There has recently been a growth in research that examines how corporations respond to allegations of unethical actions. Although scholars have gained much insight about the range of responses available to and used by organizations, there has been almost no study of why firms choose one response over another. In this article, the authors present a framework of likely organizational response choices to allegations of wrongdoing; we propose that response choices are based on the degree of reputational risk from stakeholder (...) withdrawal of support and on perceived threats to the firm’s primary or secondary identity. (shrink)

The purpose of this article is to call for the formulation and adoption of a declaration on the universal rights and duties of business. We do not attempt to define the specific contents of such a declaration, but rather attempt to explain why such a declaration is needed and what would be some of its general characteristics. The catalyst for this call was the recognition that even under optimal conditions, good companies sometimes are susceptible to moral lapses, and when companies (...) undertake ventures in authoritarian countries with poor human rights records, even those with the best intentions may find themselves drawn into complicity in human rights abuses. There, market exigencies may persuade them to leave their codes of ethics and commitments to human rights at home. Pragmatism, it would seem, requires thatthey accept the ethical inconsistencies that follow from a “When in Rome, do as they Romans do” outlook. When facing the moral dilemma about whether or not to invest in human rights abusing countries, companies are offered two alternatives: they can operate in those countries and accept potential complicity or they can stay away. We suggest, however, that a preferable option is to address the underlying problem, and to this end we advocate the promulgation of a declaration for business that is comparable to the Universal Declaration of Human Rights. Our proposed name for this is the “Declaration on the Universal Rights and Duties of Business.” To be effective, such a declaration would require enforcement mechanisms. To illustrate this issue, we focus on China, not because China is unique in its human rights abuses, but because China occupies such a central place in the globalization efforts of the major companies from around the world. A robust international declaration is needed to provide a common framework for the practice of consistent and fair business competition everywhere. (shrink)

This paper aims, firstly, to bridge debates on human rights and Transnational Corporations within practical philosophy and those within the business and human rights literature and, secondly, to determine the extent to which human rights duties can be assigned to TNCs. To justifiably assign human rights duties to TNCs, it is argued that these duties need to be grounded in moral theory. Through assessment of two approaches from practical philosophy, it is argued that positive duties cannot be assigned to TNCs (...) because their bindingness cannot be grounded in moral theory. A positive argument is introduced to interpret TNCs’ human rights duties as corresponding to virtues rather than rights. Though such duties are indeterminate regarding what constitutes adequate performance, they can be made more determinate through legal instruments outside of positive human rights law. An approach is introduced exemplifying how such approaches can achieve the end of TNCs compliance with human rights norms. (shrink)

This article analyzes the relative effectiveness and limitations of companies’ voluntarily produced transparency reports in promoting change in firm and government behavior. Such reports are published by telecommunications companies and disclose how often and on what grounds government agencies compel customer data from these companies. These reports expose corporate behaviors while lifting the veil of governmental secrecy surrounding these kinds of compulsions. Fung, Graham, and Weil’s “targeted transparency” model is used to evaluate the extent to which these reports affect behavior. (...) From the analysis, it is evident that telecommunications companies’ transparency reports are only partially effective; while firms may modify their reports to present more information, these reports do not necessarily induce government to more broadly reveal its own activities. The article ultimately suggests that voluntarily produced transparency reports may become more comparable with one another as a result of either corporate reports evolving in consultation with external stakeholders or following a crisis that prompts government or industry to adopt a given standard. Such standards may positively influence the effectiveness of reports while concealing as much about firm behaviors as they purport to reveal. (shrink)

In this study, we aim to investigate how multinational corporations (MNCs) balance ethical pressures from both the home and host countries. Drawing on theories from institutional theory, international business, and business ethics, we build a theoretical framework to explain the ethical behavior of MNCs. We apply the institutional logic concept to examine how MNCs with established logics and principles that have grown in the home country respond to local ethical expectations in the host country. We differentiate the core values from (...) the peripheral components of a MNCs institutional logic and propose that a MNC will pursue distinctive ethical strategies under different scenarios and choose the "right" configuration of core values and peripheral components that align with institutional environment in host countries. (shrink)

As demonstrated by the popularity of social networking sites such as Facebook and Twitter, Internet-based social networks have become an important part of daily life, and many businesses are now involved in such networks either as service providers or as participants. Furthermore, inter-organizational networks are becoming an increasingly common feature of many industries, not only on the Internet. However, despite the growing importance of networks for businesses, there is little theoretical study on the social responsibilities of businesses in such networks, (...) and how these responsibilities are affected by different types of networks. This article explores how social network analysis, which has been developed from studies of social networks of individuals, can be used to shed light on corporate responsibilities in social networks. (shrink)

