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- W3129123527 abstract "Following the acquisition of an ebony mill in Cameroon, Taylor Guitars implemented a series of social and environmental responsibility (CSER) initiatives in ebony sourcing. The company also supplies the responsibly sourced ebony to its competitors through horizontal sourcing. Inspired by their example, we study vertical integration as an alternative strategy for CSER in sourcing. In this case, firm can vertically integrate with its supplier to ensure responsible practices in the supply chain. In a competitive setting, an exposed CSER violation in one supply chain may increase the competing supply chain’s demand (positive externalities) because of product substitution or decrease the competing supply chain’s demand (negative externalities) because of public’s heightened suspicion about the entire industry’s social and environmental practices. Furthermore, NGOs’ scrutiny and reporting policies may influence the chance of a violation exposure, as well as demand externalities created by the violation exposure. We examine horizontal sourcing as a potential strategy for mitigating the impact of a CSER externality caused by a competing supply chain. When horizontal sourcing is infeasible, we find that higher violation exposure externalities induce better CSER, but overly intensive violation scrutiny alongside strongly negative externalities may backfire and discourage CSER. By contrast, when horizontal sourcing is feasible, intensive violation scrutiny induces CSER, but strongly positive externalities may impair industry-wide CSER. These findings have important implications for firms interested in ensuring CSER in their supply chain, as well as for NGOs’ violation scrutiny and reporting policies." @default.
- W3129123527 created "2021-02-15" @default.
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- W3129123527 date "2021-01-01" @default.
- W3129123527 modified "2023-09-23" @default.
- W3129123527 title "Vertical Integration for Corporate Social and Environmental Responsibility at Taylor Guitars" @default.
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- W3129123527 doi "https://doi.org/10.1007/978-3-030-51957-5_8" @default.
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