Share:


Non-cooperative two-echelon supply chains with a focus on social responsibility

Abstract

To cooperate or not is one of the most challenging issues of supply chain management era. If the supply chain is managed optimally, the entire profitability increases. Meanwhile, corporate Social Responsibility (hereafter CSR) is defined as the social and ethical behavior of supply chain members against stakeholders such as shareholders, final customers, employees and executives. Moreover, the observance of the social responsibility obligations is of great importance for consumers and shareholders of companies. The decisions of the supply chain’s members play a direct role in determining the profits of each. These decisions are in conflict with other members in a competitive environment.


In this paper, the contradictory variables encompasses the cost resulting from the performance of corporate social responsibility, inventory, shortage, advertising and pricing in a two-level supply chain, consisting a manufacturer and a retailer. After identifying the quantitative variables for measuring the social responsibility using Delphi-Fuzzy methods and Interpretive Structural Modeling, the most important and influential variable of measuring the social responsibility performance (forced labor ratio) has been selected. Subsequently, after modeling the profit function of each player, optimal results were emanated according to the bargaining power of each member and based on Nash and Stackelberg games. Afterwards, with numerical examples, the optimization and sensitivity analysis of social responsibility in each model has been discussed. The results indicate that the profit of manufacturer and retailer reduces by increasing the proportion of forced labor. Based upon Nash equilibrium, the manufacturer’s profit decreases with a slight slope; nonetheless, on retailer and manufacturer leadership models, the profit decreases with a slight increase of the forced labor.

Keyword : supply chain management, Nash equilibrium, Stackelberg game, corporate social responsibility

How to Cite
Amoozad Mahdiraji, H., Turskis, Z., Jafarnejad, A., & Rezayar, A. (2019). Non-cooperative two-echelon supply chains with a focus on social responsibility. Technological and Economic Development of Economy, 25(6), 1162-1187. https://doi.org/10.3846/tede.2019.10719
Published in Issue
Oct 3, 2019
Abstract Views
1669
PDF Downloads
790
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Ahi, P., & Searcy, C. B. (2015). Measuring social issues in sustainable supply chains. Measuring Business Excellence, 19(1), 33-45. https://doi.org/10.1108/mbe-11-2014-0041

Akcay, E. C., Ergan, S., & Arditi, D. (2017). Modeling information flow in the supply chain of structural steel components. Journal of Civil Engineering and Management, 23(6), 753-764. https://doi.org/10.3846/13923730.2017.1281841

Amoozad Mahdiraji, H., Shateri, H., Beheshti, M., & Mokhtarzadeh, N. G. (2019). A comparison of buyback, rebate and flexible contracts in a seller-buyer supply chain. Transformations in Business & Economics, 18(1), 109-127.

Amoozad Mahdiraji, H., Zavadskas, E. K., & Razavi Hajiagha, S. (2015). Game theoretic approach for coordinating unlimited multi echelon supply chains. Transformations in Business and Economics, 14(2), 133-151.

Amoozad Mahdiraji, H., Govindan, K., Zavadskas, E. K., & Razavi Hajiagha, S. (2014). Coalition or decentralization: a game-theoretic analysis of a three-echelon supply chain network. Journal of Business Economics and Management, 15(3), 460-485. https://doi.org/10.3846/16111699.2014.926289

Ashby, A., Leat, M., & Hudson-Smith, M. (2012). Making connections: a review of supply chain management and sustainability literature. Supply Chain Management: an International Journal, 17, 497516. https://doi.org/10.1108/13598541211258573

Azapagic, A., & Perdan, S. (2000). Indicators of sustainable development for industry: a general framework. Process Safety and Environmental Protection, 78(4), 243-261. https://doi.org/10.1205/095758200530763

Azar, A., Khosravani, F., & Jalal, Y. (2013). Soft operation research. Tehran: management organization.

