Optimal Decisions and Coordination in a Socially Responsible Supply Chain with Irresponsibility Risk

Qian Wang, Yongguang Zhong and Guangye Xu
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Qian Wang: Business School, Qingdao University, Qingdao 266071, China
Yongguang Zhong: Business School, Qingdao University, Qingdao 266071, China
Guangye Xu: School of Management, Nanjing University of Posts and Telecommunications, Nanjing 210003, China

Sustainability, 2019, vol. 11, issue 24, 1-16

Abstract: Many companies make some stakeholders pleased but others cannot. To help understand why, it is very important to study the coexistence of corporate social responsibility (CSR) and corporate social irresponsibility (CSI). This paper considers a manufacturer with irresponsibility risk in a centralized and decentralized socially responsible supply chain, and uses a Stackelberg game to investigate the optimal policies on price and CSR investment level. This paper also examines the influence of consumer responsibility awareness and CSR investment efficiency on the decision behaviors of the manufacturer and retailer. Moreover, we developed a new mechanism to coordinate the decentralized supply chain system, which consists of the retailer participating in CSR and revenue sharing. Our results indicate that the manufacturer’s and retailer’s optimal decisions may not be significantly influenced by consumer responsibility awareness, but the effect of CSR investment efficiency is significant. Our results also show that if the degree of retailer participation and the proportion of revenue sharing are of moderate size, then not only can the contract mechanism coordinate the decentralized socially responsible supply chain, but it can ensure that a win–win situation can be achieved by the supply chain members.

Keywords: socially responsible supply chain; corporate social responsibility; corporate social irresponsibility; irresponsibility risk; coordination mechanism (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:24:p:7252-:d:298969

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