Value Chain Transparency
My research for the past few years has evolved into supply chain social and environmental responsibility. An overarching question that guides my work is: How can the buyer firms be sure their suppliers engage in socially and environmentally responsible practices? It’s a difficult question to answer. After all, the buyers cannot observe processes used to produce goods; they must engage with their suppliers to understand what’s going on. The buyers try different mechanisms (both reward and penalty), yet no one has completely solved the problem. I am looking into issues of how to manage suppliers to make sure they are socially and environmentally responsible.
As a Food-Energy-Water Systems (FEWS) Fellow, I conducted research that will help me answer the following question: How should companies communicate their sustainability contributions to consumers? I want to discover if it makes a difference to consumers whether a company engages in sustainable operations practices or if it does some external corporate social responsibility activities (i.e., the traditional method). Based on experiments, what I have found so far is that consumers in the U.S. do prefer a company that engages in sustainable operations practices over a company doing external corporate responsibility activities in the social domain. In terms of environmental practices, we see that companies pursuing sustainability practices internally versus externally are valued similarly. This has been one of the big takeaways of this research.
Why do the consumers value internal practices more in the social domain, but not necessarily in the environmental domain? While at this point I can only hypothesize, I do think people tend to see environmental impact as one aggregate outcome. Therefore, whether a company makes internal or external practices more environmentally friendly, the net impact appears to be the same. Whereas when it comes to social impact, people seem to account differently for internal and external practices. For instance, if a company does not treat its workers well internally, that counts—even if the company contributes to a social good as an external activity.
Ideally, we would want companies to be conscious about their own social and environmental impact. This feeling of responsibility could impel companies to take actions to reduce or mitigate their impact. An implicit goal of this research is to show companies that engaging in sustainable operations practices is good for business because the consumers do care. However, if the data shows that social and environmental responsibility appears to be something companies can delegate to others or erase by engaging in good practices outside, then I guess we cannot achieve the desired outcome.
Regardless of research outcomes, I found the FEWS program to be worthwhile. Meeting people from different parts of the campus contributed to my understanding of sustainability beyond the business aspect. Many of my peers do hands-on research (in areas such as ecology), which more directly relates to the operational parts of sustainability. Through site visits (e.g., WaterHub at Emory, the Atlanta Food Bank, and a solar industry company), I learned about different organizations’ sustainability efforts. On yet another level, a presentation by a NSF program director exposed me to the perspective of a funding agency. Overall, the program offered a broad exposure to FEWS.
My FEWS experience in the fall directly impacted my teaching this spring. During the program, discussions about food and water supply chain systems made me think more about responsible sourcing practices in which companies can engage. For my Supply Chain Modeling class’s final project, I asked students to conduct research on the supply chain implications of sustainability efforts. Many students engaged in responsible sourcing; they researched companies and the problems they faced. Then they wrote critiques of the companies’ approaches. More than 90% of the students agreed (in a survey) that the final project increased their understanding of the global sustainability challenges as well as their appreciation of the social and environmental impacts of operations and supply chain practices. Overall, I am grateful for being a FEWS Fellow because it helped me integrate my current research into my teaching practice in order to help my students better understand some critical issues in sustainable business.
Basak Kalkanci is an Assistant Professor at the Scheller College of Business.