Publication Type

Journal Article

Version

publishedVersion

Publication Date

10-2022

Abstract

Consumers tend to hold a focal firm responsible for its suppliers' unsustainable practices (chain liability), suggesting that firms need effective responses that can mitigate negative consumer reactions. In applying psychological contract theory to investigate recovery efforts related to such chain liability, the current study addresses three broad focal firm responses: Do nothing, choose a nonsubstantive response that verbally clarifies its own and the supplier's roles in the incident, or substantively rectify the supplier's wrongdoing with sustainability-focused responses, such as termination, monitoring or development. With a vignette-based experiment, we examine consumer perceptions and behaviors in three stages: before the unsustainable supplier incident (pre-incident), after the incident (post-incident) and after the focal firm has responded (post-response). A nonsubstantive, clarification response decreases consumers' purchase intentions; substantive focal firm activities increase purchase intentions, though not fully back to pre-incident levels. For consumers, termination, monitoring and development seem like equally adequate responses. Although combining several substantive responses offers even greater effectiveness for recovering purchase intentions, it still falls short of reaching pre-incident levels. Thus, our findings demonstrate the focal firm's capacity to address suppliers' unsustainable practices substantively and recover, at least partially, its damaged relationship with consumers.

Keywords

chain liability, chain liability incident, experiments, psychological contract breach and repair, sustainable supply chain management

Discipline

Marketing | Operations and Supply Chain Management

Publication

Journal of Supply Chain Management

Volume

58

Issue

4

First Page

58

Last Page

89

ISSN

1523-2409

Identifier

10.1111/jscm.12279

Publisher

Wiley

Copyright Owner and License

Author

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

External URL

https://www.youtube.com/watch?v=VoSH6z640Aw

Additional URL

https://doi.org/10.1111/jscm.12279

Share

COinS