Multi-national corporations (MNCs) have been criticised for not behaving ethically in some situations, which could have a negative effect on their reputation. This study examines the ethics of a large MNC in its relationship with its suppliers. A brief literature review of corporate identity, business ethics and buyer–supplier relationships is undertaken. The views and perceptions of the buying staff and the suppliers to a large South African MNC are obtained and discussed. The results indicate that this MNC has a (...) good corporate reputation among both its suppliers (an important stakeholder) and its own buying department. The existence and implementation of formal codes of ethics was found to be a necessary, but not sufficient condition for good ethical practice. Candid relationships with suppliers emerged as a second and important factor. Ethical perceptions of buyers by suppliers are driven by the management of corporate identity, through the elements of ethical standards and candid relationships. We present a model of corporate identity/reputation in Buyer–Supplier Relationships. (shrink)

This paper highlights the dark side of power imbalance regarding its consequences in agri-food supplier–buyer relationships. We report on findings from two studies. The first study is based on a sample of 105 key informants, while study 2 is based on a sample of 444 key informants, all from the cocoa agri-food supply market of Ghana. While the first study focuses on the antecedents of power imbalance and its consequences, the second study explores the role of cooperatives/collective action (...) in minimizing supplier exploitation. Data from these studies were analysed using the partial least squares technique. Analysis of these findings shows switching costs’ impact on power imbalance to be curvilinear, while power imbalance has a curvilinear relationship with opportunism. The negative consequences of power imbalance are further exacerbated by dependency and the lack of joint action. Furthermore, we found the negative impact of power imbalance on financial performance to be stronger for non-cooperative members than for cooperative members, while, counterintuitively, we found the positive impact of economic satisfaction on financial performance to be stronger for non-cooperative members than for cooperative members. (shrink)

This article analyses supplier-buyer relationships where the suppliers adapt to the buyers' needs and expectations to gain mutual advantages. In some cases, such closely knit relationships lead to violations of the autonomy of one or both partners. A concept of corporate autonomy (CA) is developed to analyze this problem. Three different facets can be distinguished: rule autonomy, executive autonomy, and control autonomy. A case study of Mattel's problems with lead-contaminated toys produced in China shows that the CA of (...) buyer and supplier can be restricted as a result of a dysfunctional partnership involving a moral dilemma. (shrink)

This article analyses supplier–buyer relationships where the suppliers adapt to the buyers’ needs and expectations to gain mutual advantages. In some cases, such closely knit relationships lead to violations of the autonomy of one or both partners. A concept of corporate autonomy is developed to analyze this problem. Three different facets can be distinguished: rule autonomy, executive autonomy, and control autonomy. A case study of Mattel’s problems with lead-contaminated toys produced in China shows that the CA of (...) buyer and supplier can be restricted as a result of a dysfunctional partnership involving a moral dilemma. (shrink)

The buyer–supplier relationship is the nexus of the economic partnership of many commercial transactions and is founded upon the reciprocal trust of the two parties that participate in this economic exchange. In this article, we identify how six ethical elements play a key role in framing the buyer–supplier relationship, incorporating a model articulated by Hosmer (The ethics of management, McGraw-Hill, New York, 2008 ). We explain how trust is a behavior, the relinquishing of personal control in the expectant hope that (...) the other party will honor the duties of a psychological contract. Presenting information about six factors of organizational trustworthiness, we offer insights about the relationship between ethics and trust in the buyer–supplier relationship. (shrink)

Expect for formal contracts, there are informally unwritten psychological contracts in the relationship between buyer and supplier for construction projects. The PC can affect the construction project performance and even cause project failure, but its process and formation are complex and not comprehensive in existing researches. This paper analyzes the PC between buyer and supplier by using evolutionary game and repeated game to tackle this gap. The results show the following: the goodwill and interest have an important impact on PC (...) fulfillment. The PC is vulnerable; for example, once either one fails to perform PC, the other will also destroy PC, and then the construction project will enter a vicious circle. In the process of repeated game, the effect of goodwill will gradually disappear, and the interest will play a major role. If the project performance is only linked to one participant, it will lead to breach from another player. Some measures may help both sides to complete PC, such as making both sides profitable, increasing the emphasis on business reputation, and improving the relevance of construction projects performance. (shrink)

Despite an abundance of research on inter-organizational trust, researchers are only beginning to understand the process of trust deterioration as an inter-organizational phenomenon. This paper presents a case study examining the deteriorating relationship between two international high-tech firms. We surveyed respondents from the supplier firm to identify major elements that reduced the supplier's trust in its customer, using the dimensions of trust identified by Mayer et al. (1995). While violations of ability, integrity, and benevolence all contributed to trust reduction, early (...) violations of trustee benevolence contributed importantly to trust deterioration. Over time, the relationship became "sensitive," and respondents reported many incidents of trust violation. Managers reported primarily integrity- and benevolence-related incidents, while no pattern emerged among operations personnel. We examine the results in light of Hosmer's (1995) ethically-based trust principles. The supplier and customer would likely differ in their opinion of whether the customer was acting "ethically." This suggests that scholars need to examine how many principles can be violated before trust is eliminated, and whether any of the principles are particularly salient in business relationships. (shrink)

