Agenda

Research seminar: Achieving Power Balance in Unsustainable Supply Chains

April, 7th, 2025, h. 2 PM
Room Volpato, Venice School of Management

By Daniel Ruzza, ESADE (Marie Curie Fellow)

Abstract:
Certain supply chains (SCs), especially in the agricultural commodities industries, are characterized by low mutual dependence between buyers and suppliers, weak formal and informal constraint mitigation mechanisms, limited SC visibility, and high geographic dispersion of suppliers. In such contexts, powerful buyers may exert dominance over the dependent suppliers irresponsibly, leading to significant sustainability issues. This study applies Resource Dependence Theory (RDT) to examine how to mitigate power imbalances in irresponsible SCs. We employ a two-stage methodology, using the cocoa SC as a representative case. In the first stage, we conducted a qualitative analysis based on interviews with three industry experts and 42 reports from 14 organizations. Insights from the qualitative phase inform the second stage, where we develop a causal loop diagram (CLD) of power dynamics and derive a system dynamics (SD) model to simulate different scenarios. Our findings contribute to RDT by demonstrating that power control is linked to managing four key resources: information, warehouse capacity, market concentration, and financial resources. The increased control over information, warehouse capacity, and market concentration by dependent suppliers helps reduce power asymmetries and curb irresponsible buyer dominance. Conversely, dependent suppliers' improved control over financial resources has a counterproductive effect in the long term, further exacerbating power asymmetries.