Business ethics literature regularly examines obligations of firms. This article examines the contrary and relatively under‐explored notion of obligations of stakeholders. It does so by discussing incidents of sexual misconduct arising under the umbrella of the #MeToo movement. This article explores how the theory of stakeholder responsibility can aid firms in understanding and addressing complex issues associated with stakeholder irresponsibility. It examines the moral responsibilities of regime members in the context of #MeToo incidents to provide a conceptual framework (...) for firms addressing issues associated with irresponsible stakeholder actions. (shrink)

Corporate social irresponsibility continues despite institutional pressures for socially responsible behavior, resulting in disasters like the Kalamazoo River Oil Spill and the Exxon Valdez Oil Spill. We conduct an in-depth abductive analysis of the Kalamazoo River Oil Spill to explain factors that enable corporate forgetting work projects. Specifically, we illustrate how a corporation’s political activities allow it to gain the power to suppress its mnemonic community’s voices, thereby attenuating an irresponsible event’s memory from the minds of its stakeholders, protecting (...) its image, and maintaining legitimacy in the shareholder and state’s eyes. We also highlight how the remembrance and forgetting of an irresponsible incident diverges between stakeholders based on their characteristics, future goals, and aspirations and whether they directly suffered from the disaster. Our research makes notable contributions to forgetting work literature by highlighting the importance of corporate political activities and context on the success of corporate forgetting work projects. (shrink)

The purpose of this article is to transcend the assumption that stakeholder engagement is necessarily a responsible practice. Stakeholder engagement is traditionally seen as corporate responsibility in action. Indeed, in some literatures there exists an assumption that the more an organisation engages with its stakeholders, the more it is responsible. This simple 'more is better' view of stakeholder engagement belies the true complexity of the relationship between engagement and corporate responsibility. Stakeholder engagement may be understood in (...) a variety of different ways and from a variety of different theoretical perspectives. Stakeholder engagement may or may not involve a moral dimension and, hence, is primarily a morally neutral practice. It is therefore argued that stakeholder engagement must be seen as separate from, but related to, corporate responsibility. A model that reflects the multifaceted relationship between the two constructs is proposed. This model not only allows the coincidence of stakeholder engagement with corporate responsibility, but also allows for the development of the notion of corporate irresponsibility. (shrink)

This study contributes to the corporate social responsibility, stakeholder theory, and executive succession literature by examining the effect of corporate social irresponsibility on strategic leadership turnover. We theorize that firms’ CSiR increases the likelihood of executive turnover. We also investigate the nature of succession and successor origin following CSiR. We further examine how the CSiR–CEO succession relationship is moderated by firm visibility to stakeholders and industry dynamism. Our results, based on a dataset of 248 U.S. public firms between 2001 (...) and 2008, provide evidence that firms’ CSiR affects what is conventionally seen as primarily a market-driven decision on executive turnover, especially when firms operate in a more dynamic industry. Research contributions and implications are discussed. (shrink)

In this paper, we take a framing perspective to corporate environmental irresponsibility and focus it on the community of place as one among the most affected, yet rarely examined, stakeholders. In particular, we take a framing microprocess perspective, to study how interactions within a community of place affect a mobilization after corporate environmental irresponsibility. We elicit two framing microprocess, losses display and scale augmentation, and show how they significantly, though differently, affect a mobilization. In so doing, we enrich our understanding (...) of how communities of place mobilize, the types of, and venues, where interactions take place in a community of place—and how these affect a mobilization. (shrink)

Corporate social irresponsibility (CSI) and other questionable business incidents that appear to harm stakeholders frequently afflict firms yet draw disparate investor reactions. We address this disparity by investigating the association between firm legal orientation and investor reactions to CSI. We hypothesize the proportion of board members and top management team (TMT) executives with law degrees affects investor perceptions of firm foresight, and in turn, their judgment of blame and consequent punishment. Based on abnormal returns to 629 announcements of CSI and (...) 308 publicly traded S&P 500 firms, we find that both too small and too large a proportion of board of directors and TMT members with law degrees lead investors to mete out harsher punishment. This inverted u‐shaped link is further affected by firm size, firm risk, and industry competition. Our investigation sheds light on the link between executive education and financial performance in the context of CSI and investor perceptions of foresight. (shrink)

There are major concerns about the level of personal borrowing, particularly sourced from credit cards. This paper charts the progress of an initiative to create a Responsible Lending Index (RLI) for the credit industry. The RLI proposed to voluntarily benchmark lending standards and promote best practice within the credit industry by involving suppliers of credit, customer representatives and regulators. However, despite initial support from some banks, consumer bodies and the Chair of the Treasury Select Committee, it failed to gain sufficient (...) support from financial institutions in its original format. The primary reasons for this were related to the complexity of building such a robust index and the banks trade body’s fear of exposing its members to public scrutiny. A revised alternative, the Responsible Lending Initiative, was proposed which took into account these concerns. However, the Association of Payment Clearing Service (APACS), the trade body of the credit industry, then effectively destroyed the proposal. This article describes an attempt to address the challenges in the credit card industry with the initiation of the RLI, reflected in stakeholder discourse and in the context of a wider concern expressed by the involved stakeholders in terms of the need for greater responsibility in the banking industry’s lending practices. (shrink)

