Companies are increasingly challenged for action on climate change. Most studies on business responses to climate change focus on cross-sector comparisons and neglect intra-sectoral dynamics. This paper investigates the influence of supply chain position and regional affiliation on climate change strategies within a particular industry. We present a generic framework integrating both market and non-market responses to climate change. We argue that climate change strategies comprise several corporate activities that have different foci of interaction and four main objectives: governance, innovation, compensation and legitimation. Using a global sample of 116 automotive companies, we conduct a cluster analysis and identify four types of strategy. We find that the sophistication of automobile manufacturers' strategies significantly differs from that of suppliers. Regional affiliation and firm size prove to be determinants of the strategy type pursued. We cannot find evidence for a relationship between financial performance and a company's strategic approach to climate change.
To prevent adverse effects from climate change, it is vital to involve the private sector in mitigation efforts. So far, however, research has insufficiently addressed the determinants of corporate action in specific industries. Our paper aims at bridging this gap by empirically analyzing the global automotive industry's response to climate change mitigation issues. We use publicly available information from 105 sector leaders to investigate the role of external institutional pressures and intra-organizational governance in the extent of corporate action. Based on a multiple regression analysis, we find that organizational involvement and the integration of climate change into risk management exhibit the greatest influence. Moreover, companies with business activities that necessitate interaction with the end consumer tend to be most active. Our analysis furthermore indicates that neither the stringency of a firm's home country's climate policy regime nor the degree of internationalization is associated with a higher implementation level of response strategies.
Purpose
The purpose of this study is to examine how the pressures from stakeholders located in company's country of origin and level of internationalization of the company influence the implementation of socially responsible supply chain management (SR-SCM) practices.
Design/methodology/approach
To assess this level of influence, an SR-SCM performance index is developed by building on existing theoretical frameworks and using secondary data from ThomsonReuters’ WorldScope and ASSET4 databases to capture responsible supply chain actions categorized in communication, compliance and supplier development strategies. The analysis is based on 1,252 international companies from diverse countries and sectors between 2007 and 2016.
Findings
The effectiveness of stakeholder pressures in facilitating the adoption of socially responsible practices varies greatly with regard to the strategic element of SR-SCM and the type stakeholders considered. Companies that are more internationalized tend to adopt a greater number of SR-SCM practices, whereas home country stakeholders are of diminishing relevance with the increasing internationalization of a company.
Practical implications
Governments in companies’ countries of origin should ensure that social issues in supply chains are adequately covered by regulations. Ideally, laws should not only cover firms’ domestic operations but also their global activities.
Social implications
Citizens should be given the opportunities to raise their voice and publicly express their disagreement with business misconduct and non-compliance. Apart from that, the role of workers’ associations and investors in the social sustainability debate should be strengthened.
Originality/value
This study contributes to SR-SCM theory development by operationalizing existing conceptual frameworks, showing how domestic stakeholders shape SR-SCM performance and analyzing whether the influence of certain stakeholder groups diminishes or increases when a company is more globally-oriented in its operations.
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