance outcomes in the form of reduced transaction costs and improved economic outcomes (DeWitt et al., 2006). These studies explain the impact of clusters on the focal firm, but they do not focus on the behaviour of the individual firm or the suppliers within the clusters. Therefore, in line with the call for a broader stakeholder perspective in Pagell and Wu's (2009) reconceptualization of the supply chain, the use of networks and industrial clusters as the units of analysis in SSCM research would help to extend our knowledge of sustainability in supply chains (Miemczyk et al., 2012). 3.1.3 | The GPN approach Comparatively, GPN is an alternative and yet complementary approach for two reasons: First, it includes different interest groups in the analysis. There is emphasis on the role of workers in GPN, as it aims to improve their (social) well-being (Barrientos, 2013; Coe & Hess, 2013). Second, GPN explicitly analyses the role of networks of companies and industrial clusters. The network perspective in GPN includes firms, workers or consumers, government agencies, NGOs, unions, and other external stakeholders that seek to shape organizational practices and clusters; some of these entities are rather only addressed recently in traditional SSCM research (see e.g. Rodriguez et al., 2016). The argument for choosing a network viewpoint in the sustainability debate is that it offers a more comprehensive understanding of the nature and extent of interorganizational relationships (Coe et al., 2004). The GPN approach argues that external stakeholders, such as states and their governance mechanisms at the local and global levels, are important drivers of network configuration. Glasman (2011) argues that government regulations and contracting between business organizations are influenced by prevailing geopolitical scenarios that in turn determine the accessibility of firms to other local and global firms resulting in the formation of supply networks. It is evident in the massive global sourcing strategies taken up with the firms in Asia and Far East economies and the onset of new global legislations regulating environmental and social issues across the supply chains. Similarly, the inclusion of political factors such as natural calamities, wars, and the resulting new global strategic alliances and its impact on the supply networks is more pronounced in GPN literature (Chung Yeung, 2009; Neilson et al., 2014). Such explanations provide a nuanced view of the role of external stakeholders by considering the global political economy that is recently starting to emerge (Gold & Schleper, 2017; Thürer et al., 2019; Wieland, 2021)in SSCM literature. Similarly, most studies that investigate the impact of clusters on supply chains typically adopt a GPN approach (Azmeh & Nadvi, 2013; Henderson & Nadvi, 2011; Nadvi, 2008). This way, the GPN literature provides a more detailed explanation of the mechanisms underlying the formation of clusters (Rutherford & Holmes, 2008). A detailed description of cluster formation and its impact on the economic and social development of the respective regions can be obtained, for example, in the study of Bair and Gereffi (2001). These studies argue that various external political and economic factors influence the formation of industrial clusters. They point out that product type and market volatility contribute to the formation of clusters and networks and that this, in turn, drives the agglomeration and dispersion of suppliers. This dispersion and agglomeration then help to diffuse and transfer knowledge across the networks and clusters. The knowledge diffusion creates linkages among the firms and across the industries, which improves the coordination in production networks. Such coordination and linkages improve the collective innovation capabilities that are a source of competition ultimately contributing to the local and regional development (Bair & Gereffi, 2001; Coe et al., 2004; Humphrey & Schmitz, 2001). 3.1.4 | Summary While the SSCM literature would argue that networks and clusters are a reality that practitioners must deal with, researchers have often treated them as being outside the scope of the SSCM discipline. GPN can provide SSCM researchers with complementary explanation about the formation and functioning of networks and clusters, and it can relate this knowledge to the underlying socioeconomic and political debate, which can help to broaden the prevailing view in SSCM. Because global supply chains face complex challenges concerning the management of sustainability, research in this area should adopt a broader perspective that includes network structures and industrial clusters (Azmeh & Nadvi, 2013). Based on the above discussion, we propose the following: P1. The influences of external stakeholders on network and cluster formation in GPN asks for the integration of the economic and social development in SSCM research. 