In recent years, there have been several high-profile recalls of hybrid products. If consumers perceive a global firm to be responsible for the recall, then it will reduce their brand equity. Therefore, global firms may respond in ethically questionable ways to justify themselves to important stakeholders and avoid blame. Understanding how stakeholders attribute blame for crises involving hybrid products is important to shed light on the unethical manner in which global firms might avoid blame in such situations. The research reported (...) here shows that in a hybrid product crisis, consumers show a bias in favor of the brand company and against the manufacturing company. This bias is more pronounced when the country of manufacture has an unfavorable image or when consumers lack familiarity with the recalled brand. Ambiguous recall announcements by companies that fail to provide a specific and clear reason for the product defect prompt consumers to assume that a manufacturing flaw caused the product defect. As a result, consumers reduce their attribution of blame for the brand company, and thus its brand equity is maintained. (shrink)

The concept of business responsibility, usually termed as corporate social responsibility (CSR), originated in the early 1930s after the Wall Street crash of 1929 exposed corporate irresponsibility in large organisations. The understanding of CSR has evolved since then and its scope has now broadened from mere compliance to corporate laws to active alignment of internal business goals with externally set societal aspirations. Unfortunately, the significance of this multidimensional concept within the small and medium enterprise (SME) sector has continued to be (...) overshadowed by its application in large and multinational organisations. More importantly, this has led to the practice of judging SMEs, which are experiencing increasing pressure to engage in social activities, as if they are no different from their larger counterparts. This study therefore investigates CSR from the perspective of SMEs in Australia without any theoretical presumptions and then comments on the relevance and applicability of the two theories that have been commonly used to investigate business responsibility, namely, stakeholder theory (ST) and social capital theory (SCT). The research findings indicate that CSR within the SME sector is more aligned to the fundamentals of SCT, mainly owing to the unique resource and survival challenges that they face, and which are, arguably, not so pronounced in large organisations. (shrink)

Corporations perform actions that can inflict harm with different levels of intensity, from death to material loss, to both companies’ internal and external stakeholders. Research has analysed corporate harm using the notions of corporate social irresponsibility and corporate crime. Critical management studies have been subjecting management and organizational practices and knowledge to critical analysis, and corporate harm has been one of the main concerns of CMS. However, CMS has rarely been deployed to analyse CSIR and corporate crime. Thus, the aim (...) of this paper is to critically analyse the perspectives of CSIR and corporate crimes on corporate harm via CMS in general and postcolonial studies in particular. The paper contributes by arguing that research on CSIR and corporate crime could be perceived as producing research that does not challenge the essence of contemporary corporation profit-seeking activities that ultimately produces corporate harm. We argue that CSIR and corporate crime are ideologies that assist in disguising the contradiction between producing shareholder value and the social good that is at the heart of the modern corporation system and the current economic system. Furthermore, the postcolonial view of CSIR and corporate crime highlights how they are based on a Western-centric view of corporate harm that ignores the realities and perspectives of the Global South, especially in situations where corporate harm leads to death in the Global South. (shrink)

A growing body of literature documents the important role played by moral outrage or moral anger in stakeholders’ reactions to cases of corporate social irresponsibility. Existing research focuses more on the consequences of moral outrage than a systematic analysis of how appraisals of irresponsible corporate behavior can lead to this emotional experience. In this paper, we develop and test, in two field studies, an extended model of moral outrage that identifies the cognitions that lead to, and are associated with, (...) this emotional experience. This research contributes to the existing literature on reactions to corporate social irresponsibility by explaining how observers’ evaluation of irresponsible corporate behavior leads to reactions of moral anger. The paper also helps clarify the difference between moral outrage and other types of anger and offers useful insights for managers who have to confront public outrage following cases of irresponsible corporate behavior. Finally, the analysis of the causes of stakeholders’ anger at irresponsible corporations opens important avenues for future research that are presented in the paper. (shrink)

Current research has documented how cases of irresponsible corporate behavior generate negative reactions from consumers and other stakeholders. Existing research, however, has not examined empirically whether the characteristics of the victims of corporate malfeasance contribute to shaping individual reactions. This study examines, through four experimental surveys, the role played by the national identity of the people affected on consumers’ intentions to spread negative word of mouth. It is shown that national identity influences individual reactions indirectly; mediated by perceived similarity (...) and sympathy. Consumers perceive foreign victims as different from the self and this reduces the sympathy experienced towards them. Sympathy is an emotion that shapes consumer reactions and regulates WOM. The study identifies two moderating processes of this effect. Individuals who score high on collective narcissism are most likely to be strongly biased against foreign victims. In-group bias is also moderated by the perceived severity of the crisis. When a case is perceived as very serious, perceived similarity plays a less important role in generating sympathy because consumers focus on the perceived suffering of the victims. Hence, in-group bias is stronger in cases perceived as having minor consequences. The paper contributes to the literature on corporate social irresponsibility and offers implications for both scholars and managers. (shrink)

