The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/1463-5771.htm

Unethical
Internal and vendor employees’ behaviors in
unethical behaviors in the supply the supply
chain
chain: the case of India
Gawon Yun and Maling Ebrahimpour 59
College of Business, University of Rhode Island, Kingston, Rhode Island, USA
Received 21 January 2019
Prabir Bandyopadhyay Revised 6 July 2019
Accepted 6 July 2019
Symbiosis Institute of Business Management Pune,
Symbiosis International (Deemed University), Pune, India, and
Barbara Withers
University of San Diego, San Diego, California, USA

Abstract
Purpose – The purpose of this paper is to examine the impact of a corporate ethical policy, such as a code of
ethics, on the unethical behavior of internal and vendor employees in the supply chain in India. It also aims to
find whether International Standards Organization (ISO) certification of vendors affects the result and any
significant relationship between management commitment and unethical behavior can be supported by the
findings as well.
Design/methodology/approach – Empirical analyses were conducted on a survey consisting of 43 questions
comprising 181 valid responses. Multiple regression analysis that includes four independent variables – code of
ethics, management commitment, supply chain principles and personal values taking unethical behavior as
dependent variable – was used to find the significance of the relationship.
Findings – The implementation of a code of ethics, management commitment, supply chain principles and
personal values all have a negative association with unethical behavior. Personal values, measuring a firm’s
financial aspects for non-compliance to ethical behavior, have a positive association with unethical behavior. The
relationships of top management commitment, personal values with internal employees’ unethical behavior are
significant. The significant relationship between management commitment and unethical behavior can be
supported by the findings as well. It was also found that ISO certificates and firm size as the control variables did
not have any effect on the relationship between the independent variables and unethical behavior. The analysis
also shows that ISO 26000 certificate, the international standard for socially responsible operations, does not
impact this relationship.
Research limitations/implications – Measuring substantial managerial effort for corporate social
responsibility (CSR) practices by asking questions like, “how committed employees think top management
is to social responsibility,” may not fully measure substantial managerial effort for CSR practices. To
improve the results of the current study, future research can use the CSR index or disclosure as a measure
to better reflect management commitment and practice for social responsibility. Second, the current study
is limited to measuring how many occurrences of unethical behavior are witnessed by employees instead of
what specific unethical behavior is more often witnessed. Considering India has the second largest
population in the world, 181 responses may not represent the true practices in the business environment in
India for generalization.
Practical implications – The findings suggest that management should put more of an emphasis on
improving the commitment of upper-level managers to decrease the overall unethical practices of their
employees. The study finds that employees’ personal values influence their ethical behavior. Therefore,
communications and training of employees at all levels should emphasis on improving personal values.
Social implications – Businesses should influence academics to incorporate personal value building in
course curricula. The Indian CSR law should incorporate the holistic view of CSR taking care of needs of all
stakeholders under the provision of the regulation. In 2015, India became the first country in the world to
legislate CSR practices in corporations but it misses the opportunity to sensitize the management and
employees on ethical practices as it mainly identified philanthropic expenses as mandatory CSR spending and
silent on ethical business practices. Benchmarking: An International
Journal
Vol. 27 No. 1, 2020
pp. 59-80
The authors sincerely acknowledge the contribution of the anonymous reviewers for their insightful © Emerald Publishing Limited
1463-5771
comments, which has helped the authors to make the manuscript in its present form. DOI 10.1108/BIJ-01-2019-0038
BIJ Originality/value – The present study contributes to the literature by bringing supply chain context to the
effect of different factors on unethical behaviors and interaction of internal and vendor firms in terms of
27,1 ethical practices. There are several studies on business ethics in different countries including China, but in the
case of India similar studies are not much. The present study fills the gap.
Keywords Supply chain, Corporate social responsibility (CSR), Business ethics, Code of ethics,
Unethical behaviour
Paper type Research paper
60
Introduction
Corporate social responsibility (CSR) has become increasingly important in the global
supply chain. Firms are expected to be profitable and socially responsible in their
management and decision making. The media is replete with reports of scandals and
unethical behavior in both large and small organizations, as well as among individual
employees. Employee-centered ethical practices are an important success factor for
corporate sustainability (Singh et al., 2019). For example, Guardian (2011) reported that
although Apple Inc. claims to be committed to CSR, as reflected in their code of conduct, the
company has a major supplier, Foxconn, the company whose inhumane work conditions
encouraged its employees to commit suicide. Public outcry led to Apple forcing Foxconn to
improve its treatment of employees (Hayatt, 2012). More recently, Uber’s CEO and his senior
executives were forced out by investors after the disclosure of hostile work environments
and sexual harassment was made public (Segal and Mullen, 2017). Similar disclosures have
forced firms around the world to consider CSR in their strategic plans, which are often
carried out by adopting formal policies, such as a code of ethics and code of conduct. Despite
increased interest in ethical behavior in supply chain contexts in the west, the adoption of
CSR in developing countries has been slow; particularly, in India it is more philanthropic in
nature (Chahoud et al., 2007). Even extant literature examining the importance of
considering corporate environmental ethics is limited (Kasar and Singh, 2017). In a recent
paper, Mani et al. (2018) suggested the need of integrating social sustainability aspects into
the management of supply chains in the context of emerging economies. Subramanian and
Gunasekaran (2015) have pointed out that sustainability aspects of supply chain
management have not been reviewed adequately in literature. However, as major exporters
have increased awareness of the effects of pollution on their citizens, China and India have
become more aware of the benefits of CSR activities beyond the potential for increased
economic performance. This has led to firms such as Foxconn and Tata to implement formal
CSR policies as a response to the disclosure of unethical behavior (ENS Economic Bureau,
2016). While there have been abundant studies on business ethics in China regions including
Hong Kong and Taiwan with respect to their cultural aspects that affect ethical conduct, few
have been done in India (Yin and Quazi, 2018).
Organizations are promoting diversity, openness and efficiency through adaptive
performance (Pradhan et al., 2017), but there is a paucity of empirical studies examining the
efficacy of various policies on promoting and improving employee behavior and ethical
concerns in a supply chain context (Quarshie et al., 2016) – particularly examining the
unethical practices of both internal and external stakeholders. While we can question the
efficacy of the policies taken by organizations, policies play a significant role, as good
leadership and practices among leaders help develop the behavior of employees (Zaabi et al.,
2017). For this reason, in this study, we attempt to investigate the influence of these policies on
unethical behavior within the supply chain. Using a survey of 305 firms in India, we
empirically examine the impact of a code of ethics on the unethical behavior of internal and
vendor employees in the supply chain. In addition, we identify relevant factors including
management commitment, employees’ perceptions of ethics, and firm orientation and how
they may influence unethical behaviors. In an early study in a similar context, Mathews (1987)
also examined the effect of ethical guidelines and the role of management in improving ethical Unethical
practices. However, our study contributes to the literature by examining the supply chain behaviors in
context and the effects of different factors on unethical behaviors and interaction of internal the supply
and vendor firms in terms of ethical practices. The central issue of the research question that
we are exploring is: what is the impact of the implementation of a code of ethics, personal chain
values, supply chain principles and management commitment on the unethical behavior of
internal stakeholders, such as employees of the organization, and external stakeholders, the 61
employees of the vendors. The remaining sections of the paper are comprised of a literature
review, methods, results, discussion and conclusion.

Literature review
The literature in the domain of business ethics, stakeholder theory, CSR from developing
countries and the supply chain context is reviewed, and toward the end we present our
hypotheses after a critical examination of the extant literature.

