Using an international setting consisting of 5410 corporations domiciled in 24 countries, we test the insurance-like effect of corporate social responsibility (CSR) performance in the era of the pandemic and confirm that CSR performance increases socially responsible companies’ resilience against the adverse effects of the crisis. Comparing stakeholders' responses to CSR activities during the pandemic and normal periods, we observe that the link between CSR performance and firm value is stronger during the crisis period. We also realize that the social aspect of CSR performance is the main driver for the mentioned effects. Finally, comparing the resilience of highly committed socially responsible companies with those with moderate and very low CSR ratings, we observe that best-in-class companies enjoy the greatest buffering effects, implying that the insurance-like effect of CSR performance is non-linear against systematic crises. Findings are robust to ceremonial CSR activities, extreme values of market-based instruments, endogeneity concern, etc.
Grievance landscapes form in rapidly industrialising contexts where social and environmental impacts are inevitable. This paper focuses on the complex operational and organisational settings in which grievances arise and the industrial pathologies that form around resource development projects. The arguments draw on classic and contemporary literature on “grievance”, “right” and “entitlement”, and the authors’ own sustained engagement with global mining companies and local communities. Our contention is that the grievance landscape is far more critical to understanding environmental, human rights, and mining interactions than the managerial systems that companies construct to signal compliance with voluntary international norms. These managerial systems, or operational-level grievance mechanisms, map the procedural contours of how a local grievance would travel once it is made visible to the company. In practice, however, it is fiction, illegibility and invisibility that dominate. Across the pathologies, the common denominator is the corporate propensity to avoid recognising the legitimacy of a local grievance and the source of its cause.
The manufacturing industry faces a trend in which employees’ work processes are being redesigned into simple, repetitive tasks that maximize performance and efficiency. This neo-Tayloristic business model reduces social interactions and stifles relationship building, leading to disgruntled employees and raising questions about leaders’ moral obligation as to the mechanisms they use to enhance employees’ performance at work. As an alternative to redesigning work processes, we contend that servant leaders can enhance employees’ overall performance by cultivating positive interpersonal dynamics at work where social connectedness flourishes. Integrating insights from self-determination theory with servant leadership’s moral foundations, we investigate the degree to which servant leadership fosters two elements of a relationally supportive social context, interactional justice climate and coworker support, that facilitate its influence on followers’ intrinsic motivation and, subsequently, their voice and in-role performance. Temporally-separated data collected from a sample of 296 employees and their supervisors situated in 44 teams yielded results that support our hypotheses. Results underscore the importance of servant leadership cultivating a positive relational context to increase employees’ intrinsic motivation and improve their behaviors at work.
In this study, we propose and test the relationship between CSR and firm financial performance, how this relationship differs between firms led by CEOs with political connections and those led by CEOs without political connections, and how this relationship differs between state-owned firms and nonstate-owned firms. Based on a sample of 1645 Chinese listed firms during the period 2011 and 2020 (inclusive), we find that CSR has an inverted U-shaped relationship with firm financial performance. As the level of CSR increases from slight to moderate, CSR is positively related to firm performance; as the level of CSR increases from moderate to great, CSR is negatively related to firm financial performance. Additionally, we find that this inverted U-shaped relationship differs between firms led by CEOs with political connections and those led by CEOs without political connections and differs between state-owned firms and nonstate-owned firms. That is, both the synergic effect (positive effect) of CSR on firm financial performance when the level of CSR is low and the competitive effect (negative effect) of CSR on firm financial performance when the CSR is high are more pronounced for firms led by CEOs without political connections and nonstate-owned firms than for firms led by CEOs with political connections and state-owned firms. The theoretical and managerial implications of these findings are discussed.
The literature on error sharing has focused on employees’ cost–benefit assessment to predict whether employees will disclose self-made errors. Our study advances this line of research by adopting a different theoretical lens and examining leaders’ role in promoting employee error sharing. Drawing primarily upon social learning theory, we expected that when team leaders openly talk about their own errors within teams, through their behavior, they would set an example for team members and encourage members’ error sharing with team leaders. Based on a sample of 353 employees within 95 teams, we found a positive link between leader error sharing and team member error sharing; in addition, we found that ethical leadership evaluation partially mediates this positive link. Moreover, we found that leader error sharing was positively related to the team error management climate, which moderated the relationship between ethical leadership evaluation and team member error sharing in such a way that the positive relationship becomes stronger under a higher error management climate. Our findings highlight the critical roles played by leaders in promoting employees’ error sharing.
The coevolution process enables organizations to adapt to and influence their external environment. Multinational corporations (MNCs) operating in dynamic foreign markets use this capability to achieve operational sustainability. MNCs in China operate in a changing stakeholder environment that features rising consumer activism and local stakeholders' persistent ethical problems and encounter recurrent consumer crises. Coevolving with this environment requires MNCs to react to consumer challenges and actively influence the environment by improving stakeholders' ethical behavior. Based on the attention-based view and bounded rationality studies, we propose that the tension between expansion attention and stakeholder attention hinders MNCs from coevolving with this environment. Our analysis of MNC-linked consumer crises in China reveals that MNCs can reduce the consumer crisis risk by maintaining continuous attention to improving the ethical behavior of local employees, suppliers, and dealers. In contrast, MNCs' rapid local expansion weakens this stakeholder's attention, expanding MNCs' crisis risk. Our findings reveal an attention-based constraint to MNCs' coevolution and inform approaches to overcoming this constraint. This paper also extends international attention studies by affirming the significance of matching the focus of attention with environmental change for MNCs' operational sustainability in foreign markets.
