Business Ethics

This study examines the 3.5 m+ English-language original tweets that occurred during the 2011 Occupy Wall Street protests. Starting from previous research, we analyze how character terms such as “the banker,” “politician,” “the teaparty,” “GOP,” and “the corporation,” as well as concept terms such as “ethics,” “fairness,” “morals,” “justice,” and “democracy” were used by individual participants to respond to the Occupy Wall Street events. These character and concept terms not only allowed individuals to take an ethical stance but also accumulated (...) into a citizen’s narrative about social accountability. The analysis illustrates how the centrality of the different concepts and characters in the conversation changed over time as well as how the concepts ethics, morals, fairness, justice, and democracy participated within the conversation, helping to amplify the ethical attributes of different characters. These findings contribute to our understanding of how demands for social accountability are articulated and change over time. (shrink)

Firms in controversial industries such as tobacco, alcohol, gambling, weapon, and nuclear power suffer organizational legitimacy problems. These firms, therefore, adopt various strategies to acquire legitimacy. Drawing on institutional theory, we conceptualize the top management team gender diversity as a legitimacy-seeking strategy and examines how a firm’s belonging to a controversial sector affects TMT gender diversity. Based on a cross-country sample of 1542 firms operating in controversial industries from 34 countries and control sample with another set of 1542 similar-sized firms (...) from non-controversial industries, the empirical evidence shows that belonging to a controversial industry exerts a positive impact on TMT gender diversity. The effect of industry belonging on TMT gender diversity is positively moderated by institutional gender parity and a low level of corruption. It indicates that institutional factors act as emancipative forces that foster women's empowerment. Taken together, our results for moderating variables highlight the role of institutional characteristics in supporting women empowerment initiatives. (shrink)

Employees perceive illegitimate tasks as inappropriate assignments because such tasks are beyond what they expect to do in any given job position. Extant literature indicates that, in addition to creating psychological strain and reducing well-being, illegitimate task assignments can result in counterproductive work behavior. This study extends the literature by examining whether illegitimate tasks may lead to two specific forms of CWB targeting organizations: destructive voice and time theft. To understand how and when this happens, we investigate the mediating role (...) of moral disengagement and the moderating role of psychological entitlement. Survey results based on 258 supervisor–subordinate dyads in China reveal that illegitimate tasks are positively related to destructive voice and time theft through moral disengagement. Furthermore, psychological entitlement strengthens the positive relationship between illegitimate tasks and moral disengagement and the indirect effect of illegitimate tasks on destructive voice and time theft. Overall, the findings provide insightful theoretical and managerial implications for research related to illegitimate tasks and CWB. (shrink)

A correction to this paper has been published: https://doi.org/10.1007/s10551-021-04854-9.

This article presents the results of a systematic literature review on religiosity and spirituality, particularly in the work context. We aimed to verify the state-of-the-art of scientific production related to these themes. To achieve the proposed objective, we identified 312 articles published in journals in the period between 1960 and 2018 using a rigourous method of analysis and sorting, which resulted in 52 appropriate studies. The analyses presented are based on the three bibliometric laws: those of Lotka, Bradford and Zipf. (...) This article brings contributions that encompass four approaches: measurement scales of spirituality and religiosity; behavioural benefits of religiosity in individuals; insertion of religiosity and spirituality in social service practice; and research directions. This research presents technical and managerial implications to provide theoretical support for the creation of programmes and/or practices of spirituality and religion in the workplace as an effective strategy, towards ethical attitudes. Also, this study contributes to the methodological achievement of SLRs in the field of religion in the workplace, highlighting an effective method for thematic mapping, and holistically identifying new research topics and directions, especially because of the several guidelines presented. (shrink)

The attention being paid to ethics education in accounting has been increasing, especially after the corporate accounting scandals at the turn of the century. This paper provides a comprehensive overview of the existing research in the field of ethics education in accounting. To synthesize past research, a bibliometric analysis that references 134 primary studies is performed and three bibliometric methods are applied. First, we visualize the historical evolution of ethics education in accounting research through historiography. Second, we use bibliographic coupling (...) to identify clusters of ethics education in accounting research before, during, and after major corporate scandals. Third, we perform a co-word analysis to connect the identified patterns into a map of a contextual space. The results reveal, in each decade, not only an increasing academic focus on this field of research, but also an increasing number of different research clusters. While the clusters Factors affecting moral judgement, Perception of ethics, and Lack of ethics topics in the last research period develop further from the respective clusters in the previous periods, Accounting beyond technical skills, Integration of ethics in accounting education, Use of developed ethics frameworks, and Professional values on the contrary develop anew in the last decade, as a consequence of a growing demand for teaching ethics. Overall, the paper presents the development patterns of ethics education in accounting research and sets up a research agenda that encourages future research. (shrink)

