Moral repair is an important way for firms to heal moral relationships with stakeholders following a transgression. The concept is rooted in recognition theory, which is often used to develop normative perspectives and prescriptions, but the same theory has also propelled a view of moral repair as premised on negotiation between offender and victim(s), which involves the complex social construction of the transgression and the appropriate amends. The tension between normative principles and socioconstructivist implementation begs the question how offending firms (...) should approach moral repair. Addressing this question, we develop a two-level conceptualization of moral repair, distinguishing between procedural and substantive levels of practice, which accommodate normativity and socioconstructivism, respectively. In so doing, we enrich the literature by 1) promoting conceptual clarity, 2) refining understanding of the moral repair process, and 3) suggesting the use of a unified, configurational approach to studying (nonlinear) relations between amends and moral outcomes. (shrink)

Individual and/or co-offenders fraudulent activities can have a devastating effect on a company’s reputation and credibility. Enron, Xerox, WorldCom, HIH Insurance and One.Tel are examples where stakeholders incurred substantial financial losses as a result of fraud and led to a loss of confidence in corporate dealings by the public in general. There are numerous theoretical approaches that attempt to explain how and why fraudulent acts occur, drawing on the fields of sociology, organisational, management and economic literature, but there is limited (...) empirical evidence published in accounting literature. This qualitative inductive study analyses perceptions and experiences of forensic accountants to gain insights into individual fraud and co-offending in order to determine whether the conceptual framework developed from literature accurately depicts the causes of fraud committed by individuals and groups in the twenty-first century. Findings from the study both support and extend the conceptual framework, demonstrating that strain and anomie can result in fraud, that deviant sub-groups recruit and coerce members by providing relief from strain, and that inadequate corporate governance mechanisms both contribute to fraud occurring, and provide the opportunity for fraudulent activities to be executed and often remain undetected. Additional factors emerging from this study were also identified as contributors to fraud, particularly relevant to the twenty-first century, and consequently, a refined conceptual framework is presented in the discussion and conclusion to the paper. (shrink)

Despite its central position in the history of European and Christian thought on the protection of human dignity, the virtue of mercy is currently a problematic and under-developed concept in business ethics, compared to related ideas of care, compassion or philanthropy. The aim of this article is to argue for its revival as a core principle of ethical business practice. The article is conceptual in method. An overview is provided of the scope of contemporary business ethics research on related topics (...) and clarifies some of the similarities and differences between mercy and popular terms, such as compassion and prosocial behaviour. The question is then explored as to why mercy has so little traction in business ethics. Some of the history of the idea of mercy in European and Anglophone philosophy is discussed, from Anselm and Aquinas to the present day, showing how discourse on mercy came to be split into a wider concept of the prevention and alleviation of suffering (_misericordia_) and a narrower one of clemency or leniency. Aquinas’s wide concept of the virtue of _misericordia_ is developed as the basis for a principle of mercy, which is applicable directly to corporations. The practical implications of this for standards of corporate behaviour towards employees and other stakeholders are then considered through the introduction of a ‘vulnerability grid’. The grid offers a critical contrast to other analysis tools, such as stakeholder power-interest matrices. Cases drawn from empirical studies are used to illustrate application of the grid and to challenge some common assumptions of stakeholder theory. (shrink)

A growing body of literature has examined managers’ use of restorative practices in the workplace. However, little is currently known about why managers use restorative practices as opposed to alternative responses. We employed a qualitative interview technique to develop an inductive model of managers’ restorative versus punitive response in the context of employee wrongdoing. The findings reveal a set of key motivating and moderating influences on the manager’s decision to respond to wrongdoing in a restorative versus punitive manner. The findings (...) also suggest that managers’ personal needs and perceived duties in the aftermath of employee wrongdoing are generally more consistent with restorative responses than punishment responses, which helps explain managers’ use of restorative workplace practices. (shrink)

Business Ethics: A European Review, EarlyView.

