CSR-Related Stakeholder Pressure in Supply-Chains : A Qualitative Study of the Clothing Industry

Corporate Social Responsibility increases in importance, especially in the context of Supply-Chain Management. This is anchored in the rising competitiveness between entire supply-chains, as a competitive shift from individual companies to supply-chains as entities is taking place. Hence, the entire supply-chain becomes more critical in the creation of a competitive advantage. Corporate Social Responsibility has the potential to create legitimacy in the eyes of stakeholders and thus, also may contribute to the creation of this competitive advantage for entire supply-chains. Therefore, changing societal demands and stakeholder pressure stimulate the necessity for supply-chains to integrate Corporate Social Responsibility and thus, the three dimensions of the Triple-Bottom-Line (People, Planet, Profit) approach (as opposed to the traditional economic paradigm) into their operations. With regards to this necessity it becomes worthwhile to explore how individual actors within supply-chains perceive pressure and whether the shift from inter-firm competition to inter-supply-chain competition is accompanied by a similar shift in stakeholder pressure (based on the Triple-Bottom-Line) from individual companies to entire supply-chains. A set of four interrelated theories, namely ‘business as open systems’, ‘social contract theory’, ‘stakeholder theory’ and ‘legitimacy theory’, is used to approach this topic. Then, the perceived pressure is investigated by means of a series of qualitative interviews with representatives of seven companies within the clothing industry, located at different positions of supply-chains. These positions include Suppliers of Raw Material, Manufacturer, Logistics and Retailers. Findings show that primary stakeholders, especially employees and customers, are perceived to be the most influential sources of CSR-related pressure. This pressure includes a wide range of demands, covering all three dimensions of the Triple-Bottom-Line. The assumption that supply-chains as entities perceive stakeholder pressure is not yet supported by these findings. What can be identified is a noticeable ‘trickle-up’ effect, meaning that pressure flows upstream from retailers to suppliers of raw materials. The shift in stakeholder pressure onto chains as entities is not identified due to the sample available to the authors. Further research should investigate this shift by means of examining single supply-chains instead of various companies from different chains