Abstract:

Although consumers are concerned about social responsibility （SR）， they may not be willing to pay for corporate SR behavior in actual purchases. However， most of the literature has examined the incentives for corporate SR based on reciprocity with consumers rather than altruism towards consumers. It is necessary to explore new drivers， which are different from consumers' willingness to pay， for corporations to engage in SR， especially when consumers have insufficient awareness of SR behavior or their actual willingness to pay is not so sensitive to SR attributes of products. To narrow this gap， a supply chain where two competing manufacturers purchase a same component through a common group purchasing organization （GPO） to achieve economies of scale is studied. The manufacturers can endogenously make SR strategies simultaneously by choosing how much consumer surplus should be considered in their production decisions. By developing a stylized model to analyze the coopetition game between the manufacturers with respect to SR level and quantity decisions， the impact of SR levels on operational performance is identified and the equilibrium SR strategies are solved. From this， the impact of group purchasing on SR incentives and their sustainability is untangled， and the sustainable path of group purchasing to value creation is explored.The results indicate that SR can always benefit the GPO and consumers by increasing production while it can benefit the manufacturers only if cooperation dominates. As a result， SR can make both the supply chain and social welfare either better off at low levels or worse off at high levels. In equilibrium， the manufacturers will implement SR strategies only if cooperation and competition are unbalanced. In this scenario， the manufacturers may sink into Prisoner’s Dilemma and suffer losses from SR strategies if competition dominates， whereas SR strategies can also make the manufacturers better off and achieve the Pareto improvement of social welfare if cooperation dominates. Compared to individual purchasing， group purchasing can create values of cooperation and SR by inducing the share of purchasing power and a cooperative relationship between the manufacturers. In particular， when the competition intensity and GPO commission are sufficiently low， group purchasing can sustain SR strategies and thus creates significant social benefit， i.e.， improve the consumer surplus and social welfare at the same time. Above all， by demonstrating the mutual promotion on sustainable value creation between group purchasing and corporate SR， we propose a new strategic driver of SR for corporations under competition.

Key words: corporate social responsibility, coopetition, altruism, group purchasing, prisoner’s dilemma