Abstract:This paper considers one of the hot topics in the currentsociety—— Food quality and safety problem. We analyze the new features of CSR undersupply chain management and then analyze its short, medium and long-termeffects on the profits allocation in supply chain management under theperspective of externality. Based on the analysis, the CSR has different effectson the profits distribution in short, medium and long-term ways. Theexternalities produced by CSR are not an easy way but a step-by-step process.In the short term, it has no obvious effects on manufacturers, retailers andsociety, the profits of the short term can not compensate for costs. In themedium term, there are three situations which depended on the specificcircumstances. While in the long term, it will improve the Pareto Optimal ofsociety, bring about positive external effects. We can use the J Curve tomanifest the relationship among short, medium and long-term. Finally, weconclude strategic choices for the supply chain under CSR.
Key words: Corporate Social Responsibility（CSR）, Externality, ProfitsAllocation, Supply Chain
1 Introduction
Nowadays, we can see a large number ofquality problems in the food area. In 2004, the case of inferior milk powder whichhappened in Anhui province in
We also note that with the impact of theincident happened in September 2008, the export of Chinese dairy in Octoberdropped 90 percent. People from the foreign countries are afraid of buying theproducts. In this condition, it spreads rapidly to the whole country and alsomakes the profits of the retailers reduced. So the study of the relationshipbetween CSR and profits allocation in supply chain is full of importanttheoretical and practical significance.
2 Literature Review
Jouni Korhonen(2003) attempted to bridge business ethics to corporate social responsibilityincluding the social and environmental dimensions[1]. Sarah Roberts (2003)began by examining the relationship between corporate social responsibility,reputation, and supply network conditions[2]. Mark S. Schwartz andArchie B. Carroll (2003) presented a three-domain approach in which the threecore domains of economic, legal, and ethical responsibilities are depicted in aVenn model framework[3]. Risako Morimoto, John Ash and Chris Hope(2005) examined the possibility of developing a new corporate socialresponsibility (CSR) auditing system based on the analysis of current CSRliterature and interviews conducted with a number of interested andknowledgeable stakeholders[4]. Che-Fu Hsueh,Mei-Shiang Chang (2008)evaluated the profit of coordination between manufacturers oncorporate social responsibility(CSR) under network equilibrium[5]. Jose M.Cruzv (2008) develops aframework for the analysis of the optimal levels of corporate social responsibility (CSR)activities in a multiperiod supplychain network consisting of manufacturers, retailers, and consumers.Manufacturers and retailers determine their production quantities, transactionquantities, and the amount of socialresponsibility activities they want to pursue that maximize net return,minimize emission, and minimize risk over the planning horizon[6,7].
Studies have analyzedthe problem from a management view, which did not reveal the profound economicsreasons of the CSR and did not analyze the profits allocation in supply chain undertakingthe CSR. This article mainly considers the function of CSR in the profitsallocation of supply chain. We analyze the influence of the CSR on the profitsallocation from the externality. Based on this, we propose some measures sothat the company can get more profits by undertaking CSR. The article mainlyincludes five parts: the first part is introduction of the significance of thisquestion and the second is the literature review; the third part is analysis ofsome features of CSR in the supply chain; the fourth part is the main part ofthis article, we analyze the relationship between CSR and profits allocation insupply chain based on externality and finally we point out some strategicchoices for undertaking CSR in the global supply chain.