IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i23p10105-d455715.html
   My bibliography  Save this article

Exploring Environmental Supply Chain Innovation in M&A

Author

Listed:
  • Pavan Manocha

    (Department of Engineering, University of Cambridge, Cambridge CB3 0FS, UK)

  • Jagjit Singh Srai

    (Department of Engineering, University of Cambridge, Cambridge CB3 0FS, UK)

Abstract

Organisations are challenged with executing innovation for sustainable development within the context of their operations and value networks—networks which are increasingly fuelled by mergers and acquisitions (M&As), and which accounted for USD 4 trillion in global deal value in 2019. While outcomes from M&As may produce mixed results, merger synergies fundamentally change the environmental, social and governance (ESG) footprint of an organisation and its product-supply chain. These compounding challenges of innovation for sustainability and ESG product-supply chain due diligence are not adequately explored in the operations management literature or practically considered during M&As. In this article, we consider those factors that determine “how innovative is the deal?” and explore how environmental supply chain innovation for sustainability might inform M&As. A case study approach is adopted, drawing upon an exemplar deal within the global food product-supply chain for ingredient production, where high M&A deal-interest and ESG sustainability considerations exist. The theoretical lens is the resource-based view (RBV) of the firm. A deal analysis framework, integrating key concepts from strategic environmental supply chain management and the M&A process literature, is defined. These findings suggest that product design and technology selection factors represent sources of M&A value creation when exploring an innovation for sustainability deal thesis. The implication for firms with ambitious environmental agendas or motives is that the M&A process needs to be reconfigured, such that product design and technology selection, currently secondary factors, are considered primary drivers. Together, these drivers form substantive strategic considerations and new merger motives of both theoretical and practical relevance, informing a new perspective of operations sustainability targeted M&A.

