Is doing more doing better? The relationship between responsible supply chain management and corporate reputation

Industrial Marketing Management 43 (2014) 77–90

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Industrial Marketing Management

Is doing more doing better? The relationship between responsible supply chain management and corporate reputation Stefan U. Hoejmose ⁎, Jens K. Roehrich 1, Johanne Grosvold 2 University of Bath, School of Management, UK

a r t i c l e

i n f o

Article history: Received 8 July 2012 Received in revised form 14 June 2013 Accepted 29 August 2013 Available online 6 November 2013 Keywords: Corporate reputation Responsible supply chain management Reputation protection Reputation enhancement Multiple-case study approach

a b s t r a c t Responsible supply chain management (RSCM) can help protect a firm's corporate reputation by shielding it from negative media attention and consumer boycotts. RSCM can also enhance a firm's corporate reputation, which allows firms to secure business contracts and penetrate new market segments successfully. This study empirically examines: (i) the extent to which responsible supply chain management practices is driven by a desire to protect corporate reputation; and (ii) whether responsible supply chain management can enhance corporate reputation and thereby generate competitive advantage to the firm. We draw on primary and secondary datasets across seven firms, spanning the publishing, technology, beverage, tobacco, finance and home improvement sectors. We find compelling evidence to suggest that firms often engage in RSCM due to a desire to protect corporate reputation. Similarly, we find empirical evidence to suggest that responsible supply chain practices can enhance reputation and thereby create competitive benefits, although this link is not as profound as the relationship between RSCM and reputation protection and there are significant variations across industries. These findings have significant implications for marketing theory and, in particular, industrial marketers, who are increasingly expected to implement responsible supply chain practices. © 2013 Elsevier Inc. All rights reserved.

1. Introduction Failure to manage the supply chain in a socially and environmentally responsible manner can have significant implications for a firm's corporate reputation. Responsible supply chain management (RSCM), which encapsulates socially (e.g. child labor, working conditions, human rights) and/or environmentally (e.g. ISO 14001,3 waste management, recycling, use of natural resources) responsible supply chain issues (Carter & Rogers, 2008; Seuring & Muller, 2008), can help protect a company's reputation by shielding the firm from negative media attention and consumer boycotts. Corporate reputation protection occurs when firms faced with negative press can prove to its stakeholders that they took reasonable steps to prevent an incident from happening (Coombs, 2013), through, for instance, appropriate RSCM practices. RSCM can also enhance corporate reputation, which in turn allows

⁎ Corresponding author at: University of Bath, School of Management, Claverton Down, Bath BA2 7AY, UK. Tel.: +44 1225 384763. E-mail addresses: [email protected] (S.U. Hoejmose), [email protected] (J.K. Roehrich), [email protected] (J. Grosvold). 1 University of Bath, School of Management, Claverton Down, Bath BA2 7AY, UK. Tel.: + 44 1225 385060. 2 University of Bath, School of Management, Claverton Down, Bath BA2 7AY, UK. Tel.: + 44 1225 384130. 3 ISO 14001 is an environmental management system developed by the International Organization for Standardization and offer firms a framework for incorporating environmental issues into their operations (Bansal & Hunter, 2003; Curkovic & Sroufe, 2011). 0019-8501/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.indmarman.2013.10.002

firms to secure business contracts and better target specific customer groups (Phillips & Caldwell, 2005; Roberts, 2003). A firm's corporate reputation is enhanced through the positive actions firms take, the programs they implement and the other tangible things that firms do, rather than by increasing advertising or more effective corporate communication management (Burke, 2011; Greyser, 1999). The distinction between the two concepts is therefore subtle, but important. Corporate reputation protection is concerned with evidencing firms' efforts to meet stakeholder expectations, while enhancement goes beyond a purely evidential basis to encompass embedded practice. Conversely, corporate reputations are jeopardized by irresponsible supply chain practices which can “directly harm business contracts, marketing, and sub-sourcing, and damage the corporation's brands and the trust they have established with their business customers” (Lee & Kim, 2009, p. 144). Fombrun and Shanley (1990) argue that social and environmental responsiveness contributes to stakeholders' opinion about the organization and its reputation. In this regard, RSCM has been highlighted as particularly important from an industrial marketing perspective, as business customers are better placed to put pressure on suppliers to take their sustainability responsibility more seriously (Sharma, Gopalkrishnan, Mehrotra, & Krishnana, 2010). Similarly, the supply chain is important for building and maintaining business relationships (Gray & Balmer, 1998), and firms use responsible supply chain practices as a way to reduce and mitigate risks and use social and environmental practices as a means to signal an image of high product quality and sustainability to consumers (Tate, Ellram, & Kirchoff, 2010). This, coupled

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with the finding that socially responsible business practices have been shown to improve both brand equity and brand performance in the B2B market (Lai, Chiu, Yang, & Pai, 2010) reinforces the importance of RSCM for industrial marketing and the B2B market, and suggests that proactive engagement with RSCM is in the firm's interest. The notion of proactivity in the context of RSCM is however a more recent phenomenon. Historically, firms were often deemed reactive in their engagement with social and environmental protection. Firms' concern for legislative compliance was more pronounced than a commitment to embedding RSCM practices at the firm level (Preuss, 2001). More recently, however it has been argued that firms are more proactive in their engagement with RSCM, and rather than see it as an addon, it increasingly forms part of the firm's broader strategic commitment (Walker, Di Sisto, & McBain, 2008; Walker & Preuss, 2008; Zhu, Sarkis, & Lai, 2013). However, research to date has in the main only analyzed firms' alleged proactive RSCM practices with reference to case studies (see for example Pagell & Wu, 2009) or anecdotal evidence drawn from corporate sustainability reports (see for example, Tate et al., 2010). Few studies have sought to take a broader look at the issue across different contexts and facets (Seuring & Muller, 2008), consequently our recent knowledge of RSCM corporate reputation is based on narrowly focused, or ad hoc data. Our study seeks to redress this, and empirically examines the triangular relationship between RSCM, corporate reputation protection and corporate reputation enhancement in a systematic way across industries. In doing so, we also respond to calls from the literature for empirical evaluation of the relationship between “formal processes and organizational structures that favor the alignment and integration of supply chain orientation and [responsible] orientation” (Klassen & Johnson, 2004) across different industries and firms (Keating, Quazi, Kriz, & Coltman, 2008).4 Thereby, we advance the debate about the strategic role of responsible supply chain management. Thus, this study addresses the following research questions: (i) To what extent is responsible supply chain management driven by a desire to protect corporate reputation?; and (ii) Can responsible supply chain management enhance corporate reputation and thereby generate intangible and tangible benefits to the firm? To address these questions we draw on recent research in the field of corporate reputation, supply chain management and industrial marketing (e.g. Keh & Xie, 2009; Money, Hillenbrand, Day, & Magnan, 2010; Mudambi, 2002) and develop a conceptual framework. We subsequently assess this framework by using comprehensive primary and secondary datasets. We conducted 31 in-depth interviews within seven firms, spanning the publishing, technology, beverage, tobacco, finance and home improvement sectors. In order to obtain a more comprehensive picture of how reputation relates to RSCM, we interviewed organizational members across different departments and hierarchical positions. In addition, secondary data such as company and industry reports were used to gain a better understanding of industry developments with regards to our study's interest (e.g. DEFRA, 2011; NBS, 2011; United Nations Global Compact, 2012). In this paper, we make three contributions to extant literature. First, we provide one of the first systematic analyses of RSCM and corporate reputation. In so doing, we respond to an increasing body of literature, which has started to consider the business case of RSCM (e.g. Carter, 2005; Keating et al., 2008; Walker & Jones, 2012) and in line with recent work from the strategy (e.g. Godfrey, Merrill, & Hansen, 2009; Muller & Kraussl, 2011) and the marketing (e.g. Luo & Bhattacharya, 2009; Smith, Palazzo, & Bhattacharya, 2010) literature we focus specifically on reputation. As such, we also position a revised conceptual framework to guide further research into RSCM in relation to corporate reputational exposure and enhancement. Second, our study explicitly explores rich datasets, going beyond anecdotal evidence as often offered by prior studies, concerning RSCM and corporate reputation. We do so by distinguishing

