Sustainable competitiveness in global value chains: how do small Danish firms behave?

Purpose – Small and medium‐sized enterprises (SMEs) have increasingly become integrated into global value chains, where they face social and environmental requirements from multinational buyers. The purpose of this paper is to examine the role of SMEs with respect to sustainable supply chain management in global value chains. Design/methodology/approach – Drawing from a survey of sustainable supply chain management practices among 300 Danish SMEs, the paper discusses the concept of governance in global value chains. The paper addresses two questions: first, to what extent are SMEs affected by social and environmental requirements from buyers? Second, to what extent do SMEs apply such requirements to their own suppliers? Findings – The paper concludes that SMEs face requirements from their buyers much more frequently than they apply such requirements to their own suppliers. Also many buyer requirements in the value chain seem to be latent in that they are neither contractual nor subject to verification. The paper argues that this points to a gap between rule making and rule keeping in sustainable supply chain management. Research limitations/implications – Research should focus on the impact of sustainability standards on the competitiveness of small firms in other developed countries, as well as in emerging markets such as China and India. Practical implications – Multinational buyers and SME‐support providers should focus on improving the capacity of SMEs to reconcile sustainability standards with competitiveness. Originality/value – The paper provides new data on the role of SMEs in sustainable supply chain management.