Though exploratory in nature, the framework that is introduced and tested furnishes managers with an understanding of the dimensions and drivers of CARS in purchasing. This research sheds light on the interrelatedness of these dimensions, suggesting that purchasing managers can build upon their experiences in one area of CARS when initiating other areas of CARS. The involvement of the purchasing function in CARS has been labeled as Purchasing Social Responsibility (USSR) and working definitions of these terms re provided in the ensuing section of the paper.
USSR has the characteristics Of CARS, but is divergent because of the purchasing managed distinct interaction with a broad set of stakeholders including buyers, suppliers, contractors, the community, and internal employees in most of the other functional areas of the company. While some of these activities may overlap with the general CARS of the firm, the purchasing manager occupies a distinct role in garnering support from and coordinating with other groups for socially responsible conduct in the company’s relationship with suppliers. The specific goal is to answer the following research questions: 1 .
What are the specific activities that comprise USSR? 2. What are the drivers of USSR? A new concept of USSR is developed through a review of the CARS and related purchasing and supply chain management literature and an integration Of extant findings from in-depth interviews with supply chain managers. The concept is further developed and the stud’s research questions are answered by creating a reliable and valid scale to measure USSR, and by advancing and testing a theoretical model of the antecedents to USSR through the use of a large-scale mail survey.
The following sections of the paper provide a brief overview of the extensive literature in the broad area of CARS and then focus more specifically on the purchasing and supply management literature concerning USSR. Hypotheses are next developed, through an integration of the social responsibility literature with literature from the fields of organizational behavior and organizational theory. In both these sections and the sections that follow, findings are integrated from an earlier, standalone project involving exploratory interviews conducted with 26 managers and executives in the areas Of purchasing, transportation, and arousing.
These interviews were conducted prior to the development of this stud’s hypotheses and survey instrument. For a more detailed description of the interviews, see Carter and Jennings (2002, up. 150-152). These interviews, along with the literature introduced in the literature review section that follows, helped us to understand USSR, the measurement of USSR, and the antecedents to USSR. After the introduction of the stuffs hypotheses, the methodology used to test the hypotheses is described and results are presented.
Finally, the implications of our findings, both from a theoretical perspective and from the dominant of managers and executives who initiate and manage USSR activities and programs, are discussed. JOURNAL OF BUSINESS LOGISTICS, Volvo. 25, No. 1, 2004 147 LITERATURE REVIEW Within the CARS literature, there are three schools of thought on the definition Of CARS. In One view, CARS consists of specific Sets of activities or dimensions and includes charitable and philanthropic donations (Washout 1 998), community considerations (Maillot 1 998), the advancement of gender, racial, and religious diversity in the workplace (Claim et al. 997), safety (Washout 1992), human rights (Jennings and Entwine 1999), and the environment (Freely ND Dooley 1997). The second view, found in several taxonomies and frameworks, defines business ethics to be a key dimension of corporate social responsibility (Lineally 1 998) and uses the term business ethics interchangeably with CARS (e. G. , Béchamel and Bowie 2001; Velasquez 1982). Streams of research have been developed here in specialty journals such as the Journal of Business Ethics and Business Ethics Quarterly, with empirical research in these specialty journals often focusing on the avoidance Of unethical practices.
The second view emphasizes fewer stakeholder issues ND focuses on those areas traditionally associated with compliance programs and more likely to be labeled business ethics including antitrust issues, pricing policies, dubious sales inducements, deceit, and foreign bribery (Washout and Maillot 1998). A third school incorporates both of the prior views regarding what firm behaviors and activities actually comprise corporate social responsibility.
For example, Carroll (1 979, 1 991) attempted to bring greater precision in answering the question of what constitutes social responsibility by offering four hierarchically related duties: 1) Economic Responsibilities – to transact equines and provide needed products and services in a market economy; 2) Legal Responsibilities – to obey laws which represent a form of “codified ethics;” 3) Ethical Responsibilities – to transact business in a manner expected and viewed by society as being fair and reasonable, even though not legally required; and 4) Voluntary/Discretionary – to conduct activities which are more “guided by business’s discretion” than actual responsibility or expectation.
