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HE IMPACTS OF SUPPLY CHAIN SOCIAL SUSTAINABILITY ON SUPPLY CHAIN PERFORMANCE, MEDIATING ROLE OF SUPPLY CHAIN INTEGRATION THE CASE OF VIETNAM
i MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH DUONG NGOC HONG THE IMPACTS OF SUPPLY CHAIN SOCIAL SUSTAINABILITY ON SUPPLY CHAIN PERFORMANCE, MEDIATING ROLE OF SUPPLY CHAIN INTEGRATION THE CASE OF VIETNAM Major: Business Administration Code: 9340101 SUMMARY OF DISSERTATION Academic Advisors: Professor Nguyen Dong Phong Associate Professor Bui Thanh Trang Ho Chi Minh City – 2022 ii The Thesis was completed in: Scientific guide: Reviewer 1: Reviewer 2: Reviewer 3: The thesis will be protected by the Board of Review in: At The thesis can be found at the library: CHAPTER INTRODUCTION 1.1 Research gap While attention to social sustainability practices has been increasing over the globe recently, many researchers point out that there are limited studies on the Asian context in this domain (Gugler and Shi, 2009) Many focal companies are located in developing countries, particularly in Asia Social issues in the supply chain are considered one of the most discussed topics in these countries; however, managers did not pay much attention to understanding and addressing these issues Furthermore, applying social standards to measure environmental, financial, and social performance is hardly practiced, especially in supply chains (Torugsa, O’Donohue, & Hecker, 2013; Hutchins and Sutherland, 2008) Also, social manners are complex and diverse based on a particular country’s social development Therefore, many scholars suggest that this domain needs further research to explore and identify these issues As a result, this study has been conducted for various reasons Firstly, as mentioned above, our research recognizes the necessity for further study about the impacts of supply chain social sustainability on supply chain performance with the mediating role of supply chain integration, particularly in developing economies Recently, as a responsible member of the United Nations, Vietnam has been actively developing and implementing strategies to promote green growth and sustainable development There have been several policies and programs to raise awareness, support, and encourage businesses to apply sustainable business models Therefore, our research examines these main subjects: (1) How supply chain social sustainability influence supply chain integration and supply chain performance? (2) How does supply chain integration (internal integration, supplier integration, and customer integration) enhance supply chain performance? (3) How the integrations between supply chain members mediate the relationship between supply chain social sustainability and supply chain performance? Our research will gain the following contributions in the context of developing economies 1.2 Research objectives Objective 1: Identifies the relationship between supply chain social sustainability and supply chain performance, mediating role of supply chain integration Objective 2: Examines the impact of social sustainability on three dimensions of supply chain integration: internal, customer, and supplier Objective 3: Identifies the influence of supply chain integration on customer performance, supplier performance, and supply chain performance 1.3 Research questions RQ1 How does social sustainability enhance supply chain performance, mediating role of supply chain integration? RQ2 How does social sustainability influence internal integration, supplier integration, and customer integration in the supply chain? RQ3 How the three dimensions of supply chain integration affect supplier performance, customer performance, and supply chain performance? 1.4 Research methodology and data collection This study is divided into two main parts: the pilot study and the main study The supply chain social sustainability was adapted from the research of Mani et al., (2016) and Mani and Agrawal (2015) In addition, the measurements from a prior study by Jajja, Chatha, & Farooq (2018) were used to measure the Supply Chain Integration, including Supplier Integration (4 items), Internal Integration (4 items), and Customer Integration (4 items) For the Customer performance (2 items), Supply chain performance (3 items), and Supplier performance (3 items), the author used items from Mani, Jabbour, and Mani (2020) The author delivered online and offline surveys to executive staff and managers of companies located in Vietnam This study’s data were taken in 2021; the survey subjects are small, medium, and large companies in the South of Vietnam, particularly in HCMC, Dong Nai, Binh Duong, and Mekong Delta Rivers The total time for collecting the data from respondents will be six months All companies have at least to years of operating The author applied these criteria to ensure all the companies are mature in operations and have enough knowledge of social sustainability practices In total, 428 responses were received 1.5 Research contribution 1.5.1 Theoretical contributions By examining these primary questions, this research will contribute to the social sustainability domain Firstly, it presents the concept of supply chain social sustainability and clearly explains how sustainability practices can increase performance outcomes Secondly, this study is perhaps the first study investigating the positive influence between supply chain social sustainability and supply chain integration in emerging markets, especially in Vietnam