Dimensions of Sustainable Value Chains: Implications for Value Chain Analysis

Purpose – Value chain analysis (VCA) can expose strategic and operational misalignments within chains, and the consequential misallocation ofresources, and hence opportunities for improvements which create value and economic sustainability. This paper’s purpose is to argue why and howVCA needs to integrate the social and environmental aspects of sustainability in pursuit of sustainable competitive advantage.Design/methodology/approach – Based on a review of existing methods and case studies, the paper proposes three dimensions of VCA, whichillustrate the flaws in narrow tools, and the need to broaden the boundaries of VCA, the interpretation of “value” and relationships along the chain inorder to highlight opportunities for creating sustainable value chains.Findings – To date VCA has largely focused on economic sustainability and paid inadequate attention to social and environment consequences of firmbehaviour and the (re) allocation of resources within and between firms in the chain. This risks producing recommendations which either ignore thecompetitive advantage offered from improving environmental management and social welfare, or have such detrimental external consequences as torender any proposals unsustainable when exposed to government or broader (public) scrutiny.Research limitations/implications – VCA variants need to be developed which incorporate all three pillars of sustainability. Some initial experiencesare presented and ideas for future research and applications proposed.Practical implications – The development of sustainable VCA tools should identify business opportunities consistent with Porter and Kramer’simperative for value chains to create shared value between business and society.Originality/value – Adopting the broader dimensions identified will allow VCA to become more widely applicable, and more relevant in businessscenarios where there is a growing imperative to include social and environmental impacts into “mainstream” business strategies.