Corporate Social Responsibility is a label covering managerial checks and institutional balances introduced against the background of ethical values. Values are clearly formulated and organizational processes are designed with the inclusion of stakeholders and their voice in mind. In case of the post-communist societies designers of CRS cope with an additional level of complexity. Original sin of market reforms after the political fall of the communist regimes is the corrupt take-over of markets and democracies. Social institutions of capitalist markets and (...) democratic states have been subverted and invaded by the unpurged networks of the post-communist power elites. They privatized the wealth of state enterprises becoming new owners of economic resources and they drifted towards the top functions in state institutions becoming post-communist power brokers. Their long-term monopoly of the media left them in command of the mainstream PR communications long after their absolute political power was gone. Democratic institutions, and the right to free speech are daily challenged by influential image and market competition. They cannot be taken for granted. Some democratic institutions are undermined by subversive networks of the corrupt mafias often formed by ex-functionaries of the communist party and her secret services. Their tacit power is explicitly legitimized by media-clusters of cultural representatives of the communist ex-power elites exploiting leftist bias of media mainstreams. (shrink)

Ensuring access to clean water is one of the most important development and health challenges of the twenty-first century. Given the manifold impacts of business activities on water resources, corporate water actions should be of central concern to business ethics researchers. Yet so far we know too little about whether business activities that impact on water resources are noticed or how corporate water actions are valued by a firm’s stakeholders, including by financial markets. In response, we conduct an event study (...) to investigate the shareholder wealth effect of reports of corporate water actions. We explore stock market reactions to water actions by S&P 500 firms from 2005 to 2017, showing that the market reacts positively to reports of responsible water actions and negatively to irresponsible actions. We further explain that these abnormal returns to water actions are associated with a firm’s past performance on ethical issues, arguing that the reputational effects from prior corporate social responsibility and irresponsibility influence market reactions. Our analysis provides evidence that there are diminishing marginal returns to responsible water actions for firms with records of past responsibility and an offsetting effect for those with past irresponsibility. Similarly, we demonstrate an insurance effect that limits punishment for irresponsible water actions for firms with responsible performance records and diminishing negative marginal returns for those already seen to be irresponsible. This study is the first to show that shareholders recognize market value in corporate water actions and are prepared to award or punish firms in stock markets based on their impacts on water. (shrink)

Prior studies on stakeholders’ responses to firms with high prior corporate social responsibility (CSR) engaging in corporate social irresponsibility (CSIR) show inconsistent results. To explore this inconsistency, we focus on the intentionality of CSIR and draw upon cognitive dissonance theory to examine how transgressional CSIR and accidental CSIR differently influence investors’ responses to firms with high prior CSR through both emotional (e.g., anger) and cognitive (e.g., moral judgment) processes. An experimental study using a facial expression analysis technology— FaceReader 5.0 (Study (...) 1) and a scenario experiment (Study 2), reveal that high prior CSR is a double-edged sword. Specifically, high prior CSR elicits an aggravating effect on investor responses (more anger, more negative moral judgment, and more negative effects on investment) in light of transgressional CSIR, but it has a buffering effect on investor responses (less anger, less negative moral judgment, and less negative effects on investment) in light of accidental CSIR. Moreover, we find that when prior CSR and CSIR are in the same (vs. different) domain, the aggravating effect of transgressional CSIR is strengthened, but the buffering effect of accidental CSIR is weakened. Our findings provide important theoretical and practical insights into the effect of prior CSR on investor responses in cases of different CSIR. (shrink)

This paper seeks to make a contribution toward a general theory of responsibility and irresponsibility. Such a theory, or framework or model, addresses therelationship between responsibility and irresponsibility. The motive for the effort is that the literature on business ethics, corporate citizenship, and corporate social responsibility combines negative prohibitions with positive requirements and at both individual and organizational levels of action. A prohibition takes the form “do not” expressed in laws and ethics. A requirement takes the form “should” or “ought” (...) expressed in theories of responsibility and stakeholder engagement. Armstrong (1977) points out that actually preventing harm may be socially much more valuable than promoting contribution. (shrink)

The Panama Papers (2016), Paradise Leaks (2017), and Pandora Papers (2021) have revealed the extensive practice of corporate tax avoidance. Yet, the tax behavior of companies claiming to be “socially responsible” has been less examined. This study examines the association between corporate social responsibility disclosure (CSRD) and tax avoidance, particularly in developing economies, focusing on Sub-Saharan Africa (SSA). By analyzing data from 600 firm-year observations across 13 SSA countries using panel quantile regression, we found a negative relationship between CSRD, which (...) includes ethical, social, and environmental dimensions, and tax avoidance. This aligns with legitimacy theory, indicating that firms are increasingly adopting CSR transparency to meet societal expectations and gain stakeholder trust, avoiding socially irresponsible behaviors. Furthermore, the quality of national governance significantly moderates the CSRD–tax avoidance relationship, supporting the concept of institutional isomorphism. This evidence is valuable for professionals and policymakers and encourages further research to deepen and broaden these findings. (shrink)

This paper examines the impact on firm value created by investor reaction to same day news of corporate social responsibility and corporate social irresponsibility activities. First, using trading volume, the authors establish that the perceived value of moral capital generated by news involving institutional stakeholders is less clear to investors than that of the news involving technical stakeholders. Subsequently, the authors analyze abnormal returns from 565 unique firm events—each comprising at least one positive and one negative stakeholder news item. (...) Using signaling theory, the authors demonstrate that news of the number of CSR activities involving institutional groups counteracts the effects of same day CSiR news in an inverted U-shaped fashion. In contrast, they find that news of the number of CSR activities involving technical groups mitigates the effects of same day CSiR news in a U-shaped fashion. (shrink)

