Journal of Business Ethics 104 (1):47-58 (2011)

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.
Keywords Ethical code enforcement  Switching costs  Commitment  Inter-organizational relationships
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DOI 10.1007/s10551-011-0888-8
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Does Business Ethics Make Economic Sense?Amartya Sen - 1993 - Business Ethics Quarterly 3 (1):45-54.

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