In today’s marketing conditions, it becomes really vital for companies to establish an appropriate relationship with suppliers and salesperson based on ethical values in order to survive. Besides, ensuring an effective relationship between the parties would contribute to increase buyer satisfaction along with economic and social satisfaction. In this study, the direct effects of suppliers’ and salespersons’ unethical behaviors on buyer satisfaction, and the moderator effect of communication between buyer–supplier relationships are examined. The results of the study have revealed (...) that unethical behaviors of suppliers and salesperson affect buyer satisfaction negatively and the communication variable has moderately affected. The results are providing important advantages for buyers who want to improve the relationships between the suppliers and their salesperson for pharmaceutical enterprises. (shrink)

. This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived (...) to be a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers. (shrink)

This study examines unethical purchasing practices from the perspective of buyer–supplier relationships. Based on a review of the inter-organizational literature and qualitative data from in-depth interviews with purchase managers from diverse industries, a conceptual framework is proposed, and theoretical arguments leading to propositions are presented. Taking into consideration the presence or absence of an explicit or implicit company policy sanctioning ethically questionable activities, unethical purchasing practices are conceptualized as a three-tiered set. Three broad themes emerge from the analysis toward (...) explaining purchasing ethics from a buyer–seller perspective: Inter-organizational power issues, Inter-organizational relational issues, and Interpersonal relational issues. Theoretical and managerial implications of the conceptual framework are discussed. (shrink)

A major challenge for supply chain managers is how to manage sourcing relationships to ensure reliable and predictable actions of distant suppliers. The extant research into sustainable supply chain management has traditionally focused on the transactional and collaboration approaches through which buyers encourage suppliers to act responsibly. However, little effort has been devoted to investigating the factors that underpin and enable effective implementation of these two approaches, or to exploring alternative approaches to help sustain an acceptable level of social (...) performance from suppliers. Building on organisational justice theory, we developed a framework in which we propose that buyers’ justice as perceived by suppliers can serve as an alternative and complementary vehicle to the conventional sustainability governance approaches for driving the social justice exhibited by suppliers. The paper sheds new light on an alternative relational approach to help to restrain potentially harmful acts of suppliers. It provides a foundation for new research avenues in the SSCM context and supports more informed decision making by practitioners. (shrink)

This study examines unethical purchasing practices from the perspective of buyer-supplier relationships. Based on a review of the inter-organizational literature and qualitative data from in-depth interviews with purchase managers from diverse industries, a conceptual framework is proposed, and theoretical arguments leading to propositions are presented. Taking into consideration the presence or absence of an explicit or implicit company policy sanctioning ethically questionable activities, unethical purchasing practices are conceptualized as a three-tiered set. Three broad themes emerge from the analysis toward (...) explaining purchasing ethics from a buyer— seller perspective: (a) Inter-organizational power issues (inter-organizational power and idiosyncratic investments), (b) Inter-organizational relational issues (long-term orientation and satisfaction), and (c) Interpersonal relational issues (interpersonal ties and trust). Theoretical and managerial implications of the conceptual framework are discussed. (shrink)

While ethical and moral issues have been widely considered in the general areas of marketing and sales, similar attention has not been given to the impact of strategic account management (SAM) approaches to handling the relationships between suppliers and very␣large customers. SAM approaches have been widely␣adopted by suppliers as a mechanism for managing␣relationships and partnerships with dominant customers␣– characterized by high levels of buyer–seller inter-dependence and forms of collaborative partnership. Observation suggests that the perceived moral intensity of␣these (...) class='Hi'>relationships is commonly low, notwithstanding the underlying principles of benefiting the few (large, strategic customers) at the expense of the many (smaller customers and other stakeholders), and the magnitude of the consequences of concessions made to large customers, even though some such consequences may be unintended. Dilemmas exist also for executives implementing strategic account relationships regarding such issues as information sharing, trust, and hidden incentives for unethical behaviour. We propose the need for greater transparency and senior management questioning of the ethical and moral issues implicit in strategic account management. (shrink)

Recognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice (...) in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement-new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers. (shrink)

Global production networks connect multiple producers involved in fragmented manufacturing processes. Major brands and retailers, considered as lead firms, are under increasing pressure to ensure products made through GPNs are produced sustainably. Theories of governance developed to understand dynamics in outsourced production can provide insight into this issue. However, these theories and related empirical research have often focused on relationships between lead firms and upper-tier suppliers. When manufacturing involves multiple fragmented stages, understanding the role of lead firms becomes more (...) difficult. This article considers new governance roles that lead firms, as buyers, are playing when attempting to promote sustainable practices across all stages of production for buyer-driven industries. The focus is exploring the nature of new governance approaches which lead firms have developed in order to address diverse sustainability challenges found within GPNs, particularly related to lower-tier suppliers. These approaches can involve lead firms working through vertical buyer–seller links or developing new horizontal relationships, which link lead firms with lower-tier suppliers and governance processes in these suppliers’ local productive systems. The findings draw from field research examining how top UK garment retailers provide governance to producers involved in creating cotton garments in India and a review of publicised policies and practices of these retailers related to promoting sustainable production. Five types of governance mechanisms that can involve vertical or horizontal links are identified. Considering the growth of new governance relationships expands previous conceptions of the roles of lead firm governance. (shrink)

