Design And Coordination Of Social Charitable Donation In The Supply Chain Considering Government Subsidy

Most managers believe that corporate social responsibility(CSR)can not only improve the competitiveness of enterprises,but also be crucial to the success of future business.Stakeholders also expect enterprises will incorporate social responsibility into the business process.The implementation of corporate social responsibility activities has become a feasible strategy for enterprises to improve corporate brand image and enhance their marketing ability.This article studied a specific way for enterprises to demonstrate their social responsibility(i.e.,social charitable donation),which is a specific practical activity of CSR.It refers that the producing enterprises donate a certain amount of money for social welfare projects when consumers buy a product.In recent years,many large companies,such as Wal-Mart,Apple and Nongfu Spring,have demonstrated their social responsibility by implementing social charitable donation programs.However,donations increase a company’s costs,which may reduce its profitability.Too much focus on social responsibility may harm the interests of stakeholders.Whether and how companies integrate social charitable donation into their business strategies remains to be addressed.The purpose of this article is to determine the optimal donation channel for managers and provide support for their product pricing decisions,so that the social charitable donation activities of enterprises can not only contribute to our society,but also better improve corporate performance.Compared with foreign countries,the overall level of corporate donation in China needs to be improved.How the government encourages enterprises to contribute to the improvement of social welfare is also one of the hot spots in the current academic concerns.Therefore,it is also an issue to be discussed to consider government subsidy and how to strengthen cooperation among channel members to realize coordination of the supply chain.This article establishes two-stage supply chain models with a single supplier and retailer,and assumes that enterprises will bear the costs associated with preparing and maintaining social charitable donation activities.This article considers different donation models(the supplier donating and the retailer donating),and studies the subsidy adopted by the government.From the perspective of operation management,this study provides decision support for enterprises to improve performance by using game theory.In addition,this article uses coordination contracts to help enterprises in the supply chain address the inefficiencies caused by decentralized decision-making when implementing strategies.Specifically,considering the complexity of supply chain channels in real business practice,this article explores the economic consequences of social charitable donation activities under different donation models.The results show that when consumers have a high preference for social responsibility,social charitable donation can be used as a tool of CSR to improve corporate performance.Otherwise,the government needs to provide sufficient subsidies to encourage enterprises to carry out social charitable donation activities.This study provides management insights into how the government implement subsidy policy.In addition,in decentralized channels,the implementation of social charitable donation activities by the retailer can bring better economic and social performance.Finally,this article proposes to design a coordination contract to make the total donation amount and total profit of decentralized channels under different donation models reach the same level as those of centralized system.This study contributes to the research on corporate donation and provides some supports for the formulation of government subsidy policies and the implementation of corporate social responsibility strategies.