This study examines retail investors’ trading behaviour and its determinants in the Indonesian Shari’ah stock market by mainly focusing on the religious practice-related factors in the form of sadaqah or charitable giving on individual investors’ trading behaviour. Contextually, the Islamic moral economy (IME) assumes a direct relationship between religiosity and sadaqah giving due to the falah (salvation) oriented individual objective function, which can be reached through doing ihsan (beneficence for equilibrium). The findings based on a questionnaire survey distributed to individual investors on Shari’ah Online Trading System (SOTS) delineate that religiosity, accounting information, neutral information, personal financial needs, and the sadaqah feature have significantly affected investors’ trading behaviour in which the sadaqah feature is positively correlated, while religiosity factors are negatively correlated. Thus, despite the theoretical expectation through IME, this study evidences that Islamic logic is not the main determining factor, as market logic related factors seem to be more dominant in the behaviour of investors in the Indonesian capital market.
The disclosure of corporate environmental performance is an increasingly important element of a firm’s ethical behavior. We analyze how the legal origin of foreign institutional investors affects a firm’s voluntary greenhouse gas emissions disclosure. Using a large sample of firms from 36 countries, we show that foreign institutional ownership from civil law countries improves the scope and quality of a firm’s greenhouse gas emissions reporting. This relation is robust to addressing endogeneity and selection biases. The effect is more pronounced in firms from non-climate-sensitized countries, for which the gap between firms’ environmental standards and investors’ environmental targets is potentially larger, and in less international firms. Firms with a higher level of voluntary greenhouse gas emissions disclosure also exhibit higher valuations.
This article introduces the Normative Representativeness Requirement (NRR) on any moral objection to a decentralized, profit-oriented system of political economy. I develop and defend the NRR and then show why the most important recent critique of the profit system—which I call The Moderate Critique (developed by, for instance, Elizabeth Anderson)—fails to meet the NRR. This article also defends the radical claim that no objection to the profit system itself, rather than just key aspects or salient instances of it, succeeds in meeting the NRR. Critics of the profit system should not seek an alternative to the profit system, but, at most, an alternative within it.
Examining the effect of hedge fund activism on gender diversity, we find that the number of female directors decreases after a firm is targeted by hedge fund activism. Using the employment history data from BoardEx, we find that activist hedge funds are more likely to appoint people with finance backgrounds to the boards of target firms. And the newly appointed finance background directors are almost all male because of the lack of diversity in the finance industry. The lack of gender diversity of the hedge funds’ networks and the lack of qualified female directors in the local area also help explain the impact of hedge fund activism on gender diversity on the board.
Business owners sometimes refuse to transact with certain customers on principle, given some normative (political, personal, moral, or religious) commitment which they hold. I call such refusals ‘conscientious refusals.’ Evaluating two possible positions on the permissibility of vendor conscientious refusals, I argue in favor of an impersonal market in which vendor conscientious refusals are generally not justified. I argue impersonal norms, which crowd out conscientious considerations, support pluralist, healthy markets from which we reap individual and communal benefits; further, impersonal markets buttress individual freedom by providing a distinctive sphere of activity characterized by norms of radical inclusivity. These considerations constitute a strong case that vendor conscientious refusals are ceteris paribus unjustified. I conclude by addressing several potential objections to this view.
This research examines the impact of implicit religious beliefs on work ethic in specific cultural contexts. Based on three studies, the authors found that thoughts related to religion impact work ethic, but only when the culture embraces religious values at work and in public environments. In a comparative setting, Moroccan participants primed with religious thoughts displayed greater work ethic, whereas similarly primed French participants exhibited less work ethic (Study 1). For North African–French biculturals, religious stimuli interacted with cultural identity to predict work ethic (Study 2) and activated religious beliefs and cultural identity had a significant effect on their level of effort (Study 3). Our research reveals that implicit religious beliefs can predict work ethic in a manner contingent on a cultural setting. In cultures where religious values are historically embraced and encouraged, work ethic constitutes a religious construct that enhances work ethic. Conversely, in secular cultures, religious cues inhibit work ethic. We believe that within a multi-cultural, multi-religion work force, it is important to take note of these influences.
Despite the rapid adoption of technology in human resource departments, there is little empirical work that examines the potential challenges of algorithmic decision-making in the recruitment process. In this paper, we take the perspective of job applicants and examine how they perceive the use of algorithms in selection and recruitment. Across four studies on Amazon Mechanical Turk, we show that people in the role of a job applicant perceive algorithm-driven recruitment processes as less fair compared to human only or algorithm-assisted human processes. This effect persists regardless of whether the outcome is favorable to the applicant or not. A potential mechanism underlying algorithm resistance is the belief that algorithms will not be able to recognize their uniqueness as a candidate. Although the use of algorithms has several benefits for organizations such as improved efficiency and bias reduction, our results highlight a potential cost of using them to screen potential employees during recruitment.
