This paper analyses the use of strategies and instruments for organising ethics by small and large business in the Netherlands. We find that large firms mostly prefer an integrity strategy to foster ethical behaviour in the organisation, whereas small enterprises prefer a dialogue strategy. Both large and small firms make least use of a compliance strategy that focuses on controlling and sanctioning the ethical behaviour of workers. The size of the business is found to have a positive impact on the (...) use of several instruments, like code of conduct, ISO certification, social reporting, social handbook and confidential person. Also being a subsidiary of a larger firm has a significant positive influence on the use of instruments. The most popular instrument used by small firms is to let one member of the board be answerable for ethical questions, which fits the informal culture of most small firms. With respect to sectorial differences, we find that firms in the metal manufacturing and construction sectors are more actively using formal instruments than firms in the financial service sector and retail sector. The distinction between family and non-family firms hardly affects the use of instruments. (shrink)

Whether or not capitalism is compatible with ethics is a long standing dispute. We take up an approach to virtue ethics inspired by Adam Smith and consider how market competition influences the virtues most associated with modern commercial society. Up to a point, competition nurtures and supports such virtues as prudence, temperance, civility, industriousness and honesty. But there are also various mechanisms by which competition can have deleterious effects on the institutions and incentives necessary for sustaining even these most commercially (...) friendly of virtues. It is often supposed that if competitive markets are good, more competition must always be better. However, in the long run competition enhancing policies that neglect the nurturing and support of the bourgeois virtues may undermine the continued flourishing of modern commercial society. (shrink)

There are relatively few empirical studies on the impacts of corporate social responsibility policies and programs. This article addresses the research gap by analyzing the incidence of, and the conditions that affect, decoupling among CSR policies, implementation of CSR programs, and CSR impacts for various environmental and social issues. Complete decoupling is a condition of full divergence among policies, programs, and impacts amounting to purely ceremonial CSR. Using ratings from a sustainability rating agency on a sample of about 1,000 large (...) companies in 24 countries, the authors find empirical evidence not supporting a conclusion of complete decoupling. The empirical evidence suggests four levels of nondivergence in the sample. First, for most CSR issues examined, CSR policies of high quality do have relatively strong effects on CSR implementation. Second, CSR programs of high quality do have relatively strong effects on CSR impacts. Third, for most CSR issues, even low-quality CSR policies enforce the incidence and quality of programs in comparison with having no policy at all. Fourth, weak programs have more impact on the realization of CSR goals than having no program at all. The authors also find that the quality of CSR reporting and locating the responsibility for CSR at the board level reduce decoupling by strengthening the quality of CSR programs. (shrink)

Starting from MacIntyre’s virtue ethics, we investigate several codes of conduct of banks to identify the type of virtues that are needed to realize their mission. Based on this analysis, we define three core virtues: honesty, due care, and accuracy. We compare and contrast these codes of conduct with the actual behavior of banks that led to the credit crisis and find that in some cases banks did not behave according to the moral standards they set themselves. However, although banks (...) and the professionals working in them can be blamed for what they did, one should also acknowledge that the institutional context of the free market economy in which they operated made it difficult to live up to the core values lying at the basis of the codes of conduct. Given the neo-liberal free market system, innovative and risky strategies to enhance profits are considered desirable for the sake of shareholder’s interests. A return to the core virtues in the financial sector will therefore only succeed if a renewed sense of responsibility in the sector is supported by institutional changes that allow banks to put their mission into practice. (shrink)

Starting from MacIntyre’s virtue ethics, we investigate several codes of conduct of banks to identify the type of virtues that are needed to realize their mission. Based on this analysis, we define three core virtues: honesty, due care, and accuracy. We compare and contrast these codes of conduct with the actual behavior of banks that led to the credit crisis and find that in some cases banks did not behave according to the moral standards they set themselves. However, although banks (...) and the professionals working in them can be blamed for what they did, one should also acknowledge that the institutional context of the free market economy in which they operated made it difficult to live up to the core values lying at the basis of the codes of conduct. Given the neo-liberal free market system, innovative and risky strategies to enhance profits are considered desirable for the sake of shareholder’s interests. A return to the core virtues in the financial sector will therefore only succeed if a renewed sense of responsibility in the sector is supported by institutional changes that allow banks to put their mission into practice. (shrink)

In this paper, we examine the relationship between various Christian denominations and attitude and behavior regarding consumption of socially responsible products. Literature on the relationship between religiosity and pro-social behavior has shown that religiosity strengthens positive attitudes towards pro-social behavior, but does not affect social behavior itself. This seems to contradict the theory of planned behavior that predicts that attitude fosters behavior. One would therefore expect that if religiosity encourages attitude towards SR products, it would also increase the demand for (...) them. We test this hypothesis for four affiliations on a sample of 997 Dutch consumers, using structural equation modeling. We find that Christian religiosity, indeed, increases positive attitude towards SR products, except for the Orthodox Protestant affiliation. In accordance with the theory of planned behavior, attitude is found to increase the demand for SR products. We find no evidence of hypocrisy for any of the Christian denominations. (shrink)

