Transmission of csr practices and values in buyer supplier relationships a study

MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY  LE THUY DUONG TRANSMISSION OF CSR PRACTICES AND VALUES IN BUYER-SUPPLIER RELATIONSHIPS: A STUDY OF GARMENT COMPANIES IN VIETNAM PHD DISSERATION IN BUSINESS ADMINISTRATION Hanoi – 2024 MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY  LE THUY DUONG TRANSMISSION OF CSR PRACTICES AND VALUES IN BUYER-SUPPLIER RELATIONSHIPS: A STUDY OF GARMENT COMPANIES IN VIETNAM SPECIALIZATION: BUSINESS ADMINISTRATION SPECIALIZATION CODE: 9340101 PHD DISSERTATION Supervisors: 1. Nguyen Vu Hung 2. Dinh Le Hai Ha Hanoi – 2024 DECLARATION I have read and understood the National Economics University’s policy on plagiarism and academic integrity. I hereby declare in my honor that this research paper is my own work and does not violate the regulations on good academic practices.

PhD candidate Le Thuy Duong i TABLE OF CONTENT DECLARATION. i TABLE OF CONTENT. ii LIST OF ABBREVIATIONS .v LIST OF TABLES. vi LIST OF FIGURES .1 CHAPTER 1: LITERATURE REVIEW.

Overview of Corporate social responsibility. Overview of the buyer-supplier relationship and its relation to socially responsible supply chain. The buyer-supplier relationship in the supply chain setting. The buyer-supplier relationship and its vital roles in shaping responsible supply chains.

The literature review on CSR transmission in supply chains. CSR in the supply chain context. CSR transmission in the buyer-supplier relationship. Identifying the research gaps and the research questions.

The research gaps on CSR transmission in supply chains. The research questions of the dissertation .44 CHAPTER 2: THEORETICAL FOUNDATION. The inter-organizational learning theoretical frameworks. The inter-organizational learning as a dynamic process.

The various inter-organizational learning mechanisms and types of learning outcomes. CSR development through the lens of inter-organizational learning perspective: drivers, mechanisms, and outcomes. CSR learning drivers and mechanisms. CSR-related learning outcomes and determinants in inter-organizational relationships.

Model of Heterogeneous Interorganizational Learning (Greve, 2005) – the dissertation’s theoretical framework .59 ii CHAPTER 3: RESEARCH METHODOLOGY. Reasons for choosing the sequential exploratory mixed research methodology. Background of the research context: CSR transmission in garment supply chains and the context of Vietnam’s garment industry. CSR transmission in garment supply chains.

The context of Vietnam’s garment industry. The qualitative study: objectives and research design. The objectives of the qualitative study. The research design of the qualitative study.

The quantitative study: objectives and research design. The objectives of the quantitative study. The research design of the quantitative study. The interdependence between the two phases of the dissertation .74 CHAPTER 4: DATA ANALYSIS AND FINDINGS.

The qualitative study on CSR transmission modes in buyer-supplier relationships. Data collection and analysis procedures. The case description. The qualitative study’s key findings.

The quantitative study on determinants of CSR practices and values learning within the buyer-supplier relationship. The theoretical framework of the quantitative study. Hypothesis development and the testing model. Data collection and Sample.

Quantitative data analysis. The quantitative study’s key findings .124 CHAPTER 5: DISCUSSION AND IMPLICATIONS. Discussion on key findings. The multi-faceted and dynamic nature of the CSR transmission process in buyer-supplier relationships across supply chains.

Antecedents for the learning of CSR practices and values within buyer- supplier relationships across the supply chain settings. Theoretical and practical implications. Theoretical implications of the study. Practical implications of the study.