The ICIJ’s release of the Panama Papers in 2016 opened up a wealth of previously private financial information on the tax avoidance, tax evasion, and wealth concealment activities of politicians, government officials, and their allies. Drawing upon prior accountability and ethics focused research, we utilize a dataset of almost 28 M tweets sent between 2016 and early 2020 to consider the microdetails and overall trajectory of this particular social accountability conversation. The study shows how the publication of previously private financial information triggered a Twitter-based social accountability conversation. It also illustrates how social accountability utterances are intra-textually constructed by the inclusion of social characters, the personal pronoun ‘we,’ and the use of deontic responsibility verbs. Finally, the study highlights how the tweets from this group of participants changed over the longer-term but continued to focus on social accountability topics. The provided analysis contributes to our understanding of social accountability, including how the release of previously private accounting-based financial information can trigger a grassroots social accountability conversation.
Ethical networks are an emerging form of social alliance based on collaboration between organizations that share a common ethical commitment. Grounded in a theoretical framework of virtue-based business ethics and focusing on nonprofit alliances, this study investigates the virtuousness of ethical networks; that is, how they trigger virtuous practices in their member nonprofit organizations. Adopting a qualitative grounded theory approach, the study focuses on one of the largest Italian ethical networks of nonprofit organizations operating in the social care sector. The findings show that shared ethical values and religious beliefs are positively associated with ethical network building. Based on these findings, a circular model of virtuousness is proposed in which ethical networks foster virtuous practices among their members at four levels: (1) the strategic orientation level, (2) the institutional level, (3) the organizational level, and (4) the relational level. At each of these levels, ethical networks foster a habituation to virtues and the propagation of virtuous behaviors among their members. Theoretical, practical, and social implications of the research findings are discussed.
Exploring a prevalent yet under-researched phenomenon in organizations, we examine the effect of multi-source negative gossip (i.e., gossip from coworkers and supervisors) on targets’ strategic behavioral responses. Drawing on appraisal theory of emotion, we propose that negative gossip from coworkers and supervisors interactively affect targets’ anger and shame. These discrete emotions, in turn, lead to distinct strategic behavioral responses of gossip targets: social undermining and exemplification, respectively. In Study 1, we tested our hypotheses with a three-wave, time-lagged survey among 500 Chinese employees; in Study 2, we conducted a scenario experiment with 479 international employees. Supporting our theorizing, negative gossip from coworkers was associated with stronger feelings of anger when negative gossip from supervisors was lower (vs. higher), which led to social undermining of coworkers. Negative gossip from coworkers was associated with stronger feelings of shame when negative gossip from supervisors was higher (vs. lower), which led to exemplification of socially desirable behavior. Overall, investigating the phenomenon of multi-source gossip within organizations, we document emotional and behavioral responses of targets to multi-source negative gossip and discuss their theoretical and practical implications, as well as future avenues for research.
Deontological and teleological evaluations are widely utilized in the context of consumer decision-making. Despite their use, the differential effect of these distinct types of evaluations, and the conditions under which they hold, remains an unresolved issue. Thus, we conduct a meta-analysis of 316 effect sizes, from 53 research articles, to evaluate the extent to which deontological and teleological evaluations influence ethical judgments and intentions, and under what circumstances the influence occurs. The effect is explored across three categories of moderators: (1) contextual elements of the ethical issue, (2) stakeholders, and (3) methodological characteristics of primary studies. We find that the overall effect of deontological evaluations on ethical judgments and intentions is stronger than for teleological evaluations; however, the magnitude of the effect is contingent on several moderators. Deontological evaluations are weaker in offline consumer contexts and stronger when there are financial implications of the ethical issue. Conversely, the effect of teleological evaluations is relatively stable across ethical consumer contexts. Teleological evaluations are stronger from a utilitarian perspective than from an egoist one. Furthermore, the effect of deontological evaluations is weaker, but the effect for teleological evaluations is stronger, when the decision-maker has a personal relationship (as compared to an organizational relationship) with the victim of the unethical act. Findings validate the effect of both deontological and teleological evaluations on ethical judgments and intentions and highlight their importance in consumers’ ethical decision-making. Implications for developing programs to prevent consumer unethical behavior are discussed.
Interest in the drivers of firms’ corporate social responsibility (CSR) is growing. However, little is known about the influence of a CEO’s childhood experience of natural disasters on CSR. Using archival data, we explore this relationship by offering three mechanisms that may account for how the CEO’s childhood experience of natural disaster is related to their CSR. More specifically, while prior research has established a positive relationship based on the post-traumatic growth theory, we show that the dual mechanisms of prosocial values and a CEO’s risk aversion explain the positive relationship. We further find that the positive relationship is stronger (1) when CEOs have longer career horizons and (2) when community social capital is high. This study contributes to both research and managerial implications on the topics of CEO’s childhood experience and CSR. In particular, this study advances the upper echelon theory by revealing that a CEO’s childhood experience of natural disaster is a useful yet relatively underexplored variable that can help explain the substantial variations in firms’ CSR. Moreover, we emphasize that a CEO’s career horizons and level of community social capital are important variables that further amplify the effect of a CEO’s childhood experience of natural disaster on the firm’s CSR commitment.
