Corporate social and environmental irresponsibilities in supply chains, contamination, and damage of intangible resources: A behavioural approach

Corporate social irresponsibility (CSI) and corporate environmental irresponsibility (CEI) are associated with a range of immoral business-related conducts (e.g., modern slavery, child labour, deforestation, soil contamination). Building on previous research showing that CSI and CEI hold the potential to negatively impact the market value of supply chain partners (i.e. supply chain contamination), we examine the effects of CSI and CEI on companies' intangible resources (i.e. corporate trust, corporate image, attitude toward the firm, and word-ofmouth (WOM) intention). Through the application of two scenario-based experiments and using a multi-tier behavioural approach, we explore how CSI and CEI practiced by a supply chain partner in the earlier positions of a supply chain affect the perception of buyers in the subsequent stages. In addition, we investigate the impact of CSI and CEI in the way the company that engaged in corporate irresponsibilities is perceived by supply chain partners across the chain. Our results reinforce the importance of organizations' efforts to guarantee that homogenous social and environmental standards are observed by all their partners, as a supply chain seems to be only as sustainable as its least sustainable tier. Beyond that, our empirical evidence allows for new applications of the Resource-Based View (RBV) in supply chain contexts, along with the initial development of the Shared Resources View (SRV).

Automated summary

The study examines the impact of corporate social irresponsibility and corporate environmental irresponsibility on companies, finding that these behaviors can have negative effects on market value and intangible resources, emphasizing the importance of consistent social and environmental standards among supply chain partners.