Sustainable Innovation

CSR Orientation of Suppliers is among the key drivers for Innovation

In December 2010, Mirjam Kibbeling PHD presented the findings of her thesis on ‘Creating Vlaue in Supply Chains’ at the Research School for Operations Management and Logistics in Eindhoven in The Netherlands.

New publication of Mirjam Kibbeling PHD.

For long, purchase has been equivalent with cost reduction. Nowadays suppliers are asked to contribute much more : from developing new customer value propositions to reducing carbon emissions. It is illustrative that not less than 50 to 80% of companies activities are currently outsourced to suppliers.

Mirjam Kibbeling dissertation deals what the key factors of the suppliers contribution to a firm’s value creation processes, or in other words : its innovativeness.

Kibbeling analysed the relationships between :

  • supplier : innovativeness, market orientation, and CSR orientation 
  • target company :  innovation competences, CSR reputation, customer satisfaction and financial performance.

88 matching supply chain sets (supplier-firm-customer) were analysed based The Netherlands and Belgium. Surveys were send out to analyse the mentioned factors.

Kibbelings key findings were :

1. Suppliers innovativeness is a key driver of the focal firm’s innovativeness and companies financial performance : Hence a crucial role exists for strategic purchase management and selection of innovative suppliers to accomplish the companies innovation ambitions.

2. Market orientation has been known in business literature for long as a factor for Innovation. Kibbelings confirmed this assumption.

3. The CSR orientation of a supplier boosts the innovation of products, business and processes. The ability to embed environmental social and ethical needs in business processes has been suggested as a driver for a companies innovativeness in literature before. Kibbeling proved that this is the case in an empirical way. 

Note that a single-orientation on CSR seems not a good idea. Companies should make sure that the three most important criteria for the innovativeness of a company (suppliers innovativeness, market orientation and CSR orientation) are taken into consideration together.

Too extensive ‘CSR codes of conduct’ and ‘extensive supplier surveys’ may hinder essential stream of ideas between supplier and the company, on products and customers . This constant stream of ideas are essential levers for creative (co)development and innovation. In contacts with suppliers, companies have to make sure that enough time and room is reserved for the necessary creative flow of ideas and knowledge on products and customers.

More information on Mirjam Kibbelings new book and other publications can be found on Mirjams publication site.

To stay tuned on news on CSR and Innovation practices in Europe, you are invited to subscribe to this blog on the left hand side.

Jacobine Das Gupta, The Green Take, Paris.


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