4

See also New in New and Westbrook (2004).

between the ‘protection’ and ‘enhancement’ role of RSCM on corporate reputation, and as such our analysis provides detailed insights into the merit which practitioners put on the ability of RSCM to ‘protect’ and ‘enhance’ corporate reputation. In turn, this has significant implications for the way in which firms implement RSCM and the extent to which they view RSCM as a tool to ‘insure’ reputation or ‘build’ competitive reputation. Third, our analytical approach, which is based on multiple-case studies across seven different sectors, allows us to analyze both hetero- and homogeneity across companies and sectors. As such, we develop a more comprehensive understanding of how RSCM relates to corporate reputation and the contextual issues that may influence these relationships. This paper is structured as follows: In the next section, we provide an overview of the extant literature and develop a conceptual framework. We then describe our methodology, followed by an analysis of our findings. These are then discussed in light of a revised conceptual framework, and theoretical and practical implications and contributions are drawn out. 2. Literature review and conceptual development The supply chain field has often been argued to be atheoretical (e.g. Mollenkopf, Stolze, Tate, & Ueltschy, 2010; Sieweke, Birkner, & Mohe, 2012). This is particularly true for sustainable supply chain work (e.g. Hoejmose, Brammer, & Millington, 2012; Seuring & Muller, 2008), and with this paper we are addressing such earlier comments by applying a reputational perspective to the engagement with responsible supply chain management. Specifically, we draw on stakeholder theory (Mitchell, Agle, & Wood, 1997; Sarkis, Zhu, & Lai, 2011) and social cognition (Fiske & Taylor, 1991; Mervis & Rosch, 1981) — both are theories that have received limited empirical attention in the field — to explain how firms can use RSCM to protect and enhance their corporate reputation. Research on responsible supply chain management has gained considerable attention in the last decade, with contributions from a variety of fields, including marketing (e.g. Closs, Speier, & Meacham, 2011; Piercy & Lane, 2009; Polonsky & Jevons, 2009), supply chain (e.g. Awaysheh & Klassen, 2010; Simpson, Power, & Samson, 2007), corporate responsibility (e.g. Preuss, 2009; Seuring & Muller, 2008) and industrial marketing (e.g. Corbett, 2009; Ewing, Windisch, & Newton, 2010; Helm & Salminen, 2010; Lillywhite, 2007; Liu, Kasturiratne, & Moizer, 2012). Firms that fail to implement responsible supply chain practices run the risk of damaging their reputation — if discovered. For example, firms such as Nike (Wang, 2005) Primark (Jones, Temperley, & Anderson, 2009), and Adidas (Winstanley, Clark, & Leeson, 2002) all suffered negative reputational media exposure and loss of income as a result of their irresponsible supply chain practices such as the utilization of child labor. It is, however, not only business-to-consumer firms that can experience reputational damage as a result of their irresponsible supply chain activities. For instance, Haliburton, Total SA, and Baxter are just some of the firms in the business-to-business market which have seen the value of their firms decrease and their reputation tarnished due to poor supply chain practices (Lefevre, Pellé, Abedi, Martinez, & Thaler, 2010). Despite the obvious threats and opportunities, many firms are still struggling to implement RSCM into the supply chain and manufacturing processes (Egels-Zanden, 2007), and there is evidence that suggests that there are significant gaps between policy and practice (Preuss, 2009; Yu, 2008). In turn, this means that firms are susceptible to negative media exposure, stakeholder disenfranchisement and damage to their corporate reputation. At the same time, firms may not realize potential reputational gains, if responsible policies are not fully implemented. 2.1. Corporate reputation Corporate reputation (henceforth: reputation) has been defined as “a set of attributes ascribed to a firm, inferred from the firm's past actions” (Weigelt & Camerer, 1988, p. 443). More explicitly, Fombrun

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and Shanley (1990) argue that reputation “signals publics about how a firm's products, jobs, strategies, and prospects compare to those of competing firms” (p. 233). The value of reputation has been subject to extensive research, which has highlighted that reputation is related to financial performance (Flanagan, O'Shaughnessy, & Palmer, 2011), favorable stakeholder behavior (Money, Hillenbrand, & Downing, 2011), customer trust and purchase intentions (Keh & Xie, 2009). Extant work suggests that reputation is important because it establishes credibility (Greyser, 1999; Herbig, Milewicz, & Golden, 1994). The notion that reputation is related to credibility has also been noted in the wider corporate social (and environmental) responsibility literature. McWilliams and Siegel (2001) argue that building a reputation of ‘responsibility’ can signal trustworthiness and quality. Similarly, CSR can establish trust and ultimately develop a company's reputation (Lewis, 2003), as responsible corporate behavior “builds trust and enhances the firm's reputation, which attracts customers, employees, suppliers and distributors, not to mention earning the public's goodwill” (Lantos, 2001, p. 606). Given the development of stakeholders' expectations and demands, responsible behavior is increasingly becoming an important instrument for reputation enhancement, not only to mitigate reputational risk exposure, but also to potentially realize reputation enhancement (Fan, 2005). Reputation is fundamentally a signal to stakeholders (Ponzi, Fombrun, & Gardberg, 2011) and is important in markets where there is imperfect information (Kreps & Wilson, 1982; Weigelt & Camerer, 1988). In these settings, firms must use market signals, such as their engagement with social and environmental issues, in order to establish their reputation (Heil & Robertson, 1991). As such, it is market signals that drive reputation, which in turn influence stakeholders' perception of the firm. The company's stakeholders are the primary “consumers” of their reputational enhancement and protection efforts and it is therefore important to identify both primary and secondary stakeholders (Maignan, Ferrell, & Ferrell, 2005). From an RSCM perspective, firms must not only identify who their stakeholders are, but also determine how legitimate the stakeholders' claim is on the firm's resources and finally, how to respond to those claims. Social cognition theory offers one way of dealing with this. The basis of social cognition theory is that firms use categorizations in interpreting their environment (Fiske & Taylor, 1991; Mervis & Rosch, 1981; Weick, 1995, in Ferguson, Deephouse, & Ferguson, 2000). Research suggests that managers categorize their stakeholders into reference groups, and such groupings allow managers to adopt schema that help them evaluate other firms' corporate reputations, based on interactions at, for example, trade shows and conventions (Ferguson et al., 2000; Porac, Thomas, & Baden-Fuller, 1989; Reger & Huff, 1993). The same mechanism allows the focal firm's stakeholders to form a reputational impression of the focal firm. This reciprocal assessment of corporate reputation has been found to impact on firms' performance. Ferguson et al. (2000) concluded firms should seek to “have their reputation stand out from their group” (p. 1211) to increase their chances of building a competitive reputational advantage, and not risk a downward moving reputational spiral stemming from a poor stakeholder assessment of the focal firm's reputation impact. Consequently, corporate reputation enhancement and protection may be an important lever managers can pull in responding to stakeholder demands and pressures.