Theoretical underpinnings – examining business ethics in the context of stakeholder theory

Expanding the scope of shareholders to be shown as a more important component of firms’
strategic decisions, the stakeholder theory explains how different stakeholders are associated
with each other. Unlike shareholders who are primarily concerned with the financial performance
of an organization by owning its shares, stakeholders can be any groups or individuals who
influence and are influenced by firms in various ways. Donaldson and Preston (1995) explained
that the traditional input–output model of corporations considers suppliers, investors and
employees as the input and customers as the output. However, the stakeholder model presents
the simultaneous interactions of all stakeholders, including governments, investors, suppliers,
employees, consumers, communities and so forth. Often related to organizational ethics, the
stakeholder theory further posits that management efforts should be for the benefit of all
stakeholders, which would mean business ethics is one such effort (Phillips, 2003).
Goodpaster (1998) noted that managers have two different moral obligations. Although as
human beings they must be concerned with the results and impact of their moral or immoral
decisions, in a management role, their moral obligation leans toward what can better achieve the
firm’s financial goals. However, Cragg (2002) argued that unethical decisions can be made and
justified when, for example, a violation of the laws can increase profits or avoid loss for the firm
at no increased risk. Not only attached to management roles, other factors affect how individual
employees form “what is ethical” and “whether to make ethical or unethical decisions.”
Donaldson and Dunfee (1994), through the social contract theory, also identified that moral
rationality or uncertainty (through unethical employee compensation or unethical systems and
practices), priority rules and norms can be bonded to individuals to make them behave ethically.
Studies attempting to examine business ethics are limited to examining the unethical
conduct of internal employees, rather than extending this examination to external
stakeholders. In this sense, the stakeholder theory provides a framework for the current
study by suggesting that there is a relation between an organization’s management and the
moral values of stakeholders in the supply chain. With our research focus on stakeholders in
the supply chain, the integration of both internal and external stakeholders helps explain
whether business ethics imposed on internal stakeholders can affect the behaviors of
external stakeholders in the supply chain. As we are interested in studying the interaction
effect of ethical behaviors of both cohorts – internal employees and vendor’s employees – we
have examined both in our study. In particular, this study identifies internal employees and
vendor employees as two primary internal and external stakeholders, investigating whether
corporate moral values, ethical policy and managerial practices are associated with
stakeholders in the upstream of the supply chain.
BIJ Corporate Social Responsibility (CSR)
27,1 CSR is defined as “the social responsibility of business encompasses the economic, legal,
ethical and discretionary expectations that society has of organizations at a given point in
time” (Carroll, 1979 p. 500). CSR has led firms to encourage socially responsible practices
among business partners who are in their supply chains. The literature has raised the
importance of considering CSR activities as a crucial part of supply chain management
62 (Carter, 2000; Carter and Jennings, 2002). A number of studies (Saeidi et al., 2015; Kang et al.,
2016; Wang et al., 2015) have shown that CSR activities can have a positive impact on firm
performance (Margolis and Walsh, 2003). This is driven by how customers currently
perceive CSR as an integral part of corporate performance. Customers care about firms’
social activities, which encompass “doing good” and “not doing any harm” to society. In this
regard, ethical or unethical behavior at the firm level also leads to the decision to purchase
products or service (Creyer, 1997). The CEC (2002) report has recommended that CSR
practices be encouraged by improving codes of conduct, management standards and
assessment guidelines in the International Standards Organization (ISO). CSR codes, such as
ISO and SA 8000, build trust and improve coordination among firms in the supply chain
(Ciliberti et al., 2009, 2011). Still other authors suggest that supplier selection process does
not adequately cover the sustainability issues, which should be included to give justice to
CSR in supply chain management (Faisal et al., 2017).

CSR and business ethics in developing countries

Many studies have examined business ethics in the global environment. Baughn et al. (2007)
found strong relationships between CSR and a country’s economic, political and social
contexts and that the institution-level capacity to promote and support CSR practices is
important in these relationships. For example, employees in developing regions are more
likely to be involved in unethical practices, which can result in a substantially negative
impact on society as a whole (Kashif et al., 2018; McCarthy et al., 2012). The unethical
practices in these regions make it more difficult for multinational firms to manage the CSR
compliance of their partner firms. For this reason, many studies on CSR and business ethics
deal with CSR practices based on region- and country-specific or cultural differences. For
example, Kim and Kim (2010) examined the influence of cultural values on the perceptions of
CSR in South Korea and found a relationship between Hofstede’s cultural value dimensions
and public relations practitioners’ perceptions of CSR. However, they found that social
traditionalism values can better explain CSR attitudes. Although business ethics is studied
globally, it is still more prevalent in North America and Europe than in Asian regions
(Rossouw, 2011). However, with the extant literature indicating that culture has a strong
positive relationship with business managers’ ethical attitudes (Christie et al., 2003), it is
important to understand the ability of disclosure and transparency to encourage better
practice for ethical behavior regarding the influence of culture and business practice
(Kimber and Lipton, 2005). Current studies on CSR and ethical issues in developing
economies have examined East Asian regions, especially because of their rapid economic
growth in recent years. Cheung et al. (2010), due to the impact of Asia on the global market
as a fast-growing region, examined the relationship between CSR and market valuation in
Asian emerging markets. While recognizing the characteristics of Asian markets and their
different corporate practices, the authors found a positive association between CSR and
market valuation based on the Credit Lyonnais Securities Asia CSR score. CSR and business
ethics have been considered increasingly important in East Asian countries (Zhou et al.,
2011). However, while many studies have examined ethical issues in developing countries,
there has been less attention to South Asian countries, such as India and Pakistan. It was
pointed out by Babu et al. (2018) that the sustainability issues, which are an integrated
component in CSR, are not covered in measuring the managers in the tourism sector with
particular reference to India. In the same line, Dubey and Ali (2015) have pointed out that Unethical
economies like India and China should ensure effective implementation of sustainability behaviors in
policies along the supply chain so to achieve sustainable growth. the supply
chain
CSR and business ethics in the global supply chain
Roberts (2003) examined the relationship between corporate ethical reputation and labor
practices in supply chain networks and found that to build and maintain their reputation 63
and effectively implement ethical sourcing codes of conduct, firms must develop systematic
mechanisms for interacting with all their key stakeholders. Maloni and Brown (2006)
identified the unethical procurement process as one of the new dimensions to CSR in the
context of the food supply chain. Ethical issues occurring in the procurement process
include power abuse or unfair treatment to suppliers, bribery, abuse of contract terms, etc.
According to Carter (2000), these issues can be caused by different perceptions of buyers
and suppliers toward various ethical issues. Due to this disparity in the perception of ethical
behaviors, researchers tried to address the needs for the interaction between buyers and
suppliers in the supply chain in this regard. Carter and Jennings (2002) suggested that
purchasing and logistics managers can influence purchasing decisions based on social
responsibility (PSR) practices in their supply chain relationships, possibly through their role
in negotiations. The supplier code of conduct (SCC) is positively influenced by hierarchical
relation-norms governance and self-regulations ( Jiang, 2009a). However, the suppliers’
unethical behaviors may be driven by an excessive workload imposed on them.
Outsourcing to developing countries has increased the interest in social and ethical issues
globally. Jiang (2009b) identified price pressure, production complexity and contract duration as
the antecedents to ethical supplier conduct and inter-organizational governance. Furthermore,
the author also found that the current reliance on buyer-to-supplier governance is not effective
as peer-to-peer governance in demonstrating a supplier’s compliance with the SCC. For this
reason, countries such as China have attempted to institutionalize ethical international
standards as a government policy (Krueger, 2008). However, a formal ethical policy between
buyers and suppliers is still implemented to set the ethical standards in these relationships.
Mamic (2005), based on interviews with managers of 22 multinational enterprises (MNEs) and
their suppliers, finds that the MNEs dominantly influence the SCC implementation in managing
global supply chains. Although other business functions, such as accounting and management,
have drawn considerable attention to the importance of social responsibility and ethical issues,
there has been less attention to logistics. An empirical study by Murphy and Poist (2002)
suggested that logistics policies have an important role in the ethical behavior of firms.

