Does Socially Responsible Supplier Selection Pay Off for Customer Firms? A Cross‐Cultural Comparison

• Author: Anis Ben Brik,LaDonna M. Thornton,Chad W. Autry,David M. Gligor
• Date: 01 July 2013
• Published date: 01 July 2013
• DOI: http://doi.org/10.1111/jscm.12014

DOES SOCIALLY RESPONSIBLE SUPPLIER SELECTION

PAY OFF FOR CUSTOMER FIRMS? A CROSS-CULTURAL

COMPARISON

LADONNA M. THORNTON, CHAD W. AUTRY, DAVID M. GLIGOR

University of Tennessee

ANIS BEN BRIK

Dubai (U.A.E.) Chamber of Commerce

Building on Carter and Jennings (2002a,b, 2004) seminal works on

socially responsible purchasing and logistics, this multinational study

investigates the extent to which socially responsible supplier selection

(SRSS) is associated with customer firms’financial performance in three

key world economic regions. We collect and utilize a unique dataset con-

sisting of a total of 479 manufacturing, retail, and service provider firms

operating in three distinct national cultures: China, the United Arab Emi-

rates, and the United States of America. Based on an exploratory empirical

analysis, we observe evidence that, overall, firms that consider social

responsibility aspects during the supplier selection process enjoy financial

performance advantages versus rivals. However, model comparisons across

the studied countries reveal differential outcomes of SRSS by region. Our

findings aid supply chain managers by linking SRSS to commonly

expected outcomes within these important national settings.

Keywords: corporate social responsibility; global procurement; global sourcing;

purchasing; socially responsible supplier selection; supplier selection; sustainability

INTRODUCTION

Corporate social responsibility (CSR), defined as the

“context-specific organizational actions and policies

that take into account stakeholders’ expectations and

the triple bottom line of economic, social, and envi-

ronmental performance,” (Aguinis, 2011) has been a

focal topic in a variety of business-related literature

for over two decades (e.g., Aguinis, 2011; Aguinis &

Glavas, 2012; Carroll, 1999; McGuire, Sundgren,

& Schneeweis, 1988; Waddock, 2004; Wagner, Lutz, &

Weitz, 2009). The research to date has primarily

focused on CSR perceptions, initiatives, and outcomes

within single organizations, with CSR often being

characterized as a business philosophy influencing

corporate strategy, enacted in response to stakeholder

interests or demands (Carroll & Shabana, 2010;

McWilliams & Siegel, 2001; Salam, 2009). Contempo-

rary studies have begun to consider CSR-related issues

that extend across firm boundaries in interorganiza-

tional structures, and a few have assessed CSR within

international contexts (e.g., Brammer, Hoejmose, &

Millington, 2011; Mishra & Suar, 2010). Yet, relatively

little research has synthesized these perspectives by

focusing on interorganizational CSR practices and out-

comes. Attempts to answer Carroll’s (1999) call for a

broadened perspective (e.g., Lindgreen, Swaen, &

Campbell, 2009; Salam, 2009) have virtually all

focused on CSR in single nation contexts, with very

little focus on the global supply chain.

Herein, we address CSR within the context of a

common but very important global supply chain

management task—the selection of suppliers.

Though supplier selection has been a research focus

for nearly a half-century (e.g., Agarwal, Sahai, Mish-

ra, Bag, & Singh, 2011; Dickson, 1966; Edwards,

1967; Hakansson & Wootz, 1975; Koufteros, Vic-

kery, & Droge, 2012), only more recently have

scholars begun to link CSR postulates and initiatives

to supply management activities (e.g., Carter, 2005;

