Drivers of Consumer Protection Practices : Implications for Operational Performance

Drawing from stakeholder theory, this paper explores how the supply chain characteristics of distance and power affects the adoption of consumer protection (CP) practices focused on product safety and supply chain security and assesses the implications for firm operational performance. A typology was created that identified two CP practices related to product safety (consumer education and product design) and three CP practices for supply chain security (packaging, tracking and authenticity). Results indicate that greater cultural distance between the focal firm and its suppliers was positively associated with investments in safer design CP practices, while increased geographical distance between the focal firm and the customer was significantly related to consumer education CP practices. Findings also show that as power of the focal firm relative to its suppliers increased, investments in supply chain security CP practices expanded. Lastly, the research identified an association between CP practices and operational performance. Product safety CP practices were associated with delivery and innovation performance, while supply chain security CP practices contribute to improved quality and delivery performance