Problem definition: Governments have adopted various subsidy policies to promote investment in renewable energy sources such as rooftop solar panels. The German government uses a feed-in-tariff policy that provides a guaranteed stream of payments for each unit of electricity generated by a household. In contrast, the U.S. government uses a tax-rebate policy that reduces the initial investment cost, and the household receives the retail price for the generated electricity. In this paper, we study the key practical factors that favor one policy over the other from the perspective of the government. These factors are the heterogeneity in the generating efficiency, the variability in the electricity price, and the variability in the investment cost. Academic relevance: Unlike the previous literature on the feed-in-tariff and tax-rebate policies, we focus on the effects of variability on a household's investment timing. We identify the optimal policy for the government to manage the aggregate household investment, accounting for the heterogeneity in efficiency. Methodology: We consider an infinite-horizon, continuous-time model where the government moves first and announces either a feed-in tariff or a tax rebate. Then each household dynamically decides if and when to invest in a unit of solar panels. The objective of the government is to maximize the expected value of a subsidy policy, that is, the difference between the societal benefit of solar panel investments and the subsidy cost over time. Results: We characterize the timing of the investment decision of the households and the optimal subsidy parameters for the government. We identify which practical factors favor the feed-in-tariff or the tax-rebate policy. Policy implications: Our results suggest that a government should prefer the feed-in-tariff policy when the electricity price is highly uncertain. Intuitively, feed-in-tariff policy eliminates the price variability; thus, it removes the strategic delay in the investment. The tax-rebate policy should be adopted if the households are heterogeneous in generating efficiency, if the investment cost is highly variable, or if the price and cost uncertainty are positively correlated.
参考文献：Babich, V., et al. (2020). "Promoting Solar Panel Investments: Feed-in-Tariff vs. Tax-Rebate Policies." M&Som-Manufacturing & Service Operations Management 22(6): 1148-1164.
Problem definition: A key question in socially responsible supply networks is as follows: When firms audit some, but not all, of their respective suppliers, how do the degree centralities of the suppliers (i.e., the number of firms to which they supply) affect their auditing priority from the viewpoint of the firms? To investigate, we consider an assembly network consisting of two firms and three suppliers; each firm has one independent supplier that uniquely supplies to that firm and one common supplier that supplies to both. Academic/practical relevance: Most supply networks are characterized by firms that source from multiple suppliers and suppliers that serve multiple firms, thus resulting in suppliers who differ in their degree centrality. In such networks, any negative publicity from suppliers' noncompliance with socially responsible practices-for example, employment of child labor, unsafe working conditions, and excessive pollution-can significantly damage the reputation of the buying firms. To mitigate this impact, firms preemptively audit suppliers although resource and time considerations typically restrict the number of suppliers a firm can audit. Consequently, it becomes important to understand the impact of the degree centralities of the suppliers on the priority with which firms audit them. Methodology: Game-theoretic analysis. Results: Downstream competition between the firms drives them away from auditing the supplier with higher centrality, that is, the common supplier, in equilibrium, despite the fact that auditing this supplier is better for the aggregate profit of the firms. We show that this inefficiency is corrected when the firms cooperate (via a stable coalition) to jointly audit the suppliers and share the auditing cost in a fair manner. We also identify conditions under which joint auditing improves social welfare. Managerial implications: We have two main messages: (i) individual incentives can lead firms to deprioritize the auditing of structurally important suppliers, which is inefficient; (ii) the practice of joint auditing can correct this inefficiency.
参考文献：Chen, J. Y., et al. (2020). "Supplier Centrality and Auditing Priority in Socially Responsible Supply Chains." M&Som-Manufacturing & Service Operations Management 22(6): 1199-1214.
Problem definition: Although they enjoy low costs in sourcing from emerging economies, global brands also face serious brand and reputation risks from their suppliers' noncompliance with environmental and labor standards. Such a supplier problem can be viewed as a process quality problem concerning how products are sourced and produced. Academic/practical relevance: Addressing this problem is a key component of many global companies' responsible sourcing programs. A common approach is to use an audit as an auxiliary supplier screening mechanism. However, in regions with lax law enforcement, an unethical, noncomplying supplier may attempt to bribe an unethical auditor to pass the audit. Such supplier-auditor collusion compromises the integrity of the audit and weakens its effectiveness. Methodology: In this paper, we develop a game-theoretical model to study the effect of supplier-auditor collusion on the buyer's auditing and contracting strategy in responsible sourcing, as well as various driving factors that help reduce collusion. Results: We show that the buyer's equilibrium contracting strategy is a shutout contract that takes three different forms, depending on the collusion risk level. We also define and analyze the screening errors and social efficiency loss caused by supplier-auditor collusion. By comparing the cost versus collusion elimination trade-off between a third-party audit and an in-house audit, we offer explanations for why many global brands fully rely on third-party audits and set higher process quality requirements for suppliers located in high-risk countries. The robustness of our insights is verified by two model extensions: one involving additional supplier audit cost and the other allowing for supplier process quality improvement before audit. Managerial implications: These model insights provide useful theoretical support and baseline guidance for the current supplier audit practices in responsible sourcing. Our extended model analysis further demonstrates the importance for global brands to lobby local governments to increase collusion penalties and to promote the ethical level of the third-party auditors located in high-risk countries.