Corruption within the private sector has often not been dealt with in Brazil. Organizations may find corrupt acts in its operations or practices, but specific concepts and programs to avoid them are neither concrete nor clear. Some Brazilian stockholders have become aware of the risks involved in unethical procedures and are adopting the Best Practices of Corporate Governance initiative. International agencies have intensively supported organizations and governments in an effort to define policies that inhibit illegal or corrupt cultural habits throughout (...) the world, but Brazilian practitioners show insufficient response. Skepticism may indicate a lack of understanding about how an ethical leadership can guide employees, setting high standards for the organizational culture and climate, clearly defining limits of correct behavior, and creating appropriate codes of ethics. Transparency still has to be discovered as a significant tool to encourage professionalism in performance and reporting of data in Brazilian companies. In this article, we analyze the ethical behavior of the purchasing department of a multinational company in its host country, Brazil. It focuses specifically on the supplier–buyer relationship. The results indicate that despite the negative reputation Brazilians have in business ethics, a company can still develop a positive and ethical relationship with its stakeholders. Communication, transparency, compliance with the company’s code of conduct as well as the supplier’s awareness of the buyer’s code of conduct are the factors which influence the supplier–buyer relationship. Transparency can be used as a tool to reduce corruption, thereby increasing ethical behavior and company image. Good ethical behavior can help to build up a company’s image. (shrink)

Supplier diversity programs were created in the United States nearly 50 years ago to encourage private sector companies to provide business opportunities to underutilized minority business enterprises. In order to assess the experiences that minority business enterprise CEOs have with large purchasing organizations and their perceptions of justice and commitment of large purchasing organizations to the buyer–supplier relationship (BSR), this study utilizes survey data collected from 206 minority business enterprise CEOs who supply large purchasing organizations that espouse a strong commitment (...) to supplier diversity. The theoretical framework of organizational justice is utilized to establish testable hypotheses. The results from hierarchical linear regression show minority business enterprise CEOs’ perception of large purchasing organizations’ commitment to the BSR is positively related to the distributive and informational dimensions of organizational justice. Surprisingly, the procedural dimension was found to have a significantly negative relationship. This research also found a significant, negative relationship between minority firm CEOs’ perception of distributive and informational justice and their perceptions of unethical behavior by large purchasing organizations. (shrink)

The disaggregation and geographic dispersion of global value chains (GVCs) have expanded the responsibility of international buyers from firm-level corporate social responsibility (CSR) towards social sustainability of their emerging country suppliers. We theorize, in this paper, that the effectiveness of lead firms’ GVC governance strategies for social sustainability—which can be audit-based or cooperation-based—depends on the local institutional context of the supplier. Supplier country institutions exert legal and civil society pressures for social sustainability, which shape suppliers’ attitude and receptiveness towards lead (...) firm requests. Using unique primary data from 356 garment and footwear suppliers in 11 emerging countries, which supply to Western European or North American buyers, we show that GVC governance strategies are particularly effective for suppliers’ social sustainability implementation when there is ‘contextual fit’ with local institutional pressures for social sustainability in the supplier country. Our study identifies the boundary conditions of GVC governance modes, and demonstrates a complementary relationship between organizational arrangements and their institutional-level counterparts in the context of social sustainability. (shrink)

The theoretical understanding of e-commerce has received much attention over the years; however, relatively little focus has been directed towards e-commerce ethics, especially the SMEs B2B e-ecommerce aspect. Therefore, the purpose of this paper is to develop and empirically test a framework that explains the impact of SMEs B2B e-commerce ethics on buyer repurchase intentions and loyalty. Using SEM to analyse the data collected from a sample of SME e-commerce firms in Egypt, the results indicate that buyers’ perceptions of supplier (...) ethics construct is composed of six dimensions and strongly predictive of online buyer repurchase intentions and loyalty. Furthermore, our results also show that reliability/fulfilment and non-deception are the most effective relationship-building dimensions. In addition, relationship quality has a positive effect on buyer repurchase intentions and loyalty. The results offer important implications for B2B e-commerce and are likely to stimulate further research in the area of relationship marketing. (shrink)

