Heightened ethical concerns involving upstream suppliers (e.g., Peanut Corporation of America, dairy suppliers to Chinese infant formula manufacturers) have sparked interest in how managers’ knowledge of suppliers’ behavior influences decision making. This article explores the role of managers’ ethical beliefs in these often information asymmetric decisions. Using economic experiments, the authors asked managers to make strategic marketing decisions given upstream supplier ethical information. The results show how information asymmetries can interact with managers’ ethical beliefs to produce inconsistent behaviors related to (1) upstream investment in ethical product attributes and (2) willingness to leverage ethical product attributes in downstream markets. Specifically, low-ethical-beliefs managers seemed to rationalize leveraging ethics downstream even when upstream supplier past behavior was negative. High-ethical-beliefs managers invested positively in ethical product attributes with a known ethical supplier but were less willing to leverage that behavior downstream. The findings provide insight into how managers’ individual ethical beliefs, given upstream supplier information asymmetries, can affect stakeholders, including consumers, investors, and society at large.
AbelaAndrew V., and MurphyPatrick E. (2008), “Marketing with Integrity: Ethics and the Service-Dominant Logic for Marketing,”Journal of the Academy of Marketing Science, 36(Spring), 39–53.
2.
AjzenIcek, and FishbeinMartin (1977), “Attitude-Behavior Relations: A Theoretical Analysis and Review of Empirical Research,”Psychological Bulletin, 84(September), 888–918.
3.
AllenAsh (2009), “The ‘Green’ Hypocrisy: America's Corporate Environmental Champions Pollute the World,”247 Wall Street, (April 2), (accessed April 2, 2009), [available at http://247wallst.com].
4.
AshforthBlake E., and AnandVikas (2003), “The Normalization of Corruption in Organizations,” in Research in Organizational Behavior, Vo. 25, StawBarry M., and KramerRoderick M., eds. Kidlington, UK: Elsevier, 1–52.
5.
BergJoyce, DickhautJohn, and McCabeKevin (1995), “Trust, Reciprocity, and Social History,”Games and Economic Behavior, 10(1), 122–42.
6.
BergenMark, DuttaShantanu, and WalkerOrville C. (1992), “Agency Relationships in Marketing: A Review of the Implications and Applications of Agency and Related Theories,”Journal of Marketing, 56(July), 1–24.
7.
BhattacharyaC.B., Craig SmithN., and VogelDavid (2004), “Integrating Social Responsibility and Marketing Strategy: An Introduction,”California Management Review, 47(Fall), 5–8.
8.
BlasiAugusto (1980), “Bridging Moral Cognition and Moral Action: A Critical Review of the Literature,”Psychological Bulletin, 88(July), 1–45.
9.
ByrnesNanette, and BalfourFrederik (2009), “Philip Morris Unbound,”BusinessWeek, (May 4), 38–42.
10.
CarrollArchie B. (1999), “Corporate Social Responsibility: Evolution of a Definitional Construct,”Business & Society, 38(September), 268–95.
11.
CarsonStephen J. (2007), “When to Give Up Control of Outsourced New Product Development,”Journal of Marketing, 71(January), 49–66.
12.
ChatelinYves Marie, VinziVincenzo Espositor, and TenenhausMichel (2002), “State-of-Art on PLS Path Modeling Through the Available Software,” Research Paper Series 746/2002, HEC School of Management.
13.
ChinWynne W. (1998), “The Partial Least Squares Approach to Structural Equation Modeling,” in Modern Methods for Business Research, MarcoulidesGeorge A., ed. Mahwah, NJ: Lawrence Erlbaum Associates, 295–336.
14.
ChinWynne W., MarcolinBarbara L., and NewstedPeter R. (2003), “A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study,”Information Systems Research, 14(June), 189–217.
DoneyPatricia, and CannonJoseph P. (1997), “An Examination of the Nature of Trust in Buyer–Seller Relationships,”Journal of Marketing, 61(April), 35–51.
17.
DrumwrightMinette E. (1994), “Socially Responsible Organizational Buying: Environmental Concern as a Noneconomic Buying Criterion,”Journal of Marketing, 58(July), 1–19.
18.
EngardioPete (2007), “Beyond the Green Corporation,”BusinessWeek, (January 29), 50–64.
19.
FarzadRoben (2008), “In Search of a Subprime Villain,”BusinessWeek, (February 4), 77–78.
20.
FerrellO.C., and GreshamLarry G. (1985), “A Contingency Framework for Understanding Ethical Decision Making in Marketing,”Journal of Marketing, 49(July), 87–96.
21.
