This study compares the different emphases on virtuous characters presented in their values, across global firms considering country and industry of origin. It presents a content analysis of the 122 codes of conduct statements from Fortune Global 500 firms, drawn from four sectors and using correspondence analysis. American firms tend to emphasize courage, while European firms emphasize integrity and empathy, surprisingly with Asian firms being closer to European ones. Retailers and pharmaceutical firms emphasize empathy, while banks and petroleum emphasize courage. (...) This study extends the newly emerging strategic paradigm of organizational virtue, by introducing an empirical study of ethical values. Implications for multinational companies are then discussed. (shrink)

While proponents of sustainability reporting believe in its potential to help corporations be accountable and transparent about their social and environmental impacts, there has been growing criticism asserting that such reporting schemes are utilized primarily as impression management tools. Drawing on Goffman’s self-presentation theory and its frontstage/backstage analogy, we contrast the frontstage sustainability discourse of a sample of large U.S. oil and gas firms to their backstage corporate political activities in the context of the passage of the American-Made Energy and (...) Good Jobs Act, also known as the Arctic National Wildlife Refuge Bill. The ANWR Bill was designed to allow oil exploration within the most sensitive environmental areas in the Refuge and this bill was vigorously debated in the United States Congress in 2005 and 2006. Our results suggest that the firms’ sustainability discourse on environmental stewardship and responsibility contrasts sharply with their less visible but proactive political strategies targeted to facilitate the passage of the ANWR Bill. This study thus contributes to the social and environmental accounting and accountability literature by highlighting the relevance of Goffman’s frontstage/backstage analogy in uncovering and documenting further the deceptive nature of the discourse contained in stand-alone sustainability reports. In addition, it seeks to contribute to the overall understanding of the multifaceted nature of sustainability reporting by placing it in relation to corporate political activities. (shrink)

Due to the prevalent influence of legal trends in driving ethical homogenization and persistent decoupling between ethical substance and symbolism in today’s organizations, scholars are calling for a renewed interest in the structural makeup of ethical codes. This article explores the disclosure trends and examines the contents of codes of ethics in the context of Canadian publicly listed acquirers. Relying on the analysis of codes’ public availability, structure, purpose, and promoted values, four clusters of behavior are identified. Although many firms (...) avoid the public disclosure of their codes, the results indicate that code of ethics’ patterns in sample firms are not driven merely by regulatory forces but increasingly shaped by aspirations for building a sustainable values-based corporation. The reported differences across clusters demonstrate that many companies in Canada overcome isomorphic pressures by displaying some originality in the writing of their codes. While symbolism in codes of ethics’ design and adoption prevails in publicly listed acquiring firms, the study provides evidence of an emerging trend of substantial commitment to social responsibilities. (shrink)

Using the emerging technology of large-scale textual analysis, this study examines the use of the term ‘customer satisfaction’ and its variants in the annual reports issued by publicly traded U.S. corporations and filed with the Securities and Exchange Commission as Form 10-K. We document the frequency of the term’s occurrence in 10-Ks over the 1995–2013 period and the differences in usage across industries. We then relate the term’s usage in 10-Ks to subsequent scores from the American Customer Satisfaction Index to (...) determine whether management’s discussion of customer satisfaction in financial disclosures is credible. The commitment of management to shareholders versus, more broadly, stakeholders is a central question in business ethics, and the integrity of management communication is a fundamental construct in the American Marketing Association’s Statement of Ethics. We document a complex relation between management’s discussion of customer satisfaction and subsequently reported satisfaction. We find that the general use of customer satisfaction in 10-K documents is negatively correlated with subsequent ACSI scores. However, for retail firms, when the phrase is located near words indicating measurement or monitoring of the phenomenon, the empirical relation is reversed and becomes positive. (shrink)