The implementation of socially sustainable supply chain management (SSCM) practices (i.e. assessment and collaboration) to tackle suppliers’ social deficiencies (e.g. the use of child labour) often requires a level of cooperation that can be difficult to establish. Despite this daunting challenge, scant scholarly attention has been paid to explore how the implementation of socially SSCM practices can be effectively facilitated and enhanced. Drawing on social capital theory, this study examines the individual impact of assessment and collaboration practices on suppliers’ social (...) performance and explores whether and how these effects can be moderated (strengthened) by the level of social capital (i.e. relational, cognitive, and structural) embedded in the buyer–supplier relationship. Based on a survey of 119 manufacturing companies in the UK, we found that assessment practices are less likely to influence suppliers to improve social performance compared to collaboration practices. However, when relational and structural capital are manifested in the relationship, assessment practices become significant in driving suppliers’ social performance. We also found that the positive impact of collaboration practices is more pronounced when relational and cognitive capital are established in the relationship. This paper contributes to the growing socially SSCM literature by disentangling the vital and relative importance of social capital dimensions on the implementation of socially SSCM practices. (shrink)

Over the last decade, the news media have reported on corporate scandals involving high-profile organizations such as Arthur Anderson, AOL Time Warner,Enron, Halliburton, Kmart, and Xerox. In 2001, the Conference Board of Canada noted that supplier relationships represent some of the most common ethical problems in the private sector, and estimated that 95% of corporations in the United States and 86% of corporations in Canada have implemented ethical codes of conduct and are espousing their commitment to building relationship with (...) ethical suppliers. While a significant amount of research on corporate ethics has been published (for examples see Akaah and Riordan 1989; Cullen et al. 2003; Román and Ruiz 2005; Schminke et al. 2005; and Weaver et al. 1999a, 1999b), what still remains unknown is how and when a supplier’s ethical code of conduct matters to the buyer making decisions regarding their choice of suppliers. (shrink)

In this study, we evaluate how individual virtues and inter-organizational management control systems influence buyer–supplier performance through relationship quality. Results from a sample of 232 firms confirm that virtues and IOMCS relate positively to relationship quality and performance, respectively. However, IOMCS lose their positive influence on relationship quality when considered along with virtues. That is, when both variables enter the regression model simultaneously, virtues win. This interesting finding has particular resonance at a time when research on ethics still needs to (...) reinforce its positive effects on the practice of management. (shrink)

In this study, we evaluate how individual virtues and inter-organizational management control systems influence buyer–supplier performance through relationship quality. Results from a sample of 232 firms confirm that virtues and IOMCS relate positively to relationship quality and performance, respectively. However, IOMCS lose their positive influence on relationship quality when considered along with virtues. That is, when both variables enter the regression model simultaneously, virtues win. This interesting finding has particular resonance at a time when research on ethics still needs to (...) reinforce its positive effects on the practice of management. (shrink)

The aim of this study is to examine the decision-making processes at work among French buyers—whether beginners or more experienced individuals, when confronted with a dilemma involving an ethical or non-ethical choice to be made. We go on to illustrate these dilemmas through the use of five original scenarios that reproduce typical situations that arise in a purchasing context in relation to the environment, physical integrity, conflict of interest, or paternalism. Based on 172 participants, the results of our study show (...) that, ethical decision-making depends very clearly on two main factors: expertise and gender. The study also reveals that there is not always a coherent link between ethical choices made and the reasons and justifications given for those choices. Ethical options chosen are not exclusively justified on the grounds of purely ethical reasons but also on the grounds of commercial or economic reasons, or else reasons of avoidance. (shrink)

Corruption within the private sector has often not been dealt with in Brazil. Organizations may find corrupt acts in its operations or practices, but specific concepts and programs to avoid them are neither concrete nor clear. Some Brazilian stockholders have become aware of the risks involved in unethical procedures and are adopting the Best Practices of Corporate Governance initiative. International agencies have intensively supported organizations and governments in an effort to define policies that inhibit illegal or corrupt cultural habits throughout (...) the world, but Brazilian practitioners show insufficient response. Skepticism may indicate a lack of understanding about how an ethical leadership can guide employees, setting high standards for the organizational culture and climate, clearly defining limits of correct behavior, and creating appropriate codes of ethics. Transparency still has to be discovered as a significant tool to encourage professionalism in performance and reporting of data in Brazilian companies. In this article, we analyze the ethical behavior of the purchasing department of a multinational company in its host country, Brazil. It focuses specifically on the supplierbuyer relationship. The results indicate that despite the negative reputation Brazilians have in business ethics, a company can still develop a positive and ethical relationship with its stakeholders. Communication, transparency, compliance with the company's code of conduct as well as the supplier's awareness of the buyer's code of conduct are the factors which influence the supplier–buyer relationship. Transparency can be used as a tool to reduce corruption, thereby increasing ethical behavior and company image. Good ethical behavior can help to build up a company's image. (shrink)