2.2. Corporate reputation protection and enhancement through RSCM The real value of social and environmental management is perhaps not from its role in enhancing reputation, but more about protecting it (Middlemiss, 2003). If firms fail to be responsible in the supply chain, they risk losing customers who will defect to rival companies over time (Harwood & Humby, 2008) Furthermore, in a recent survey, 20% of firms viewed social and environmental issues as the biggest supply chain risk, and 25% required their suppliers to adhere to specific

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corporate social responsibility (CSR) requirements in order to reduce exposure to risk (Anon., 2006, in Harwood & Humby, 2008). There is, however, evidence to suggest that firms can enhance their reputation by implementing socially and environmentally responsible practices in their supply chains (Ansett, 2007), and also to suggest that social and environmental activities not only can enhance the reputation of the firm, but also enhance the goodwill trust of stakeholders (Carlisle & Faulkner, 2005; Siltaoja, 2006). Much of the work on corporate social–financial performance also implicitly assumes that this relationship is positive, because social and environmental activities lead to improved reputation, which in turn facilitates revenue and profit growth (Orlitzky, Schmidt, & Rynes, 2003; Surroca, Tribo, & Waddock, 2010). RSCM can also generate competitive advantages because it enhances corporate reputation (Ansett, 2007; McWilliams, Siegel, & Wright, 2006). Kleindorfer, Singhal, and Wassenhove (2005) suggest that responsible supply chain practices can lead to increased profitability, as customer satisfaction and loyalty will improve as a result of a stronger reputation. Markley and Davis (2007) confirm this arguement and note that RSCM has the potential to send positive market signals to a range of stakeholders, and thereby improve a firm's competitive position. However, the literature on the relationship between RSCM and corporate reputation enhancement has so far been fairly descriptive and is dominated by conceptual arguments. As such, the relationship between RSCM and enhancement, has received very limited empirical attention. This is evident from Table 1, which summarizes the body of literature on RSCM and reputation. The work of Baden, Harwood, and Woodward (2009) is an exception as it does consider the benefits of RSCM, and they find that corporate reputation enhancement is not a significant outcome. However, their study does not systematically consider the issue of reputation. Rather it is an ‘add-on’ to the list of benefits firms may experience from RSCM. Similarly, their emphasis is on small businesses, and their perceived benefits may not be generally applicable to larger firms which is the predominate focus of our study. Therefore, the reputation element of RSCM have only been explored in a fairly narrow sense, and further work is still needed to understand the strategic role of RSCM in ‘protecting’ and ‘enhancing’ reputation. 2.3. Positioning the conceptual framework Given the above discussion, our initial conceptual framework is shown in Fig. 1. The first half of the conceptual framework reflects research question 1, which seeks to explain the extent to which RSCM is driven by a desire to protect corporate reputation. As such, it extends our view of the drivers of RSCM, and views this in terms of risk and reputation management. The second half is concerned with research question 2, where we explore the extent to which RSCM can enhance corporate reputation. In addition, we explore how RSCM can lead to competitive advantages through its role in enhancing reputation. 3. Methodology 3.1. Research approach and setting Following Piekkari, Plakoyiannaki, and Welch (2010), we use an abductive research approach based on multiple-case studies. This approach is particularly appropriate when the empirical fieldwork parallels the theoretical conceptualization of the research (Dubois & Gadde, 2002; Stake, 1995). At its core, the logic of abduction is that the research process commutes between theories and practice as an interweaving dialog between theory and empirical findings. In addition, our multiplecase study approach allows us to investigate RSCM from multiple perspectives, rather than from a single viewpoint (Yin, 2003). We deliberately selected a multiple-case design in order to benefit from the advantages over a single-case design. More specifically, our study took advantage of the collection of robust and comprehensive datasets across

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Table 1 Key articles for RSCM and reputation. Author

Year

Method

Social

Ansett Baden et al. Bendixen and Abratt Carter Carter and Roger Cruz Cruz and Wakolbinger Faisal et al. Ganesan et al. Harwood and Humby Keating et al. Koplin et al. Lamming and Hampson Lee and Kim Lillywhite Roberts, S. Teuscher Tulder et al. Walker et al. Welford and Frost Zutshi et al.

2007 2009 2007 2005 2008 2008 2008 2006 2009 2008 2008 2007 1996 2009 2007 2003 2006 2009 2008 2006 2009

Descriptive Quantitative Qualitative/single case-study Quantitative Conceptual Conceptual Conceptual Conceptual Conceptual Qualitative/multi-case studies Qualitative/single case-study Qualitative/single case-study Qualitative/multi-case studies Qualitative/quantitative Descriptive Comparative analysis Descriptive Content analysis Qualitative Quantitative/interviews Descriptive

x x x x x

multiple sectors. This helped to compare and contrast results and draw out more fine-grained contributions to theory and practice (Eisenhardt, 1989). As such, our approach facilitates the generation of refined and robust insights across companies and sectors by going beyond anecdotal evidence and encourages further research about how RSCM practices are driven by a desire to protect and enhance corporate reputation. Our literature analysis also illustrated that prior studies mainly deployed survey methodology (e.g. Brammer & Walker, 2011; Vachon & Klassen, 2008). While we acknowledge the merits of this research approach, we see substantial leeway to delve deeper into the relationships between RSCM and corporate reputation by deploying a multiple-case study approach. The empirical element of this paper stems from seven carefully selected and discrete case studies of companies across the publishing, technology, beverage, tobacco, finance and home improvement sectors. Existing research (e.g. Keating et al., 2008; Palazzo & Richter, 2005; Vachon & Klassen, 2008; Pagell and Wu, 2009) have revealed that many of these industries face a set of unique, but different, challenges in terms of socially and environmentally responsible supply chain management. For example, Roberts (2003) notes the challenges for many ‘home-improvement’ retailers and publishing firms, as they have to respond to developments in consumer expectation and therefore ensure that, in particular, their forest products are sustainably sourced. This, however, is a complicated task as such sourcing activities often take place in countries with weak institutional frameworks and where corruption is common (Millington, 2008). Similarly, many technology companies make use of global supply chain practices, which

x x x x x x x x x x x x x

Environmental

Risk management

x

x

x x x x

x x x x

Reputation enhancement x x x x x x x

x x x x x x x x x

x x x x x x x x x x x x

have implications for how they monitor and verify suppliers' environmental and social practices — the problems of Foxconn and Apple are a case in point. The number of selected cases reflects the recommended number of cases for a multiple-case study design and facilitated a meaningful comparison across cases and further refinement of our conceptual framework (Eisenhardt, 1989). Our goal was to ensure replication of findings across the cases and cases were carefully selected so that we could assess theoretical and empirical similarities and differences across cases (Yin, 2003). In other words, the rationale for choosing these cases lies in the possibility to observe our selected concepts across different companies and sectors. 3.2. Data collection In general, interviews are one of the most important sources of case study information, whose key strength is the focus on the case study topic and the provision of insights into perceived casual inferences (Eisenhardt & Graebner, 2007; Yin, 2003). This research not only requires an interview style that uses a set of prepared questions in order to examine our concepts under study, but also creates the atmosphere for open discussions to ensure a balance between structure and flexibility. Therefore, the research adopts the semi-structured interview technique where a mix of open-ended questions and theory driven questions are employed. Consequently, when interesting avenues not directly pertaining to the interview questions arise, those lines of questioning are pursued, and comments noted. This is a helpful

Fig. 1. Initial conceptual framework.