Cascio, W. (2010). Employment downsizing: causes, costs and consequences. In L. Stadtler, A. Schmitt, P. Klarner, & Th. Straub, (Eds.), More than bricks in the wall: organizational perspectives for sustainable success (pp. 87-96). Gabler Verlag. https://doi.org/10.1007/978-3-8349-8945-1_9

Caulier-Grice, J., Davies, A., Patrick, R., & Norman, W. (2012). Defining social innovation. In A deliverable of the project: “The theoretical, empirical and policy foundations for building social innovation in Europe, European Commission e 7th Framework Programme. Brussels: European Commission, DG Research.

Chen, S., & Wu, W. (2010). A systematic procedure to evaluate an automobile manufacturer distributor partnership. European Journal of Operational Research, 205(3), 687-698. https://doi.org/10.1016/j.ejor.2010.01.036

de Bloom, J., Kompier, M., Geurts, S., de Weerth, C., Taris, T., & Sonnentag, S. (2009). Do we recover from vacation? Meta-analysis of vacation effects on health and well being. Journal of Occupational Health, 51(1), 13-25. https://doi.org/10.1539/joh.k8004

Debing, N., Kevin, L., & Xiaowo, T. (2010). Social responsibility allocation in two-echelon supply chains: insights from wholesale price contracts. European Journal of Operational Research, 207(3), 1269-1279. https://doi.org/10.1016/j.ejor.2010.06.026

DPE. (2011). The Benefits of Collective Bargaining for Professional and Technical Workers. DPE Research Department, Washington, DC. Retrieved from http://dpeaflcio.org/programs-publications/issuefact-sheets/the-benefits-of-andtechnical-workers

Erol, I., Sencer, S., & Sari, R. (2011). A new fuzzy multi-criteria framework for measuring sustainability performance of a supply chain. Ecological Economic, 70(6), 1088-1100. https://doi.org/10.1016/j.ecolecon.2011.01.001

European Commission. (2014). Social innovation. A decade of changes. Luxembourg: Publications Office of the European Union.

Fazlollahtabar, H. (2018). Operations and inspection cost minimization for a reverse supply chain.
Operational Research in Engineering Sciences: Theory and Applications, 1(1), 91-107. https://doi.org/10.31181/oresta19012010191f

Goering, G. (2012). Corporate social responsibility and marketing channel coordination. Research in Economics, 66(2), 142-148. https://doi.org/10.1016/j.rie.2011.10.001

GRI. (2011). Sustainability reporting guidelines. Amsterdam, The Netherlands.

Hanafizadeh, P., & Mirzazadeh, M. (2011). Visualizing market segmentaition using self-organizing maps and fuzzy Delphi method-ADSL market of telecommunication company. Expert Systems with Applications, 38(1), 198-205. https://doi.org/10.1016/j.eswa.2010.06.045

Hassini, E., Surti, C., & Searcy, C. (2012). A literature review and a case study of sustainable supply chains with a focus on metrics. International Journal of Production Economics, 140(1), 69-82. https://doi.org/10.1016/j.ijpe.2012.01.042

Hediger, W. (2010). Welfare and capital-theoretic foundations of corporate social responsibility and corporate sustainability. The Journal of Socio-Economics, 39(4), 518-526. https://doi.org/10.1016/j.socec.2010.02.001

Hsueh, C. (2014). Improving corporate social responsibility in a supply chain through a new revenue sharing contract. International Journal of Production Economics, 151, 214-222. https://doi.org/10.1016/j.ijpe.2013.10.017

ICheme, O. (2002). The sustainability metrics: sustainable development progress metrics recommended for use in the process industries. Rugby, UK.

