Information Transparency, Location, and Stakeholder Pressure on the Socially Responsible Partner Selection

Transparência da Informação, Localização e Pressão dos Stakeholders na Seleção de Parceiros Socialmente Responsáveis

ABSTRACT

Objective:

the purpose of this paper is to explore the effect of information transparency on the selection of a socially responsible partner, taking into account the role played by signal send by the location of the partner and stakeholder pressure.

Theoretical approach:

this study is based on the premise that information transparency is a central element in the buyer-supply relationship and can play a key role in the selection of a socially responsible partner. The location of a partner can also affect the feeling of transparency if the country where the partner is located is not recognized for its reputation. The stakeholder pressure for socially responsible practices can also affect the decision to choose a business partner.

Methods:

we employed a 2 x 2 full-factorial between-subjects, scenario-based role-playing experiment. In Study 1, we simulated a situation in which the buyer is asked about their likelihood of selecting a socially responsible supplier, while in Study 2 we simulated a situation in which the socially responsible supplier is asked about the likelihood of selling products to a buyer.

Results:

the results indicate that information transparency affects the decision to select socially responsible partners. Stakeholder pressure partially moderates this relationship, while location does not moderate this relationship in either study.

Conclusion:

we conclude that information transparency throughout the supply chain is a relevant factor in negotiations within a socially responsible context. Information transparency is a key aspect for both the buyer and the supplier when selecting a socially responsible partner.

Keywords:
buyer-supplier view; socially responsible partner selection; information transparency; experimental design; social sustainability

RESUMO

Objetivo:

o objetivo deste artigo é explorar o efeito da transparência da informação na seleção de um parceiro socialmente responsável, levando em consideração o papel desempenhado pelo sinal enviado pela localização do parceiro e a pressão dos stakeholders.

Marco teórico:

Este estudo parte da premissa de que a transparência da informação é um elemento central na relação comprador-fornecedor e pode desempenhar um papel-chave na seleção de um parceiro socialmente responsável. A localização de um parceiro também pode afetar o sentimento de transparência se o país onde o parceiro está localizado não for reconhecido por sua reputação. A pressão dos stakeholders por práticas socialmente responsáveis também pode afetar a decisão de escolha de um parceiro de negócios.

Métodos:

empregamos um experimento baseado em cenários e fatorial 2 x 2 entre participantes. No Estudo 1, simulamos uma situação em que o comprador é questionado sobre sua probabilidade de selecionar um fornecedor socialmente responsável, enquanto no Estudo 2 simulamos uma situação em que o fornecedor socialmente responsável é questionado sobre a probabilidade de vender produtos a um comprador.

Resultados:

os resultados indicam que a transparência da informação afeta a decisão de selecionar parceiros socialmente responsáveis. A pressão dos stakeholders modera parcialmente essa relação, enquanto a localização não modera essa relação em nenhum dos estudos.

Conclusão:

a divulgação de informações em toda a cadeia de suprimentos é um fator relevante nas negociações em um contexto socialmente responsável. A transparência das informações é um aspecto fundamental para o comprador e fornecedor na seleção de um parceiro socialmente responsável.

Palavras-chave:
visão comprador-fornecedor; seleção de parceiro socialmente responsável; transparência da informação; desenho experimental; sustentabilidade social

INTRODUCTION

Scandals related to the use of slavery work and precarious working conditions in the supply chain of global retailers, like Primark, Walmart, and even Brazilian ones, as Via Veneto, have shown the importance of socially responsible partner selection and adoption of ethical principles throughout their supply chains. In addition to reducing such scandals that severely affect the company’s brand (e.g., Sodhi & Tang, 2019) and harm future brand relationships (Romani et al., 2016), the selection of supply chain partners with a social responsible approach helps reducing social inequality, and increases competitiveness in markets that are sensitive to sustainability issues. This purchasing criterion is an important socially responsible practice related to the operations management (OM) field (Klassen & Vereecke, 2012; Shafiq et al., 2014).

Many challenges emerge when controlling processes and working conditions that supply chain partners adopt in their sites and it is difficult to mitigate opportunism in a global supply chain (Skowronski et al., 2022). Such aspect renders the selection of socially responsible partners more difficult. Information transparency in the supply chain, however, can mitigate these problems by facilitating the flow of information and showing how the processes are being performed through the supply chain. By disclosing information to external parties, e.g., consumers, suppliers, and investors, about their operations and products (Sodhi & Tang, 2019), parties enable negotiations to occur based on a clear and concise criterion.

Existing studies show a positive relationship between information transparency in the supply chain and socially responsible supplier management practices (Awaysheh & Klassen, 2010) and the effectiveness and efficiency of the buyer-supplier relationship (Zhu, 2002). More recently, the effect of information transparency on customers’ intention to purchase from a specific supplier has started to receive attention (Duan et al., 2020; Mollenkopf et al., 2022). Yet, the literature offers limited evidence on the role of information transparency in the decision to collaborate with specific buyers. Indeed, few studies have focused on understanding the supplier’s role in behaving in a socially responsible way (e.g., Shafiq et al., 2020; Zhan et al., 2021), and aspects that influence suppliers’ decisions on the buyers they want to sell to. For this reason, we still need studies investigating how suppliers connect with transparency and sustainability within and between supply chains (Gualandris et al., 2021).

