Contextual Relevance of Sustainable Supply Chain: Recycling, Philanthropy, or Both?

Abstract

Many firms have already been actively or passively involved in sustainable supply chain management with the objective of improving the triple bottom line (TBL). But whether the limited funds should be allocated to both community responsibility activities (e.g., corporate philanthropy) and environmental protection activities (e.g., recycling) is a confusing question. This paper provides deep insights into the combination strategy of two corporate social responsibility (CSR) types in a two-tier sustainable supply chain by modeling analysis. The decision models in eight scenarios with different combinations of CSR types are proposed and applied for the determination of equilibrium scenarios. The paper’s findings highlight: under certain conditions, (1) the supply chain with two types of CSR is the equilibrium scenario and improves the TBL; (2) counter-intuitively, balancing short- and long-term benefits, firms are more willing to cooperate with partners with relatively low consumers sensitivity of CSR activities; (3) it is wise for the manufacturer to allocate more funding to environmental responsibility than to community responsibility. In addition, considering both short- and long-term benefits, comparing with the manufacturer, the retailer has a stronger incentive to improve recycling efficiency.