This paper examines the ethics of the Australian business community’s responses to the phenomenon of modern slavery. Engaging a critical discourse approach, we draw upon a data set of submissions by businesses and business representatives to the Australian government’s Joint Standing Committee on Foreign Affairs, Defence and Trade ‘Parliamentary Inquiry into Establishing a Modern Slavery Act in Australia’—which preceded the signing into law of Australia’s Modern Slavery Act 2018—to examine the business community’s discursive construction in their submissions of the ethical–political (...) concept of freedom. The paper shows how the concept of freedom was employed by Australian business in a manner that privileged their own subject status and advocated for legislation with minimal burden. Relating this contemporary case to a longer historical context, we show how Australian business responses towards modern slavery map onto liberal and neoliberal ethics in which the freedom of the propertied takes precedent over that of the property-less. Further, we show discursive similarities in the arguments presented by modern Australian businesses and certain historical efforts by members of the business community to privilege commercial freedoms in responses to 18th and 19th Century abolitionist movements. Overall, our research makes two important contributions: first, it highlights the value of a critical discourse lens in business ethics research to show how business and other stakeholders in the field construct and shape their own and other’s ethically-laden understanding of reality; and second, it presents a case for considerable scepticism about the motivation of business to employ the freedoms made available to it under neo/liberal discourse to confront a key human rights challenge. (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)

Compassion is acknowledged as a key motivational source of prosocial opportunity recognition. This study examines the underlying processes of different types of compassion that lead to prosocial OR interventions designed to solve or ameliorate social problems. Self-compassion is associated with intimate personal experiences of suffering and encompasses a desire to alleviate the distress of others based on common humanity, mental distance and mindfulness. Other-regarding compassion is associated with value structures and social awareness and is based on a desire to help (...) the less fortunate. Using a life-story analyses of 27 Israeli social entrepreneurs, we identified two OR process mechanisms, reflexivity and imprinting. The relationship between these two types of compassion are equifinal, that is, both can lead to prosocial OR; however, the mechanisms differ. We contribute to the literature by showing that compassion serves as an internal enabler based on both cognitive and affective motivations for prosocial OR. We introduce a theoretical perspective that establishes a process model for further research on the role of compassion in identifying and leading prosocial action. (shrink)

A correction to this paper has been published: https://doi.org/10.1007/s10551-021-04827-y.

Due to ethical lapses of leaders, interest in ethical leadership has grown, raising important questions about the responsibility of leaders in ensuring moral and ethical conduct. Research conducted on ethical leadership failed to investigate the active role that the characteristics of ethical climate and organisational justice have an increasing or decreasing influence on the ethical leadership in the organisation’s outcomes of employees’ ethical behaviour. Thus, this study examined the dual-mediations of work ethical climate and organisational justice on the relation of (...) ethical leadership and ethical behaviour of employees. A total of 620 full-time employees from five Iraqi provinces working at 33 Iraqi organisations in the field of manufacturing, retailing, medical, insurance, information technology, legal, finance, and telecommunication responded to the questionnaire survey. Structural equation modelling (SEM) was used to test the model and data analysis was carried out using structural equation modelling-partial least square (SEM-PLS). The results revealed that there is a significant relationship between ethical leadership behaviour and the ethical behaviour of employees. Primarily, the study also found that ethical climate and organisational justice play a very significant mediating role between ethical leadership and employees’ ethical behaviour. (shrink)

Over the years, companies have adopted hiring algorithms because they promise wider job candidate pools, lower recruitment costs and less human bias. Despite these promises, they also bring perils. Using them can inflict unintentional harms on individual human rights. These include the five human rights to work, equality and nondiscrimination, privacy, free expression and free association. Despite the human rights harms of hiring algorithms, the AI ethics literature has predominantly focused on abstract ethical principles. This is problematic for two reasons. (...) First, AI principles have been criticized for being vague and not actionable. Second, the use of vague ethical principles to discuss algorithmic risks does not provide any accountability. This lack of accountability creates an algorithmic accountability gap. Closing this gap is crucial because, without accountability, the use of hiring algorithms can lead to discrimination and unequal access to employment opportunities. This paper makes two contributions to the AI ethics literature. First, it frames the ethical risks of hiring algorithms using international human rights law as a universal standard for determining algorithmic accountability. Second, it evaluates four types of algorithmic impact assessments in terms of how effectively they address the five human rights of job applicants implicated in hiring algorithms. It determines which of the assessments can help companies audit their hiring algorithms and close the algorithmic accountability gap. (shrink)

