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)

Why do otherwise well-intentioned managers make decisions that have negative social or environmental consequences? To answer this question, the authors combine the literature on construal level theory with the compromise effect to explore the circumstances that lead to seemingly unethical decision-making. The results of two studies suggest that the degree to which managers make high-risk tradeoffs is highly influenced by how they mentally represent the decision context. The authors find that managers are more likely to make seemingly unethical tradeoffs when (...) psychological distance is high (rather than low) and when they are forced to choose between competing alternatives. However, when given the option not to choose, managers better reflect on the consequences of each alternative, and thus become more likely to choose options with less risk of negative consequences. The results suggest that simply offering managers the option not to choose may reduce psychological distance and help organizations avoid seemingly unethical decision-making. (shrink)

Prior research has shown the importance of institutional pressures in investigating corporate environmental behaviour. To date, the literature has been lacking in survey-based reflective measures of institutional pressures. This paper focuses on the development of reflective measures of coercive, mimetic, and normative isomorphism.

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)

While evidence exists suggesting that irresponsible corporate behaviour may lead to decreased shareholder wealth (Frooman 1997), one cannot help but question the generalizability of these results when companies such as Exxon, an organization well known for its environmental problems, remains at the top of the 2006 Fortune 500 list. In this paper we show with regards to news of irresponsible behaviour, the market punishes smaller, less capitalized firms but not necessarily the very large and highly capitalized companies.

This article introduces a new scale to measure executive servant leadership, situating the need for this scale within the context of ethical leadership and its impacts on followers, organizations and the greater society. The literature on servant leadership is reviewed and servant leadership is compared to other concepts that share dimensions of ethical leadership (e.g., transformational, authentic, and spiritual leadership). Next, the Executive Servant Leadership Scale (ESLS) is introduced, and its contributions and limitations discussed. We conclude with an agenda for (...) future research, describing ways the measure can be used to test hypotheses about organizational moral climate, ethical organizational culture, corporate responsibility, and institutional theory. (shrink)