Factors affecting unethical behavior

Code of ethics. As an increasing number of firms have adopted a formal ethical policy as an
ethical norm, many studies have examined firms’ compliance with ethics policy and the
impact it has on CSR practices. Egels-Zanden (2010) analyzed the current misconduct of
Chinese toy suppliers to their Swedish retailers regarding their actual compliance to the
retailers’ standards; the author found that approximately two-thirds of the Chinese suppliers
did not comply with their retailers’ codes of conduct. Helin and Sandstrom (2008) studied the
cross-cultural aspects of implementing ethical codes in American firms and their Swedish
subsidiaries and suggested that fundamental ethical codes may be universally understood,
yet these codes should be carefully adjusted when implemented in different cultural
contexts. A global corporate code of ethics has developed in terms of the content and
regional and industrial differences based on the principles of the UN Global Compact, which
includes human rights, labor, bargaining, environment and anti-corruption (Stohl et al.,
2009). Stohl et al. (2009) reported that these differences are likely to arise because of various
BIJ traits or values embedded in different cultures and environments. In the context of medical
27,1 supply chain, Kaynak et al. (2015) studied the effect supply chain unethical behavior on
buyer–supplier relationship in medical supply chain. Their study indicates that only the
fraudulent unethical behavior of the supplier directly affects the relationship while
procedural and distributive justice of the buyer negatively influences the relationship.
Alon et al. (2010) highlighted that there is a significant difference among these countries in
64 the implementation of CSR processes. Among the BRIC countries, India in particular has the
highest preference for a code of ethics for its CSR communication. Garcia-Sanchez et al. (2011)
found that the effectiveness of ethical codes on controlling unethical conduct is different in the
context of developed and developing countries that have varying levels of education.
The impact of corporate ethics and CSR practices is often recognized by the financial
performance of firms. However, prior to the financial results, a corporate ethical climate that is
built on an ethical policy can affect employees’ attitudes and their behavior at work, which may
impact firm performance (Chun et al., 2011). There are contrasting results in the literature on the
influence of a code of ethics and code of conduct on employees’ behavior (Schwartz, 2001). Cleek
and Leonard (1998) demonstrated that a corporate code of ethics does not influence an
individual’s ethical decision making in organizations. In contrast, Adams et al. (2001) stated that
a code of ethics has a positive impact on the organizational climate (e.g. supportiveness for
ethical behavior, freedom to act ethically and satisfaction) and perception of ethical behavior at
firms. These contrasting views on the effect of ethical policy among studies can be affected by
the quality and content of an ethical policy formed based on company-specific goals and CSR
performance (Erwin, 2011). Chen and Slotnick (2015) have studied the linkage between firm’s
competitiveness and ethical sourcing and disclosure of supply chain sources. And their findings
suggest that firm’s policy toward disclosure is a function of not only cost of disclosure but also
of the actions exhibited by its competitors and how it will affect its own market share. The
effectiveness of ethical codes relies on not only what ethical codes are about, but also how
they are communicated (Kaptein, 2011). However, regardless of these results, firms continuously
adopt formal written CSR policy to encourage their internal stakeholders to behave ethically
and prevent their unethical behaviors. Despite the literature presenting contrasting views on the
effectiveness of ethical guidelines, an abundance of studies suggests that although the content
and quality of ethical policy matters, if implemented appropriately, it can promote ethical
behaviors by setting up an ethical climate.
Before presenting the hypothesis, we would like to highlight that the purpose of the study
is focused on the “unethical behavior” of internal and external stakeholders, and we have
preferred double negatives in our hypothesis formation. And our data-capturing instrument is
also designed in light of this orientation.
Thus, our first hypothesis is as follows:
H1. The implementation of a code of ethics has a negative impact on internal employees’
unethical behavior.
Business ethics has become an integral part of organizations’ decision-making process.
However, ethical issues and the relevant policy in developing countries need to be studied
further because of the unethical behavior caused by economic status, immorality and structural
deficiencies in these societies (Rossouw, 1994). For example, a study on Chinese footwear
manufacturer by Yu (2008) examined the social impacts of labor-related CSR policies and codes
of conduct on labor standards. Yu found that labor rights abuse among Chinese firms is due to
the conflict between profit maximization and workers’ rights, the competition in the
marketplace, and inadequate legal protection for workers. Tsalikis et al. (2008) investigated the
status of business ethics in China and India and found that China has a lower Business Ethics
Index (BEI) than the USA, but India has an even lower BEI than China. This suggests that even
though researchers have studied the impact of ethical policy or standards, further research Unethical
efforts are needed to evaluate the policy as a tool for CSR compliance in the supply chain behaviors in
context (Quarshie et al., 2016), particularly in developing regions. the supply
Personal values. Personal values are “individual beliefs about desirable behaviors and
goals that are stable over time and which influence decision making” (Crane and Matten, 2016,
chain
p. 149). Personal moral values or the philosophy of individuals in organizations also can be
associated with unethical behavior (Allen and Davis, 1993). Bass et al. (1998) found that one’s 65
personal moral philosophy influences the ethical judgments and ethical behavioral intentions
in decision making; individuals evaluate differently when they are faced with ethical questions
(Mayo and Marks, 1990). Schwartz (2001) indicated that employees are encouraged to behave
ethically because of their personal values, fear of discipline (disadvantages) and loyalty to a
company, but they do not comply with a code of ethics because of self-interest, the
environment (e.g. peer pressure, etc.), the company’s interest and ignorance. Nitsch et al. (2005)
reported that implementing codes of conduct and the appropriate sanctions for the code
violations is important in the effectiveness of these codes. However, despite their effectiveness,
not reporting problems of code violations hinders firms from exercising their codes of conduct.
Nitsch et al. (2005) argued that the attitudes developed in an educational setting that do not
encourage reporting observed violations are likely the cause of not reporting problems in the
workplace. Similar to Schwartz (2001), Finegan and Theriault (1997) found that the
effectiveness of a code of ethics depends on the individuals’ personal values and the values
behind the organizational code of ethics. Their findings suggest that how employees evaluate
the code of ethics can predict violations based on the similarity in their values. In addition,
individual moral values are also influenced by the moral values set by firms, as explained
earlier by the stakeholder theory. For example, employees conduct unethical behavior to meet
financial goals. This indicates that employees’ ethical or unethical decisions are greatly
influenced by the employees’ moral values, which are developed based on both the
individuals’ and societal attitudes toward ethical conduct. In other words, employees’ moral
values are formed by not only individual motivation, but also corporate culture and climate in
terms of CSR performance (Collier and Esteban, 2007). Cragg (2002) also suggested that
managers have moral obligations both as human beings and managers. That is, managers
must consider the impact of their behavior on their stakeholders or strive only to maximize
profits for their firms. Thus, these two different moral obligations can form the employees’
personal values as to whether to comply with ethical norms or regulations. The different
moral obligations can be influenced by managerial motivation, accountability structure, the
relationship of ethical behavior and financial results (Donaldson and Dunfee, 1994). Based on
the literature, personal values seem to be considered by two aspects that motivate compliance
and non-compliance to ethical behavior standards: personal moral values to behave ethically
are expected to lead to ethical behavior, while personal values for non-compliance can result in
unethical behavior:
H2. Personal values are associated with internal employees’ unethical behavior.
H2a. Personal values for compliance to a code of ethics have a negative impact on internal
employees’ unethical behavior.
H2b. Personal values for non-compliance to a code of ethics have a positive impact on
internal employees’ unethical behavior.
Supply chain principles. In addition to implementing the codes and moral values of individual
employees, firms want their moral values to be applied to their operations. By adopting moral
values as corporate principles at the firm level, they can enforce ethical behavior to employees in
an implicit way. These principles can be differentiated from moral values at the individual
BIJ employee level in that Schwartz (2005) identified respect, responsibility, fairness, caring,
27,1 citizenship, trustworthiness, honest, loyalty and so forth as important moral values that should
be integrated as the principles of a code of ethics. Donker et al. (2008) used accountability,
courage, excellence, fairness, honesty, honor, respect, trust, integrity and responsibility as a
corporate value index; they demonstrated that respect, responsibility, integrity and trust are the
most relevant indices for a code of ethics and that these indices have a positive association with
66 firm performance. In the context of the current study, supply chain principles are referred to as
corporate ethical values, which particularly focus on the three principles of honesty, respect and
trust. Trust is often recognized as a business tool in the supply chain relationship; however, it is
an attitude in relationships that develops personal responsibility (Brenkert, 1998). Among
various types of trust, identity- and knowledge-based trusts are associated with less unethical
behavior. Honesty, or “not faking reality in the pursuit of values than merely not lying to others,”
is also an important moral principle used by effective corporate leaders and plays a significant
role in ethical decision making (Woiceshyn, 2011). Being honest is bounded to morality and seen
as a composite of an individual’s ethical values (Ang and Leong, 2000; Chan, 2008):
H3. Supply chain principles, such as honesty, respect and trust, that are integrated in
daily operations have a negative impact on internal employees’ unethical behavior.
Management commitment. An extensive number of studies have shown the influence of
management commitment on employees’ performance and outcomes in various aspects (e.g.
safety, service quality, employee behavior, financial performance and non-financial
performance) (Cheung and To, 2010; Michael et al., 2005; Kim et al., 2009; Babakus et al.,
2003; Verschoor, 1998; Vig and Dumicic, 2016). How employees perceive organizational support
plays an important role in individual engagement with CSR activities (Lamm et al., 2015). In
particular, the literature indicates that firms’ management commitment to ethical behavior is
positively associated with their CSR performance. For example, Jones and Kavanagh (1996)
supported the association between managerial influence and unethical behavior at work. They
identified managerial influence as one of the most important situational factors that can
influence employees’ unethical behavioral intentions. Managers committed to both ethics and
firm performance can play an important role as moral actors for more integrated ethical
practices when it comes to improving overall corporate ethics by maintaining an ethical climate
(Weaver et al., 1999; Kaptein, 2004). As one of the more important aspects of CSR performance,
the ethical issues of employees are likely influenced by how their firm considers business ethics,
which is often understood by how upper-level management, including the CEO and managers,
copes with existing and potential ethical issues. Godos-Diez et al. (2011) suggested that a CEO’s
emphasis on ethics and social responsibility, regardless of a firm’s size, affects the perception
and consequences of ethical and social commitment. Thus, the more committed managers are to
ethical issues, the more employees will consider ethical problems on a daily basis. On the other
hand, employees may not be as conscious of the impact of unethical conduct at either or both
the individual and firm level when managers or top management do not pay much attention to
these ethical concerns. Lalwani et al. (2018) have argued that there is a gap between what the
companies’ policy says on sustainable practices and what they do. Although there is a positive
relationship between top management’s ability and the firm’s CSR performance, the degree of
the performance may vary based on the social and geographical environment (Yuan et al., 2017).
Thus, the fourth hypothesis is developed as follows:
H4. Management’s commitment has a negative impact on internal employees’ unethical
behavior.
The current study attempts to examine the impact of relevant factors on the unethical
behavior of both internal employees and vendor employees in the supply chain. Thus, the
dependent variable, an employee’s unethical behavior, is measured from a firm’s internal Unethical
employees’ and its vendor employees’ perception. H1–H4 are developed to examine the behaviors in
impact of the variables on the organization’s management of internal employees (see Figure 1). the supply
H5–H8 are developed to measure the impact of those variables on vendor employees’
ethical behavior (see Figure 2). Based on the interaction of internal and external chain
stakeholders on ethical issues, each hypothesis is developed at two levels to investigate the
impact of an individual firm on both its internal employees and vendor employees in its 67
supply chain. Thus, the hypotheses are developed accordingly as follows:
H5. The implementation of a code of ethics has a negative impact on vendor employees’
unethical behavior.
H6. Personal values influence vendor employees’ unethical behavior.
H6a. Personal values for compliance to a code of ethics have a negative impact on
vendor employees’ unethical behavior.
H6b. Personal values for non-compliance to a code of ethics have a positive impact on
vendor employees’ unethical behavior.
H7. Supply chain principles, such as honesty, respect and trust, that are integrated into a
firm’s daily operations have a negative impact on vendor employees’ unethical behavior.
H8. Management commitment has a negative impact on vendor employees’ unethical
behavior.

