Business Ethics

As climate change continues to be a pressing issue affecting businesses, firms are taking proactive measures by integrating carbon considerations into their overall strategic planning for environmental sustainability. Nonetheless, the question of whether it pays to be green remains inconclusively answered. Based on an analysis of the 200 largest public listed firms by market capitalisation in Malaysia, the findings indicated that most of the firms are still reactive in managing their carbon activities; however, corporate carbon strategy does, indeed, lead to (...) better financial performance. The findings reaffirmed that going green pays off, particularly for firms with higher levels of foreign ownership. Interestingly, an inverse relationship was observed among firms with higher levels of government shareholdings. Additionally, the firms have been categorised into six different groups based on their scope and level of corporate carbon strategies, ranging from “wait-and-see” to “all-round explorer” classifications. Taken together, these findings enrich corporate carbon and sustainability literature and offer insights into theoretical and policy implications, along with suggestions for future research. (shrink)

Small and medium-sized enterprises (SMEs) play a critical role in the green economy due to their significant environmental footprint. Because more than 84% of the world’s population identifies with a religion, most SME top-executives are likely to identify with a religion that would influence their decision-making. Despite these recent advances, prior studies have focused on SMEs’ external drivers and did not consider the role of internal drivers, such as the characteristics of SMEs’ top-executives, in influencing green marketing strategy. We aim (...) to address this gap by focusing on religious identification as a key driver of green marketing by SMEs. Specifically, we examine the effects of top-executives’ religious identification on strategic green marketing orientation (SGMO), and how such effects are moderated by political ideology. Using respondents comprised of CEO and/or owner-managers of SMEs in the US, the results show empirical evidence supporting the importance of religious identification in influencing green marketing decisions. Moreover, we found that the effects of religious identification on SGMO are more pronounced among top-executives with Conservative ideology. (shrink)

We investigate how firms adjust corporate pension plans in response to economic policy uncertainty (EPU). Using a sample of US-listed firms, we find that firms increase pension underfunding levels when facing higher EPU. The result is robust to controlling for pension portfolio returns, discount rates, plan sizes, pension liability, numbers of employees, other macroeconomic factors, difference-in-differences and instrumental variable estimation, and additional evidence of pension risk-shifting. Further analysis reveals that financial distress and information asymmetry induced through EPU are the potential (...) channels. The effect is stronger for firms having CEOs being excessively paid, using cash flow as a performance metric in CEO compensation, paying high dividends, and having short-term institutional investors, whereas the presence of unions, positive corporate culture, and social capital alleviate the effect. Notably, managers, not shareholders, appear to be the party reaping the benefits. Our findings suggest that firms may shift risk to employees in response to heightened uncertainty and institutional characteristics play a moderating role in this crucial business ethics issue. (shrink)

The COVID-19 pandemic is a global crisis which has witnessed consumers experiencing significant anxiety provoked by the threats to their health and even lives. Meanwhile, consumers have been observed to make more ethical purchases since the start of the pandemic. Drawing on literature on terror management and negotiable fate, this research employs a moderated moderating model to investigate how consumers’ perception of the pandemic severity leads to ethical consumption as a defensive mechanism against death-related anxiety, as well as the differential (...) role of consumers’ belief in negotiable fate in moderating this pandemic impact across tight and loose cultures. We conducted two cross-cultural studies with 592 and 423 respondents, respectively, at different times during the pandemic. Results consistently show that perceived pandemic severity increases consumers’ intention to consume ethically. Consumers’ belief in negotiable fate directly enhances ethical consumption, but it alleviates the effect of pandemic severity on ethical consumption among consumers who live in a tight culture. Our findings reveal the existential meaning of ethical consumption as a buffer against pandemic-triggered mortality salience, identify the positive psychological functions of negotiable fate in promoting ethical consumption but mitigating consumers’ need to buffer death-related concerns, and advances the importance of investigating the cultural variances in the terror management process toward ethical consumption. The findings offer insights for marketers and policy makers to develop effective strategies to support consumers’ ethical coping during societal crises. (shrink)

Corporate misconduct receives significant attention in the business ethics literature. This paper studies how corporate misconduct is impacted by import penetration from China, which is largely exogenous to the U.S. product market. Using this natural experiment, we find that heightened Chinese import penetration curbs corporate misconduct of U.S. firms. The effect is more pronounced for firms with weaker corporate governance and firms more vulnerable to product market competition. The findings provide implications for firms facing increased import penetration. Firms may consider (...) improving corporate governance and exploring avenues for differentiation as potential strategies to cope with the competition. In addition, we address the exogeneity concern derived from the influence of Chinese value penetration. Furthermore, we find that competition-related policies such as tariff reduction and U.S. granting China Permanent Normal Trade Relations (PNTR) status also lower corporate misconduct. Our work adds to the debates on competition and corporate misconduct in a cross-country competitive landscape. (shrink)