Jia, P., Amoozad Mahdiraji, H., Govindan, K., & Meidutė, L. (2013). Leadership selection in an unlimited three-echelon supply chain. Journal of Business Economics and Management, 14(3), 616-637. https://doi.org/10.3846/16111699.2012.761648

Jong, S., & Slavova, K. (2014). When publications lead to products: the open science conundrum in new product development. Research Policy, 43(4), 645-654. https://doi.org/10.1016/j.respol.2013.12.009

Ju, Q., Ding, L., & Skibniewski, M. J. (2017). Optimization strategies to eliminate interface conflicts in complex supply chains of construction projects. Journal of Civil Engineering and Management, 23(6), 712-726. https://doi.org/10.3846/13923730.2016.1232305

Katsikea, E., Theodosiou, M., & Morgan, R. (2014). Why people quit: explaining employee turnover intentions among export sales managers. International Business Review, 24(3), 367-379. https://doi.org/10.1016/j.ibusrev.2014.08.009

Klassen, R., & Vereecke, A. (2012). Social issues in supply chains: capabilities link responsibility, risk (opportunity), and performance. International Journal of Production Economics, 140(1), 103-115. https://doi.org/10.1016/j.ijpe.2012.01.021

Kruse, S., Flysjö, A., Kasperczyk, N., & Scholz, A. (2009). Socioeconomic indicators as a complement to life cycle assessment e an application to salmon production systems. The International Journal of Life Cycle Assessment, 14(1), 8-18. https://doi.org/10.1007/s11367-008-0040-x

Kuo, Y. F., & Chen, P. C. (2008). Constructing performance appraisal indicators for mobility of the service industries using Fuzzy Delphi Method. Expert Systems with Applications, 35(4), 1930-1939. https://doi.org/10.1016/j.eswa.2007.08.068

Kwon, I., & Milgrom, E. (2014). The significance of firm and occupation specific human capital for hiring and promotions. Labour Economics, 31, 162-173. https://doi.org/10.1016/j.labeco.2014.07.003

Lim, L., Chan, C., & Dallimore, P. (2010). Perceptions of human capital measures: from corporate executives and investors. Journal of Business and Psychology, 25(4), 673-688. https://doi.org/10.1007/s10869-009-9150-0

Lopez, R., Chong, H.-Y., Moon, S., & Wang, X. Y. (2017). Case study on subcontracting arrangements in the scaffolding supply chain of a Liquefied Natural Gas infrastructure project. Journal of Civil Engineering and Management, 23(8), 1136-1147. https://doi.org/10.3846/13923730.2017.1388277

Lukovac, V., & Popović, M. (2018). Fuzzy Delphi approach to defining a cycle for assessing the performance of military drivers. Decision Making: Applications in Management and Engineering, 1(1), 67-81. https://doi.org/10.31181/dmame180167l

Ma, P., Wang, H., & Shang, J. (2013). Contract design for two-stage supply chain coordination: integrating manufacturer-quality and retailer-marketing efforts. International Journal of Production Economics, 146(2), 745-755. https://doi.org/10.1016/j.ijpe.2013.09.004

Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing Science, 32(1), 3-19. https://doi.org/10.1177/0092070303258971

Mani, V., Agrawal, R., & Sharma, V. (2014). Supplier selection using social sustainability: AHP based approach in India. International Strategic Management Review, 2(2), 98-112. https://doi.org/10.1016/j.ism.2014.10.003

Modak, N., Panda, S., Mishra, R., & Sana, S. S. (2016). A three-layer supply chain coordination in socially responsible distribution system. Review of Applied Management Studies, 14(1), 75-87. https://doi.org/10.1016/j.tekhne.2016.06.001

Modak, N., Panda, S., Sana, S., & Basu, M. (2014). Corporate social responsibility, coordination and profit distribution in a dual-channel supply chain. Pacific Science Review, 16(4), 235-249. https://doi.org/10.1016/j.pscr.2015.05.001

Nematollahia, M., Hosseini-Motlagha, M., & Heydarib, J. (2017). Coordination of social responsibility and order quantity in a two-echelon supply chain: a collaborative decision-making perspective. International Journal of Production Economics, 184, 107-121. https://doi.org/10.1016/j.ijpe.2016.11.017

Ni, D., Li, K., & Tang, X. (2010). Social responsibility allocation in two-echelon supply chains: insights from wholesale price contracts. European Journal of Operational Research, 207(3), 1269-1279. https://doi.org/10.1016/j.ejor.2010.06.026

OECD. (2012). Sick on the job? Myths and realities about mental health and work. Paris.