Code of Ethics
H1–

Personal Values H2a– and H2b+

(compliance and
Unethical
non-compliance)
Behaviors
H3–
Supply Chain
H4– Figure 1.
Principles
Representation of the
hypotheses – internal
Management employees’ unethical
Commitment behaviors

Code of Ethics
H5–
Personal Values
(compliance and H6a– and H6b+ Unethical
non-compliance) Behaviors
H7– Vendor Employees Figure 2.
Supply Chain Representation of
Principles H8– hypotheses – influence
of internal or vendor
Management employees’ unethical
Commitment behaviors
BIJ Methods
27,1 Sample and data collection
We used a survey instrument for the purpose of the current study. The survey is comprised
of 43 questions based on five-point Likert scales, with “I don’t know” as an option, along
with a few dichotomous responses. The “I don’t know” option increases the reliability
because it allows respondents to exclude items for which they cannot provide correct
68 answers. The initial questionnaire was developed based on a review of the relevant
literature and an established survey (Withers and Ebrahimpour, 2013) in the area of CSR
and ISO 9000 certification. The questionnaire was refined through a two-stage pilot-test
process. The repetitive pre-testing process was adopted to increase the reliability of our
survey instrument (Dillman and Bowker, 2001). First, it was tested by business students at a
university in the USA. As we have used students in the first stage, one may question the
justification of this decision. Several studies confirmed that students behave like
experienced managers, particularly in the supply chain context (Lee et al., 2018). Based on
the pilot test results, corrections were made. To further clarify and improve the validity, the
revised survey was tested by a group of business professionals of a supply chain
organization. We have designed the questions to directly focus on and address only one
issue and thus avoided the need to determine convergent and divergent validity. The final
questionnaire was distributed in 2015 through e-mails to 728 supply chain professionals in
Indian firms and multinational firms across several industries operating in India. The
contact details of the supply chain professionals were purchased from a private database,
which became the sample frame for this survey. The online survey was primarily sent to
employees from manufacturing, procurement, pharmaceutical and logistics industries. The
respondents were comprised of employees with 1–20 years of work experience. The total
number of the initial responses was 188, a 25.8 percent response rate. Five responses with a
0 percent completion rate were removed. Then, we eliminated two additional responses with
less than a 15 percent completion rate in which the only given answers were on the
respondent’s demographics or basic information of the firm. This resulted in 181 responses.
Missing values (of the total) were imputed using the series mean. The sample demographics
are presented in Table III. The scale reliability was determined using Cronbach’s α, as
shown in Table IV and discussed in the Results section.

Independent variables
Code of ethics. The implementation of a code of ethics was measured by asking whether the
company has a formal written ethical policy, such as a code of ethics and code of conduct.
The respondents’ answers could be yes, no or I don’t know.
Management commitment. This was measured by asking how committed the top
management of the company is to social responsibility. This measure was based on a five-
point Likert scale, with 1 representing not committed at all and 5 completely committed.
Supply chain principles. These were measured by asking how often honesty, respect and
trust are applied as principles to daily supply chain operations. Honesty, respect and trust
were selected from the list of moral values provided by Schwartz (2005), which should be
integrated as the principles for a code of ethics. Each principle was measured based on a
five-point Likert scale, with 1 representing never and 5 quite often.
Personal values. These were measured at two levels: reasons for compliance and
non-compliance. In detail, each was measured by asking the respondents to provide a rating
based on the importance of each factor and the significance of each factor as a barrier to
ethical behavior in supply chain management. Table I provides the list of the items used to
measure personal values. The questions asking the reasons for non-compliance and
compliance consist of nine items and eight items, respectively. These items have been
Reasons for non-compliance Reasons for compliance
Unethical
behaviors in
Top management does not support it To meet corporate objectives the supply
Employees do not support it To increase market share
It would be too difficult to monitor and control Customers expect it chain
Lack of employee training on company’s code of ethics Vendors expect it
Poor communications from management about importance To improve public image
of ethical behavior 69
No accountability for unethical behavior It is the right thing to do
It would hurt the bottom line It will help the bottom line Table I.
It would hinder business negotiations It would help business negotiations Measures for
It would decrease company effectiveness personal values

identified based the extant literature study, mentioned in section Personal values. Each item
was rated based on a five-point Likert scale as well, with 1 representing not significant at all
and 5 very significant.

Dependent variable
Unethical behavior was measured by the number of occurrences of unethical behavior witnessed
by employees. As listed in Table II, 11 different items from alcohol or drug abuse to
discrimination on personal characteristics were used as measures for unethical behavior.
Unethical behavior was measured at two levels: the unethical behavior of internal employees and
the unethical behavior of vendor employees. We examined how ethical policy implementation,
supply chain principles, management commitment and employees’ personal values influence the
unethical behavior of employees within a firm, as well as those in the firm’s supply chain.

Control variables
ISO certification and firm size were controlled for their possible effects. ISO certification was
controlled at two levels. First, we controlled for all types of ISO certification, which
encompasses standards of various aspects of business management. Then, we controlled for
ISO 26000 certification, which specifically requires firms to meet social responsibility
standards. Firm size was measured by the number of employees in the organization.

Results
As presented in Table III, approximately 54 percent of the respondents are mid-level managers,
and their work experience ranges from 1 to 20 years. The largest numbers of respondents are
employees with more than 20 years of work experience in their profession. Firm size greatly

No. Unethical behaviors

1 Abusing drugs or alcohol

2 Engaging in sexual harassment
3 Giving or accepting bribes, kickbacks or inappropriate gifts
4 Falsifying records and reports
5 Lying to employees, customers, vendors or the public
6 Withholding needed information from customers, vendors or the public
7 Misreporting actual time or hours worked
8 Stealing, theft or related fraud
9 Breaking environmental and safety laws or regulations Table II.
10 Abusing or intimidating other company employees Measures for
11 Discriminating on the basis of race color, gender, age or similar categories unethical behaviors
BIJ Work
27,1 experience Firm size ( full-time
Job position (years) employees) Industrya