A further issue in understanding the importance of information transparency in supply chain management for the selection of a socially responsible buyer or supplier is the influence of partners’ locations. In global supply chains, partners are in different countries. Since we know that specific signals can convey indirect information and subsequently influence purchasing intentions (Mollenkopf et al., 2022), partners’ location may convey clues that may shape the importance of information transparency. For instance, transparency may influence less the intention to transact if the reputation of the country where the partner is located sends negative signals to the other side. On the other hand, countries known for the pressure supply chain stakeholders put on companies to implement sustainable practices (Sarkis et al., 2010) can signal credibility and potentialize the benefits of information transparency in the supply chain. Any decision to invest on a socially responsible partnership in a different country, therefore, must consider such signs and hard pressures.

Given this context, this research presents the following research question: Do location and stakeholder pressure affect the effect of information transparency on the selection of a socially responsible partner? Our study explores the effect of information transparency on the selection of a socially responsible partner, taking into account the role played by signals send by the location of the partner and stakeholder pressure. To answer these questions, we ran two scenario-based experiments with professional managers from the USA who are familiar with purchasing/supply chain topics. This research provides contribution to the literature in three ways.

First, we show that information transparency is a determinant element in the selection of socially responsible buyers and suppliers. In situations where partners did not show transparency, the selection was impaired, it did not occur. In doing so, we complement the existing literature on the implications of information transparency in the supply chain (Awaysheh & Klassen, 2010; Zhu, 2002), specially because no study considers the selection of buyers as we do, and we enrich the growing body of knowledge on the importance of understanding and measuring transparency in the supply chain (Lamming et al., 2001; Morgan et al., 2018; Sodhi & Tang, 2019). Moreover, our findings show when and why the country’s reputation and stakeholders’ pressure matter in this context. In this way, we provide further evidence on aspects that matter in promoting social practices in the supply chain (e.g., Villena et al., 2021).

This study is also one of the first experimental studies that emphasize the buyer and supplier view (both) in the socially responsible supply chain context. In this sense, our contributions are not limited to socially responsible supply chain management, covering the entire operations management area because few studies analyze both perspectives (Ro et al., 2016; Rottenburger & Kaufmann, 2020).

THEORETICAL DEVELOPMENT

Previous studies have defined socially responsible supplier selection as a “firm’s capabilities for and/or orientation toward the selection of suppliers that embrace sustainability and CSR principles when conducting normal operations” (Thornton et al., 2013, p. 68). Selecting a socially responsible supplier is important because, when the company becomes socially responsible, the association between firms in the supply chain can improve or damage the company’s reputation (Sodhi & Tang, 2019). Having a supplier that does not comply with the company’s overall CSR strategy can limit the company’s ability to reach its own targets. We further argue that suppliers with socially responsible orientations may select buyers too. Although it is less common to talk about buyer selection, suppliers’ views need to be analyzed because suppliers can control critical business aspects, allowing them to gain bargaining power over buyers and make choices too (Skilton, 2014).

In a context where companies are changing their corporate strategies to focus on environmental and social sustainability (Tang, 2018), transparency between supply chain partners appears as a fundamental issue. When transparency in the supply chain increases, the mechanisms of socially responsible supplier practices that companies implement also increase (Awaysheh & Klassen, 2010). In this vein, we argue that transparency in the supply chain is also essential to define the selection of partners. This aspect still deserves attention in the literature, as few studies so far have focused on buyers’ purchase intentions (not suppliers) and just started to uncover conditions that may be relevant to further understand this issue (Duan et al., 2020; Mollenkopf et al., 2022).

The literature, for instance, offers few insights to understand the role of location in shaping the importance of information transparency, an aspect that seems critical because supply chains are increasingly global. Information transparency matters because it sends a positive signal to buyers and suppliers and they can use the information to make inferences about each other (Mollenkopf et al., 2022). However, the country where the partner is located also matters, as it may send positive (or negative) signals that can counterbalance (or enhance) the positive effect of information transparency.

Our study aims to contribute to this gap in the literature by providing evidence from an experimental study and showing how both buyers and suppliers select a partner in a context with (or without) information transparency. Additionally, we stressed this relationship by looking at how the location of the trading partner and the stakeholder pressure moderate the effect in focus.

Information transparency in the supply chain and partner selection intention

Transparency is a concept found in other management areas, like finance or strategy, and researchers in operations management are paying increasing attention to this concept. Lamming et al. (2001) discussed transparency in supply relationships, and concluded that transparency in supply means a relationship that is associated with a particular project, with an emphasis on the value created in the relationship when the companies are involved in creating a product or service (Lamming et al., 2001). In this case, the main elements to result in valuable transparency are information exchange and knowledge transfer. For Awaysheh and Klassen (2010), “transparency captures the extent to which information is readily available to end-users and other firms in the supply chain” (Awaysheh & Klassen, 2010, p. 1249).

Information transparency can also be seen as a competitive strategy because firms can indicate their visibility and/or accessibility outside the firm by eliminating or reducing the barriers that have an impact on stakeholder decision-making (Key & Challagalla, 2020; Turilli & Floridi, 2009). It therefore highlights how supply-chain-related information is communicated to various stakeholders is important (Duan & Aloysius, 2019; Morgan et al., 2018). Supply chain transparency means “a company disclosing information to the public, including consumers and investors, about upstream operations and about the products it sells to consumers” (Sodhi & Tang, 2019, p. 2946). It can engage and sensitize partners and consumers, and consequently stimulate relationships in the supply chain.