Limitations of the study and recommendation for future research. Limitations of the study. Recommendation for future research .151 LIST OF WORKS RELATED TO THE DISSERTATION THAT THE PHD CANDIDATE HAS PUBLISHED.175 iv LIST OF ABBREVIATIONS ASEAN Association of Southeast Asian Nations BSCI Business Social Compliance Initiative CAP Corrective action plan CED Committee for Economic Development CSR Corporate social responsibility EFA Exploratory Factor Analysis EU the European Union (EU), GRI Global Reporting Initiative HRP Human Responsibility in Production ILO The International Labor Organization IPL Industrialization production leader Operational process manager - Sustainable OPM - SD development PTM Production team manager (PTM QPL Quality Production Leader SA8000 Social Accountability 8000 Standard SCM Supply chain management SMEs small and medium-sized enterprises SPL Supply Production Leader US The United States of America WRAP Worldwide Responsible Accredited Production v LIST OF TABLES Table 1.1: The development of CSR concepts .2: Motivations for firms to implement CSR.3: CSR-related development and management mechanisms within buyer- supplier relationships in supply chains .4: A summary of the existing literature on drivers and barriers for CSR transmission process .37 in the supply chain setting .1: Two-dimensional structuring framework for conceptualizing organizational learning processes in CSR development .1: Research questions of the two-stage study.1: Company profiles and informant’s information .2: Summary of the buyer-supplier dyadic CSR transmission modes .3: The drivers of inter-organizational learning and their linkages with buyer- supplier dyadic CSR transmission modes .4: Summary of hypotheses of the dissertation .5: Demographic characteristics of respondents .6: Independent variables and measuring items .7: Independent variable - exploratory factor analysis (EFA) and reliability analysis result .8: Descriptive statistics and Correlation Matrix .9: Regression results with Learning CSR practices as dependent variable .10: Regression results with Learning CSR values as dependent variable .11: Summary of the research findings .125 vi LIST OF FIGURES Figure 1.1: The Corporate Social Performance Model .2: The corporate social performance model.3: The Corporate Social Performance Model .4: The Pyramid of Social Corporate Responsibility .5: The Three-Domain Model of Corporate Social Responsibility .6: Comparison of CSR area classifications by United Nations Global Compact and ISO 26000 with the Tripple Bottom Line model .7: Supply chain network structure .8: The upstream and downstream flow of a supply chain .9: The vertical and horizontal relations .10: Levels and corresponding types of interactions .1: Organizational learning as a dynamic process .2: The 5I Learning framework .3: The interorganizational learning process .4: Conceptual delineation of organizational learning for CSR development .5: The model of inter-organizational sustainability learning .6: Model of Heterogenous Interorganizational Learning.1: Vietnam's textile and garment export value growth .2: The sequential exploratory mixed method research design .1: The CSR transmission modes in buyer-supplier relationships .2: The testing model for the buyer-supplier dyadic CSR transmitting-learning process. Rationale of the research How corporate social responsibility (CSR) could be successfully incorporated in supply chain settings has gained remarkable interest from scholars and practitioners.

As defined by the European Commission (2011, p. 6), CSR is “the responsibility of enterprises for their impacts on society.” In greater detail, “enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders” (European Commission, 2011, p. It is worth noting that by virtue of the changing nature of business relations in an era of globalization and outsourcing, the domain of CSR, has gone beyond the boundary of an individual firm, extending to the entire supply chain (Andersen & Skjoett-Larsen, 2009; Pedersen & Andersen, 2006; Perry & Towers, 2013; Roberts, 2003). In fact, being under pressure exerted by both internal and external stakeholders, brand-owning enterprises and multinational ones are not only expected to behave socially responsibly but also held accountable for CSR issues along their supply chains (Andersen & Skjoett-Larsen, 2009; Ayuso et al., 2013; Ciliberti et al., 2008; Gold et al., 2010; Kirste et al., 2024; Seuring & Müller, 2008; Stekelorum et al., 2019; Zhang et al.

Failing to do so, they would expose to substantial risks of losing their reputation or financial performance (Hoejmose et al., 2014; Oelze et al. Stark examples include well-known brands such as Nike, Disney, Adidas, Apple, Primark, Mattel, or Walmart (Freise & Seuring, 2015; Frost & Burnett, 2007; Hoang & Jones, 2012; International Trade Union Confederation, 2016; Winstanley et al. The engagement of the entire supply chain with CSR, on the other hand, is believed to result in enormous benefits including improved stakeholder relationships (Welford & Frost, 2006), reputational protection and enhancement (Hoejmose et al., 2014), or an increase in total chain profits (Hsueh & Chang, 2008). Therefore, as suggested by Ciliberti et al.

