Functioning markets require a state that will enforce property rights; contracts mediated by money; and the prevalence of a certain type of morality that prevents people from cheating in complex exchange relationships. Monetary exchange abstracts from the personal loyalties that bind small groups together, but at the same time it creates an overarching commitment to norms that bind people more loosely in national societies—as long as monetary exchanges are enforced by the state. In the Soviet Union, conversely, the abolition of (...) money as a universal medium of exchange led both to a deterioration of the norms of impersonal morality and to a loss of state capacity. The state lost control of the economy to informal, personally binding economic networks, and it lost its monopoly on violence in competition with sub-state, personal enforcers of impersonal economic commitments between these networks. Thus, capitalism can be seen as diverting people from norms of loyalty to the members of the relatively small groups of which they are a part toward loyalty to the abstract norms that make it possible for anonymous people to deal with each other reliably. (shrink)

This article theoretically proposes and empirically verifies an understudied issue in the business ethics and corporate social responsibility literature—how moral degradation in a society influences the relationship between BE or CSR and firm performance. Building on strategic choice theory, we propose that both BE and CSR become more important in enhancing business success when the perceived MD is heightened. Our analysis of 300 firms operating in China statistically confirms our hypotheses: first, under high MD, firms’ engagement in CSR results in (...) higher corporate legitimacy and competitive advantage, and second, their adherence to ethical business codes leads to higher corporate legitimacy. We conclude the article by outlining the implications for both theory and practice. (shrink)

As a sovereign wealth fund, the $1 trillion Norwegian Government Pension Fund-Global, which is managed by Norges Bank Investment Management on behalf of the welfare of Norway’s citizens, is supposed to be a flagship for socially responsible investments through its Council of Ethics. However, its investment in Delta Topco, the holding company of Formula 1 world championship that, through Formula One Group, brokered a deal with Russia to host a Formula 1 Grand Prix in 2014, raises the question of whether (...) the Oil Fund should enhance its due diligence processes. Although no evidence of corruption related to the race is introduced, the complex relation between financial logic and the world of sports still raises questions about the ethical solidity of the Oil Fund’s investment. Drawing upon reports of the relationship between political economy and sporting events, this paper therefore analyses, in light of the Oil Fund’s ethical guidelines, the complexities of its investment in Delta Topco. As a result, it is argued that a new set of examination methods by the Council of Ethics may be warranted. (shrink)

Scholarly debates on sustainable consumption have generally overlooked alternative agro-food networks in the economies outside of Western Europe and North America. Building on practice-based theories, this article focuses on informal raw milk markets in post-socialist Lithuania to examine how such alternative systems emerge and operate in the changing political, social, and economic contexts. It makes two contributions to the scholarship on sustainable consumption. In considering semi-subsistence practices and poverty-driven consumption, this article argues for a richer, more critical, and inclusive theory (...) of sustainability that takes into consideration vernacular forms of exchange and approaches poor consumers as subjects of global history. Second, it revisits practice theories and infrastructures of consumption approaches to consider ruptures, discontinuities, and historical change in infrastructures as a way to account for inequalities and experiences of marginalization. (shrink)

This article investigates the use of favors by managers of BRIC firms to accomplish business goals, the ethicality of which should be determined by the moral reasoning in these countries rather than from a developed country perspective. We define a favor as an exchange of outcomes between individuals, typically utilizing one's connections, that is based on a commonly understood cultural tradition, with reciprocity by the receiver typically not being immediate, and its value being less than what would constitute bribery within (...) that cultural context. This exchange normally takes place between and among members of networks, and may involve a network outsider contacted by a network insider on behalf of another insider. We see the giver and receiver of the favor, as well as network insiders and outsiders, as stakeholders. Additionally, society could also be considered to be a stakeholder since the practice of using favors generally inhibits the development of legitimate, strong formal institutions, since the use of favors in emerging economies is rooted in cultural traditions that we view as informal institutions. Furthermore, we assert that the practice of using favors can lead to bribery which harms society as a stakeholder both morally and economically. We posit that BRIC-country managers' behaviors stem from informal, culturally based practices—jeito in Brazil, blat/sviazi in Russia, jaan-pehchaan in India, and guanxi in China. We utilize institutional theory to explain why favors are relied upon, and ISCT to support the argument that the use of favors in environments like the BRICs is generally considered ethical. (shrink)

