Sustainability-oriented supplier development for SMEs: exploring challenges and opportunities for inclusive supply chains

Abstract

This study explores how small and medium-sized enterprises (SMEs) in South Africa experience Sustainability-Oriented Supplier Development (SSD) within evolving and institutionally fragmented environments. SSD has been recognised as a pathway toward inclusive industrialisation and sustainable competitiveness, yet limited research captures its dynamics in emerging economies. Guided by an interpretivist paradigm, the study adopted a qualitative, exploratory design using semi-structured interviews with SME owners and managers across manufacturing and service sectors. Data were analysed thematically through an inductive process. Findings indicate that policy, finance, infrastructure, and human capital shape SME engagement in SSD, functioning simultaneously as enablers and constraints. Relationships with corporates, financiers, government agencies, and mentors influence how SMEs sustain participation in sustainability practices. Two constructs, relational capability and adaptive legitimacy, emerged as explanatory mechanisms through which SMEs convert collaboration and trust into sustainable outcomes. The study offers a relational-ethical interpretation of SSD, highlighting sustainability as a negotiated and contextually adaptive process rather than a prescriptive model. The findings contribute insight for scholars, policymakers, and practitioners seeking to strengthen inclusive supplier-development ecosystems in emerging markets.