There is an impressive literature on organizational capacities that enable specific types of performance, but no work has been done on whether such capabilities extend to an organizational capacity for trustworthiness (CFT). This paper introduces the notion of a capacity for trustworthiness (CFT) defined as the collective capability of the organization to produce positive signals of trustworthiness to stakeholders. The antecedents to the CFT are bundles of organization routines that enable the firm to manifest trustworthiness and balance attending to both financial and relational goals. The consequences of a high CFT are outcomes and behaviors that are congruent with pivotal stakeholder expectations and are, therefore, trust inducing. A process model is offered that outlines how an organization’s routines and CFT change in response to feedback and pressure and increase or decrease stakeholders’ trust. Implications for the management of stakeholder relations, trust repair, and the management of organizational systems are reviewed.
Committees multiply in firms, whether stakeholder boards or committees, multi-stakeholder initiatives, ethics committees, or oversight boards. These arrangements aim to organise and legitimise the social and political activities of corporations. This article raises the question of the appropriate form of such governance structures. The examples above illustrate three possible ways of legitimising corporate quasi-public social and political activities: deliberation within the company, deliberation outside, and an approach we label corporate constitutionalism. While the first two models have been tested in practice and assessed in theory, the third one is comparatively more recent, both in practice and in theory. This article focuses on the latter model and asks whether corporate constitutionalism offers a suitable addition, or alternative, to deliberation (with or within firms) for legitimising corporate quasi-public social and political activities. It examines the respective merits of the three models and argues that a corporate constitutional court may mitigate some of the limits of deliberative practices alone. It argues the court is needed in weak regulatory environments, whether they are failing or inherently limited.
Organizational transgressions cause recurring scandals. Often disclosed by whistleblowers, they generate public outrage and force organizations to respond. Recent studies have tried to answer the question: “What happens after a transgression becomes publicly known?” They highlight organizational responses marked by recognition of the transgression, penance and reintegration of the organization. However, that research only deals with transgressions involving illegal organizational practices. This article broadens the field of study to include legal but unethical organizational practices. It is based on the case study of a recent scandal: LuxLeaks (2010–2018). This scandal concerns tax avoidance practices that were advised by the international audit and consulting firm PwC to hundreds of companies and made public by whistleblowers. The case data result from cross-comparisons of several organizational (PwC) and governmental (Luxembourg) communication documents as well as parliamentary, judicial and press documents. The article’s results highlight a legalistic organizational response that is so far under-explored in the literature. This response is marked by a rhetoric of denial, reformism and self-victimization and by judicial retaliation against the whistleblowers. It reveals the paradoxes of “legalization” in contemporary organizations, and its role in the perpetuation of unethical corporate practices.
The move from open outcry to electronic trading added another responsibility to futures exchanges—that of matching orders between buyers and sellers. Matching systems can affect the level and speed of price discovery, the distribution of revenue, as well as the level of price efficiency of a given market. Whether the matching system is procedurally fair is another important consideration. I argue that while FIFO (First In First Out) is a fair procedure in principle and is perceived as the default matching system, it is not a fair procedure in practice. Likewise, while pro rata is a fair procedure in principle, it is not so in practice. Nevertheless, both FIFO and pro rata are relics of an open outcry system. Instead, I propose an alternative approach to matching systems that builds on the strengths of electronic trading—the ability to randomize in real time. I introduce random selection for service (RSS) as a matching system that is procedurally fair both in principle and in practice.
Few studies in the business ethics literature explore marginalized populations, such as the racially minoritized entrepreneur. This absence is an ethical issue for the business academy as it limits the advancement of racial epistemologies. This study explores how this exclusionary space emerges within the academy by identifying white solipsistic behavior, an ‘othering’ of minoritized populations. Using a multi-method approach, we find the business literature homogenizes the racially minoritized business owner regardless of race/ethnic origin and categorizes them as lacking in comparison to White entrepreneurs. A critical discourse analysis of university entrepreneurship website language and images reveals that the racially minoritized are presented as the outgroup. The language used to describe entrepreneurs was found to be predominantly agentic, building a hegemonic categorization of White men dominating entrepreneurship. Troublingly, but consistent with the literature review, when racialized minorities were present in images, we found them to be marginalized. Employing an experimental design to mock-up four websites featuring student entrepreneurs differing by race and gender, we ask ‘what if we make these under-represented entrepreneurs visible?’ Results show that women, and specifically racially minoritized women, have a greater impact on the entrepreneurial interests of university students compared to men. Overall, the results provide empirical evidence for white solipsism in the business academy. We call for self-reflexivity to transparentize the ‘invisible’ racially minoritized entrepreneur and fill the ‘white space’ by changing the framing and context of business research to be more inclusive.
Today’s scholarship and policymaking on business and human rights (BHR) urges businesses to better understand their human rights responsibilities and remedy them, when and if abuses do occur. Despite the public discourse about businesses and human rights, the state—as the main duty bearer in international human rights law—plays a fundamental role as the protector and enforcer of human rights obligations. Yet, the existing literature overlooks state involvement as perpetrators of abuse in the corporate context. We develop the term economic complicity to shed light on the state’s role in directly or indirectly abusing human rights within a corporation’s sphere of influence, such as police violence toward nonviolent protesters or granting environmental licenses without adhering to legally required community consultations. We ask: What contributes to the state’s engagement in economic complicity in corporate human rights abuses? We assess hypotheses emergent from the democratic change and development studies literatures with a unique database that includes economic complicity data from Latin America, the Corporations and Human Rights Database (CHRD). This research has important theoretical implications for the business ethics and BHR literatures, as understanding economic complicity highlights the need for business actors to avoid shirking their moral responsibilities to not only ‘do no harm’ but also to protect human rights when they are threatened by the state.
