Voting with the wallet: a principal–agent framework for the analysisof sustainable supply chains
DOI:
https://doi.org/10.1108/RAUSP-09-2023-0193Keywords:
Supply chain, Delegation, Agency theoryAbstract
PurposeThis paper aims to investigate delegation decisions in supply chains, exploring the metaphor that consumers who make environmentally and socially responsible choices are equivalent to voters in an election.
Design/methodology/approachThis theoretical paper relies on the principles of agency theory to shed light on fundamental challenges that shape our ability to transform supply chains.
FindingsThis paper unravels two puzzles linked to delegation decisions within sustainable supply chains. It shows that as firms adopt sustainable production systems, their ability to convey relevant information that convinces consumers to enter in a delegation relationship diminishes, ceteris paribus; and once a delegation relationship is established, complementarity within the dimensions of the contract is necessary to guarantee the delivery of sustainability attributes.
Research limitations/implicationsThe findings of this paper offer insights that can inspire empirical research on sustainable supply chain management.
Practical implicationsPolicymakers and entrepreneurs willing to incentivize the transformation of supply chains must think about the nature of the relationship between firms and consumers. This paper provides a metaphor that can help practitioners to reinterpret their role as providers or consumers of products and services with sustainability attributes.
Social implicationsThis paper provides insights that may enhance the understanding of how individual consumption decisions may contribute to transforming supply chains.
Originality/valueThis paper expands the repertoire of theoretical tools that can be applied to study the emergence and resilience of sustainable supply chains.
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