Sensemaking along global supply chains: implications for the ability of the MNE to manage sustainability challenges

Multinational enterprises (MNEs) are increasingly called upon to address sustainability issues along their supply chains. We advance prior literature on this topic by building on the argument that comprehending individual-level sensemaking is the foundational step for understanding the design and execution of corporate sustainability strategy. Hence, we undertook a qualitative study of one European agri-food MNE and captured how internal and external stakeholders along two entire supply chain segments, reaching into India and Ethiopia, respectively, make sense of farmer livelihoods as one particular sustainability issue. Using Weick’s stages of sensemaking as our theoretical lens, we find a high degree of diversity in interpretations regarding (1) the nature of the sustainability challenge, (2) the MNE’s motives for addressing it, and (3) the potential solutions to it. However, consistent patterns emerge for the three sensemaking stages in relation to the individual’s position in the supply chain. As a result of our analysis, we develop a conceptual model that elucidates differences in sensemaking of sustainability challenges by actors at different positions along global supply chains. Building on our findings, we offer a detailed explanation of how individual sensemaking influences collective sensemaking and, in turn, the direction and effectiveness of corporate strategy on sustainability.