Supply chain unethical behaviors and continuity of relationship: Using the PLS approach for testing moderation effects of inter-organizational justice

Abstract

Unethical behaviors in supply channels have been analyzed extensively in the business ethics literature. However, specifically regarding the medical supply chain literature, analysis of unethical behavior in a buyer-supplier relationship has received limited attention. The importance attached to ethical values in buyer-supplier engagements positively affects the continuity of the relationship. In this study, the following issues have been investigated: (1) whether the unethical behaviors of the supplier have a negative impact on the continuity of the relationship between the parties, and (2) the moderating effects of the procedural and distributive justice of the buyer on the relationship. Data have been collected from 307 pharmacies and analyzed utlizing the PLS (Partial Least Squares) based structural equation modeling technique. The findings obtained indicate that only the deceitful unethical behavior of the supplier directly affects the continuity of the relationship. At the same time, procedural and distributive justice of the buyer negatively influences the continuity of the relationship. However it has been determined that procedural and distributive justice do not moderate the relationship between the unethical behavior and continuity of the relationship. The research that has been carried out brings forward important results with regard to all suppliers that intend to develop relationships with the pharmaceutical sector and buyer firms. (C) 2015 Elsevier B.V. All rights reserved.