Lower 21 1–5 23 1–100 39 a. Agriculture, forestry and fishing 0

Middle 99 6–10 31 101–500 46 b. Mining and quarrying 0
Upper 50 11–15 22 501–1,000 29 c. Manufacturing 96
70 n/a 13 16–20 37 1,001–5,000 26 d. Electricity, gas, steam and air conditioning 5
supply
Above 70 5,001–10,000 7 e. Water supply; sewerage, waste management 0
20 and remediation activities
10,001–25,000 7 f. Construction 3
25,001–50,000 9 g. Wholesale and retail trade; repair of motor 1
vehicles and motorcycles
more than 50,000 18 h. Transportation and storage 5
n/a 2 i. Accommodation and food service activities 1
j. Information and communication 25
k. Financial and insurance activities 0
l. Real estate activities 5
m. Professional, scientific and technical activities 10
n. Administrative and support service activities 0
o. Public administration and defense; compulsory 0
social security
p. Education 5
q. Human health and social work activities 5
r. Arts, entertainment and recreation 0
s. Other service activities 16
t. Activities of households as employers; 0
undifferentiated goods- and services-producing
activities of households for own use
u. Activities of extraterritorial organizations 0
and bodies
n/a 7
Table III.
Demographics of Total 183 183 183 183
survey respondents Note: aIndustry classification is based on International Standard Industrial Classification (ISIC)

varies, but about half of the respondents work in the manufacturing industry; none came from
industry groups such as agriculture, mining, administrative jobs and so forth.
The results of our principal component analysis (PCA) assessed the measurement items
for each component of the variables using several different measurement items: supply
chain principles, Personal Values 1 (compliance) and Personal Values 2 (non-compliance).
The component matrix results and reliability analysis indicate high reliability with all three
Cronbach’s α values higher than 0.88: supply chain principles (0.882), Personal Values 1
(compliance) (0.883) and Personal Values 2 (non-compliance) (0.883). The correlation matrix
results for the personal values for non-compliance indicate that the variable is comprised of
two components: Component 1 primarily includes financial barriers to ethical behavior, and
Component 2 includes managerial constraints. The details of the PCA results are presented
in Table IV. Thus, our multiple regression analysis uses two components: Personal Values
2.1, which are the financial factors that hinder employees from conducting themselves
ethically, and Personal Values 2.2, which are managerial factors.
We ran a multiple regression analysis that includes all four independent variables, as
presented in Table V. Model 1 tests the relationship between the independent variables and
internal employees’ unethical behavior; Model 2 tests the relationship between the
independent variables and vendor employees’ unethical behavior.
Variable Component Items Loading Component matrix Cronbach’s α
Unethical
behaviors in
Supply chain principles 1 Honesty 0.817 0.904 0.882 the supply
Respect 0.781 0.884
Trust 0.840 0.917 chain
Personal Values 1 (compliance) 1 1 0.465 0.682 0.883
2 0.713 0.844
3 0.519 0.720 71
4 0.615 0.785
5 0.388 0.623
6 0.362 0.602
7 0.673 0.820
8 0.689 0.830
Personal Values 2 (non-compliance) 1 1 0.666 0.769 0.883
2 0.648 0.760
3 0.494 0.617
7 0.656 0.733
8 0.756 0.791
9 0.812 0.786 Table IV.
2 4 0.720 0.559 Results of principal
5 0.769 0.513 component analysis
6 0.738 0.572 (PCA)

Analysis
Managerial implications
In Model 1, the coefficient estimates of the variables show that the implementation of a code
of ethics, management commitment, supply chain principles and Personal Values 1 all have
a negative association with unethical behavior. Personal Values 2.2, which measure a firm’s
financial aspects for non-compliance to ethical behavior, have a positive association with
unethical behavior. The relationships of top management commitment, Personal Values 1
and Personal Values 2.1 (managerial reasons) with internal employees’ unethical behavior
are significant. In Model 1, significant relationships of management commitment, Personal
Values 1, and Personal Values 2.2 with unethical behavior are found. Thus, H2a and H4
were supported, and H2b was partially supported. The significant relationship between
management commitment and unethical behavior can be supported by the findings as well.
However, in Model 2, which shows the impact on the unethical behavior of vendor
employees, the results were inconsistent. Unlike Model 1, management commitment and
Personal Values 1 are not significantly related to unethical behavior. Rather, Personal
Values 2.1 and 2.2 for non-compliance have a significant relationship with vendor
employees’ unethical behavior. This relationship is inconsistent with the results of Model 1.
Although Personal Values 2.1 have a positive relationship and Personal Values 2.2 have a
negative relationship with internal employees’ unethical behavior, they show reverse
relationships with vendor employees’ relationship. Thus, H6b is not supported. This result
is interesting in that although internal employees are positively influenced by managerial
reasons for their unethical behavior, this is not the case for vendor employees. That is,
perceived managerial barriers encourage internal employees to behave unethically.
However, the unethical behavior of vendor employees is negatively influenced by
managerial reasons for non-compliance but positively influenced by financial reasons.
Whether the vendor is ISO certified or not does not affect this result. Overall, ethical policy
does not impact the unethical behavior of either the internal or vendor employees.
The results suggest that the managerial effort of an individual firm, including the
implementation of a code of ethics, management commitment and adaptation of supply chain
 72
BIJ
27,1

analysis
Table V.
Results of regression
Internal employees Vendor employees
Model 1 – internal employees Model 2 – vendor employees
Variables β Sig. β Sig. β Sig. β Sig. β Sig. β Sig.

(const.)
Code of ethics −0.080 0.263 −0.076 0.286 −0.069 0.332 −0.099 0.184 0.134 0.076 0.133 0.082
Management commitment −0.241 0.002* −0.253 0.001* −0.231 0.003* −0.254 0.002* 0.040 0.620 0.495 0.621
Supply chain principles −0.066 0.424 −0.037 0.661 −0.054 0.513 −0.056 0.507 −0.031 0.723 −0.030 0.729
Personal Values 1 (compliance) −0.235 0.002* −0.246 0.001* −0.251 0.001* −0.224 0.003* 0.072 0.351 0.072 0.353
Personal Values 2.1 (non-compliance) 0.193 0.014* 0.199 0.012* 0.213 0.007* 0.186 0.019* −0.362 0.000* −0.361 0.000*
Personal Values 2.2 (non-compliance) −0.093 0.245 −0.096 0.233 −0.073 0.362 −0.095 0.239 0.272 0.001* 0.272 0.002*
ISO certification 0.096 0.166 0.010 0.889
ISO 26000 −0.133 0.059
Firm size 0.075 0.307
Note: *Significant at 0.05 level
principles, does not have any impact on its vendor employees’ ethical practices in the supply Unethical
chain. Rather, it may be difficult for firms downstream to have considerable managerial behaviors in
impact on the employees of their upstream firms. Individual firms need to make their own the supply
managerial effort to be committed to ethical practices, which, in turn, affects low-level
employees. To implement successful ethical practices in their supply chain partners, the chain
cooperative commitment of managers among firms in the supply chain is needed. As proven
by studies and scandals revealed through the media, the unethical conduct of vendor 73
employees results in financial loss and hurts a firm’s reputation and value.
Further analysis is conducted to examine the difference among respondents at varying
levels of job status within organizations due to about half of the respondents in the mid-level
manager group. Two groups, respondents with mid-level and top-level positions, are
compared, excluding those with low-level positions who represent only about 10 percent of
the total responses. The regression results for the top-level positions did not show a
significant relationship between unethical behaviors of management commitment nor
personal values for non-compliance. This result is surprising that there is difference in
perception among employees on what impacts on the employees’ unethical behaviors.
However, there are two main reasons for this result. First, top-level management is not
directly involved in daily operations where they can observe both internal and vendor
employees’ unethical behaviors. In addition, they are likely to be influenced to a small degree
by upper-level management.

Influence of system certification and firm size

ISO certificates and firm size as the control variables had no effect on the relationship
between the independent variables and unethical behavior. Especially, Model 1 shows that
the ISO 26000 certificate, the international standard for socially responsible operations, does
not impact this relationship.

Theoretical implications
The findings of the current study are valuable in that numerous researchers have tried to
investigate the impact of a code of ethics as an important policy in organizations. Because
corporate ethics is expected not only at a firm, but also at an individual employee level, firms
strive to exercise their social responsibility by integrating an ethical policy as part of their
strategic plan. However, with the literature showing contrasting results, compliance with an
ethical policy in practice has been questionable. The current study demonstrates that a
formal ethical policy does not influence the prevention of unethical behavior; this finding is
especially meaningful in the context of India, where social consciousness about business
ethics is developing. It does not imply that firms should be discouraged from adopting a
code of ethics or code of conduct. Rather, as suggested by the results, firms should focus
more on improving upper-level employees’ commitment to ethical practices. One
explanation for this result can be in how employees are influenced by the existing ethical
policy. Our survey asked respondents whether their firms have a formally written ethical
policy. The implementation of an ethical policy itself may not have a high impact on their
behavior. However, this needs further investigation of other relevant factors, for example,
policy communication, education and so forth, to identify whether the policy can have a
more direct influence on employees. This also leads to the following question: Does merely
documenting a code of ethics indicate its implementation as well? In India, it is mandatory
for listed companies to have a written code of ethics and get it signed by Tier 1 senior
employees at least. Many organizations may be complying with this requirement as a
“check box.”
Furthermore, employees are motivated and discouraged to behave ethically based on
their personal values. It is crucial for firms to understand the sources of employee
BIJ motivation and hindrance. Although employees are aware of the impact of their ethical
27,1 behavior in supply chain transactions on firm performance, a lack of communication and
support from management creates a barrier for employees who want to avoid unethical
behavior. Meeting a firm’s financial goals may not be motivation for employees to perform
their day-to-day corporate tasks. Our results suggest that managerial barriers discourage
employees from complying with corporate guidance on ethical behavior. For example, when
74 an employee behaves unethically but is not accountable or punished for his or her behavior,
other employees may believe that unethical behavior has no negative impact or
disadvantage at the individual level.