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interviewing approach to explore interesting areas adjacent to the core of the interview. This interview type involves the implementation of a number of predetermined interview areas which are typically asked of each interviewee in a systematic and consistent order, while still allowing (in fact, expecting) the interviewee to develop and speak more widely on issues raised by the research (Berg, 2004). The areas of enquiry are defined based on a systematic review of the literature (Tranfield, Denyer, & Smart, 2003). This approach supports cross-case comparison after analyzing the data on a within-case level. The semi-structured interview protocol was operationalized as follows: First, the interviewer introduced the project and informed the participant that the interview was a conversation around the topic of implementing socially and environmentally responsible supply chain management. This was done to focus the interview early on and to ensure that RSCM remains the focal theme in our interviews. We were anxious to use the time allocated to the interview by our interviewees effectively, and while an opening discussion about the firms' broader engagement with CSR might have been interesting, we felt it would limit our potential to explore the specifics of RSCM and reputation and risk. From there, the interview would then proceed, and allow the participant to describe and explain his/her role within the organization and discuss some broader questions, such as: responsible [social and/or environmental]. This helped to get a better understanding of how interviewees perceive concepts under study and what they mean to interviewees. As the interview proceeded the interviewer would question the participant on the drivers for their engagement with RSCM. Typical open-ended questions included: “What were some of the driving forces for your engagement with RSCM [social and/or environmental]?” and “What has been the primary driver for action in respect of social and environmental issues in your supply chain?”. Similarly the interviewer would ask about the benefits of RSCM, where a typical question would be: “Have there been any benefits of implementing social and environmental practices in your supply chain?” and in most cases the interviewees said ‘yes’ so the interviewer would proceed by asking “Could you elaborate on the type of benefits and how they came about?”. In consequence, semi-structured interviews represent a useful compromise between the very formal structured approach and the informal conversational approach. The researcher can ensure that all relevant areas are covered in a systematic fashion when grouping and listing the topics to be covered in advance. Patton (1990) notes that interviews can be still kept fairly conversational and situational, allowing for reaction to responses that appear interesting and relevant to the overall research study. Nevertheless, the researcher must ensure that this flexibility does not lead to the omission of central topics or a reduction in the comparability between cases (Patton, 1990). We use semistructured, in-depth interviews, which is particularly appropriate for understanding work activities and for exploring processes within the firm (Barley & Kunda, 2001). The fieldwork was conducted in 2010 and involved 31 interviews. Firms were initially contacted through a letter that was directed to the Head of Procurement, except for cases where contact had already been made (due to participation in previous projects), where we contacted them either through email or by phone. As indicated by Table 2, interviews were categorized into two groups: first, individuals from multiple levels of the organizational hierarchy such as coordinators, category managers, heads of departments, managing directors, and chief executive officers; and second, individuals from different departments including supply chain; operations; corporate social responsibility, sales, and communication. The wide range of interviewees was necessary to capture a variety of perspectives and build rich insights relating to RSCM. Each interview lasted between 60 and 120 min and was digitally recorded and transcribed. We encouraged informants to illustrate their statements with examples from various situations and specific events. As our research progressed, our interviews became more targeted. That means, we were able to update our interview protocol regularly so that it was anchored in our findings. More specifically, having

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Table 2 List of participant. Case

Sector

Position of interviewee

A

Publishing

B

Publishing

C

Technology

D

Finance

E

Tobacco

F

Drinks

G

Home improvement

Head of Production Director of Communication Sales Representative Procurement Manager Communication and sustainability manager Procurement Manager Head of CSR Global Environmental Manager Sustainable Supply Chain Procurement Manager (Government Sourcing) Head of Government Sourcing Senior Sourcing Manager (Private Sector Division) Head of Sourcing (UK & Ireland) Director of Operations Senior Supply Manager Strategic Commodity Manager Group Head of Procurement Strategy and Planning Group Sustainability Projects Manager Global Co-ordinator Procurement Account Manager Procurement Manager Director Strategy and M&A Europe Sector Procurement Manager Responsible Supply Chain Manager Sustainability Manager CSR Manager 1 CSR Manager 2 Head of CSR Procurement Manager Quality Assurance Audit Manager Quality Assurance Manager

identified multiple informants for each selected case helped to further hone questions asked throughout the interview process. For example, after having interviewed a few informants for one case study, we could then refer to particular examples and RSCM practices within this case and discuss in more depth with subsequent interviewees. Additionally, we collected secondary data such as company (e.g. code of conduct), industry and government reports (e.g. DEFRA, 2011; OECD, 2010) to inform our analysis. In order to address construct validity, this study deployed different remedies: using multiple sources of evidence, establishing a chain of events, and having key informants review individual case reports (Gibbert, Ruigrok, & Wicki, 2008). Data collection stopped when we experienced conceptual saturation and hence when additional data resulted in only incrementally improved understanding. In other words, probing deeper into the concepts under study with subsequent interviews helped to elicit rich primary data, but after a number of interview rounds similar RSCM activities and examples were brought up for individual case companies which meant that we had explored a particular case in sufficient depth for our analysis and research focus. 3.3. Data analysis The data was openly, axially and selectively coded, summarized and displayed in an iterative fashion (Miles & Huberman, 1994). The data analysis process was supported by the computer-aided program NVivo. More specifically, as a first line of coding we deployed an open coding approach to code our rich empirical datasets line by line to identify key categories of interest which are, for instance, RSCM activities, enhancing reputation and protecting reputation. As a second step, we deployed axial coding to our study, seeking to establish connections between categories such as RSCM activities and corporate reputation. We used axial coding to focus on one category at a time in order to consider the relationships between core concepts under investigation (Strauss, 1987). As a final step of the iterative process, we used selective coding

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to focus on key codes in informing our coding and analysis processes. Codes emerged from the conceptual review and the interview process, and were subsequently revised during the actual coding process. Our analysis included broader codes such as case company background information and more specific codes zooming in on our concepts under study. For instance, we coded particular RSCM activities related to reputation protection and enhancement. The empirical findings were compared with the theoretical framework to explore if conceptual and observed patterns matched (Yin, 2003) and we subsequently position a revised conceptual framework to inform theory and practice. Our understanding of the relationships between our concepts emerged iteratively from an evolving literature review and empirical data analysis. In line with Pettigrew (1990), we maintained a data analysis process comprising three sub-processes, namely data reduction to focus on key concepts through selective coding, data display to explore relationships between categories and codes (i.e. axial coding), and conclusion drawing and verification to simplify and make sense of our complex datasets. The repetition of information and consistent verification of our understanding during data collection and interviews was an indication that we had reached saturation. Recurring themes focusing on areas such as the extent of protecting and enhancing corporate reputation through RSCM across the investigated cases were detected. An example of a recurring theme was that interviewees across firms illustrated that RSCM is a strong driver and incentive to protect corporate reputation. Subsequently, the coding process informed the structure of this study's findings and discussion sections. We identified the multi-level (i.e. within firm, across firms and sectors) and issue-organized (i.e. based around key areas such as reputation protection and enhancement) analytical chronology as the most suitable way to display the data and in seeking to answer our research questions. These techniques and procedures provide the gradual building of explanation and are commonly cited as vital for building an explanation about the cases (Glaser & Strauss, 1967; Yin, 2003); facilitating a conceptual coherence from the observations and information garnered from the interviews. 4. Research findings 4.1. Case background — code of conduct analysis As a starting point of our analysis — and as a way of triangulating our understanding of firms' engagement with RSCM — we reviewed the code of conduct for each case. All seven companies that participated had a formal code of conduct, but there were significant discrepancies between their content. We conducted a content analysis of each case's code of conduct, and Table 3 provides a summary of this analysis as well as key case characteristics, along with the type of certifications and associations they are engaged with. The majority of the cases had a code of conduct that considered specific issues related to the socially and environmentally responsible

standards expected from their suppliers (Table 4). Cases D and E, however, had a fairly generic code of conduct, which addressed broad, rather than specific, supply chain issues. Similarly, with respect to the code of conduct for cases A, B, E and G, there were evidence of some type of auditing and monitoring process, which allowed the firm to verify and assess the extent to which suppliers complied with their social and environmental requirements. This was, however, not evident for cases C, D and F. From the interviews, there was significant evidence from the two publishing companies (cases A and B) that RSCM was a major part of their business agenda. In both cases, RSCM was predominately initiated by employees' vision and passion. In addition, there was significant evidence of industry-wide collaboration within the publishing industry. For example, the development of common policies and auditing processes, predominantly due to the present of ‘quirky’ people within the publishing sector, as a representative of case A noted. For cases C and D, RSCM was highly formalized. As such, the head of procurement/ supply chain representative for each case noted the strategic importance of RSCM, but when interviewing individual category managers, it became clear that there was a significant decoupling effect between policy and actual practices. Similarly, for case E there was a formal process in place in order to ensure and monitor the responsibility of the supply chain. In case E, however, it was evident that there were some discrepancies between the organizational members in charge of the firm's broader social responsibilities and organizational members responsible for supply chain management. Case F had recently established a RSCM strategy, which included the hiring of a global (US based) responsible supply chain manager. At the time of the interviews, it was clear that they were still at a fairly early stage of their RSCM practices. For example, when purchasing into the UK, RSCM was of a greater priority due to the power of retailers, compared to when they (case F) exported to other European countries. Case G was perhaps the company that showed the greatest commitment to RSCM. There, the RSCM program was supported by auditing processes, and clear top management support, coupled with individual desire to ensure that products were sourced responsibly, allowed the firm to implement most of its policies and engage proactively in RSCM. Having provided a background to the cases, we turn our attention to the research questions outlined earlier. First, we discuss RSCM as a means of protecting corporate reputation. Second, we explore how RSCM can enhance corporate reputation and subsequently lead to competitive advantage. 4.2. Protecting corporate reputation through RSCM Our findings across all investigated cases illustrate that RSCM is a strong driver and incentive to protect corporate reputation. Tarnished reputation through negative press and by not meeting customers' expectations was often described by interviewees as a “very strong incentive” to establish effective RSCM. A CSR Manager explains that: “[…] the