Virtues and character strengths are often assumed to be universal, considered equally important to individuals across cultures, religions, racial-ethnic groups, and genders. The results of our surveys and laboratory studies, however, bring to light subtle yet consistent gender differences in the importance attributed to character in leadership: women considered character to be more important to successful leadership in business than did men, and women had higher expectations that individuals should demonstrate character in a new leadership role. Further, the gender of the research participant affected character ratings such that male respondents viewed a female leader who exhibited agentic behaviors in a professionally challenging situation less positively than a male leader who displayed the same agentic behaviors. The data also showed that male participants rated almost every dimension of character displayed by the female leader lower than did female participants. Our findings suggest that the question as to what extent gender differences may bias the assessment of virtues and character strengths is an important one, and one for which the practical implications for individuals in organizations need to be studied in more detail.
In examining how reform-leading supranational institutions respond to public criticism, this article advances current theory on their institutional accountability mechanisms and extends research on this topic by focusing on their responses to public criticism of alleged reform failures. We consider the case of the International Monetary Fund’s (IMF’s) involvement in the Greek economic crisis, as the structural adjustment reforms it imposed to stabilize the economy. We show how these controversial and, by many accounts, failed policies have profoundly impacted the well-being of the recipient country by reducing social cohesion and impoverishing the most vulnerable groups. In explaining the IMF’s institutional response mechanism for fending off such criticism, we offer moral regulatory appropriation (MRA) as a processual framework and present the IMF’s organizing logic of institutional legitimation processes in four domains of action: agentic mission, reform policies, institutional policy negotiations, and moral appropriation. We argue that this enables institutions to maintain moral legitimacy despite evidence of their reforms’ policy failure and various negative consequences for their populations. The proposed framework has theoretical implications for conceptualizing the rhetorical deployment of moral legitimation to secure and defend institutional accountability. We also highlight the limitations and boundaries of such an approach by the IMF and similar reform-leading institutions.
Culture is the most difficult thing about an organization to change in a lasting way. Our paper is predicated upon the idea that better ethics leadership through change is the foundation to more successful implementation of change. Ethical culture will enable the firm to initiate the change process from a stronger position: the obstacles to change such as mistrust, fear of uncertainty, failure of communication and empowerment will be easier to overcome in an atmosphere pursuing the ethically correct approach, combining ethical leadership with an ethical corporate culture. Our idea goes one step beyond the virtuous change circle by incorporating a series of check points a leader can reference to stay on a course of change management based in good ethical principle that will lead to effective change. Our model incorporates the concept of values into the management of change; this allows for a more comprehensive approach to change management by the utilization of well-known change management principles used in conjunction with basic principles of ethics. We argue that the change leader can depend on this more comprehensive approach for a better assurance of ethical and therefore more effective change. Our idea also would be effective regardless of the type of change confronting the organization and/or the leaders of the firm. Our point is that, while change is by its nature hard and there is an inclination to resist change, with ethical change management, the firm has a better chance of success.
Solidarity is a principle oriented toward the common good that ensures that each person can have the necessary goods and services for a dignified life. As such, it is very often approached in a theoretical manner. In this empirical study, we explored the development of a culture of solidarity within an organizational context. In particular, we qualitatively investigated how a culture of solidarity can concretely spread within and beyond organizations by conducting 68 semi-structured interviews with members of three common good-oriented organizations located in the Philippines, Korea, and Paraguay. We found that a culture of solidarity develops through a three-step process that includes constructing the solidarity mission, sharing soli- darity, and disseminating solidarity, which together form a virtuous circle. We further found that solidarity is not supported by constrained, instrumentalized, or sacrificial actions, but can instead be a free, authentic, and fulfilling way for members of an organization to flourish while serving the mission of their company.
Extant research has identified various effects of leader humor on subordinates and work groups. In contrast, less research has explored the influence of leader humor on leaders themselves and leaders’ subsequent behaviors. To address these issues, we drew from ego depletion theory and investigated when and how leader humor impacted leader workplace deviance. We argued that leader humor along with high impression management motive would bring increased ego depletion to leaders themselves and ultimately result in more leader workplace deviance. We tested our theoretical model using a three-wave time-lagged field survey data collected from 103 leaders and 595 subordinates, as well as an experiment involving 487 leader participants, which provided overall support for our hypotheses. Our findings revealed the possible dark side of leader humor influencing both leaders themselves and organizations. Theoretical contributions and new avenues for future research are addressed.