Emerging markets are a growing force, and the resulting increase in wealth—especially among the middle class—promotes conspicuous consumption with potentially negative impacts for societal and environmental well-being. Efforts to encourage ethical consumer behavior in emerging markets often meet various forms of consumer resistance. One reason that ethical consumption may suffer in emerging markets is because consumers have difficulty considering ethical other-focused attributes, such as Fair Trade or eco-friendly options, especially if those attributes do not directly benefit the self. Our research (...) demonstrates a simple way to encourage more ethical consumption in emerging markets, without economic incentives. In particular, when consumers see narrow (vs. broad) product categories, they are more likely to incorporate both salient (self-focused) and non-salient (other-focused) attributes into their decision. Thus, narrow product categories encourage consumers to consider ethical attributes to a greater extent than they normally would. This finding holds in private settings, across various product categories (i.e., coffee, tea, juice) and contexts (i.e., online and in the field), and in different emerging markets (e.g., India, South Africa, and Iran). (shrink)

The process by which auditors consider fraud risk in assessing management’s motivation and character remains under-addressed. This is problematic given the rising tide of narcissism, as well as recent research documenting that both self- and other-perceptions of narcissism influence an array of judgments. While a skeptical attitude is fundamental to the auditor’s gatekeeper role, it remains unclear how auditors form and act on perceptions of client narcissism. With a large sample of experienced accountants as participants, we leverage insights from current (...) narcissism and perceiver effects research to predict (and find) that auditor skepticism responds in a divergent manner to both the auditor’s (1) own antagonistic versus agentic narcissism and (2) perceptions of the client’s antagonistic and agentic narcissism. We discuss the observed opposing behavioral externalities related to these distinct forms of grandiose narcissism, particularly in dynamic interactions between clients and auditors. (shrink)

Despite a growing body of literature focused on understanding experiences of workplace dignity, attention has centered almost exclusively on employees with lower-level jobs. As a result, little is known about how workplace dignity and indignity are experienced by employees with middle- and upper-level jobs and how their experiences differ from those with lower-level jobs. We address these absences by interviewing employees from a diversity of lower-, middle-, and upper-level jobs about their experiences of indignity at work. We outline common dignity (...) threats, along with typical emotional responses and recourses employees use at each level. We find lower-level employees experience chronic dignity threats from being disrespected, devalued, demeaned, and dehumanized, to which their most typical response is endurance. Middle-level employees experience periodic dignity threats due to undermining of their work, confidence, and reputation. For them, the typical response is strategizing. Finally, on the rare occasions upper-level employees experience dignity threats, it usually is due to a disregard of their special expertise or denial of special rights, to which they respond by rising above. (shrink)

This study examines the participation strategies of an environmental non-governmental organization (NGO) in community-based conservation (CBC) initiatives in the developing country context of Pakistan. We use local Pakistani concepts and terms to interpret and narrate our study. Drawing on the micro-mobilization literature, our analysis embeds a situated analysis of the_ ‘biradari’_ (kinship) structures that pervade Pakistani social and cultural milieu. We shed light on the importance of various gatekeepers in providing access and ongoing support for CBC initiatives, suggesting NGOs must (...) navigate complex cultural and social structures to manage participation in developing country contexts. Here our findings point to the importance of local knowledge not just in articulating community needs but also in articulating participation strategies. Furthermore, even though ‘elite’ structures have the potential to jeopardize equitable participation and project long-term sustainability, our analysis suggests interacting and gaining ‘_bharosa’_ (trust) of communities’ via these structures is critical to participation. While previous research has called into doubt the efficacy of CBC in advancing conservation, we suggest that frequent and culturally atoned engagement is a must for environmental NGOs working in socially entrenched developing nations. Our research brings to light the complex ethical terrain navigated by environmental NGOs in CBC projects, illuminating the inherent potential for both empowering and subjugating outcomes. (shrink)

