Managing the adverse effect of supply chain risk on corporate reputation: The mediating role of corporate social responsibility practices

Abstract

Within the last decade, research has focussed on corporate social responsibility (CSR) practices as a strategic tool that enables firms to improve stakeholder perception, brand image and corporate reputation. However, one area that remains understudied is the role played by CSR practices in managing corporate reputation under conditions of supply chain risk. To answer this research question, we conduct a literature review and develop the corresponding hypothesis. We test our hypothesis using quantitative analysis of both primary and secondary data collected from organizations dispersed globally. The results highlight that under conditions of supply chain network disruption risk, CSR practices play an important role in enabling firms to manage the negative impact of such risk drivers on corporate reputation. The study further suggests that CSR practices positively impact supply chain risk management (SCRM) practices and are a necessary condition for SCRM practices to be effective in improving corporate reputation of organizations.

Under pressure: Finding organizational legitimacy through the supply chain

“…Companies that embrace a stakeholder perspective tend to outperform peer organizations (Wheeler and Davies, 2004). Specifically, firms that embrace CSR as a best practice can mitigate supply chain risk and insulate their reputation during times of disruption (Singh, 2021). The legitimation of the supply chain practices of Gartner ranked firms can help insulate organizations from perceptions of risk and scandal within the supply chain.…”

“…The increasing global nature of production and distribution means that supply chain management is vital not only for a firm's profitability but also for a firm's relationship to a broad range of stakeholders, including workers, communities and consumers around the world (Freeman et al, 2004;Hutchins and Sutherland, 2008). The ability to improve financial performance and profitability through supply chain management initiatives has been demonstrated to benefit organizational shareholders (D'avanzo et al, 2003;Ellinger et al, 2011Ellinger et al, , 2012Losbichler et al, 2008;Singh, 2021). Unfortunately, this pressure can also encourage firms to avoid regulation, cut labor costs and increase price competition among suppliers (Locke et al, 2013).…”

“…In fact, sustainability has been highlighted as a key component of outcome based, or demand driven, supply chain effectiveness (Melnyk et al, 2010). CSR initiatives within the supply chain have also been found to reduce supply chain risk and to insulate corporate reputations (Singh, 2021). Given the need for organizations to respond to coercive pressures from both shareholders and stakeholders in order to achieve legitimacy this competing hypothesis is suggested: H4b: Organizations will be more responsive to stakeholders in the year prior to earning the Gartner ranking than they are in the other years.…”

Responding to a societal crisis: How does corporate social responsibility engagement influence corporate reputation?

“…As noted by Aguinis and Glavas (2012) and Orlitzky et al (2017) , considerable research has investigated potential drivers for firms engaging in CSR at various levels of analysis, including institutional, industry, and stakeholder pressures such as the sensitivity of shareholders or religion in a country ( Campbell, 2007 ; Flammer, 2013 ; Jamali et al, 2020 ; Jeong, 2021 ), firm-level characteristics such as strategic orientation or corporate governance ( Brower and Rowe, 2017 ; Jain and Jamali, 2016 ; Ji, 2015 ; Zhang et al, 2018 ), and individual-level characteristics such as CEO incentives or CEO values ( Chin et al, 2013 ; Sajko et al, 2021 ; Velte, 2019 ). In addition to examining the drivers of CSR engagement, prior literature has also examined a variety of outcomes of CSR engagement, including firm performance ( Hossain et al, 2016 ; Jeong, 2021 ; Úbeda-García et al, 2021 ), corporate reputation ( Lai et al, 2010 ; Lin-Hi and Blumberg, 2018 ; Singh, 2021 ), and organizational attractiveness ( Belinda et al, 2018 ; Lis, 2018 ).…”

Predicting supply chain risks through big data analytics: role of risk alert tool in mitigating business disruption

“…They ultimately suggest that a supply chain disruption orientation by itself does not necessarily translate into supply chain risk resilience. It is also important for firms to identify capabilities and strategies that are sustainable and can proactively enable firms to mitigate the negative influences of these disruption risks (Singh, 2021).…”