Supply chain orientation (SCO) has the potential to contribute to supply chain sustainability performance. The literature, however, has not determined whether SCO has a direct effect on supply chain sustainability performance, nor has it differentiated between the effects of different categories of SCO on supply chain sustainability performance. A SEM analysis of data collected from supply chain managers determined that the SCO construct of supply chain collaboration and communication could directly affect both supply chain environmental and social sustainability performance. The SCO construct of internal supply chain coordination, however, affected only supply chain environmental sustainability performance and this effect was mediated by the organisation’s internal supply chain sustainability practices. A second path between supply chain collaboration and communication and supply chain environmental sustainability performance, which was mediated by internal supply chain sustainability practices was also identified. These findings indicate that different SCO constructs have different effect pathways in relation to supply chain sustainability performance. The identification of the different effects of different categories of SCO and the SCO – performance relationship has important implications for SCO research design.

Introduction

The contribution of manufacturing supply chain activities to global warming and the depletion of natural, non-renewable resources by distribution, transportation and material disposal has drawn attention to the importance of addressing the sustainability of operations in the supply chain (Ageron, Gunasekaran, & Spalanzani, 2012; Klassen & Vereecke, 2012; Wong, Lai, Shang, Lu, & Leung, 2012). This has resulted in an increased focus on supply chain sustainability in the extant literature (Hassini, Surti, & Searcy, 2012) and the development of the concept of Sustainable Supply Chain Management (SSCM). The globalisation of supply chains has transformed the concept of social sustainability, in particular. Typical social sustainability issues in supply chains include child labour, forced labour, poor health and safety, discrimination and government rules and regulations (Andersen & Skjoett-Larsen, 2009). Luzzini, Brandon-Jones, Brandon-Jones, and Spina (2015) also identified a relationship between collaborative practices and combined environmental and social sustainability. SSCM research is founded on supply chain management (SCM) concepts and views the supply chain as an integrated system (Mentzer et al., 2001a). It is also focused on sustainability performance and subsequently includes both strategic and implementation elements (Barratt, 2004). This supply chain performance perspective suggests a logical connection with the emergent SCM research domain called Supply Chain Orientation (SCO). SCO is based on the perspective that the organisation’s supply chain is an independent entity and that a focus on achieving outcomes within the supply chain will lead to greater performance (Esper & Defee, 2010; Hult, Ketchen, Adams, & Mena, 2008; Signori, Flint, & Golicic, 2015). It is different from supply chain integration which is based on the concept of vertical integration of the supply chain with the organisation (Stonebraker & Liao, 2004) and focuses on coordinating direct supply chain relationships for operational benefits (Flynn, Huo, & Zhao, 2010; Hefu, Weiling, Kwok Kee, & Zhongsheng, 2014). The literature has suggested that it is time to consider the effect of SCO on Supply Chain Sustainability Performance (SCSP) (Chen et al., 2017). The extant literature, however, has not defined the variables necessary to test this effect (Esper & Defee, 2010; Kirchoff, Omar, & Fugate, 2016a). The SCO and SSCM literatures requires research which identifies and tests the effect of SCO constructs on SCSP. Identifying this relationship would also connect the two previously unconnected research domains of SCO and the sustainability performance literature. Even more importantly, it would introduce a new decision-performance relationship to the literature – the relationship between SCO and supply chain performance. Until now, the extant literature has considered SCO to be an ‘organising’ influence and has focussed on its effect on internal organisational capabilities, such as sustainable practices, eg. Esper and Defee (2010); Lee and Nam (2016); Satten and Grummer-Strawn (2005). The decision-external performance outcome relationship is unanticipated in the literature, which has not considered whether SCO can have a direct and significant effect on an external performance outcome. Identifying this relationship would create the opportunity for future research to examine the effect of SCO on other supply chain performance and externally located performance outcomes, as well as the effect of potential moderating factors, such as technology turbulence. This would open a new and important avenue for SCO research.