Decision-making of ethical sourcing and information disclosure in supply chain under competitive environment
Ethical sourcing and information disclosure are the focus issues in supply chain corporate social responsibility.In order to solve the tradeoffs between the decision-making of ethical sourcing and information disclosure,and explore the interaction mechanism between them,we construct a model consisting of an ethical supplier who fulfill its social responsibility,a non-ethical supplier who have the risk of violating its social responsibility and two buying firms with different competitive strengths.Two buying firms first decide whether to choose an ethical supplier or an unethical supplier,and then decide whether to disclose their suppliers.We used backward induction to solve the Nash game equilibrium,and we focused on the impact of the tradeoffs between disclosure cost and market share on the buyer's ethical sourcing and information disclosure.The study found that the ethical sourcing will promote a firm to disclose its sources,and vice versa.However,as the cost of disclosure increases,firms will tend to conceal their procurement sources,and the probability of companies conducting ethical souring will decrease,while market reputation(the increase in market share brought about by ethical sourcing and the probability of exposure to unethical sourcing)can motivate buying firms to choose ethical supplier and disclosure their information.In addition,the ethical purchasing and disclosure decisions of the two buying firms are also affected by the degree of market competition.When the cost of disclosure is moderate,the more competitive the market,the more the two buying firms'decisions converge.
corporate social responsibility in supply chainethical sourcinginformation disclo-sure
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