The aim of this paper is to discuss popular conceptions of business ethics and their relationship to the problem of racial injustice by way of reviewing Spike Lee’s (1989) Do the Right Thing. Taking place on one day in late 80’s Bedford-Stuyvesant, and set against a tense decade of racial conflict in New York City, Spike Lee’s masterpiece has deeply influenced American discourse on race, capturing many of the complex interpersonal dynamics that are both constitutive and consequence of American racial hierarchies. Instead of focusing on shareholders and stakeholders, I argue that Do The Right Thing suggests a more political understanding of business’s ethical obligations: a business’s ethical obligations don’t emanate from internal relations but from its social and political position. I conclude by discussing a more recent film, Steve McQueen’s (2020) Mangrove. Like Do the Right Thing, Mangrove also focuses on a business that is at the center of an urban racial conflict, but which stands in a very different relationship to this tension, providing an alternative illustration of business ethics informed by political and social positioning.
To understand the ethical issue of gender inequality in entrepreneurial financing, we examine the effect of angel investors’ political ideology, the conservatism–liberalism continuum, on their investments in women-owned ventures. We propose that more conservative angel investors tend to have a lower percentage of investments in women-owned ventures in their portfolios. Moreover, drawing on the gender role congruity theory, we show that when investing in women-owned ventures, more conservative angels favor women-owned ventures with a higher percentage of male co-founders and operating in women-dominated industries. Our analysis, based on a longitudinal sample of 172 angels from 2010 to 2019, supports these hypotheses. Our study contributes to the literature by highlighting angel political ideology as a critical antecedent of the gender disparity in entrepreneurial financing.
Banks are expected to play a key role in assisting the real economy with the green transition process. One of the tools used for this purpose is the issuance of green bonds. We analyze the characteristics of banks that issue green bonds to understand: (i) which banks are more likely to resort to these funding instruments, and (ii) if the issuance of green bonds leads to an improvement in a bank’s environmental footprint. We find that large banks and banks that had already publicly expressed their support for a green transition are more likely to issue green bonds. Conditional on being a green bond issuer, smaller banks tend to resort to green bonds in a more persistent manner and for relatively larger amounts, while larger banks issue green bonds on a more occasional basis and for smaller amounts. This heterogeneity is also reflected in our findings that only banks that issue green bonds more intensively improve their emissions and reduce lending to polluting sectors, thus contributing to the decarbonization of the financial sector.
Social entrepreneurship (SE) is gaining increasing legitimacy as a form of ethical business practice and a solution to various societal challenges. Despite the burgeoning interest in SE in the realms of ethical business scholarship and business ethics education, new pedagogical developments have been limited. To advance SE pedagogy, we produced a new multimedia-based tool consisting of two SE-focused comics and evaluated their efficacy in “winning the hearts and shaping the minds” of learners in an experimental setting. We tested the effects of the two comics individually. Comic #1, a story of a gambling addict who transforms into a social entrepreneur, was used to examine the effects of using a comic on learners’ engagement and cognitive enhancement, while comic #2, a story of a teenage academic misfit who finds her passion in crafting objects and establishes a social enterprise, was used to interrogate the effects of using a comic on the relationship among SE self-efficacy, SE intent, and entrepreneurial passion. We also collected qualitative feedback in the form of learners’ comments about the second comic. Our results supported the two proposed models and suggested that comics show promise in enhancing SE teaching and learning. Our new contribution consists of the theoretical relationships examined in the models, our insights into why comics can be beneficial to learners, the scholarly artistic contribution of the comics, and the use of an experimental approach. We end the article with suggestions for designing, implementing, and evaluating future multimedia-based pedagogy in SE and ethical business teaching and learning.
Based on China’s mandatory requirement for listed firms to implement online voting in their annual general shareholder meetings, we investigate whether and how minority shareholders influence corporate environmental performance (CEP). We use the difference-in-difference approach and find that the implementation of online voting promotes minority shareholders’ participation in shareholder meetings, which, in turn, leads to improved CEP of listed firms. We discover that “local pollution” exposure and “the increasing awareness of listed firms’ environmental risks” are the main motives of minority shareholders concerning listed firms’ environmental performance. Furthermore, we find that the minority shareholders improve CEP of listed firms through influencing groups with greater bargaining power.
The study of ethical decision-making has made significant advances, particularly with regard to the ways in which different types of processing are implicated. In recent decades, much of this advancement has been driven by the influence of dual-process theories of cognition. Unfortunately, the wealth of findings in this context can be confusing for management scholars and practitioners who desire to know how best to encourage ethical behavior. While some studies suggest that deliberate reflection leads to more ethical behavior, other studies find, in contrast, that intuitive decision-making leads to more ethical results. The goal of this integrative conceptual review is to help make sense of such apparently contradictory findings by identifying the moderating influences that lead to more versus less ethical decisions, whether they are made via intuitive or deliberative processes. Based on our integrative review of moderators from different disciplines and eras, we develop a taxonomy that can aid researchers in the task of identifying when similar constructs have been studied under different names. We organize our findings concerning these influences in accordance with four emergent moderator categories—psychological, situational, social, and physiological. This work helps us identify patterns of moderating factors across both intuitive and deliberative ethical decision-making, gaps that suggest future research directions and practical implications.
Stakeholder theorists have traditionally objected to the neoclassical conception of the firm as a vehicle for maximizing profit or shareholder wealth, thus opening up space for controversial engagement with neoclassical economics. The present paper fills some of this space by elaborating the parallels between stakeholder theory and classical institutional economics, a heterodox school of economic thought that has long been critical of a broad range of neoclassical ideas. Rooted in the writings of Veblen and Commons, classical institutional economics explores how the social provisioning process is coordinated or hindered by real-world business institutions. From this standpoint, stakeholder theory highlights the possibility of overcoming the institutionally ingrained conflicts and trade-offs for the sake of realizing common human interests in organizing the social provisioning process in an orderly and reasonable way. This argument not only illuminates the relationship of stakeholder theory to the wider societal context of modern capitalist economies but also elaborates novel aspects of the moral nature of stakeholder management.
