Research On Supplier's Environmental Innovation Decision-making Mechanism

With more and more attention paid to environmental issues worldwide,the global sustainable supply chain management has become increasingly complex.A company's operating performance and good reputation may be jeopardized by its suppliers' environmental violations.However,due to the objective and risk differences between suppliers and buyers and the cognitive differences in environmental management among decision makers,suppliers often lack the motivation to invest in environmental innovation.Although green supplier management has gradually become a new research hotspot,most of them explored the buyer's motivation,specific measures and performance outcomes.However,the studies on supplier's motivation to participate in environmental innovation were very limited and failed to fully answer the problem of how to promote suppliers to invest in environmental innovation.Through literature review,this study identifies a few research limitations.Internally,existing studies have found that decision-makers' environmental management cognition significantly influences their environmental innovation decisions,but ignores the perception of environmental commitment of external stakeholders.Moreover,how different dimensions of environmental managerial cognitions affect different types of environmental innovation remains to be further explored.Externally,there is no consistent conclusion about which contract coordination mechanism with the buyer can maximize the input of suppliers' environmental innovation.In addition,although existing literature emphasized that supply chain collaboration is critical to sustainable supply chain management,the key role of power dependence relationship between partners was neglected.Based on this,this study mainly discusses the following three research questions:(1)How does the environmental managerial cognition of the supplier's internal decision-maker affect the supplier's incremental and radical environmental innovation decision?(2)How does the contract coordination mechanism between supplier and buyer affect suppliers' radical environmental innovation decision?(3)How does the dependence between supplier and buyer affect the relationship between the above internal and external factors and the supplier's environmental innovation decision?To answer the above research questions,based on the managerial cognition perspective,the principal-agent theory and resource dependency theory,this study proposed a conceptual model that the relationship between decision makers' environmental managerial cognition,the contract coordination mechanism and suppliers' environmental innovation decision was moderated by buyer-supplier dependence and research hypothesis was put forward.Then,two experiments were designed by using scenario-based role-playing experiment and discrete choice experiment,and the hypothesis was tested by large-scale empirical samples.The first experiment tested the influence of internal decision-makers' environmental managerial cognition and buyer-supplier dependence on their environmental innovation decisions through sample data of 105 middle and senior managers of Chinese manufacturing enterprises.The second experiment tested the impact of various contract coordination mechanisms on suppliers' environmental innovation decisions under different buyer-supplier dependence structures through the sample data of the middle and senior managers of 677 Chinese manufacturing enterprises(218 companies for supplier dominance context,232 companies for buyer dominance context,227 companies for mutual dependence context).Based on the test results,the following research conclusions were drawn in this study:First,the supplier's adoption of incremental and radical environmental innovation was motivated by different motivations of managerial environmental cognitions.The supplier's adoption of incremental environmental innovation was motivated by moral value based environmental managerial cognitions,while its adoption of radical environmental innovation was mainly based on profit-seeking based cognitions.Second,the decision maker's perception of buyer's environmental commitment positively influences the incremental environmental innovation,but not on radical environmental innovation.However,supplier dependence positively moderates the relationship between buyer environmental commitment perception and radical environmental innovation decision and buyer dependence positively moderates the relationship between buyer environmental commitment perception and incremental environmental innovation decision.Third,when the suppliers need to invest a large amount of capital to break through environmental innovation technical problems to meet the buyers' environmental requirements,the contract coordination mechanisms between the buyer and the supplier can significantly influence the suppliers' environmental innovation decision,but the effectiveness of different contract mechanisms depend on buyer-supplier dependence structure.This study explored supplier's environmental innovation decision-making mechanism based on multiple perspectives not only fill the research gap that supplier's motivation to conduct environmental innovation should be paid more attention,but also provides an explanation of the inconsistent conclusion about the effectiveness of different contract mechanisms,as well as broaden related theories,thus enriching the theoretical basis of sustainable supply chain management.The results of this study also provide valuable managerial implications for practitioners and policy makers.