This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Transparent supply chains boost consumer trust—if the results are positive. A new paper by Kühne Logistics University (KLU), in collaboration with the University of Tennessee and Tilburg University, published in the Journal of Business Logistics, reaches a surprising conclusion.
The researchers advise companies: It's better to publish mixed results than none at all. More and more people are listening to their social conscience when making purchases: How fair are a company's wages along the supply chain, and are employees treated decently? The Supply Chain Due Diligence Act requires companies to investigate precisely these questions and publish the results—though not down to the last detail.
As a result, companies remain uncertain about whether they should make all information—including negative information—transparent. Full transparency carries risks, especially when the LkSG requirements have not yet been fully implemented. "It's not surprising that publishing positive information leads to positive effects, as it signals fairness and trust," confirms co-author Prisca Brosi, professor of human resource management at Kühne Logistics University.
According to Brosi, companies fear that negative information could lead to public criticism, declining sales or regulatory scrutiny. But that doesn't have to be the case. "Our research has shown that mixed results regarding compliance with corporate due diligence are perceived in a nuanced way.
While the disclosure of shortcomings leads to lower perceived fairness, this is offset by a positive effect. A realistic portrayal of the process is rewarded with trust and positive word-of-mouth." Based on this finding, Brosi advises companies to be more confident: "Companies should have the courage to publish mixed results. Realistic signals are rewarded—and are definitely better than none at all." To confirm their hypothesis, the researchers—Emily C.
Dickey (Haslam College of Business at the University of Tennessee), Brosi (KLU) and Jan Fransoo (Tilburg University)—conducted two studies based on signal theory: What signals do the various forms of transparency disclosure convey? To this end, approximately 780 participants from the U.S., ages 19 to 66, evaluated the e-commerce product page of a fictional clothing company. One study examined reactions to consistently positive information compared with no information at all.
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