Supplier selection based on corporate social responsibility practices

Abstract

Due to the momentous effects of responsible sourcing in a firm’s performance, the sourcing process is tedious. Purchasing managers face a difficult decision in determining how to select responsible suppliers so they can maintain their firm’s competitive advantage in the contemporary business environment. Firms need to satisfy not only the views of society but also to consider the opinions of all stakeholders to stay profitable and to create a supportive business strategy. Existing studies fail to provide a model for socially responsible supplier selection, particularly when various actors are involved. To fill this gap, this study proposes a model to select the best supplier based on their corporate social responsibility (CSR) practices and to identify the key actors (Shareholder, Governments, Customers, and Community) whose perspective is vital. We utilize a hybrid multi criteria decision making (MCDM) approach; however, the supplier selection portion relies on a pure decision making process with consideration of multiple criteria. This study proposes the model in three phases as follows. In the first phase, the collected common CSR practices are scrutinized through fuzzy Delphi with the assistance of experts’ opinions. In second phase, the interdependencies, interrelationship and weights of CSR practices are analysed through DEMATEL-ANP (DANP). The final phase proceeds with the selection of the best alternative (supplier) based on CSR practices through PROMETHEE. The proposed model is validated with the case illustration and the results are discussed with feedback from the case purchasing managers. Finally, the study ends by identifying managerial implications and its limitations, and we provide some useful future insights which will increase the effective integration of CSR in supply chains and especially in the supplier selection process.