Plastic consumption is an important aspect of contemporary living, and studies that systematically examine consumers’ plastic waste recycling intentions from an ethical perspective are scarce. Considering the severity of plastic waste recycling problems globally based on the stimulus-organism-response paradigm, this study analyses how the information publicity influences consumers’ plastic waste recycling intentions from an ethical perspective in an emerging market economy. We investigate this link by focusing on the indirect effect of perceived social pressure and the moderating role of media (...) disposition (i.e., media richness and content trustworthiness). Data from a three-wave field survey of 469 household consumers from China showed that social pressure mediated the positive relationship between information publicity and ethical recycling intentions. Additionally, media richness and content trustworthiness moderate the link between information publicity and consumers’ perceptions of social pressure. These findings provide encouraging evidence for applying the SOR paradigm to explain the ethical recycling intention of consumers. The findings may assist policymakers in motivating consumers to think ethically about plastic waste recycling. (shrink)

While scholarly research on the relationship between female board representation and strategic decision-making has gained momentum, employee policy outcomes have remained relatively understudied. Integrating theory from the ethics of care perspective with research on the glass ceiling and workplace voice, we seek to understand the circumstances under which female directors influence policy changes for firm employees. We argue that firms with increasing female board representation are more likely to enact human capital development policies benefiting firm employees. However, this positive relationship (...) will ultimately diminish as boards accrue an increasing number of female directors. We further predict that the presence of a female leader at the firm (serving in the role of either the CEO or the board chair) will moderate this diminishing effect. Using a sample of S&P 1500 firms, we find support for our hypotheses. The findings from this study provide evidence that while female board representation is positively related to human capital development policies, this effect is nuanced and impacted by the presence of female leadership at the top of organizations. Our paper extends existing research on the nature of female directors’ influence on ethical decisions, emphasizing the impact of these directors on employees. (shrink)

The establishment or nurturing of a supportive organizational climate encompasses various activities rooted in ethical commitments. This study focuses on the outcome of these activities, exploring how team members’ collective interpretation and evaluation of corporate social responsibility (CSR) initiatives’ presence and authenticity impact team empowerment as a driver of team performance. Drawing on the organizational climate literature, while integrating signaling theory and attribution theory, we hypothesize that the impact of CSR climate on team performance through team empowerment hinges on two (...) key factors. First, teams must perceive the presence of CSR initiatives, denoting CSR climate quality. Secondly, there must be a consensus regarding the authenticity of these initiatives, signifying CSR climate strength. Results from a partial least squares—structural equation modeling analysis of multi-informant data obtained from 537 team members within 73 teams of 35 retail organizations in Belgium support most of our hypotheses. The results reveal that both CSR climate quality and strength are important drivers of team empowerment in support of team performance. (shrink)

Research on ethical norms has grown in recent years, but imprecise language has made it unclear when these norms prescribe “what ought to be” and when they merely describe behaviors or perceptions (“what is”). Studies of ethical norms, moreover, tend not to investigate whether participants were influenced by the prescriptive aspect of the norm; the studies primarily demonstrate, rather, that people will mimic the behaviors or perceptions of others, which provides evidence for the already well-substantiated social proof theory. In this (...) review article, we delineate three streams of norms research in business ethics: behavioral, perceptual, and prescriptive. We argue that by properly categorizing norms, and designing studies to investigate when prescriptions, more than mere mimicry, improve ethical outcomes in organizations, researchers can enhance managers’ efforts to promote ethical outcomes in organizations. (shrink)

The business case constitutes an important instrumental motive for corporate social responsibility (CSR), but its relationship with other moral and relational motives remains controversial. In this article, we examine the articulation of motives for CSR among different stakeholders in Germany historically. On the basis of reports of German business associations, state agencies, unions, and nongovernmental organizations from 1970 to 2014, we show how the business case came to be a dominant motive for CSR by acting as a coalition magnet: the (...) vocabulary was used strategically by key policy entrepreneurs, while being ambiguous for flexible interpretations by different stakeholders, and thereby growing in attractiveness. As a resulting discourse coalition emerged among business, state, and civil society actors, the moral and relational motives for CSR became increasingly marginalized. The article offers a new approach to studying motives and contributes to understanding the complementary or competing nature of different motives for CSR. (shrink)

Why do organizations conduct job interviews? The traditional view of interviewing holds that interviews are conducted, despite their steep costs, to predict a candidate’s future performance and fit. This view faces a twofold threat: the behavioral and algorithmic threats. Specifically, an overwhelming body of behavioral research suggests that we are bad at predicting performance and fit; furthermore, algorithms are already better than us at making these predictions in various domains. If the traditional view captures the whole story, then interviews seem (...) to be a costly, archaic human resources procedure sustained by managerial overconfidence. However, building on T. M. Scanlon’s work, we offer the value of choice theory of interviewing and argue that interviews can be vindicated once we recognize that they generate commonly overlooked kinds of noninstrumental value. On our view, interviews should thus not be entirely replaced by algorithms, however sophisticated algorithms ultimately become at predicting performance and fit. (shrink)

