Outsourcing offers numerous economic benefits to global firms but also presents challenges in ensuring responsible behavior among partners, given the opaque nature of supply chains. As corporate responsibility extends beyond a firm's boundaries, buying firms are increasingly accountable for their entire supply chain and are thus motivated to seek more thorough insights into suppliers’ internal practices through certifications. This paper explores the opposite phenomenon, namely that of decertification, where firms voluntarily abandon third-party standards such as ISO 14001 and ISO 9001. Drawing on Relational Signaling Theory (RST), we examine the nuances of supplier-buyer relationships whereby parts continue transacting forgoing certifications despite their role in reducing information asymmetries. Drawing on a unique dataset of Latin American firms that have decertified ISO in the last decade, ISO auditing firms, ISO consultants, and ISO-certified firms, we unveil three types of supplier-buyer relationships—self-interest, trust, and judgment—emphasizing the inherent ambiguity of the certification landscape. This study contributes to the theory by providing a qualitative understanding of decertification, supporting RST empirically, and enhancing our knowledge of buyer-supplier relationships in developing countries.