We examine how recruiting managers cope with communal norms and expectations of favoritism during recruitment and selection processes. Combining insights from institutional theory and network research, we develop a communal perspective on favoritism that presents favoritism as a social expectation to be managed. We subsequently hypothesize that the communal ties between job applicants and managers affect the strategies that managers employ to cope with this expectation. We test these ideas using a factorial survey of the effects of clan ties on (...) recruitment and selection processes in Kazakhstan. The results confirm communal ties as antecedents to the strategies managers use to cope with communal favoritism. Surprisingly, the results also show that these coping strategies are relatively decoupled from managers’ recruitment decisions. The findings contribute to favoritism research by drawing attention to the mitigating work of managers in societies in which favoritism is common. (shrink)

Corrupt regulatory environment encourages firms to deploy middlemen for speedy and assured acquisition of different services from regulatory agencies. Using a World Bank dataset of 2210 Indian manufacturing firms, this article examines how firms with middlemen deal with corrupt governmental agencies for its operational efficiency. Our results demonstrate that deployment of middlemen by the firms is often accompanied by a substantial increase in operational delay, relatively trigger more consumption of senior management’s time on regulatory disentanglement, enhance the likelihood/tendency to pay (...) bribe, and likely to face more court cases as a means of restitution of legal rights. As firm-specific attributes may contaminate our preliminary results, we utilized the propensity score framework to examine relationships among variables of interests. Our study contributes to the inconspicuous part of the corruption literature by attempting to present a comprehensive but indirect assessment of the functions of middlemen that predominantly remained unattended except some scattered descriptive, case-based anecdotal presentations. (shrink)

Unlike recent tendencies to specify the variety of postsocialist trajectories, this article attempts to characterize the common features of postsocialist capitalism, as it has developed since the 1990s in Eastern Europe. Using conceptual tools of economic sociology, the postsocialist socio-economic organization is analyzed as embedded economy, the institutionalization of capitalism as a moral project, and the pervasiveness of informality from the networks and culture perspectives. Economic development is viewed as dependent, simultaneously, on the system’s structural, political and cultural features. For (...) postsocialist capitalism, these features include lack of state autonomy due to close coupling of political and economic roles; the embrace of greed and self-interest as legitimate motives for action; and persistence and bolstering of informality as modus operandi. Stipulations about developmental consequences are provided in the conclusion. (shrink)

This article seeks to synthesise three fields of inquiry – management studies, linguistics and cognitive psychology – to explore an arguably emerging phenomenon of global management knowledge impoverishment. To this end, three literatures are reviewed and interrogated for the insights they may provide into the underlying factors affecting global MK: trends in knowledge production, Englishisation of management scholarship and the culturally determined differences in cognition. Arguments are developed through descriptive investigation, discussion and analysis. The central proposition of this article is (...) that the politics of knowledge production, the hegemony of English as the dominant language of management studies and the variations in thinking styles are synergistically interlinked in a way that facilitates Anglophone homogenisation of management research and potentially leads to global MK impoverishment. The ways of addressing the situation are discussed. (shrink)

Social capital has as its key element the value of social relationships to generate positive outcomes, both for the key parties involved and for wider society. Some authors have noted that social capital nevertheless has a dark side. There is a moral element to such a conceptualisation, yet there is scarce discussion of ethics within the social capital literature. In this paper ethical theory is applied to four traditions or approaches to economic social capital: neo-capitalism; network/reputation; neo-Tocquevellian; and development. Each (...) is considered in detail and subject to ethical analysis by the application of utilitarianism, Kantianism, justice and rights, and ethic of care. Accordingly, the assumption that social capital is either value-neutral or a force for good is critiqued, and a framework for understanding social capital from an ethics perspective is presented. (shrink)

Tax compliance is an important issue for governments and the public alike. To meet public needs and fund public mandates, firms around the world are expected to comply with tax laws. Factors that are related to organizational (firm) tax compliance have not been sufficiently examined in the literature. Owing to the increasing global influence of transition economies, factors associated with firm tax compliance in transition economies are particularly of interest. Based on a sample of over 5,000 firms from 22 former (...) Soviet Bloc transition economies, we find that higher levels of corruption and higher levels of particularized trust (reliance on friends and family) are associated with lower levels of tax compliance. Interestingly, we also find that the negative relationship between corruption and tax compliance is weakened in situations of higher generalized trust (trust in strangers). Overall, our study’s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies. (shrink)

The wantok system in the Solomon Islands and the Melanesian countries more broadly, strongly links to the practices of group identity and belonging, reciprocity, and caring for one’s relatives. It is a term used to express patterns of relationships that link people in families, tribes, islands, provinces, nationality and even more superficially at greater Melanesian sub-regional aggregates. Various aspects of the wantok system are called different names by distinct language groups in Papua New Guinea, Solomon Islands and Vanuatu. Nevertheless, the (...) word wantok originates from the English words ‘one talk’, which literally means in Melanesian pidgin, speakers of the same language. (shrink)