When do companies deserve moral credit for doing what is right? This question concerns the positive side of corporate moral responsibility, the negative side of which is the more commonly discussed issue of when companies are blameworthy for doing what is wrong. I offer a broadly functionalist account of how companies can act from morally creditworthy motives, which defuses the following Strawsonian challenge to the claim that they can: morally creditworthy motivation involves being guided by attitudes of “goodwill” for others, (...) and these attitudes involve affect and/or phenomenal consciousness, which corporate agents cannot maintain. In response, I show that what matters about being guided by attitudes of goodwill is being directly concerned for others in one’s practical deliberation. Companies can achieve this direct concern through their decision-making procedures without affect or phenomenal consciousness. I also explore how a company’s moral creditworthiness, or lack thereof, should shape stakeholders’ relationship with it. (shrink)

We consider the problem of moral disjunction in professional and business activities from a virtue-ethical perspective. Moral disjunction arises when the behavioral demands of a role conflict with personal morality; it is an important problem because most people in modern societies occupy several complex roles that can cause this clash to occur. We argue that moral disjunction, and the psychological mechanisms that people use to cope with it, are problematic because they make it hard to pursue virtue and to live (...) with integrity. We present role coadunation as a process with epistemic and behavioral aspects that people can use to resolve moral disjunction with integrity. When role coadunation is successful, it enables people to live virtuous lives of appropriate narrative disunity and to honor their identity-conferring commitments. We show how role coadunation can be facilitated by interpretive communities and discuss the emergence and ideal features of those communities. (shrink)

Contemporary business trends in Africa portray a spate of paradoxes in her socio-economic development. For instance, there is a rapid increase of international interventions and establishment of multinational corporations as a result of globalization; yet not much of this has been domesticated. Industrial and infrastructural developments are sprawled around us; yet unemployment is on the increase. While financial institutions and government agencies take capricious interests and levies in businesses; the human community and environment are left out in tatters. The media (...) advertises business via any means possible, ignoring questions about moral values of individual persons in the society as well as companies that drive the economy. These happenings, no doubt, raise genuine cause for concern as it threatens African indigenous morality. This is a pointer to the fact that there is something lacking. That desideratum is a unifying business ethic. This paper is a research that attempts to fill that ethical gap. It is considered that the philosophical concept of Ubuntu – an African traditional philosophy of social existence is essential. It supports and encourages integral human development, and as such can serve as an ethical ideal in an ever-dynamic business operation in Africa. (shrink)

Research on corporate sustainability has started to acknowledge the role of temporality in creating more sustainable organizations. Yet, these advances tend to treat firms as monolithic and we have little understanding of how different temporal patterns throughout an organization shape perceptions of and actions toward sustainability. Building on studies highlighting how the temporal structures of work shape employee engagement with different organizational processes and issues, we seek to answer: How does the temporality of work practices structure perceptions of corporate sustainability (...) throughout the firm? Using data from an ethnography of a small European sustainable bank, we provide an account of the variety of ways in which employees in different departments perceive the bank and how they engage with sustainability. We then go on to show how the temporal structures of work practices within different departments help explain some divergence in perceptions of sustainability. Our study highlights the variegation of temporal structures in organizational processes of meaning-making and its role for a better understanding of the efforts to make corporations more sustainable. (shrink)

This article reports the findings of a field study conducted on the purchasing intentions of ethical consumers in India. We explored how the involvement of ethical consumers with social networking sites (SNSs such as Facebook, Twitter, Instagram, Snapchat, LinkedIn, and others) affects their intentions to buy ethical products. Applying an extended theoretical lens of theory of planned behavior and social capital, we present an analysis of a rich qualitative data. We identify and describe 7 dimensions, representing the 19 factors and (...) manifesting the informational, relational, and valuation usage of SNSs that explain their impact on the purchase intention of ethical consumers in India. We conclude by highlighting the decision-making role played by the ethical knowledge and price sensitivity of ethical consumers, reflecting the peculiarities and dynamics of ethical consumption in India. (shrink)