Media increasingly accuse firms of exploiting suppliers, and these allegations often result in lurid headlines that threaten the reputations and therefore business successes of these firms. Neither has the phenomenon of supplier exploitation been investigated from a rigorous, ethical standpoint, nor have answers been provided regarding why some firms pursue exploitative approaches. By systemically contrasting economic liberalism and just prices as two divergent perspectives on supplier exploitation, we introduce a distinction of common business practice and unethical supplier exploitation. Since supplier (...) exploitation is based on power, we elucidate several levels of power as antecedents and investigate the role of ethical climate as a moderator. This study extends Victor and Cullen’s ethical climate matrix according to a supply chain dimension and is summarized in an integrated, conceptual model of five propositions for future theory testing. Results provide a frame of reference for executives and scholars, who can now delineate unethical exploitation and understand important antecedents of the phenomenon better. (shrink)

In line with the current trend toward sustainability and CSR, organizations are pressured to assume extended responsibility. However, taking such a responsibility requires serious and challenging efforts as it appears to involve a wider range of issues and increased need for close interaction between actors along commodity chains. Using a qualitative case study approach, the present article focuses on Swedish public and private procurement organizations with attention paid to textiles and chemical risks. It focuses on two crucial aspects of buyers’ (...) relationships with suppliers in their efforts to advance environmental responsibility-taking—monitoring and trust—as well as how they intersect. The aim is to demonstrate, both theoretically and empirically, the limits and possibilities of monitoring and trust for developing extended upstream responsibility. The article demonstrates the problems with, on one hand, simple ritualistic monitoring and, on the other, simple trust, and explores potentially constructive pathways to extended upstream responsibility at the intersection of monitoring and trust. In connection with the findings, the article argues that theories on responsible and sustainable supply chain management must also take the enormous variety of organizations into account: not only large, private, transnational companies, which the literature has until now been preoccupied with. (shrink)

Does private regulation of workers’ rights in global value chains improve working conditions on the factory floor? Drawing on one of the first systematic longitudinal studies of supplier compliance with multinational corporation (MNC) codes of conduct, this paper finds—in contrast to previous research—substantial improvements over time. While in 2004, the four examined Chinese toy suppliers violated most of the evaluated code of conduct criteria and consciously decoupled the code of conduct policy from actual practices, by 2009 they had recoupled policy (...) and practice and complied with nearly all examined criteria (except working hours). The paper contributes to the private regulation literature by challenging previous research claims, identifying factors that could make private regulation effective, and outlining a research method for empirically studying the effects of codes of conduct over time. The paper also contributes to new institutional theory by discussing how recoupling could be influenced by two factors not identified in previous research: (i) trusting relationships between the organization and the stakeholder exerting pressure and (ii) factors unrelated to main external pressures leading to “accidental” recoupling. (shrink)

Codes of conduct are the main tools to privately regulate worker rights in global value chains. Scholars have shown that while codes may improve outcome standards (such as occupational health and safety), they have had limited impact on process rights (such as freedom of association and collective bargaining). Scholars have, though, only provided vague or general explanations for this empirical finding. We address this shortcoming by providing a holistic and detailed explanation, and argue that codes, in their current form, have (...) limited impact on trade union rights due to (i) buyers paying lip service to trade union rights, (ii) workers being treated as passive objects of regulation in codes of conduct, (iii) auditing being unable to detect and remediate violations of trade union rights, (iv) codes emphasizing parallel means of organizing, (v) suppliers having limited incentives for compliance, and (vi) codes being unable to open up space for union organizing when leveraged in grassroots struggles. Our arguments suggest that there is no quick fix for codes’ limited impact on trade union rights, and that codes, in their current form, have limited potential to improve trade union rights. We conclude by discussing ways in which codes of conduct, and private regulation of worker rights more generally, could be transformed to more effectively address trade union rights. (shrink)

Corporate social responsibility (CSR) is gaining momentum in the business world, but several issues continue to challenge managers in charge of sustainability. Supply chain management is one area in which CSR-related activities could potentially drive the process of sustainability within firms. This case presents the way that illycaffè, an Italian coffee producer, has approached CSR. Since 1991, the company has focused on developing a new relationship with Brazilian coffee producers based on networking translated into knowledge transfer—Brazilian producers became responsible for (...) their operations all along the supply line—and innovation translated into quality—one supplier talks about how illycaffè persuaded him he was capable of producing a Ferrari among coffees instead of a Fiat. These two factors not only drive the supplier relationship, but also serve as the drivers of illycaffè’s sustainability strategy. Lessons for managers relate to benefits for the business, for society and for stakeholders, and questions arise about how to replicate illycaffè’s success and create value through values. (shrink)

The influence of corporate social performance on stakeholders is one of the focal issues in corporate social responsibility research. Using data of listed companies in China, this paper examines whether CSR behavior in the form of charitable donations garners a positive reaction from suppliers. Results derived from both level and change model regressions show that superior CSP makes it easier for a firm to obtain trade credit from suppliers, although the effect is significant only in non-state-owned enterprises. The results are (...) robust to various measures of CSP and endogeneity tests. The results support the strategic philanthropy view and apply stakeholder theory in supply chain, that strategic CSR can help firms to attract suppliers and consolidate cooperative relationships with them, which in turn benefits the firms in terms of more trade credit financing from suppliers. This paper also shows that state-owned enterprises and non-SOEs have different CSR intentions and use CSR to achieve strategic goals in different ways. The conclusions drawn from this study provide practical guidance on CSR strategy, suggesting that CSR activities can help a firm in transition economies to enhance its corporate image, establish and consolidate the good relationship with suppliers, and obtain economic benefits or achieve long-term business objectives. (shrink)