Conclusion
Having a formal code of ethics plays an important role in the global business environment,
where the importance of CSR is an integral part of organizational operations. However, we
found that the implementation of a code of ethics does not have a significant effect on
either internal or vendor employees’ unethical behavior in Indian firms. Rather, top
management’s commitment and employees’ personal values as motivating factor for
compliance with ethical behavior have a significant impact on internal employees’
unethical behavior in Indian firms. This result has been found in studies by Shin (2012)
and Wu et al. (2015) in a similar context; the authors demonstrated that CEO ethical
leadership had a positive impact on the ethical climate of the firms and CSR, which
resulted in organizational ethical behavior. However, ethical leadership did not have a
significant impact on vendor employees. In the current study, Personal Values 2.1, or
managerial barriers for ethical behaviors, were shown to have a significant impact on both
internal and vendor employees. We also found a difference among respondents in this
result showing that the relationship between management commitment and unethical
behaviors is not significant among top-level employees. The overall result has practical
implications. In 2015, India became the first country in the world to legislate CSR practices
in corporations, but it missed the opportunity to sensitize the management and employees
on ethical practices, as it mainly identified philanthropic expenses as mandatory CSR
spending and is silence on ethical business practices. The law is under review at present. It
is high time that India should incorporate a holistic view of CSR taking care of the needs of
all stakeholders under the provision of the regulation, as the awareness of CSR in Indian
society will increase and the pressures to comply with the social expectations of business
ethics should also improve ethical behavior. However, especially in a society with strict
hierarchy in the corporate culture, such as India, it seems important for top management
to provide guidance for promoting ethical behavior and discouraging unethical conduct
among employees. This suggests that management should place more of an emphasis on
improving the commitment of upper-level managers to minimize employees’ unethical
practices. Furthermore, employees’ personal values influence their ethical behavior.
Interestingly, however, financial factors did not have a significant influence on internal
employees’ unethical behavior, but it did on vendor employees’ unethical behavior. This
suggests that internal employees’ ethical behavior is motivated by factors at the
individual level (i.e. management and employee support, communication, training and
accountability) rather than from those that influence firms’ financial performance.

Study limitations and future scope of research

Despite these important findings, the current study has limitations that future studies could
address. First, the questionnaire depends on “how employees perceive or witness” the
measured variables. For example, the survey asks respondents “how committed employees
think top management is to social responsibility.” This may not fully measure substantial
managerial effort toward CSR practices. To improve the results of the current study, future
researchers can use the CSR index or disclosure as a measure to better reflect management Unethical
commitment and practice of social responsibility. Second, the current study is limited to behaviors in
measuring how many occurrences of unethical behavior are witnessed by employees the supply
instead of what specific unethical behavior is more often witnessed. For instance, in India,
giving or accepting bribes or inappropriate gifts can be more frequently encountered than chain
abusing drugs or alcohol. Thus, future studies can improve this limitation by considering
the weighted importance of different types of unethical behavior. Furthermore, the sample 75
selection may have limited the generalizability of the current study due to its small sample
size and respondent demographics. Although the survey results had a good response
rate for an online survey, the overall sample size is small and regionally focused.
Considering India has the second largest population in the world, 181 responses may not
represent the true practices in the business environment in India. The results of the current
study can be extended by considering different countries and their unique cultural contexts
and by increasing the sample size to increase generalizability. Future researchers can
provide more rigorous results by improving these limitations.