Although not frequently regarded as controversial, digital communications industries continue to be sites of CSR conflicts, particularly internationally. Investigating CSR issues in the digital communications industry is pertinent because in addition to being one of the fastest growing industries, it has created a host of new CSR issues that require further attention. This case study examines an incident in early 2010, when Google Inc. China and the Chinese government reached an impasse that produced a large-scale, transnational conflict that reached a (...) head ostensibly over state-mandated censorship, ultimately prompting Google to withdraw from the mainland Chinese market and redirect its activities to Hong Kong. We track Google's experience in China, both to explore its strategies and to consider the implications for corporate social responsibility. We situate Google's drastic decision to withdraw entirely from mainland China in the complex multiplicity of ethical, cultural, and political conflicts that affect this particular case. On a broader level, the incident raises the question of how multinational corporations (MNCs) can achieve corporate growth while negotiating the highly sensitive sociopolitical and institutional environments of foreign nations. (shrink)

In the late 1990s, the Internet seemed a perfect medium for business: a facilitator of unlimited economical propositions to people without any regulatory limitations. Cases such as that of Yahoo! mark the beginning of the end of that illusion. They demonstrate that Internet service providers (ISPs) have to respect domestic state legislation in order to avoid legal risks. Yahoo! was wrong to ignore French national laws and the plea to remove Nazi memorabilia from its auction site. Its legal struggle proved (...) futile and may have harmed its business. This essay argues for the adoption of standards of corporate social responsibility (CSR). CSR considerations may trump some forms of antisocial, highly offensive expression. (shrink)

We extend the theory of secular business cults (SBCs) to manipulative businesses (MBs), which we define as a financially‐successful type of reformed SBC, and explain their influence on industry, government, and social environments. Prior work on irresponsible, illegally‐behaving, and anti‐social SBCs suggests that they arise when antisocial business leaders are left unconstrained. This article examines the other side of this argument: What emerges from the 'toxic triangle' when such leaders are constrained by legal limits? We posit that pressure from lawsuits (...) leads to the metamorphosis of an SBC into an MB that retains the intent and "formula of success" of the SBC. In both business types (SBCs and MBs), the underlying process involves the unethical manipulation of the employee's commitment, and the buyer's interest, through established policies and business models for higher profits. We further explain how the profit‐seeking anti‐social business leaders who find success in the toxic triangle lead to the emergence of manipulative policies and practices in businesses, legal systems, and industries (the “iron triangle”), and eventually influences general societal norms. (shrink)

Today’s globalized economy cannot be governed by legal strictures alone. A combination of self-interest and regulation is not enough to avoid the recurrence of its systemic crises. We also need virtues and a sense of corporate responsibility in order to assure the sustained success of the global economy. Yet whose virtues shall prevail in a pluralistic world? The moral theory of Thomas Aquinas meets the present need for a business ethics that transcends the legal realm by linking the ideas of (...) justice and virtue in an ingenious way. While allowing for, and incorporating, the specificities of region and religion, industry and culture, Thomas’s virtue theory coordinates private and public activities through a set of context-invariant, justice-oriented norms with conceptual appeal to contemporary questions of global business ethics.In our article, we first sketch how Aquinas’s theory can be also of relevance to a non-confessional audience through its appeal to the ‘natural light of reason.’ Then we explain how his theory of ‘natural law’ aligns his ideas of virtue and justice. From this vantage point, we address the tension between cultural diversity and moral uniformity in the economic sphere in general and in today’s globalized business world in particular. Throughout the article, we aim to show that by interpreting the virtue-dimension of business in light of the idea of social justice, Aquinas’s conception of virtuous business conduct gains inter-personal and inter-cultural validity that establishes social justice as the global virtue of business. (shrink)

This paper introduces the special theme on management and political philosophy, following a call for papers in the journal Philosophy of Management. The scope of this introduction is to emphasize the importance of political philosophy as a subtheme in the discipline of philosophy of management by shedding light on a cornerstone conversation: the role of the state in fostering corporate accountability for social injustice. For doing so, we present the papers invited to this special theme and show how they contribute (...) to this conversation. Inspired by the arguments that the articles in this special theme develop, we also provide further thoughts for the directions that future research should pursue for enriching the discussions in the political philosophy of management. (shrink)