With complex buyer-driven global production networks and a labour-intensive manufacturing process, the fashion industry has become a focal point for debates on the social responsibility of business. Utilising an interview methodology with influential actors from seven export garment manufacturers in Sri Lanka, we explore the situated knowledge at one nodal point of the production network. We conceptualise factory management perspectives on the implementation of corporate social responsibility in terms of the strategic balancing of ethical considerations against the commercial pressures of (...) cost and lead time. Factory managers framed CSR in terms of compliance, rather than going above and beyond regulatory requirements; seeing it as a strategic competitive imperative and less a developmental mechanism. Sri Lankan manufacturers maintain that they have benefitted from a unique combination of factors, including strict national labour laws, an educated workforce, the characteristics of the garments produced, industrial upgrading, and long-term non-adversarial buyer–supplier relationships, which they argue has supported the establishment and maintenance of CSR practices. The paper thus provides managerial implications that relate CSR activities to CSR outcomes which include both reputational and production benefits. Such insights will be of strategic relevance for lead retail buyers as well as apparel producers keen to invest in CSR to partly mitigate against increasing price-based competition. (shrink)

Religion is an important cultural and individual difference variable. Yet, despite its obvious importance in consumers’ lives, religion in the United States has been under-researched. This study addresses that gap in the literature and investigates the influence of consumer religion in the buyer–seller dyad. Specifically, this study examines the influence of consumer religious commitment and a Christian consumer’s conservative beliefs in the United States on store loyalty when retailers make business decisions which are potentially reli- gious objectionable. This study uses (...) structural equation modeling and applies Anderson and Gerbing’s :411–423, 1988 ) two-step approach to exam- ine data obtained from a national sample of 531 consumers. The results from this study suggest that consumers evaluate seller’s actions and form ethical judgments. These judgments are a major explanatory variable in consumer store loyalty intentions. (shrink)

Based on social exchange and customer relationship marketing theory, this study examines how ethical leadership contributes to inter-organizational conflict management (task conflict (TC) and relationship conflict), and the moderating role of task interdependence in these relationships. Data was collected from 81 suppliers and 45 corresponding managers of a large group company in China. Results show that ethical leadership is negatively associated with the levels of inter-organizational conflict, whether task or relationship. Task interdependence significantly moderates the relationship between ethical leadership (...) and TC. Managerial implication in terms of creating sound buyer–supplier relationship through an ethical perspective is discussed. (shrink)

Labour issues in global supply chains have been a thorny problem for both buyer firms and their suppliers. Research initially focused mostly on the bilateral relationship between buyer firms and suppliers, looking at arm’s-length and close collaboration modes, and the associated mechanisms of coercion and cooperation. Yet continuing problems in the global supply chain suggest that neither governance type offers a comprehensive solution to the problem. This study investigates collaborative governance, an alternative governance type that is driven by buyer firms (...) setting up a coalition with competitor firms to increase leverage and address the supplier and/or host country-specific labour issues. Based on interviews with managers involved in the establishment and management of such coalitions and supplier firms in the garment industry, we examine the rationale behind collaborative governance and discuss its opportunities and challenges in addressing labour issues in global supply chains. (shrink)

In this article, we shift the usual analytical attention of the GPN framework from lead firms to suppliers in the network and from production to IT services. Our focus is on how Indian IT suppliers embed in the Netherlands along the threefold characterization of societal, territorial and network embeddedness. We argue that Indian IT suppliers attempt to display societal embeddedness when they move to The Netherlands. Our findings reveal that the endeavour by Indian IT suppliers to territorially dis-embed from the (...) Dutch context is reinforced by their peripheral position in the network and their ability to offshore work in a bid to contain costs, in addition to the influence of client domination. Therefore, territorial embeddedness is considered to be secondary to societal embeddedness which is intertwined with client interest while neglecting the interest of other network members. Nonetheless, the inter-firm relationship is complex, given the tension between societal, territorial and network embeddedness. While preferring Indian IT suppliers because of their low pricing, Dutch clients also insist on compliance with the institutional context of the Netherlands especially when it comes to Dutch employees. This results in hybridization which means that Indian IT suppliers find ways to adhere to the institutional framework for Dutch nationals while simultaneously insulating Indian employees from the same. Consequently, a highly unfair segmented internal labour market develops, with Dutch nationals being treated more favourably as compared to Indian nationals. Nonetheless, to address these violations, Indian employees prefer individual strategies of resilience and rework rather than a collectivization response. (shrink)

