Reliably Responsible: Structuring Supply Chains for Socially Responsible Behavior

34 Pages Posted: 16 Oct 2018 Last revised: 10 Jun 2019

See all articles by Mahdi Mahmoudzadeh

Mahdi Mahmoudzadeh

Georgia Institute of Technology, Scheller College of Business

Enno Siemsen

University of Wisconsin - Madison

Date Written: May 1, 2019

Abstract

We examine what type of consumer reactions—encouraging ones that emphasize the value of responsible sourcing or discouraging ones that emphasize the possibility of a consumer boycott in the face of violations—can lead supply chain partners engage in more responsible sourcing, using a behavioral lens. The classic model in this context predicts that only discouraging consumer reactions reliably incentivize firms to source responsibly. In contrast, our behavioral model predicts that an encouraging reaction, irrespective of its magnitude, always increases the firm's responsible sourcing when the discouraging reaction from the market is weak, and further refines that a discouraging reaction always increases responsible sourcing irrespective of the type of product considered. We use a behavioral experiment to test our behavioral model.

Keywords: responsible sourcing, behavioral operations, sustainable operations, dual sourcing, social responsibility

JEL Classification: M1

Suggested Citation

Mahmoudzadeh, Mahdi and Siemsen, Enno, Reliably Responsible: Structuring Supply Chains for Socially Responsible Behavior (May 1, 2019). Georgia Tech Scheller College of Business Research Paper No. 18-38. Available at SSRN: https://ssrn.com/abstract=3260168 or http://dx.doi.org/10.2139/ssrn.3260168

Mahdi Mahmoudzadeh (Contact Author)

Georgia Institute of Technology, Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Enno Siemsen

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

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