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Corporate social responsibility and inventory policy

  • Barcos, Lucía
  • Barroso, Alicia
  • Surroca, Jordi
  • Tribó, Josep A.

In this article, we study the impact of implementing corporate social responsible (CSR) practices on firms’ inventory policy. We propose that there is an inverted U-shaped relationship between firms’ CSR and their inventory levels. Two elements explain such a proposal. First, stakeholders have different interests regarding the outcome of the inventory system. Specifically, we hypothesize that customers put pressure on firms to increase inventories; employees have conflicting views regarding inventories, and for this reason they do not put pressure on firms in a particular direction; and environmental activists force firms to reduce inventories. The second element to explain the previous relationship is that there is a different level of stakeholder proactiveness contingent on the intensity in the implementation of social responsible policies. While employee demands are a priority for every firm, we posit that there is variation in the relative importance attached to customers and the natural environment: for low levels of CSR, customers are more relevant; and for higher levels of CSR, the natural environment gains importance.

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Article provided by Elsevier in its journal International Journal of Production Economics.

Volume (Year): 143 (2013)
Issue (Month): 2 ()
Pages: 580-588

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Handle: RePEc:eee:proeco:v:143:y:2013:i:2:p:580-588
Contact details of provider: Web page: http://www.elsevier.com/locate/ijpe

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