参考文献：Chen, L., et al. (2020). "Responsible Sourcing Under Supplier-Auditor Collusion." M&Som-Manufacturing & Service Operations Management 22(6): 1234-1250.
Problem definition: This paper studies two cooperative approaches of firms in managing social responsibility violations of their supplier: auditing a common supplier jointly (joint auditing) and sharing independent audit results with other firms (audit sharing). We study this problem in a market with externalities and a large number of firms. Academic/practical relevance: With numerous firms procuring their materials and parts worldwide, there are many cases in which overseas suppliers violate safety, labor, or environmental standards. Those violations have externalities in the sense that one firm's violation affects other firms in the same market. It is not clear how such externalities affect competing firms' incentives to cooperate and the effectiveness of such cooperation. Methodology: We develop a model based on a cooperative game in partition function form, which enables us to analyze the competitive and cooperative interactions of a large number of firms in a market. Results: Although there has been concern about cooperation for fear of compromising a competitive advantage, firms have incentives to cooperate in managing their suppliers when one firm can be hurt by others' violations, that is, the negative externality is high. However, neither cooperative approach necessarily improves social responsibility, especially when one firm can benefit from others' violations, that is, the positive externality is high. Finally, even if agreement is not reached for cooperation before conducting individual audits, social responsibility can still be improved by incentivizing firms to share their private audit results with others under a properly designed mechanism. Managerial implications: The careful assessment of the externalities associated with social responsibility violations is a key to the success of joint auditing and audit sharing. Although firms cooperate voluntarily in some cases, a government agency or an industry association should intervene in other cases to motivate cooperation if it is beneficial. In addition, caution must be taken to monitor manufacturers' audit efforts, especially when cooperative approaches are implemented in the market where competition is fierce and consumers switch brands easily.
参考文献：Fang, X. and S. H. Cho (2020). "Cooperative Approaches to Managing Social Responsibility in a Market with Externalities." M&Som-Manufacturing & Service Operations Management 22(6): 1215-1233.
Problem definition: Under what conditions and how can a buying firm, by committing to publish a list of its suppliers and/or the identities and violations of terminated suppliers, increase its expected profit and supplier responsibility? Academic/practical relevance: This paper contributes to a recent thrust in the operations-management literature on how various sorts of transparency influence social and environmental responsibility in a supply chain. In practice, companies are under pressure to publish their supplier lists and suppliers' violations, and some are beginning to do so. This paper could help guide their decisions. Methodology: The methodology is game theory. Results: This paper shows how a buying firm can use transparency to reward a supplier for responsibility effort to eliminate social or environmental violations. By publishing its supplier list, the buying firm can signal that a supplier is responsible and generate profitable new business for the supplier. However, the resulting competition for the supplier's scarce capacity could cause the buying firm to obtain fewer units or pay a higher price. We identify the conditions under which a buying firm should commit to publish its supplier list and conditions under which the buying firm should also help a supplier with cost reduction or capacity expansion. In addition, the paper shows how a buying firm can use transparency to punish a supplier for a responsibility violation-by warning other buying firms not to source from that supplier. Commitment to do so increases the supplier's responsibility effort and can screen out a supplier with a known responsibility violation, thereby increasing a buying firm's expected profit. If the supplier is uncertain whether it has a violation (e.g., faulty electrical wiring likely to cause a fire), then the two forms of transparency can be complementary. Managerial implications: Buying firms should consider transparency as a potentially profitable approach to mitigating social and environmental violations in their supply chains.
参考文献：Kalkanci, B. and E. L. Plambeck (2020). "Reveal the Supplier List? A Trade-off in Capacity vs. Responsibility." M&Som-Manufacturing & Service Operations Management 22(6): 1251-1267.
