Journal of Business Ethics

Zueva, Anna; Fairbrass, Jenny

doi: 10.1007/s10551-019-04330-5pmid: N/A

Governments are widely viewed by academics and practitioners (and society more generally) as the key societal actors who are capable of compelling businesses to practice corporate social responsibility (CSR). Arguably, such government involvement could be seen as a technocratic device for encouraging ethical business behaviour. In this paper, we offer a more politicised interpretation of government engagement with CSR where “CSR” is not a desired form of business conduct but an element of discourse that governments can deploy in structuring their relationships with other social actors. We build our argument through a historical analysis of government CSR discourse in the Russian Federation. Laclau and Mouffe's (Hegemony and socialist strategy: Towards a radical democratic politics,Verso Books, London, 1985) social theory of hegemony underpins our research. We find that “CSR” in the Russian government’s discourse served to legitimise its power over large businesses. Using this case, we contribute to wider academic debates by providing fresh empirical evidence that allows the development of critical evaluation tools in relation to governments’ engagement with “CSR”. We find that governments are capable of hijacking CSR for their own self-interested gain. We close the paper by reflecting on the merit of exploring the case of the Russian Federation. As a “non-core”, non-western exemplar, it provides a useful “mirror” with which to reflect on the more widely used test-bed of Western industrial democracies when scrutinising CSR. Based on our findings, we invite other scholars to adopt a more critical, politicised stance when researching the role of governments in relation to CSR in other parts of the world.

Schrage, Stephanie; Gilbert, Dirk Ulrich

doi: 10.1007/s10551-019-04388-1pmid: N/A

Multinational enterprises (MNEs) dominate the governance of global value chains (GVCs), such that according to the concept of political corporate social responsibility (PCSR), they are responsible to address governance gaps throughout the chains, even at the level of their independent suppliers. In practice, MNEs often struggle to cope with the complexity of these governance gaps, and PCSR does not provide a clear definition nor offer guidance for how to analyze and address them. By adopting the notion of governance mechanisms from GVC literature, this study proposes a more nuanced view, in which governance gaps result from inactive, ineffective, or inequitable governance mechanisms adopted by relevant actors, rather than a complete absence of governance. MNEs, through their governance mechanisms, commonly create governance gaps. This study distinguishes different types of governance mechanisms to create a typology of governance gaps, such that it contributes to the literature on PCSR by offering a more refined understanding of governance gaps, along with a means to identify mechanisms to address them. Furthermore, it contributes to the literature on GVCs by defining governance-related terms and adding an ethical perspective on MNEs’ global business conduct. To illustrate the typology, this article presents the case of low wages (below a living wage) for workers in the textile industry and efforts by H&M to deal with this governance gap.

Steyn, Francois; Sewchurran, Kosheek

doi: 10.1007/s10551-019-04328-zpmid: N/A

Aristotle’s philosophical insights into ethics, wisdom and practice have drawn the attention of scholars. In the current professional context where ethics are often compromised, this debate assumes a necessary urgency. This subject is highly relevant to business schools, given the general neglect of this quality in executive management development. Our research involved an analysis of contemporary literature on phronesis in the management scholarship, practice and teaching domains. Our definition of phronesis identifies themes and paradoxes distilled from this literature. Stories are by nature multi-layered and paradoxical, embracing ambiguity and contradiction, so we incorporate narrative as essential to our enquiry. While it appears to be easily grasped, phronesis is complex, nuanced and paradoxical, seen as an unorganised set of characteristics in the management scholarship domain. We argue that the neglect of phronesis in modernity flows from the challenging nature of developing it, itself the consequence of its indistinctness. It calls for Einstein’s words “I would give my life for the simplicity on the other side of complexity”. This article argues that developing this virtue as a form of practical wisdom, should be an integral part of executive management development if we are to cultivate morally responsible leadership. A typology of managerial phronesis will encourage contextually appropriate leadership excellence based on the virtue-attributes of managers-as-scholars. The typology we propose is based on a Grounded Theory synthesis of relevant literature. We adopt a phenomenological stance. Through incorporating Grounded Theory second order themes, we offer a grainier understanding of the qualities of managerial phronesis.

Seele, Peter; Dierksmeier, Claus; Hofstetter, Reto; Schultz, Mario D.

doi: 10.1007/s10551-019-04371-wpmid: N/A

Firms increasingly deploy algorithmic pricing approaches to determine what to charge for their goods and services. Algorithmic pricing can discriminate prices both dynamically over time and personally depending on individual consumer information. Although legal, the ethicality of such approaches needs to be examined as often they trigger moral concerns and sometimes outrage. In this research paper, we provide an overview and discussion of the ethical challenges germane to algorithmic pricing. As a basis for our discussion, we perform a systematic interpretative review of 315 related articles on dynamic and personalized pricing as well as pricing algorithms in general. We then use this review to define the term algorithmic pricing and map its key elements at the micro-, meso-, and macro levels from a business and marketing ethics perspective. Thus, we can identify morally ambivalent topics that call for deeper exploration by future research.

Zolotoy, Leon; O’Sullivan, Don; Song, Keke

doi: 10.1007/s10551-019-04356-9pmid: N/A

Prior studies suggest that firms headquartered in areas with strong religious social norms have higher ethical standards. In this study, we examine whether the ethical standards associated with local religious norms influence the M&A announcement returns. We document that the M&A announcement returns of acquirer firms increase with the strength of religious social norms in the area surrounding firms’ headquarters. We also document that the relationship is attenuated when acquirer firms have strong corporate social responsibility credentials, is amplified when public trust that firms act in the best interest of stakeholders suffers a negative shock and when the M&A deal has greater economic significance for the acquirer, and manifests predominantly in the lower tail of the distribution of M&A returns. Our findings are consistent with investor assessments of firms’ ethical standards driving the relationship between local religious social norms and M&A announcement returns. We find no evidence for the competing explanation—that investor assessments of firms’ risk preferences drive the documented relationship.

