The Effect of Sustainability Standard Uncertainty on Certification Decisions of Firms in Emerging Economies

Journal of Business Ethics 154 (3):667-681 (2019)

Abstract

Voluntary sustainability standards that establish global rules for firms’ environmental and/or social conduct and allow for verification of firm compliance via third-party certification hold the promise to govern firms’ sustainability conduct in a globalizing world economy. However, the recent proliferation of competing and overlapping global sustainability standards that have been developed by various stakeholders with different agendas, creates uncertainties for firms that likely reduce their propensity to adopt any standard. Without widespread adoption these standards cannot effectively govern firm conduct and in contrast create barriers for firms’ access to export markets. We suggest that the uncertainties associated with competing standards and the effect of these uncertainties on standard certification decisions are especially large for firms in emerging economies because these firms lack access to information about current and future standards and the resources to obtain certifications to multiple standards. We theoretically propose and empirically identify three distinct sources of sustainability standard uncertainty: diversity of customer requirements, dynamism of customer requirements, and the unpredictability of the future evolution of standard and propose that each of these sources reduces firms’ propensity to obtain certification to any standard. Our empirical results based on certifications to food safety standards by a sample of 97 Mexican food exporting firms confirm that three distinct sources of sustainability standard uncertainty exist and that all of them negatively impact certification. We discuss ethical implications and offer recommendations for both suppliers as well as standard setting organizations.

Download options

PhilArchive



    Upload a copy of this work     Papers currently archived: 72,660

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Analytics

Added to PP
2019-02-01

Downloads
9 (#957,844)

6 months
1 (#388,784)

Historical graph of downloads
How can I increase my downloads?

Similar books and articles

Corporate Sustainability Disclosure Standards: A Framework for Analysis.Cathy A. Rusinko & John O. Matthews - 2008 - Proceedings of the International Association for Business and Society 19:335-342.
Drivers of Sustainability Strategy in Family Firms.Sanjay Sharma - 2009 - Proceedings of the International Association for Business and Society 20:194-205.

Author's Profile

Trevor Zink
Loyola Marymount University