We find that agency problems are embedded in firm's excess and abnormal equity investments that are mainly dictated by controlling shareholder's motives and ethical choices manifested in ownership and board structure. The excess equity investment is gauged with respect to industry average. The abnormal equity investment is specifically referred to the number of nominal investment companies that are fully controlled by the controlling owners while subject to little governance. Our empirical evidences of 345 Taiwanese non-financial listed firms show that firm's (...) excess and abnormal equity investments are negatively correlated with controlling shareholder's cash flow rights while are positively correlated with the control-cash flow deviation, and board affiliation. The results are supportive of the positive incentive hypothesis and the negative entrenchment hypothesis put forth by La Porta et al. and Claessen et al.. The negative relation between equity investment and firm's value further supports the agency postulation that corporate excess and abnormal equity investments represent a leeway for controlling shareholder to exploit wealth of minority shareholders. This study potentially contributes to the literature of business ethics by portraying an empirically testable linkage from controlling owner's ethical choices to his actions and therefore firm's value. (shrink)

This paper examines the relationship of ethical decision-making by individuals to corporate business ethics and organizational performance of three groups: SMEs, Outstanding SMEs and Large Enterprises, in order to provide a reference for Taiwanese entrepreneurs to practice better business ethics. The survey method involved random sampling of 132 enterprises within three groups. Some 524 out of 1320 questionnaires were valid. The survey results demonstrated that ethical decision-making by individuals, corporate business ethics and organizational performance are highly related. In summary, then, (...) high levels of organizational performance were directly attributable to high levels of applied corporate and individual ethics. Furthermore, there is a demonstrable tendency for Outstanding SMEs to reject ethically unsound practices such as padded expense accounts, tax evasion and misleading advertising. The measurement criteria used to assess organizational performance, however, did not include an objective evaluation of financial performance. (shrink)

The practice of business ethics is a constant concern for both business and academics. Thus this study attempts both to explore the effective performance of business ethics and to provide a learned reference. The researcher has gathered relevant literature, developed a notion of business ethics operation which have been put to the test within four selected enterprises across the Taiwan Strait. The findings reveal that different types of ethical leadership and catalytic mechanism precipitated four operations and a swathe of different (...) approaches to business ethics. The study has, it is hoped, justified academic interest in business ethics by obtaining experimental results which demonstrate the merits of promoting their practice. (shrink)

Taiwanese enterprises generally display a tacit acceptance and practice of globally-recognized business ethics such as the respect of human rights. Yet some Taiwanese business supervisors subscribe instead to a philosophy of leadership, dubbed "pseudo-harmony", which actively seeks to evade responsibility and any conflict of interest with profitability. Meanwhile other Taiwanese entrepreneurs are even less enlightened, dictatorially upholding self-serving regimes which operate on a philosophy which is euphemistically referred to as "householder management".These attitudes result in the sub-optimal development of "organizational democratization" (...) within Taiwanese enterprises and hi-light the fragility of "ethical leadership" in Taiwan. There is a strong argument, therefore, that Taiwanese business needs to become both its own analyst and therapist if it is to enhance its "governance ethics". Only this way can the nation's enterprises evolve their ethical responsibilities to stakeholders and sustain their competitiveness in a global market that increasingly demands an adherence to ethical standards. (shrink)

The authors identify the challenge of holding contemporary business leaders accountable for enhancing the intangible strategic asset of integrity capacity in organizations. After defining integrity capacity and framing it as part of a strategic resource model of sustainable global competitive advantage, the stakeholder costs of integrity capacity neglect are delineated. To address this neglect issue, the authors focus on the cultivation of judgment integrity to handle behavioral, moral and hypothesized economic complexities as key dimensions of integrity capacity. Finally, the authors (...) recommend two leadership practices to build competence in business leaders to enhance integrity capacity as an organizational strategic asset. (shrink)

Professional associations, like the Academy of Management, exist to foster and promote scholarship, exchange among faculty, and an environment conducive to member professional ethics development. However, this last purpose of such organizations has received the least amount of attention. Moreover, previous research has demonstrated that there are differences in perceived needs for professional ethics development between tenured and untenured faculty. In the current research 260 Academy of Management members were surveyed. The research identified differences between tenured and untenured management faculty (...) with respect to expectations for the Academy of Management to provide ethics education and research with respect to the professional code of conduct. Implications of the findings are discussed from a developmental perspective. Directions for future research are provided. (shrink)