Suggested Citation

  • Pavan Manocha & Jagjit Singh Srai, 2020. "Exploring Environmental Supply Chain Innovation in M&A," Sustainability, MDPI, vol. 12(23), pages 1-15, December.
  • Handle: RePEc:gam:jsusta:v:12:y:2020:i:23:p:10105-:d:455715
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/23/10105/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/12/23/10105/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sorensen, Donald E., 2000. "Characteristics of merging firms," Journal of Economics and Business, Elsevier, vol. 52(5), pages 423-433.
    2. Fumagalli, Chiara & Motta, Massimo, 2001. "Upstream mergers, downstream mergers, and secret vertical contracts," Research in Economics, Elsevier, vol. 55(3), pages 275-289, September.
    3. Nagurney, Anna, 2009. "A system-optimization perspective for supply chain network integration: The horizontal merger case," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(1), pages 1-15, January.
    4. Li, Da-yuan & Liu, Juan, 2014. "Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China," Journal of Business Research, Elsevier, vol. 67(1), pages 2793-2799.
    5. Olimpia Meglio & Kathleen Park, 2019. "Strategic Decisions and Sustainability Choices," Springer Books, Springer, number 978-3-030-05478-6, September.
    6. Roman Inderst & Greg Shaffer, 2007. "Retail Mergers, Buyer Power and Product Variety," Economic Journal, Royal Economic Society, vol. 117(516), pages 45-67, January.
    7. Rick Edgeman & Jacob Eskildsen, 2014. "Modeling and Assessing Sustainable Enterprise Excellence," Business Strategy and the Environment, Wiley Blackwell, vol. 23(3), pages 173-187, March.
    8. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    9. Elisabete Correia & Helena Carvalho & Susana G. Azevedo & Kannan Govindan, 2017. "Maturity Models in Supply Chain Sustainability: A Systematic Literature Review," Sustainability, MDPI, vol. 9(1), pages 1-26, January.
    10. Thais González-Torres & José-Luis Rodríguez-Sánchez & Eva Pelechano-Barahona & Fernando E. García-Muiña, 2020. "A Systematic Review of Research on Sustainability in Mergers and Acquisitions," Sustainability, MDPI, vol. 12(2), pages 1-18, January.
    11. Tang, Christopher S. & Zhou, Sean, 2012. "Research advances in environmentally and socially sustainable operations," European Journal of Operational Research, Elsevier, vol. 223(3), pages 585-594.
    12. Soo-Haeng Cho, 2014. "Horizontal Mergers in Multitier Decentralized Supply Chains," Management Science, INFORMS, vol. 60(2), pages 356-379, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karolis Andriuškevičius & Dalia Štreimikienė, 2022. "Sustainability Framework for Assessment of Mergers and Acquisitions in Energy Sector," Energies, MDPI, vol. 15(13), pages 1-20, June.
    2. Karolis Andriuškevičius & Dalia Štreimikienė, 2022. "Energy M&A Market in the Baltic States Analyzed through the Lens of Sustainable Development," Energies, MDPI, vol. 15(21), pages 1-21, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhu, Jing & Boyaci, Tamer & Ray, Saibal, 2016. "Effects of upstream and downstream mergers on supply chain profitability," European Journal of Operational Research, Elsevier, vol. 249(1), pages 131-143.
    2. Jyoti Dhingra Darbari & Devika Kannan & Vernika Agarwal & P. C. Jha, 2019. "Fuzzy criteria programming approach for optimising the TBL performance of closed loop supply chain network design problem," Annals of Operations Research, Springer, vol. 273(1), pages 693-738, February.
    3. Symeonidis, George, 2010. "Downstream merger and welfare in a bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 230-243, May.
    4. Karolis Andriuškevičius & Dalia Štreimikienė, 2022. "Sustainability Framework for Assessment of Mergers and Acquisitions in Energy Sector," Energies, MDPI, vol. 15(13), pages 1-20, June.
    5. Yuhong He & Saibal Ray & Shuya Yin, 2022. "Retail power in distribution channels: A double‐edged sword for upstream suppliers," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2681-2694, June.
    6. Varsei, Mohsen & Polyakovskiy, Sergey, 2017. "Sustainable supply chain network design: A case of the wine industry in Australia," Omega, Elsevier, vol. 66(PB), pages 236-247.
    7. Chen, Jen-Yi & Baddam, Swathi R., 2015. "The effect of unethical behavior and learning on strategic supplier selection," International Journal of Production Economics, Elsevier, vol. 167(C), pages 74-87.
    8. Soo-Haeng Cho & Xin Wang, 2017. "Newsvendor Mergers," Management Science, INFORMS, vol. 63(2), pages 298-316, February.
    9. Cory Searcy, 2016. "Measuring Enterprise Sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 120-133, February.
    10. Schöll, Michaela, 2017. "Three Essays on Sustainable Supply Chain Management – Towards Sustainable Supplier Selection and Sustainable Sourcing," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 172463, July.
    11. Davidson de Almeida Santos & Osvaldo Luiz Gonçalves Quelhas & Carlos Francisco Simões Gomes & Luis Perez Zotes & Sérgio Luiz Braga França & Guilherme Vinagre Pinto de Souza & Robson Amarante de Araújo, 2020. "Proposal for a Maturity Model in Sustainability in the Supply Chain," Sustainability, MDPI, vol. 12(22), pages 1-37, November.
    12. Ramos, Tânia Rodrigues Pereira & Gomes, Maria Isabel & Barbosa-Póvoa, Ana Paula, 2014. "Planning a sustainable reverse logistics system: Balancing costs with environmental and social concerns," Omega, Elsevier, vol. 48(C), pages 60-74.
    13. Barros, Victor & Verga Matos, Pedro & Miranda Sarmento, Joaquim & Rino Vieira, Pedro, 2022. "M&A activity as a driver for better ESG performance," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    14. Durowoju, Olatunde A. & Chan, Hing Kai & Wang, Xiaojun & Akenroye, Temidayo, 2021. "Supply chain redesign implications to information disruption impact," International Journal of Production Economics, Elsevier, vol. 232(C).
    15. Olimpia Meglio, 2020. "Towards More Sustainable M&A Deals: Scholars as Change Agents," Sustainability, MDPI, vol. 12(22), pages 1-11, November.
    16. Inghels, Dirk & Dullaert, Wout & Bloemhof, Jacqueline, 2016. "A model for improving sustainable green waste recovery," Resources, Conservation & Recycling, Elsevier, vol. 110(C), pages 61-73.
    17. Qing (Ray) Cao & Andrew N. K. Chen & Bradley T. Ewing & Mark A. Thompson, 2021. "Evaluating Information System Success and Impact on Sustainability Practices: A Survey and a Case Study of Regional Mesonet Information Systems," Sustainability, MDPI, vol. 13(13), pages 1-23, June.
    18. Yann Bouchery & Asma Ghaffari & Zied Jemai & Jan Fransoo, 2016. "Sustainable transportation and order quantity: insights from multiobjective optimization," Flexible Services and Manufacturing Journal, Springer, vol. 28(3), pages 367-396, September.
    19. Y Bouchery & Asma Ghaffari & Zied Jemai & Jan C Fransoo, 2016. "Sustainable transportation and order quantity: insights from multiobjective optimization," Post-Print hal-01954465, HAL.
    20. Ekaterina Yatskovskaya & Jagjit Singh Srai & Mukesh Kumar, 2018. "Integrated Supply Network Maturity Model: Water Scarcity Perspective," Sustainability, MDPI, vol. 10(3), pages 1-26, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:23:p:10105-:d:455715. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.