Although legitimacy theory provides strong arguments that environmental, social and governance disclosure and performance can help mitigate firm-specific risks, this relationship has been repeatedly challenged by conceptual arguments, such as ‘transparency fallacy’ or ‘impression management’, and mixed empirical evidence. Therefore, we investigate this relationship in the revelatory case of initial public offerings, which represent the first sale of common stock to the wider public. IPOs are characterised by strong information asymmetry between firm insiders and society, while at the same time (...) suffering from uncertainty in firm legitimacy, culminating in amplified financial risks for both issuers and investors in aftermarket trading. Using data from the United States, we demonstrate that voluntary ESG disclosure reduces idiosyncratic volatility and downside tail risk and higher ESG ratings have lower associated firm-specific volatility and downside tail risk during the first year of trading in the aftermarket. We provide theoretical arguments for the relationships observed, suggesting that companies striving for ESG performance and communicating their efforts signal their compliance with sustainability-related norms, thus acquiring and upholding a societal license to operate. ESG performance and disclosure help companies build their reputation capital with investors after going public. We also report that ESG disclosure is a more consistent proxy for ex-ante uncertainty as an indicator of aftermarket risk, thereby replacing some of the more conventional measures, such as firm age, offered in the existing literature. (shrink)

Artificial intelligence is shaping strategy, activities, interactions, and relationships in business and specifically in marketing. The drawback of the substantial opportunities AI systems and applications provide in marketing are ethical controversies. Building on the literature on AI ethics, the authors systematically scrutinize the ethical challenges of deploying AI in marketing from a multi-stakeholder perspective. By revealing interdependencies and tensions between ethical principles, the authors shed light on the applicability of a purely principled, deontological approach to AI ethics in marketing. To (...) reconcile some of these tensions and account for the AI-for-social-good perspective, the authors make suggestions of how AI in marketing can be leveraged to promote societal and environmental well-being. (shrink)

With the advent of responsible business, ensuring social responsibility in sourcing is of interest to both academics and practitioners. In this study, we examine one way of achieving this goal: ethical sourcing initiatives. ESIs refer to a firm’s formal and informal actions to manage sourcing processes in an ethical and socially responsible manner. While ESIs have been established as an important part of corporate social responsibility, it is unclear whether, how, and when this corporate effort is economically beneficial. We conduct (...) an event study estimating the shareholder value effect of 159 publicly traded firms’ ESIs and find that the stock market reacts positively to ESIs in general. We also compare market reactions under different conditions including reactive versus proactive ESIs, and their interactions with initiative timing, firm size, and financial risk. Additionally, we find that ESIs are associated with long-term stock price and operating performance. Overall, our findings clarify the potential economic benefits of corporate ESIs and encourage buying firms to take these initiatives selectively according to business contexts. (shrink)

This paper examines the role of speculative motives in the determination of commodity prices and specifically food related commodity prices. The motivation for this study is the considerable flow of funds into commodities, the widespread view that the process of financialization has led to greater levels of speculation and that speculation is the primary cause of regular spikes in food prices since the turn of the century. We consider two forms of short-term trading, a biasing influence and a correcting influence, (...) relative to the fundamental price. While both forms of short-term trading are relevant, they are small in terms of their influence on overall prices. We do however find some evidence of an increased role being played by Manipulators during the period most associated with financialization. (shrink)

The commercial VR/AR marketplace is gaining ground and is becoming an ever larger and more significant component of the global economy. While much attention has been paid to the commercial promise of VR/AR, comparatively little attention has been given to the ethical issues that VR/AR technologies introduce. We here examine existing codes of ethics proposed by the ACM and IEEE and apply them to the unique ethical facets that VR/AR introduces. We propose a VR/AR code of ethics for developers and (...) apply this code to several commercial applications. (shrink)

Stakeholder theory has largely been anthropocentric in its focus on human actors and interests, failing to recognise the impact of nonhumans in business and organisations. This leads to an incomplete understanding of organisational contexts that include key relationships with nonhuman animals. In addition, the limited scholarly attention paid to nonhumans as stakeholders has mostly been conceptual to date. Therefore, we develop a stakeholder theory with animals illustrated through two ethnographic case studies: an animal shelter and Nordic husky businesses. We focus (...) our feminist reading of Driscoll and Starik’s stakeholder attributes for nonhumans and extend this to include affective salience built on embodied affectivity and knowledge, memories, action and care. Findings reveal that nonhuman animals are important actors in practice, affecting organisational operations through human–animal care relationships. In addition to confirming animals are stakeholders, we further contribute to stakeholder theory by offering ways to better listen to nontraditional actors. (shrink)

