Purchasing social responsibility and firm performance

Abstract

Purpose – This paper aims to examine how socially responsible supply management activities, a term labeled purchasing social responsibility (PSR) in the extant literature, affect a firm's costs. There has been much debate, and mixed empirical findings, regarding whether socially responsible behavior on the part of companies improves or reduces firm performance.Design/methodology/approach – A survey methodology and structural equation modeling are used to assess the relationship between PSR and supplier performance, including the mediating role of organizational learning. The theoretical scope is developed through an integration of literature from logistics, corporate social responsibility, the resource‐based view of the firm, and organizational learning.Findings – No direct relationship is found between PSR and costs; however, organizational learning and supplier performance act as key, mediating variables between PSR and costs, with PSR leading to organizational learning, improved supplier performance, a...