Table 3 Key case characteristic. A member of:

Case Case Case Case Case Case Case

A B C D E F G

Sector

No of employees (ca.)

Publishing Publishing Technology Finance Tobacco Beverage Home improvement

254 30000 16000 Not available 88000 250 31000

UN Global Compact

Ethical Trade Ethical Trading Initiative (ETI)

International Labour Organization (ILO)

Fair Labour Association (FLA)

Global Reporting Initiative (GRI)

Business in the Community (BiTC)

x

x x x x x x

Sustainability

SEDEX

X x x x

NB: Memberships data was obtained from a previous study conducted in 2008.

x

x X X

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Table 4 Content analysis of code of conduct.

Code of conduct Anti-corruption Child labor Coercion and harassment Confidentiality Conflict minerals issues Discrimination Environment Forced labor discrimination Freedom of association Health and safety Hours Human rights Product safety Responsible forestry Responsible/ethical trading Sub-suppliers Wages Auditable standards

Case A

Case B

Case C

Case D

Case E

Case F

Case G

Yes

Yes x x x x

Yes x

Yes

Yes

Yes x x x

Yes

x

x x x x x

x x x x x x

x x Yes

x

x x x

x

x x x

x x x x Yes

x

x x x x x x

x

x

x

No evidence

No evidence

way you sell it back to the company is risk avoidance, so the way that you then engage your principal stakeholders internally would be if you want to avoid having the equivalent of a BP or a Nike” (CSR Manager, case G). Along the same lines, the Director, Strategy of case F mentioned that: “On the one hand, there is a very defensive approach where we just never want to be exposed. As far as we are concerned this area is a threat. So there is a certain population of leaders who just want to make sure we maintain the minimum standard and are at least somewhere average in the pack”. However, empirical data shows that financial considerations were never far from their mind. “There is a link with the Dow Jones, so financial recognition is important. We have to, as a public company, it [corporate reputation] is important” (Responsible Supply Chain Manager, case F). The theme of establishing RSCM, driven by concerns over negative financial and reputational impacts to the company, was prevalent across all investigated cases. “If we are not legally compliant that is a serious reputational risk […]” (Global Environmental Manager, case B). Similarly, our case study companies showed awareness of the negative impact of poor RSCM practices as outlined in the following statement: “[…] by having the program that we have, hopefully prevents us from negative press, from losing because of negative press. I think there is a positive effect, but there is also avoidance as you want to avoid the negative press.” (Sustainable Supply Chain Manager, case B). Interviewees also emphasized that some RSCM initiatives were increasingly becoming a central requirement for firm strategy, “The other day it was seen as a ‘nice to have’, and now it is a ‘must have’” (Group Head of Procurement Strategy and Planning, case E). This observation was supported by the Procurement Manager of case E, stating that: “We are in a very mature business and responsibility and sustainability are nothing new to our supply base”. RSCM was often seen as the right signaling strategy to protect the company's reputation: “We would not want [the company] to be seen in the press; you see a headline to say [the company] is buying from a supplier who does this and this” (Head of Sourcing, case C). Further, the respondent noted that “We can evidence to our customers that we are choosing carefully and selecting the right sort of suppliers”. Our findings also suggest that RSCM can only mitigate reputational risks when the whole organization and its wider supply network adopt RSCM practices. For example, a number of interviewees also stated that it was important to ensure that the RSCM policy was turned into real RSCM activities. Some of the respondents argued that ‘green washing’ was no longer tolerated and that customers would easily spot initiatives, which were not conducted seriously, negatively impacting on a company's reputation. In order to avoid this reputation harming

x x x x

x

Yes

x No evidence

x Yes

practice, interviewees emphasized the importance of incorporating RSCM policies in the company's overall strategy: “I think it is a fundamental part of our corporate strategy” (Procurement Manager, case A). 4.3. RSCM to enhance reputation Our findings also indicate that RSCM not only help protect but also enhance corporate reputation. “There is also brand enhancement, every time we do something like this you feel that there is a little bit of a polish been put on our brand. It is brand enhancing. We don't do it solely for that purpose, but the sum of the parts is quite powerful for us” (Director of Operation, case D). Along the same line, the Head of CSR of case B emphasized the importance of RSCM to enhance trustworthiness: “One of the five values of [the company] is passion for winning. So if we can get a differential because we are better in terms of our corporate responsibility than the next company, then all the better. We like that […]”. Corporate reputation enhancement was also mentioned as a tool to improve a number of different internal and external areas, ultimately leading to improved competitive advantage. For example, the Director of Communication for a publishing company (case A) explains that: “I think it gives employees pride in where they work. I think to the outside world it enhances our reputation and we are seen as a leader in this field. I think also for employees therefore it becomes a place where you want to work. It is not just making money for making money's sake. There is a reason for doing it over and above what is actually needed […]”. Another interviewee echoed this statement: “It is one of the things that I find really attractive about the organization. They are not just simply doing something because top management has said [so]. It is part of our DNA and our culture now” (Director, Strategy and M&A Europe Sector, case F). Apart from internal advantages such as better staff retention and improved workplace, RSCM practices have also been considered as enhancing the reputation with regards to a company's suppliers. “What is particularly rewarding is the point the suppliers come back to us and say ‘given where you are going as an organization we really appreciate the work that has been done through the carbon disclosure project’. So it is their feedback, they are good barometers on that” (Director, Strategy and M&A Europe Sector, case F). An interviewee from a tobacco company emphasized that RSCM can also help to establish the firm's reputation as a leader in the area that will lead to improved business opportunities. “So corporate social responsibility means doing as much as we can on all fronts that demonstrates that we are: a) responsible and b) a leader. That is what it is all about”

