Enhancing supply chain operations with extended corporate social responsibility practices by multinational enterprises: Social capital perspective from Chinese suppliers

Abstract

Extending corporate social responsibility (CSR) to manage global supply chains has become strategically important for multinational enterprises (MNEs) to keep long-term relationships with suppliers in emergent countries. However, whether and how suppliers in developing countries respond to pressures from MNEs for CSR practices is lacking related studies. Built on the value of formal control through contracts and monitoring for diffusing CSR practices, this study further argues that evolving relational ties, which usually happen in multi-periods, with MNEs at both corporate and individual levels can be helpful or even necessary for suppliers to implement CSR practices from the social capital and guanxi theory perspective. Using survey data collected from 211 suppliers of MNEs in China, which is an emergent country characterized with the world's largest supplier base servicing MNEs, our hierarchical regression analysis demonstrates that relational ties including reciprocity, cooperation, and interaction at the corporate level have mediation and moderation effects on the formal control-CSR practices implementation link for these suppliers. Furthermore, personal trust is important and even necessary to motivate CSR practices implementation among the Chinese suppliers. Researching CSR from the supplier perspective, this study contributes new theoretical insights for MNEs to cultivate relational ties with their emergent-country suppliers in support of their formal control for CSR practices adoption by the latter.