Manufacturer’s cooperation strategy of closed-loop supply chain considering corporate social responsibility

Abstract

Corporate social responsibility (CSR) has become a popular and important strategy for corporate operation and sustainable development. Meanwhile, many social or environmental incidents that occur in one enterprise could bring huge risk or disruption for the entire supply chain. This study discusses the manufacturer’s cooperation strategy of closed-loop supply chain (CLSC) composed of a dominant manufacturer with CSR behavior consciousness, a retailer with CSR investment, and a third-party recycler. In the CSR-CLSC, the manufacturer exhibits CSR behavior consciousness through considering stakeholders welfare, the retailer makes CSR investment through profit donation and the third-party recycler exhibits CSR activity through product recycling. And under the Stackelberg Game setting, we formulate four different decision-making models to investigate the interaction between manufacturer’s CSR behavior consciousness and retailer’s CSR investment, as well as their impact on the manufacturer’s cooperative strategy selection and CLSC operation. The results show that both the CSR behavior consciousness of manufacturer and CSR investment of retailer are conducive to reducing the wholesale price of new products, enhancing the recycling rate of waste products and improving the performance of CSR-CLSC members, and both of them have the function of mutual incentives. The vertical cooperation strategy of manufacturer is conducive to increasing the overall performance of CSR-CLSC, and compared with the cooperation with the third-party recycler, the manufacturer has stronger motivation to cooperate with the retailer, and it is also more beneficial to improving the CSR investment level, the waste product recycling rate, and the performance of CSR-CLSC members.

Who will undertake corporate social responsibility in supply chain encroachment? Manufacturer or retailer

“…Part (i) of Corollary 1 shows that, with manufacturer CSR, whether there is manufacturer encroachment or not, the higher the CSR level, the lower wholesale price will be set at. Previous studies have obtained similar conclusions, for example, Yan et al (2021). The reason might be that as the manufacturer becomes more aware of its CSR behavior, it will take the initiative to reduce wholesale prices in the retail channel to better benefit stakeholder, thus maximizing social welfare (Corollary 3 also suggests that manufacturer's social welfare maximization goal is positively related to its awareness of CSR behavior).…”

“…For an earlier review of CSR conception, please refer to Frederick (1987). Most studies focus on the supply chain members' CSR strategy, that is, CSR concern (He et al, 2019; Liu & Xiao, 2019; Modak et al, 2014, 2019; Panda et al, 2015, 2017; Wang et al, 2021; Wang & Li, 2021; Ying et al, 2023), CSR investment (Arya & Mittendorf, 2015; Liu et al, 2019, 2021; Ma et al, 2017; Modak et al, 2019; Ni & Li, 2012; Wu et al, 2017, 2020; Yan et al, 2023), CSR sharing (Hsueh & Chang, 2008; Ni et al, 2010; Syed Asif Raza, 2018), and CSR affect (Nie et al, 2019; Yan et al, 2021). Our work uses consumer surplus to measure the CSR of manufacturer and retailer, corelated with the first issue.…”

Modelling low-carbon closed-loop supply chain considering channel power structures and cross-shareholding

“…Research shows that the recovery rate is higher under recycler leadership than centralized decision-making and manufacturer leadership. Yan et al [31] explored the manufacturer's cooperation strategy of CLSC composed of a dominant manufacturer with CSR behaviour consciousness, a retailer with CSR investment, and a third-party recycler.…”

Impact of corporate social responsibility on carbon emission reduction in supply chains

“…They found that a more significant market share and higher system profit can be obtained only through CSR cooperation among member enterprises. Yan et al (2021) discussed a closed-loop supply chain cooperation strategy composed of manufacturers with social responsibility consciousness, retailers with CSR investment and recyclers. They found that CSR consciousness can motivate each other and improve the overall performance of the supply chain.…”