The social role of supply chain firms during the pandemic period

Abstract

Purpose Social risk management is vital for growth and business continuity. This study investigates the social risk shift in supply chain management during the Coronavirus Disease 2019 (COVID-19) pandemic.

Design/methodology/approach Data were retrieved from Bloomberg between 2010 and 2021 regarding all supply chain enterprises from nine countries. The authors undertake a confirmatory examination of formulated hypotheses. Social supply chain risk (SSCR) refers to “firms that took the necessary steps to decrease social risks in their supply chain. Social risks involve the child or forced labor, poor working conditions, lack of a living and fair or minimum wage”. The authors complement the analysis and address the endogeneity issue using the dynamic generalized moments method (GMM).

Findings A significant positive relationship between COVID-19 and SSCR was discovered in this study. Due to the COVID-19 pandemic, supply chain firms faced supply chain social risk. Notably, SSCR policies differ from one country to another during this period.

Research limitations/implications The research has some limitations. The sample data are limited to 9 countries. Furthermore, it was somewhat difficult to determine the country-wise difference using COVID-19 as a dummy variable. Future research may adopt qualitative approaches, such as structural or semi-structural interviews.

Practical implications The results have important implications for supply chain practitioners to consider the critical role of social risk in their operations. COVID-19 has exposed the new political economy and re-centered governments as the key actors in tackling grand challenges to safeguard workers, produce socially useful products and protect their stakeholders. Also, the study highlights the importance of governments and policymakers having a well-structured regulatory framework and environment for firms to comply with the social norms in their supply chain management. Finally, the study's findings should encourage supply chain managers to adopt a proactive mechanism that reduces the social risk impacts of pandemics.

Originality/value Considering the historical backdrop of the COVID-19 pandemic, this study is unique in measuring the SSCR of enterprises from a worldwide viewpoint. Keywords : Supply chain firms, Social supply chain risk, GMM regression, COVID-19 pandemic