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A coordination mechanism through value‐added profit distribution in a supply chain considering corporate social responsibility

Yong Liu, Qian Xu and Zhi‐yang Liu

Managerial and Decision Economics, 2020, vol. 41, issue 4, 586-598

Abstract: The consumers pay more and more attention to corporate social responsibility (CSR), which has been a new competitiveness for the enterprises. This paper constructs a supply chain consisting of a dominated retailer, a socially responsible supplier and a non‐socially responsible supplier (compared with the socially responsible supplier), consider the consumer preference and exploit the game analysis technique to analyze the optimal decisions under the decentralized and concentrated decision, and then design a coordination mechanism based on value‐added profit distribution. The results show that compared with the decentralized decision, the retail price and order quantity of two products are lower, the CSR effort degree of socially responsible supplier is higher, and the performance of the whole supply chain is better under the concentrated decision. In addition, the mechanism designed can induce the socially responsible supplier to undertake CSR without damaging its profit, prompt the supply chain members to make the concentrated decisions, and promote the competitiveness of the retailer‐dominated supply chain.

Date: 2020
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Handle: RePEc:wly:mgtdec:v:41:y:2020:i:4:p:586-598