Information transparency is a path to a supply chain to be considered transparent (Sodhi & Tang, 2019). For example, information transparency can help large companies identify and resolve possible problems detected by audits in the whole of the supply chain. In doing so, companies can avoid falling out of favor with their consumers and any negative impacts on their brand value (Awaysheh & Klassen, 2010). Based on the above definitions, we define information transparency as a company’s disclosure of information to all stakeholders (consumers, investors, and both upstream and downstream supply chain members). Information transparency guarantees that a firm’s procedures and decisions are socially and environmentally friendly.

When companies address their transparency strategy, they must make their supply chain operations more transparent to consumers, investors, and the public in general (Sodhi & Tang, 2019). Being transparent, however, has at least three risks (Sodhi & Tang, 2019): (a) information can be used to manipulate stakeholders (Sodhi & Tang, 2019); (b) associations with partners that are known for their misconduct in terms of social and environmental issues may have a spillover effect on a company’s reputation (Goebel et al., 2018; Lamming et al., 2001; Sodhi & Tang, 2019); and (c) a company risks becoming uncompetitive if it discloses strategic information (Sodhi & Tang, 2019). Recent studies have highlighted the fact that transparency in relation to information, processes, and products is a core criterion for any evaluative technique, but unfortunately this has not been implemented (Bai & Sarkis, 2020).

When we focus on purchase intentions, we see from the literature that disclosing information in a transparent manner by way of supplier monitoring activities in the supply chain has a positive impact on purchase intentions (Duan et al., 2020; Mollenkopf et al., 2022). Firms that present information transparently are more attractive when it comes to forming partnerships in the supply chain, since information transparency can make the relationship between buyers and suppliers more effective and efficient (Zhu, 2002). Information transparency can affect both the buyer and the supplier in the business process (Zhou & Zhu, 2010). Considering these arguments, we present the following hypotheses:

H1a: The likelihood of the buyer selecting a socially responsible supplier is greater when the supplier discloses information in a transparent manner.

H1b: The likelihood of the supplier selling to a socially responsible buyer is greater when the buyer discloses information in a transparent manner.

Location in the supply chain

Location is a crucial decision when companies are looking to achieve strategic goals and cost reductions. Many companies take a partner for their operations from other countries with the goal of developing innovative processes, guaranteeing competitive advantage, reducing costs (Arrigo, 2020; Kedia & Mukherjee, 2009), ensuring the quality of the services rendered (Martínez-Noya & García-Canal, 2018), and/or improving the transparency of the supply chain (Sodhi & Tang, 2019). Location in this research means where the supplier manufactures a product (Voss, 2013), or where the buyer is located.

Despite the benefits, geographical distance could be hard to the focal firm because it may hinder the transparency in the supply chain and the ability to address the “ever-growing informational demands of external stakeholders” (Gualandris et al., 2021, p. 823). In order to reduce the risks associated with a potential partner distance, previous studies have suggested auditing the supplier to ensure that sustainable practices are in place (e.g., Klassen & Vereecke, 2012; Subramaniam et al., 2019), and involving relational governance to protect company relationships in developing markets from opportunism (Skowronski & Benton, 2018). Mitigating opportunism in the buyer-supplier relationship in global supply chain has become more complex (Skowronski et al., 2022) given the distance and different cultures.

However, company location (as a buyer or supplier) in the supply chain may create not only geographic distance, but also cultural and organizational distance (Awaysheh & Klassen, 2010). Country’s institutional environments, e.g., legal structure, available infrastructure, labor and environmental laws, and market structure (Khanna & Palepu, 2010), shape the way transactions are made (North, 1989) and create a reputation of what it is to do business in that environment. As such, it can influence decisions with regard to choosing a partner.

For example, companies located in a developing country generally have lower rates of compliance with sustainable practices than companies located in developed countries (Robertson, Di, Brown, & Dehejia, 2016). A company may think it will face higher risks if it buys from a particular country, or expands its activities there (Goebel et al., 2018), because the location may implicitly define ideas about the socially responsible approach of the company. In such case, the positive signal sent by information transparency (Mollenkopf et al., 2022) should have less impact on the intention to select partners from a developing country because of the negative sign send by the country’s reputation. Conversely, if the partner is in a developed country that normally has more mechanisms to induce socially responsible behavior, partners may believe more in the information shared. Information transparency then may have a stronger influence on partner selection. Therefore, we present the following hypotheses:

H2a: The positive effect of information transparency on the intention to select a socially responsible supplier is stronger (weaker) when the supplier is located in a developed (developing) country.

H2b: A buyer located in a developed country strengthens the positive effect of information transparency on the intention to sell to a socially responsible buyer.

Stakeholder theory and stakeholder pressure

Stakeholder theory (ST), which was initially proposed by Freeman (1984), suggests that individuals or groups are affected by a firm’s decisions, actions, and performance and, in their turn, they can also influence the firm. Before ST, the strategic thinking was that the firm was restricted to connecting with suppliers, customers, investors, and employees. With the emergence of the ST came the realization that many more institutions are linked to a firm, including government, trade associations, communities, and political groups (Donaldson & Preston, 1995; Freeman, 1984).

