CSR failures in food supply chains – an agency perspective

Abstract

Purpose -Companies implement corporate social responsibility (CSR) practices along their supply chains to fulfil stakeholder requirements. In doing so, failures in which CSR aspects are violated also emerge, caused by single supply chain members. In these situations, quite often the other supply chain members also appear responsible although they mostly do not have complete control over suppliers and sub-suppliers due to information gaps. Therefore, the malpractice of one single company can harm the reputation of related companies. This paper aims to analyse recent CSR failures along food supply chains with the aim of evaluating why these occurred and what possibilities exist to avoid similar failures in the future. Design/methodology/approach -Agency theory analyses information asymmetries in relationships in which one party delegates work to another party. In the considered failures, the downstream company can be regarded as principal by ordering products from the suppliers (agents). Consequently, agency theory contributes towards understanding failures in CSR implementation and highlighting solutions. Findings -The cases analysed illustrate that CSR failures can have negative impacts on the companies' reputation and therefore also financial effects. Implementing a successful CSR policy should therefore be a primary interest of companies. Agency theory proved suitable to illustrate supply chain relationships and point out implications for companies. The instruments of agency theory can help to avoid CSR failures in food supply chains. Originality/value -The paper combines agency theory with failures in CSR along food supply chains. In doing so, new insights into supply chain relationships are gained and implications for supply chain members to avoid CSR failures can be deduced. One special characteristic of the analysed failures is that the principal is not aimed at increasing the quantity of the agent's output but the quality.

Sustainability in multi‐tier supply chains: Understanding the double agency role of the first‐tier supplier

“…(2012) on the use of agency theory in supply chain management and the screening of additional representative studies that take the unit of analysis beyond the dyad and/or specifically addressed sustainability, we found that scholars have not delved deeply into understanding the specific role of the first‐tier supplier in disseminating sustainability standards. For example, Wiese and Toporowski (2013) argue that the complexity of food supply chains implies that lead firms need to rely extensively on their agents (i.e., the direct suppliers) for controlling sub‐suppliers. However, this study is silent on the conditions under which the first‐tier supplier actually accepts this responsibility and begins to manage sustainability considerations autonomously in their upstream processes.…”

Sustainable grocery retailing: Myth or reality?—A content analysis

“…There is a consensus in the literature (de Man & Burns, ; Wiese & Toporowski, ) that both consumers and NGOs regard retailers as responsible for all activities in their supply chain. Thus, sustainability in retailing is not exclusively related to the own activities of the retail company but also dependent on the behavior of their suppliers (Mefford, ; Schramm‐Klein, Morschett, & Swoboda, ).…”

Environmental Upgrading of Developing Country Firms in Global Value Chains

“…It assumes that different actors (NGOs, media) exert sufficient pressure on western companies to force them to develop conduct codes or ethical guidelines that stipulate the conditions under which products and services should be produced in developing countries. While some authors (Wiese and Toporowski, ) consider codes of conduct as useful tools to reduce information asymmetry and increase transparency in the supply chains, others cast doubt on their efficiency. Lim and Phillips () and Lund‐Thomsen and Lindgreen () specify that pressure exerted on suppliers in developing countries has led to fraudulent practices in CSR initiatives in order to avoid the costs associated with compliance.…”