In addition, the finding indicates that customer integration does not significantly influence customer performance due to the differences in respondents’ perceptions which are probably influenced by employee positions, job tenure, and managerial knowledge Furthermore, this study attempts to fill the current research gap by interpreting different dimensions of supply chain social sustainability The finding indicates that companies frequently contribute to the local community and support their employees, which helps firms improve their corporate reputation and credibility Last but not least, this study broadens other research on supply chain integration by including literature on the links between three main aspects of integration (internal integration, supplier integration, and customer integration) and performance outcomes 1.5.2 Practical implications Firms’ managers should emphasize supply chain integration, including supplier integration, customer integration, and internal integration The finding proves that different forms of integration influence different aspects of performance in the supply chain It provides many helpful guidelines for managers to increase supply chain integration in a specific situation following firms’ objectives Secondly, the results help managers solve social issues responsively in several aspects It encourages supply chain managers to enrich employees’ welfare and working conditions and contribute interest to the local community Besides, to control and manage risks in the supply chain, managers should apply risk management practices Therefore, managers can predict and recognize risks quickly and effectively after the post-Covid-19 period Based on the findings, the authors suggested that collaborative practices within organizations and the firm’s strategic partners are highly recommended to control risks and increase the firm’s performance Furthermore, improving integrated internal communications will increase the gathering and collecting of information from external sources (suppliers and customers) efficiently and sufficiently CHAPTER LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT This chapter will examine the literature review to clarify the research gap that provides related theories These existing theories will illustrate how supply chain social sustainability is related to supply chain performance under the influence of supply chain integration 2.1 Current status of social sustainability in Vietnam Vietnam is a country that is strongly committed to the implementation of the sustainable development goals through the issuance of the Vietnam Strategic Orientation for Sustainable Development in 2004, the Vietnam Sustainable Development Strategy for the period 2011 – 2020; and most recently the National Action Plan to implement the 2030 Agenda for Sustainable Development Furthermore, the United Nations and its partners in Vietnam are working to achieve the Sustainable Development Goals: 17 ambitious Goals that address the major development challenges faced by people in Vietnam and around the world (United Nations Vietnam, 2022) The Sustainable Development Goals call for global action to reduce poverty, protect the earth’s environment and climate, and ensure that people everywhere can enjoy peace and prosperity These are the goals that the United Nations is implementing in Vietnam Vietnam has nationalized the global 2030 Agenda into a National Action Plan for the implementation of 17 sustainable development goals and 115 specific goals in line with conditions and priorities to the development of the country On September 25th, 2020, the Government issued Resolution No 136/NQ-CP on sustainable development The resolution sets out 17 goals for Vietnam by 2030, including: 2.2 Key concepts 2.2.1 Supply chain social sustainability Many authors explained that SCSS refers to how companies address products and services throughout the supply chain that influence the safety, health, and well-being of those involved in the chain (Tate, Ellram, & Kirchoff, 2010; Giannakis & Papadopoulos, 2016; Castka & Corbett, 2016) Recently, experts and researchers have gained a number of concerns about supply chain social sustainability (Lu et al., 2012; Mani, Gunasekaran, & Delgado, 2018b) Some studies have suggested that high-performance outcomes are related to applying social sustainability practices (Carter, 2005) On the one hand, SCSS has been examined for a while (Carter & Liane Easton, 2011; Carter & Jennings, 2004) In contrast, there are limited studies in developing countries (Ashby, Leat, & Hudson-Smith, 2012) While attention to the social sustainability practices has been increasing over the globe recently, many researchers point out that there are limited studies on the Asian context in this domain (Gugler and Shi, 2009) Many focal companies are located in developing countries, particularly in Asia Social issues in the supply chain are considered one of the most discussed topics in these countries; however, managers did not pay much attention to understanding and addressing these issues In addition, applying social standards to measure environmental, financial, and social performance is hardly practiced, especially in supply chains (Torugsa et al., 2013; Hutchins and Sutherland, 2008) Also, social manners are complex and diverse based on a particular country’s social development Furthermore, Yawar and Seuring (2017) argue that “scholars and practitioners should embrace contextual, time-dependent, dynamic, and developing social