Establishment of Corporate Social Responsibility Evaluation Index System of Chinese Pharmaceutical Distribution Enterprises
—Based on Grounded Theory ()
1. Introduction
The concept of corporate social responsibility (CSR) was first introduced in the United States during the early twentieth century. According to Clark, an American economist, individuals should transition from a limited focus on economic responsibility to a more expansive sense of social responsibility that includes considerations for society, the environment, and other relevant factors ( Clark, 1916 ). During the mid-to-late twentieth century, the CSR movement was launched in developed Western countries and has since garnered widespread recognition. The United Nations’ “Global Compact” program, initiated in 2000, and the United Nations Sustainable Development Goals (SDGs), established in 2015, have significantly strengthened the link between CSR and sustainable development. CSR is a business practice that extends beyond conventional practices to meet social needs. CSR behavior is driven by various mechanisms and motivations, such as legitimacy pressures, perceived sincerity of stakeholders, and the impact of corporate ethics on consumers. Research has continuously investigated the relationship between CSR and corporate performance since the emergence of CSR. Some scholars contend that CSR implementation and promotion exert a positive influence on corporate performance ( Flammer, 2015 ; Freeman et al., 2010 ). Others argue that the adoption of CSR impedes corporate performance, due to the dissipation of corporate resources and the possibility of managers pursuing their self-interest ( Masulis & Reza, 2014 ; Brammer & Millington, 2008 ). While a consensus on the relationship between CSR and corporate performance remains elusive, the number of firms that have proactively undertaken CSR initiatives to address social challenges is on the rise ( Wang, Tong, & Luo, 2020 ).
China has encountered conflicts during its swift economic development. Enterprises prioritize profit maximization, resulting in various social and environmental issues that impede the economic and social development at both the firm and national level. The implementation of CSR by Chinese companies is strongly characterized by a distinctive “Chinese character” and is closely linked to national strategies ( Li, 2022 ). The Chinese government plays a significant role in promoting and implementing CSR among companies in China. In addition to fulfilling environmental responsibilities similar to those of Western companies ( George, Schillebeeckx, & Liak, 2015 ), Chinese companies also assume responsibilities that align with national development goals, such as poverty alleviation and education ( Chang, He, & Wang, 2021 ). The CSR evaluation system used by international organizations may not be suitable for evaluating CSR performance in China. Consequently, a reasonable evaluation system with “Chinese characteristics” is essential for enterprises to fulfill their social responsibility. It can comprehensively assess the efficiency and effectiveness of CSR implementation in Chinese enterprises and enables a scientific measurement and evaluation of CSR development.
The pharmaceutical distribution industry is a highly regulated and technology-intensive industrial sector that centers on the pharmaceutical business flow and is supported by logistics, information flow, and capital flow ( Huang & Deng, 2019 ). Pharmaceutical distribution enterprises serve as a general term for pharmaceutical trading entities, comprising both wholesale and retail enterprises. These enterprises play a crucial role in the distribution chain by purchasing pharmaceutical commodities and selling them to legal medical institutions, pharmaceutical production and trading enterprises, and consumers as well. The products they handle are vital to patient life, health, and safety. In 2016, a case was uncovered in Shandong, China, involving the unlawful sale of vaccines worth 570 million yuan ( People’s Daily on Line, 2016 ). Amid the ongoing battle against COVID-19 (novel coronavirus pneumonia) since 2020, some pharmaceutical distribution companies have stockpiled scarce medical supplies and hiked their prices. This has brought the social responsibility of drug distribution companies into the public spotlight time and again. Consequently, promoting the development of CSR in pharmaceutical distribution enterprises has become an urgent concern in order to ensure the quality, quantity, and fair pricing of pharmaceutical products to end-users. The establishment of a scientific and rational CSR evaluation index system in pharmaceutical distribution enterprises can accurately measure the development of CSR in such enterprises and offer guidance in its construction.
2. Literature Review
2.1. Research on the Evaluation Index System for Corporate Social Responsibility
According to theoretical researchers, the evaluation of CSR has been examined at both the macro and micro levels. The macro-level analysis examines the entire industry and designs CSR evaluation index systems from multiple perspectives, including stakeholder and consumer viewpoints. Additionally, these systems are constructed utilizing different methods, such as factor analysis and structural topic modeling. Meanwhile, at the micro level, researchers focus on the evaluation of a certain industry or in a given region, incorporating regional characteristics and industry features to construct the evaluation index systems. Such systems are established by combining various approaches, including stakeholder perspectives, literature review, expert research and judgment, questionnaire research, and managerial communication (see Table 1).