This paper explores the relationship between attitudes to corporate social responsibility (CSR) and the cultural dimensions of business activity identified by Hofstede & Hofstede using a sample of nearly 90,000 stakeholders drawn from 28 countries. We develop five general propositions relating attitudes to CSR to aspects of culture. We show that the propensity of consumers to punish firms for bad behaviour varies in ways that appear to relate closely to the cultural characteristics identified by Hofstede. Furthermore, this variation appears to (...) be understandable in terms of the standard interpretation of the Hofstede dimensions, suggesting that cultural variation in the attitudes of consumers may play an important role in helping us to understand variations in CSR across countries. This in turn has implications for how managers of multinational companies should implement CSR strategies in different cultural contexts. (shrink)

This paper explores the relationship between attitudes to corporate social responsibility (CSR) and the cultural dimensions of business activity identified by Hofstede & Hofstede using a sample of nearly 90,000 stakeholders drawn from 28 countries. We develop five general propositions relating attitudes to CSR to aspects of culture. We show that the propensity of consumers to punish firms for bad behaviour varies in ways that appear to relate closely to the cultural characteristics identified by Hofstede. Furthermore, this variation appears to (...) be understandable in terms of the standard interpretation of the Hofstede dimensions, suggesting that cultural variation in the attitudes of consumers may play an important role in helping us to understand variations in CSR across countries. This in turn has implications for how managers of multinational companies should implement CSR strategies in different cultural contexts. (shrink)

ABSTRACTThis article examines how a firm’s prior record on corporate social responsibility influences individual stakeholders’ perceptions of corporate hypocrisy in the wake of a corporate social irresponsibility event. Our research extends extant corporate hypocrisy literature by highlighting the role of individual stakeholders’ inferences about a genuine CSR motive in their judgments of corporate hypocrisy. This can serve to differentiate perceived corporate hypocrisy from inconsistency that arises because of a lack of ability and/or resources. Our research further identifies a source for (...) such perceptions: individual stakeholders’ perceptions of firm warmth generated by a firm’s prior record of CSR. In addition, we find that when CSR and CSI are in the same domains, it can strengthen perceptions of hypocrisy. This provides direct evidence to explain why markets react differently when CSR and CSI events occur in the same domain. (shrink)

This study investigates the connection between corporate social responsibility (CSR) and corporate reputation among the public using fuzzy set qualitative comparative analysis (fsQCA). To examine complex processes underlying the reactions of this influential stakeholder group, hypotheses are drawn from the category diagnosticity approach. Thereby, a psychological model of perceived (im)morality is transferred to the CSR context. In line with these hypotheses, positive/negative CSR activities influence reputation in the expected directions (H1a, b), while the effects of specific configurations of CSR (...) activities reveal an asymmetry suggesting a negativity bias (H2). Further analyses confirm that positive effects require a consistent positive performance regarding prior reputations (H3a) and the aggregated CSR activities of several previous years (H3b, c). Moreover, the relevant patterns vary between industries (H4). The present study thus contributes to CSR research by investigating a powerful but hitherto understudied stakeholder group through a category diagnosticity lens combined with a configurational approach to analysis. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" effect. (...) We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)

Relationships between stakeholders and businesses have the potential for conflict and cooperation. Such conflicts arise out of real differences in values and interests. This article explores the employment relationship as an emblematic case of business–stakeholder relations in which conflict is inevitable because employers and employees have interests that are at least partially conflicting, even while some degree of collaboration and shared interests underpins the existence of all employment relationships. We build on insights from the philosophy of agonism to develop (...) the concept of agonistic business responsibility, which is a stakeholder management orientation that views conflict and contestation differently from the status quo, which we term antagonistic business irresponsibility. We discuss the broader implications of these ideas for stakeholder relations at the organizational level and the prospect of strengthened institutions at the societal level. (shrink)

This study examines the impact of chief executive officer ability on firms’ corporate social responsibility performance. We find that firms’ CSR performance increases with CEO ability. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. We further find that the positive relation between CEO ability and CSR is weakened for CEO who is also the chair of the board (...) and for CEO who is close to retirement; and is weakened when the CSR emphasis exerted by a firm’s external environment is high. Our results are robust after controlling for firm fixed effects and to the use of multiple measures of CSR performance and CEO ability. Overall, our evidence is consistent with our conjecture that more able CEOs have less career concerns so that these CEOs are more willing to undertake long-term investments in socially beneficial activities, leading to better CSR performance. (shrink)