In recent years, firms have been pushed to implement sustainability policies and ensure that their supply chains are operating in a socially responsible way (Shafiq et al., 2020). Considering the sustainable context (environmental and social perspectives), previous studies (e.g., Sarkis et al., 2010; Villena et al., 2021) argued that suppliers respond to the pressures that come from stakeholders such as regulatory agencies, buying firms, and nongovernmental organizations. In this way, stakeholder pressure influences companies and their strategies and processes, shaping the implementation of sustainable practices. Pressure from stakeholders can also contribute to the quality of the transparency in the sustainability reports that companies publish (Fernandez-Feijoo et al., 2014).

ST enables us to understand if and how stakeholders pressure companies to develop and implement social practices in the supply chain. However, the pressure from stakeholders varies depending on the country. When consumers are more socially and environmentally responsible, ONGs are more active, governments apply fines, and companies experience more pressure from their stakeholders to adopt socially responsible practices in a transparent manner. Such pressure can be perceived as a positive signal and reinforce the positive signal already send by information transparency (Mollenkopf et al., 2022). On the other hand, in locations where stakeholders are less active, partners can perceive the low pressure of stakeholders as a negative aspect for not reinforcing the need for transparency. Based on these arguments, we present the following hypotheses:

H3a: The positive effect of information transparency on the intention to select a socially responsible supplier is stronger (weaker) when the perceived stakeholder pressure is high (low).

H3b: The positive effect of information transparency on the intention to sell to a socially responsible buyer is stronger (weaker) when the perceived stakeholder pressure is high (low).

Figure 1 shows our conceptual model linking information transparency, location, and stakeholder pressure to buyer and supplier decisions.

Figure 1
Research framework.

SCENARIO-BASED ROLE-PLAYING EXPERIMENT

A scenario-based role-playing experiment was developed following the suggestions of Rungtusanatham et al. (2011). It was based on supply chain literature and reports from the European Union and the garment industry. We developed two scenario-based experiments (2 x 2), each of which involved four descriptive vignettes. The vignettes were distributed randomly to the subjects, so each subject had the same probability of receiving one of the four treatment conditions (Bachrach & Bendoly, 2011). We used random assignment in order to decrease the likelihood of systematic between-group differences and to maximize the internal validity of the experiment (Huang et al.,2008) and reduce demand effects (Charness et al., 2012; Zizzo, 2010).

We recruited participants for both studies using Prolific.co, a crowdsourcing platform developed at Oxford University that helps collect data for specific subjects (Palan & Schitter, 2018). Prolific is recognized as being more suitable than M-turk when the scenario is not directed at consumers (DuHadway et al., 2018).

In order to provide a field-relevant context, we used the language and considered aspects present in reports from the European Union and the websites of garment sector organizations and nonprofit organizations that deal with poor working conditions and low wages in the garment sector. We also accessed the CSR reports of the industry and academic studies in the operations management and fashion areas.

After reading the scenario and following treatment (manipulation), the subjects answered questions about the dependent and moderating variables, the attention and manipulation checks, and the realism of the vignette.

In both studies, we used one independent variable (information transparency) and two moderating variables (location and stakeholder pressure). We manipulated transparency (with and without information transparency) and location (buyer or supplier from a developed country/developing country) and used a construct to measure stakeholder pressure. We adapted the scale of stakeholder pressure of Sarkis et al. (2010) and asked respondents their perceptions in relation to how much different stakeholders (i.e., clients, government, shareholders, employees, NGOs, and society) put pressure on companies to implement socially responsible practices. Figure 2 shows the manipulation levels.

Figure 2
Manipulation levels.

Vignette design and validation

We designed two vignettes (Appendix in the Online Supplement), one directed at buyers (the buyer assessing the supplier) and the other directed at suppliers (the supplier assessing the buyer). We needed to develop two vignettes in order to simulate a realistic situation for each one (buyer/supplier) to reveal the subject’s intention in a specific situation. We selected insights from business magazines that describe transparency and the location in relation to supply chain issues. We also introduced information related to the garment sector taken from newspapers and reports of the European Union that highlighted, for example, poor working conditions and low wages in supplier firms. Finally, we presented the characteristics that are essential for socially responsible supply chain management.

Experimental cues. Study 1 dealt with a supplier located in a developing country (we chose São Paulo, a representative city in the garment industry in Brazil) and a supplier located in a developed country (Dusseldorf, Germany, for the same reasons). For information transparency, we described a situation in which the buyer asks the supplier to prove that it satisfies four conditions that are requirements for a socially responsible supply chain. We have two situations: one in which a supplier cannot present evidence of the practices required (no transparency) and another in which the supplier can prove that it adopts the required practices (transparency).

Validation process. For Study 1, we also conducted two pretests in order to refine the vignettes and the design of the experiment. The first examined the understanding of the vignette and the manipulation of the subjects. It was done with 126 participants from academia and with professionals who hold positions in operations management areas. After the first pretest, we improved the common module and the manipulations checks, and decided to conduct a second round of our pilot study. We sent the vignettes to 120 individuals who have some experience or a position in operations management; they were selected by Profilic.co.

A pilot study was also undertaken for Study 2. In this pilot study, our goal was to see if our vignette was understandable, and if the checks really measured what we wanted. We also decided to test the moderator variable - location, with a focus on understanding if the subject’s answers were different with regard to Myanmar and Brazil as developing countries in the manipulation. The test was carried out with 120 Prolific participants who have some experience or a position in operations management. The results show that São Paulo/Brazil makes more sense to participants, because most of them did not know about Myanmar (geographically and politically).

