Supply management ethical responsibility: reputation and performance impacts

Abstract

PurposeThere is a lack of extensive research related to the immediate consequences of supply management ethical responsibility (SMER) and the moderating and/or mediating factors that strengthen or weaken its consequences. Although the underlying presumption is that companies no longer have the luxury of ignoring the importance of SMER, the lack of empirical research of SMER's impact on supply management performance (SMP) reflects the need for research that draws on and empirically tests established theories concerning the role of corporate ethics within the context of supply management (SM). Therefore, the purpose of this study is to determine the impact of SMER and strategic supply management skills on SM perceived reputation and performance.Design/methodology/approachStructural equation modeling is employed to investigate the hypothesized relationships. A sample of 162 purchasing managers provided the data via survey.FindingsStrategic supply management skills and perceived reputation have a positive direct impact on performance. SMER is not directly affected by skills and has an indirect impact on performance through its positive relationship with perceived reputation.Practical implicationsThe findings suggest that SMER is limited in its ability to predict performance, but is a valuable component of building SM perceived reputation. Firms should not ignore SMER, as it may provide strategic marketing advantage as an order qualifier or limiting criterion.Originality/valueThis paper investigates the interplay among several important determinants of supply chain performance, including the greatly under‐studied ethics construct.