The Impact of Supplier Instability on Corporate Social Responsibility Performance over the Firm Lifecycle: A Social Systems Theory Perspective

Abstract

AbstractManaging corporate social responsibility (CSR) in the supply chain context requires companies to consider complex issues embedded in their supply chains, one of which is the complexity caused by unstable suppliers. However, prior studies have focused primarily on how supplier instability affects a firm's operational or financial performance. Grounded in social systems theory, we aim to enrich this body of literature by investigating the impact of supplier instability on CSR performance throughout the firm lifecycle. Using a large panel dataset of Chinese manufacturing firms from 2008 to 2018, we find that the relationship between supplier instability and CSR performance varies throughout a firm's lifecycle. At the growth and maturity stages, supplier instability can negatively affect a firm's external and internal CSR performance, respectively. At the decline stage, this negative relationship is insignificant. Further, we unravel the moderating effects of different complexity reduction practices. This paper has significant implications for both research and practice in the increasingly important domain of CSR management in supply chains.