Responsible Supply Chain Management Behaviors,process Innovation,and Sustainable Performance In China’s Pharmaceutical Industry

The phenomenon of social and environmental responsibility concerns have aroused public attention in most Chinese firms particularly,within the pharmaceutical industry given the increasing spate of incidents concerning product safety and environmental pollution.Numerous incidents of irresponsibility involving pharmaceutical-related supply chain management systems have been reported within the industry in the last decade.In light of the growing importance of merging sustainability into the supply chain,the concept of responsible supply chain management(RSCM)has emerged.RSCM integrates environmental,social(including human and labor rights),and good governance factors into the lifecycles of goods and services.RSCM aids to create,protect,and grow long-lasting social,environmental,and economic value for stakeholders along a company’s value chain.Various studies have confirmed that linking social and environmental responsibility to the supply chain is a crucial step and,ultimately,brings improved sustainable performance.In recent times,various debates have been opened concerning this RSCM paradox,throwing doubt on whether an investment in the implementation of RSCM behaviors certainly comes with a corresponding performance outcome and,therefore,the commercial benefits of responsibility management in the context of SCM remain open for interrogation.The performance implications of RSCM from extant literature have not been able to bring certainty,and therefore this dissertation attempts addressing this gap interrogating whether a sustainable performance outcome(environmental,social,and economic)can be experienced through the effective implementation of an RSCM strategy.In addition,the effects of the implementation of RSCM behaviors on sustainable performance have not been examined for the introduction of new constructs.As the emergence of new constructs into the RSCM-sustainable performance relationship arises,there is the need to test whether these new variables are effective in changing the direction of performance outcomes.Therefore,there is a need to assess whether process innovation(PI)and supply chain integration(SCI)are useful in enhancing other types of performance,particularly on sustainable performance.This constitutes an additional knowledge gap.This study aims to explore the effects of responsible SCM behaviors on sustainable performance on the principles of the triple-bottom-line among pharmaceutical firms in China.In addition,the intervening roles of process innovation(PI)and supply chain integration(SCI)on the relationship between RSCM and sustainable performance outcomes are investigated as mediating and moderating constructs,respectively.The research hypothesis was formulated following an extensive study of relevant literature and was based on resource and capability-based and marketing theories such as the resource-based view,institutional theory,the strategic choice theory,,and the strategic orientation principle.Therefore,this study sought to achieve these objectives:(i)identify the effects of RSCM on economic performance(ii)examine the impact of RSCM on social performance.(iii)analyze the effect of RSCM on environmental performance(iv),investigate the mediating effect of process innovation on the relationship between RSCM behaviors and sustainable performance,and(v)explore the moderating effect of Supply chain integration on the relationship between RSCM behaviors and sustainable performance outcomes.In light of these issues,this research develops a comprehensive RSCM behaviors-process innovation-supply chain integration-sustainable performance model with a focus on outcome effects,relating theoretical linkages between RSCM behaviors and commensurate sustainable performance outcomes.RSCM,with its embedded constructs of environmentally responsible management,socially responsible management,supplier monitoring,and assessment,and Supplier collaboration remain the focal constructs in the theoretical model,with sustainable performance outcomes,while being mediated and moderated by process innovation and supply chain integration respectively.Credible instruments were subsequently developed to conduct robust research that included a pilot study and data collected through an internet-mediated questionnaire.The proposed relationships in the study’s model were tested using structural equation modeling(PLS-SEM)from a survey of 123 Chinese pharmaceutical firms selected across Jiangsu,Shanghai,Zhejiang,and Guangdong provinces.By following Anderson and Gerbing’s two-step model,the confirmatory factor analysis(CFA)was tested to establish the validity and reliability of the scales.The structural relationships were also tested to establish the effect of the RSCM behaviors on sustainable performance outcomes(environment,social,and economic).The empirical findings of the study confirmed that an effective application of RSCM behaviors,process innovation,and supply chain integration initiatives positively and significantly improves environmental,social,and economic performance outcomes.More specifically,the findings confirmed that(1)the application of RSCM behaviors positively affects the value of process innovation,and(2)the application of RSCM and process innovation behaviors has a positive and significant relationship on environmental,social,and economic performance outcomes.The positive effect of RSCM behaviors on process innovation validated the importance of RSCM,in improving the innovative processes of these firms.Similarly,supply chain integration was found to have an intensifying effect on the relationship between RSCM and sustainable performance.Thus,the value of supply chain integration has been highlighted in this study’s findings as having a “magnifying effect” on RSCM behaviors and sustainable performance outcomes.This study contributes to the existing body of knowledge within RSCM by:(i)asserting that the implementation of RSCM behaviors translates to an improved environmental,social and economic performance,while process innovation and supply chain integration strengthen the relationship between RSCM and all three constructs within the sustainable performance outcome cluster.This dissipates the seeming uncertainties within the current RSCM knowledge relating to the consequences of RSCM implementation.This study has significant policy implications.Based on these findings,this research offers valuable insights for both practitioners seeking to implement RSCM behaviors and policymakers,trying to promote an RSCM agenda further.Business practitioners are equipped with a validated model for assessing the effects of the application of RSCM behaviors on their organizational performance at the environmental,social,and economic levels.In conclusion,the primary RSCM practices confirmed in this study empower manufacturers in identifying those aspects of RSCM where improvements are required and those areas,which need to be prioritized.While the short-term economic benefits of sustainable supply chains may not be evident,a proposition has been developed in this research so that long-term benefits can be accrued,providing ‘win-win’ opportunities for both environmental protection,social safety,and economic benefits.