The buyer‐supplier social contract: information sharing as a deterrent to unethical behaviors

Purpose – The purpose of this paper is to focus on the role of information sharing as a deterrent to unethical behavior in a buyer‐supplier relationship. The authors investigate the broader supplier network, examining information sharing as it occurs through both the buyer‐supplier structure as well as supplier‐supplier structures. The authors propose that buyer‐supplier and supplier‐supplier information sharing serve to reduce perceived buying firm unethical behavior while at the same time fostering increased commitment and satisfaction in long‐term buyer‐supplier relationships. Design/methodology/approach – The relational model presented is grounded in the theory of social contract. The authors' hypotheses are tested using structural equation modeling with survey data collected from supplier firms from a wide range of industries and that have been involved long‐term (minimum of five years) in the provision of goods and/or services with their buying firm. Findings – The authors demonstrate that perceived buying firm unethical behavior goes beyond the nature of the dyadic buyer‐supplier relationship; the supplier's entire structure of contacts facilitates the flow of information regarding a buying firm. Originality/value – This research contributes to the operations and supply chain management literatures by adopting a more comprehensive view of the networks involved in relationship management efforts than what has typically been evaluated in these literatures.