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(Group Head of Procurement, case E). This statement was supported by an interviewee from a technology company. “I think it also improves the perception of [the company] in the marketplace. We are seen to be not only a professional, commercial organization, but we are also seen to be an organization that treats its people fairly, it treats the environment fairly and that includes our customers and our suppliers. It is the image of [the company] benefiting from that and that obviously leads on to additional business” (Head of Government Sourcing, case C). 4.4. RSCM to achieve competitive advantage We do not find overwhelming evidence to support the link between RSCM, reputation enhancement and subsequent competitive advantage. Rather, it is the desire to achieve competitive advantage, through an enhanced reputation, that drives RSCM: “It was not the point that we wanted to be different, it is the realization that we all need to be different. And if [the company] is slightly more progressive on that journey, well so be it” (Director, Strategy and M&A Europe Sector, case F). The link between reputation enhancement and competitive advantage was based on conjectures rather than specific examples. For example, interviewees reported that RSCM had a positive impact on sales, thus may potentially create a competitive advantage in the market place. “I think, it is important to meet customers' needs which then helps to sell more products and that is obviously very important to us” (Director of Operations, case D). Interviewees emphasized that establishing the company as a market leader in adopting RSCM practices will further drive financial rewards for the company. “It is about being better than the rest and ensuring that we drive the agenda. We have a very progressive perspective on the subject and to a certain degree we get some consumer value from that” (Director, Strategy and M&A Europe Sector, case F). Some interviewees emphasized and drew out a positive relationship between RSCM and creating competitive advantage. For example, one interviewee mentioned the relationship between investing in RSCM practices as a differentiator in the market place. “Invariably customers will buy on price, but if the price is equal how do you differentiate? One of the differentiators is to say ‘this desktop uses less power than that desktop’. It gives you the advantages to be better for the environment, saves you money etc.” (Head of Government Sourcing, case C). Nevertheless, most of our investigated companies do not consider RSCM practices to function as a market differentiator, but rather a “must have” to be “competitive” in the marketplace. Further quotes from each company for the role of RSCM in protecting reputation, enhancing reputation, and subsequently leading to competitive advantage can be found in Table 5. 5. Discussion This study, drawing on 31 in-depth interviews, empirically investigated the role of responsible supply chain management in protecting and enhancing corporate reputation. In so doing, we provide one of the first systematic analyses of RSCM and corporate reputation, which goes beyond existing work and anecdotal evidence, in order to understand both reputation ‘protection’ and ‘enhancement’ elements of RSCM. Further, our rich dataset of multiple case studies allow us to explore hetero- and homogeneity across the different companies, and has the added value of reducing some of the typical shortcomings associated with qualitative work. In the following sections, we relate our empirical findings to the research questions outlined in the introduction. As such, we first (Section 5.1) consider the extent to which responsible supply chain management is driven by a desire to protect corporate reputation (RQ1) and then (Section 5.2) consider if responsible supply chain management can enhance corporate reputation and, thereby generate intangible and tangible benefits to the firm (RQ2).

5.1. Protecting reputation We find compelling evidence to suggest that firms often engage in RSCM due to a desire to protect corporate reputation. As such, among the cross-sectional companies in our sample, there is an overwhelming desire to protect the corporate reputation by acting responsibly in the supply chain. This desire to protect corporate reputation was perhaps the strongest driver of implementing and maintaining RSCM practices. The majority of respondents noted that irresponsible supply chain practices could have detrimental implications for the company's reputation and subsequent business success. For example, respondents from our case companies wanted to avoid negative media attention and consumer boycott as this would tarnish corporate reputation and would have a negative impact on company revenues. However, although not all respondents could identify the ‘risks’ associated with irresponsible supply chain practices, it was clear that it was the ‘fear’ of sudden stakeholder revolts that drove their desire to ensure responsible supply chain management practices. A number of interviewees emphasized that once a reputation is tarnished it is “difficult and costly to repair”. Hence, RSCM practices were foremost established to protect a company's reputation. In addition, some interviewees mentioned that the company wanted to at least “maintain a minimum standard” of RSCM to avoid any negative effects. Along the same lines, respondents across our investigated cases pointed out that customers are aware of a company's RSCM practices and that ‘window dressing’ could have severe implications for the company. More specifically, it was clear that that B2C firms passed on consumer expectations and demands to B2B firms further down the supply chain. Indeed, B2C firms explicitly asked some of the companies in our sample for their RSCM standards and used screening mechanisms to verify and further enforce these standards. Similarly, it was evident that being responsible was a part of a risk management strategy. This is partly in line with the work of Roberts (2003), Phillips and Caldwell (2005), and Pedersen (2009), as we observe relationships between protecting the reputation and RSCM is not specific to only socially or environmentally sensitive industries. For example, interviewees from the finance and technology sector also emphasized that RSCM was an important element of protecting and ensuring that their reputation would not be harmed. These considerations were closely linked to financial considerations, as negative RSCM could potentially harm the company's reputation, hence leading to lower sales of products and services. While companies paid ample attention to avoid malpractices internally, interviewees across industries were aware of the importance of supply chain wide initiatives and their impact on a company's reputation. It was seen as vital by our interviewees to align corporate strategy with supply chain strategies incorporating suppliers and customers alike. This was important in order to establish effective RSCM practices and policies, and to move away from ‘window dressing’ to ‘real’ CSR initiatives as companies feared customers who could spot ‘half-hearted’ initiatives. However, interviewees also emphasized that the task of aligning RSCM practices across supply chain partners is time- and resource-consuming and should not be seen as a ‘quick fix’. Compliance initiatives, driven by larger companies in the supply chain, are mainly seen as a starting point to realizing RSCM initiatives. Over time, RSCM practices need to permeate supply chain partners and become “the natural way of working” and not an ‘add-on’. 5.2. Enhancing reputation and competitive advantage In accordance with research question (ii), we also assessed how RSCM can potentially enhance reputation and ultimately generate competitive advantage for the company. We found empirical evidence to suggest that RSCM can enhance reputation and lead to competitive advantage due to the reputational benefits of RSCM. More specifically, interviewees noted that RSCM can help to ‘polish’ a corporate brand and

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Table 5 Key quotes across investigated cases. Case

RSCM to protect reputation

RSCM to enhance reputation

RSCM to achieve CA

A — Publishing

“It is like our philosophy which is to work with factories to ensure that they work and they treat their workers fairly. It is based on our experience in previous companies…” (Sales Representative) “It is commercial concerns at the end of the day, and if the social side starts to come under the commercial and that is important for your reputation. Yes, it is important to them [top management] but it is not, it is still not foremost in their minds.” (Sales Representative) “I think the first understanding came because of seeing bad publicity, adverse publicity in the marketplace with companies like Nike or even Marks and Spencer once, a number of other companies” (Procurement Manager) “It probably felt like it was the right thing to do and we may have been prompted by some questions that they were getting from stakeholders” (Sustainable Supply Chain Manager) “…if we are not legally compliant than that is a serious reputational risk…” (Global Environmental Manager) “…by having the program that we have, hopefully prevents us from negative press, from losing because of negative press. I think there is a positive thing about it, but there is also an avoidance, you want to avoid the negative press…” (Sustainable Supply Chain) “The more pressure we have I think, sometimes it is positive pressure, the better it is I think. Because that helps to drive messages through the organization that this stuff counts and it matters and it matters to key stakeholders” (Head of CSR) “It is in the last 5, 6 years where we have really gone out there to try and as part of our bid collateral and to win business, we had to sign up to this, and ensure that our third parties, our suppliers were all of those things, environmentally friendly, everything of that nature.” (Procurement Manager (Government Sourcing)) “We would not want [the company] to be seen in the press; you see a headline to say [the company] is buying from a supplier who does this and this.” (Head of Sourcing (UK & Ireland)) “We can evidence to our customers that we are choosing carefully and selecting the right sort of suppliers.” (Head of Sourcing (UK & Ireland))

“…everyone is waiting for [the company] to do something and then they will copy…” (Head of Production. Responsible for the management of day-to-day operations in the UK) “I think it helps retain staff within the company. Everybody knows pay in publishing is not great. I think if you are ethically minded and the company you are working for is ethically minded then that is a strong pull factor…” (Procurement Manager)

“…it gives you a difference in the marketplace. I think it makes customers feel happy to place business with you in terms of there is going to be no nasty skeletons in the close” (Sales Representative)

“It helps to improve our reputation and helps to mitigate risk, to identify opportunities to attain the best staff and retain them as well.” (Head of CSR) “I think that from a morale point of view it is something that people can feel good about the company” (Global Environmental Manager)

“…Well our performance as a business is predicated on our financial performance and our non-financial performance. Both of those things are integral, they are intertwined and what I look at is the non-financial performance which has a definite impact on our business success.” (Head of CSR)