References
Adams, J.S., Tashchian, A. and Shore, T.H. (2001), “Codes of ethics as signals for ethical behavior”,
Journal of Business Ethics, Vol. 29 No. 3, pp. 199-211.
Allen, J. and Davis, D. (1993), “Assessing some determinant effects of ethical consulting behavior: the
case of personal and professional values”, Journal of Business Ethics, Vol. 12 No. 6, pp. 449-458.
Alon, I., Lattemann, C., Fetscherin, M., Li, S. and Schneider, A.M. (2010), “Usage of public corporate
communications of social responsibility within Brazil, Russia, India and China (BRIC)”,
International Journal of Emerging Markets, Vol. 5 No. 1, pp. 6-22.
Ang, S.H. and Leong, S.M. (2000), “Out of the mouths of babes: business ethics and youth in Asia”,
Journal of Business Ethics, Vol. 28 No. 2, pp. 129-144.
Babakus, E., Yavas, U., Karatepe, O.M. and Avci, T. (2003), “The effect of management commitment to
service quality on employees’ affective and performance outcomes”, Journal of the Academy of
Marketing Science, Vol. 31 No. 3, pp. 272-286.
Babu, D.E., Kaur, A. and Rajendran, C. (2018), “Sustainability practices in tourism supply chain:
Importance performance analysis”, Benchmarking: An International Journal, Vol. 25 No. 4,
pp. 1148-1170.
Bass, K., Barnett, T. and Brown, G. (1998), “The moral philosophy of sales managers and its influence on
ethical decision making”, Journal of Personal Selling and Sales Management, Vol. 18 No. 2, pp. 1-17.
Baughn, C.C., Bodie, N.L. and McIntosh, J.C. (2007), “Corporate social and environmental responsibility
in Asian countries and other geographical regions”, Corporate Social Responsibility and
Environmental Management, Vol. 14 No. 4, pp. 189-205.
Brenkert, G.G. (1998), “Trust, business and business ethics: an introduction”, Business Ethics Quarterly,
Vol. 8 No. 2, pp. 195-203.
Carroll, A.B. (1979), “A three-dimensional conceptual model of corporate social performance”, Academy
of Management Review, Vol. 4 No. 4, pp. 497-505.
Carter, C.R. (2000), “Ethical issues in international buyer–supplier relationships: a dyadic examination”,
Journal of Operations Management, Vol. 18 No. 2, pp. 191-208.
Carter, C.R. and Jennings, M.M. (2002), “Social responsibility and supply chain relationships”,
Transportation Research Part E, Vol. 38 No. 1, pp. 37-52.
CEC (2002), “Corporate social responsibility: a business contribution to sustainable development”,
Commission of the European Communities, Brussels, July 2, available at: https://ec.europa.
eu/europeaid/sites/devco/files/communication-corporate-social-responsibility-sustainable-
development-com2002347-20020702_en.pdf (accessed December 2017).
BIJ Chahoud, T., Emmerling, J. and Kolb, D. (2007), “Corporate social and environmental responsibility in
27,1 India – assessing the UN Global Compact’s role”, available at: www.die-gdi.de/uploads/media/
Studies_26.pdf (accessed February 26, 2018).
Chan, G.K.Y. (2008), “The relevance and value of Confucianism in contemporary business ethics”,
Journal of Business Ethics, Vol. 77 No. 3, pp. 347-360.
Chen, J.Y. and Slotnick, S.A. (2015), “Supply chain disclosure and ethical sourcing”, International
Journal of Production Economics, Vol. 161 No. C, pp. 17-30.
76
Cheung, M.F.Y. and To, W.M. (2010), “Management commitment to service quality and organizational
outcomes”, Managing Service Quality: An International Journal, Vol. 20 No. 3, pp. 259-272.
Cheung, Y.L., Tan, W., Ahn, H. and Zhang, Z. (2010), “Does corporate social responsibility matter in
Asian emerging markets?”, Journal of Business Ethics, Vol. 92 No. 3, pp. 401-413.
Christie, P.M.J., Kwon, I.G., Stoeberl, P.A. and Baumhart, R. (2003), “A cross-cultural comparison of
ethical attitudes of business managers: India, Korea and the United States”, Journal of Business
Ethics, Vol. 46 No. 3, pp. 263-287.
Chun, J.S., Shin, Y., Choi, J.N. and Kim, M.S. (2011), “How does corporate ethics contribute to firm
financial performance? The mediating role of collective organizational commitment and
organizational citizenship behavior”, Journal of Management, Vol. 39 No. 4, pp. 853-877.
Ciliberti, F., de Groot, G., de Haan, J. and Pontrandolfo, P. (2009), “Codes to coordinate supply chains:
SMEs’ experiences with SA8000”, Supply Chain Management: An International Journal, Vol. 14
No. 2, pp. 117-127.
Ciliberti, F., de Groot, G., de Haan, J. and Pontrandolfo, P. (2011), “CSR codes and the principal-agent problem
in supply chains: four case studies”, Journal of Cleaner Production, Vol. 19 No. 8, pp. 885-894.
Cleek, M.A. and Leonard, S.L. (1998), “Can corporate codes of ethics influence behavior?”, Journal of
Business Ethics, Vol. 17 No. 6, pp. 619-630.
Collier, J. and Esteban, R. (2007), “Corporate social responsibility and employee commitment”, Business
Ethics A European Review, Vol. 16 No. 1, pp. 19-33.
Cragg, W. (2002), “Business ethics and stakeholder theory”, Business Ethics Quarterly, Vol. 12 No. 2,
pp. 113-142.
Crane, A. and Matten, D. (2016), Business Ethics: Managing Corporate Citizenship and Sustainability in
the Age of Globalization, Oxford University Press, Oxford.
Creyer, E.H. (1997), “The influence of firm behavior on purchase intention: do consumers really care
about business ethics?”, Journal of Consumer Marketing, VoL. 14 No. 6, pp. 421-432.
Dillman, D.A. and Bowker, D.K. (2001), “The web questionnaire challenge to survey methodologists”, in
Reips, U.D. and Bosnjak, M. (Eds), Dimensions of Internet Science, Pabst Science Publishers,
Lengerich, pp. 159-178.
Donaldson, T. and Dunfee, T.W. (1994), “Toward a unified conception of business ethics: integrative
social contracts theory”, The Academy of Management Review, Vol. 19 No. 2, pp. 252-284.
Donaldson, T. and Preston, L.E. (1995), “The stakeholder theory of the corporation: concepts, evidence,
and implications”, The Academy of Management Review, Vol. 20 No. 1, pp. 65-91.
Donker, H., Poff, D. and Zahir, S. (2008), “Corporate values, code of ethics, and firm performance: a look
at the Canadian context”, Journal of Business Ethics, Vol. 82 No. 3, pp. 527-537.
Dubey, R. and Ali, S.S. (2015), “Exploring antecedents of extended supply chain performance measures:
an insight from Indian green manufacturing practices”, Benchmarking: An International Journal,
Vol. 22 No. 5, pp. 752-772.
Egels-Zanden, N. (2010), “Supplier’s compliance with MNCs’ code of conduct: behind the scenes at
Chinese toy suppliers”, Journal of Business Ethics, Vol. 75 No. 1, pp. 45-62.
ENS Economic Bureau (2016), “Cyrus Mistry hits back at Tata Group with slew of allegations:
fraudulent transactions, unethical ways”, Indian Express, October 27, available at: http://
indianexpress.com/article/business/companies/cyrus-mistry-hits-back-with-slew-of-allegations-
fraudulent-transactions-unethical-ways-3104860/ (accessed June 21, 2017).
Erwin, P.M. (2011), “Corporate codes of conduct: the effects of code content and quality on ethical Unethical
performance”, Journal of Business Ethics, Vol. 99 No. 4, pp. 535-548. behaviors in
Faisal, M.N., Al-Esmael, B. and Sharif, K.J. (2017), “Supplier selection for a sustainable supply chain: the supply
triple bottom line (3BL) and analytic network process approach”, Benchmarking: An
International Journal, Vol. 24 No. 7, pp. 1956-1976. chain
Finegan, J. and Theriault, C. (1997), “The relationship between personal values and the perception of
the corporation’s code of ethics”, Journal of Applied Social Psychology, Vol. 27 No. 8, 77
pp. 708-724.
Garcia-Sanchez, I.M., Rodriguez-Dominguez, L. and Gallego-Alvarez, I. (2011), “Effectiveness of ethics
codes in the public sphere: are they useful in controlling corruption?”, International Journal of
Public Administration, Vol. 34 No. 3, pp. 190-195.
Godos-Diez, J.L., Fernandez-Gago, R. and Martinez-Campillo, A. (2011), “How important are CEOs to
CSR Practices? An analysis of the mediating effect of the perceived role of ethics and social
responsibility”, Journal of Business Ethics, Vol. 98 No. 4, pp. 531-548.
Goodpaster, K. (1998), Business Ethics and Stakeholder Analysis, JAI Press, Greenwich, CT.
Guardian (2011), “Apple factories accused of exploiting Chinese workers”, available at: www.
theguardian.com/technology/2011/apr/30/apple-chinese-factory-workers-suicides-humiliation
(accessed June 2019).
Hayatt, J.C. (2012), “Apple, Foxconn, promise improvements for workers”, Business Ethics, March 29,
available at: http://business-ethics.com/2012/03/29/1747-apple-foxconn-criticized-in-report-
promise-improvements-for-workers/ (accessed June 21, 2017).
Helin, S. and Sandstrom, J. (2008), “Codes, ethics and cross-cultural differences: stories from the
implementation of a corporate code of ethics in a MNC subsidiary”, Journal of Business Ethics,
Vol. 82 No. 2, pp. 281-291.
Jiang, B. (2009a), “Implementing supplier codes of conduct in global supply chains: process
explanations from theoretic and empirical perspectives”, Journal of Business Ethics, Vol. 85
No. 1, pp. 77-92.
Jiang, B. (2009b), “The effects of interorganizational governance on supplier’s compliance with SCC: an
empirical examination of compliant and non-compliant suppliers”, Journal of Operations
Management, Vol. 27 No. 4, pp. 267-280.
Jones, G.E. and Kavanagh, M.J. (1996), “An experimental examination of the effects of individual and
situational factors on unethical behavioral intentions in the workplace”, Journal of Business
Ethics, Vol. 15 No. 5, pp. 511-523.
Kang, C., Germann, F. and Grewal, R. (2016), “Washing away your sins? Corporate social responsibility,
corporate social irresponsibility, and firm performance”, Journal of Marketing, Vol. 80 No. 2,
pp. 59-79.
Kaptein, M. (2004), “Business codes of multinational firms: what do they say?”, Journal of Business
Ethics, Vol. 50 No. 1, pp. 13-31.
Kaptein, M. (2011), “Toward effective codes: testing the relationship with unethical behavior”, Journal
of Business Ethics, Vol. 99 No. 2, pp. 233-251.
Kasar, A.N. and Singh, S. (2017), “Green innovation and organizational performance: the influence of big
data and the moderating role of management commitment and HR practices”, in El-Kassar, A.-N.
