Within the banking community, the argument about sustainability and profitability tends to be inversely related. Our research suggests this does not need to be strictly the case. We present a credit score system based on sustainability issues, which is used as criteria to improve financial institutions’ lending policies. The Sustainability Credit Score System is based on the analytic hierarchy process methodology. Its first implementation is on the agricultural industry in Brazil. Three different firm development paths are identified: business as usual, (...) sustainable business, and future sustainable business. The following six dimensions are present in the SCSS: economic growth, environmental protection, social progress, socio-economic development, eco-efficiency, and socio-environmental development. The results suggest that sustainability is not inversely related to profit either from a short- or long-term perspective. The SCSS is related to the Equator Principles, but its application is not driven to project financing. It also deals with short- and long-term risks and opportunities, instead of short-term sustainability impacts. (shrink)

As a transitional economy, Vietnam has undergone tremendous changes over recent decades within a ‘fusion’ context that blends both traditional and modern values from its complex history. However, few studies have explored how contemporary issues in the context of Vietnam have brought both obstacles and skillful initiatives to managerial approaches to doing business. We draw on the concepts of social trust and institutional theory to explore how informal institutions such as religious forces can contribute to the development of individual trust (...) and whether individuals are willing to extend trust beyond familial networks. We contribute to the notion of a moral conception of trust by exploring how Buddhism in particular has initiated distinctive managerial approaches in the context of Vietnam, in response to dilemmas of social trust. Our findings highlight that as an informal institution, engaged Buddhism yields significant impact on the formation of social trust. We carried out in-depth interviews in Vietnam with 33 organizational leaders who were Buddhist practitioners, using thematic analysis to elucidate our findings and arguments. The study reveals how the incorporation of Buddhist principles has fostered context-sensitive, non-extreme, and reflexive managerial approaches to enhance morality as a response to social trust issues. (shrink)

The organizational trust literature relies strongly on the notion of trust and trustworthiness as a calculative cause-and-effect relationship aimed at assessing the advantages and disadvantages between two actors. This utilitarian notion of trust has been critiqued by studies that highlight _construct inconsistencies_ related to utilitarian trust, which, it is argued, is deficient, incomplete and misleading. Our empirical study of the Dutch insurance sector identifies and categorizes three _process inconsistencies_ that help to explain why the calculation of trust in a utilitarian (...) sense is seemingly impossible in practice and is a barrier to the unambiguous assessment of individual needs and individual utility. These process inconsistencies successively concern insufficient information, complex behavioural dynamics, and a convoluted pattern of stakeholder influence to assess utility in trust relationships, specifically within complex socio-economic systems. Our findings contribute to the trust literature by proposing a classification of the previous critiques on utilitarian trust, and by showing that in scenarios of systematic rather than dyadic trust, process inconsistencies may be too strong to endure a ‘leap of faith’, at least with regard to suspension and assessing utilitarian trust in these more complex socio-economic systems. (shrink)

Accountability is of universal interest to the business ethics community, but the emphasis to date has been primarily at the level of the industry, organization, or key individuals. This paper unites concepts from relational and felt accountability and team dynamics to provide an initial explanatory framework that emphasizes the importance of social interactions to team accountability. We develop a measure of team accountability using participants in the USA and Europe and then use it to study a cohort of 65 teams (...) of Irish business students over three months as they complete a complex simulation. Our hypotheses test the origins of team accountability and its effects on subsequent team performance and attitudinal states. Results indicate that initial team accountability is strongly related to team trust, commitment, efficacy, and identifying with the team emotionally. In established teams, accountability increases effort and willingness to continue to collaborate but did not significantly improve task performance in this investigation. (shrink)

Trust is a key ingredient of business activities. Scams are spectacular betrayals of trust. When the victim is a powerful organization that does not look vulnerable at first sight, we can suspect that this organization has developed an excessive trust, or over-trust. In this article, we take over-trust as the result of the intentional production of gullibility by the scammer. The analysis of a historically famous scam case, the Elf “Great Sniffer Hoax,” suggests that the victim is made gullible by (...) the scammer through a range of seduction and protection maneuvers that prevent the victim from developing doubts and suspicions. An integrated framework of the production of gullibility in organizations is proposed in order to further our understanding of over-trust. We discuss how these insights might be extended, beyond the case of scams, to more ordinary contexts of business activities. (shrink)