885), “a socially responsible company should thus persuade supply chain partners to implement CSR (or even force them, should persuasion be not effective)”. Practically, given the substantial benefits to be gained from undertaking CSR in supply chain settings (Hoejmose et al., 2014; Welford & Frost, 2006) and the serious repercussions of any CSR violations (Hoejmose et al., 2014; Oelze et al., 2016), lead firms and large international buyers tend to prioritize the incorporation of CSR throughout their entire supply chains. To achieve such a goal, these firms generally adopt the two CSR-related management strategies along their supply chains: (i) Compliance with CSR requirements and (ii) CSR-related capacity building (Ciliberti et 1 al., 2008; Hultman & Elg, 2018; Vachon & Klassen, 2006, 2008). While the former highlights the establishment of CSR-related requirements and the adoption of strict governing mechanisms to ensure suppliers’ CSR compliance, the latter focuses more on CSR-related awareness building and training (Ciliberti et al.

Unfortunately, despite the employment of various CSR management techniques in buyer-supplier relationships, it is evidenced that there still exists a gap between buyers’ CSR desirability and the actual implementation by their suppliers (Andersen & Skjoett- Larsen, 2009; Roberts, 2003; L. In most cases, suppliers merely adhere to buyers’ CSR requirements rather than go beyond them (Perry et al. Worse still, some suppliers may even engage in mock compliance or other opportunistic behaviors to avoid penalties from buyers (Köksal & Strähle, 2021; Welford & Frost, 2006). Indeed, the existence of these practical issues could be explained by two primary reasons.

Firstly, the dissemination of CSR throughout the supply chains, particularly in multi-tier ones, is generally considered complex and challenging. Given the geographical dispersion of global supply chains, lead firms could find it difficult to engage their entire chains into CSR operations (Roberts, 2003; Walker et al., 2008) or constantly monitor CSR concerns of all members (Köksal & Strähle, 2021; Perry & Towers, 2013). Additionally, supply chain participants rarely share the same CSR motivations because they work in various political and cultural environments with different mindsets, acceptable norms, and customs (Awaysheh & Klassen, 2010; Kirste et al. Furthermore, while a lack of sufficient influences or high monitoring expenses could challenge lead firms’ attempts to assure proper environmental and social performance throughout their supply chains (Awaysheh & Klassen, 2010; Ciliberti et al., 2008), other barriers including resources constraints, a lack of knowledge, or cost-cutting pressure are likely to prevent suppliers, particularly those are small and medium-sized enterprises (SMEs) in developing countries, from pursuing CSR orientation (Ciliberti et al., 2010; Jenkins, 2006; Welford & Frost, 2006).

Secondly, for CSR transmission in supply chains to be genuinely effective and sustainable, the dynamic interactions between buyers and suppliers must be better understood. So far, certain international CSR-related standards (e. ISO 14001, Social Accountability 8000 (SA8000), or ISO 26000), reporting frameworks, and industry-or-firm’ codes of conduct, along with monitoring techniques have traditionally been employed by lead firms and large buyers to guarantee CSR implementation in their supply chains (Andersen & Skjoett-Larsen, 2009; Awaysheh & Klassen, 2010; Beske et al., 2008; Llach et al., 2015; Marimon et al. Spence & Bourlakis, 2009; Welford & Frost, 2006).

However, it is undoubted that such a buyer- 2 to-supplier CSR-related enforcement approach seems insufficient to ensure the implementation and development of CSR by suppliers (Perry & Towers, 2013; Welford & Frost, 2006). This is especially true in the absence of acceptance and willingness from suppliers to adopt these CSR-related requirements within their own organizations (Andersen & Skjoett-Larsen, 2009). Moreover, given that CSR governance mechanisms appear to be inadequate for changing suppliers' attitudes and behavior regarding CSR, they may encourage suppliers to take minimal action in order to avoid penalties from buyers, or, worse still, lead to suppliers’ mock compliance (Fortis et al., 2016; Jiang, 2009; Perry & Towers, 2013).