Consumers care and firms should too: On the benefits of disclosing supplier monitoring activities

Abstract

Stakeholders increasingly put pressure on firms to ensure their suppliers' adherence to corporate social responsibility principles and standards. A firm's supplier monitoring activities (SMA) are, thus, central to achieving supply chain transparency. In an effort to help build a business case for SMA, this research explores the effect of SMA disclosures on consumers' attitude toward the firm and purchase intention. In so doing, we also examine how consumer attitude and purchase intention vary as a function of SMA disclosure characteristics. The results of three behavioral studies reveal more positive consumer attitude and higher purchase intention when a firm discloses that its supplier monitoring extends to lower‐tier suppliers (SMA depth) and the firm monitors its lower‐tier suppliers directly rather than relying on its first‐tier suppliers or third parties to do so (lower‐tier supplier monitoring mechanism). Greater SMA breadth—monitoring both suppliers' social and environmental activities—in turn, is not associated with more positive consumer attitude and higher purchase intention. Further, attitude toward the firm mediates the relationship between SMA disclosure characteristics and purchase intention. Collectively, these findings underline that consumers value firms' SMA and point toward an economic rationale for a firm's transparency regarding its supplier monitoring efforts.

Optimization of Large Passenger Aircraft Supply Chain Resilience Based on Bilateral Grey Quality Function Deployment considering Cooperation Uncertainty

“…when ec 1 i , ec 2 j support each other, 0, when ec 1 i ec 2 j have no relationship, −1, when ec 1 i , ec 2 j offset each other,…”

“…ec 1 1 Establishment of information sharing platform and information feedback mechanism 90 ec 1 2 Perfecting financial supervision mechanism and implementing financial transparency management 40 ec 1 3 Establishment and improvement of supplier supervision and evaluation system 90 ec 1 4 Continuous optimization of product design process 35 ec 1 5 Establishment and improvement of supplier resource pool 50 ec 1 6 Improvement of risk identification emergency system 70 ec 1 7 Flexible contract terms and strategic partnership with partners 60 Suppliers ec 2 1 Collaborative implementation of multiple inventory management modes 80 ec 2 2 Perfecting financial supervision mechanism and implementing financial transparency management 35 ec 2 3 Establishment of information sharing mechanism 70 ec 2 4 Updating and improvement of production technology in time and iteratively 60 ec 2 5 Construction and improvement of risk identification and emergency system 65…”

“…erefore, it is not difficult to find that even mature civil aircraft manufacturers have difficulty in avoiding the impact of supply chain emergencies. Actually, under the current social and economic conditions, the real competition is not between enterprises but that of the supply chain [1,2]. Nowadays, the outsourcing, internationalization, and complexity of the aviation supply chain make aircraft manufacturers depend on one another in structure [3]; thus most of the delay and quality problems can also be traced back to the supply chain management and cooperation problems [4].…”

Supply chain transparency: Consumer reactions to incongruent signals

“…The company explicitly states that communication to consumers is linked clearly to their brands, demonstrating that the company recognizes that consumers “care how the products they buy are sourced, produced, and brought to market” (Nichols et al, 2019, p. 536). Scholars have begun to address this supply chain‐consumer relationship (Abbey et al, 2019; Akturk et al, 2018; Simpson et al, 2019; Ta et al, 2018), particularly within the realm of supply chain sustainability, addressing issues such as upstream supplier practices or internal operations, often focusing on the important relationship between sustainability practices and firm performance (Duan, Aloysius, & Mollenkopf, 2022; Duan, Hofer, & Aloysius, 2021; Goebel et al, 2018; Wiengarten et al, 2019; Wilhelm et al, 2016).…”

Communicating supply chain sustainability: transparency and framing effects

“…Yet, little is known about the impact of disclosing SSCM information to consumer stakeholders (Bell et al , 2016). It is important to address this gap because intentional disclosure of sustainable supply chain practices could enable firms to signal their integrity (Castillo et al , 2018), build trust with consumers (Cailleba and Casteran, 2010), and ultimately, influence firm performance (Duan et al , 2021).…”