Decision Models and Governance Mechanisms Considering Corporate Social Irresponsibility in Supply Chains

Background

In terms of corporate sustainable development (CSD), many scholars have discussed the relationship with CSR. Hu (2004) illuminated that CSR is an ethical basis for CSD and has practical significance to CSD. Xin and Liao (2013) argued that CSR has driving and restrictive effects on CSD. If an enterprise does not undertake the social responsibility, it can only gain temporary profit and achieve short-term development, but cannot develop sustainably. Hediger (2010) defined CSR as an action contributing to corporate profit maximization and social improvement, and pointed out that CSD requires corporate profit maximization, which shouldn’t decrease with time. He also pointed out that if an enterprise undertakes the social responsibility, it could accumulate reputation and capital to enhance its values. Of course, some other scholars have confirmed that a certain positive correlation between CSR and corporate performance is conducive to its sustainable development. Sun and Li (2012) analyzed the 2011 report on CSR and IPO audit, concluding that for sustainable development, an enterprise should not only pay attention to economic benefits, but also actively undertake social responsibility. Wang and Hou (2009) confirmed that there is a positive correlation between performance of CSR and CSD. Carrasco and Buendía (2013) confirmed that if an enterprise integrates social responsibility into its culture, it could make self-innovation and internationalization a reality while implementing cultural innovation, so as to increase returns and promote social sustainable development. Wang and Han (2016) confirmed that CSR and internal control quality are significantly positively correlated with the level of CSD, and that a benign interaction between these two factors has a synergistic effect on CSD. All these researches directly reveal the positive correlation between CSR and CSD, while very few involve the influence of CSI on CSD.