Social Responsibility Auditing in Supply Chain Networks

• 成果类型: Article
• 署名作者: Zhang, Han; Aydin, Goker; Parker, Rodney P.
• 署名单位: Michigan State University; Michigan State University's Broad College of Business; Johns Hopkins University; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3950
• 发表日期: 2022
• 页码: 1058-1077
• 关键词: socially responsible sourcing; auditing; supply networks; supply risk

摘要

We study a buyer's problem of auditing suppliers within an existing network to ensure social responsibility compliance. The buyer suffers economic damages if a violation at a supplier is exposed (whether by the media, regulator, or nongovernmental organization). To avoid damages, the buyer may audit the network to identify noncompliance. If a supplier fails an audit, the buyer must take one of two costly actions: either rectify the supplier or drop the supplier (along with any dependent suppliers). Dropping a supplier changes the network topology, reducing competition and thereby increasing the buyer's input cost arising from an equilibrium. We show that the buyer's optimal dynamic auditing policy has two subphases: the buyer will first audit and drop some suppliers before either auditing and rectifying all remaining suppliers or halting auditing altogether. By halting, the buyer tolerates some noncompliance in the network (see no evil, hear no evil). Within the audit-and-drop subphase, when auditing only in the upper tier, the buyer always audits a least valuable unaudited supplier, yielding greater balance in the network. When the buyer audits both tiers, it might choose a supplier other than the least valuable. The buyer may choose a supplier in a pivotal position to help ascertain the viability of a portion of the network (litmus test). In extensions, we find that when violations in tier 1 carry a higher penalty for the buyer, the buyer may audit and rectify only tier 1 suppliers; when audits may be inaccurate, the buyer more likely tolerates a greater level of noncompliance.