Research suggests that the experience of meaningless work is prevalent in various occupations, and that it is destructive for organizations and individuals, making this an issue of major ethical importance. In this paper, we present the results of a qualitative study based on interviews with Canadian public servants who self-identified as experiencing meaninglessness at work. Our main goal is to better understand participants' responses to the experience of meaningless work and the broader implications their experiences had on the rest of (...) their lives. We surface and explore the harms inflicted on participants through their experiences with meaningless work and suggest that these harms may have been made worse by structural features of our study's public-sector setting. We contribute to organization studies literature by showing the intersection of meaningless work with three related concepts: bullshit jobs, empty labour, and functional stupidity and argue that our empirical findings complement and complicate these frameworks by presenting the complex but hidden emotional experiences that can accompany outwardly observable workplace behaviours. (shrink)

This study conducts a moral analysis of leverage buyouts (LBOs) and relies on the holistic framework of the Triple Font Theory. It shows that the claims made by standard agency theory have not been successful both for the purchased firms and for the investors. In addition, the reductionism of the theories justifying LBOs may have favored some of the excesses observed in practice and contributed toward lessening the moral responsibility of market participants. The study suggests some possible reforms and explains (...) what improvements virtue ethics and Catholic Social Teaching can bring. It formulates a set of recommendations that can be implemented by the regulators or market participants. (shrink)

This paper draws on MacIntyre’s ethical thought to illuminate a hitherto underexplored religious context for business ethics, that of the Amish. It draws on an empirical study of Amish settlements in Holmes County, Ohio, and aims to deepen our understanding of Amish business ethics by bringing it into contact with an ethical theory that has had a signifcant impact within business ethics, that of Alasdair MacIntyre. It also aims to extend MacIntyrean thought by drawing on his neglected critique of modernity (...) in the context of business ethics. The Amish context allows us to appreciate the relationship between MacIntyre’s critique of modernity, his conception of practices and communities, and his distinctive approach to the virtues. It also helps us to better understand how the ethical life is possible within our emotivist culture. (shrink)

The growing uses of algorithm-based decision-making in human resources management have drawn considerable attention from different stakeholders. While prior literature mainly focused on stakeholders directly related to HR decisions (e.g., employees), this paper pertained to a third-party observer perspective and investigated how consumers would respond to companies’ adoption of algorithm-based HR decision-making. Through five experimental studies, we showed that the adoption of algorithm-based (vs. human-based) HR decision-making could induce consumers’ unfavorable ethicality inferences of the company (study 1); because implementing a (...) calculative and data-driven approach (i.e. algorithm-based) to make employee-related decisions violates the deontological principles of respectful employee treatment (study 2). However, this effect was attenuated when consumers had high (vs. low) power distance beliefs (study 3); the algorithm served as assistance (vs. replacement) for human decisions (study 4); or the adoption was framed as employee-oriented (vs. company-oriented) motivated (study 5). Our findings suggested that consumers are aversive to algorithm-based HR decision-making because it is deontologically problematic regardless of its decision quality (i.e. accuracy). This paper contributes to the extant understanding of stakeholders’ responses to algorithm-based HR decision-making and consumers’ attitudes toward algorithm users. (shrink)

Abundant research exists on the restructuring operations of large, publicly listed firms. However, little is known about the antecedents of layoffs in small and medium-sized enterprises (SMEs). Building on the stakeholder salience theory and arguments on social proximity, this study posits that SMEs are less likely to dismiss employees than large firms. We argue that the existence of strong interpersonal ties between employees and managers makes it hard for SME owners and managers to dismiss employees. Empirically analyzing a large sample (...) of European Union firms, the results confirm that the likelihood of layoffs is lower in SMEs than in large firms, even when performance declines. (shrink)

Integrating stakeholder agency theory with the instrumental corporate social responsibility (CSR) literature, this study explores how award-winning CEOs consider personal interests and balance competing stakeholder demands when they decide between external and internal CSR, or CSR focus. Using a difference-in-differences research design, we find that after winning a prestigious media award, CEOs engage in more external CSR, which is more visible to the public, and less internal CSR, which is less likely to attract public attention. We find that such an (...) influence on CSR focus is more salient for award-winning CEOs with lower stock ownership (i.e. a stronger self-serving motivation) than for CEOs with higher stock ownership. Furthermore, we explore the role of stakeholder salience in modifying award-winning CEOs’ decisions about CSR focus. When external stakeholder salience is higher (e.g. higher media coverage), award-winning CEOs' manipulation of CSR focus by increasing external CSR and decreasing internal CSR is more salient. However, such effects can be dampened when internal stakeholder salience is higher (e.g. higher human capital intensity). Our study contributes to the instrumental CSR literature by demonstrating the underlying processes and boundary conditions of how awards affect CEOs' balance of stakeholder salience. (shrink)

