Impacts of CSR implementation and channel leadership in a socially responsible supply chain

Purpose Corporate social responsibility (CSR) has now been paid notable attention by a large number of firms. The aim of this paper is to investigate a better way to implement CSR in a socially responsible supply chain with different channel leaderships. Design/methodology/approach Started from measuring CSR by purely taking consumer surplus into account, a stylized centralized channel and two different decentralized channels are first developed and examined for equilibria in the socially responsible chain. Furthermore, this paper extends to a socially irresponsible supply chain and a broader practice of CSR by simultaneously incorporating environmental externality and consumer surplus into CSR. Findings With the analytical studies, several interesting and important results and managerial insights are clearly revealed. For example, but not limited to, it is found that: (1) Compared with the leader, the follower can effectively implement CSR for a better performance in both pure and socially responsible profits in the decentralized channel; (2) undertaking socially responsible concerns does not always mean reducing the economic profit and conversely being socially irresponsible does not always induce an increase in economic profit for the socially responsible member(s); (3) CSR concern level plays a key role in both the pure and socially responsible profit. An increase in CSR concern level clearly increases the socially responsible profit and poses an ambiguous impact on pure profit depending on different channel leaderships: it decreases the centralized channel in pure profit but increases the pure profit with the decentralized channel under certain conditions; and (4) interestingly, the authors find that decentralization can outperform centralization regarding on both pure and socially responsible channel profits by properly implementing CSR concern levels. Practical implications The results derived in this paper provide novel managerial implications to the socially responsible members in terms of pricing decisions, order quantity and CSR practice. In addition, this paper assists the socially responsible supply chain in determining the optimal channel leadership to undertake CSR. That is, decentralization may achieve a better performance than integration under certain market conditions. Originality/value To the best of the authors' knowledge, this paper is the first attempt to explore the interactive of the CSR practice and channel leadership in a socially responsible supply chain.