This paper presents a review of 100 empirical papers studying corporate codes of ethics in business organizations from the time period mid-2005 until mid-2016, following approximately an 11-year time period after the previous review of the literature. The reviewed papers are broadly categorized as content-oriented, output-oriented, or transformation-oriented. The review sheds light on empirical focus, context, questions addressed, methods, findings and theory. The findings are discussed in terms of the three categories as well as the aggregate, stock of empirical CCE (...) studies in comparison with previous reviews, answering the question “where are we now?” Content and output studies still stand for the majority of the studies, whereas the transformation studies are fewer. Within these areas, two new trends are found to have emerged: discursive analyses and a focus on labor conditions. The review finds that the content of CCEs is still predominantly self-defensive, that CCEs are insufficient in themselves in terms of protecting workers’ rights, that CCEs are likely to encounter tensions when implemented across national and organizational boundaries, and that while perception of CCEs is generally positive, CCEs may lead to both positive and negative outcomes. Based on these findings, potential areas for further exploration in the area of CCE research are suggested. (shrink)

Trust is both ethically important and essential for business but difficult to measure. This paper contributes toward clarifying the nature of trust in a way that is both conceptually helpful for ethical inquiries concerning business and pertinent to the measurement of trust as an element in organizations. Several papers hypothesize that increasing the role of trust in a corporation reduces the need for external monitoring and contracts. Assessing this important hypothesis requires a way to gauge whether a firm has a (...) trusting corporate culture. We develop an objective measure of trust in a firm’s corporate culture by counting the number of times 21 trust-related words appear in an important kind of document: the Management Discussion and Analysis section of the annual report. We report two significant findings: that, contrary to what one might think, firms with a trusting culture frequently use audit and control-type words and that trust is positively linked with subsequent share price volatility. We propose explanations of these findings with the hope of facilitating the objective measurement of trust and enhancement of a trusting atmosphere in corporate culture. (shrink)

In contrast to the conventional fund management industry with a profit-oriented logic based on risk and return, ethical and faith-based funds should follow the religious principles of their investment-style philosophy. Islamic funds should obey the theological teachings of the primary sources of Islam, the Quran and Sunnah, as stakeholders expect these religious teachings to influence the investment decisions of fund managers. In practice, Islamic fund managers use Accounting and Auditing Organization for Islamic Financial Institutions ’s screening criteria, based on secondary (...) sources of Islam, which allow investments that are only partially halal to be included in their portfolios. This study finds that a more religious logic in screening practices, although impairing diversification, does not necessarily harm performance. Thus, Islamic investment funds, and the wider ethical fund management industry, should, and could, adopt stricter screening criteria that match their investment mandates and bring more ethical business practices to the industry. (shrink)

Sarbanes–Oxley Section 406 requires a code of ethics for top financial and accounting officers in public companies. The objective of this research is to discover the impact of a financial code of ethics on firm behavior. We performed a longitudinal tracking of firm adoption of a financial code of ethics starting in 2005. We checked these companies’ codes again in 2011 to confirm their continued implementation. Financial restatements were used as a dependent variable to measure improved financial reporting after the (...) adoption of the financial codes. The results confirm that the adoption of a financial code of ethics improves the integrity of financial reporting. (shrink)

This paper investigates different modes of organizing for corporate social responsibility (CSR). Based on insights from organization theory, we theorize two ways to organize for CSR. “Complete” organization for CSR happens within businesses and depends on the availability of certain organizational elements (e.g., membership, hierarchy, rules, monitoring, and sanctioning). By contrast, “partial” organization for CSR happens when organizers do not have direct access to all these organizational elements. We discuss partial organization for CSR by analyzing how standards and cross-sector partnerships (...) make selective use of organizational elements. We maintain that an important feature of the increasing institutionalization of CSR—not only within businesses but also among non-governmental, governmental, and professional actors—is the rise of partial forms of organization. We discuss the contributions to this Special Issue in the context of our theorization of complete/partial organization for CSR and outline avenues for further research. (shrink)

Originally conceptualized by Bandura as the process of cognitive restructuring that allows individuals to disassociate with their internal moral standards and behave unethically without feeling distress, moral disengagement has attracted the attention of management researchers in recent years. An increasing body of research has examined the factors which lead people to morally disengage and its related outcomes in the workplace. However, the conceptualization of moral disengagement, how it should be measured, the manner in which it develops, and its influence on (...) work outcomes are areas of continued debate among researchers. In this article, we undertake a systematic review of research on moral disengagement in the workplace and develop a comprehensive research agenda that highlights opportunities for theoretical and empirical advancement of the literature. (shrink)

