Firm size and the organizational response to supply chain responsibility issues

Abstract

Concerns for responsible business practice have increased in the wake of supply chain scandals. Consequently, companies are increasingly held accountable not only for irresponsible business conduct within their own organisation but also by supply chain partners. In this light, companies implement controls to safeguard responsible business conduct within their international supply chain. Extant literature looks extensively at internal controls in isolation, with less of a focus on how supply chain partners can interact to ensure responsibility. Moreover, literature on the topic pays little attention to the organisational differences between small and medium size enterprises (SMEs) and their larger counterparts. Rather, extent literature places a heavy emphasis on formal controls favoured by large enterprises and tends to overlook the informal approaches taken by SMEs. With this in mind, the aim of the present paper is to propose a qualitative inductive framework based on contingency theory, illustrating how SMEs’ and larger companies’ responsibility-related control systems are organised. Based on the model, it becomes evident why the approaches used by SMEs and LEs to implement, promote and ensure responsible management throughout the international supply chain are often incompatible in practice and lead to conflicts.