Abstract
AbstractThis study unpacks the environmental and social dimensions of supplier responsibility and links each dimension to distinct drivers. Using stakeholder theory and the relational view, we distinguish between two main drivers: stakeholder pressures (i.e., from regulatory agencies, buying firms, and nongovernmental organizations) and relational mechanisms offered by multinational companies (MNCs) (i.e., lean trainings and relational capital). We used a multi‐method research design to study how these drivers uniquely influence supplier responsibility in an emerging‐country context. An in‐depth case study with Philips Lighting and 10 of its Chinese suppliers reveals causal inferences that link stakeholder and relational drivers with each responsibility dimension (environmental vs. social). Audit and survey data from Philips Lighting's 134 Chinese suppliers, complemented with four archival databases, bolster these inferences. Overall, the results show that supplier environmental responsibility can be fostered through both stakeholder pressures and relational drivers; whereas, supplier social responsibility is much harder to address. The integrated methods offer a fuller, more comprehensive understanding of the specifics of supplier responsibility in China and also provide recommendations for MNCs that seek to improve it.
Highlights
Increasing pressures on global brands to promote responsible practices in their supply chains have driven some multinational companies (MNCs) to adopt supplier development programs that seek to minimize environmental harm and improve working conditions at supplier factories
Using stakeholder theory (Agle et al, 1999; Mitchell et al, 1997) and the relational view (Dyer & Singh, 1998), we argue that suppliers respond to pressures exerted by stakeholders, and to relational drivers offered by MNCs that purchase from them
We examined the data for violations of assumptions of normality and multicollinearity
Summary
Increasing pressures on global brands to promote responsible practices in their supply chains have driven some multinational companies (MNCs) to adopt supplier development programs that seek to minimize environmental harm and improve working conditions at supplier factories. Suppliers do not always comply with these environmental and social requirements to the same degree. According to recent reports by the Electronics Industry Citizenship Coalition (EICC), audited suppliers have steadily improved their environmental efforts, but not their labor practices (e.g., overtime and fair wages). Foxconn's subsidiary Taiyuan have been blamed for multiple employee suicides, even as it gained ISO 14001 certification, which reflected some commitment to environmental protection (Foxconn Social and Environmental Responsibility Report, 2011). Because MNCs require suppliers comply with both environmental and social requirements, we need enhanced insights into how MNCs can stimulate progress in each dimension
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