Supply chain quality management and firm performance in China's food industry—the moderating role of social co-regulation

• DOI: https://doi.org/10.1108/IJLM-05-2018-0124
• Pages: 99-122
• Date: 20 February 2020
• Published date: 20 February 2020
• Author: Jiangtao Hong,Zhihua Zhou,Xin Li,Kwok Hung Lau
• Subject Matter: Logistics,Management science & operations

Supply chain quality management

and firm performance in China’s

food industry—the moderating role

of social co-regulation

Jiangtao Hong, Zhihua Zhou and Xin Li

International Business School,

Shanghai University of International Business and Economics, Shanghai, China, and

Kwok Hung Lau

School of Business IT and Logistics, RMIT University, Melbourne, Australia

Abstract

Purpose –The purpose of this paper is to investigate the relationships between supply chain quality

management (SCQM) and firm performance (including quality safety performance and sales performance)

leveraging social co-regulation as a moderator.

Design/methodology/approach –Using survey data collected from 203 food manufacturers in China, a

series of hierarchical linear modeling analyses were conducted to test hypotheseson the relationships between

SCQM and firm performance.

Findings –The findings are threefold. First, all three dimensions of food SCQM practices, i.e., supplier quality

management, internal quality management, and customer quality management, have significant positive

effects on an enterprise’s quality safety performance and sales performance. Second, SCQM practicescan also

increase sales performance indirectly through quality safety performance as a mediator. Third, while social co-

regulation has no significant effect on the relationship between supplier quality management and quality

safety performance, it has a significant moderating effect on the relationship between internal quality

management and quality safety performance, customer quality management and quality safety performance.

Research limitations/implications –This study not only integrates SCQM with social co-regulation but

also explores the regulating effect of social co-regulation through empirical analysis, thereby providing a

theoretical base for future research. However, this research is confined to China and so the results are not

necessarily generalizable to other countries.

Practical implications –The findings inform managers of the importance in enhancing awareness of food

quality and safety as well as in improving their sensitivity to salient quality demands of external stakeholders

in order to achieve better SCQM practices. The findings can also inform policymakers of the significance in

designing a systematic multi-agent cooperation mechanism for food SCQM as well as to build an effective

information sharing mechanism for social co-regulation of food safety.

Originality/value –This study contributes to knowledge by empirically examining the relationships of

SCQM practices with firm performance. It also expands the scope of SCQM research by incorporating social co-

regulation in the study framework.

Keywords Supply chain quality management, Food quality and safety, Social co-regulation, Food

manufacturers

Paper type Research paper

1. Introduction

In recent years,food safety problems in the global scope,such as the peanut butter Salmonella

infectionevent in America, European “horsemeat”event and “stinky meat”event in Shanghai,

China, have raised great concerns. All these events point tothe common issue of global food

supply chain management—assurance of food safety. With globalization, food supply chain

has become increasingly complex. This aggravates the uncertainty and information

SCQM and firm

performance in

food industry

99

This research was supported by the National Social Science Fund of China (#17FGL010). It was also

sponsored by Shanghai Pujiang Program.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 14 May 2018

Revised 20 October 2018

15 April 2019

15 October 2019

10 December 2019

Accepted 31 December 2019

International Journal of Logistics

Management, The

Vol. 31 No. 1, 2020

pp. 99-122

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-05-2018-0124

asymmetryin the supply chain and makesmonitoring of food safetymore difficult (Validiet al.,

2014;Darkowet al.,2015). In light of the frequentfood safety incidents, academiaand industry

have begun to pay moreattention to supply chain qualitymanagement (SCQM) to ensure food

safety by focusing on the development of quality traceability system, quality safety system,

quality risk analysis, and quality coordination mechanism, among others (Aung and Chang,

2014;Wangand Yue, 2017;Hammoudi et al.,2009;Diabat et al.,2012;Van Der Vorst et al., 2009).

However, most studies on food safety focus on consumer and enterprise behavior, as well as

regulationsmade by government and socialorganizations. There is a lack of explorationof the

core issues, suchas the roles of different actors in social governance and the synergiesgained

from collaboration between actors.

Since the beginning of the 21st century, the concept and practice of social co-regulation of

food safety have been drawing increasing attention in occidental developed countries

(Henson and Hooker, 2001;Codron et al., 2007). Efforts have been made to achieve more

desirable results in social governance of food safety by emphasizing the value of coordination

between self-discipline of enterprises and regulatory power of third parties as well as

governments (Rouvi

ere and Caswell, 2012;Garcia Martinez et al., 2013). In developed

countries, current research on food safety social co-regulation focuses primarily on new

technology and microbial risk, while opportunistic behavior—the main cause of food safety

crisis in developing countries such as China—is seldom explored (Dai, 2017). With different

regulatory systems, developing countries should identify their own ways to promote social

co-regulation of food safety according to their distinct market and institutional conditions

(Chen et al., 2015;Wu et al., 2017). Using the Chinese food manufacturers as an example, this

paper aims to study food safety social co-regulation in developing countries taking into

consideration the various factors that impact on food safety.

Chinese food manufacturing industry has developed rapidly in recent years. Nevertheless,

it is still at its infancy stage with various challenges, e.g. lack of transparency and self-

discipline in food handling and manufacturing in the factory, unwillingness to cooperate

between raw material suppliers and manufacturers in improving product quality, and largely

dispersed supply chain network involving multiple small- and medium-sized players.

Besides, a lack of monitoring and detection system also makes it difficult to regulate the

industry (Zhang et al., 2015;Chen et al., 2015).

Sincefood safety is of utmost importanceto public health, the Chinesegovernment made it a

top priority to reform the regulations and build the food safety system in recent years,

especiallyin the field of supply chain managementand social co-regulation.On March 15, 2014,

the Chinese Premier Li Keqiang proposed in the governmentwork report that “a monitoring

mechanism for the entire process, a social co-regulation system and a traceability system to

controlevery step from production to consumption”should be established.On October 1, 2015,

the new FoodSafety Law of People’s Republicof China took effect which requiresmore actors,

in addition to the government, to be involved in governance of food safety.

Food safety incident affects sales. Many studies have found that food safety incidents

have negative impacts on sales performance (Agus et al., 2000;Roberts and Dowling, 2002;

Halstead, 2002). McKeown and Werner (2009) discussed from the perspective of media that

repeated exposure of food safety incidents could lead to significant loss in business sales. In

China, researchers also found that selling food products of poor quality could tarnish the

reputation of manufacturers and reduce business sales. Liu and Niyongira (2017) revealed

that consumers with higher level of education were less likely to buy products from food

manufacturers with safety issues. Most of these studies investigated the influence of one or

two factors on sales performance. Impact of multiple factors, including quality management

and practices on food safety hence sales performance in the context of social co-regulation,

has seldom been studied. To supplement this adequacy, the following research questions

are raised:

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