From a practical application perspective, several international and domestic Chinese third-party institutions, investment institutions, and financial institutions have developed and implemented CSR evaluation systems (see Table 2). Due to the different purposes and uses of these evaluations, the hierarchies vary and a certain degree of bias is exhibited towards certain enterprises. Furthermore, the index systems used in practical applications are increasingly tailored to specific regions or industries, in addition to general indicators.
2.2. Research on the Social Responsibility Evaluation Index System of Pharmaceutical Distribution Enterprises
Researches on the evaluation of social responsibility of the pharmaceutical
![]()
Table 1. Theoretical indicators for CSR evaluation.
![]()
Table 2. CSR evaluation from a practical perspective.
distribution industry are so limited with only a few references in the existing literature. For example, Hepler & Strand argues that pharmacies can enhance the professional maturity by assuming social responsibility ( Hepler & Strand, 1990 ), while Amerine, L. B. contends that the dedication of pharmacy employees has an impact on the organization as a whole ( Amerine et al., 2017 ). Li et al. considers that knowledge dissemination about drug use, recycling, and the safe destruction of expired drugs, as well as awareness of the dangers of expired drugs in drug distribution companies should be promoted to enhance their social responsibility ( Li et al., 2022 ). Nematollahi, & Hosseini-Motlagh assess the level of CSR performance in the drug supply chain based on the willingness of customers to return unused drugs, and the strength of that willingness ( Nematollahi & Hosseini-Motlagh, 2022 ). Finally, Zhang asserts that the most fundamental CSR of pharmaceutical distribution enterprises is to ensure the safety and effectiveness of drug quality in their marketing activities ( Zhang, 2007 ).
Based on the literature analysis above, it is evident that research on CSR evaluation index system has progressed from a generalized approach to a more localized and specialized level that accounts for industry-specific factors. However, when it comes to the evaluation of CSR in pharmaceutical distribution enterprises, the existing research only considers certain aspects such as quality assurance and drug knowledge popularization during the drug marketing process. The CSR characteristics specific to this industry have not been thoroughly investigated, which has resulted in the use of generic or shared evaluation systems between pharmaceutical distribution and manufacturing enterprises, ultimately leading to a lack of specificity and effectiveness. Therefore, the development of a micro-level CSR evaluation index system that reflects the unique features of the drug distribution industry is necessary.
3. Research Methodology and Design
3.1. Research Methodology
Currently, research on corporate social responsibility (CSR), including the development of general and industry-specific evaluation index systems, has achieved certain results and offers valuable insights.
However, academic research on the social responsibility of Pharmaceutical distribution enterprises is relatively limited and fragmented, with a dearth of available reference experience. Grounded theory extracts concepts from the primary data. Rather than presupposing theories and conclusions, it generates theories and explains phenomena or problems through data analysis. Therefore, it is appropriate to employ grounded theory as a research approach for investigating the CSR evaluation index system of pharmaceutical distribution enterprises. With the adoption of grounded theory, this research uses in-depth interviews as primary data, develops a theoretical system through three-level coding, and ultimately formulates the social responsibility evaluation index system. The research process of grounded theory is depicted in Figure 1.
3.2. Data Collection
Due to the paucity of studies pertaining to the CSR evaluation index system of pharmaceutical distribution enterprises, and the lack of available literature and
![]()
Figure 1. Grounded theory research flow chart.
referenceable experiences, this study employs in-depth interviews as a data collection method. In-depth interviews entail involving participants who are engaged in or have a direct relation to activities associated with the research subject ( Charmaz, 2006 ). Therefore, we selected a sample of participating experts from representative pharmaceutical distribution enterprises and intermediary evaluation organizations. The sample size was determined according to Fassinger’s suggestion on sample selection for grounded theory studies, and ultimately, 22 experts were identified to participate in the in-depth interviews (refer to Table 3).
4. Research Process
In this study, a sample of 15 units was randomly chosen for the initial coding process, whereas the remaining 7 units were reserved for the purpose of theoretical saturation testing. Throughout the study, only concepts that appeared at least 3 times were considered for categorization.
4.1. Open Coding
During the open coding phase, the textual data underwent sentence-by-sentence coding. The original statements were first excerpted and numbered, with each interviewee represented by a capital letter, from A to V, and the corresponding statements were labeled with numbers in the order of extraction. For instance, the first extracted statement from the first interviewee was marked as A1, the second extracted statement as A2, and so on. The sentences were then coded using the native coding form, which was subsequently refined into initial concepts. Finally, these concepts were grouped into categories. The coding and analysis process was facilitated using of Nvivo12 throughout the study. A total of 665 original utterances were coded, and their corresponding concepts were generated. Concepts that appeared less than three times were removed, resulting in 62 categories, as illustrated in Table 4, which provides examples of open coding.
