A structured literature review on successful implementation of supplier diversity initiatives

Abstract

The aspirations of companies to improve their social sustainability performance through the supply chain have led to a renewed interest in supplier diversity. Notwithstanding this renewed interest, recent studies indicate that companies' implementation of supplier diversity remains inadequate, with only 15% of the Fortune Global Companies having formal diversity programs. This paper aims to critically examine the existing literature on the successful implementation of supplier diversity, to understand the theoretical underpinnings of this phenomenon, and to elucidate opportunities for future research. Methodology: This paper uses a structured literature review of 61 articles from highly ranked journals from Scopus and Web of Science databases to foster a deeper understanding of supplier diversity. Moreover, the paper adopts an inductive thematic analysis to unearth themes from the literature. Findings: The review suggests that supplier diversity literature is under-researched within the context of supply chain management. Consequently, buyers often perceive supplier diversity as an onerous obligation that conflicts with supply chain objectives rather than a strategic business imperative. Furthermore, companies are increasingly aware that strong ESG performance can enhance their brand reputation, leading to a growing prioritisation of supplier diversity as a social sustainability dimension. Limitations: The time constraint may impact the comprehensiveness of the study. There is a risk of excluding some articles from the low-ranked journals because of the predefined inclusion and exclusion criteria. Practical implications: The paper introduces an implementation framework to aid practitioners in successfully implementing supplier diversity. Originality/value (theory): The paper contributes to the supplier diversity literature by integrating findings from diverse and fragmented studies and facilitating a clearer understanding of the literature. The paper also contributes to theory by critically analysing how different theories relate to each other in explaining supplier diversity in an implementation framework. Additionally, the paper provides an original contribution by providing an analytical framework showing how the theoretical explanations mutually reinforce a suboptimal performance on supplier diversity in a vicious cycle of disempowerment.