Social Collaboration with Suppliers & Role of Justice

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2022 ZIBS Forum, on the theme of "Redefining the Triple Helix: Technology, Business, and Education in Digital Era", was successfully held on 5 Jan 2023. Scholars and subject-matter specialists presented their recent research findings on digital technology, innovation management, corporate strategy and sustainable development besides other fields of business studies.

The second part of the forum revolved around the integration of academia and industry in the new business era. In this session, ZIBS Assistant Professor Jia Jia Lim presented her research work — "Collaboration as a Structural Aspect of Proactive Social Sustainability: The Differential Moderating Role of Distributive and Procedural Justice", which was completed in collaboration with Professor DAI Jing from the University of Nottingham and Professor Anthony Paulraj from the NEOMA Business School, France. Here's the review:

Introduction

That many companies are under pressure to improve their social sustainability performance is irrefutable. The widely publicized industrial accidents such as the Rana Plaza building collapse in 2013 have revealed that firms paid little attention to the ethical dilemmas of exploitation and labor rights, life-threatening working conditions, and/or poor safety standards. Companies such as Zara, H&M, and Primark were involved in the incident. In a quest to embrace a truly sustainable business, firms are growing sensitive towards eliminating social failures (i.e. workplace accidents, child labor, etc.) and enhancing social practices across the supply chain by ensuring that their suppliers are implementing social practices to the same degree.

The societal practices focused in this research refer to the welfare of people, employee health and safety, and local community development - which is a social conundrum that redefines the supply chain as well as involves stages and sub-processes for new product and process development that benefits multiple stakeholder groups. It is unlikely to be implemented by a single firm because it requires a proactive attitude that voluntarily deploys a social sustainability strategy that goes above and beyond what the law necessitates.

Theoretical Motivation

Thus, this paper adopts a strategy-structure-performance (SSP) framework to explore how proactive social strategy could motivate firms to collaborate with suppliers on social sustainability initiatives and how such collaborative efforts could unlock a win-win opportunity for both noneconomic (social performance) and economic (operational performance) performance. Additionally, drawing on the tenets of the social exchange theory, the different moderating effects of distributive justice and procedural justice on the social collaboration-performance relationship are also examined.

Research Model and Hypothesis

While the SSP framework has been widely applied in supply chain management research, it has not been examined within the context of social sustainability along the supply chain. Our SSP framework starts with a proactive social strategy that enables firms to: (1) recognize their employees’ health, safety, and general well-being; (2) offer social training and development to motivate the workforce; and (3) act as good citizens. As opposed to a reactive social strategy, firms with a proactive social strategy would embrace new opportunities by voluntarily addressing social issues in their supply chain over and above what the law necessitates. As a case in point, firms with a proactive social strategy would be willing to plan a series of actions that could mitigate risks well before they occur. Accordingly, a proactive posture would lead firms to extend social sustainability considerations to their suppliers in order to reduce the supplier’s problematic issues by implementing supplier development practices. For instance, buyer firms could involve suppliers directly in collaboration by providing technical support, equipment, and professional personnel to the supplier’s firm.

More specifically, this study adheres to the SSP framework and contends that a proactive social strategy will lead to social collaboration with suppliers. Such social collaborations are an important aspect of structure because they involve structuring and coordinating activities to help firms utilize, allocate, and align resources for social sustainability. Such a conceptualization is in line with existing research that views structure as a configuration of firms’ resources. Other scholars have also added sufficient support to the notion that inter-organizational collaboration is a structure. For example, Chow et al. (1995) applied the SSP framework to logistic enterprises and suggested that inter-organizational relationships are important when it comes to structure. Dai et al. (2017) used an extended SSP framework in environmental sustainability and proposed environmental collaboration with suppliers as a structure that follows a proactive environmental strategy. Among others, social collaboration with suppliers includes training sessions as well as joint planning concerning social issues (e.g. training concerning health and safety) with a shared purpose.

As per social exchange theory, firms engage in a buyer-supplier relationship with the expectation of rewards. The perception of justice alters firms’ expectations of rewards and consequential relational attitudes and behaviors. Justice is a fundamental concern in supply chain relationships when conducting economic exchange activities. Literature differentiates two types of justice, namely, distributive justice and procedural justice. Distributive justice denotes the extent to which firms perceive fairness in terms of economic outcome; procedural justice signifies the perceived fairness in terms of procedure and process control. Each of these dimensions of justice has a different emphasis, function, and objective. The perception of justice is often followed by direct and mutual coupling behaviors such as opportunism, relationship quality, and continuity of resource investment.

Methodology

This study uses survey data collected from 215 manufacturing companies in China. The proposed hypotheses are tested using multiple linear regression models as well as the PROCESS macro within SPSS.

Results

All hypotheses in the main effect of the research model are supported. Regarding the moderating effects of social collaboration → performances, there is no significant moderating effect of procedural justice on social collaboration with suppliers who have both social and operational performances.

Implications

This study makes several theoretical contributions to the existing literature.

1

It emphasizes the importance of a firm’s proactivity in managing sustainable supply chain management;

2

Based on the SSP framework, this study proposes and provides empirical evidence that social collaboration with suppliers is an appropriate structure for successful strategy implementation in developing both social and operational performance, confirming social collaboration is a "win-win" when it comes to both economic and noneconomic performance;

3

This study contributes to the supply chain sustainability and justice literature through a multi-theoretical approach that integrates both SSP and SET in the collaboration-performance link. The results provide implications on how the effectiveness of social collaboration on performance would be influenced by these two types of justice.

Overall, our study shows that among Chinese manufacturing firms, distributive justice is a significant factor impacting the relationship between collaboration and performance in the social sustainability context but procedural justice is not. Particularly, distributive justice is a double-edged sword in the social collaboration-performance link, wherein it will positively moderate the social collaboration-operational performance (economic) link while weakening the social collaboration-social performance (non-economic) link.

More reviews of the forum are coming soon, please stay tuned!

*This article is based on the speech made by ZIBS Assistant Professor Jia Jia Lim at 2022 ZIBS Forum. The views and opinions expressed in this article are those of the speaker and do not necessarily reflect the views or positions of ZIBS.

The related research article has been officially published in "International Journal of Operations and Production Management", Tap "Read more" below to learn more.

Jia Jia Lim

Assistant Professor

Dr. Jia Jia Lim is an Assistant Professor of Supply Chain Management & Sustainability at ZIBS. She uses qualitative and quantitative methods to examine the intersections between new technologies and collaboration relationship between firms for sustainability. Within the area of supply chain management and sustainability, she has published in International Journal of Operations & Production Management, Industrial Marketing Management, Journal of Business Research, and International Journal of Production Economics. She also served as an editorial review board member at Journal of Supply Chain Management and as a reviewer at Industrial Management and Data Systems.

Writer｜KANG Yu

Editor｜LI Songjiao, XU Fan

Managing Editor｜CHENQI Lisha, Jia Jia Lim

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