Companies are faced with a choice of which type of power to use in their efforts to persuade their first-tier suppliers to adopt socially responsible procurement practices with key second-tier suppliers. However, we know little about how first-tier suppliers will react to different types of power and which are most effective in encouraging the adoption of socially responsible procurement practices. We are also ignorant of the impact of these practices on first-tier suppliers’ performance. This paper uses bases of power theory (...) to examine the impact of buyer companies’ power usage on first-tier suppliers’ adoption of socially responsible procurement practices with their own suppliers. We surveyed managers responsible for sustainable supply chain management in 156 firms and analyzed the results using structural equation modeling. Our findings show that non-mediated power use influences the adoption of process-based and market-based practices, while mediated power use has no significant impact on the adoption of either type of practice. Additionally, we find that the adoption of market-based socially responsible procurement practices leads to enhanced performance for first-tier suppliers who adopt these practices with their second-tier suppliers. (shrink)

Major construction projects have a great influence on the national economy and society, wherein cooperative relationship between construction suppliers plays an increasingly significant role in the overall supply chain system. However, the relationships between suppliers are noncontractual, multistage, dynamic, and complicated. To gain a deeper insight into the suppliers’ cooperative relationships, an evolutionary game model is developed to explore the cooperation tendency of multisuppliers. A replicator dynamic system is further formulated to investigate the evolutionary stable strategies of multisuppliers. (...) Then, fourteen “when-then” type scenarios are concluded and classified into six different evolutionary tracks. Meanwhile, the critical influencing factors are identified. The results show that the suppliers’ production capacity, owner-supplier contract, and the owner’s incentive mechanism influence the cooperation tendency of suppliers directly. The managerial implications contribute to insightful references for a more stable cooperative relationship between the owner and suppliers. (shrink)

This study examines whether customer firms’ unethical behavior distorts suppliers’ investment decisions. Using litigation and restatement to measure unethical behavior, we find that suppliers with customers engaged in frauds tend to invest more during the cheating period, compared to unaffected suppliers. In cross-sectional analyses, we examine the moderating effect of suppliers’ reliance on customer information and peer information. Results show that more industry peers’ voluntary disclosures and analyst coverage, lower sales volatility, and lower relationship-specific investments mitigate the distortion effect on (...) suppliers. Suppliers’ overinvestments caused by customers’ misreporting also lead to the suppliers’ inferior future performance and subsequent negative market reaction, and the severity of customers’ misreporting influences the magnitude of suppliers’ investment distortions. These results are robust in a dynamic difference-in-difference specification, an SEC enforcement sample, and a sample that excludes observations for suppliers and customers in the same industry. This paper contributes to the ethics literature by emphasizing the importance of creditable supply-chain information transfer to investment decisions and clarifying the nontrivial influence of principal customers in the supply-chain network. (shrink)

Supply chains are an indispensable element of any global economy. At the same time such supply chains create a societal and environmental burden. Drastic actions are required to mitigate these effects. Supply chains should become responsible and sustainable (where responsibility and sustainability are understood in a broad sense) addressing economic, political, societal, legal, human rights, ethical and environmental concerns. This research shifts from the question of why companies should implement responsibility and sustainability into supply chains, to how they should do (...) so effectively. Illustrated by a case study of Sedex, a collaborative platform for buyers and suppliers, this paper proposes three solutions for responsible and sustainable supply chain management (SCM). Firstly, supply chains have to be supported by research and innovation (R&I). Secondly, supply chains should be based on multi-stakeholder efforts of industry, governmental and non-governmental organisations. Thirdly, the responsibility should lie not only with an individual company and its employees, but also with organisations of companies (supra-agency). As a result, responsible and sustainable supply chains require technological, political and ethical solutions involving the development of sound, multi-stakeholder business and governance models. These models should be based on the equal consideration of all three dimensions of sustainability (economic, environmental and social), the cooperation of the partners in the chain, strengthening long-term relationships and legitimate requirements of the stakeholders of a supply chain. (shrink)

Despite the growing public awareness of social sustainability issues, little is known about what drives firms to emphasize social criteria in their supplier management practices and what the precise benefits of such efforts are. This is especially true for relationships with international suppliers from the world's emerging economies in Asia, Latin America, and Eastern Europe. Building on stakeholder theory, we address the issue by examining how pressures from customers, the government, and employees as primary constituencies of the firm determine (...) the extent to which firms consider social aspects in the selection of emerging economy suppliers. Further, we analyze how such socially sustainable supplier selection relates to the capabilities of the firm's suppliers, its market reputation, and the learning in its supply management organization. We test the developed research framework empirically using data from 244 U. S. and German corporations. Our findings, consistent with our hypothesized model, suggest that middle-level supply managers as internal stakeholders play a major driving role for firms' socially sustainable supplier selection, and that strong positive links exist between that selection and the investigated outcomes. (shrink)