Panda, S. (2014). Coordination of a socially responsible supply chain using revenue sharing contract. Transportation Research Part E: Logistics and Transportation Review, 67, 92-104. https://doi.org/10.1016/j.tre.2014.04.002

Panda, S. M. (2016). Exploring the effects of social responsibility on coordination and profit division in a supply chain. Journal of Cleaner Production, 139, 25-40. https://doi.org/10.1016/j.jclepro.2016.07.118

Panda, S., Modak, N., & Cárdenas-Barrón, L. (2017). Coordinating a socially responsible closed-loop supply chain with product recycling. International Journal of Production Economics, 188, 11-21. https://doi.org/10.1016/j.ijpe.2017.03.010

Panda, S., Modak, N., Basu, M., & Goyal, S. (2015). Channel coordination and profit distribution in a social responsible three-layer supply chain. International Journal of Production Economics, 168, 224-233. https://doi.org/10.1016/j.ijpe.2015.07.001

Podgorski, D. (2015). Measuring operational performance of OSH management system e a demonstration of AHP-based selection of leading key performance indicators. Safety Science, 73, 146-166. https://doi.org/10.1016/j.ssci.2014.11.018

Popovic, T., Povoa, A., Kraslawski, A., & Carvalho, A. (2018). Quantitative indicators for social sustainability assessment of supply chains. Journal of Cleaner Production, 180, 748-768. https://doi.org/10.1016/j.jclepro.2018.01.142

Puška, A., Maksimović, A., & Stojanović, I. (2018). Improving organizational learning by sharing information through innovative supply chain in agro-food companies from Bosnia and Herzegovina. Operational Research in Engineering Sciences: Theory and Applications, 1(1), 76-90. https://doi.org/10.31181/oresta19012010175p

Raj, A., Biswas, I., & Srivastava, S. (2018). Designing supply contracts for the sustainable supply chain using game theory. Journal of Cleaner Production, 185, 275-284. https://doi.org/10.1016/j.jclepro.2018.03.046

Roca, L., & Searcy, C. (2012). An analysis of indicators disclosed in corporate sustainability reports. Journal of Cleaner Production, 20(1), 103-118. https://doi.org/10.1016/j.jclepro.2011.08.002

Seuring, S., & Müller, M. (2008). From literature review to a conceptual framework for sustainable supply chain management. Journal of Cleaner Production, 16(15), 1699-1710. https://doi.org/10.1016/j.jclepro.2008.04.020

Simoes, M., Freitas, C., Barbosa-Povoa, A., & Carvalho, A. (2016). Social life cycle assessment e a framework for mid- and end-point impact categories (Working-paper #1e2016). CEG-IST, Instituto Superior Técnico (Technical University), Portugal.

Strandberg, T., von Bonsdorff, M., Strandberg, A., Pitkala, K., & Raikkonen, K. (2017). Associations of vacation time with lifestyle, long-term mortality and health related quality of life in old age: the Helsinki Businessmen Study. European Geriatric Medicine, 8(3), 260-264. https://doi.org/10.1016/j.eurger.2017.03.003

Szekely, F., & Knirsch, M. (2005). Responsible leadership and corporate social responsibility: metrics for sustainable performance. European Management Journal, 23(6), 628-647. https://doi.org/10.1016/j.emj.2005.10.009

Uma, S. (2003). A study on training importance for employees of their successful performance in the organization. International Journal of Science and Research, 2(11), 137-140.

Working definition, ISO 26000 Working Group on Social Responsibility. (2007). Sydney.

Zavadskas, E. K., Šaparauskas, J., & Antucheviciene, J. (2018). Sustainability in construction engineering. Sustainability, 10(7), 1-7. https://doi.org/10.3390/su10072236