Cambridge Business Association
Maximizing the Benefits of B2B Supplier Diversification
Article

Maximizing the Benefits of B2B Supplier Diversification

Supplier diversity initiatives are a savvy business move as well as an investment in social responsibility.

Simha Mummalaneni and Jonathan Z. Zhang
MIT Sloan Management Review, 2020
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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
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Recommendation

Large companies from a variety of sectors have initiated programs that support diversity and inclusion among their suppliers. As Simha Mummalaneni and Jonathan Z. Zhang write in Sloan Management Review, this promotes small supply companies owned or run by members of otherwise marginalized groups, including women, ethnic minorities and the LGBTQ community. Small businesses that reflect society’s diversity are crucial to overall economic stability; their success benefits everyone. This article makes a strong case for the value and viability of supporting diversity all the way through the supply chain. 

Summary

Diversity initiatives for suppliers help companies owned or run by members of marginalized groups obtain contracts.

As the United States grows increasingly diverse, its people are increasingly aware of the importance and value of diversity. Institutions like governments, not-for-profit institutions and large, profit-driven companies, such as Nike and Microsoft, attempt to respond to and reflect these changes with initiatives that promote diversity among suppliers.

These initiatives are designed to support small businesses and firms owned and run by members of traditionally underserved communities. They boost companies belonging to women, ethnic minorities and members of the LGBTQ community by helping them obtain contracts. These businesses are crucial for the US economy. Women own some 40% of...

About the Authors

Simha Mummalaneni is assistant professor of marketing at the University of Washington’s Foster School of Business. Jonathan Z. Zhang is assistant professor of marketing at Colorado State University’s College of Business.

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