Addressing supplier sustainability misconducts: response strategies to nonmarket stakeholder contentions

Abstract

PurposeFirms are increasingly accountable for their suppliers' social and environmental practices. Nonmarket stakeholders nowadays do not hesitate to confront buying firms for their suppliers' misconducts by mobilizing demonstrations, social media campaigns and boycotts. This paper aims to develop a typology of response strategies by targeted firms when they face such contentions and to empirically investigate why these strategies vary among those firms.Design/methodology/approachDrawing on social movement and stakeholder salience theories, the authors develop a set of hypotheses linking their typology of four response strategies to three key contextual factors – nonmarket stakeholder salience, nonmarket stakeholder ideology and the target firm reputation – and examine them using a vignette-based experiment methodology.FindingsThe results suggest that nonmarket stakeholder salience significantly impacts the nature of response (reject or concede), whereas the nonmarket stakeholder ideology is significantly related to the intensity of response (trivial or vigorous). Interestingly, the firms' reputation was found to have no significant effect on their response strategy when they faced stakeholder contentions.Originality/valueThis paper adds both theoretical and methodological value to the existing literature. Theoretically, the study develops and tests a comprehensive typology of response strategies to nonmarket stakeholder contentions. Methodologically, this study is original in leveraging a vignette-based experiment that allows establishing causal factors of response strategies following a supplier sustainability misconduct.

Supply chains' sustainability trajectories and resilience: a learning perspective in turbulent environments

“…Consequently, our findings help managers to simultaneously cope with two key challenges of SCM to date: Facing a complex and dynamic turbulence like the COVID-19 pandemic and its resulting erratic supply and demand patterns, while at the same time managing SC stakeholders' increasing SC sustainability demands (Bateman et al. , 2021; Hajmohammad et al. , 2021).…”

“…Consequently, our findings help managers to simultaneously cope with two key challenges of SCM to date: Facing a complex and dynamic turbulence like the COVID-19 pandemic and its resulting erratic supply and demand patterns, while at the same time managing SC stakeholders' increasing SC sustainability demands (Bateman et al, 2021;Hajmohammad et al, 2021). As a baseline implication, we find that long-term investments in exploration of for example sustainability, integrating wider spaces in the SC, and preparing IJOPM 42,8 for at least temporal shifts in functional set-ups offer substantial potentials to enhance SCRes and sustainability before and during a turbulence.…”

Toward suppliers' corporate social responsibility performance: the role of relationship dependence

“…Second, liability and reputation issues in the supply chain can motivate socially responsible buyers to reduce suppliers' irresponsible acts and improve suppliers' CSR performance (Hartmann and Moeller, 2014). Consumers may hold downstream firms responsible for the misconduct of suppliers (Jia et al, 2021), which can thus prompt buyers with socially responsible awareness to extend CSR practices to suppliers to reduce the probability of suppliers' misconduct (Hajmohammad et al, 2021;Liu et al, 2019). Therefore, buyers' socially responsible awareness enables them to focus on suppliers' CSR behavior.…”

“…The effect of suppliers' irresponsible behavior can propagate across the supply chain from upstream to downstream, leading to a loss of profits and reputation for downstream firms (Hartmann and Moeller, 2014;Hajmohammad et al, 2021). For example, the stock market reacted negatively to downstream retailers whose suppliers were involved in the Rana Plaza disaster (Jacobs and Singhal, 2017).…”

“…The effect of suppliers' irresponsible behavior can propagate across the supply chain from upstream to downstream, leading to a loss of profits and reputation for downstream firms (Hartmann and Moeller, 2014; Hajmohammad et al. , 2021).…”