A salient if under researched feature of the new age of global inequalities is the rise to prominence of entrepreneurial philanthropy, the pursuit of transformational social goals through philanthropic investment in projects animated by entrepreneurial principles. Super-wealthy entrepreneurs in this way extend their suzerainty from the domain of the economic to the domains of the social and political. We explore the ethics and ethical implications of entrepreneurial philanthropy through systematic comparison with what we call customary philanthropy, which preferences support for (...) established institutions and social practices. We analyse the ethical statements made at interview by 24 elite UK philanthropists, 12 customary and 12 entrepreneurial, to reveal the co-existence of two ethically charged narratives of elite philanthropic motivations, each instrumental in maintaining the established socio-economic order. We conclude that entrepreneurial philanthropy, as an ostensibly efficacious instrument of social justice, is ethically flawed by its unremitting impulse toward ideological purity. (shrink)

Using a conviction-based measure, we find that local public corruption exerts a negative effect on the lending activity of US banks. Our baseline estimations show that the difference in public corruption between, for example, Alabama, where corruption is high, and Minnesota, where corruption is low, implies that banks headquartered in the former state grant 0.55% less credit ceteris paribus. Using proxies for relationship lending and monitoring, we also find that these bank characteristics weaken the negative effect of public corruption on (...) lending. These results are robust to tests that address endogeneity, to the use of perception-based measures of corruption, and after controlling for credit demand conditions. In further analysis, we show that these effects are more evident for smaller banks and banks operating in a single state. These findings provide evidence that public corruption could facilitate information asymmetry in the lending market and, thus, could hinder local development by reducing bank credit. (shrink)

This study adds to business ethics research by investigating how employees’ exposure to despotic leadership might influence their peer-rated workplace status, along with a mediating role of ingratiatory behavior targeted at supervisors and a moderating role of their power distance orientation and self-enhancement motive. Multisource, three-wave data from employees and their peers in Pakistani organizations reveal that exposure to despotic leaders spurs employees’ upward ingratiatory behavior, and this behavior in turn can help them attain higher status in the organization. The (...) mediating role of upward ingratiatory behavior also is more prominent among employees with higher levels of power distance orientation and self-enhancement motive. For business ethics scholars, this study thus pinpoints a potentially dangerous pathway—featuring employees’ deliberate efforts to impress self-centered, destructive supervisors—by which despotic leadership can generate beneficial outcomes for employees but not for the organization, as well as how this process varies due to key personal characteristics. (shrink)

This study answers Vazquez’s :691–709, 2016) call for more research focused on the intersection between family firms and business ethics. We investigate two contextual factors potentially affecting the ethical reporting of chief financial officers : a firm’s social ties to the controlling family and the CFOs’ perceived relationship quality with the CEO. We test our hypotheses by examining the financial reporting behavior of Chinese CFOs who work at family or nonfamily businesses and in private or public firms. Results of this (...) study advance our understanding of social and contextual factors that may compromise CFOs' reporting behavior in family firms. This research also suggests that failure to distinguish between public and private companies may bias the results of studies that examine family firms. (shrink)

The development of commercial revenue streams allows traditional nonprofit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition. In order to capture commercial revenue-generating opportunities, traditional nonprofit organizations need to deliberately transform themselves into social enterprises. Through the theoretical lens of institutional entrepreneurship, we explore the institutional work that supports this transformation by analyzing field interviews with 64 institutional entrepreneurs from UK-based social enterprises. We find that the route to incorporate commercial processes (...) and convert traditional nonprofit organizations into social enterprises requires six distinct kinds of institutional work at three different domains; these are—“engaging commercial revenue strategies”, “creating a professionalized organizational form”, and “legitimating a socio-commercial business model”. In elaborating on social entrepreneurship research and practice, we offer a comprehensive framework delineating the key practices contributing to the transformation from traditional nonprofit organizations to social enterprises. This extends our understanding of the ex-ante strategy of incorporating commercial processes within social organizations. Furthermore, the identification of these practices also offers an important tool for scholars in this field to examine the connection of each practice with different ethical concerns of social entrepreneurship in greater depth. (shrink)