Figure 1 exhibits the hierarchical nature of these four levels of corporate social responsibility. 148 FIGURE 1 THE HIERARCHY OF CORPORATE SOCIAL RESPONSIBILITY Discretionary Responsibilities Ethical Legal Economic Source: Adapted from Carroll (1 979, 1991) There is some disagreement among the above viewpoints over the application of moral development theory to these approaches to CARS. One view holds that the compliance component of CARS is simply a lower order Of moral development and that the addressing of issues related to human rights, diversity, and the environment reflect a higher order of moral development on the part of the company (leanings and Entwine 1999).
Such a compromise conceptual framework is helpful, but researchers have yet to empirically examine the dimensionality of CARS from a managerial perspective. Instead, much of this research has been conceptual and normative in nature, and has discussed underlying values and debated managerial responsibilities (e. G. , Warwick and Cochran 1985). While empirical work has examined antecedents such as corporate governance and institutional ownership (e. G. , Johnson and Greening 1999) and consequences including financial outcomes (e. G. , Alexander and Buckhorn 1 978), CARS itself has been personalized in a multitude of fashions without recognition of the need to develop a common assortment approach.
Early definitions Of CARS have also been somewhat contradictory. Davis (1960) defines CARS as, “Decisions and actions taken for reasons at least partially beyond the firm’s direct economic or 149 technical intent” (p. 70). Conversely, Friedman (1962, 1 970) contends that the only social responsibility of a business is to make as much money as possible for shareholders. These definitions have coalesced to a great degree with the introduction of Carol’s framework and definition of CARS: “The social responsibility of business encompasses the economic, legal, ethical, and secretion expectations that society has of organizations at a given point in time” (1 979, p. 500).
The viewpoints of Carroll (1 979, 1991), Lineally (1 998), and Seth (1975) are adopted here to provide a working definition of CARS as, “meeting the economic, legal, ethical, and discretionary responsibilities expected by society. ” Thus this definition encompasses activities relating to diversity, the environment, human rights, philanthropy, and safety, as well as activities relating to business ethics as described above. The reader should note that in following Carol’s framework, ethical responsibilities are noninsured as a building block, and at a hierarchically lower level of CARS, in terms of moral development (Jennings and Entwine 1 999), than Carol’s discretionary responsibilities such as diversity, the environment, human rights, philanthropy, and safety.
The reader should also note that the CARS literature tends to focus more upon the ethical and discretionary dimensions of Carol’s model, as there is much less debate among managers regarding the need to meet the economic and legal dimensions of the model. Review of the Purchasing and Supply Management Literature In this section, the focus is narrowed by reviewing literature that encompasses purchasing and supply management activities relating to environmental, diversity, ethics, and human rights issues. These issues were recognized in the prior section as being encompassed within CARS and were identified through a review of the supply chain management literature as existing or emerging streams of research. Further, these topics, along with safety and philanthropy, were also identified during the course of interviews with managers.
In the latter sections of the paper, hypotheses are developed and empirical support is provided for the inclusion of these issues within USSR. The Environment Alarm and Burro (1995) suggest that one way in which the purchasing function can contribute to a firm’s socially responsible purchasing is through environmental initiatives. Purchasing literature in the area of environmental management includes the use of case studies of environmental supply management (Handheld et al. 1 997; Maharanis and Carter 1 998), along with survey research employed to study environmental purchasing (Min and Gale 1997), including its antecedents (Carter and Carter 1 998; Carter, Alarm, and Ready 1998) and economic consequences (Carter, Kale, and Grimm 2000).