It is widely recognized that workplace sexual harassment has significant negative psychological and personal consequences, and employees facing harassment suffer reductions in productivity. Our contribution is to propose a novel measure of workplace sexual harassment risk and provide a fuller estimation of the firm value impact of sexual harassment. In contrast to recent studies that focus on short-run market reactions to media announcements of harassment scandals, we use employee job reviews to identify low-profile harassment incidents that better reflect the pervasive, (...) toxic environment pertaining to sexual harassment than do newsworthy scandals, and we measure the longer-term effect on firm value starting from the date when harassment risk affects employee morale. We identify firm harassment risk by analyzing employee job reviews and estimate the sexual harassment score (SH) through textual analysis of online job reviews. Our sample of high-SH firms, or firms with unusually high-SH scores, exhibits significant reductions in future stock performance and profitability. For example, firms with a top 2% SH score earn a value-weighted risk-adjusted stock return of − 17% in the 1-year period after high-SH classification, and this damage is concentrated in firms with higher investor attention. Furthermore, high-SH firms experience a decline in operating profitability and an increase in labor costs during a 5-year period around high-SH classification. Our evidence suggests that sexual harassment can cause greater damages to firm value than previously documented. (shrink)

Prior research on workplace ostracism and helping behavior has yielded mixed results. This study integrates social learning theory and social role theory by constructing a multilevel model to examine the relationship between supervisor ostracism and helping behavior that focuses on the mediating role of coworker ostracism and the moderating role of subordinate gender. Using a two-wave, multisource approach, data were collected from 382 employees and 43 immediate team leaders in four business corporations in Guangxi Province, China. The results of path (...) analysis reveal that supervisor ostracism has a cross-level effect on helping behavior through the mediating role of coworker ostracism. Furthermore, the positive direct effect of supervisor ostracism on coworker ostracism and the negative cross-level indirect effect of supervisor ostracism on helping behavior via coworker ostracism was stronger for men than women. These findings expand and deepen our understanding of the ostracism field. (shrink)

Activism undertaken by CEOs has been on the rise in recent years. Research on this practice has been primarily concerned with determining the conditions under which a CEO’s public statements on sociopolitical issues are beneficial or detrimental to her firm’s business performance. We complement this instrumental perspective on CEO activism with an ethical investigation of the implications of CEO activism for the democratic process. Drawing on political philosophy, we show that the answer to the question of whether CEO activism is (...) conducive to the democratic process depends on the view of democracy that is adopted. From the perspective of liberalism, the sole requirement that an instance of CEO activism must fulfill is that it is lawful, provided that the applicable law sufficiently protects people’s essential rights. However, from the viewpoint of republicanism, this is not a sufficient condition. Besides being law-abiding, CEOs should be “civic-minded” when intervening in public debates, i.e., concerned with the quality and fairness with which those debates are conducted. Based on the literature on republicanism, we suggest four possible criteria that civic-minded CEOs can apply to gauge the democratic conduciveness of a possible public intervention: added insight, timeliness, constructiveness, and transparency. Our article complements the predominantly instrumentally oriented literature on CEO activism and contributes, more broadly, to the literature that explores the normative dimensions of corporate political involvement, as well as to a growing strand of research that draws on philosophical theory to inform business leaders’ ethical decision-making. (shrink)

This study examines whether and how a CEO’s personal traits (gender, altruism, age, and founder) influence organizational performance. Building upon upper echelons theory, this study develops a conceptual framework that gives explicit recognition to how the institutional environment surrounding the CEOs shapes their characteristics, which, in turn, are reflected in the different organizational strategies and performance. This study moves beyond the existing focus on for-profit corporations and conducts the empirical analysis on a novel, hand-collected, longitudinal dataset of 1342 firm-year observations (...) of 128 faith-based charity organizations operating in a major developing, Muslim-majority country in the period 1996–2019. This study reveals that those faith-based charity organizations led by CEOs with specific personal traits (woman, altruistic, young, and founder) exhibit better organizational performance. Importantly, CEOs’ personal traits, however, do not have a uniform, systematic effect; their effect is generally strengthened when the CEO is also the founder of the faith-based charity organization, given the greater latitude of managerial discretion that a CEO has in managing the organization. Our findings have important implications for individual charity organizations; their board of directors; and their stakeholders, in particular the communities they serve, as well as the whole society where they operate. (shrink)