A recent French reform has revised the legal definition of the corporation. In essence, the law stipulates that the corporation must be run with due regard to the social and environmental impacts of its activity. It also introduces the notion of raison d’être and affords the possibility for any corporation to assign social or environmental purposes to itself, defined in its by-laws. This reform is similar to recent reforms in the UK and the US, but is based on an original (...) and distinctive theoretical argument. The aim of our article is to analyze the fundamental tenets of this reform and their implications for the theory of the corporation. It shows that the new law is based on a new positive definition of the enterprise as not only an economic organization or a productive entity, but more fundamentally a space for innovative collective action. We argue that this view of the enterprise challenges our conceptualization of the corporation in two important ways. First, it shows that the traditional theories overlook the activities of the enterprise and their related impacts, and that the corporation is not necessarily the appropriate legal vehicle for the innovative enterprise. Second, it suggests that the stipulation of the enterprise’s purpose or raison d’être in the corporate by-laws can provide new promising legal foundations for corporate responsibility. (shrink)

Social enterprises in the microfinance industry need to adhere to both financial and social demands. Critics argue that there is a mission drift away from the social mission, and this has motivated the introduction of social rating agencies to strengthen the business ethics of microfinance institutions. Using a global dataset of 204 socially rated MFIs from 58 countries, we assess the factors that drive the social performance ratings of MFIs. Overall our results show that social ratings of MFIs are significantly (...) related to financial performance, greater outreach especially in rural areas, well-defined social objectives, staff commitment, service quality and an enhanced customer service. We observe that various rating agencies attach different importance to each of the social indicators. The public policy implication is that social rating agencies need to become more transparent, to reduce the information asymmetries between heterogenous socially motivated investors and the focal MFI. (shrink)

Explanations of organizational misconduct frequently point to declining firm performance and/or the actions of unethical or suspect leaders. Evidence that high-performing firms act illegally or unethically is an enigma. The purpose of this paper is to address these issues by exploring organizational performance using aspirational rather than absolute measures and examining the effect that suspect leader succession has on the increased probability of organizational misconduct. Our analysis of 128 collegiate football programs competing between 1953 and 2016 reveals an increased likelihood (...) of misconduct among organizations with strong as well as weak performance, most notably in comparison to competitive peer programs. Social- and self-referenced aspirations produced distinct relationships between relative performance and misconduct. The impact of leader succession was conditional. The data revealed an increased likelihood of infraction episodes with the appointment of suspect leaders. In some instances, however, a reduced likelihood of misconduct accompanied succession events involving untainted leaders. (shrink)

Self-confidence is associated with many positive outcomes, and training programs routinely seek to build participants’ self-efficacy. In this article, however, we consider whether self-confidence increases unethical behavior. In a series of studies, we explore the relationship between negotiator self-efficacy—an individual’s confidence in his or her negotiation ability—and the use of deception. We find that individuals high in negotiator self-efficacy are more likely to use deception than individuals low in negotiator self-efficacy. We also find that perceptions of the risk of deception (...) mediate this relationship. By identifying negotiator self-efficacy as an antecedent to unethical behavior, our findings offer important theoretical and empirical insights into the use of deception, the role of individual differences in ethical decision making, and the broader consequences of self-confidence in business and society. (shrink)

Moral reasoning among media professionals varies. Historically, advertising professionals score lower on the Defining Issues Test than their media colleagues in journalism and public relations. However, the extent to which professional identity impacts media professionals’ moral reasoning has yet to be examined. To understand how professional identity influences moral reasoning, if at all, and guided by theories of moral psychology and social identity, 134 advertising practitioners working in the USA participated in an online experiment. While professional identity was not a (...) significant predictor of moral reasoning, an interaction effect between gender and identity priming occurred. This finding suggests that we reconsider moral psychology theory’s explanatory power for media practitioners and consider how the complexity of professional identities in concert with gender and professional training, among other variables, interact to affect moral reasoning. In addition, advertising practitioners participating in this experiment scored higher on the DIT than those tested previously. (shrink)

This study explores Islamic influences on corporate bribery practices in Indonesia. As the dominant religion in Indonesia, Islam substantially influences society in everyday life, including business practices. Although bribery issues in Indonesia have been raised in great numbers for many years, few studies have explored the role of Islamic influences in the ways businesspeople rationalize corporate bribery. This study aims to explore the lived experiences of businesspeople involved in corporate bribery. The authors conducted a phenomenological study to analyze the mindsets (...) of businesspeople who used the Islamic religion to rationalize corporate bribery. To this end, a phenomenological study was conducted based on in-depth interviews with inmates who were imprisoned for their bribery practices in Indonesia. The interview data were subsequently analyzed and revealed several ways that Indonesian businesspeople invoked Islam to rationalize their practices of bribery and render them coherent with their mindsets. The analyses in this study provide insights into how to curb the rationalization of corporate bribery via religious perspectives and point to recommendations for future research. (shrink)