Professional associations, like the Academy of Management, exist to foster and promote scholarship, exchange among faculty, and an environment conducive to member professional ethics development. However, this last purpose of such organizations has received the least amount of attention. Moreover, previous research has demonstrated that there are differences in perceived needs for professional ethics development between tenured and untenured faculty. In the current research 260 Academy of Management members were surveyed. The research identified differences between tenured and untenured management faculty (...) with respect to expectations for the Academy of Management to provide ethics education and research with respect to the professional code of conduct. Implications of the findings are discussed from a developmental perspective. Directions for future research are provided. (shrink)

This article presents a theorized and conceptually informed method for the undertaking of an ethics audit organization. At an operational level, the overall integrity of an organization, it is argued, may be evaluated through the application of a conceptual frame-work that embraces the inter-related themes of individual responsibility, social equity and political responsibility. Finally, a method is presented for ethics audit which was developed in the auditing of a national public sector sports organization: sportscotland. This emphasizes the significance of key (...) personnel (individuals and in groups) in producing and reproducing the organizational ethos, whilst recognizing the importance of anonymity and confidentiality throughout the process. The theoretical terrain of the ethics audit is articulated through a consideration of ethics as applied moral philosophy, equity as social justice and corporate governance as the moral health (or otherwise) of a public sector sports organization. (shrink)

As corporate social responsibility involves a voluntary business endeavour to address social and environmental issues beyond legal compliance, governments cannot fall back on hierarchical command-and-control policies to support it. As such, it is complementary with the increasing popularity of public policies known as New Governance policies, where the government is engaged in a horizontal inter-organizational network of societal actors and where public policy is both formed and executed by the interacting and voluntary efforts from a multitude of stakeholders. However, such (...) policies are known to generate substantive uncertainty about the content of CSR and its related issues, strategic uncertainty regarding the behavior of the actors involved and institutional uncertainty related to the interaction process involved in the institutional change. We explore New Governance policy instruments to address these uncertainties in the context CSR and discuss the experiences with these methods in the European Union. (shrink)

Although the importance of measuring and reporting the social and environmental impact of organisational action is increasingly well recognised by both organisations and society at large, existing approaches to impact measurement are still far from being universally accepted. In this context, the stakeholder dynamics within the nascent field of impact investing demonstrate the complexity of resolving potentially differing perspectives on key impact measurement issues such as materiality. This paper argues, from an organisational perspective, that such arenas of contestation can be (...) conceptualised in terms of social justice. Specifically, we draw upon Sen’s notions of ‘arrangement and realisation’ to explore the dynamics of contestation across a range of stakeholders concerning materiality judgements to suggest that such ‘arrangements’ may lead to suboptimal impact outcomes as ‘realisations.’ Our analysis of the nature of materiality contestations in impact measurement reveals the conflicts, tensions and paradoxes evident in this field of action. Empirically, we examine data drawn from 19 cases and 33 interviews. The analysis suggests three arenas of contestation around the materiality of impact measurement: the power dynamics between economically powerful investors and objectified investees; the conflicts between materiality norms and standards; and the interactions between all stakeholders with differing motivations towards radical or incremental materiality. Building upon this analysis, we then discuss how arenas of contested materiality may be mediated by drawing upon Sen’s notions of transcending the individual interests of the invested parties for the greater good via processes of contextualisation and case-specificity. (shrink)

Calls for greater corporate responsibility have resulted in the creation of various extralegal mechanisms to shape corporate behavior. The number and popularity of corporate responsibility standards has grown tremendously in the last three decades. Current estimates suggest there may be over 300 standards that address various aspects of corporate behavior and responsibility (e. g., working conditions, human rights, protection of the natural environment, transparency, bribery). However, little is known about how these standards relate directly to the notion of peace through (...) commerce and the reduction of violent conflict in the world. This article explores the relationship between corporate responsibility standards and peace through commerce. After a summary of the current state of standards with respect to the creation of peace and the reduction of violent conflict, I explore concerns regarding the effectiveness of standards in shaping corporate behavior and the potential future role standards could have in creating peace through commerce. (shrink)

This article examines a social accounting cycle in a Danish savings bank with specific focus on how employees interacted with the cycle. The case study is based on archival material and observations of employee engagement sessions that were a significant part of the cycle. The article exposes the ways in which the cycle can be understood as an initiative that prompts different forms of accountability. The cycle had the potential to bring different forms of accountability together, but the cycle also (...) faced challenges that threatened its relevance from an employee perspective. These challenges might have implications for the way we perceive social accounting and the role of employees. (shrink)