This article examines the empirical association between analyst coverage and corporate social responsibility (CSR) by investigating their simultaneous and causal effects, and its joint effects of CSR engagement and analyst coverage on firm risk. We find a positive association between the level and change of CSR engagement and the level and change of analyst coverage after considering simultaneity and causality. Based on the first-difference approach, we further find that the change in analyst following from the previous year affects the change (...) in CSR in the current period, whereas the change in CSR from the previous period does not influence the change in analyst following in the current period. Furthermore, we find that the change in CSR engagement as well as the interaction effect of changes in CSR and analyst coverage reduces the change of firm risk. When we examine the CSR strengths and concerns separately, analyst following does not significantly influence firms’ CSR strength but CSR concern activities decreases significantly as firms have more analyst followings. We further find the mediating role of financial analysts between CSR concerns (but not CSR strengths) and firm risk. We maintain that analysts provide indirect but additional social pressure to the firms to eventually reduce their irresponsible activities. Taken together, we interpret these results to support the stakeholder theory-based conflict-resolution explanation that considers CSR engagement as a vehicle to reduce conflicts of interest between managers and noninvesting stakeholders but not the overinvestment hypothesis that views CSR as a waste of valuable resources at the cost of shareholders. (shrink)

Why do multinational corporations frequently encounter corporate social responsibility crises in leading emerging markets in the new century? Existing research about institutional impacts on MNC CSR has developed a void-based account about how the flawed institutional system allows misdeeds to happen. But the fact that such misdeeds have turned into increasing CSR crises in the new century along with institutional change is rarely taken into account. This paper combines studies of institutional voids, institutional entrepreneurship, and stakeholder theory to develop (...) a concept of institutional sophistication, which refers to both the top-down maturation of the regulatory system that standardizes firm behavior and the bottom-up diversification and intensification of grassroots initiatives that redefine stakeholder membership. Based on this concept, we developed a framework to comprehensively demonstrate how both institutional voids and sophistication drive the MNC CSR crisis in leading emerging markets. Empirically, we established an original database that includes 309 publicized CSR crises encountered by major foreign MNCs in China, India, and Russia, 2000–2011. Through a content analysis, the paper reveals six common sophistication processes that drive the MNC crisis across contexts and also specifies stakeholder strategies that make these processes happen and vary by social problems and national contexts. We also discussed the value of studying corporate social irresponsible behavior in understanding the institution–MNC relationship. (shrink)

This study examines whether the chief executive officer’s poverty experience has an impact on firms’ corporate social responsibility. We find that firms’ CSR performance increases with CEOs’ poverty experience; specifically, firms with CEOs who experienced early-life poverty are associated with more socially responsible activities and fewer socially irresponsible activities, such as on-the-job consumption, and are more associated with key stakeholder-related rather than community-related CSR. We further find that the positive relationship between the CEO’s poverty experience and CSR strengthens (...) for well-educated or powerful CEOs. Our evidence is consistent with our conjecture that CEOs who experienced early-life poverty have stronger compassion and prosocial psychology. Consequently, these CEOs are more willing to make long-term investments in socially beneficial activities, leading to better CSR performance, which further confirms the altruistic motivation of CSR. (shrink)

This study examines the relation between a firm’s business strategy and its corporate social responsibility performance. Using a comprehensive measure of business strategy based on the Miles and Snow theoretical framework, we find that firms following an innovation-oriented strategy are associated with better CSR performance than those following an efficiency-oriented strategy. Specifically, compared with defenders, prospectors engage in more socially responsible activities, fewer socially irresponsible activities, and perform better in both stakeholder- and third-party-related CSR areas. Taken together, our (...) results suggest that business strategy is an important determinant of CSR performance. Prospectors take advantage of CSR, as their innovation-oriented strategy allows them not only to benefit more from CSR, but also to have more tolerance for the uncertainty, risk, and long time-horizon associated with CSR engagement. (shrink)

What has ethics got to do with my job? How can I take on ethical responsibility and help to make my company more successful at the same time? Although 'ethical responsibility' has become something of a catchphrase these days, most people only have a vague idea what it means and how it can be demonstrated in actual practice.Disasters like the Volkswagen's emission scandal, the oil spill in the Gulf of Mexico, the nuclear meltdown of Fukushima, the global financial crisis, and (...) countless lesser-known cases of damage to human beings and the environment are the result of unethically irresponsible business practices. Efforts to maximize profits frequently lead to reckless behavior, as those in charge focus on short-term benefits and ignore social and environmental risks. Their actions have negative consequences, not only for the victims but, in many cases, for the perpetrators themselves too. Aggrieved interest groups or disadvantaged stakeholders may react with strikes, public protests, or boycotts, jeopardizing their reputation and profitability.This textbook, Applied Business Ethics, is the result of many years of research work and lecturing, and is an attempt to present the most important principles and the latest approaches in business ethics to students, teachers, and business practitioners alike, and help them to make business decisions that everyone concerned will benefit from, rather than just a few fortunate stakeholders.The author illustrates his theoretical subject matter with practical examples of real-life situations and provides numerous exercises to help the reader grasp complex issues, moral dilemmas, and business risks better. In clear, accessible, and easily understandable terms, he demonstrates how ways of finding satisfactory solutions can be found in a systematic way thanks to interdisciplinary research and philosophical reflection. (shrink)

Considerable interest exists regarding the media’s influence on corporate reactions, but the link between media visibility and corporate philanthropic response is not clear. Natural disasters thus provide an environment that makes visible the general processes relevant to that link. Based on agenda-setting theory, stakeholder theory, and impression-management theory, we propose that corporations that are highly visible in the news media are more likely to engage in CPR and donate more money. We also propose that companies with reputations for irresponsibility (...) or vulnerability strengthen that tendency. Data from Chinese firms after the Wenchuan earthquake on May 12, 2008, and the corresponding empirical results support our hypotheses. This study also shows that CPR is an active conduit for deflecting undesired reputations. (shrink)