FerrellO.C., and SkinnerSteven J. (1988), “Ethical Behavior and Bureaucratic Structure in Marketing Research Organizations,”Journal of Marketing Research, 25(February), 103–109.
22.
FerrellO.C., and Mark WeaverK. (1978), “Ethical Beliefs of Marketing Managers,”Journal of Marketing, 42(July), 69–72.
23.
FornellClaes, and BooksteinFred L. (1982), “Two Structural Equation Models: LISREL and PLS Applied to Consumer Exit-Voice Theory,”Journal of Marketing Research, 19(November), 440–52.
24.
FornellClaes, and LarckerDavid F. (1981), “Evaluating Structural Equation Models with Unobservable Variables and Measurement Error,”Journal of Marketing Research, 18(February), 39–50.
25.
FranklinDaniel (2008), “A Stitch in Time: How Companies Manage Risks to Their Reputation,”The Economist, 386(8563), 12–14.
26.
FriedmanDaniel, and SunderShyam (1994), Experimental Methods: A Primer for Economists.Melbourne, Australia: Cambridge University Press.
27.
FroelichKristina S., and KottkeJanet L. (1991), “Measuring Individual Beliefs About Organizational Ethics,”Educational and Psychological Measurement, 51(2), 377–83.
28.
GoldRussell (2008), “U.S. Probe into LNG Contracts Reaches Beyond Nigeria,”The Wall Street Journal, (September 5), B1.
29.
GoolsbyJerry R., and HuntShelby D. (1992), “Cognitive Moral Development and Marketing,”Journal of Marketing, 56(January), 55–68.
30.
GraysonKent (2007), “Friendship Versus Business in Marketing Relationships,”Journal of Marketing, 71(October), 121–39.
31.
GundlachGregory T., and MurphyPatrick E. (1993), “Ethical and Legal Foundations of Relational Marketing Exchanges,”Journal of Marketing, 57(October), 35–46.
32.
HamelGary, and PrahaladC.K. (1989), “Strategic Intent,”Harvard Business Review, 67(May-June), 63–76.
33.
HamelGary, and PrahaladC.K. (1994), Competing for the Future.Boston: Harvard Business School Press.
34.
HeideJan B., and MinerAnne S. (1992), “The Shadow of the Future: Effects of Anticipated Interaction and Frequency of Contact on Buyer-Seller Cooperation,”Academy of Management Journal, 35(June), 265–91.
35.
HeideJan B., and WathneKenneth H. (2006), “Friends, Businesspeople, and Relationship Roles: A Conceptual Framework and a Research Agenda,”Journal of Marketing, 70(July), 90–103.
36.
HendryJohn (2002), “The Principal's Other Problems: Honest Incompetence and the Specification of Objectives,”Academy of Management Review, 27(January), 98–113.
37.
HullandJohn (1999), “Use of Partial Least Squares (PLS) in Strategic Management Research: A Review of Four Recent Studies,”Strategic Management Journal, 20(February), 195–204.
38.
HuntShelby D., and VitellScott J. (1986), “A General Theory of Marketing Ethics,”Journal of Macromarketing, 6(Spring), 6–15.
39.
HuntShelby D., and VitellScott J. (2006), “The General Theory of Marketing Ethics: A Revision and Three Questions,”Journal of Macromarketing, 26(December), 143–53.
40.
KagelJohn H., and RothAlvin E. (1995), The Handbook of Experimental Economics.Princeton, NJ: Princeton University Press.
41.
KennyDavid A., and JuddCharles M. (1986), “Consequences of Violating the Independence Assumption in Analysis of Variance,”Psychological Bulletin, 99(3), 422–31.
42.
LaczniakGene R., and MurphyPatrick E. (2006), “Normative Perspectives for Ethical and Socially Responsible Marketing,”Journal of Macromarketing, 26(December), 154–77.
43.
LuoXueming, and BhattacharyaC.B. (2006), “Corporate Social Responsibility, Customer Satisfaction, and Market Value,”Journal of Marketing, 70(October), 1–19.
44.
LuoXueming, and BhattacharyaC.B. (2009), “The Debate over Doing Good: Corporate Social Performance, Strategic Marketing Levers, and Firm-Idiosyncratic Risk,”Journal of Marketing, 73(November), 198–213.
45.
MaignanIsabelle, and FerrellO.C. (2004), “Corporate Social Responsibility and Marketing: An Integrative Framework,”Journal of the Academy of Marketing Science, 32(Winter), 3–19.
46.
MandliMargie, and ModoryKim (2004), “SC Johnson Exceeds Goal to Use More Earth-Responsible Raw Materials,”CSRwire, (accessed April 20, 2008), [available at http://www.csrwire.com/News/2825.html].