This paper reports on an interpretive research project which examines the feasibility of implementing social audit within the general medical practice setting. The study aims to communicate patients' voices to aid evaluation of the potential contribution of social audit to the public health sector and also addresses particular conceptual problems which arise when attempting to implement social audit within this environment. The fieldwork focuses on one general health practice in Lanarkshire (in southern central Scotland). Consultative focus group discussions and individual (...) interviews were carried out with a sample of twenty two patients. Patients were most concerned with health service organisational and delivery issues. Overall, the results suggest patients are enthusiastic about the ideas and process of the social audit. Patients were able to demonstrate a capacity for grasping accountability issues and balanced reasoning. There was an acute awareness of the constraints which exist in the public services. Patients addressed the broad rights and responsibilities issues, and highlighted the possible pitfalls of relying on a representational mechanism for ensuring their voices were heard. The study concludes that an involved and negotiative dialogue process of implementing social audit could provide beneficial understanding and ideas to the organisation which may be further researched. (shrink)

Developing and implementing a meaningful code of conduct by managers or consultants may require a change in orientation that modifies the way these precepts are determined. The position advocated herein is for a different approach to understanding and organizing the guiding parameters of the firm that requires individual reflection and empowerment of the entire organization to advance their shared values. The processes involved are discussed using four discrete stages that move from the personal to the work team and to the (...) unit to the full company, followed by the board of directors’ evaluation. The hoped-for end product is dynamic, employee-driven, codes of conduct that recognize the systemic and far-reaching impact of organizational activities across internal and external stakeholders. Operational details for and some issues associated with its implementation are also provided. (shrink)

This article explores solidarity as an ethical concept underpinning rules in the global health context. First, it considers the theoretical conceptualisation of the value and some specific duties it supports (ie: its expression in the broadest sense and its derivative action-guiding duties). Second, it considers the manifestation of solidarity in two international regulatory instruments. It concludes that, although solidarity is represented in these instruments, it is often incidental. This fact, their emphasis on other values and their internal weaknesses diminishes the (...) action-guiding impact of the solidarity rules. The global health and human subject research scene needs a completely new instrument specifically directed at means by which solidarity can be achieved, and a reformed infrastructure dedicated to realising that value. (shrink)

In this paper we report a study of the approach of six U.K. water and electricity companies towards managing the relationship with their ''green'' stakeholders. Stakeholders are accorded increasing importance in political discourse and stakeholder theory is emerging as a promising framework for the analysis of corporate social performance.We studied the companies'' general approach towards green stakeholders, their dealings with specific stakeholder groups and whether they emphasised the consultation or the information aspect of stakeholder management. We found that none of (...) the six companies had a systematic stakeholder approach that extended to all potential green stakeholders. Rather, the importance of specific stakeholder groups seemed to be determined by managers'' intuition and by the stance that the stakeholders themselves displayed towards the company. (shrink)

Since Ackerman in Corporate social responsiveness, the modern dilemma (1973), pleaded for the institutionalisation of corporate social performance (CSP) in business processes, researchers have focused on the role of strategy in CSP. This article demonstrates that CSP is institutionalised within the governance structure. We will attempt to make this clear by means of a description of the Dutch system of corporate governance. Under certain circumstances Dutch companies are already bound to CSP due to prevailing legislation. A governance perspective shows that (...) CSP is institutionalised within a company's governance structure. "Processes of responsiveness", since long regarded as a starting point of CSP-analysis, appear to be decision-making processes. Within these processes the expectations of the stakeholders can be institutionalised, trust can be built and interests can be incorporated. This makes CSP context-dependent. However, it is possible to analyse companies by comparing the companies' individual governance structures. The article concludes that CSP-analysis can fruitfully extend into analysing in the role of the stakeholders in the influence-pathways that are incorporated within the governance structure. (shrink)

The purpose of this paper is to advance research on CSR beyond the stalemate of economic versus ethical models by providing an alternative perspective integrating existing views and allowing for more shared dialog and research in the field. It is suggested that we move beyond making a normative case for ethical models and practices of CSR by moving beyond the question of how to manage organizational self-interest toward the question of how accurate current conceptions of the organizational self seem to (...) be. Specifically, it is proposed that CSR is not a question of how self-interested the corporation should be, but how this self is defined. Economic and ethical models of CSR are not models of opposition but exist on a continuum between egoic and post-egoic, illusory and authentic conceptions of the organizational self. This means that moving from one to the other is not a question of adopting different paradigms but rather of moving from illusion and dysfunction to authenticity and functionality, from pathology to health. (shrink)