Some of the key antecedents identified by these studies are: ; the influence of downstream members of the supply chain, including distributors, retailers, and ultimate customers (Carter and Carter 1998); 150 ; the extent of coordination between buying and supplying organizations (Carter and Carter 1 998; Maharanis and Carter 1 998; Walton, Handheld, and Melvyn 1998); ; management support (Carter, Alarm, and Ready 1 998; Outright 1 994; Maharanis and Carter 1998); ; organizational culture and philosophy (Outright 1 994); ; initiatives of individual employees (Outright 1 994; Kopi et al. 1993); ; the establishment of specific goals (Carter, Alarm, and Ready 1998; Maharanis and Carter 1 998); and ; the provision of training (Carter, Alarm, and Ready 1998). Evidence of the influence of government regulation on environmental purchasing is mixed. Melvyn et al. 1999) find that environmental management systems are positively related to environmental regulations; case study research by Walton, Handheld, and Melvyn (1998) and the descriptive statistics presented by Min and Gale (1997) suggest a positive relationship between government regulation and environmental supply chain management, but also indicate hat regulation can act as a barrier to green purchasing due to the constant changes to existing regulation. Empirical research by Carter and Carter (1998) found no relationship between regulation and environmental purchasing. Teeth CICS Ethical issues in buyer-supplier relationships have long been studied from the standpoint of purchasing management (Belch 1 985; Grumbler 1968; Rudderless and Buckhorn 1 979; Turner, Taylor, and Hartley 1 994), sales management (e. G. Chon, Tanner, and Weeks 1 996; Hunt and Vital 1986; Levy and Dubbing’s 1983), and the concurrent perspectives of both the buyer and applier (Carter AAA; Dubbing’s and Gain 1 981 The purchasing and marketing management research in this area has suggested that examples set by top company management have the potential to shape company culture with regard to ethics (Chon and Hunt 1 985; Chon, Tanner, and Weeks 1996; Hunt, Chon, and Wilcox 1984; Turner, Taylor, and Hartley 1994). Other antecedents identified in the extant literature include the presence of a code of ethics (Former and Jason 1 990) and ethics policies and standards (Carter Bibb). More recent empirical research finds that ethical issues in buyer-supplier relationships consist of two unique dimensions Carter AAA).
The first dimension, “deceitful practices,” includes activities such as using obscure contract terms to gain advantage of suppliers; the second dimension, “subtle practices,” encompasses somewhat more subtle activities such as showing favoritism when selecting suppliers. Diversity Diversity issues in the purchasing management literature center upon purchasing from minority/women-owned business enterprises (Carter, Kaolin’s, and Ketchum 1999; Dillinger, NZ, and Daily 1991). Here, researchers have found that top management support and policies that 151 require inclusion of EMBER purchasing criteria in the formal evaluation of arching managers are positively related to the extent of purchases from EMBER suppliers.
Additionally, Krause, Ragtag, and Hugely (1999) suggest that some firms’ EMBER programs are driven not only by social concerns, but also customer considerations as minorities can represent large and growing market segments for many consumer organizations. Human Rights, Safety, and Philanthropy Purchasing management research in the areas of human rights and philanthropy, and safety has been rare, with only scant focus on subjects such as human rights issues at suppliers’ plants (Emailing and Adams 1999). Here, issues center upon selecting suppliers that pay a living wage and that avoid the use of inhumane working conditions in their factories. Emailing and Adams advocate that these issues have become relevant for purchasing managers due to increased awareness of U. S. Consumers and increased regulatory scrutiny.
Exploratory interviews with purchasing managers for the current research suggest that purchasing involvement in CARS also includes safety issues such as ensuring safe operations at suppliers’ plants and more general philanthropic issues including volunteering at local charities. Overall Assessment The literature review shows that close parallels exist between the dimensions of activities considered within CARS and those examined in the purchasing literature and identified through interviews with purchasing managers. Purchasing managers who participated in these interviews concentrated on the ethical and discretionary responsibilities of Carol’s model, as has the standalone supply management literature reviewed in the prior paragraphs. Thus, USSR is labeled as purchasing involvement in CARS.
The following specific, working definition of USSR, based on Carol’s definition and modified n accordance with the perspectives Of purchasing managers participating in these interviews is offered: “purchasing activities that meet the ethical and discretionary responsibilities expected by society. ” The dimensions of USSR appear to mirror those of CARS; however many of the specific activities appear to be unique to purchasing. While conceptual frameworks and a working definition of CARS exist, and can be adapted for USSR, empirical research that holistically examines the dimensions and drivers of the general notion of CARS for business or for supply chain management is missing. Further, managers’ views on the resent of virtue ethics and their relationship to the presence or non- presence of CARS has not been subjected to empirical examination.