David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 105 (1):53-68 (2012)
This article examines whether ethical business practice enhances financial performance with respect to interorganizational favour exchange. We argue that the link between the ethicality and economic utility of interorganizational favour exchange is governed by: (1) organizational–individual interest alignment/conflict and (2) the fairness or justifiability of favour exchanges from the perspective of third parties. We classify interorganizational (IO) favour exchange into four types (Business–Personal, Personal–Business, Personal–Personal and Business–Business favour exchange). Our analysis shows that the first three types of favour exchange are unethical as they involve conflicts between organizational and individual interests in one or both participating organizations that negatively affect organizational value creation. The last type of favour exchange involves organizational–individual interest alignment in both participating organizations and positively affects the capacity of those involved in the exchange to create value. Favour exchanges of this fourth variety are ethically justifiable unless they unfairly damage the legitimate interests of third parties. In the latter case, these favour exchanges create the risk of negative third party reactions, which in turn affect the sustainability of the benefits of the favour exchanges to the focal group (the dyad). Our research results advance understanding of the ethical and economic implications of IO favour exchange, counter the prejudice against this behaviour in organizations, provide ethical guidance for management and business practice, and have implications for the relationship between doing well and doing good.
|Keywords||Ethical business Favour exchange Conflict of interest Interorganizational relationship Codes of ethics Bribery Stakeholder analysis Value creation|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
Tim Rowley & Shawn Berman (2000). A Brand New Brand of Corporate Social Performance. Business and Society 39 (4):397-418.
Mark S. Frankel (1989). Professional Codes: Why, How, and with What Impact? [REVIEW] Journal of Business Ethics 8 (2-3):109 - 115.
Dinah M. Payne & Cecily A. Raiborn (2001). Sustainable Development: The Ethics Support the Economics. [REVIEW] Journal of Business Ethics 32 (2):157 - 168.
Scott J. Vitell, Erin Baca Dickerson & Troy A. Festervand (2000). Ethical Problems, Conflicts and Beliefs of Small Business Professionals. Journal of Business Ethics 28 (1):15 - 24.
Rodger Spiller (2000). Ethical Business and Investment: A Model for Business and Society. [REVIEW] Journal of Business Ethics 27 (1-2):149 - 160.
Citations of this work BETA
No citations found.
Similar books and articles
Stephen Chen & Chong Ju Choi (2005). A Social Exchange Perspective on Business Ethics: An Application to Knowledge Exchange. [REVIEW] Journal of Business Ethics 62 (1):1 - 11.
Gopalkrishnan R. Iyer (2001). International Exchanges as the Basis for Conceptualizing Ethics in International Business. Journal of Business Ethics 31 (1):3 - 24.
Panagiotis Lekkas (1998). Insider Trading and the Greek Stock Market. Business Ethics 7 (4):193–199.
Amartya Sen (1993). Does Business Ethics Make Economic Sense? Business Ethics Quarterly 3 (1):45-54.
Alison Watkins & Ronald Paul Hill (2005). The Impact of Personal and Organizational Moral Philosophies on Marketing Exchange Relationships: A Simulation Using the Prisoner's Dilemma Game. [REVIEW] Journal of Business Ethics 62 (3):253 - 265.
Todd S. Mei (2009). The Preeminence of Use: Reevaluating the Relation Between Use and Exchange in Aristotle's Economic Thought. Journal of the History of Philosophy 47 (4):pp. 523-548.
Shenjiang Mo, Simon A. Booth & Zhongming Wang (2012). How Do Chinese Firms Deal with Inter-Organizational Conflict? Journal of Business Ethics 108 (1):121-129.
Chong Ju Choi, Tarek Ibrahim Eldomiaty & Sae Won Kim (2007). Consumer Trust, Social Marketing and Ethics of Welfare Exchange. Journal of Business Ethics 74 (1):17 - 23.
Ronald A. Cordero (1988). Aristotle and Fair Deals. Journal of Business Ethics 7 (9):681 - 690.
Alena V. Ledeneva (1998). Russia's Economy of Favours: Blat, Networking, and Informal Exchange. Cambridge University Press.
Naresh Khatri & Eric W. K. Tsang (2003). Antecedents and Consequences of Cronyism in Organizations. Journal of Business Ethics 43 (4):289 - 303.
Stephen Lovell, Alena V. Ledeneva & A. B. Rogachevskiĭ (eds.) (2000). Bribery and Blat in Russia: Negotiating Reciprocity From the Middle Ages to the 1990s. St. Martin's Press, in Association with School of Slavonic and East European Studies, University of London.
Linda D. Molm (2003). Theoretical Comparisons of Forms of Exchange. Sociological Theory 21 (1):1-17.
Wei Yang & Kit-Chun Lam (2012). An Ethical Analysis of Economic Issues Related to the Appreciation of Renminbi. Asian Journal of Business Ethics 1 (1):79-87.
Added to index2011-12-01
Total downloads10 ( #324,666 of 1,793,159 )
Recent downloads (6 months)1 ( #463,411 of 1,793,159 )
How can I increase my downloads?