While the coexistence of trust and distrust has been acknowledged in previous literature, the understanding of their connection with organisational culture is limited. This study examines how trust and distrust construct the unity and fragmentation of organisational culture. Productive working relationships can be characterised by high trust, but strong ties and high trust may also account for false organisational unity. This study shows that trust and distrust can co-exist and distrust may even increase trust in particular situations. Moreover, we describe (...) how the cognitive and affective components of trust and distrust relate to the unity and fragmentation of organisational culture. We present an empirical case study of a company where tension and distrust between top management, middle management and shop stewards affected the organisational culture. The study contributes to earlier research by discussing trust as a multidimensional and dynamic phenomenon. The study shows how the affective and cognitive components of trust and distrust constitute the unity and fragmentation of organisational culture. We propose that if an organisation is willing to improve its ethics, it should rely on fragmentation rather than unity. (shrink)

The issue of trust has increasingly attracted attention in the business ethics literature. Our aim is to contribute further to this literature by examining how the use of the carbon copy function in email communication influences felt trust. We develop the argument that the use of cc enhances transparency—representing an important characteristic of workplace ethics—and hence promotes trust. We further argue that a downside of the cc option may be that it can also be experienced as a control mechanism, which (...) may therefore negatively affect trust. The results of our first study showed that the use of cc indeed enhances perceived transparency, but at the same time also leads to the experience of increased control. Building upon this insight, the findings of five subsequent studies consistently revealed that the use of cc negatively influences felt trust. More precisely, employees felt trusted the least when the supervisor was always included in cc. This effect on felt trust also negatively influenced how trustworthy the organizational climate was perceived. We further replicated these results in two field surveys, which showed that the negative effect of cc on felt trust lowered perceptions of psychological safety and contributed to a culture of fear. Taken together, our findings suggest that when transparency in email communications is experienced as a control mechanism, its use is perceived as unethical, rather than as ethical. Implications and recommendations for future business ethics research are discussed. (shrink)

We propose a construct, the Trust Triangle, that highlights three primary mechanisms that provide ex post accountability for opportunistic behavior and motivate ex ante trust in economic relationships. The mechanisms are a society’s legal and regulatory framework, market-based discipline and reputational capital, and culture, including individual ethics and social norms. The Trust Triangle provides a framework to conceptualize the relationships between trust, corporate accountability, legal liability, reputation, and culture. We use the Trust Triangle to summarize recent developments in the empirical (...) finance literature that examine how trust is formed and how trust, or its absence, affects financial markets, firm performance, and the incidence of financial fraud. To date, most studies examine only one leg of the Trust Triangle in isolation. The evidence, however, indicates that all three legs of the Trust Triangle have first-order effects on a wide range of financial outcomes and that they are interrelated. Attempts to model trust and trustworthiness that do not incorporate all three aspects of the Trust Triangle will therefore miss essential aspects of the basic economic problem of how counterparties overcome the risks of moral hazard, asymmetric information, and opportunism to engage in mutually beneficial exchange and production activities. We focus especially on culture-related mechanisms, a recently developed area in empirical finance research that has potential to influence the more established research on laws and reputation. (shrink)

According to some philosophers and social scientists, mainstream economic theories currently play an unprecedented role in shaping human societies. This phenomenon can be linked to the dissemination of methodological individualism, where common goods are interpreted as reducible to aggregates of individuals' well-being. Nonetheless, some emergent difficulties of economics in coping with global institutional issues have encouraged some authors to revise that paradigm. In the last three decades, there has been a parallel growing philosophical interest in investigating social sciences' epistemological and (...) ontological foundations. Unfortunately, these two research trends have often not communicated systematically enough to understand the specific ontology of collective aims. It is still unclear whether some irreducible social goods exist and how the answer to this question can set up a consistent understanding of cooperative actions. This dissertation addresses this issue, drawing on philosophical investigations about collective intentionality. It claims that a coherent ontological taxonomy of irreducible and reducible social goods is theoretically viable and can reframe prevailing approaches to collective action dilemmas influenced by the traditional economic categorisation of goods. The research begins by analysing how the influential theory of public goods has paved the way for some social and moral impasses. Furthermore, some theoretical proposals suggesting the existence of relational goods and common-pool resources are scrutinised. Hence, a refutation of the ontological reduction of all social goods to individual ones is developed, arguing that a specific form of cooperation, grounded in we-intentions and we-reasoning, shows the plausibility of the existence of some kinds of irreducible collective goods. Expanding on that view, a refinement of this categorisation of social goods is put forward by underlying the function of some relational entities, such as trust and shared sensemaking processes, in making cooperation robust in uncertain environments. Finally, by applying the taxonomy to collective action gridlocks regarding climate change, digital information, and public education, the consistency of this hypothesis is tested, showing that a pluralistic ontological account of social goods might improve the moral understanding of current social dilemmas. (shrink)