Abstract
Although ethical codes of conduct are commonly used in supply chain management, the effectiveness of the codes has been questionable and the ethical risks from a supplier are rarely examined in a buyer-supplier dyad. Drawing on the literature on supply management, business ethics, agency theory and stakeholder theory, we propose that both the buyer and supplier should adopt ethical codes of conduct in order to reduce ethical supplier risk and improve their financial performance. A survey of 200 pairs of matched manufacturers and suppliers was conducted from automotive, clothing, food and pharmaceutical industries in China. Structural equation modelling was used to analyse the data. Our findings show that the implementation of buyer (supplier)’s ethical codes positively relate to its financial performance, and the buyer’s ethical codes positively relate to the supplier’s financial performance through ethical supplier risk. Our findings provide new empirical evidence on the critical significance of ethical codes of conduct and the particular role of suppliers in the adoption of this initiative in a supplier-buyer dyad.
| Original language | English |
|---|---|
| Number of pages | 20 |
| Journal | Production Planning and Control |
| Early online date | 3 Jun 2024 |
| DOIs | |
| Publication status | E-pub ahead of print - 3 Jun 2024 |
Bibliographical note
Copyright © 2024 Informa UK Limited, trading as Taylor & Francis Group. This is an Accepted Manuscript version of the following article, accepted for publication in Production Planning and Control and published on 3rd June 2024. This version is made available under the terms of the Creative Commons Attribution-NonCommercial License (https://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited.Keywords
- Supply chain management
- ethical supplier risk
- financial performance
- buyer-supplier relationship