Based on the results of the realism and manipulation checks, we chose to use Germany and Brazil in both experiments for manipulating the location variable. We also assessed the realism of the scenario, and carried out attention and manipulation checks for Study 2 (supplier’s view). In order to reduce validation problems, we used the approaches that can be seen in Table 1.

Table 1
Experimental procedures.

	Possible concern	Our approach
Vignette	It does not represent the reality	We developed a vignette using reports from the EU, information from garment sector organizations and from nonprofit organizations; we accessed CSR reports from the industry, and academic studies in operations management and the fashion areas.
		We pretested the vignettes twice to make sure that the context is understandable and measure the realism (Rungtusanatham et al., 2011).
Participant’s selection	Participants who do not understand the field or who do not work in this specific field	We used the Prolific platform to select the subjects (DuHadway et al., 2018; Palan & Schitter, 2018). We filtered subjects who have a management position and who have some experience in operations management.
Bias	Random assignment failure (personal selection)	Random assignment was used to reduce the likelihood of systematic between-group differences and maximize internal validity of the experiment (Huang et al.,2008). We adopted random assignment to distribute the vignette and we used software to do that, so each subject had the same chance of receiving the treatments.
	Small sample sizes	We selected more than 50 subjects for each cell.
Attention checks	Catch inattentive subjects	We introduced two questions for each study, and the subjects that failed to answer were eliminated (Abbey & Meloy, 2017).
Manipulation checks	Participants might answer the questions, but not understand the manipulation	We introduced three questions for each manipulation, and we collected them three times (two in the pretest and one in the final data collection). Manipulation checks are used to identify the different levels of the manipulation and attend the convergent validity (Bachrach & Bendoly, 2011).
Demand effects	“The changes in behavior by experimental participants due to cues about what constitutes appropriate behavior” (Zizzo, 2010, p. 75)	We adopted a between-subject design in both studies, and collected Study 1 and 2 separately, in order to reduce the demand effects and to improve the results (Charness et al., 2012).
		We recruited and conducted the studies online, and the random assignment was used to distribute the multiple scenarios to each subject.
Confounding tests	Make sure that one experimental manipulation cannot be influenced by another.	Confounding tests were used to assess the discriminant validity of the manipulation and ensure that one experimental manipulation was not influenced by another (Perdue & Summers, 1986; Thomas et al., 2013).

• Note. Source: Adapted from Duan et al. (2021).

Experiment checks. For both studies, we used three types of experiment checks that included attention, realism, and manipulation checks. Attention checks were used to identify if the subjects understood the scenario and their role in the situation (Abbey & Meloy, 2017). Realism checks were used to assess the degree to which each descriptive vignette was considered realistic (two questions). Manipulation checks were used to identify the different levels of manipulation (Bachrach & Bendoly, 2011). We included three independent questions in each manipulation check (transparency and location) and tested them in the pilot tests. We chose the best from each manipulation to collect the final data. Manipulation checks are used to verify that subjects understand the manipulations (Perdue & Summers, 1986). The results of the manipulation checks were analyzed using Anova.

DATA ANALYSIS

Study 1

Methodology

The participants were advised on the cover page that there were no correct or incorrect responses, and that they should be as truthful as possible. After the cover page, they were directed to a common module that described an ordinary business situation. The participants assumed the position of a buyer at Funny Company that operates in the garment sector. We introduced the subject to a situation in which he/she had to select a socially responsible supplier. The scenario described a situation of information transparency and supplier location. After reading the scenario, the subject answered the dependent variable with the following question: “Based on the case described, how likely are you to select this supplier?” A seven-point Likert-response scale was used, ranging from one (‘very unlikely’) to seven (‘very likely’). They also answered additional questions related to the realism of the scenario, the attention and manipulation checks, the stakeholder pressure construct, and demographic characteristics.

Attention check. The participants were asked: “Who are you in this context?” and “What is your major concern/issue?” We excluded the participants who answered incorrectly, and ended up with 233 participants. Realism check: The 233 participants judged the vignette to be realistic (ᵡ = 5.17, std. dev. = 1.312) and interesting (ᵡ = 5.13, std. dev. = 1.492) on seven-point Likert-type scale. Manipulation check: For the location variable, the subject responded to the following statement: “The supplier is from a developing country.” The means for this question were ᵡ developing country = 5.36 vs. ᵡ developed country = 2.47; F1 231 = 160.780, p < 0.000. For the information transparency variable, “The supplier really uses the four practices you are looking for,” the mean for ᵡ supplier with transparency was 5.51, and the mean for ᵡ supplier without transparency was 3.21; F1 231 = 150.309, p < 0.000.

Sample

We recruited 250 participants via Prolific.co for this study. The participants had management experience, were US nationals, and were familiar with purchasing and supply chain topics. In Study 1 (buyer view), we eliminated 12 participants based on attention check questions. A total of 128 of the participants were female, and 105 were male. More than 70% of participants were 30 years old or older, and all participants were familiar with procurement/purchasing topics.

Results

We ran a moderation analysis using Hayes’s (2018) PROCESS macro (model 2) with 10,000 bootstrap samples and 95% confidence intervals, with information transparency (with or without) as the independent variable, location (supplier from a developing/developed country) as the moderator, stakeholder pressure as a continuous moderator, and select a socially responsible supplier (SSRS) as the dependent variable. We performed Pearson and Spearman bivariate correlations between all the variables; results are present on the Appendix (in the Online Supplement). According to Hayes (2018), the correlation coefficients suggested no concerns for multicollinearity among the variables.

