SOCIAL SUSTAINABILITY IN THE SUPPLY CHAIN OF INDIAN MANUFACTURING INDUSTRIES

Abstract

In the wake of the emerging social issues in the developing countries, research on social sustainability has gained importance for both the academics and the practitioners. Although there are a number of studies of social sustainability in the supply chain, they are either supplier-related or manufacturer-related and predominately address the CSR issues, referring to the internal stakeholders. This research integrates the literature on the supplier, manufacturer and customer responsibility to propose a new concept, that is, supply chain social sustainability (SCSS), which addresses the social issues within the overall supply chain. The research was conducted in three broad steps. First, an extensive literature review was carried out through online databases, including Scopus, EBSCO Business Source Premier, Emerald and Elsevier, Taylor and Francis, Springer, Wiley, and Inderscience, using keywords such as social sustainability, sustainability, social sustainability and supply chain, social sustainability and operations, and manufacturing sustainability, to identify the key social sustainability dimensions available in the literature. At the same time, in-depth interviews were conducted with supply chain managers. The interviews pointed to various social sustainability issues prevailing in the Indian manufacturing supply chain, and gave insights into how social sustainability can be managed and what can be the possible outcomes of adopting such practices in the supply chain. In addition, an expert panel was constituted to identify the social sustainability dimensions and their measures suitable to the Indian context. An initial questionnaire was designed using the measures identified by the expert panel. To check the suitability of the questionnaire, pilot tests were conducted with the practitioners, which suggested some changes, including some ambiguous words and phrases that needed to be altered. The questionnaire was finalised after deleting, rewording and rephrasing some scale items and the final questionnaire with 59 scale items, along with a write up on social sustainability, was mailed to 1200 manufacturing companies, randomly selected from the Prowess database (https://prowess.cmie.com) using two criteria: one, the company should have revenues exceeding 100 billion, and second, the company should have been operating for at least ten years in India. ii The first phase yielded 300 usable surveys, with which the exploratory factor analysis (EFA) was performed. The results suggested six dimensions measuring social sustainability with required reliability and validity, and the second phase survey was conducted with the refined scale items. In the second phase, 1400 companies were picked up randomly with the above criteria from Prowess and mailed the questionnaire. This yielded 450 usable responses. In the third phase, the first order confirmatory factor analysis (CFA) was performed to test the psychometric properties of the constructs (measurement model). The results showed that the model was fit with the required reliability and validity. In addition, the second order factor analysis was performed to find out social sustainability as the second order latent construct. The results suggested six underlying social dimensions to measure social sustainability, namely equity, safety, philanthropy, health and welfare, human rights and ethics. In order to validate the second order measurement model, efficacy testing and predictive validity tests were performed. The tests suggested six social dimensions with 20- item scale with adequate reliability and validity. Finally, the structural equation modelling (SEM) was performed with the constructs of social sustainability, supply chain performance, supplier performance, operational performance and customer performance. The statistical analysis suggested that the model was fit with the required validity. The results suggested that social sustainability in the supply chain significantly impacted the supply chain performance, supplier performance and operational performance. However, customer performance did not show any significant relationship with the supply chain performance. For the purpose of clarity, simplicity and convenience, the thesis has been organised as follows. The first chapter “Introduction” presents an overview of the prevailing social sustainability issues in the supply chain of the Indian manufacturing industry and discusses the need for social sustainability research. The second chapter “Literature Review” carries out a detailed review of the literature available in the field of social sustainability and its practice so far. This chapter also identifies the performance measures related to the supply chain, suppliers, customers, and operations. In addition, it also uncovers the research gaps in the literature and formulates the research hypotheses. iii The third chapter “Methodology” presents the detailed research design comprising both qualitative and quantitative methods. This chapter discusses the research hypotheses and the methods to test these hypotheses. In addition, it gives an overview of the questionnaire design and data collection method, sample size and tools used for analysis. The fourth chapter “Results and Analysis” presents the various statistical tools used, followed by a comprehensive analysis of the results using these. It also presents an overview of the results of the confirmatory factor analysis and structural equation modelling, with convergent and discriminate validity. The fifth chapter “Discussion” presents the detailed outcome of the research contributions and elaborates on social sustainability and its relationship with the supply chain performance, operational performance, supplier performance and customer performance. The various proposed hypotheses and the research outcomes have been compared. The sixth chapter “Conclusions, Implications, Future Directions” discusses in detail the conclusions arrived at in this research and examines its limitations and managerial implications, also suggesting the future research directions.