Problem definition: We examine how a profit-driven firm (she) can motivate better social responsibility (SR) practices by a supplier (he) when these practices cannot be perfectly observed by the firm. We focus on the firm's investment in the supplier's SR capabilities. To capture the influence of consumer demands, we incorporate the potential for SR information to be disclosed by the firm or revealed by a third party. Academic/practical relevance: Most firms have limited visibility into the SR practices of their suppliers. However, there is little research on how a firm under incomplete visibility should (i) invest to improve a supplier's SR practices and (ii) disclose SR information to consumers. We address this gap. Methodology: We develop a game-theoretic model with asymmetric information to study a supply chain with one supplier and one firm. The firm makes her investment decision given incomplete information about the supplier's current SR practices. We analyze and compare two settings: the firm does not disclose versus she discloses SR information to the consumers. Results: The firm should invest a high (low) amount in the supplier's capabilities if the information she observes suggests the supplier's current SR practices are poor (good). She should always be more aggressive with her investment when disclosing (versus not disclosing). This more aggressive strategy ensures better supplier SR practices under disclosure. When choosing between disclosing and not disclosing, the firm most likely prefers not to disclose when the supplier's current SR practices seem to be average. Managerial implications: (i) Greater visibility helps the firm to better tailor her investment to the level of support needed. (ii) Better visibility also makes the firm more "truthful" in her disclosure, whereas increased third-party scrutiny makes her more "cautious." (iii) Mandating disclosure is most beneficial for SR when the suppliers' current practices seem to be average.
参考文献：Kraft, T., et al. (2020). "Motivating Supplier Social Responsibility Under Incomplete Visibility." M&Som-Manufacturing & Service Operations Management 22(6): 1268-1286.
Problem definition: A manufacturer takes raw material with an exogenous quality distribution to make a traditional product and a coproduct using material of quality above and below a well-established standard, respectively. The market consists of traditional consumers, who are only willing to pay for a product's consumption value, and some environmentally conscious (i.e., green) consumers, who additionally value the product's material conservation. In this context, we study the firm's optimal design of its coproduct, that is, its quality and price decisions. Academic/practical relevance: Motivated by emerging conservation-oriented business practices exemplified by companies such as Taylor Guitars, our study informs resource-dependent firms whether and how to design their product line to leverage a coproduct's environmental value. Our findings also yield important policy implications regarding the conservation of natural resources. Methodology: We formulate and solve the firm's challenge as a constrained optimization problem, supplemented with extensive sensitivity analyses and robustness tests. Results: When the material cost is intermediate and consumers are not sufficiently green, the firm should position the coproduct without exploiting its environmental value. Otherwise, the firm should position the coproduct by extracting its environmental value from green consumers, in which case the firm may strategically abandon some traditional consumers by leaving their demand unfulfilled. Managerial implications: Quotas and taxation on material supply in general act as policy substitutes. A greener market may inadvertently result in higher resource consumption and waste. Quotas can mitigate such adverse effects.
参考文献：Lin, Y. T., et al. (2020). "Designing Sustainable Products Under Coproduction Technology." M&Som-Manufacturing & Service Operations Management 22(6): 1181-1198.
Problem definition: This study examines the impact of disability diversity on the productivity of apparel manufacturing teams in the context of a work integration social enterprise. Two measures of disability diversity are examined: the number of disability categories employed in a production line and the evenness of disability category dispersion among workers employed in an apparel production line. Academic/practical relevance: The problem has both academic and practical relevance. From an academic standpoint, the current literature does not study the implications of employing individuals with disabilities and their impact on productivity with microdata. The issue also has practical relevance because it ties into recent managerial interest to employ individuals with disabilities in organizations. According to statistics, only 35% of workers with disabilities have some form of significant full-time employment. Methodology: The study uses panel regression analyses to test the impact of disability diversity (number of disability categories and evenness of disability category dispersion) of workers in a production line using detailed multiyear data on the productivity of apparel manufacturing cells. Results: Two key insights emerged from the analyses. First, productivity can be enhanced by increasing the diversity of workers with disabilities in the workforce within a garment-manufacturing cell. Specifically, productivity is best at moderate levels of disability categories in a team. Second, team productivity is higher at greater levels of evenness of disability category dispersion. Managerial implications: The analysis in this paper sheds light on the potential benefits of integrating individuals with disabilities into organizations and its implications on productivity. Specifically, the study finds evidence that having moderate levels of disability categories on a team with higher levels of evenness in disability category dispersion is associated with better productivity rather than having a concentrated team focused on a specific disability. The implications of the results and limitations for the study as well as its potential insights into the context of social enterprises that employ individuals with disabilities are discussed.
