Impact of firms׳ policies on Chinese industrial purchasers׳ ethical decision making

•Double standards between the selling function and purchasing function damage ethical behavior.•Tolerating unethical sales practice leads purchasers to perceive their own behavior as less unethical.•Uniform salesperson and purchaser standards moderate the potential for unethical practices.

This article investigates the impact of firms׳ policies with respect to procurement, sales, and interfirm personal relationship (guanxi) on industrial purchasers׳ inclination to adopt gray procurement (a particular type of unethical behaviors in industrial purchasing) using data from industrial purchaser’s in China. The effect of a firm׳s purchasing policy on purchasers׳ behavioral intention towards gray procurement was, in addition to the direct effect, mediated by the purchasers׳ ethical judgment of the practice. The application of double standards (i.e., a firm forbids gray procurement by its own purchasers but tolerates its salespersons offering inducements to its customers׳ industrial purchasers) had both main effects and moderating effect on the purchasers׳ ethical judgment of the practice, which increases the purchasers׳ behavioral intention towards the practice. The two moderating effects of guanxi policy counteracted each other in direction, so jointly the effect of guanxi policy on the purchasers׳ intention may depend on the relative strength of the two moderating effects.