The results indicate that information transparency in the supplier process positively affects the buyers’ intention to select these suppliers (b = 1.8201, se = 0.7323, t = 2.4854, p = 0.0137), which supported H1a (see Table 2). The direct effect of location on SSRS indicates that suppliers located in developed countries are more likely to be selected by the buyers. However, although the result is positive, it is not statistically significant at the p < 0.05 level (b = 0.2851, se = 0.1591, t = 1.7924, p = 0.0744). The effect of the interaction between information transparency and location on SSRS is positive and not significant (b = 0.1142, se = 0.3182, t = 0.3589, p = 0.7200). The results reveal that supplier location does not moderate the relationship between information transparency and SSRS. Thus, hypothesis H2a is not supported.

Table 2
Results of Studies 1 and 2.

Model	Study 1		Study 2
Dependable variable	Select a socially responsible supplier		Sell to a socially responsible buyer
	b	SE	b	SE
(Constant)	3.7493***	0.3662	3.7882***	0.4028
Experimental variables
Information transparency (H1)	1.8201*	0.7323	3.0354**	0.8055
Location	0.2851****	0.1591	0.0847	0.2055
Moderators
Stakeholder pressure	0.0983	0.0833	0.2446**	0.0889
Interactions
Information transparency X location (H2)	0.1142	0.3182	-0.166	0.4110
Information transparency X stakeholder pressure (H3)	0.3009****	0.1666	-0.0828	0.1777
R 2	0.6410		0.4735
R 2 change	0.0052		0.0011
F-statistic	81.0709***		35.6100***
n	233		204

• Note. Unstandardized coefficients are reported. * p< 0.05; ** p< 0.01; ***p< 0.001; **** p < 0.1.

The direct effect of stakeholder pressure on SSRS was also positive but not significant (b = 0.0983, se = 0.0833, t = 1.1803, p = 0.2391). The participants perceived stakeholder pressure in the selection of a supplier, but the result was not statistically significant. The effect of the interaction between information transparency and stakeholder pressure on SRSS is positive and not significant at p < 0.05 level (b = 0.3009, se = 0.1666, t = 1.8058, p = 0.0723). At this level of significance, stakeholder pressure does not moderate the relationship between information transparency and SRSS. However, if we consider the interaction using p < 0.10, we can assume that hypothesis H3a is partially confirmed.

Study 2

Methodology

Participants were instructed to assume the role of the sales manager at 4U company - a garment manufacturer (supplier company). The situation presented a phone call between a buyer and the sales manager. Manipulation of information transparency and location were included in the text after the first dialogue. The participants had to answer the question: “Based on the case described, how likely are you to sell to Zar Company?” The scale was a seven-point Likert ranging from one (‘very unlikely’) to seven (‘very likely’). They answered additional questions related to scenario realism, attention and manipulation checks, stakeholder pressure, and personal characteristics.

Study 2 described a buyer located in the same countries as in Study 1. The same advice was given with regard to information transparency.

Attention check. Participants answered two questions, “Who are you in this context?” and “Who are you in the context presented?” We excluded those participants who gave the wrong answers, which resulted in 204 participants at the end. Realism check: Participants answered the same two questions as in Study 1. The results indicate that participants judged the vignette to be realistic (ᵡ = 4.50, std. dev. = 1.605) and interesting (ᵡ = 4.85, std. dev. = 1.575). Manipulation check: For location variable, the participants answered their agreement with the following statement: “Zar Company is from a developing country”; the means for this question were ᵡ developing country = 4.77 vs. ᵡ developed country = 2.02; F1 202 = 159.188, p < 0.000. For the information transparency variable, the participants answered their agreement with the following statement: “Zar Company really does the same practices that are required to your company”; the means for this question were ᵡ buyer with transparency = 5.90 vs. ᵡ buyer without transparency = 3.20; F1 202 = 311.164, p < 0.000.

Sample

We recruited 250 participants via Prolific.co for Study 2. The participants had managerial experience, were U.S. nationals, and were familiar with purchasing and supply chain topics. In Study 2 (supplier view), we eliminated 46 participants as a consequence of the attention check. With regard to the participants’ profile, 112 were female, 87 were male, 70% of participants were more than 30 years old, and all participants were familiar with procurement/purchasing topics.

Results

Study 2 followed the same procedures as Study 1. We ran a moderation analysis using Hayes's (2018) PROCESS macro (model 2) with 10,000 bootstrap samples and 95% confidence intervals, with information transparency (with or without) as the independent variable, location (the buyer from a developing/developed country) as the moderator, stakeholder pressure as a continuous moderator, and sell to socially responsible buyer (SSRB) as the dependent variable. We performed Pearson and Spearman bivariate correlations between all the variables; results are present on the Appendix (in the Online Supplement). According to Hayes (2018), the correlation coefficients suggested no concerns for multicollinearity among the variables.

The results indicate that information transparency in the buyers’ processes positively and significantly affected the suppliers’ intention to SSRB (b = 3.0354, se = 0.8055, t = 3.7682, p = 0.0002), thus supporting H1b. The direct effect of location on SSRB was not significant (b = 0.0847, se = 0.2055, t = 0.4119, p = 0.6808). The effect of the interaction between information transparency and location on SSRB was not significant (b = -0.1660, se = 0.4110, t = -0.4038, p =0.6868). The results reveal that the buyer’s location did not moderate the relationship between information transparency and SRSB. Thus, H2b is not supported.

