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The Impact of Sustainability-Focused Strategies on Sourcing Decisions
Abstract
This book chapter examines the relationship between the pursuit of a sustainability-focused corporate strategy and the level of vertical integration observed in organizations. The study makes two contributions. First, it develops the theoretical foundation for linking sustainability strategies to organizational structure. Second, it empirically examines the vertical integration level of 144 sustainability-focused companies in 9 different industries. The results demonstrate that sustainability-focused companies in the healthcare industry and the industrials industry tend to have more vertically integrated organizational structures than their industry competitors that are not pursuing such a strategy. There was no significant difference in the vertical integration level of sustainability-focused versus non-sustainability-focused companies for the other seven industries studied. In the literature, the linkage between environmental strategies and vertical integration has not been thoroughly examined. These study results should be useful to researchers and managers who are interested in corporate sustainability behavior.
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