Greenwashing is a phenomenon that is linked to scandals that often occur at the supply-chain level. Nevertheless, research on this subject remains in its infancy; much more is needed to advance our understanding of stakeholders’ reactions to greenwashing. We propose here a new typology of greenwashing, based on the locus of discrepancy, i.e. the point along the supply-chain where the discrepancy between ‘responsible words’ and ‘irresponsible walks’ occurs. With three experiments, we tested how the different forms of greenwashing affect (...) stakeholders’ reactions, from both ethical and business perspectives. We developed our hypotheses by building on attribution theory, which seeks to account for how observers construct perceptions about events. We had anticipated that the more internal, controllable and intentional the discrepancy is, the greater the blame attributed to a company is, and the lower the intention to invest will be. When greenwashing occurs at a company level, this results in a higher level of blame attribution, while the intention to invest falls. Indirect greenwashing refers to a misbehaviour perpetrated by a supplier who claims to be sustainable, and which results in a less negative impact on a supplied company. We also propose the vicarious greenwashing, which occurs when the behaviour of a supplier is in breach of a company’s claims of sustainability. This type of greenwashing is nevertheless detrimental to investment. The findings here advance our understanding of how greenwashing shapes stakeholders’ reactions, and highlight the need for the careful management of the supply-chain. (shrink)

Greenwashing is a phenomenon that is linked to scandals that often occur at the supply-chain level. Nevertheless, research on this subject remains in its infancy; much more is needed to advance our understanding of stakeholders’ reactions to greenwashing. We propose here a new typology of greenwashing, based on the locus of discrepancy, i.e. the point along the supply-chain where the discrepancy between ‘responsible words’ and ‘irresponsible walks’ occurs. With three experiments, we tested how the different forms of greenwashing affect (...) stakeholders’ reactions, from both ethical and business perspectives. We developed our hypotheses by building on attribution theory, which seeks to account for how observers construct perceptions about events. We had anticipated that the more internal, controllable and intentional the discrepancy is, the greater the blame attributed to a company is, and the lower the intention to invest will be. When greenwashing occurs at a company level, this results in a higher level of blame attribution, while the intention to invest falls. Indirect greenwashing refers to a misbehaviour perpetrated by a supplier who claims to be sustainable, and which results in a less negative impact on a supplied company. We also propose the vicarious greenwashing, which occurs when the behaviour of a supplier is in breach of a company’s claims of sustainability. This type of greenwashing is nevertheless detrimental to investment. The findings here advance our understanding of how greenwashing shapes stakeholders’ reactions, and highlight the need for the careful management of the supply-chain. (shrink)

Aspirational talk has gained increasing research attention as a compelling concept theoretically explaining the potential of talk-action discrepancies in corporate responsibility communication to instigate organizational change. Under certain conditions, aspirational talk can facilitate discourse, agreement, reframing, and corporate reflexivity. However, perceived talk-action discrepancies can negatively affect organizational members, leading to disengagement, and demotivation, causing emotional exhaustion, exposing employees to vulnerabilities, and even catalyzing unethical or illicit behaviors. Thus, this book focuses on how aspirational talk becomes irresponsible in an organizational (...) context, and how it can be avoided. The author proposes that aspirational talk becomes irresponsible if it creates expectations that lead to illegitimate harm to employees or involved stakeholders. A framework is derived, constituting the finding that it takes two types of investments into performativity and responsibility conditions, to avoid the irresponsible use of aspirational talk – and thus, to inspire responsibly. (shrink)

The authors discuss the consistency of transnational companies in their home, as well as in less developed host countries, concerning ethics, values and social responsibility. Ethical behavior offers good reputation, credibility and tradition to the corporation. It leads to corporate social, environmental and economic responsibilities, cooperating to the desired sustainability. This paper analyzes the inversion of values that corporate governance systems have suffered. The meaning and implication of the corporate social responsibility is investigated and discussed. A “pyramid of values” is (...) built upon individual ethical values at the basis. Over them, the organizational ethical values should indicate the limits of operations, so that the corporate social responsibility can be sustained, in the top. The authors comment that ethical values no longer lead the organization. Its communication with the stakeholders, specifically through reports, has been gradually replacing the code of ethics and corporate values. These reports have taken the basis of the pyramid leading the organizations to socially irresponsible and unethical behavior. They do not guarantee transparency or communicate the needs of the society. It appears that transnational companies do not behave the same way in their home country as they do in host countries, particularly in less developed regions like Latin America and Africa. Lack of communication and transparency may induce employees to unethical decisions and transform the reporting system into a marketing instrument. In order to guarantee compliance with the codes, transparency and ethical responsibility, communication within the organization is essential. (shrink)