However, the direct effect of stakeholder’ pressure on SSRB was positive and significant (b = 0.2446, se = 0.0889, t = 2.7521, p = 0.0065). The effect of the interaction between information transparency and stakeholder pressure on SRSB was not significant (b = -0.0828, se = 0.1777, t = -0.4660, p = 0.6417), revealing that stakeholder pressure did not moderate the relationship between transparency and SRSS, and H3b is not supported. Table 2 summarizes the results of both studies.

DISCUSSION AND CONCLUSION

To summarize our findings, we present Table 3, which includes the hypotheses for each study and the results of our analysis. In both studies, we confirmed hypotheses 1a and 1b. Hypotheses 2a, 2b, and 3b were not supported at the significance level of 0.05. However, hypothesis 3a was partially supported at the significance level of 0.10.

Table 3
Summary of hypotheses and results.

Study	Hypothesis	Result
1 Buyer’s perspective	H1a: The likelihood of the buyer selecting a socially responsible supplier is greater when the supplier discloses information in a transparent manner.	Supported
	H2a: The positive effect of information transparency on the intention to select a socially responsible supplier is stronger (weaker) when the supplier is located in a developed (developing) country.	Not supported
	H3a: The positive effect of information transparency on the intention to select a socially responsible supplier is stronger (weaker) when the perceived stakeholder pressure is high (low).	Partially supported
2 Supplier’s perspective	H1b: The likelihood of the supplier selling to a socially responsible buyer is greater when the buyer discloses information in a transparent manner.	Supported
	H2b: A buyer located in a developed country strengthens the positive effect of information transparency on the intention to sell to a socially responsible buyer.	Not supported
	H3b: The positive effect of information transparency on the intention to sell to a socially responsible buyer is stronger (weaker) when the perceived stakeholder pressure is high (low).	Not supported

When we analyze Study 1, we observe that the location and the interaction between information transparency and stakeholder pressure are not significant when we analyze from p < 0.05; but if we accepted this at the p < 0.10 level, we could consider this relationship to be significant. Based on this, we conclude that in the buyers’ view, location matters but does not moderate the relationship between information transparency and intention to select a supplier. On the other hand, stakeholder pressure does. When there is more pressure from stakeholders, information transparency is more relevant in the decision to select a socially responsible supplier.

When it comes to suppliers, based on Study 2, we observed that stakeholder pressure has significant positive effect on the intention to sell to a socially responsible buyer (SSRB). In other words, the results indicate that suppliers perceived and planned to respond to pressure from stakeholders to sell to a socially responsible buyer. Nevertheless, stakeholder pressure does not moderate the relationship between transparency and SSRB.

Theoretical contributions

We explored in depth the role of information transparency in the buyer-supplier relationship when they are immersed in a socially responsible context. Our results show that information transparency played a central role in both studies and affected the intention to buy or sell products. Based on our studies, we suggest that information transparency is a critical element in both sides of the relationship. In doing so, we offer at least three theoretical contributions.

First, this research contributes directly to the concept of supply chain transparency from both the buyer and the supplier perspectives and their decisions to select a socially responsible partner. The results of our studies also confirm that information transparency plays a significant role in buyer-supplier partner selection of a socially responsible partner. As such, our study fills the gaps suggested by previous studies that emphasize the importance of understanding and measuring transparency in the supply chain (Lamming et al., 2001; Morgan et al., 2018; Sodhi & Tang, 2019), and investigate how buyers and suppliers in a supply chain relate to their transparency and sustainability (Gualandris et al., 2021).

Second, we complement the existing literature that so far focused only on purchasing intentions (Duan et al., 2020; Mollenkopf et al., 2022). This contribution reaches beyond the literature of socially responsible practices in the supply chain, given the dearth of experimental studies that analyze the role of both buyer and supplier in the SCM. Prior experimental studies in operations management have focused on the buyer perspective (e.g., Chae et al., 2019; Joshi & Arnold, 1998; Polyviou et al., 2018; Thomas et al., 2011), especially when they are related to sustainable practices, or even socially responsible practices (Goebel et al., 2018; Thomas et al., 2021). The supplier’s perspective, however, has been less studied (Thomas et al., 2013; Wuttke et al., 2018), and very few studies included the perspectives of both the buyer and the supplier (e.g., Ro et al., 2016; Rottenburger & Kaufmann, 2020), such as our study.

Our study contributes to the emerging concept that is socially responsible supply chain by providing an empirical study that simulates a real-life scenario, thus aligned to the future studies suggestions from Tang (2018) and Tang and Zhou (2012). Our findings highlight how the participants make partner decisions within a socially responsible buyer-supplier situation regarding signals of location and stakeholder pressure.

Third, we bring to the light the importance of considering partners’ location and the signals it sends upstream and downstream in the supply chain. In line with previous studies that suggest that developed countries are propitious to suffer more pressure from stakeholders than developing countries (Villena et al., 2021), our results suggest stakeholders’ pressures in developed countries send a reinforcement signal to buyers and enhance the importance of information transparency in selecting socially responsible suppliers. On the other hand, just location is not enough to send a significant clue and does not affect the effect of information transparency on the socially responsible partner selection. In this way, we further uncover conditions under which information transparency matter the most. Moreover, although previous studies have found that suppliers respond better to stakeholder pressure (e.g., buyer companies, regulatory agency) to implement new practices (Villena et al., 2021), our findings do not support this, because in Study 2 stakeholder pressure does not affect the effect of information transparency on selecting a socially responsible partner.