When organizations face the coexistence of multiple institutional logics for environmental management (e.g., maximizing market profit, protecting the environment), how do firms configure green human resource management (GHRM) practices to achieve sustainability in both environmental and market domains? Leveraging the fuzzy-set qualitative comparative analysis (fsQCA) technique, this study adopts a configurational approach to analyze the complex interdependence of GHRM practices with the underlying institutional logics for achieving firm sustainable performance. Employing a multi-source matched sample of 179 firms, the findings reveal the existence of multiple configurations of institutional logics and GHRM practices that equally result in high environmental performance, market performance, or both. The analysis also identifies that firms vary in their selection between environment protection and market profit logics, and the need to match different control- or commitment-based GHRM practices to achieve high environmental and market performance.
This study draws on theory of dyadic morality and categorization to disentangle opportunistic behaviors from the perception by their victim that leads to the moral categorization of the perpetrator as an opportunist. We show that it is this moral categorization, not the behaviors, that determines the trust beliefs of the victim. Further, the effect of psychic distance on the process of perpetrator moral categorization as an opportunist depends on the form of opportunistic behaviors. Finally, this study questions the cultural universality of opportunism by showing that effects of opportunistic behaviors on categorization vary across national cultures-based on data sets of French and Slovene exporters.
As environmental issues have become increasingly prominent around the world, corporate environmental responsibility has begun to attract more attention. As the decision-makers of firms, top executives play an important role in the environmentally ethical behavior of their corporations. Few studies, however, have explored the motivations behind corporations’ environmentally responsible behavior from the perspective of how CEOs’ early experiences shape their decisions. This paper explores the impact that CEOs who experienced the Send-down movement have on their companies’ environmentally responsible behavior and the boundary conditions of this impact from the perspective of the imprinting theory. Based on the data of listed Chinese companies from 2009 to 2020, we have found that CEOs who were themselves “Sent-down youth” have a positive impact on corporate environmental responsibility. For firms with a higher proportion of state ownership and CEOs with Chinese Communist Party membership, the relationship between experience with the Send-down movement and corporate environmental responsibility is strengthened, whereas a higher level of market competition weakens the relationship. This article enriches and deepens the research on the imprinting theory, and it also has certain practical implications for firms that hire top executives with unique types of early experiences to promote business ethics improvement.
We explore corporate environmental accountability by examining how carbon emissions affect voluntary climate-related information disclosure based on TCFD principles. Using computerized textual analysis to measure such climate-related disclosure, our results show that firms with higher levels of carbon emissions disclose more climate-related information. This relation is stronger in firms belonging to carbon-intensive industries, such as energy, materials, and utilities. We also examine this relationship at the category level for Governance, Strategy, Risk Management, and Metrics and Targets, finding that carbon emissions drive disclosure in all categories except in Governance. Overall, our findings indicate that high carbon emitting firms appear to discharge their corporate accountability by increasing climate-related disclosure, consistent with legitimizing their potentially unethical actions and submitting to stakeholder and societal pressure.
Spoofing—placing orders on financial exchanges intending to withdraw them prior to execution—is widely legally prohibited. I argue instead on two main grounds that spoofing should be permitted and legalised. The first is that spoofing as a form of bluffing remains within the market practice of making legally binding offers—as opposed to lying or betraying trust—and primarily concerns the spoofer’s personal information. As a form of bluffing spoofing helps prevent financial speculators, in particular high-frequency algorithmic traders, from easily profiting by other market actors reliably revealing their underlying preferences through their market activity. The second is that at the systemic level permitting spoofing would benefit non-speculative actors who place orders to hedge economic risk and whose activities provide the raison d’être for financial exchanges, differentiating them from simple forums for gambling. I also address potential concerns that legalised spoofing would drive speculators out of financial markets entirely and, therefore, undermine market liquidity. This work contributes to the wider debate in business ethics regarding bluffing by illustrating the acceptability of bluffs which do not betray counterparty trust or reliance on testimony by remaining within the framework of market practices.
In this editorial essay, we argue that business ethics research should be aware of the ethical implications of its own methodological choices, and that these implications include, but go beyond, mere compliance with standardized ethical norms. Methodological choices should be made specifically with reference to their effects on the world, both within and outside the academy. Awareness of these effects takes researchers beyond assuring ethics in their methods to more fully consider the ethics of their methods as knowledge practices that have broader institutional consequences. Drawing from examples in published research, we examine five ways in which authors can formulate their methodological approaches with purpose, care and reflexivity.
The underrepresentation of females on corporate boards is an important ethical issue that raises serious concerns about gender equality in senior management teams. Relying on a large sample of public firms from the Chinese market, we examine how social trust affects female board representation. We find that female board representation has a positive and significant relation with social trust. The effect is more pronounced in regions with a higher male-to-female sex ratio at birth, lower levels of education, lower GDP per capita, and in nonfamily firms. We also find that higher social trust is more likely to increase the number of non-independent female directors rather than independent ones. Further analyses show that increased female board representation is an important channel through which social trust improves corporate ESG ratings. Overall, our study suggests that social trust contributes positively to gender diversity in corporate management.
