This study involved using a mixed method research design to examine the moral philosophy difference between the ethical decision-making process of CEOs in U.S.-led and non-U.S.-led within the luxury goods industry. The study employed a MANOVA to compare the ethical profiles between the two leader types and a phenomenological qualitative process to locate themes that give indication as to the compatibility of the luxury strategy values and practices with the principles and concepts of responsible leadership and conscious capitalism. As the (...) luxury goods industry is facing the first slowdown since 2000, pressure to achieve sales targets in the U.S. to make up for losses in other markets will place these CEOs under extreme pressure from their headquarters. These leaders must possess the ethical decision-making capability to balance legal and moral dilemmas unique to multinational luxury goods organizations while delivering business results in a challenging environment. Results of the study show no evidence of difference in the ethical decision-making profiles between the two groups of leaders. The themes and emergent findings resulting from the qualitative analysis indicate a profound incompatibility between the values informing decision-makers using the luxury strategy and those employed by leaders operating within the principles and parameters of responsible leadership and conscious capitalism. Recommendations for future research include replicating the study with a larger sample, within a different geographic region or comparing leaders using the luxury strategy to those using conscious capitalism. (shrink)

Despite universal agreement that corruption is norm-deviant, the criteria required to ascertain deviance remain elusive. The problem is even more pronounced for organizational corruption, not least because the construct remains somewhat ambiguous and is often conflated with proximate management constructs like antisocial or unethical organizational behavior. In this article, I identify the suitable criteria for the determination of deviance in organizational corruption and determine whether it is, indeed, antisocial or unethical. In order to minimize ambiguity, I first limit the scope (...) of organizational corruption to corruption within, rather than by, organizations, which is most conceptually challenging insofar as the aforementioned questions are concerned. I then conclude that organizational corruption should be specified solely with respect to the focal organization’s normative framework; it is anti-organizational rather than antisocial. Higher level normative prescriptions that arise from the organization’s embedding within its social context remain relevant, but only insofar as they are incorporated within the organization’s normative framework. Moreover, I argue that organizational corruption is not necessarily unethical, since the moral evaluation of an organizational act is, in principle, distinct from the determination of its deviance to organizational norms. (shrink)

Organizational corruption has recently attracted considerable scholarly attention, especially since its devastating effects following recent major corporate scandals, the worldwide economic crisis of 2009, and the current European Union monetary crisis. This paper is based on the analysis of three distinct, yet contextually related, case studies in a European Union member state: (a) an incident of corruption by a minister in an adjudicative role, (b) widespread financial misreporting and perjury within an organization, and (c) abuse of due process and obstruction (...) of justice by civil servants within a ministry. These cases serve to illustrate, for the first time, Aguilera and Vadera’s (in J Bus Ethics 77:431–449, 2008 ) framework of organizational corruption, which relates distinct types of a corrupter’s opportunity, motivation, and justification with the type of corruption present in the organization. Furthermore, the data suggest how the framework may be extended and reveal conceptual issues that require reconciliation. This study attempts such reconciliations and offers some suggestions on how the findings may be utilized by policy reformers or corruption controllers. (shrink)

Corporate anti-corruption initiatives can make a substantial contribution towards curtailing corruption and advancing efforts to achieve the United Nations’ Sustainable Development Goals. However, researchers have observed that underdeveloped assumptions with respect to the conceptualization of corruption and how firms respond to corruption risk impeding the efficacy of anti-corruption programs. We investigate the relationship between the perceived level of corruption in foreign host countries and the organizational structure of subsidiary operations established by multinational corporations. Foreign host market corruption is disaggregated into (...) two components—private and public corruption. We employ an uncertainty-based perspective grounded in transaction cost theory to focus upon the distinct mechanisms through which private and public corruption can each be expected to impact a foreign subsidiary’s organizational structure [wholly-owned subsidiary or a joint venture with a local partner]. We expect that each type of corruption fosters a different type of uncertainty which predominates in shaping the MNC’s choice of foreign subsidiary investment structure. Hypotheses are developed and tested with a sample of 187 entries into 19 foreign host markets. Each type of corruption was found to exert a distinct effect upon the organizational structure of foreign subsidiaries. More precisely, while heightened perceived levels of public corruption were found to motivate MNCs to invest through a JV with a local partner rather than a WOS, more pronounced private corruption precipitated the opposite outcome. (shrink)

The aim of this study is to better understand why public officials and business employees engage in corruption. Insight into individual-level explanations for corruption was obtained with the aid of a self-report survey. The results suggest that the most indicative factors of whether or not individuals are corruption-prone are as follows: the moral conviction they have to refrain from corruption; perceptions of whether their colleagues approve of and engage in corruption; and difficulties experienced in complying with the rules on corruption. (...) This result pattern was identical for public officials and business employees alike, and as a consequence, for both sides of corrupt acts. The latter indicates that the same motives may not only underlie corruption in both private and public sectors, but also the act of corruption in its active and passive forms. The results of the current study do not provide strong support for the assumption that economic considerations—expected costs and benefits—are crucial in predicting corruption. Based on the findings that norms and the perceived opportunity to comply are dominant factors in explaining corruption, this article focuses on the practical implications for the development of anti-corruption strategies within both public and private sectors. (shrink)

This study examines the role of executive compensation in public governance. We collect data on corruption cases that involve top-level executives in Chinese listed state-controlled firms. We find a significant positive relationship between underpayment of executives and the likelihood of an investigation into corrupt behavior. We also show that corruption is positively associated with firm performance and that the relationship between underpayment of executives and corruption is influenced by firm performance, suggesting that top managers are more likely to engage in (...) illicit behavior if they are compensated poorly while the firms under their control perform well. Finally, we find that pay-performance sensitivity decreases when top executives are involved in corruption investigations, indicating a lack of pecuniary incentives. Our empirical findings point toward an important relationship between executive compensation and corrupt behavior, thus providing valuable input to the understanding of executive pay and its effects in China’s state sector. (shrink)

Even though potential impacts of political and legal environments of business on ethical behavior of firms (EBOF) have been conceptually recognized, not much evidence (i.e., empirical work) has been produced to clarify their role. In this paper, using Bayesian causal maps (BCMs) methodology, relationships between legal and political environments of business and EBOF are investigated. The unique design of our study allows us to analyze these relationships based on the stages of development in 92 countries around the world. The EBOF (...) models structured through BCMs are used to explain how EBOF in a given country group are shaped by how managers perceive political, legislative, and protective environments of business in these countries. The results suggest that irregular payments and bribes are the most influential factors affecting managers’ perceptions of business ethics in relatively more advanced economies, whereas intellectual property protection is the most influential factor affecting managers’ perceptions of business ethics in less-advanced economies. The results also suggest that regardless of where the business is conducted in the world, judicial independence is the driving force behind managers’ perceptions of business ethics. In addition, the results of this study provide further support for scholars who argue that business ethics is likely to vary among countries based on their socio-economic factors. In addition to its managerial implications, the study provides directions for policy makers to improve the ethical conduct of businesses in their respective countries. (shrink)