This article advances the idea that shareholders who seek to influence corporate behaviour can be understood analytically as norm entrepreneurs. These are actors who seek to persuade others to adopt a new standard of appropriateness. The article thus goes beyond studies which focus on the influence of shareholder activism on single instances of corporate conduct, as it recognises shareholders' potential as change agents for more widely shared norms about corporate responsibilities. The article includes the empirical example of US internet technology (...) companies who, in their Chinese operations, face conflicts of norm systems in regard to freedom of expression on the internet. Shareholders have been active in seeking to persuade these companies to adopt a norm of adhering to global standards for human rights over restrictions implied by authoritarian regimes to which they deliver services. (shrink)

We propose a liminality-based analysis of the process of ethical leadership/followership in organizations. A liminal view presents ethical leadership as a process taking place in organizational contexts that are often characterized by high levels of ambiguity, which render the usual rules and preferences dubious or inadequate. In these relational spaces, involving leaders, followers, and their context, old frames may be questioned and new ones introduced in an emergent way, through subtle processes whose evolution and implications may not be easy to (...) grasp even by those participating in them. (shrink)

We propose a liminality-based analysis of the process of ethical leadership/followership in organizations. A liminal view presents ethical leadership as a process taking place in organizational contexts that are often characterized by high levels of ambiguity, which render the usual rules and preferences dubious or inadequate. In these relational spaces, involving leaders, followers, and their context, old frames may be questioned and new ones introduced in an emergent way, through subtle processes whose evolution and implications may not be easy to (...) grasp even by those participating in them. (shrink)

The purpose of this article is to call for the formulation and adoption of a declaration on the universal rights and duties of business. We do not attempt to define the specific contents of such a declaration, but rather attempt to explain why such a declaration is needed and what would be some of its general characteristics. The catalyst for this call was the recognition that even under optimal conditions, good companies sometimes are susceptible to moral lapses, and when companies (...) undertake ventures in authoritarian countries with poor human rights records, even those with the best intentions may find themselves drawn into complicity in human rights abuses. There, market exigencies may persuade them to leave their codes of ethics and commitments to human rights at home. Pragmatism, it would seem, requires thatthey accept the ethical inconsistencies that follow from a “When in Rome, do as they Romans do” outlook. When facing the moral dilemma about whether or not to invest in human rights abusing countries, companies are offered two alternatives: they can operate in those countries and accept potential complicity or they can stay away. We suggest, however, that a preferable option is to address the underlying problem, and to this end we advocate the promulgation of a declaration for business that is comparable to the Universal Declaration of Human Rights. Our proposed name for this is the “Declaration on the Universal Rights and Duties of Business.” To be effective, such a declaration would require enforcement mechanisms. To illustrate this issue, we focus on China, not because China is unique in its human rights abuses, but because China occupies such a central place in the globalization efforts of the major companies from around the world. A robust international declaration is needed to provide a common framework for the practice of consistent and fair business competition everywhere. (shrink)

This article introduces an “ordonomic” approach to corporate citizenship. We believe that ordonomics offers a conceptual framework for analyzing both the social structure and the semantics of moral commitments. We claim that such an analysis can provide theoretical guidance for the changing role of business in society, especially in regard to the expectation and trend that businesses take a political role and act as corporate citizens. The systematicraison d'êtreof corporate citizenship is that business firms can and—judged by the criterion of (...) prudent self-interest—“should” take on an active role in rule-finding discourses and rule-setting processes with the intent of realizing a win-win outcome of the economic game. We identify—and illustrate—four ways that corporate citizens can employ moral commitments as a factor of production to enhance their processes of economic value creation. (shrink)

ABSTRACTThis article introduces an “ordonomic” approach to corporate citizenship. We believe that ordonomics offers a conceptual framework for analyzing both the social structure and the semantics of moral commitments. We claim that such an analysis can provide theoretical guidance for the changing role of business in society, especially in regard to the expectation and trend that businesses take a political role and act as corporate citizens. The systematicraison d'êtreof corporate citizenship is that business firms can and—judged by the criterion of (...) prudent self-interest—“should” take on an active role in rule-finding discourses and rule-setting processes with the intent of realizing a win-win outcome of the economic game. We identify—and illustrate—four ways that corporate citizens can employ moral commitments as a factor of production to enhance their processes of economic value creation. (shrink)