The Integration of Corporate Social Responsibility in Supply Chain Coordination

Along with the frequently happened food safety problems, corporate social responsibility (CSR) in the food industry has become a serious issue. In this study the author analyzes the typical two-stage food supply chain which includes upstream food producers and downstream retailers. With manufacturers and retailers socially concerned about the stakeholders' welfare in addition to pure economic profits, CSR is integrated into the supply chain coordination contract, e. g. the revenue sharing mechanism. The effects of CSR are modeled; and the author found out that a company that is accountable to their stakeholders can get market consumer surplus from stakeholders. The two-stage Stackelberg game model is used to analyze how stakeholder engagement of CSR affects the coordination contract, namely the optimal order quantity, wholesale price, buyback price or revenue sharing ratio.