This study investigates the influence of formal and informal institutions on firm innovation in transitional economies of Central and Eastern Europe (CEEs) by explicitly differentiating between corruption and bribery as distinct informal institutions. We integrate institutional theory and legitimacy theory to explain that the failure of formal institutions creates an environment of corruption which encourages firms to use bribes to facilitate economic exchange. We test our hypotheses on the innovation performance of a sample (n = 1603) of firms in 11 (...) CEEs. The results show that weak rule of law and ineffective business regulations in CEEs propagate the perception of corruption that inhibits firm innovation. However, the use of bribery enables firms to transform this environment of corruption into innovation outcomes. The policy and managerial implications of our research for differentiating between corruption and bribery and our findings that bribery acts as the glue that binds formal and informal institutions are fully discussed. (shrink)

Employees remaining silent about ethical aspects of work or organization-related issues, termed employee ethical silence, perpetuates misconduct in today’s business setting. However, how and why it occurs is not yet well specified in the business ethics literature, which is insufficient to manage corporate misconducts. In this research, we investigate how and when exploitative leadership associates with employee ethical silence. We draw from the conservation of resources theory to theorize and test a cognitive resource pathway (i.e., work meaningfulness) and a moral (...) resource pathway (i.e., moral potency) to explain the association between exploitative leadership and employee ethical silence. Results from two studies largely support our hypotheses that work meaningfulness and moral potency mediate the effect of exploitative leadership on ethical silence contingent on performance reward expectancy. Theoretical and practical implications are thoroughly discussed in the paper. (shrink)

We examine the important roles of two forms of capital—human and social—in the accumulation of critical resources that enable firms to adopt sound environmental management practices which contribute to better firm performance. Drawing on human and social capital theories and the resource-based view of the firm, we tested this proposition using data from a survey of 141 small manufacturing firms drawn from a survey of business enterprises in a metropolitan city in the southern region of the Philippines. The results of (...) our analysis using structural equation modelling-partial least square approach show that both human capital such as age, experience and education of managers of the firm and social capital such as external managerial ties and networks have significant and positive contribution to the environmental management resources of firms although the effects vary in magnitude. The accumulation of environmental management resources not only is positively linked to the adoption by firms of pro-environment practices but also fully mediates the effects of the two types of capital on the adoption of such practices. Pro-environment practices are positively linked to better performance outcomes. The findings underscore the need to account for the intangible and more tacit forms of capital such as managerial talent, knowledge, skills and social ties and networks in the wider debate on how small manufacturing firms in developing countries can address the pressing need to integrate environmental sustainability in business. (shrink)