Since Ackerman in Corporate social responsiveness, the modern dilemma (1973), pleaded for the institutionalisation of corporate social performance (CSP) in business processes, researchers have focused on the role of strategy in CSP. This article demonstrates that CSP is institutionalised within the governance structure. We will attempt to make this clear by means of a description of the Dutch system of corporate governance. Under certain circumstances Dutch companies are already bound to CSP due to prevailing legislation. A governance perspective shows that (...) CSP is institutionalised within a company’s governance structure. “Processes of responsiveness”, since long regarded as a starting point of CSP-analysis, appear to be decision-making processes. Within these processes the expectations of the stakeholders can be institutionalised, trust can be built and interests can be incorporated. This makes CSP context-dependent. However, it is possible to analyse companies by comparing the companies’ individual governance structures. The article concludes that CSP-analysis can fruitfully extend into analysing in the role of the stakeholders in the influence-pathways that are incorporated within the governance structure. (shrink)

Acknowledging the increasing attention in the literature devoted to the incorporation of ethical considerations into consumers' purchase decisions, this paper explores the notion of an ethical product. It is argued that ethical issues have long been involved in consumers' product evaluations, but that there has been little academic investigation of ethics in terms of product concepts and theories. Ethics are thus examined in the context of the augmented product concept, and two dimensions of ethical augmentation are identified: direction and content. (...) These dimensions are set out and discussed at some length, and then they are used to construct an ethical product matrix. It is shown how this could be used to provide structure and coherence to examinations of the perceived ethics of any given product offering. The implications of the analysis offered in the paper are discussed, and a number of limitations of the ethical product notion are identified. Finally some conclusions and directions for future research are suggested. (shrink)

In 1999, the Journal of Business Ethics published its 1 500th article. This article commemorates the journal's quest "to improve the human condition" (Michalos, 1988, p. 1) with a summary and assessment of the first eighteen volumes. The first part provides an overview of JBE, highlighting the journal's growth, types of methodologies published, and the breadth of the field. The second part provides a detailed account of the quantitative research findings. Major research topics include (1) prevalence of ethical behavior, (2) (...) ethical sensitivities, (3) ethics codes and programs, (4) corporate social performance and policies, (5) human resource practices and policies, and (6) professions – accounting, marketing/sales, and finance/strategy. Much remains to be done. (shrink)

In this research, we develop a reporting framework based on an ethical account of the Australian live sheep export industry’s current operations. We demonstrate that LSE operates within a legitimacy vacuum constituted by a repeated cycle of events that we characterize as scandal-response-obduracy with a constant factor being animal cruelty on an industrial scale. The lack of legitimacy is facilitated by an obdurate regulatory context, an absence of consumer awareness of industry practices, jurisdictional impediments to enforcement of animal cruelty laws (...) and foundational epistemic vices upon which the industry calculates an unethical cost benefit analysis of current practice. While legitimacy theory would expect demise of the LSE industry, its prolonged continuation is more than a curiosity. It presents an opportunity to understand how focus on vice epistemics and reporting of animal welfare may contribute to emancipatory change in the form of improved animal welfare in agricultural industries. (shrink)

Recent research suggests that corporate social responsibility is institutionalised amongst multinational corporations. Yet CSR scholarship faces considerable challenges. An agreed definition is lacking, even amongst researchers adopting aligned approaches. Studies remain heavily focused on making a business case for CSR, despite its widespread acceptance into business practice. Few studies examine CSR’s on-ground implications for the communities it purports to help, favouring instead a macro-level focus. And concerns about CSR’s sincerity, motivations and ethics perpetuate questions about its integrity. This article argues (...) that new institutionalism is well placed to respond to these core challenges for CSR, and that new institutionalist perspectives can complement and enrich other common theoretical approaches. It contributes a social mechanism-based framework for CSR, identifying and exploring the key social mechanisms that institutionalise it; namely, discourse, mimesis, normative learning and coercion. Understanding CSR as an institution facilitates new and different explorations of its causes and effects and opens new avenues for scholarly inquiry. Illustrative examples from a 3.5-year study of CSR in the global mining industry are presented to explore the implications of CSR as an institution and to suggest pathways for innovative research. (shrink)