When does Ethical Code Enforcement Matter in the Inter-Organizational Context? The Moderating Role of Switching Costs

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 suppli...

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Bibliographic Details
Authors: Colwell, Scott R. (Author) ; Zyphur, Michael J. (Author) ; Schminke, Marshall (Author)
Format: Electronic Article
Language:English
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Published: Springer Science + Business Media B. V 2011
In: Journal of business ethics
Year: 2011, Volume: 104, Issue: 1, Pages: 47-58
Further subjects:B Ethical code enforcement
B Switching costs
B Organizational commitment
B Inter-organizational relationships
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Summary: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.
ISSN:1573-0697
Contains:Enthalten in: Journal of business ethics
Persistent identifiers:DOI: 10.1007/s10551-011-0888-8