Stakeholders' pressure and managerial responses: Lessons from hybrid car development and commercialisation

Sustainability has risen to prominence as firms strategically pursue competitive advantage in their supply chains. Various stakeholders' pressures have been a driving force behind the scenes. It is unclear, however, why some firms make more proactive responses than others despite the fact that they are under lower levels of pressure. This paper proposes the idea that the management's proactive responses guide firms to achieve sustainable competitive advantage in the supply chain. These proactive responses overcome 'long-term planning traps' by strategic intent, short- and long-term concurrency, and strategic flexibility. This study presents a research model that synthesises three theoretical lenses: institutional theory, stakeholder theory, and strategic choice theory. Examining seven automotive companies that competed for the development and commercialisation of the hybrid car, this study suggests that while stakeholders' pressures play a significant role, managerial vision and perspective allow firms to progress toward innovative product development even under unfavourable market conditions and competing stakeholder pressures. In this strategic process, integrated information systems enable firms to scan the implicit customer demands and facilitate the translations of the market information to product development.