47.
MarshHerbert W., and HocevarDennis (1985), “The Application of Confirmatory Factor Analysis to the Study of Self-Concept: First- and Higher-Order Factor Structures and Their Invariance Across Age Groups,”Psychological Bulletin, 97(3), 562–82.
MudrackPeter E., and Sharon MasonE. (1996), “Individual Ethical Beliefs and Perceived Organizational Interest,”Journal of Business Ethics, 15(August), 851–61.
50.
NunnallyJum C., and BernsteinIra H. (1994), Psychometric Theory, 3d ed. New York: McGraw-Hill.
StevenPerkins W., and RaoRam C. (1990), “The Role of Experience in Information Use and Decision Making by Marketing Managers,”Journal of Marketing Research, 27(February), 1–10.
53.
ReinartzWerner, KrafftManfred, and HoyerWayne D. (2004), “The Customer Relationship Management Process: Its Measurement and Impact on Performance,”Journal of Marketing Research, 41(August), 293–305.
ReynoldsScott J. (2006), “Moral Awareness and Ethical Beliefs: Investigating the Role of Individual Differences in the Recognition of Moral Issues,”Journal of Applied Psychology, 91(1), 233–43.
56.
RingleChristian Marc, WendeSven, and WillAlexander (2005), SmartPLS 2.0 (M3) Beta.University of Hamburg, [available at http://www.smartpls.de].
57.
RyanRichard M., and DeciEdward L. (2000), “Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being,”American Psychologist, 55(January), 68–78.
58.
SenSankar, and BhattacharyaC.B. (2001), “Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility,”Journal of Marketing Research, 38(May), 225–43.
59.
ShapiroSusan P. (2005), “Agency Theory,”Annual Review of Sociology, 31, 263–84.
60.
SimonsTony (2002), “Behavioral Integrity: The Perceived Alignment Between Managers’ Words and Deeds as a Research Focus,”Organization Science, 13(January-February), 18–35.
61.
SinghapakdiAnusorn, and VitellScott J. (2007), “Institutionalization of Ethics and Its Consequences: A Survey of Marketing Professionals,”Journal of the Academy of Marketing Science, 35(Summer), 284–94.
62.
CraigSmith N. (1993), “Ethics and the Marketing Manager,” in Ethics in Marketing, Craig SmithN., and QuelchJohn A., eds. Homewood, IL: Richard D. Irwin, 1–34.
63.
SniderJamie, HillRonald Paul, and MartinDiane (2003), “Corporate Social Responsibility in the 21st Century: A View from the World's Most Successful Firms,”Journal of Business Ethics, 48(2), 175–87.
64.
SparksJohn R., and HuntShelby D. (1998), “Marketing Researcher Ethical Sensitivity: Conceptualization, Measurement, and Exploratory Investigation,”Journal of Marketing, 62(April), 92–109.
65.
StromStephanie (1996), “A Sweetheart Becomes Suspect: Looking Behind Those Kathie Lee Labels,”The New York Times, (June 27), (accessed April 20, 2008), [available at http://query.nytimes.com/gst].
TreviñoLinda K., WeaverGary R., and ReynoldsScott J. (2006), “Behavioral Ethics in Organizations: A Review,”Journal of Management, 32(December), 951–90.
70.
TrudelRemi, and CotteJune (2009), “Does It Pay to Be Good?”Sloan Management Review, 50(Winter), 61–68.
VitellScott J., RallapalliKumar C., and SinghapakdiAnusorn (1993), “Marketing Norms: The Influence of Personal Moral Philosophies and Organizational Ethical Culture,”Journal of the Academy of Marketing Science, 21(Fall), 331–37.
73.
The Wall Street Journal (2009), “Consumers Still Shun Peanut Butter,” Eastern Edition, 253 (March 11), D2.
74.
WeberJames, and GillespieJanet (1998), “Differences in Ethical Beliefs, Intentions, and Behaviors,”Business & Society, 37(December), 447–67.
75.
WeberJames, and WasieleskiDavid (2001), “Investigating Influences on Managers’ Moral Reasoning,”Business & Society, 40(March), 79–110.
76.
WoldHerman (1982), “Soft Modeling: The Basic Design and Some Extensions,” in Systems Under Indirect Observation: Causality, Structure, and Prediction, JöreskogKarl G., and WoldHerman, eds. Amsterdam: North-Holland, 1–54.
77.
WrightPeter, MukherjiAnanda, and KrollMark J. (2001), “A Reexamination of Agency Theory Assumptions: Extensions and Extrapolations,”Journal of Socio-Economics, 30(5), 413–29.