issues as social Indicators in measuring supply chain performance.” As a result, the author believes that social manners are significantly dissimilar among different stakeholders across countries Moreover, these issues might change depending on the society and business environment where companies operate (Hoejmose, Brammer, & Millington, 2013) Because of all that has been mentioned so far, this study will select “philanthropy, equity, human rights, safety, ethics, and health & welfare” as six significant factors that affect supply chain social sustainability in emerging economies, especially in Vietnam 2.2.2 Supply chain integration Supply chain integration is explained as a process in which all the supply chain members are engaged to effectively and efficiently achieve the objective’s goals effectively and efficiently This step acquires fascinating collaboration and adjustment to ensure everybody is efficiently working toward the same objective all the time According to Horvath (2001), one of the primary keys to success is supply chain collaboration Therefore, firms should pay attention to supply chain collaboration to increase competitiveness Supplier linkage, internal linkage, and customer linkage have been identified as three significant aspects of supply chain integration (Frohlich & Westbrook, 2001; Zhao, Huo, Selen, & Yeung, 2011) Additionally, the need for a strong linkage among suppliers, customers, and internal mechanisms is rising because of global competition This leads to the requirement of an adequate movement of information and goods/services in the supply chain (Chang & Lee, 2007) In addition, previous research has indicated the collaboration among internal linkage, supplier linkage, and customer linkage (Hillebrand & Biemans, 2004) There is a positive relationship between internal and external integration (Stank, Keller, & Daugherty, 2001) Similarly, another survey has shown that internal collaboration positively affects external collaboration (Braunscheidel & Suresh, 2009) By comparison, some writers argue a negative relationship between external linkage and internal linkage (Salvador, Rungtusanatham, & Forza, 2004; Sanders & Premus, 2005; Sanders, 2007) The influence of internal linkage on external linkage can affect the exchange of information (Carr & Kaynak, 2007) Supply chain integration also influences the development of new products/services (Koufteros, Vonderembse, & Doll, 2001) 2.2.3 Supply chain performance An explanation of supply chain performance is access to determine the overall performance of the supply chain Another definition of supply chain performance is the broad supply chain’s actions in satisfying final consumer needs and demands (Grimm, 2004) In addition, supply chain performance refers to the extended supply chain’s activities in meeting end-customer requirements, including product availability, on-time delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance responsively Finally, supply chain performance crosses company boundaries since it includes introductory materials, components, subassemblies, finished products, and distribution through various channels to the end customer (Hausman, 2004) 11 questionnaire, participants and data collection The author will evaluate the reliability, convergent, and discriminant validity of the measurements In addition, common method biases were checked by applying two different approaches Finally, the author adopts the partial least square structural equation modeling (PLS-SEM) technique to test the direct, mediation effects, control variables and multi-group analysis 3.1 Pilot study 3.1.1 Design questionnaire The selected measures were reworded and slightly modified to suit the social sustainability phenomenon The measures of the relevant constructs for dependent variables were drawn from established measures or published research on similar subjects In addition, the author adapted and revised the measurement items from previous studies and used a 7-point Likert scale (ranging from Strongly disagree to Strongly agree) for these measurement items The supply chain social sustainability was adapted from the research of Mani, Agarwal, et al (2016) and Mani and Agrawal (2015) The measurements from a prior study by Jajja et al (2018) were used to measure the Supply Chain Integration, including Supplier Integration (4 items), Internal Integration (4 items), and Customer Integration (4 items) For the Customer performance (2 items), Supply chain performance (4 items), and Supplier performance (3 items), the author used items from Mani, Jabbour, and Mani (2020) Consistent with the research from which these measures were drawn, all constructs were modeled as reflective, first-order constructs in this research These items can be found in Table Respondents were asked to apply the 12 statements to their supply chain-related activities in their firms and rate their level of agreement on a 7-point Likert scale In the next step, a pilot test was conducted with 10 managers and 30 executive staffs to assess survey performance These respondents have more than 10 years working experience In addition, their companies have participated in the supply chain for a long time and often contributed to the communities and societies All of the managers in the pilot tests come from medium and large companies in their provinces As a result, they will have sufficient knowledge and a deep understanding about their organizational culture as well as sustainable development goals Firstly, the author