4.2. Axial Coding
Axial coding involves a repeated process of comparison and analysis of categories that are generated during the open-ended phase. This process requires refinement and differentiation of categories, application of both inductive and deductive thinking, and continuous iteration through the categories, focusing on one category at a time to distinguish and understand the primary and secondary categories as well as the relationships between different categories ( Strauss, 1987 ). By applying axial coding, 62 categories were consolidated into 14 main categories, namely, CSR governance responsibility, employment, occupational health and safety, employee development and care, drug accessibility responsibility, drug supply assurance system, drug quality assurance system, supplier responsibility, customer and consumer responsibility, economic contribution, sustainable development, community involvement, public welfare and special pharmaceutical events, and environmental policy and management (see Table 5).
4.3. Selective Coding
Selective coding is an advanced stage of axial coding that involves further refinement of the categories and main categories generated in the initial two stages. This process entails expanding, analyzing, and focusing on the core categories, ultimately leading to the formation of a comprehensive framework with the core categories at its center. By conducting an in-depth analysis of both categories and main categories, the 14 previously identified main categories were consolidated into 7 core categories, namely: corporate responsibility governance, labor practice, responsibility for ensuring drug supply, supplier, customer and consumer responsibility, socio-economic responsibility, and community development and
public welfare responsibility. These core categories were then used to develop a hierarchy model to evaluate CSR of Chinese pharmaceutical distribution companies (see Figure 2).
4.4. Theoretical Saturation Test
When new materials and data are continuously introduced for comparison, analysis and integration, but fail to generate new concepts, categories or relationships, and the logical relationship between the categories remains constant, it is considered that the theory has reached saturation and the sampling analysis can be concluded. In this study, 15 samples were randomly selected for prior coding, and the remaining 7 samples were reserved for the theoretical saturation test. By analyzing the 7 samples, no new content emerged. Hence, the hierarchey
![]()
Figure 2. A hierarchey model to evaluate CSR of Chinese pharmaceutical distribution enterprises.
model of social responsibility evaluation for pharmaceutical distribution enterprises has met the test prerequisites and reached theoretical saturation.
5. Construction of Model Interpretation and Evaluation Index System
5.1. Model Interpretation
According to the three-step coding model of the evaluation structure of grounded theory, the CSR evaluation hierarchey model for pharmaceutical distribution enterprises is composed of 7 core categories: corporate responsibility governance, labor practices, responsibility for ensuring drug supply, supplier responsibility, customer and consumer responsibility, socio-economic responsibility, and community development and public welfare responsibility. These categories are distinct and interdependent, forming a holistic evaluation framework for social responsibility.
5.1.1. Corporate Responsibility Governance
The effective implementation of CSR practices in pharmaceutical distribution enterprises necessitates a systematic approach. This approach involves establishing pertinent strategies, principles, and policies from relevant management and ensuring their implementation. It also requires regular audits, risk management, adherence to national policies and regulations, and timely communication of CSR implementation to the society. Additionally, it integrates CSR implementation with the corporate management system, remediating adverse impacts, and promoting sustainable development. CSR governance encompasses the establishment of specialized management or departments that are responsible for social responsibility work. There should be timely and accurate disclosure of CSR implementation through various channels. An effective anti-corruption compliance system should also be established. Furthermore, timely training is necessary to deliver CSR ideas and anti-corruption and anti-bribery compliance into the daily operations of the company.
5.1.2. Labor Practice
The workforce, or “People,” represents a crucial element in business development, and employee is an essential part of any business. The company has an inescapable social responsibility to its employees. These responsibilities are founded on the initiatives and norms issued by international labor or human rights organizations and the labor laws of each country, encompassing employment, occupational health and safety, and employee development and care. The relationship between the company and its employees must ensure the quality of the employee’s production and life, must provide adequate income to maintain their standard of living. Additionally, any work-related issues must be resolved promptly and efficiently. Companies should provide a safe working environment that facilitates the employee’s overall health and productivity. Moreover, enterprises must support employees’ development and care their life by offering training, development planning, and other opportunities to promote their growth. In turn, employees can contribute to the enterprise and society.
5.1.3. Responsibility for Ensuring Drug Supply
Pharmaceutical distribution enterprises have a distinctive social responsibility of ensuring drug supply, which encompasses drug accessibility, drug supply guarantee system, and drug quality guarantee system. The responsibility of drug accessibility is primarily concerned with the geographical accessibility of drugs, thereby resolving the challenges of separating the place of drug manufacturing and use. Given the irreplaceable and medically exclusive nature of drugs, pharmaceutical distribution enterprises need to expand the geographic range of their operations and increase the variety of drugs operated in order to ensure the accessibility of drugs. The business model, accessibility of Chinese herbal medicines, and international flow of medicines also need to be considered. The drug supply guarantee system refers to the ability to guarantee the flow of drugs. Meanwhile, the drug quality assurance system refers to the establishment of systems and training to ensure the quality of drugs in the process of import, storage, transportation, and distribution.
