Corporate social responsibility and decision analysis in a supply chain through government subsidy

Abstract

With rapid economic development, related social issues have become more prominent than before. How to effectively encourage enterprises to undertake more corporate social responsibility (CSR) and maintain the sustainable development of society has become an urgent task for managers and researchers to resolve. With respect to decision problems of a retailer-dominated supply chain considering CSR under government subsidy, based on game analysis technology, we establish a three-stage Stackelberg game model that consists of the government, a dominant retailer and n suppliers, and exploit it for analyzing the optimal decisions either with or without government subsidy, and explore the impact of the government subsidy on the profits of the members of the supply chain, the CSR effort level and social welfare in the retailer-dominated supply chain, and determine the relationship between the optimal government subsidy rate and CSR level. Our results show that the higher the effort level is, the more positive effect on the profits the whole supply chain experiences. Compared with those situations under non-government subsidies, a certain range of government subsidies can promote the supply-chain members to undertake CSR and improve overall performance of the supply chain and the welfare of the society.