Carter & Easton, 2011; Carter & Jennings, 2002a,b,

2004; Maloni & Brown, 2006; Sarkis, Zhu, & Lai,

2011; Walker & Jones, 2012). Carter and Easton

Volume 49, Number 366

(2011) suggest that not only do firms need to look

at price and service quality when selecting suppliers,

but also suppliers’ sustainability practices that may

impact a firm’s total environmental impact and soci-

ety as a whole. Defined as “the tripartite pursuit of

economic, ecological, and social performance” (Re-

uter, Foerstl, Hartmann, & Blome, 2010, p. 46) and

also referred to as the triple bottom line of the

organization (Elkington, 1998), sustainability has

received increased attention within the supply chain

management area as organizations expand their glo-

bal supply chain base. While previous research iden-

tifies the need for a focus on sustainability and

social responsibility specifically within purchasing

and logistics processes, the issue of supplier selec-

tion based on social responsibility and sustainability

has yet to be fully explored. There is thus an oppor-

tunity to merge the supplier selection, sustainability

and social responsibility literatures. For instance, a

recent Business Week article describes a spike in fac-

tory worker suicide attempts attributable to poor

working conditions at a Taiwanese supplier of

Apple, Dell, and HP. In response, all three custom-

ers are investigating the working environment at the

supplier plant and have publicly indicated that their

international suppliers must maintain the same high

working condition standards that are expected

within their own domestic operations (Culpan &

Guglielmo, 2010). Issues such as these emphasize

the need for more research focused on supplier

selection and CSR and sustainability together, which

positions these processes as a single overarching glo-

bal supply chain concept linked to customer firm

performance outcomes.

In response, our purpose here is to explore the

plausible association between the undertaking of

supplier selection with CSR in mind, and multiple

dimensions of organizational performance within

three culturally and economically distinct environ-

ments: China, the U.A.E., and the U.S. Drawing pri-

marily on the recent stream of CSR-related work

pertaining to supplier selection (i.e., Carter & Easton,

2011; Carter & Jennings, 2002a; Sarkis et al., 2011;

Walker & Jones, 2012), we define the concept of

socially responsible supplier selection (SRSS) based on

multiple theoretical dimensions and explore whether

and when customer firms pursuing SRSS gain finan-

cial performance advantages as a result of doing so.

We contrast our results across the aforementioned,

culturally and economically diverse countries to

determine the impact of SRSS on three key financial

performance measures: sales revenues, 3-year sales

growth, and market share. In short, we ask, in these

three key national contexts, does SRSS pay off financially

for the customer firms that practice it? Our results illus-

trate several interesting performance-based similarities

and differences stemming from SRSS across the three

focal countries and lead to numerous potential cul-

tural and economic implications for supply chain

managers and academics.

DERIVING SRSS: SUPPLIER SELECTION,

CSR, AND SUSTAINABILITY

To theoretically ground our study of SRSS, we began

with a review of its two root literature bases: those

addressing CSR and supplier selection. Using the

Business Source Premier,Google Scholar, and LexisNexis

Academic databases, we searched for these topics indi-

vidually, as well as any cross references. We first recap

the supplier selection, CSR and sustainability litera-

tures and then blend these to identify the SRSS phe-

nomenon. Because SRSS is a response to stakeholder

pressures in the supply chain, we also review the liter-

ature on stakeholder theory, to derive the research

question of interest.

Supplier Selection

Supplier selection research has traditionally focused

on the firm-level impacts of supplier characteristics,

evaluation frameworks and metrics, selection criteria,

and means of cost reduction (Dominguez & Zinn,

1994; Ellram, 1990; Ghodsypour & O’Brien, 1998;

Hakansson & Wootz, 1975; Spekman, 1988; Weber,

Current & Benton, 1991). These themes permeate the

early literature, having been reflected as components

of the total cost of ownership (TCO) perspective of

supply management, as well as within the supplier

selection and supply base management literatures

(Cavinato, 1992). For most of the first two decades of

scholarship, such studies focused almost exclusively

on costs associated with activities such as inventory

management, delivery, quality, service, price, and

communications (i.e., Ellram & Siferd, 1993). How-

ever, more recently, the research has begun to take an

increasingly holistic view of the supplier selection pro-

cess, by focusing more on social issues such as sup-

plier management strategy, relationship dynamics,

and their performance impacts (e.g., Defee, Stank,

Esper, & Mentzer, 2009; Ghodsypour & O’Brien,

2001; Kannan & Tan, 2002; Wisner, 2003). Despite

multiple studies spanning various topical threads,

investigations of supplier selection criteria remain

highly relevant. This is evident from the voluminous

emergent research positing new and additional selec-

tion criteria, much of which focuses on the social and

environmental impacts of selection decisions (e.g.,

Carter, Maltz, Maltz, Goh, & Yan, 2010; Defee et al.,

2009; Voss, Closs, Calantone, Helferich, & Speier,

2009; Wolf & Seuring, 2010). This prominence sug-

gests additional aspects of supplier selection should

be examined and that a contemporary focus in this

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Socially Responsible Supplier Selection

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