This article proposes a specific logic of dynamics for integrative social contracts theory that combines two empirically oriented process extensions strengthening concreteness of Donaldson and Dunfee’s conceptualization, namely international policy regime theory and Tiebout migration. While either would help “dynamize” and “concretize” ISCT, the two combined are even more insightful. Real-world policy regime processes can develop concrete action-guiding norms instantiating hypernorms to guide business decisions. Donaldson and Dunfee placed empirical reliance on expectation of converging parallel evolution of universal principles and (...) authentic local values. ISCT remains vague on how global or local norms can develop and change, for two reasons. First, ISCT does not explain mechanisms for how proposed hypernorms can become actual global norms and also become accepted across extant authentic communities. International policy regime theory explains how hypernorms can become instantiated as global norms expressed in policy regimes. Second, a basic element in ISCT is implied consent positing free exit from voluntary moral communities. Empirically, individuals or businesses may be unable to exit from undesired membership in authentic communities to which they do not consent. The Tiebout migration model provides valuable insights concerning how substantive mobility or its absence improves on the minimum ISCT assumption of implied consent. An integrated logic of ISCT dynamics generates a three-level framework in which instantiated hypernorms and authentic community norms can empirically change, and individuals or businesses can migrate more freely across extant communities. (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)

Corporate social responsibility (CSR) is a relatively undeveloped concept despite its increasing importance to corporations. One difficulty is the possible inexactness of CSR. Another is the apparent reluctance by regulatory authorities and policy makers to intervene in the area. This is largely a result of inhibitions created by traditional approaches to company law with emphasis on shareholder protection and financial disclosure. The consequence is the stultification of independent development of CSR by tying social issues to financial performance. This attitude might (...) not be unconnected to the theoretical and practical challenges in justifying CSR and defining its scope. The underlying impediment is a factual and theoretical failure to distinguish ‘instrumental’ and ‘pure’ (ethical) CSR. This article demonstrates that ethical CSR highlights the role of regulation, and a principal stance is that regulation is neither incompatible nor irreconcilable with ethical CSR. The article argues that cognizance of the intrinsic moral justification of ‘pure’ CSR is required for delineating the scope of CSR as well as for clarifying the desirability and extent of its regulation. It argues that the dynamic history and visage of multinational corporate corruption illuminates the fluidity of the regulation–CSR relationship. The current and widening backlash against transnational corporate corruption is, arguably, a demonstration of the position that regulation and CSR are not mutually exclusive and absolute concepts. This article submits that recognition and application of this ‘ethical’ and ‘instrumental’ CSR distinction is fundamental to the development of CSR and resolution of connected questions of regulation. (shrink)

We examine the responses of South African multinational enterprises to corruption in African markets in the context of institutional voids. Corruption is a source of uncertainty and additional transactional costs for MNEs and it necessitates a strategic response. The research employs a qualitative study of a sample of MNEs with experience in internationalising into Africa. The results indicate that corruption in African markets is pervasive and closely associated with the institutional voids in these countries. MNEs see themselves as ‘institution takers’ (...) responding to countries’ institutional makeup at the organisational and individual level but fail to fully appreciate their impact on institutions both positively and negatively. Rather MNEs focus on strategic responses at the organisational level to address corruption operationally in the host country. We add to the existing literature by providing a dynamic framework of the complex webs of association between institutions, MNEs and corruption in conditions of economic underdevelopment. The research suggests that MNEs do not need to get caught in a vicious cycle whereby they perpetuate corruption in conditions of underdevelopment and institutional voids but instead can contribute towards a virtuous cycle through which they institutionalise ethical foundations. (shrink)

While previous literature provides evidence of the positive relationship between ethical climate and job satisfaction, the possible mechanisms of this relationship are still underexplored. This study aims to enhance scholars’ and practitioners’ understanding of the ethical climate–job satisfaction relationship by identifying and testing two of the possible mechanisms. More specifically, this study fills an existing research gap by examining social and interpersonal mechanisms, referred to in this study as workplace isolation of colleagues and salesperson’s teamwork, of the ethical climate–job satisfaction (...) relationship. This is vital for the selling profession because job satisfaction is known to drive higher levels of salespeople’s performance. The arguments for such mechanisms are built on the foundations of social/psychological contract theory and ethical climate literature. Empirical testing using a large sample of salespeople shows higher levels of ethical climate to decrease workplace isolation and increase teamwork. Findings support hypothesized model where ethical climate positively relates to job satisfaction as partially mediated by workplace isolation and teamwork. Ethical climate is negatively related to workplace isolation and positively to teamwork. Further, findings indicate negative effect of workplace isolation on teamwork and sales performance. Job satisfaction is found to be key factor in driving performance of salespeople. (shrink)

The study explores the use of Graphic Novels as an innovative form of training that may improve an individual’s ethical efficacy. A quantitative comparison of the graphic novel method and the traditional written case study is analyzed. The literature on ethics, graphic novels, and training are brought together from theories of narrative and literature perspective to formulate a study. The study uses a 2 × 2 repeated-measure MANOVA to analyze the participant’s reaction to bribery situations based on varying levels of (...) ‘grayness.’ The overall study finds that ethical efficacy increases with the use of the graphic novel method. The greatest improvements are in the individual’s level of self-efficacy and understanding of principle-based ethical issues. In addition, the participant’s level of industry experience may play a factor in applying the graphic novel technique. Finally, guidelines on how to effectively utilize the graphic novel method are stated. Improving ethical efficacy through business ethics training may help improve an individual’s self-efficacy, involvement and principle-based understanding. The study explores the use of Graphic Novels as an innovative form of training that may improve an individual’s ethical efficacy. A quantitative comparison of the graphic novel method and the traditional written case study are analyzed. Literature on ethics, graphic novels, and training are brought together with theories of narrative and literature perspective to formulate a study. The study uses a 2 × 2 repeated-measure MANOVA to analyze the participant’s reaction to bribery ethical situations based on varying levels of ‘grayness.’ The overall study finds that ethical efficacy increases with the use of the graphic novel method. The greatest improvements are in the individual’s level of self-efficacy and understanding of principle-based ethical issues. In addition, the participant’s level of industry experience may play a factor in applying the graphic novel technique. Finally, guidelines on how to effectively utilize the graphic novel method is set forth. (shrink)