Corporate social responsibility (CSR) is becoming increasingly important in China. This paper investigates the implementation of instruments for dimensions of CSR that are relevant for the Chinese context and the challenges that Chinese companies face. Based on a survey among 109 Chinese companies, we find that formal instruments to implement CSR are rather common. Companies spend most effort in improving the economic aspects of CSR, such as competitiveness, product innovation and process innovation. Only a small minority of the companies set (...) concrete targets and report the realization of these targets for social and environmental goals. This indicates that the attention to social and environmental aspects of CSR is still rather loose. The most important challenges for improving CSR are strong competitive pressure, insufficient support from the government and/or nongovernmental organizations and high costs of CSR implementation. Multiple regression analysis shows that the use of instruments is positively related to company size and foreign ownership and negatively related to lack of resources and support for CSR by investors and consumers. (shrink)

During the last years competition in the textile sector has increased, putting financial returns under considerable pressure. As a result, production has shifted to low wage countries in the third world. This has raised the relevance of ethical procedures. This paper analyses how C&A, as one of the largest Western apparel companies, organises its sourcing ethics, notwithstanding the financial pressure in the market. Based on interviews with Asian suppliers of C&A during the second half of 2000, we review the opinions (...) of external stakeholders about the sourcing ethics of C&A. Finally, we evaluate C&A’s sourcing ethics from a theoretical perspective. (shrink)

In this paper, we examine the relationship between Christian religiosity, attitudes towards corporate social responsibility, and CSR behavior of executives. We distinguish four types of CSR attitudes and five types of CSR behavior. Based on empirical research conducted among 473 Dutch executives, we find that CSR attitudes mediate the influence of religiosity on CSR behavior. Intrinsic religiosity positively affects the ethical CSR attitude and negatively affects the financial CSR attitude, whereas extrinsic religiosity stimulates the philanthropic CSR attitude. Financial, ethical, and (...) philanthropic CSR attitudes significantly affect some types of CSR behaviors. However, because religiosity has opposing effects on the three attitudes, the joint mediation effect of the three attitudes is negligible. Furthermore, we find a direct negative influence of intrinsic religiosity on diversity and a direct positive influence on charity. (shrink)

Transparency is a crucial condition to implement a CSR policy based on the reputation mechanism. The central question of this contribution is how a transparency policy ought to be organised in order to enhance the CSR behaviour of companies. Governments endorsing CSR as a new means of governance have different strategies to foster CSR transparency. In this paper we discuss the advantages and disadvantages of two conventional policy strategies: the facilitation policy and the command and control strategy. Using three criteria (...) (efficiency, freedom and virtue) we conclude that both strategies are defective. Most attention is paid to the facilitation strategy since governments nowadays mainly use this. In evaluating this strategy we analyse the Dutch case. As an alternative we introduce a third government policy: the development of a self-regulating sub-system. By construing an analogy with the historical development of corporate financial disclosure, we point out that the vital step in the creation of a self-regulating subsystem is the creation of strong informational intermediate organisations. (shrink)

This paper explores the relationship between religious belief and the dilemmas Dutch executives confront in daily business practice. We find that the frequency with which dilemmas arise is directly related to various aspects of religious belief, such as the belief in a transcendental being and the intensity of religious practice. Despite this relationship, only 17% of the dilemmas examined involve a religious standard. Most dilemmas originate from a conflict between moral and practical standards. We also find that 79% of the (...) identified dilemmas stem from a conflict between two or more internalized standards of the executive. (shrink)

This paper investigates the possibilities and problems of benchmarking Corporate Social Responsibility (CSR). After a methodological analysis of the advantages and problems of benchmarking, we develop a benchmark method that includes economic, social and environmental aspects as well as national and international aspects of CSR. The overall benchmark is based on a weighted average of these aspects. The weights are based on the opinions of companies and NGO's. Using different methods of weighting, we find that the outcome of the benchmark (...) is rather robust for a sample of more than 50 large Dutch companies. (shrink)

This article clarifies the relationship between profits and principles by distinguishing four alternative perspectives: the win-win perspective in which ethical behaviour generates the highest profits; a licence-to-operate perspective in which a minimum ethical performance is required to receive legitimation from the society; an acceptable profits perspective, in which an acceptable profitability is required to assure the financial continuity; and an integrated perspective. These four perspectives are illustrated by statements from Shell reports and from interviews with managers of a large European (...) retail company. (shrink)