Drawing on the influence of primacy and recency effects in processing information about corporate social responsibility, the authors examine how internal and external factors impact the consumer-firm relationship in the presence of contradictory CSR information. Evaluating these factors provides a more comprehensive understanding of how consumers react to unethical and socially irresponsible actions. Contrary to recent research that suggests a reactive CSR communication strategy to be best due to recency effects, the present findings show that past customer experiences with (...) the firm facilitate a ‘primacy effect’. Thus, when corporate social irresponsibility occurs, a customer’s prior experiences mitigate negative consequences. Conversely, a firm’s positive CSR reputation may provide goodwill, although it does not guarantee that consumers will process CSR information differently. Therefore, firms cannot build a strong CSR reputation and expect to be immune from the consequences of CSI. Given these new findings of how consumers process contradictory CSR information, firms should implement a strategic and deliberate communication plan that delivers different messages to different stakeholders. Specifically, these findings suggest that firms benefit most from a proactive communication strategy with their current customers and a reactive communication strategy with the general public. (shrink)

Hype over novel quantum technologies has prompted discussion on the likely societal impacts of the sector. Calls to ensure the responsible development of quantum technologies are complicated by a lack of concrete case studies or real-world examples of irresponsible quantum. At this stage, responsible quantum faces a situation reminiscent of the Collingridge dilemma. In this dilemma, the moment in which discussion on societal risks and benefits can be most impactful is also the time when the least information is available. (...) The flipside of this challenge is an opportunity to build processes for examining the public good of quantum before the trajectory (and potential problems) of the sector become “locked in”. Recent work in this space has argued that quantum researchers and innovators must work with society to address uncertainties and concerns. By engaging quantum stakeholders and understanding their perspectives on responsibility, this paper seeks to support this proposition and enable further dialogue on responsible development and use of quantum technologies. (shrink)

The world is suffering from a dearth of health care workers, and sub-Saharan Africa, an area of great need, is experiencing the worst shortage. Developed countries are making the problem worse by luring health care workers away from the countries that need them most, while developing countries do not have the resources to stem the flow or even replace those lost. Postmodern philosopher Emmanuel Levinas offers a unique ethical framework that is helpful in assessing both the irresponsibility inherent in the (...) current global health care situation and the responsibility and obligation held by the stakeholders involved in this global crisis. Drawing on Levinas’ exploration of individual freedom and self-pursuit, infinite responsibility for the Other, and the potential emergence of a just community, we demonstrate its effectiveness in explaining the health care worker crisis, and we argue in favor of a variety of policy and development assistance measures that are grounded in an orientation of non-indifference toward Others. (shrink)

Despite the burgeoning literature on the governance and impact of cross-sector partnerships in the past two decades, the debate on how and when these collaborative arrangements address globally relevant problems and contribute to systemic change remains open. Building upon the notion of wicked problems and the literature on governing such wicked problems, this paper defines harnessing problems in multi-stakeholder partnerships as the approach of taking into account the nature of the problem and of organizing governance processes accordingly. The paper (...) develops an innovative analytical framework that conceptualizes MSPs in terms of three governance processes harnessing three key dimensions of wicked problems. The Roundtable on Sustainable Palm Oil provides an illustrative case study on how this analytical framework describes and explains organizational change in partnerships from a problem-based perspective. The framework can be used to better understand and predict the complex relationships between MSP governance processes, systemic change and societal problems, but also as a guiding tool in organizing governance processes to continuously re-assess the problems over time and address them accordingly. (shrink)

In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy (...) is typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy. (shrink)

This paper explores the relationship between business experience in cross-sector partnerships and the co-creation of what we refer to as ‘dynamic capabilities for stakeholder orientation,’ consisting of the four dimensions of sensing, interacting with, learning from and changing based on stakeholders. We argue that the co-creation of dynamic capabilities for stakeholder orientation is crucial for CSPs to create societal impact, as stakeholder-oriented organizations are more suited to deal with “wicked problems,” i.e., problems that are large, messy, and (...) complex. By means of a grounded theory approach of inductive research, we collected and interpreted data on four global agri-food companies which have heterogeneous experience in participating in CSPs. The results of this paper highlight that only companies’ capability of interacting with stakeholders continually increases, while their capabilities of sensing, learning from, and changing based on stakeholders first increase and then decrease as companies gain more experience in CSP participation. To a large extent, this can be attributed to the development of corporate strategies on sustainability after a few years of CSP participation, which entails a shift from a reactive to a proactive attitude towards sustainability issues and which may decrease the need or motivation for stakeholder orientation. These findings open up important issues for discussion and for future research on the impact of CSPs in a context of wicked problems. (shrink)

BackgroundCase consultation performed by clinical ethics committees (CECs) is a complex activity which should be evaluated. Several evaluation studies have reported stakeholder satisfaction in single institutions. The present study was conducted nationwide and compares clinicians’ evaluations on a range of aspects with the CEC’s own evaluation.MethodsProspective questionnaire study involving case consultations at 19 Norwegian CECs for 1 year, where consultations were evaluated by CECs and clinicians who had participated.ResultsEvaluations of 64 case consultations were received. Cases were complex with multiple (...) ethical problems intertwined. Clinicians rated the average CEC consult highly, being both satisfied with the process and perceiving it to be useful across a number of aspects. CEC evaluations corresponded well with those of clinicians in a large majority of cases. Having next of kin/patients present was experienced as predominantly positive, though practised by only half of the CECs. The educational function of the consult was evaluated more positively when the CEC used a systematic deliberation method.ConclusionsCEC case consultation was found to be a useful service. The study is also a favourable evaluation of the Norwegian CEC system, implying that it is feasible to implement well-functioning CECs on a large scale. There are good reasons to involve the stakeholders in the consultations as a main rule. (shrink)

