A quantitative study on the impact of corporate social responsibility on supplier selection and suppliers’ market share in the oil industry

Due to the short-term management periods and frequent changes in leadership, especially in the oil industry in some developing countries, suppliers often prioritize profitability, neglecting the crucial impacts on the environment and society. As organization profitability has a direct relationship to its market share, this study proposes a quantitative analysis for examining the relationship between corporate social responsibility changes and market share of suppliers. To do this, this research investigates the impact of corporate social responsibility on supplier selection, order allocation, and supplier market share in the oil industry. Accordingly, this study proposes a multi-objective optimization model to address the challenges of integrating corporate social responsibility in supplier selection and order allocation problem and uses both traditional and corporate social responsibility criteria. The Best-Worth Method is applied to determine the weights of criteria. The study is validated with a numerical example and a real case to compare the amounts allocated to suppliers and their market share in two models: one that includes corporate social responsibility and one that does not. The findings indicate that there is no significant positive relationship between corporate social responsibility consideration and the improvement of suppliers' market share, at least in the short-term.