Presenter: Heli Wang

Dean, College of Graduate Research Studies; Janice Bellace Professor of Strategic Management,

Managing ESG Mandate Complexity Through Standardized Convergence: Supplier Responses in Global Supply Chains

ABSTRACT

Organizations increasingly face diverse ESG demands across national contexts, where variations in regulations and expectations complicate response strategies. While prior research on institutional complexity emphasizes conflicting demands across institutional spheres, we focus on the challenges posed by nuanced differences within a shared ESG domain. This study examines how buyer-country ESG disclosure mandates influence Chinese suppliers’ strategic responses—specifically, whether they pursue direct ESG improvements or adopt standardized certifications. We argue that regulatory diversity heightens the appeal of standardized responses, which offer broadly recognized legitimacy, over direct, resource-intensive ESG improvements. Using panel data linking 1,388 Chinese suppliers to ESG policies across 86 buyer countries, we find that suppliers significantly increase standardized certification adoption in response to stronger ESG mandates. The preference for standardized responses intensifies with greater regulatory diversity among buyers. Our findings extend institutional research by identifying a distinct form of complexity within a common domain and offering new insight into ESG governance in global supply chains.