This article explores how meanings around risk, health/safety, and workers’ bodies are constructed in an academic context. I do so through the study of a single academic in Australia who sustained a back injury at work. Through an analysis of in-depth interviews and documents, I attempt to show the embodied experience of an injured worker’s struggle for care, recovery, and survival in the neoliberal academy. Writing from the nexus of workplace health and safety and critical management literatures, the raw testimony (...) of this injured academic lays bare the violences that are enabled within a wider culture of self-discipline, individualism, and performativity in the university. The story presented in this article exposes how physiological and psychological injuries can be exacerbated through the very health and safety procedures that are designed to prevent and alleviate harm. Please note that this article contains references to suicide and suicidal ideation. (shrink)

Drawing on social exchange theory, we examine the conditions under which employees’ good intentions motivate them to engage in unethical pro-organizational behavior and the psychological mechanism behind this behavioral decision. Findings from a time-lagged field study and a scenario study indicate an interactive effect between perceived organizational support and employee performance on UPB; that low performers who perceive high levels of organizational support are more likely to engage in UPB; and that feelings of indebtedness to the organization mediate the interactive (...) effect on UPB. Therefore, the paper highlights the importance of conditional factors in motivating UPB by combining employee ‘good intentions’ and ‘disadvantageous situations’ to understand the UPB decision process. The paper concludes with theoretical and practical implications. (shrink)

This study investigates how Islamic religiosity affects ethical decision making. The study was conducted in the Malaysian workforce across the public and private sectors with a sample of N = 160. Five factors are tested to determine if they mediate the relationship between Islamic religiosity and ethical intention. These factors are: perceived importance of the ethical issue, moral judgment, ego strength, spiritual intention, and conscience. A parallel mediation design was chosen to test six hypotheses derived from the theoretical literature. The (...) findings indicate that only the variable conscience mediates the relationship between religiosity and ethical intention. This study gives insights into the role of Islam in ethical decision-making, especially for Muslims in Malaysia, an area which has limited exploration. More generally, it contributes to the ongoing discussion in the literature on the relationship between religiosity and ethical decision-making. (shrink)

In recent years, trade-control laws and regulations such as embargoes and sanctions have gained importance. However, there is limited empirical research on the ways in which small- and medium-sized enterprises respond to such coercive economic measures. Building on the literature on organizational responses to external demands and behavioral ethics, this study addresses this issue to better understand how external pressures and managerial decision-making are associated with the scope of trade-control compliance programs. Based on a sample of 289 SMEs, the findings (...) show that the organizational responses of SMEs reflect proportionate adjustments to regulatory pressures but only if decision-makers are well informed and aware of the prevailing rules and regulations. Conversely, uninformed decision-making leads to a disproportionate response resulting in an inadequately reduced scope of the compliance program. In addition, the results indicate that SMEs that are highly integrated into supply chains are susceptible to passing-the-buck behavior. (shrink)

The relationship between analysts' forecasts and corporate fraud is a vital theoretical and practical question that needs to be clarified. Based on a strict distinction between negative performance gaps relative to analyst forecasts and analyst coverage, this study investigates the influence of analyst forecasts on corporate fraud from a panoramic perspective. Using panel data on listed companies in China from 2008 to 2019, we find that short-term performance pressure caused by negative forecast gaps is significantly positively correlated with firms’ possibility (...) for fraudulent behavior. However, this positive correlation is weaker in state-owned enterprises than in their non-state-owned counterparts. Further, as a key external governance mechanism, analyst coverage enhances the negative moderator effect of state ownership on the positive relationship between negative forecast gaps and the likelihood of corporate fraud. (shrink)

Brands are widely regarded as a constellation of shared associations surrounding a company and its offerings. On the traditional view of brands, these associations are regarded as perceptions and attitudes in consumers’ minds in relation to a company. We argue that this traditional framing of brands faces an explanatory problem: the inability to satisfactorily explain why certain branding activism initiatives elicit the moralized reactive attitudes that are paradigmatic responses to wrongdoing. In this paper, we argue for a reframing of brands (...) that calls for viewing brands as a series of normatively binding expectations that are ethically akin to promises. Our promissory framing of brands avoids the explanatory problem, illuminates a number of ethical requirements on branding, and reconceptualizes the role of brand managers. (shrink)