Ethics are of interest to business scholars because they influence decisions, behaviors, and outcomes. While scholars have increasingly shown interest in business ethics as a research topic, there are a mounting number of studies that examine ethical issues at the organizational level of analysis. This manuscript reports the results of a systematic review of empirical research on organizational ethics published in a broad sample of business journals over a 33-year period. A total of 184 articles are analyzed to reveal gaps (...) in the literature and, subsequently, lead to suggestions for future research; this is done in an effort to stimulate and perpetuate high quality research that more broadly impacts business scholars and practitioners. (shrink)

Over the past decade, corporate scandals have proliferated. These scandals, along with the emergence of the #MeToo movement and Environmental, Social, and Corporate Governance (ESG) mandates, have increased the scrutiny of corporations’ ethics culture. How have companies responded in terms of the language appearing in their public ethics documents? We compare the Code of Ethics in 2008 versus 2019 for a sample of S&P 500 firms. For the vast majority of firms, their Code of Ethics lengthened, with the average 2019 (...) code having 29% more words (about 1760 words) than the 2008 average. The language of the codes has also changed. Words such as _bribery, corruption, sustainability, speak up, bullying, slavery,_ and _human rights_ all saw significantly higher usage in the later period. We review possible reasons for the dramatic changes and suggest what questions remain about the motivations behind them. Whether the changes we observe are primarily intrinsically motivated or simply market responses to public pressures is yet to be determined. What is clear from our findings is that society seems to be entering a new age of increasingly moral—or, at least, moralized—corporate governance. (shrink)

The purpose of this article is to problematise a particular social transparency and disclosure regulation in the UK, that transcend national boundaries in order to control slavery in supply chains operating in the developing world. Drawing on notions from the regulatory and sociology literature, i.e. transparency and normativity, and by interviewing anti-slavery activists and experts, this study explores the limitations of the disclosure and transparency requirements of the UK Modern Slavery Act and, more specifically, how anti-slavery activists experience and interpret (...) the new regulations and the regulators’ implementation of the regulation. This research found limited confidence among anti-slavery activists regarding the Act’s call for transparency in relation to the elimination of slavery from global supply chains. The research also found that the limits of the transparency provisions within the Act appear to hinder the attainment of normativity. This study provides new and unique insights into the critical role that social activists play in exposing the lack of corporate transparency and failures of responsibility to protect workers within global supply chains. (shrink)

Based on a survey and content analysis of 462 peer-reviewed academic articles over the period 1990–2014, this article reviews theories related to the external drivers of corporate social responsibility and the internal drivers of CSR that have been utilized to explain CSR. The article discusses the main tenets of the principal theoretical perspectives and their application in CSR research. Going beyond previous reviews that have largely failed to investigate theory applications in CSR scholarship, this article stresses the importance of theory-driven (...) explanations of CSR and the complementarity of different theories. The article demonstrates that the current mainstream theorizing of CSR is dominated by theories related to the external drivers of CSR and is less developed with regard to the internal dynamics. The article outlines several productive avenues for future research: the need for multi-theory studies and more research at multiple levels of analysis, particularly at the individual level of analysis. It suggests that CSR scholarship can benefit from combining theoretical insights from a range of established theoretical lenses such as institutional theory and RBV, and can gain new insights from theoretical lenses such as Austrian economics and micro-level psychological theories. (shrink)

Confronted with numerous scandals, sports organizations are turning to the adoption of ethical codes to attain more ethical behavior. However, the effectiveness of an ethical code as a means to increase ethical behavior remains debated; furthermore, the particular characteristics of a sports context have not yet been taken into account, nor have the different stages of code establishment been considered in evaluation. This article studies the effectiveness, as measured by the Ethical Climate Index, of ethical codes in sports organizations. Moreover, (...) it investigates the effects of the presence, creation, content, implementation, and enforcement of ethical codes on ethical behavior in sports organizations. Our results shed a light on the conditions that need to be in place to install an effective ethical code in sports organizations: a genuine motivation to improve ethical behavior, the involvement of coaches, and the explicit targeting of the management. (shrink)