5.1.4. Supplier, Customer and Consumer Responsibility
Suppliers, customers and consumers represent the “head” and “tail” of the drug distribution chain. The operation and circulation of pharmaceutical products are subject to strict regulations. All products of pharmaceutical distribution enterprises originate from upstream suppliers, and they bear the unshirkable responsibility to evaluate, audit and monitor suppliers to ensure that the products they operate are legal, compliant and meet quality requirements. Pharmaceutical products are special commodities that require compliant sales of prescription drugs. Companies should prioritize the safety and privacy of downstream customers and consumers, maintain effective communication with them, and solve their problems promptly.
5.1.5. Socio-Economic Responsibility
Pharmaceutical distribution enterprises are business entities. Their economic contributions and sustainable development, on the one hand, support the normal operations. On the other hand, is also essential to fulfill corporate social responsibility obligations from diverse perspectives. This includes meeting the expectations of shareholders, the government, social and economic development, employees, suppliers, and customers, and other aspects of the enterprise. These lay a solid foundation for the effective execution of corporate social responsibility.
5.1.6. Community Development and Public Welfare Responsibility
The community development and public welfare responsibilities of pharmaceutical distribution companies consist of two parts: community participation and public benefit & special medical events. Although community involvement and public welfare are not compulsory responsibilities, increasing civic awareness and rapid economic growth have raised expectations that companies should participate and contribute to community development and public welfare. As an industry closely related to public health, pharmaceutical distribution companies can fulfill their social responsibility by contributing to community development and engaging in public welfare activities that align with their values. Pharmaceutical distribution enterprises can leverage their unique strengths and industry background to engage in initiatives such as drug abuse prevention, promoting rational drug use, providing expert medical consultation, facilitating drug assistance, recycling expired drugs, establishing pharmacy practice bases, supporting public charities, and contributing to special pharmaceutical events. By doing so, they can enhance their public image and fulfill their corporate social responsibility.
5.1.7. Environmental Responsibility
Since the pharmaceutical distribution industry is not directly involved in production activities, there are limited environmental responsibilities involved. However, given most of the pharmaceuticals are chemicals, the appropriate recycling and disposal of unqualified drugs, and the establishment of relevant regulations, represent a social responsibility evaluation element specific to pharmaceutical distribution enterprises. Furthermore, the use of disposable or reusable containers in the distribution of pharmaceutical products demonstrates the enterprise’s commitment to resource conservation and utilization.
5.2. Evaluation Index System Construction
In this paper, we use Nvivo12 analysis software to code and analyze the interview results of 22 in-depth interviewees. Firstly, we generated 665 original statements, which were then summarized into 62 categories. Subsequently, we established 14 main categories by axial coding. Finally, we employed selective coding to consolidate these into 7 core categories, which served as the foundation for the CSR evaluation structure dimension model for pharmaceutical distribution companies. Building on the grounded theory and the hierarchey model, a CSR evaluation index system of pharmaceutical distribution enterprises was constructed which consists of 7 primary indicators, 14 secondary indicators and 62 tertiary indicators, as presented in Table 6.
6. Conclusion
This study adopted in-depth interviews as the data collection method, with 22 in-depth interviews conducted with relevant personnel in the pharmaceutical distribution industry as the original data. Using the grounded theory, this research summarized and developed the CSR evaluation framework dimensional model of pharmaceutical distribution enterprises. Based on that, an evaluation index system is built with 7 primary indicators, 14 secondary indicators and 62 tertiary indicators. Corporate responsibility governance, labor practices, responsibility for ensuring drug supply, supplier, customer and consumer responsibility, socio-economic responsibility, community development and public welfare
![]()
Table 6. CSR evaluation index system of pharmaceutical distribution enterprises.
responsibility, and environmental responsibility constitute the primary indicators. The system not only reflects the content of social responsibility of pharmaceutical distribution enterprises, but also embodies their unique characteristics. The evaluation index system developed in this study requires careful consideration of the source and accuracy of the index data. Whenever possible, external data sources should be utilized to enhance the reliability and validity of the evaluation results. Potential sources of externally obtained data may include official government platforms, reputable websites, social groups, and organizations.
Overall, this system is scientifically rigorous and practical. The results of this study have practical implications for various stakeholders. Specifically, they can serve as a reference for the government to regulate pharmaceutical distribution enterprises, for investors to identify appropriate investment targets, and for enterprises to assess and improve their own social responsibility practices.