3.2 |The importance and relevance of embeddedness and governance 3.2.1 | Explanation Different types of embeddedness determine the composition and operation of supply chains and their impacts on sustainability management (Tate et al., 2013). Embeddedness within the SSCM context is 794 YAWAR and SEURING about managing sustainability considering the external factors such as cultural norms, institutional mechanisms globally and locally which are driven by governance mechanisms between the firms and organizations. Similarly, in GPN, managing sustainability is also about managing relationships between the various stakeholders and the context within which they are embedded. These contextual factors and the resulting relationships are again a result of governance mechanisms between organizations. Therefore, both disciplines show that embeddedness is about managing relationships and interdependencies between diverse stakeholders that are influenced by governance mechanisms thereby expressing the stepsibling phenomenon. Hess and Coe (2006) argue that various forms of embeddedness determine the effective functioning of product and service supply chains, thereby resulting in regional and global development. They place particular emphasis on territorial and network embeddedness as the main components of the implementation of sustainable supply chain strategies. Similarly, structural embeddedness plays a vital role in knowledge sharing among networks and has a positive influence on performance in the supply chain (Nair et al., 2018; Tate et al., 2013). Despite the significance attached to different forms of embeddedness, SSCM researchers are reluctant to employ embeddedness as a unit of analysis. Governance mechanisms are dependent on the existing power relationships between the buyers and suppliers in a supply chain (Alvarez et al., 2010; Grabs & Carodenuto, 2021; Matos et al., 2021). In one of the few papers from GPN-related authors to appear in an SCM journal, Gereffi and Lee (2012) argue for governance as a fundamental driver of sustainability in supply chains. They call for closer collaboration between supply chain and GPN researchers and emphasize that the relationship between governance structures and social, ecological, and economic upgrading (i.e., sustainability performance) should be thoroughly investigated. They further distinguish different forms of governance and point to the overlap and intersection with SSCM, but they refrain from integrating the broader set of constructs that the GPN approach has to offer. Therefore, governance structures and embeddedness are core criteria that are relevant to this study. 3.2.2 | The SSCM approach SSCM and GPN research emphasizes the interorganizational relationships existing among the actors, and both disciplines stress intrafirm and interfirm coordination (Norris et al., 2021). In SSCM, coordination is typically realized via extended information flows among the actors, whereas GPN focuses on implicit factors, such as power structures, cultural values, socio-political structures, and embeddedness (spatial, social, and cultural), related to enhanced sustainability (Jajja et al., 2019). The focus on various forms of embeddedness and their explicit relationship to sustainability is mainly missing from the SSCM literature. Recently, Nair et al. (2018) emphasized the role of structural embeddedness in the buyer–supplier relationships in network structures. However, such discussions are standalone examples and are not replicated in SSCM, in which other forms of embeddedness, such as societal, social, and cultural, play an important role in SSCM (see, e.g., Yawar & Seuring, 2018). Tate et al. (2013) conceptualize the diffusion of environmental business practices in networks using structural embeddedness. Both studies are contextual and focus specifically on the environmental aspect of sustainability. The influence of cultural embeddedness in SSCM has started to emerge (Gimenez & Tachizawa, 2012; Muller et al., 2012;Wu& Pullman, 2015). Even though these studies show the importance of culture in shaping supply chain strategies, it is still far from being used as a unit of analysis in SSCM research (see, e.g., Jajja et al., 2019). The role of embeddedness, which refers to the influence of external stakeholders and local factors on supply chain governance, is rarely discussed in the existing SSCM literature (Barrientos, 2013; Muller et al., 2012). Supply chain governance is mostly explained in a buyer– supplier context using a transaction cost perspective (Touboulic & Walker, 2015) indicating a limited approach taken by the SSCM literature in explaining the governing structures beyond the dyads and supply chains. 3.2.3 | The GPN approach The GPN approach is mainly concerned with three types of embeddedness (Hess & Coe, 2006): societal, network, and territorial. These three forms of embeddedness are important for global and local supply chains, as they influence firms' adoption of sustainability strategies. Similarly, the GPN approach offers insights into the firms' reconceptualization options for their supply chains to address sustainability issues. The strategies that are used to manage sustainability in local and global supply chains are not universal and depend on several local and external factors. These factors range from local and national cultures to the government policies that determine supply chain strategies. The embeddedness debate in GPN is shaped by the economic, social, and political arrangement within an environment (Hess & Coe, 2006). The discussions on embeddedness in GPN present a granular analysis of the role of states, institutions, firms, and other related stakeholders regarding wider developmental aspects, such as the local and regional development of suppliers and their communities (Hess & Coe, 2006). It is interesting to note that the view from the focal firm perspective dominates embeddedness in the SSCM literature, whereas in GPN, it is precisely the societal embeddedness and local cultures that are perceived as the drivers of supply chain performance. 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