Green consumption values have been shown to motivate consumers to engage in green consumption practices. However, surprisingly little research has examined how green consumption values develop in young people. In the current study, we employed ecological socialization theory as a framework to investigate the process by which parents’ green consumption values shape similar values in their young adolescents. In Study 1, data from 722 Chinese families that included an early adolescent showed that both mothers’ and fathers’ green consumption values were (...) positively associated with early adolescents’ green consumption values, and this association was mediated by each parent’s environmentally responsible consumption behavior. Study 2 replicated the results of Study 1 using two waves of matched parent-adolescent data collected a month apart from another group of 477 Chinese families. Furthermore, Study 2 showed that the mediation process identified in Study 1 was evident only when there was a close parent–child relationship. These findings have implications for cultivating the green consumption values of today’s youth. The results also have heuristic value for future research on the ecological socialization and inter-generational transmission of pro-environmental values. (shrink)

Virtue accounts of innovation ethics have recognized the virtue of creativity as an admirable trait in innovators. However, such accounts have not paid sufficient attention to the way creativity functions as a collective phenomenon. We propose a collective virtue account to supplement existing virtue accounts. We base our account on Kieran’s definition of creativity as a virtue and distinguish three components in it: creative output, mastery and intrinsic motivation. We argue that all of these components can meaningfully be attributed to (...) innovation groups. This means that we can also attribute the virtue of creativity to group agents involved in innovation. Recognizing creativity as a collective virtue in innovation is important because it allows for a more accurate evaluation of how successful innovation generally happens. The innovator who takes a collective virtue account of creativity seriously will give attention to the facilitation of an environment where the group can flourish collectively, rather than only nurturing the individual genius. (shrink)

Against the backdrop of a global pandemic, this study investigates how U.S. higher education leaders have centered their crisis management on values and guiding ethical principles. We conducted 55 in-depth interviews with leaders from 30 U.S. higher education institutions, with most leaders participating in two interviews. We found that crisis plans created prior to the COVID-19 pandemic were inadequate due to the long duration and highly uncertain nature of the crisis. Instead, higher education leaders applied guiding principles on the fly (...) to support their decision-making. If colleges and universities infuse shared values into their future crisis plans, they will not have to develop a moral compass on the fly for the next pandemic. This paper suggests the following somewhat universal shared values: engage in accuracy, transparency, and accountability; foster deliberative dialog; prioritize safety; support justice, fairness, and equity; and engage in an ethic of care. To navigate ethics tensions, leaders need to possess crisis-relevant expertise or ensure that such expertise is present among crisis management team members. Standing up formal ethics committees composed of diverse stakeholders also is instrumental in navigating tensions inherent in crises. The next pandemic is already on the horizon according to experts. Through infusing values into future crisis plans, higher education leaders can be confident that their responses will be grounded in their communities’ shared values. (shrink)

The concept of the self and its relation to moral action is complex and subject to varying interpretations, not only between different academic disciplines but also across time and space. This paper presents empirical evidence from a cross-cultural study on the Buddhist and Confucian notions of self in SMEs in Vietnam and Taiwan. The study employs Hwang’s Mandala Model of the Self, and its extension into Shiah’s non-self-model, to interpret how these two Eastern philosophical representations of the self, the Confucian (...) relational self and Buddhist non-self, can lead to moral action. By demonstrating the strengths of the model, emphasizing how social and cultural influences constrain the individual self and promote the social person leading to moral action, the paper extends understanding of the self with empirical evidence of the mechanisms involved in organizational contexts. (shrink)

This study examines how meritocracy as a collective social imaginary promoting social justice and fairness reproduces class and caste inequalities and fosters ethical violence. We interrogate discourse of merit in the narratives of the professional–managerial class-in-making at an Indian business school. Empirically, we draw on interviews, full-text responses to a qualitative questionnaire, and a student’s poem. We describe how business school students articulate merit as a neoliberal ethic, emphasizing prudential, enterprising attitudes, and responsibility. However, this positive, aspirational façade of merit (...) masks practices of ethical violence, wherein individuals invoke an ethical principle as grounds for moral condemnation and linguistic injuries. These practices of ethical violence desubjectify disadvantaged students and result in silence as a form of inequality. We contribute to organizational research on inequalities by foregrounding ethical violence and desubjectification. We detail the possibilities of discursive agency in contesting and interrupting ethical violence. (shrink)

