OPTIMAL STRATEGIES FOR GREEN SUPPLY CHAIN CONSIDERING SOCIAL RESPONSIBILITY AND ENVIRONMENTAL RESPONSIBILITY

Abstract

In this paper, we investigate optimal strategies and the effects of Corporate Social Responsibility (CSR) and Corporate Environmental Responsibility (CER) for a green supply chain consisting of a single supplier and a single manufacturer. For two different power structures with four different CSR-CER awareness scenarios, we establish the Stackelberg game models to derive the optimal results on the greenness level, the production quantity, and the social welfare. The first finding is that the degree of CSR awareness or CER awareness of supply chain members has positive effects on the green strategy of the supplier. The second finding is that for any CSR-CER awareness scenario, the greenness level, the production quantity, and the social welfare typically are higher when the party without CSR awareness is the leader. The only exception is that the greenness level of raw materials is higher under the supplier-led than the manufacturer-led when the supplier's CSR awareness is lower under the supplier-led and the manufacturer's CER-aware model. The third finding is that under the supplier-led, the greenness level of raw materials is highest when the manufacturer is CSR-aware; while under the manufacturer-led, the greenness level of raw materials is highest when the supplier is both CSR-aware and CER-aware.