HE IMPACTS OF SUPPLY CHAIN SOCIAL SUSTAINABILITY ON SUPPLY CHAIN PERFORMANCE, MEDIATING ROLE OF SUPPLY CHAIN INTEGRATION THE CASE OF VIETNAM

HE IMPACTS OF SUPPLY CHAIN SOCIAL SUSTAINABILITY ON SUPPLY CHAIN PERFORMANCE, MEDIATING ROLE OF SUPPLY CHAIN INTEGRATION THE CASE OF VIETNAM

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH

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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:

1 Professor Nguyen Dong Phong

2 Associate Professor Bui Thanh Trang

Ho Chi Minh City – 2022

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 1 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 do 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 do 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

 RQ3 How do 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 4 to 5 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 2 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)

In addition, performance outcome is “an analysis of both efficiency and effectiveness in accomplishing a given task” (Fugate, Stank, & Mentzer, 2009) Efficiency is defined as the ratio of resources utilized against the results derived, while effectiveness is defined as the extent to which customer-related objectives have been met (Mentzer & Konrad, 1991) For example, in the supply chain, performance outcomes include customer performance, supplier performance, and supply chain performance

2.3 Theoretical backgrounds

In this section, the author uses three main 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

 Dynamic capabilities view: the relationship between supply chain

integration and supply chain performance

 Stakeholder resource-based view: the relationship between social

sustainability and supply chain performance

2.4 Hypotheses development

The summary of the proposed research hypotheses is as follows:

No Hypothesis Description

1 H1 Supply chain social sustainability is positively

related to supplier integration

2 H2 Supply chain social sustainability is positively

related to internal integration

3 H3 Supply chain social sustainability is positively

related to customer integration

4 H4 Internal integration is positively related to supplier

integration

5 H5 Internal integration is positively related to

9 H9 Supplier performance is positively related to

supply chain performance

10 H10 Customer performance is positively related to

supply chain performance

11 H11 Supply chain social sustainability is positively

related to supply chain performance

Source: author’s summarization, 2021

Figure 1 - Proposed research model

Source: author’s proposal, 2021

CHAPTER 3 RESEARCH METHODOLOGY

This chapter describes the method to conduct this research and provides several information about the research approach, design

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 2 Respondents were asked to apply the