Stakeholder theory focuses on how more value is created if stakeholder relationships are governed by ethical principles such as integrity, respect, fairness, generosity and inclusiveness. However, it has not adequately addressed strategies that stakeholders perceive as harmful to their interests and how this perception can even lead some stakeholders to view the firm’s strategies as unethical. To fill the void, this paper directly addresses strategies that stakeholders perceive as harmful to their interests, or what we refer to as harmful stakeholder (...) strategies. Specifically, it identifies factors associated with stakeholder perceptions of harm that are likely to cause them to consider a strategy unethical, examines the negative implications for firms that pursue such strategies in terms of likely stakeholder responses and damage to stakeholder relationships, and provides theory to help explain how firms are likely to respond to stakeholder claims that a strategy is unethical, based on factors such as the strategic importance of the claim to the firm, how long the strategy has been in use, the costs of remediation, the risk of stakeholder mobilization or new regulation, and whether firms can reasonably rationalize their actions. Assessing harm allows a firm to make a more accurate estimate of the costs of a strategy and can assist managers in allocating resources intended to reduce or remediate harm. (shrink)

Using forgiveness theory, we investigated the effects of organizational apology and restitution on eliciting forgiveness of a transgressing organization after transactional psychological contract breach. Forgiveness theory proposes that victims are more likely to forgive offenders when victims’ positive offender-oriented emotions replace negative ones. Three pre-post laboratory experiments, using vignettes about a broken promise of financial aid, found that while apology-alone and restitution-alone each increased likelihood of forgiving, restitution-alone was the more effective of the two responses. When combined with an apology, (...) restitution boosted the effect of apology-alone. However, restitution was unnecessary if positive emotions replaced negative ones; third-party blame accomplished this negative-to-positive emotion replacement. Consistent with forgiveness theory, offender-oriented negative-to-positive emotion replacement partially mediated all effects, and negative emotion reductions were strongly correlated with positive emotion gains. We discuss implications for the repair of damaged norms and relationships within an organizational community. These include reparative effects of apology and restitution, dual-process conceptions of violation and repair, repair after psychological contract breach, and emotion replacement models of forgiveness. (shrink)

Using forgiveness theory, we investigated the effects of organizational apology and restitution on eliciting forgiveness of a transgressing organization after transactional psychological contract breach. Forgiveness theory proposes that victims are more likely to forgive offenders when victims’ positive offender-oriented emotions replace negative ones. Three pre-post laboratory experiments, using vignettes about a broken promise of financial aid, found that while apology-alone and restitution-alone each increased likelihood of forgiving, restitution-alone was the more effective of the two responses. When combined with an apology, (...) restitution boosted the effect of apology-alone. However, restitution was unnecessary if positive emotions replaced negative ones; third-party blame accomplished this negative-to-positive emotion replacement. Consistent with forgiveness theory, offender-oriented negative-to-positive emotion replacement partially mediated all effects, and negative emotion reductions were strongly correlated with positive emotion gains. We discuss implications for the repair of damaged norms and relationships within an organizational community. These include reparative effects of apology and restitution, dual-process conceptions of violation and repair, repair after psychological contract breach, and emotion replacement models of forgiveness. (shrink)

Despite widespread interest in the topic of moral repair in the business ethics literature and in the workplace, little is currently known about moral repair with regard to the self—i.e., how and why individuals repair themselves in the aftermath of harming others within workplace contexts and what factors may influence the success of self-repair. We conducted a qualitative study in the context of health care organizations to develop an inductive model of self-repair in the workplace. Our findings reveal a set (...) of factors, including reactions to the harm incident, motivating factors, and methods of self-repair that involve intrapersonal (e.g., self-compassion) and interpersonal (e.g., seeking feedback and support from co-workers and managers) actions. We discovered that self-repair, or what we characterize as “moral self-repair” is a complex process characterized by important ethical, emotional, and social dimensions and that the effectiveness of self-repair actions is moderated by the actions of those within the organization (e.g., co-workers, managers) and outside the organization (e.g., families, friends, counselors). These social actors can promote self-repair by offering encouragement and support, or undermine self-repair by communicating a lack of trust and respect that reinforces self-blame. This model of self-repair is intended to guide future ethics research on the topic of moral self-repair and offers insight to practicing managers. (shrink)