Managerial implications

Based on our findings, information transparency is a crucial aspect when analyzing the relationship between buyer and supplier in an SRSC. We identified that information transparency affects the buyer’s intention and the supplier’s intention to sell within a socially responsible context. Thus, a critical managerial implication of this study is that companies wanting to implement an SRSC, as a buyer or a supplier, need to be transparent in order to be successful. Thus, our results suggest that firms that implement socially responsible practices may have an advantage when the product’s market price is taken into consideration.

Managing information transparency, therefore, can be an important strategic decision because it can affect performance in different dimensions (financial, sustainable, among others). For example, a company’s image affects the company’s reputation, and even small problems that occur in the present can affect the company for a long time into the future. If a partner company seems not to be transparent, the company may prefer to step back and cancel negotiations. Furthermore, information transparency is a crucial element in the implementation of SRSC because it enables all stakeholders to see throughout the supply chain if socially responsible practices are being implemented.

We hope that this study encourages companies to engage in developing socially responsible supply chains, implementing socially responsible purchasing, and becoming aware that these practices can contribute to their competitiveness. We also hope to raise awareness of the importance of implementing public policies to foster the development of responsible supply chains that will benefit the development of public sectors and the population of the countries involved.

CONCLUDING REMARKS

This study empirically explores the effect of information transparency on the selection of a socially responsible partner, taking into account the role played by signals send by the location of the partner and stakeholder pressure. First, we concluded that the information transparency constitutes a vital aspect of the buyer-supplier relationship. Based on our results, we can state that information disclosure throughout the supply chain is a relevant factor in negotiations within a socially responsible context.

We found that information transparency is a key aspect for buyers and suppliers in selecting a socially responsible partner, and we showed how the information transparency can help manage the SRSC. Second, we identified that location does not moderate the effect of information transparency on selection of a socially responsible partner. Finally, stakeholder pressure does not moderate the effect of information transparency on selection of a socially responsible buyer, but it does so when suppliers are selecting a socially responsible partner. Next, we elaborate on the limitations of the study and future research avenues.

Limitations and directions for future research

It is clear that location does not affect the intentions of buyers and sellers to select a socially responsible partner. Therefore, future studies should try to understand why companies prefer doing business with companies located in developed countries, particularly when exploring the socially responsible supply chain context. Further research can also manipulate stakeholder pressure, and analyze transparency as a mediating variable. In this manner, future studies can contribute to stakeholder literature and supply chain transparency by providing evidence about whether different levels of stakeholder pressure can affect transparency in a socially responsible supply chain.

In this study, we focused on the more practical aspects of information transparency characteristics, and therefore addressed only one of these to determine four essential practices that characterize SRSC. Consequently, our research focused on information disclosure, showing evidence of the SRSC practices carried out by the company. Our research was limited to analyzing the buyer and supplier decisions of selecting a socially responsible partner. We suggest, consequently, that future studies might analyze the roles in a socially responsible supply chain. We also suggest that future studies look for supply chain transparency using the EVM methodology.

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• JEL Code:

  C900, M110.

• Peer Review Report:

  The disclosure of the Peer Review Report was not authorized by its reviewers.

• Funding

  The authors reported thank the Ministério da Ciência, Tecnologia e Inovação, Conselho Nacional de Desenvolvimento Científico e Tecnológico (#402619/2021-8) for the financial support for the research in this article.

• Plagiarism Check

  RAC maintains the practice of submitting all documents approved for publication to the plagiarism check, using specific tools, e.g.: iThenticate.

• Copyrights

  RAC owns the copyright to this content.

• Peer Review Method

  This content was evaluated using the double-blind peer review process. The disclosure of the reviewers’ information on the first page, as well as the Peer Review Report, is made only after concluding the evaluation process, and with the voluntary consent of the respective reviewers and authors.

• Data Availability

  The authors claim that all data used in the research have been made publicly available through the Harvard Dataverse platform and can be accessed at:
  Tondolo, Rosana da Rosa Portella; Santos, Juliana Bonomi; Tondolo, Vilmar Antonio Gonçalves; Paiva, Ely, 2022, "Replication Data for: “Information transparency, location, and stakeholder pressure on the socially responsible partner selection” published by RAC-Revista de Administração Contemporânea", Harvard Dataverse, V1.
  https://doi.org/10.7910/DVN/CLIQUH
  RAC encourages data sharing but, in compliance with ethical principles, it does not demand the disclosure of any means of identifying research subjects, preserving the privacy of research subjects. The practice of open data is to enable the reproducibility of results, and to ensure the unrestricted transparency of the results of the published research, without requiring the identity of research subjects.

Edited by

Editor-in-chief:

Marcelo de Souza Bispo (Universidade Federal da Paraíba, PPGA, Brazil)

Associate Editor:

Fernando Luiz Emerenciano Viana (Universidade de Fortaleza, Brazil)

Publication Dates

• Publication in this collection
  30 Jan 2023
• Date of issue
  2023

History

• Received
  05 Nov 2021
• Reviewed
  24 Aug 2022
• Accepted
  30 Aug 2022