Cut Them Loose? Firms' Response Strategies to Environmental Misconduct by Supplying Firms
Breeda COMYNS
, , Anne NORHEIM-HANSEN
2022, Organization and Environment, 35(3), pp.335-364
Environmental and sustainability reputation management
Organizational behavior and the environment
Green supply chain management
Greening business functions
Regression analysis
Methods—quantitative
Environmental attitudes and behavior
Organizational behavior and the environment
Non-governmental organizations (NGOs)
Sustainable development
Abstract
Firms are increasingly held accountable for their suppliers’ environmental misconduct and often face significant stakeholder pressure to respond or even end their affiliations with misbehaving suppliers. Despite the importance of the subject, we know little about antecedents to supplier exclusion. In this article, we build on the assumption of stakeholder expectations being a core mechanism—and adopt an expectancy-violation theory lens. Drawing also on complementary insights into signaling theory, we argue that the severity of the misconduct affects the decision to cut ties. Furthermore, we argue that the engagement in environmental partnerships of client firms as well as suppliers moderates this relationship. To test our hypotheses, we use a unique sample of 434 client firm–supplier dyads, including 27 focal firms pressured by Greenpeace to remove “dirty” palm oil suppliers, accused of illegal deforestation. The study’s findings provide contributions to several literature streams related to inter-organizational dynamics and environmental sustainability.