“Without being cocky, it is a very reputable thing to have and I don't know how many other companies have it but certainly it is well known, well recognized. It is part of our collateral, our internal customers are aware so they know that our reputation is up there from a sourcing perspective with a lot of the other number of high levels within organization.” (Procurement Manager) “I think it also improves the perception of [the company] in the marketplace, so we are seen to be not only a professional, commercial organization but we are also seen to be an organization that treats its people fairly, it treats the environment fairly and that includes our customers and our suppliers. It is the image of [the company] benefiting from that and that obviously leads on to additional business.” (Head of Government Sourcing) “I think the driver is we want to keep ahead of our customers as well as keep ahead of our competition because we are a commercial organization.” (Head of Government Sourcing) “Things like what kind of business are you in becoming important particularly when you are fighting hard to bring in the right kind of graduates, so you are right there is something around differentiation, about explaining that we are a different type of organization, and what is different about us.” (Director of Operation) “There is also brand enhancement, every time we do something like this you feel that there is a little bit of a polish been put on our brand. So we do not do it solely for that purpose, but the sum of the parts is quite powerful for us.” “It lives and breathes in your organization, it gives you that link with reality to say well actually this is what we are about, this is what we do, these are the things that we feel are

“Invariably customers will buy on price, but if the price is equal how do you differentiate? One of the differentiators is to say ‘this desktop uses less power than that desktop’. It gives you the advantages to be better for the environment, saves you money etc.” (Head of Government Sourcing) “I think it does differentiate us, it does give us advantages in that the customer feels secure in knowing that we are not going to get bad publicity or press from using a poor supply chain.” (Head of Government Sourcing)

B — Publishing

C — Technology

D — Finance

“It will be about actually saying well here is where we sit, here is where everybody else sits and where do we want to sit and where do we want to go in the future.” (Strategic Commodity Manager)

“We are slightly different, if you think in the sense, what we sell, one of our areas is the sustainability and climate change team. So we are actually advising on doing the right thing and how business can improve. So it is important to us from all fronts on not just doing the right thing because we believe it is right, but other people expect us to be doing it, how can we tell people this is the right way to do it. If we do not have some very good credentials ourselves to be able to use those as case studies and examples of what can we achieve, than our business model does not work.” (Senior Supply Manager?) “So you will save on your energy costs in the long run and it is also a way of reducing your taxes. You need to bear in mind that there is a balance here with waste, we (continued on next page)

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Table 5 (continued) Case

E — Tobacco

F — Drinks

G — Home improvement

RSCM to protect reputation

“Then we adopted a different way forward and this was this idea of openness visibility, stakeholder engagement and really allowing people to see what we are and what we are doing.” (Group Sustainability Project Manager) “The other day it was seen as a ‘nice to have’, and now it is a ‘must have’ in the procurement industry.” (Group Head of Procurement Strategy and Planning and Group Head of Procurement Account Management) “We are in a very mature business and responsibility and sustainability are nothing new to our supply base.” (Procurement Manager) “On one hand, there is a very defensive approach where we just never want to be exposed. As far as we are concerned this area is a threat. So there is a certain population of leaders who just want to make sure we maintain the minimum standard and are at least somewhere average in the pack” (Director, Strategy) “There is a link with the Dow Jones, so financial recognition. So we have to, as a public company, it is important” (Responsible Supply Chain Manager)

“…the way you sell it back to the company is risk avoidance, so the way that you then engage your principal stakeholders internally would be if you want to avoid having the equivalent of a BP or a Nike” (CSR Manager) “Obviously customers wanted the product we felt it was appropriate and right to make sure that those products met our customers' requirements. Because ultimately [the company] is a trusted brand on the high street and therefore if you come to one of our stores, you are coming with an expectation that we meet a number of promises” (CSR Manager) “There are expectations that we are also doing the right thing by the people that make these products for us, so through that either implied or implicit promise, we need to ensure we are meeting our customer requirements” (Procurement Manager)

RSCM to enhance reputation

RSCM to achieve CA

right and this is an articulation of our values” (Director of Operations)

mentioned waste, with recycling and landfill, so now you have got landfill tax at £48 a ton. So the more you recycle, the less you send to landfill, so the lower the tax is therefore the cost. So it all kind of adds up and gives you an advantage.” (Strategic Commodity Manager (Responsible for Sustainable Procurement)) “So it is a win–win. We are getting a cost benefit for the business in managing supply in a more holistic way, above market, but we also trying to manage measuring it and we can do something about it.” (Group Head of Procurement Strategy and Planning and Group Head of Procurement Account Management)

“So corporate social responsibility means doing as much as we can on all fronts that demonstrates us as a) responsible and b) a leader. That is what it is all about.” (Group Head of Procurement) “There is always a positive gap between what the law says or what the minimum says and what [the company] does…” (Group Head of Procurement)

“Both from being able to attract and retain talent. And then also just from a motivational perspective I think there is more employees who will bring their whole self to work if they feel more associated or more positive towards their workplace” (Director, Strategy and M&A Europe Sector (previously Director Materials Purchasing and Supply) “It is one of the things that I find really attractive about the organization is that it is not simply something someone just as a leadership has said and everyone ignores it, it is part of our DNA and our culture now” (previously Director Materials Purchasing and Supply) “…what is particularly rewarding is the point the suppliers come back to us and say given where you are going as an organization we really appreciate the work that has been done through the CDP, the carbon disclosure project. So it is their feedback, they are good barometers on that” (Director Strategy and M&A Europe Sector (previously Director Materials Purchasing and Supply) “Probably the truth of the matter is that we started on it because we were challenged by a journalist about the sources of our tropical hardwoods for garden furniture and we did not know and that began a huge journey leading to us being leaders in a lot of issues” (CSR Manager)

reputation by enhancing trustworthiness. For example, RSCM could send the right signal to both internal and external stakeholders, which allowed firms to attract and retain staff, suppliers and investors. This could potentially mean that RSCM can create significant financial and non-financial benefits such as customer loyalty and increased brand equity for the firm, and increasingly it can also be used as a differentiation, particularly if price and quality is equal to that of competitors. Although there was empirical evidence that RSCM could improve reputation and competitive advantage, this final link between ‘reputation enhancement’ and ‘competitive advantage’ was not particularly strong in our investigated cases. Instead, there was evidence that firms worked to enhance their reputation up to a point, but that once the

“A positive halo. So you have the mandate, you have the outreach, you have the metrics, and then on top of that we have what we just consider to be intrusive projects that create some noise and enthusiasm and agitation in the market that hopefully will springboard other ideas” (Director, Strategy and M&A Europe Sector (previously Director Materials Purchasing and Supply)) “[…] it is about being better than the rest and ensuring that we drive the agenda. We have a very progressive perspective on the subject and to a certain degree we get some consumer value from that” (Director, Strategy and M&A Europe Sector (previously Director Materials Purchasing and Supply)) “I think we are meeting more consumer needs and therefore selling more product. I think that is a definite win.” (Director, Strategy and M&A Europe Sector (previously Director Materials Purchasing and Supply))

n/a

case companies felt their commitment to their stakeholders were fulfilled, there was little appetite for further enhancing the brand: “I am not going to pretend, because we have got hundreds and hundreds of very small suppliers away and I am not pretending that you know everybody sees that. But the key suppliers we would ask them to sign up to the principles of our responsible procurement policy, basically it is saying that you are going to meet the standards […]” (Senior Supply Manager, case D), and “[…] Yes there will be (an audit) re-visit (…) every four years. So you could argue there is a gap there, what happens in between the audit visits, anything could happen” (Procurement Account Manager, case E). This suggests that from a reputational perspective, it pays to be good until the customer is content that it will not be