We extend the literature by providing evidence that a cultural variable, intrinsic Islamic religiosity is important in understanding auditors’ judgement in the Islamic context of Pakistan. The intrinsic Islamic religiosity theoretical construct examined is Islamic Worldview which represents deeply held enduring and stable values which are likely to be dominant in influencing professionals’ judgements. Moreover, theoretical underpinning and empirical evidence in social psychology and organisational behaviour have established the critical role of intrinsic religiosity in influencing behaviour. Our first objective is (...) to examine whether IW impacts auditors’ judgements in the context of their acceptance of uncorroborated low-reliability client-provided evidence. Understanding the potential impact of cultural factors on auditors’ acceptance of client-provided information is an essential factor in improving audit quality. Our findings support the hypothesis that auditors with high IW scores are more likely to accept uncorroborated low-reliability client-provided evidence. Our second objective is to examine the relationship between IW and auditors’ preference for exercising more or less judgements. Examining this topic is important because auditing is a judgement-based process: auditors’ judgements determine audit quality and, by extension, the quality of associated financial reports. Our findings provide overall support for the hypothesis that auditors with high IW scores have a preference for exercising more judgement. Our findings have implications for global and national standard setters, regulators, practitioners, and researchers. The results are also relevant to global audit firms and their affiliates, particularly networks operating in Islamic countries, in ensuring global consistency of audits. (shrink)

This study investigates the interaction between suppliers and fraudulent customer firms from the perspective of reputation damage and reputation recovery. Specifically, reputation damage from the regulatory penalty for corporate fraud induces the trust crisis and suppliers respond to fraudulent firms by reducing the trade credit supply. To repair a damaged reputation and rebuild the trust, fraudulent firms raise the ratio of prepayment to purchase volume when purchasing from small suppliers and increase the proportion of purchase from large suppliers in the (...) next year. Channel analysis shows that the declining trust is one of potential mechanisms to reduce the trade credit. Furthermore, the negative effect is more pronounced for fraudulent firms with non-related party suppliers, higher supplier concentration, less analyst coverage, and for fraudulent firms located in regions with less-developed financial environment. Additionally, supplier sanctions have a spillover effect on non-fraudulent customer firms in the same industry. The conclusions are robust to a series of checks, including PSM–DiD, firm and year fixed effect, the alternative measure for trade credit financing, the industry-year fixed effect and the consideration of the monetary policy and financial crisis. (shrink)

We investigate whether religion acts as a deterrent to the types of mortgage misrepresentation that played a significant role in the recent housing boom and bust. Using a large sample of mortgages originated from 2000 to 2007, we provide evidence that local religious adherence is associated with a lower likelihood of home appraisal overstatement and owner occupancy misreporting. The evidence on borrower income misrepresentation is mixed. Religiosity does not appear to reduce the incidence of income misrepresentation; however, it seems to (...) restrain the degree to which income is misrepresented. Our results are generally consistent with the hypothesis that religion, as a set of social norms, fosters ethical behavior, and possibly risk aversion, in the mortgage market. (shrink)

The readability of 10-K reports, in terms of linguistic complexity, determines the usefulness of information disclosure for stakeholders, particularly individual investors. Since investors largely depend on the financial communication in 10-K reports, firms have an ethical and legal responsibility to present disclosures in a language investors can understand. However, motivated by self-interest, managers obfuscate such disclosures to mask their own actions and hide unfavourable information. Building on the managerial obfuscation hypothesis grounded in stakeholder-agency and ethical-sensitivity theories, I hypothesize and empirically (...) test the relationship between board gender diversity and the readability of narrative disclosure in 10-K reports. Based on a relatively large sample of Russell 3000 firms for the years 2002–2018, I find a significant positive impact of BGD on 10-K reports’ readability, which in turn improves firm performance. Channel analysis reveals that the findings are driven by female independent directors, and their representation on audit and compensation committees; however, board activity does not appear to drive this relationship. Finally, I find that although gender discrimination in the appointment of directors spurs complex readability, the BGD-readability relationship is consistent in gender-biased and non-discriminant firms. I also check the robustness of our main empirical results in several ways. My study has important regulatory and managerial implications in that corporate governance is an important determinant of the readability of disclosure documents. (shrink)

We examine whether an unsophisticated investor’s own gender interacts with gender of a sell-side equity analyst to affect the investor’s judgment. Prior research shows two potential sources of gender-based discrimination that affect female investors. First, female investors’ advisors offer less risky hence lower return portfolios to female investors than to male investors with similar risk preferences as female investors are perceived as more risk adverse. Second, female equity analysts are subject to greater barriers to enter and advance in investment firms (...) that act as if they believe clients prefer male investment advisors in a male stereotypical occupation. Using two experiments, we use the judge-advisor framework to predict and find that investor’s gender and analyst’s gender jointly influence investor’s judgment. Specifically, female-female analyst-investor pair generates the strongest reaction to analyst’s advice compared to any other analyst-investor pair, everything else equal. Further, we find that efforts to highlight equal gender performance activates gender stereotypes that reduce female investors’ receptivity to female analysts’ advice. By linking the two previously different sources of discrimination we show that they reinforce each other and find that attempts to “level the playing field” by emphasizing gender performance parity may have unexpected results. (shrink)