Nestlé Nespresso AAA sustainable quality program: an investigation into the governance dynamics in a multi‐stakeholder supply chain network

Within the context of a sustainable supply chain, the purpose of this paper is to report on empirical longitudinal research on supply chain network evolution and dynamics of governance in a multi‐stakeholder supply chain sustainability initiative led by Nespresso, the speciality coffee division of Nestlé.

The paper proposes a framework to study the creation and evolution of governance mechanisms over a five‐year period. Data from 48 semi‐structured interviews and 15 recent and historic documents were also analysed. The interviews were conducted among current and past representatives of all the organisations concerned including coffee traders, NGOs and farmers.

In contrast with literature on the subject, governance mechanisms initially relied mostly on informal mechanisms. Formal governance mechanisms were incorporated into the relationships to enable the supply chain network to grow and to provide clarity to all actors. Relational quality processes that increased trust were critical elements in the early phase, and were explicitly built into a second phase of development.

Being a single case study, some caution needs to be applied to generalise findings beyond the specific context studied. An additional methodological limitation is the limited number of actors involved in the overall supply chain network.

The paper shows the importance of treating governance mechanisms within the supply chain not as a fixed variable to be determined once and for all in the beginning of a relationship, but rather to adapt the coordination mechanisms of the relationships.

The evolution of relationships over time has been “often called for but rarely chosen”. The case highlights the potential benefits of this type of research to develop an understanding of the evolution of relationships in a supply chain network.