This paper researches perceptions of the concept of price fairness in the Dutch coffee market. We distinguish four alternative standards of fair prices based on egalitarian, basic rights, capitalistic and libertarian approaches. We investigate which standards are guiding the perceptions of price fairness of citizens and coffee trade organizations. We find that there is a divergence in views between citizens and key players in the coffee market. Whereas citizens support the concept of fairness derived from the basic rights approach, holding (...) that the price should provide coffee farmers with a minimum level of subsistence, representatives of Dutch coffee traders hold the capitalistic view that the free world market price is fair. (shrink)

This paper considers the distribution of responsibility for prevention of negative social or ecological effects of production and consumption. Responsibility is related to ability and ability depends on welfare. An increase in competition between Western companies depresses their profitability, but increases the welfare of Western consumers and,hence, their ability to acknowledge social values. Therefore, an increase in competition on consumer markets shifts the balance in responsibility from companies to consumers to prevent negative external effects from production and consumption patterns. An (...) increase in competition on investor markets will shift the balance in an opposite direction. (shrink)

The political philosopher Hannah Arendt develops several arguments regarding why truthfulness cannot be counted among the political virtues. This article shows that similar arguments apply to lying in business. Based on Hannah Arendt's theory, we distinguish five reasons why lying is a structural temptation to businessmen: business is about action to change the world and therefore businessmen need the capacity to deny current reality; commerce requires successful image-making and liars have the advantage to come up with plausible stories; business communication (...) is more often about opinions than about facts, giving leeway to ignore uncomfortable signals; business increasingly makes use of plans and models, but these techniques foster inflexibility in acknowledging the real facts; and businessmen easily fall prey to self-deception, because one needs to act as if the vision already materializes. The theory is illustrated by a case study of Landis, which grew from a relatively insignificant organization into a large one within a short period of time, but ended with outright lies and bankruptcy. (shrink)

Is Nederland een fraudeland geworden? Na alle berichten over boekhoudschandalen en het bekend worden van illegale prijsafspraken is het terecht dat die vraag wordt gesteld. Het oplichten van aandeelhouders of van klanten gaat in tegen verschillende ethische noties. Het verstrekken van onjuiste informatie is niet alleen vanuit een utilistisch standpunt verwerpelijk vanwege de economische schade die ontstaat doordat een optimale marktwerking belemmerd wordt. Ook vanuit een deontologisch perspectief staan de ethische seinen op rood: het bedriegen van aandeelhouders of klanten getuigt (...) van weinig respect en is onrechtvaardig omdat dit zelfverrijking mogelijk maakt ten koste gaat van de stakeholders. Ook vanuit het perspectief van de deugdenethiek zijn deze praktijken verwerpelijk: het achterhouden van informatie getuigt van een gebrek aan integriteit en heeft een negatieve voorbeeldfunctie naar anderen. (shrink)

This article critically analyzes the environmental economics paradigm of David Pearce and Robert Kerry Turner. Our analysis is inspired by the philosophy of Herman Dooyeweerd, in particular his transcendental criticism and theory of modalities. We describe how Pearce and Turner theorize the concept of sustainable development. On the basis of this description we identify immanent tensions in their approach and analyze to what extent these tensions are caused by implicit normative presuppositions in the key concepts used by Pearce and Turner. (...) Finally, we examine whether Dooyeweerd’s conception of the economic aspect can diminish these tensions. (shrink)

"We live in an uncertain world. The politics of the United States affects our lives more often than what is decided in the Hague or Brussels. Many people experience in their daily work a kind of powerlessness when they have to face the consequences of decisions that are taken far away, for example because they work with the daughter company of a multinational. More than ever we are depending on the “global economy”. We are — whether we like it or (...) not — part of a worldwide political and economic entity." This text occurred in a 2002 publication of the Dutch Council of Churches, entitled ‘Economy in the service of life’, and has proved to be prophetic. Because since then, and especially after 2008, the awareness of global dependence and associated impotence has only become stronger. Rarely in history have we observed how quickly economic changes materialize worldwide. (shrink)

Among business ethicists, Adam Smith is widely viewed as the defender of an amoral if not anti-moral economics in which individuals’ pursuit of their private self-interest is converted by an ‘invisible hand’ into shared economic prosperity. This is often justified by reference to a select few quotations from The Wealth of Nations. We use new empirical methods to investigate what Smith actually had to say, firstly about the relationship between free market institutions and individuals’ moral virtues, and secondly about the (...) further relationship between virtues and societal flourishing. We show with more quantitative precision than traditional scholarship that the invisible hand reading dramatically misrepresents both the nuance and the sum of Smith’s analysis. Smith paid a great deal of attention to a flourishing society’s dependence on virtues, including the non-self-regarding virtues of justice and benevolence, and he worried also about their fragility in the face of the changed incentives and social conditions of commercial society. (shrink)