Business ethics research has long examined the dichotomy between remaining silent or reporting ethical misconduct to a third party. Little is known, however, about ethical conversations within a work group after observing misconduct. Specifically, we do not know how many members of their work group individuals choose to communicate with. These conversations could have important implications for creating an ethical workplace. We propose that psychological standing is an important driver of individuals’ decisions not to remain silent and to instead raise (...) moral concerns with a greater number of others in their work group. In addition, integrating existing work on structural power, psychological standing, and the bystander effect, we develop a moderated mediation model with both structural power position and work group size as contextual drivers of psychological standing. Our model is supported across four studies using different designs and methodological approaches. Our results contribute to the understanding of when and why individuals raise moral concerns, and they provide insights into how an ethical context is created in organizations. (shrink)

We examine the relation between earnings information content and the use of trust words, such as “character,” “ethics,” and “honest,” in the MD&A section of 10-K. We find that earnings announcements of firms using trust words have lower information content than earnings announcements of firms that do not use trust words. We also find that the value relevance of earnings is lower for firms using trust words than those not using trust words. Further, firms using trust words are more likely (...) to receive a comment letter from the SEC, pay higher audit fees, and have lower corporate social responsibility scores. Overall, our results suggest that firms that use trust words in the 10-K are associated with negative outcomes, and trust words are an inverse measure of trust. (shrink)

For over four decades, the topic of Chief Executive Officer (CEO) compensation has attracted considerable attention from the fields of economics, finance, management, public policy, law, and business ethics. As scholarly interest in CEO pay has increased, so has public concern about the ethics of high CEO pay. Despite growing interest and pressure among the public and government to reduce CEO pay, it has continued to increase. Using a multi-method design incorporating a pilot study, two online experiments, and an event (...) study, we investigate the impact of CEO pay on consumer purchase intent and find that this negative relationship is magnified under conditions of brand crisis. We also find that the negative interaction of high CEO pay and brand crisis on purchase intent is more negative when the brand has strong equity. Finally, when the CEO is awarded high pay while the firm they manage is undergoing a brand crisis, consumers lose trust in the firm’s brand which reduces consumer purchase intent. This research provides insight on how governance decisions can impact consumer perceptions of corporate brands and consumer behavior, with implications for public policy leaders, boards of directors, CEOs, and Chief Marketing Officers regarding how to manage and message CEO pay. (shrink)

Although extant literature has covered the differences between unethical behaviors in relation to perpetrators and targets, most of this research has not considered the effects of observed unethical behaviors on employees. In this study, we focus on observed unethical behaviors of peers targeted at their organization and examine how witnessing a peer engage in an organizationally targeted unethical behavior would impact the observer. Drawing on cognitive appraisal theory, we propose that organizational identification will inform emotions, which in turn will shape (...) employee silence, depending on how employees appraise the observed unethical behavior. We theorize that peer unethical behaviors would induce anger, anxiety, and vicarious shame, which will guide employees’ quiescent and prosocial silence behaviors. In addition, we suggest that the proposed relationships would vary with the level of organizational identification. With a sample of 329, results from a between-subject scenario study generally supported our hypotheses. There was a combined effect of peer unethical behaviors and organizational identification on anger, anxiety, and shame, which in turn led to employee silence in the cases of anxiety and shame. (shrink)

Given the dearth of research examining the distinctions across various facets of employee knowledge-hiding (KH) behaviors, there is little known about why and when leadership negatively influences playing dumb and evasive hiding but positively influences rationalized hiding. The present study fills this void by hypothesizing that employee justice orientation (JO) acts as a mediator of the associations of ethical leadership (EL) with different facets of employee KH behaviors. We also propose employee conscientiousness moderates the relationship of EL with JO and (...) the indirect relationships of ethical leadership with distinct variants of employee KH behaviors. The results based on time-lagged data from 387 employees provide support for the hypothesized relationships. Together, our research provides a more nuanced account of the influence of leadership on employee KH behaviors that can facilitate the development of more appropriate interventions to deal with the intricate problems related to employee KH behaviors. (shrink)

This paper examines the Fair Trade practices of Dure, a Korean consumer cooperative, through the extended cooperative enterprise citizenship framework. Extended cooperative citizenship means that cooperatives should replace citizenship and fill the gaps in the weakening public service sector. As dual-purpose business organizations, cooperatives have already played essential roles as extended corporate citizens. However, previous literature regarding CSR or cooperatives has not sufficiently explored the social responsibility of cooperatives. Furthermore, corporate citizenship is generally regarded as a singular and static concept. (...) Therefore, this paper analyses Dure’s Fair Trade practices through the newly developed framework. Significantly, this article clarifies how Dure collaborates with key stakeholders and upholds their civil, political, and social rights through Fair Trade. This paper also explains how cooperative enterprise citizenship has changed as Fair Trade practices have shifted. Two implications of this research are revealed. First, the paper develops a new analytical model to explain the dynamics of corporate citizenship and Fair Trade practices. Second, the research provides details about the social responsibility of Korean consumer cooperatives based on Fair Trade that will have practical applications for practitioners in the business sector. (shrink)

Robert Zafft presents the too-often abstract language of business ethics in straight-forward language, laying out two themes commonly ignored: in the real world, it is often easy to lay out an ethical path but often very difficult to implement and encourage adherence to that path, and reputation is the single most important asset in business.