will distribute the questionnaire via email and hard-copy directly to the managers and executive staffs Secondly, the author ensures their personal information and perception would be kept confidential and used mainly for the purpose of this study In addition, the author will interview via online meeting with some managers to collect information and recommendations about their social sustainability practices The author will use these recommendations in the practical implications in the last section of this study Finally, based on the testing results of Cronbach’s Alpha from 40 respondents, items in the draft questionnaire were slightly modified and used in the main study 3.1.2 Cronbach’s Alpha testing Based on the comments of two academic advisors, the Vietnamese version of the questionnaire was slightly modified to better fit with the Vietnamese style The questionnaire was initially developed in English and later translated by the author into Vietnamese, using double- and reverse-translation procedures, in a 13 coordinated manner for countries with language constraints (Vanpoucke et al., 2014) The testing results show that the Cronbach’s Alpha of most constructs was more significant than 0.7 (Cortina, 1993) and all corrected item-total correlations were more significant than 0.5 (Francis and White, 2002; Kim and Stoel, 2004) except ssph5 (0.495) and scpf3 (0.487) For the question (ssph5 – The company assists NGOs with societal development), many firms in Vietnam are not familiar with Non-government organizations, so they did not have much information about them and did not believe in them, especially in the charity aspect In addition, for the question (scpf3 – Delivery speed is improved), during the Covid-19 outbreak in Vietnam, many firms suffered difficult times, and the delivery has postponed for a while It leads to the time of delivery being longer than average As a result, ssph5 and scpf3 were rejected from the final questionnaire Lastly, there are 38 items used in the final questionnaire 3.2 The main study 3.2.1 Sampling method There are four types of non-profitability sampling: (1) Convenience sampling; (2) Judgmental or purposive sampling; (3) Snowball sampling; and (4) Quota sampling (Fowler, 2002) The author will apply purposive sampling in this research because this approach is suitable and effectively Purposive samples are created at the author’s choice In addition to considering the study’s objective, researchers also consider its intended audience (Wilson, 2010) Moreover, purposive sampling is an approach in which specific places, individuals, or events are picked on purpose in order to offer crucial data that cannot be gained through other options (Davis, 2005) 14 3.2.2 Sample size According to Hair et al (2014), the minimum sample size to use EFA is 50, preferably 100 or more The ratio of observations to an analytic variable is 5:1 or 10:1, some researchers suggest that this ratio should be 20:1 “Number of observations” simply means the number of valid questionnaires required; “Measurement variable” is a measurement question in the survey In this research, the final questionnaire has 38 questions using a 7-level Likert scale (corresponding to 38 observed variables of different factors), these 38 questions are used to analyze in EFA Applying a 5:1 ratio, the minimum sample size will be 38 × = 190, if the ratio is 10:1, the minimum sample size is 38 × 10 = 380 This sample size is larger than 50 or 100, so the author needs minimum sample size to perform EFA between 190 and 380 depending on the selection ratio 3.2.3 Participants and data collection In order to justify the hypotheses development, the proposed research model, and the measurement scales of this study, the author will develop a survey to collect the primary data After analyzing the results from the pilot study, the author promotes the final version of the questionnaire This version includes four main parts: (1) Overview about the aims and purpose of this research, the author’s affiliation and contact detail, as well as the definition and importance of sustainability, (2) Main questions for the respondents that are relevant to the research topic: Supply chain social sustainability, Supply chain integration, and Supply chain performance, (3) Company’s information: Operation year, Size, Industry, and Business type (4) Respondent’s information: Working experience, Current position (Hair, Celsi, Ortinau, & Bush, 2010) 15 Starting in April 2021, Vietnam experienced its largest Covid19 outbreak, with over 1.5 million infections recorded by December This led to two of its largest cities (Ho Chi Minh City and Hanoi) and around a third of the country’s population coming under some form of lockdown by late July 2021 As a result, the author delivered both online (to keep safe and distance) and offline (if possible) surveys to executive staff and managers from different companies The data in this study are taken in 2021; the total time for collecting the data from respondents will be approximately six months Besides, the survey subjects are small, medium, and large companies in the South of Vietnam, particularly in Ho Chi Minh City, Dong Nai, Binh Duong, and Mekong Delta Rivers This is because there are many industrial zones with a number of various companies located in these provinces In addition, most of these companies participated in the supply chain All companies have at least to years of operating The author applied these criteria to ensure all companies are mature in operations