(Ed.), Technological Forecasting and Social Change (in press), available at: https://doi.org/10.1016/
j.techfore.2017.12.016
Kashif, M., Zarkada, A. and Ramayah, T. (2018), “The impact of attitude, subjective norms, and
perceived behavioural control on managers’ intentions to behave ethically”, Total Quality
Management & Business Excellence, Vol. 29 Nos 5/6, pp. 481-501.
Kaynak, R., Sert, T., Sert, G. and Akyuz, B. (2015), “Supply chain unethical behaviors and continuity of
relationship: using the PLS approach for testing moderation effects of inter-organizational
justice”, International Journal of Production Economics, Vol. 162, pp. 83-91.
BIJ Kim, H.J., Tavitiyaman, P. and Kim, W.G. (2009), “The effect of management commitment to service on
27,1 employee service behaviors: the mediating role of job satisfaction”, Journal of Hospitality &
Tourism Research, Vol. 33 No. 3, pp. 369-390.
Kim, Y. and Kim, S. (2010), “The influence of cultural values on perceptions of corporate social
responsibility: application of Hofstede’s dimensions to Korean public relations practitioners”,
Journal of Business Ethics, Vol. 91 No. 4, pp. 485-500.
78 Kimber, D. and Lipton, P. (2005), “Corporate governance and business ethics in the Asia-Pacific region”,
Business & Society, Vol. 44 No. 2, pp. 178-210.
Krueger, D.A. (2008), “The ethics of global supply chains in China – convergences of east and west”,
Journal of Business Ethics, Vol. 79 No. 1, pp. 113-120.
Lalwani, S.K., Nunes, B., Chicksand, D. and Boojihawon, D.K. (2018), “Benchmarking self-declared
social sustainability initiatives in cocoa sourcing”, Benchmarking: An International Journal,
Vol. 25 No. 9, pp. 3986-4008.
Lamm, E., Tosti-Kharas, J. and King, C.E. (2015), “Empowering employee sustainability: perceived
organizational support toward the environment”, Journal of Business Ethics, Vol. 128 No. 1,
pp. 207-220.
Lee, S.Y., Ribbink, D. and Eckerd, S. (2018), “Effectiveness of bonus and penalty incentive contracts in
supply chain exchanges: does national culture matter?”, Journal of Operation Management,
Vol. 62, pp. 59-74.
McCarthy, D.J., Puffer, S.M., Dunlap, D.R. and Jaeger, A.M. (2012), “A stakeholder approach to the ethicality
of BRIC-firm managers’ use of favors”, Journal of Business Ethics, Vol. 109 No. 1, pp. 27-38.
Maloni, M.J. and Brown, M.E. (2006), “Corporate social responsibility in the supply chain: an application
in the food industry”, Journal of Business Ethics, Vol. 68 No. 1, pp. 35-52.
Mamic, I. (2005), “Managing global supply chain: the sports footwear, apparel and retail sectors”,
Journal of Business Ethics, Vol. 59 No. 1, pp. 81-100.
Mani, V., Gunasekaran, A. and Delgado, C. (2018), “Enhancing supply chain performance through
supplier social sustainability: an emerging economy perspective”, International Journal of
Production Economics, Vol. 195 No. C, pp. 259-272.
Margolis, J.D. and Walsh, J.P. (2003), “Misery loves companies: rethinking social initiatives by
business”, Administrative Science Quarterly, Vol. 48 No. 2, pp. 268-305.
Mathews, M.C. (1987), “Codes of ethics: organizational behavior and misbehavior”, Research in
Corporate Social Performance, Vol. 9, Jai Press Inc., Greenwich, CT, pp. 107-130.
Mayo, M.A. and Marks, L.J. (1990), “An empirical investigation of a general theory of marketing ethics”,
Journal of the Academy of Marketing Science, Vol. 18 No. 2, pp. 163-171.
Michael, J.H., Evans, D.D., Jansen, K.J. and Haight, J.M. (2005), “Management commitment to safety as
organizational support: relationships with non-safety outcomes in wood manufacturing
employees”, Journal of Safety Research, Vol. 36 No. 2, pp. 171-179.
Murphy, P.R. and Poist, R.F. (2002), “Socially responsible logistics: an exploratory study”,
Transportation Journal, Vol. 41 No. 4, pp. 23-35.
Nitsch, D., Baetz, M. and Hughs, J.C. (2005), “Why code of conduct violations go unreported: a
conceptual framework to guide intervention and future research”, Journal of Business Ethics,
Vol. 57 No. 4, pp. 327-341.
Phillips, R. (2003), Stakeholder Theory and Organizational Ethics, Berrett-Koehler Publishers, San
Francisco, CA.
Pradhan, R.K., Jena, L.K. and Singh, S.K. (2017), “Examining the role of emotional intelligence between
organizational learning and adaptive performance in Indian manufacturing industries”, Journal
of Workplace Learning, Vol. 29 No. 3, pp. 235-247, doi: 10.1108/jwl-05-2016-0046.
Quarshie, A.M., Salmi, A. and Leuschner, R. (2016), “Sustainability and corporate social responsibility
in supply chains: the state of research in supply chain management and business ethics
journals”, Journal of Purchasing & Supply Management, Vol. 22 No. 2, pp. 82-97.
Roberts, S. (2003), “Supply chain specific? Understanding the patchy success of ethical sourcing Unethical
initiatives”, Journal of Business Ethics, Vol. 44 No. 2, pp. 159-170. behaviors in
Rossouw, G.J. (1994), “Business ethics in developing countries”, Business Ethics Quarterly, Vol. 4 No. 1, the supply
pp. 43-51.
chain
Rossouw, G.J. (2011), “A Global comparative analysis of the global survey of business ethics”, Journal
of Business Ethics, Vol. 104 No. 1, pp. 93-101.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A. (2015), “How does corporate social 79
responsibility contribute to firm financial performance? The mediating role of competitive
advantage, reputation, and customer satisfaction”, Journal of Business Research, Vol. 68 No. 2,
pp. 341-350.
Schwartz, M. (2001), “The nature of the relationship between corporate codes of ethics and behavior”,
Journal of Business Ethics, Vol. 32 No. 3, pp. 247-262.
Schwartz, M.S. (2005), “Universal moral values for corporate codes of ethics”, Journal of Business
Ethics, Vol. 59 Nos 1/2, pp. 27-44.
Segal, L. and Mullen, J. (2017), “Uber CEO Travis Kalanick resigns after months of crisis”, CNN Tech,
June 21, available at: http://money.cnn.com/2017/06/21/technology/uber-travis-kalanick-
resignation/index.html (accessed June 21, 2017).
Shin, Y. (2012), “CEO ethical leadership, ethical climate, climate strength, and collective organizational
citizenship behavior”, Journal of Business Ethics, Vol. 108 No. 3, pp. 299-312.
Singh, S., Pradhan, R., Panigrahy, N. and Jena, L. (2019), “Self-efficacy and workplace well-being:
moderating role of sustainability practices”, Benchmarking: An International Journal, available
at: https://doi.org/10.1108/BIJ-07-2018-0219
Stohl, C., Stohl, M. and Popova, L. (2009), “A new generation of corporate codes of ethics”, Journal of
Business Ethics, Vol. 90 No. 4, pp. 607-622.
Subramanian, N. and Gunasekaran, A. (2015), “Cleaner supply-chain management practices for twenty-
first-century organizational competitiveness: practice-performance framework and research
propositions”, International Journal of Production Economics, Vol. 164, pp. 216-233.
Tsalikis, J., Seaton, B. and Li, T. (2008), “The International Business Ethics Index: Asian emerging
economies”, Journal of Business Ethics, Vol. 80 No. 4, pp. 643-651.
Verschoor, C.C. (1998), “A study of the link between a corporation’s financial performance and its
commitment to ethics”, Journal of Business Ethics, Vol. 17 No. 13, pp. 1509-1516.
Vig, S. and Dumicic, K. (2016), “Impact of commitment to business ethics to nonfinancial business
performance”, Interdisciplinary Description of Complex Systems, Vol. 14 No. 2, pp. 165-181.
Wang, D.H., Chen, P., Yu, T.H. and Hsiao, C. (2015), “The effects of corporate social responsibility on
brand equity and firm performance”, Journal of Business Research, Vol. 68 No. 11, pp. 2232-2236.
Weaver, G.R., Treviño, L.K. and Cochran, P.L. (1999), “Integrated and decoupled corporate social
performance: management commitments, external pressures, and corporate ethics practice”, The
Academy of Management Journal, Vol. 42 No. 5, pp. 539-552.
Withers, B. and Ebrahimpour, M. (2013), “The effects of codes of ethics on the supply chain: a
comparison of LEs and SMEs”, Journal of Business & Economic Studies, Vol. 19 No. 1, pp. 24-40.
Woiceshyn, J. (2011), “A model for ethical decision making in business: reasoning, intuition, and
rational moral principles”, Journal of Business Ethics, Vol. 104 No. 3, pp. 311-323.
Wu, L.Z., Kwan, H.K., Yim, F.H., Chiu, R.K. and He, X. (2015), “CEO ethical leadership and corporate
social responsibility: a moderated mediation model”, Journal of Business Ethics, Vol. 130 No. 4,
pp. 819-831.
Yin, J. and Quazi, A. (2018), “Business ethics in the greater china region: past, present, and future
research”, Journal of Business Ethics, Vol. 150 No. 3, pp. 815-835.
Yu, X. (2008), “Impacts of corporate code of conduct on labor standards: a case study of Reebok’s
athletic footwear supplier factory in China”, Journal of Business Ethics, Vol. 81 No. 3, pp. 513-529.
BIJ Yuan, Y., Tian, G., Lu, L.Y. and Yu, Y. (2017), “CEO ability and corporate social responsibility”, Journal
27,1 of Business Ethics, Vol. 157 No. 2, pp. 391-411.
Zaabi, H.H.J.A., Singh, S.K. and Ajmal, M.M. (2017), “Role of organisational commitment, culture and
leadership in managing innovation: a study”, International Journal of Value Chain Management,
Vol. 8 No. 3, p. 270, doi: 10.1504/ijvcm.2017.086841.
Zhou, Z., Nakano, C. and Luo, B.N. (2011), “Business ethics as field of training, teaching, and research in
East Asia”, Journal of Business Ethics, Vol. 104 No. 1, pp. 19-27.
80
Further reading
Chamberlain, G. (2011), “Apple’s Chinese workers treated ‘inhumanely, like machines’ ”, The Guardian,
April 30, available at: www.theguardian.com/technology/2011/apr/30/apple-chinese-workers-
treated-inhumanely (accessed May 20, 2017).
Frederick (Ed.), Research in Corporate Social Performance and Policy, Vol. 9, Jai Press Inc., London,
pp. 107-130.
Tuan, L.T. (2012), “The linkages among leadership, trust, and business ethics”, Social Responsibility
Journal, Vol. 8 No. 1, pp. 133-148.

Corresponding author
Prabir Bandyopadhyay can be contacted at: prabirbandyopadhyay@sibmpune.edu.in

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com
Reproduced with permission of copyright owner. Further
reproduction prohibited without permission.