The relationship between legitimacy, reputation, sustainability and branding for companies and their supply chains PT1

1. Introduction

A lack of co-ordinated corporate or supply chain response to new and often threatening trends and pressures exerted by macro environmental stimuli has a negative bearing on the reputation of the company and its supply chain. Threatening incidents can be corporate and supply chain scandals (i.e. European horse meat scandal) or non-compliance with national or international legal regulations (such as Basel III; transfer pricing). To avoid these lacunae, brand managers are recommended to better protect the consistency of their brands’ values during their supply chain journey (Lopez, 2011) and to better adapt to their social context. This implies that the rules in the global business arena need to change: brand managers, supply chain members, consumers and stakeholders, must become co-operating gladiators to arrive at the best possible practices and grow a sustainable brand (Barrow, 2013Lindgreen et al., 2012Lopez, 2011, July 29 and Meads and Sharma, 2008). According to Barrow (2013), “it is crucial that everyone involved is making decisions based on the impact for the whole value chain and that they are given the tools to understand how a design or process change will affect the cost and footprint, from the raw material level through a product’s end of life”. For this purpose, our paper innovatively synthesizes and explains a number of conceptual frameworks for improving the overall corporate and supply chain performance to the benefit of society and all stakeholders involved. We link the notions of sustainability, ethical/social responsibility, Corporate Social Responsibility (CSR) and supply chain management with the legitimacy, reputation and branding concepts. Acknowledging the differences and effective interplay between legitimacy and reputation, according to the sustainability concept, becomes important when carrying out governance activities and when planning supply chain management. The paper culminates in the call for a newly to be established marketing stream we call ‘Sustainable and Curative Marketing’.

The conceptual basis of this work rests on the assumption that, although different in their respective purposes, legitimacy and reputation can become mutually supportive ‘institutions’, i.e. conditions, useful to acquire social status and competitive advantage, both of which are key objectives for companies and their supply chains. An urgently required better understanding of the concepts and their interrelations is enhanced by an explanatory basis provided by interdisciplinary theories (institutionalist, neo-institutionalist theories, the viable system approach, isomorphism and identity) to improve corporate and supply chain behavior. Finally, the paper introduces a new paradigmatic suggestion, called curative marketing, which appeals for increased reflection on current marketing shortcomings triggered by a restitution spirit as a precondition to improve the current lacunae. Intending to better inform managerial practice the theoretical considerations are spiced with case studies among which especially the currently debated supply chain case of the European horse meat scandal is illuminated suggesting concrete managerial implications for various business functions in the food industry.

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