and have enough knowledge of social sustainability practices In addition, the author only selects participants who have at least 4-5 years of working experience in their current position since they will have sufficient information and a deep understanding of their company and organizational culture The questionnaire was sent to companies that were within our sample frame In addition, a brief description of social sustainability was sent along with the questionnaire The questionnaire was initially developed in English and later translated by the author into the Vietnamese language The questionnaire was double-checked with several supply chain managers and two academic advisors before the official launch The author wants to make sure the questionnaire is straightforward, 16 logical, and easy to understand In sum, 428 responses were received After screening to fulfill the above-mentioned conditions, 408 responses were retained and consumed for further data analyses CHAPTER DATA ANALYSIS, RESULTS, AND DISCUSSIONS This chapter investigates and estimates the data used in this study Firstly, the author will describe the sample characteristics and descriptive statistics Secondly, the author conducted a factor analysis and reliability test in SmartPLS 3.0 to examine the variable consistency The next step illustrates the empirical results of the proposed hypotheses In addition, common method bias and multigroup analysis are presented in this chapter Lastly, discussions about eleven hypotheses will be given at the end 4.1 Sample characteristics The data in this study are taken in 2021; the total time for collecting the data from respondents will be approximately six months In sum, 428 responses were received In addition, after screening to fulfill the conditions mentioned above, 408 responses from 408 companies were retained and consumed for further data analyses The detail of the sample characteristics will be shown in the following sections Table - Sample characteristics Frequency Characteristics Percent (100%) (N = 408) Company’s operation time to years 36 8.8 to 10 years 136 33.4 11 to 15 years 111 27.3 16 to 20 years 72 17.6 17 Frequency (N = 408) Above 20 years 53 Company’s capital investment Small enterprise 113 Medium enterprise 116 Large enterprise 179 Industry Manufacturing 135 Vendors 49 Transportation 63 Retailers and Distributors 70 Warehouses 43 Service 48 Respondent’s working experience to years 93 to 10 years 220 11 to 15 years 77 16 to 20 years 15 Above 20 years Respondent’s position in the company Executive employee 197 Middle manager 141 Executive and top manager 70 Characteristics Percent (100%) 12.9 27.8 28.3 44.0 33.1 12 15.4 17.2 10.5 11.8 22.8 54.1 18.8 3.6 0.7 48.3 34.6 17.1 Source: author’s calculation, 2022 According to Table 1, more than 75% of the respondents have long-time working experience (> years) in their companies It means they have sufficient information and a deep understanding of their company and organizational culture In addition, more than 50% of the respondents are middle managers or executive/top managers in their companies The rest of the respondents are executive employees Hence, all of them can answer our survey effectively and efficiently 18 It also helps the author understand the importance of social sustainability practices from different levels of working positions In addition, nearly 60% of companies have more than 11 years of operation time In addition, more than 70% of companies are medium and large enterprises (Table 4) As a result, they will pay much attention to sustainable development and focus on their supply chain integration properly Based on 408 samples, the author will divide the company’s industry into six main categories: manufacturing, vendors, transportation, retailers and distributors, warehouses, and service Most recent research about social sustainability focuses on the manufacturers’ aspect Hence, the author aims to analyze and identify differences between these categories In the next section, the author will apply multi-group analysis to compare 4.2 Common method bias As a self-answered survey, the relationship between one construct and another might be inflated, which leads to the common method bias (CMB) The author follows (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003) to adopt two tests to confirm whether our data is free from CMB First, Harman’s single-factor test was conducted in SPSS This test showed that CMB was not a severe issue, as a single factor extracted from this method only explains 42% of the variance below the threshold of 50% Moreover, the collinearity assessment approach (Ned, 2015) is also used to assess the CMB by examining the VIF generated for all constructs from PLS-SEM The results showed that all VIF values in the model were well below the 3.3 thresholds, indicating CMB is not an issue in this study (Ned, 2015) 4.3 Summary results of hypotheses testing ... Identifies the relationship between supply chain social sustainability and supply chain performance, mediating role of supply chain integration Objective 2: Examines the impact of social sustainability. .. foundation theories to explain the hypotheses development and the research model of this study Stakeholder theory view: the relationship between social sustainability and supply chain integration. .. internal integration, supplier integration, and customer integration in the supply chain? RQ3 How the three dimensions of supply chain integration affect supplier performance, customer performance,