Zigan, Krystin; Héliot, YingFei; Le Grys, Alan

doi: 10.1007/s10551-019-04358-7pmid: N/A

This paper aims to contribute to the growing discussion about leadership in the contemporary Church of England with a particular interest in the complex interaction between social context and leadership practices. Implicit leadership theory (ILT) is used to explore mutual expectations around distributed models of lay and ordained leadership as well as ‘ordinary’ members’ of congregation. Applying a qualitative research method, we conducted 32 semi-structured interviews in 6 Church of England parishes. Through the systematic analysis of relevant contextual factors at multiple levels, we identify limited congruence between ideal leadership attributes and actual behavior. We contribute to the ILT literature by identifying ethical attributes, such as the ability to help others flourish, as particularly pertinent to the religious setting. We also identify the malleability of some leadership attributes. We further contribute to the literature on organizational studies in faith-based organizations by offering novel insights into the relationship between leadership, followership and contextual factors at local parish level which have significant practical implications for recruiting and training church leaders and followers.

Cabana, Guillem C.; Kaptein, Muel

doi: 10.1007/s10551-019-04376-5pmid: N/A

Studies on the ethical culture of organizations have mainly focused on ethical culture at the organizational level. This study explores ethical culture at the team level because this can add a more detailed understanding of the ethics of an organization, which is necessary for more customized and effective management interventions. To find out whether various teams within an organization can have different ethical cultures, we employ the differentiation perspective and conduct a survey of 180 teams from one organization. The results show that there are significant differences between the ethical cultures of teams. These differences are relevant given the different relationships that were established between high and low clusters of team ethical culture and two outcome variables (i.e., the frequency of unethical behavior and employee responses to unethical behavior). The results also show that the dimensions of ethical cultures among teams have different patterns, which indicates the usefulness of using a multidimensional scale for capturing further differences among team ethical cultures.

Ali, Ishrat; Cottle, Griffin W.

doi: 10.1007/s10551-019-04327-0pmid: N/A

Although scholars have long known that entrepreneurship involves the interaction of countless individuals beyond the entrepreneur, traditional performance metrics are limited to capturing the economic value that is created for shareholders. Multiple scholars have suggested that it should be possible to develop a more complete assessment that is able to simultaneously capture both the economic and non-economic consequences of entrepreneurship that exist for the broader network of firm stakeholders. The purpose of this paper is to provide a more nuanced understanding of entrepreneurial performance by operationalizing the concept of stakeholder capabilities. Building on concepts from stakeholder theory and the human development and capability approach in welfare economics, we argue that the pursuit of entrepreneurial opportunities can either create or destroy value for multiple stakeholders, and that this value is best conceived in terms of increases and decreases in individual capabilities (social, psychological, economic, physiological and intellectual). Approaching entrepreneurial performance from a stakeholder capabilities lens has implications for how we view entrepreneurs’ impact on society, what we mean by the creation and destruction of “value,” and how we define failure and success in entrepreneurship.

Mergaliyev, Arman; Asutay, Mehmet; Avdukic, Alija; Karbhari, Yusuf

doi: 10.1007/s10551-019-04331-4pmid: N/A

This study utilises higher objectives postulated in Islamic moral economy or the maqasid al-Shari’ah theoretical framework’s novel approach in evaluating the ethical, social, environmental and financial performance of Islamic banks. Maqasid al-Shari’ah is interpreted as achieving social good as a consequence in addition to well-being and, hence, it goes beyond traditional (voluntary) social responsibility. This study also explores the major determinants that affect maqasid performance as expressed through disclosure analysis. By expanding the traditional maqasid al-Shari’ah,, we develop a comprehensive evaluation framework in the form of a maqasid index, which is subjected to a rigorous disclosure analysis. Furthermore, in identifying the main determinants of the maqasid disclosure performance, panel data analysis is used by including several key variables alongside political and socio-economic environment, ownership structures, and corporate and Shari’ah governance-related factors. The sample includes 33 full-fledged Islamic banks from 12 countries for the period of 2008–2016. The findings show that although during the nine-year period the disclosure of maqasid performance of the sampled Islamic banks has improved, this is still short of ‘best practices’. Through panel data analysis, this study finds that the Muslim population indicator, CEO duality, Shari’ah governance, and leverage variables positively impact the disclosure of maqasid performance. However, the effect of GDP, financial development and human development index of the country, its political and civil rights, institutional ownership, and a higher share of independent directors have an overall negative impact on the maqasid performance. The findings reported in this study identify complex and multi-faceted relations between external market realities, corporate and Shari’ah governance mechanisms, and maqasid performance.

Ma, Lijun; Wang, Xin; Zhang, Che

doi: 10.1007/s10551-019-04377-4pmid: N/A

Using U.S. listed firms during the period from 1971 to 2010, this paper investigates the effect of religion on corporate cost behavior. We find that religion mitigates cost stickiness induced by agency or behavioral biases of managers. This result holds for several robustness tests that address endogeneity concerns. The mitigating effect of religion on cost stickiness is through the channel of reducing top managers’ overconfidence and optimistic bias regarding future demand change (risk-aversion mechanism) and promoting managers’ adherence to fiduciary responsibilities and consideration of shareholder benefits (ethic mechanism). Further evidence shows that the reduction in cost stickiness caused by religion increases firm value. Overall, our findings suggest that religion reduces the wedge between a firm’s actual and optimal resource commitments, which helps to improve firm value and resource allocation efficiency.