The literature on meaningful work often highlights the role of leaders in creating a sense of meaning in the work or tasks that their staff or followers carry out. However, a fundamental question arises about whether or not leaders are morally responsible for providing meaningful work when perceptions of what is meaningful may differ between leaders and followers. Drawing on Buddhist ethics and interviews with thirty-eight leaders in Vietnam who practise ‘engaged Buddhism’ in their leadership, we explore how leaders understand their roles in creating meaningfulness at work and their perceptions of how employees experience their leadership approach in this respect. On the basis of Buddhist ontology on the sense of meaningfulness, we introduce a number of leadership approaches in cultivating meaning at work that question the argument that leaders are pri- marily responsible for enabling or satisfying employees’ search for meaning. The study provides an alternative lens through which to examine the role of leadership from a Buddhist ethics perspective and shows how an insight from this particular tradition can enrich secular interpretations of meaningful work and leadership.
In this article, the co-editors of the corporate responsibility: quantitative issues section of the journal provide an overview of the quantitative CSR field and offer some new perspectives on where the field is going. They highlight key issues in developing impactful, theory-driven, and ethically grounded research and call for research that examines complex problems facing businesses and the society (e.g., big data and artificial intelligence, political polarization, and the role of CSR in generating social impact). By examining topics that are under-researched, forward-looking, and socially oriented, scholars can expand the boundary of CSR’s substantive domain and produce research that helps businesses act in a long-term, socially responsible way in this quickly evolving, turbulent environment. They also discuss ways to enhance the methodological rigor of quantitative CSR research and encourage scholars to employ cutting-edge, innovative methods to shed light on the micro-level mechanisms of CSR and reveal patterns and relationships hidden in unstructured big data.
This study examines the participation and interaction of relevant individuals in the process of developing an accounting standard for South Korea’s emission trading scheme (ETS). Despite the enormous accounting implications of such schemes, there is a paucity of research on the development and application of ETS accounting. Ulrich Beck’s and Anthony Giddens’s risk society framework is utilised to scrutinise the process of setting accounting standards—from the agenda-setting stage all the way to the final publication of the standard. In this case study, we take an interpretive approach in analysing the rich data collected through face-to-face interviews with prominent standard-setters, accounting experts and representatives of industry and government. Participant observation and relevant documents were also considered. The findings highlight the political nature of accounting standard-setting and identify the risks and responsibilities of the key agents in the process along with the means of sub-political action taken to influence decisions. We reveal that the agents involved in standard-setting attempted to balance their anthropocentric priorities with ecocentric responsibilities and prioritised the production of a standard with minimal impact on economic, reputational, and operational risk. Having authority as a standard-setter, referring frequently to precedents and, perhaps most importantly, engaging actively with the stakeholders throughout the process seem to have contributed to a widely accepted standard, which can serve as a benchmark for future attempts to factor in ETSs.
Organisational restructuring involving cost-cutting, downsizing, and the acquisition and divestment of different functions is an increasingly normalised aspect of employment in both the private and public sectors. This article takes up the question of the effects of restructuring on workers through a study based on in-depth, semi-structured interviews of long-term workers in Finland’s state-owned postal service, using the concept of dignity as an analytical lens. The article distinguishes between everyday, organisational, and social dignity, using this distinction to capture how workers strove to sustain dignity in a process of organisational restructuring that generated dignity threats related to occupational devaluation. The study shows how dignity in postal work has been dependent on a particular historical configuration of public service work involving the employer organisation, employment relations, and occupational values. Cost-driven restructuring has destabilised this configuration, producing a stark separation between dignity in everyday work and the organisational indignities of restructuring in postal workers’ experiences. Feeling unable to affect organisational changes in their work, postal workers have been left to sustain dignity through everyday relationality, and by drawing intra-organisational boundaries to temporary workers and upper managers based on an occupational hierarchy of commitment and competence. The study highlights the significance of organisational support for dignity at work, particularly in relation to the dignity threats generated by prolonged processes of restructuring.
Why do some organizations suffer more than others in the wake of an industry scandal? Although ex-ante greater opportunistic behavior of organizations is one factor, we argue that ex-post greater targeting of organizations is another important factor. Using the context of microfinance organizations (MFOs), we examine why the financial sustainability of for-profit and non-profit organizations may be heterogeneously affected following a scandal. Leveraging the 2010 Indian microfinance scandal as our research setting and analyzing longitudinal data, we find a substantial decline in the financial sustainability of Indian MFOs relative to their counterparts within the rest of South Asia. Compared to Indian non-profit MFOs, Indian for-profit MFOs suffered substantially more. Intriguingly, these results hold not only in the full sample, but also in the matched sample of comparable for-profit and non-profit MFOs. Further analysis reveals that the adverse impact on for-profit MFOs was much bigger in the scandal’s epicenter. Our findings suggest that some organizations may suffer more than others not only due to their engagement in actual malfeasance but also due to their greater targeting by the social control agents. We discuss the implications of this study for social enterprise managers and policymakers.