Consumer reactions to environmentally irresponsible sourcing practices: An intentionality and motive perspective

Abstract

The purpose of this research is to better understand how and why consumers pay attention to a firm's environmentally irresponsible sourcing practices. Using signaling theory, this research develops and tests a model that examines how a firm's intentionality and motive behind irresponsible environmental sourcing practices can signal a product's environmental characteristics to consumers. The findings suggest that consumers tend to view products as more environmentally harmful when they learn that a firm intentionally sources from irresponsible suppliers. Likewise, consumers are more likely to react unfavorably to a firm's products when a firm prioritizes profit motives over responsible sourcing practices. This research also offers insight into how a firm's corrective response strategy (e.g., mandatory vs. voluntary environmental supplier actions) could mitigate the adverse impact of the firm's environmentally irresponsible sourcing practices on consumer perceptions of environmental risk. The findings indicate that a firm's mandatory corrective actions targeted to its suppliers are more likely to be effective, whereas voluntary actions were found to be ineffective. Two experiments were conducted to test the study's hypotheses. Managerial and societal implications are also discussed.