The corporate social responsibility literature has increasingly explored relationships between civil society and social movements, including non-governmental organizations, and corporations, as well as the role of NGOs in multi-stakeholder governance processes. This paper addresses the challenge of including a plurality of civil society voices and perspectives in business–NGO relations, and in CSR as a process of governance. The paper contributes to CSR scholarship by bringing insights from feminist literature to bear on CSR as a process of governance, and engaging (...) with leaders of women’s NGOs, a group of actors rarely included in CSR research. The issues raised inform contributions to the CSR literature relating to the role of women’s NGOs with regard to the gender equality practices and impacts of corporations, and with respect to defining the meaning and practice of CSR. The paper frames marginalized NGOs as important actors which can contribute to pluralism, inclusion and legitimacy in CSR as a process of governance. It identifies several key barriers to the participation of women’s NGOs in CSR, and concludes by making suggestions for future research, as well as practice. (shrink)

Poor working conditions remain a serious problem in supplier facilities in developing countries. While previous research has explored this from the developed buyers’ side, we examine this phenomenon from the perspective of developing countries’ suppliers and subcontractors. Utilizing qualitative data from a major knitwear exporting cluster in India and a stakeholder management lens, we develop a framework that shows how the assumptions of conventional, buyer-driven voluntary governance break down in the dilution of buyer power and in the web of (...) factors rooted in suppliers’ traditions, beliefs, local demands and resource dependency. We reveal out how success in governing collaborative global supply chains often falls short within the subcontracting stage, where a stakeholder management mindset is elusive to most participants. We suggest that success in governing collaborative global supply chains is dependent on concepts of stakeholder utility and the presence of shared value that is often at odds with the realities of power, information asymmetry and compliance/reward systems inherent in the non-market coordination of global supply chains. Our findings offer important insights for delineating the concepts of value creation from CSR concepts and practices, and for modifying the basic assumptions of conventional supply chain governance. (shrink)

Although agreement on the positive sign of the relationship between corporate social and financial performance is observed in the literature, the mechanisms that constitute this relationship are not yet well-known. We address this issue by extending management’s stakeholder theory by adding insights from psychology’s prospect decision theory and sociology’s resource dependence theory. Empirically, we analyze an extensive panel dataset, including information on disaggregated measures of social performance for the S&P 500 in the 1997–2002 period. In so doing, we enrich (...) the extant literature by focusing on stakeholder heterogeneity, perceptional framing, and disaggregated measures of corporate social performance. (shrink)

In this paper, the approaches of a sample of small firms to environmental issues in the UK and the Netherlands are compared.The study makes a contribution by addressing the lack of research on small firms and the environment, as well as offering insights intothe influence that cultural. institutional, and political frameworks can have on small firm owner-managers' attitudes to external issues. The environment is considered here as an ethical issue, drawing on work on the environmental responsibility of business by both (...) Bowie (1990) and Hoffman (1991). It is argued that the approaches to the environment identified in this study by Dutch and UK small firm owner-managers do not fit in with the positions of either Bowie or Hoffman. The concept of stakeholder cooperation is proposed as a more realistic alternative. (shrink)

It has long been taken for granted that clinical research involving human subjects is ethical only if it holds out the prospect of producing socially valuable knowledge. Recently, this social value requirement has come under scrutiny, with prominent ethicists arguing that the social value requirement cannot be substantiated as an ethical limit on clinical research, and others attempting to offer new support. In this paper, I argue that both criticisms and existing defenses of the social value requirement are predicated on (...) what I call the “transactional model of stakeholder obligations”. I go on to problematize this framework, and to introduce an alternative framework for conceptualizing ethical obligations within clinical research. In defending this framework, which I call the “basic structure model of stakeholder obligations”, I also demonstrate how it provides a stronger grounding for the social value requirement that is not vulnerable to critiques grounded in the transactional model. (shrink)

Recently, calls have grown louder for more stakeholder democracy that is, letting stakeholders participate in the process of organizing, decision‐making, and governance in corporations, especially in the area of Corporate Social Responsibility (CSR) activities. Despite the relevance of the subject, the impact of customer involvement in CSR on their company‐related attitudes and behaviors still represents a major research void. The paper at hand develops a conceptual framework of consumer involvement in CSR based on the existing literature, theories of (...) class='Hi'>stakeholder democracy, and organizational boundaries as well as drawing from the qualitative focus group interviews (N = 24). The framework is tested on a large scale, two‐time point field‐experimental study (N = 3,397). More specifically, consumer reactions to three degrees of customer involvement (i.e., information, feedback, and dialogue) are tested in two different CSR domains (i.e., company‐internal business process vs. company‐external philanthropic CSR). Results indicate that the customer involvement in CSR has a more beneficial effect in terms of strengthening customer outcomes in CSR domains that directly affect external stakeholders of the company (i.e., philanthropic CSR) than in domains that mainly concern company‐internal stakeholders (i.e., business process CSR). (shrink)