Stakeholder theory is a pertinent example of a framework that has been stretched over many conceptual contexts and that has been applied to a wide variety of empirical phenomena. A pressing issue involves the scope of application of stakeholder theory, however, because it is not a comprehensive ethical scheme or problem-solving algorithm. We begin our search for the boundaries of stakeholder management by identifying a presently under-acknowledged yet major underlying assumption, notably that the approach is rooted in voluntary action and (...) association. Building on this presumption, we argue that firm - stakeholder relationships are best to be understood in contractualist terms; i.e. as voluntary arrangements between two or more parties seeking mutual benefit. This assertion subsequently allows us to identify three boundary conditions applying to stakeholder theory: (1) the parties should be sufficiently autonomous; (2) their interests need to be alignable; and (3) they should be capable of living up to their commitments. We substantiate these criteria with evidence from a collective case study of buyer - supplier relationships in the Dutch manufacturing sector, demonstrating that the stakeholder management model fails when these boundary criteria are violated. (shrink)

Drawing on signaling theory, we suggest that a supplier’s enforcement of ethical codes sends signals about the supplier that affect a buyer’s decision to continue their commitment to the supplier. We then draw on side-bet theory to hypothesize how switching costs influence the importance of a supplier’s enforcement of ethical codes in predicting a buyer’s continuance commitment to a supplier. We empirically test our model with data from 158 purchasing managers across three manufacturing industries. Results confirm the connection between ethical (...) code enforcement and continuance commitment, but suggest that a supplier’s enforcement of ethical codes matter less when switching suppliers is perceived as too costly. (shrink)

Porter’s five forces model is an authoritative management tool used in analyzing the profitability and attractiveness of industries through an outside-in viewpoint. In the past decade, dramatic and rapid changes have prompted some criticism of the model. The comparison between new and old economy analysis makes the fundamentals of the model seem weak. Moreover, the past decade has shown that strategy and entrepreneurship in China are not completely dependent on the model. This study first aims to verify the sustainability of (...) the five forces model and analyze its integration into China’s entrepreneurial economy. By conducting in-depth interviews among the upper echelons from various industries, it was found that along with the competitive factors emphasized by the model, Chinese entrepreneurs attend to cooperative factors such as Guanxi, the Chinese term for relationship, and the possibilities of technology integration with the five forces. They also tend to enlarge the strategic view to consider factors such as how the market evaluates the forces. To verify these findings, the authors carried out a large-scale survey with a modified questionnaire analyzing the data collected using exploratory factor analysis with SPSS 22. The outcome shows that Porter’s model is still valid to some extent. Companies are still working in a network of buyers, suppliers, substitutes, new entrants, and competitors. However, reinventions are necessary to include the new factors of Guanxi, technology, and marketing and branding, which have changed the structure of the industry. These factors arise from the cooperative nature of Chinese culture and may have equal or even larger significance compared with their competitive counterparts in today’s business world. (shrink)

The implementation of socially sustainable practices in suppliers situated in challenging institutional contexts is examined using institutional theory, both in terms of how institutional pressures affect implementation and what explains the decoupling of practices from the day-to-day reality. A multi-case study approach is employed based on seven apparel industry suppliers in Bangladesh. Cross-case analysis highlights the coercive, mimetic, and normative pressures on suppliers to implement socially sustainable practices. A key pressure identified that has not previously been highlighted in the literature (...) is horizontal collaboration between buyers, which intensifies coercive pressure on suppliers and increases the consequences of non-compliance. The factors that contribute to decoupling are categorized into firm-, supply chain-, and environment-related factors. Further, six propositions are developed on how specific forms of institutional pressure can tackle particular decoupling factors to support implementation. The paper responds to recent calls for greater scrutiny of why and how firms decouple ethical practices and supports the development of the literature specifically on social sustainability, which lags behind that on environmental sustainability and has been largely focused on the Western buyer perspective. The findings have implications for the diffusion of ethical practices into supply chains, especially distant suppliers in very different and challenging institutional contexts. (shrink)

In the age of neoliberalism, feminists strongly disagree on the ideal legal status of prostitution while the pro-prostitution lobby endeavours to keep their male-dominated business running smoothly. Feminist debates should be concerned with the sex buyers' belief system about women, which is likely to have practical consequences in the way they behave with women (prostituted and non-prostituted) in terms of sexuality and, therefore, for feminist purposes of equality, on a broader scale. A Critical Discourse Analysis of buyer-authored online reviews of (...) prostituted women provides the opportunity to verify whether the relationship they establish with them is based on democratic mutual equality or gendered power relations driven by domination and subordination.En la era del neoliberalismo, no hay consenso entre las feministas acerca del estatus legal que debería tener la prostitución; mientras, el lobby pro-prostitución intenta proteger tan lucrativo negocio. Los debates feministas deben abordar críticamente el sistema de creencias de los sujetos prostituyentes, en tanto que afecta a cómo actúan con las mujeres (prostituidas y no prostituidas) dentro del marco de la sexualidad y, por tanto, al potencial logro de la igualdad fáctica a nivel social. El análisis crítico del discurso online de los sujetos prostituyentes sobre las mujeres prostituidas permite comprobar si las relaciones que establecen con ellas están basadas en términos igualitarios o en la dicotomía dominación-subordinación característica de las relaciones de poder de género. (shrink)