Curt Verschoor on Ethics is a compilation of the best business ethics columns that will continue for years forward to be of lasting educational value. In a company setting, the columns can function as the basis for discussion on proper business ethics. In academia, the columns can serve as assigned readings over significant ethics events and issues. Some topics that are covered in the columns include: value of a strong ethical culture, studies of ethical and unethical culture, public and management (...) accounting ethics, ethics of executive compensation, international ethics standards, fraud case studies, small organization fraud studies, regulation and enforcement, whistleblowing, sustainability and integrated reporting, tax avoidance issues, students. (shrink)

The future of the free market depends on fair, honest business practices. Business Ethics: Contemporary Issues and Cases aims to deepen students’ knowledge of ethical principles, corporate social responsibility, and decision-making in all aspects of business. The text presents an innovative approach to ethical reasoning grounded in moral philosophy. Focusing on corporate purpose—creating economic value, complying with laws and regulations, and observing ethical standards—a decision-making framework is presented based upon Duties-Rights-Justice. Over 40 real-world case studies allow students to grapple with (...) a wide range of moral issues related to personal integrity, corporate values, and global capitalism. Richard A. Spinello delves into the most pressing issues confronting businesses today including sexual harassment in the workplace, cybersecurity, privacy, and environmental justice. (shrink)

While unethical behaviors that are intended to benefit the self are often severely punished, unethical behaviors that are intended to benefit the organization (unethical pro-organizational behaviors, UPBs) are disciplined within organizations at different levels of severity. Building on the sensemaking theoretical framework, we study how employees make sense of what the organization is like through observing what the organization has done (i.e., different levels of punishment imposed for UPBs) and how employees subsequently react to the results of sensemaking (i.e., affective (...) commitment to the organization)—increased or decreased turnover and UPB engagement intention. By conducting a vignette-based experimental study and a time-lagged field study, we find that affective commitment to the organization of observers, especially those with a high moral disengagement propensity, increases at a low-to-moderate level of punishment severity for UPBs, and decreases at a moderate-to-high level of punishment severity for UPBs. Furthermore, the impacted affective commitment to the organization subsequently leads to increase in observers’ UPB engagement (intention) and decrease in observers’ turnover intention. We also highlight implications for theory and practice. (shrink)

We explore success drivers of reward-based crowdfunding for poverty alleviation in China. The results from our econometric modeling using data from 4375 reward-based crowdfunding campaigns suggest that poverty alleviation campaigns, as compared to ordinary ones, benefit from higher funded amounts, larger backer numbers, and greater success rates. The results also suggest that poverty alleviation campaigns perform better when the products sold originate from poorer (as compared to wealthier) regions and when price premiums are lower (as compared to higher). We corroborate (...) important findings from the field study with an experimental study, showing that the consumer’s feeling of warm glow accounts for the positive effects of poverty alleviation campaigns (as compared to ordinary) campaigns. We expand the applications of warm-glow theory into the context of reward-based crowdfunding campaigns for poverty alleviation and offer new insights into success drivers of such campaigns. (shrink)

Real living wages (RLWs) are an important ethical and moral policy to ensure that employees earn enough to live on. In providing ‘a fair day's pay for a fair day's work’, they set an ethical foundation for liveability. This article explores the ethics and moral economy of the RLW for lower-paid staff in the overlooked economy context of UK professional football, illustrated by a qualitative case study of Luton Town Football Club (LTFC). The article provides theoretical insights grounded in moral (...) economy concepts about how a RLW contributes to a broader common good means of enabling fuller human participation in decent working and living conditions. Applying these concepts using a multi-disciplinary moral economy interpretation offers deeper theoretical contributions than economistic interpretations restricted to mainly technocratic economic distributive issues. LTFC are evidently ethically embedded in a moral economy as a local community club paying a RLW, and part of the overlooked economy. The research also contributes to contemporary debates on ‘Common Good’ HRM regarding the role of living wages in addressing grand common good challenges like inequality and quality of working lives. (shrink)