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exposed to any reputational damage from engaging in the buyer– supplier relationship. However, normative considerations are unlikely to drive further gains in corporate reputation beyond this point. These findings confirm our conceptual postulation that the focal firm relies on social cognition in categorizing their stakeholders, and in assessing which stakeholders to respond to. These case companies clearly delineated how far their RSCM responsibilities extended, and implicitly how far their stakeholders' concerns extend. These empirical findings confirm some prior work in the conceptual body of the broader corporate social responsibility literature (Bertels & Peloza, 2008; Morsing, Schultz, & Nielsen, 2008), and suggest that RSCM is not merely about managing exposure to risk, but also about managing reputation and competitive advantage. Our study indicated a clear relationship between RSCM and reputation enhancement, but this link was not as strong as the link between reputation protection and RSCM. This may reflect difficulties of measuring intangible benefits, including reputational effects (Zaichkowsky, Parlee, & Hill, 2010). It may also reflect diminishing returns of the benefits of engaging in RSCM. Fig. 2 explains two observations from our study: i) that the primary driver (outcome) of behaving responsibly in the supply chain is a reduction in the perceived exposure to risks and negative media attention; and ii) that it is more difficult to generate reputational benefits from RSCM than it is to protect it. Therefore, our work conceptually makes a contribution to marketing theory by identifying that beyond a certain point, normatively driven continued investments in RSCM only marginally improve the firm's reputation. Our empirical findings illustrate that firms can protect their reputation up to a threshold, after which any further normatively driven investments in the brand experience diminish returns on investments. 5.3. Cross-firm and -sectional observations Our empirical data also reveals some interesting cross-sectional findings. More specifically, we observe that the firms operating in the technology, finance, tobacco and drinks industry tend to emphasize reputation enhancement to a greater extent. This can be exemplified by the following statement: “There is a clear focus on reputation protection, but also we are clearly steered towards enhancement, as this is vital for the well-being of our company and for differentiating ourselves from our competitors” (Procurement Manager, case E). Along the same lines, an interviewee responded: “There is also brand enhancement, every time we do something like this you feel that there is a little bit of a polish been put on our brand, it is brand enhancing. So we don't do it solely for that purpose, but the sum of the parts is quite powerful for us” (Director of Operations, case D). In contrast, we observe that the firms operating in the publishing and home improvement industry

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are more ‘prevention’ and ‘protection’ orientated as illustrated in the following quote: “It is commercial concerns at the end of the day, and if the social side starts to come under the commercial and that is important for your reputation. Yes, it is important to them [top management] but it is not, it is still not foremost in their minds.” (Sales Representative, case A). In light of these findings, we offer a revised conceptual framework (Fig. 3). The revised framework reflects three observations from our data: First, we observe that there are different industry clusters and these influence the ‘protection’ vs. ‘enhancement’ motivation for engaging in responsible supply chain management. This observation may be explained by the fact that these ‘clusters’ engage in different types of salient stakeholder analysis and hence make different strategic decisions with respect to the role of RSCM. Second, it highlights the lack of a consistent relationship between reputation enhancement — as a consequence of RSCM — and competitive advantage. Indeed, our findings point towards the observation that it is the desire to achieve competitive advantage through reputation that drives RSCM engagement for a number of firms. Third, it emphasizes that, in the context of RSCM, reputation protection and enhancement are often considered as independent processes. As such, it is not a continuous process — as illustrated in Fig. 1 — where the desire to protect reputation also lead to an improved reputation. 5.4. Managerial implications This study has significant implications for managers. First, supply chain practitioners must carefully consider suppliers' social and environmental standards, as failure to do so may have significant implication for their corporate reputation. Encouragingly, our interviewees showed considerable awareness of this issue, but many of the companies we interviewed still admitted that they had a long way to go. For example, at times, departmental conflicts, lack of top management support and general lack of know-how and incentives resulted in RSCM not being prioritized. As such, supply chain managers often focused on more traditional purchasing criteria, but such short-term priorities can have significant implications for the long-term success of both the buyer– supplier relationships and the overall organization. Second, industrial marketers must realize that careful custodianship of corporate reputation can attract new investors and more innovative suppliers, and result in significant competitive advantages, such as winning contracts. Nonetheless, the investments into RSCM must be carefully considered and managers should evaluate any investment in RSCM as any other investment issue (McWilliams and Siegel, 2001). Thus, from a commercial perspective industrial markets needs to weigh up any added investment against the marginal increase in the commercial benefits. A clear company policy stipulating the extent to which RSCM is undertaken in order to protect or enhance corporate reputation may help managers in this respect. Our work conceptually makes a contribution to marketing theory by identifying that beyond a certain point, normatively driven continued investments in RSCM only marginally improve the firm's reputation. Our empirical findings illustrate that firms can protect their reputation up to a threshold, after which any further normatively driven investments in the brand experience diminish returns on investments. 5.5. Limitations and further research avenues

Fig. 2. Return on responsible supply chain management.

This study contributes significantly to our understanding of the issues that drive RSCM and how RSCM used by firms to protect and enhance reputation. However, we acknowledge the study's limitations. First, our sample consists of fairly ‘proactive’ firms in the RSCM field. All of these firms had a code of conduct, and were comfortable talking about their social and environmental supply chain practices. As such, our sample ignores the ‘inactive’ category. However, given that we explicitly examine how RSCM protect and enhance corporate reputation,

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Fig. 3. Revised conceptual framework.

the assumption is that firms are responsible and engage responsibly with their suppliers. Therefore, the exclusion of ‘inactive’ RSCM organizations from our sample, have no significant implications for our conceptual and empirical work. Second, without longitudinal survey data it is difficult to assess the causality of the issues discussed in this study. More specifically, it is difficult to assess whether there is a loop between reputation protection and enhancement, given that firms with higher levels of reputation would have a stronger incentive to protect their existing reputation, which in turn will drive their RSCM engagement. Therefore, further research could usefully test our framework through quantitative techniques, in order to assess the generalizability of our model. This would also overcome some of the usual shortcomings associated with qualitative research. Further, such studies should also considering treating ‘perceived risk’ as a moderating variable in relationship between RSCM and reputation. Third, we focus on RSCM in a UK context, and therefore our findings may not be generally applicable to firms, which operate outside the UK. However, as the majority of our case studies were based on multinational enterprises (MNEs), who must manage global stakeholder needs and expectations, our results are likely to reflect the true extent to which ‘typical’ MNEs are driven by a desire to protect and enhance reputation. 6. Conclusion This is one of the first empirical papers to explicitly consider the extent to which responsible supply chain management (RSCM) is driven by a desire to protect corporate reputation and examine how such practices can enhance corporate reputation. As such, we provide one of the first studies to systematically and empirically explore how RSCM is related to both the ‘protection’ and ‘enhancement’ of corporate reputation. This is an important area of study: partly because existing work often relates the business case for RSCM to corporate reputation, but much of this is based on anecdotal evidence; and partly because untangling the ‘protection’/‘enhancement’ issue reveals important aspects about the strategic decisions firms make and their level of engagement with responsible supply chain practices.

We observe that many firms are using both social and environmental supply chain management practices, not only as a way of protecting reputation, but also further enhancing reputation and generating competitive advantages. However, our research shows that the returns of engaging in RSCM are diminishing and that primary benefits are reputation protection followed by reputation enhancement. This explains why we find a stronger relationship between the former compared to the latter. More specifically, our work illustrates that most companies are primarily considering RSCM practices as a reputation protection exercise, rather than one to enhance reputation.

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Stefan Hoejmose is a Lecturer at the University of Bath. His research investigates how firms manage social and environmental issues in their supply chains. In particular, his research is concerned with the issues of business strategy, power-dependency and trust and their respective role in facilitating responsible supply chain practices. Jens Roehrich is a Lecturer at the School of Management, University of Bath, UK. His research focuses on the management of long-term inter-organizational relationships, including the dynamic interplay of contracts and trust. Jens' research also explores public–private relationships in delivering integrated solutions and value co-creation in urban infrastructure redevelopment projects. Before joining Bath, he was a researcher at Imperial College Business School, Imperial College London, UK. Johanne Grosvold is a Lecturer in the Centre for Business and Society at the University of Bath in the UK. Her research interests relate to the role of trust in supply chain relationships, the effect of sustainable supply chain relationships on firm's competitive advantage and the role of collaboration in enhancing supply chain relationships.