The aim of this article is to define and delineate an ethical mindset. In deploying an interpretive mixed-methods analysis of the Australian services sector, data were collected through an online survey on 223 respondents followed by focus group interviews involving 20 participants. The analysis reveals evidence of ethical mindsets in Australian business context, the components of which are identified as being aesthetic judgment, spirituality, optimism, harmony and balance, contentment, truth telling, individual responsibility and professionalism. While the findings are limited to (...) the Australian context, it illuminates the value of mindsets to business ethics in a way that has theoretical rigour and practical relevance. Research has so far only considered business ethics within other mindsets (e.g. global mindset). This article provides a foundation for further application and development of mindset theory. (shrink)

This article focuses on the collective leadership of the civilian authorities of the British Channel Islands during the Nazi Occupation (1940-1945), and draws lessons from their ethical performance. The first part of the article determines that local officials in the Channel Islands disposed of operative margins, but that - in the interest of collaboration - these were not always used to the full. This article then details institutional factors that contributed to commonalities between the two bailiwicks of Jersey and Guernsey, (...) as they faced up to occupation. The second part of this article follows up with the dissimilarities, one of which is that Guernsey travelled further down the road to collaboration than her sister island. Social capital depletion is credited as being responsible for this; and this situation was further compounded by lack of 'ethical leadership'. The final part explores the relationship between social capital and leadership ethics, suggesting that virtue serves as a catalyst for social capital stock in crisis situations. The core research outcome is that ethical leadership produces tangible efficiency and moral effects in situations of extreme duress (such as Nazi Occupation) where one could have expected very little or no scope for such a thing. This is an uplifting message that runs counter to scepticism as to the practical value of business ethics. Implications are drawn with regard to the challenge of reconciling MNE activities with the moral complexity posed by globalization. (shrink)

Despite the prevailing discourses on the importance of top management ethical leadership, related theoretical and empirical developments are lacking. Drawing on institutional theory, we propose that top management ethical leadership contributes to organizational outcomes by promoting firm-level ethical and procedural justice climates. This theoretical framework was empirically tested using multi-source data obtained from 4,468 employees of 147 Korean companies from various industries. The firm-level analysis shows that top management ethical leadership significantly predicts ethical climate, which then results in procedural justice (...) climate that fully mediates the effects of top management ethical leadership on two organizational outcomes, namely, firm-level organizational citizenship behavior and firm financial performance. The present study provides a plausible theoretical account and empirical validation of a mechanism through which top management ethical leadership enhances organizational performance. (shrink)

The aim of this study is to contribute to a conceptualization of organizational politics that underscores the possibility of developing positive political behavior at the workplace. In this respect, we seek to provide a context of re-evaluating the normative foundations of organizational politics. Normative issues are critically discussed in the context of mainstream ethical theories that illuminate the interaction of ethics and political behavior. More specifically, it is argued that a deontological framework is of particular importance for the proper management (...) of negative political behavior, whereas a virtue-ethics context can be employed so as to foster positive political behavior at the workplace. Finally, the implications of this approach for organizational life and HRM processes and practices are taken into consideration. (shrink)

The buyer–supplier relationship is the nexus of the economic partnership of many commercial transactions and is founded upon the reciprocal trust of the two parties that participate in this economic exchange. In this article, we identify how six ethical elements play a key role in framing the buyer–supplier relationship, incorporating a model articulated by Hosmer (The ethics of management, McGraw-Hill, New York, 2008 ). We explain how trust is a behavior, the relinquishing of personal control in the expectant hope that (...) the other party will honor the duties of a psychological contract. Presenting information about six factors of organizational trustworthiness, we offer insights about the relationship between ethics and trust in the buyer–supplier relationship. (shrink)

We examine the influence of social capital in the municipal bond market. Defined as the norms and networks that encourage cooperation, social capital is a social construct which captures a region’s level of altruism, trustworthiness, and propensity to honor obligations. We expect that municipalities with high social capital are more trustworthy and likely to honor their debt obligations, which will result in lower bond yields. Our findings confirm that the bonds issued by municipalities located in high social capital counties exhibit (...) lower yields compared to the municipalities located in low social capital counties. Our findings are also supported by bond prices in the secondary market, which shows that bonds from the municipalities located in high social capital regions have higher prices. Additional tests reveal that the influence of social capital is stronger for general obligation bonds, suggesting that social capital matters more for bonds where the willingness of municipalities to pay taxes is an important factor. Lastly, we document that the bonds of municipalities in high social capital areas are less likely to have insurance, suggesting that social capital may act as a substitute for bond insurance. (shrink)

While recent studies have increasingly suggested leadership as a major precursor to corporate social responsibility, empirical studies that examine the impact of various leader aspects such as style and ethics on CSR and unravel the mechanism through which leadership exerts its influence on CSR are scant. Ironically, paucity of research on this theme is more prevalent in the sphere of social enterprises where it is of utmost importance. With the aim of addressing these gaps, this research empirically examines the interaction (...) between ethical leadership and CSR and, in addition, investigates organic organizational cultures as mediators in the above interaction. To this end, a model was developed and tested on the sample of 350 middle- and top-level managers associated with 28 Indian healthcare social enterprises, using Structural Equation Modeling Analysis, Bootstrapping and PROCESS. Results reveal that ethical leadership both directly and indirectly influences CSR practices. The indirect influence of ethical leadership involves nurturing clan and adhocracy cultures, which in turn influence CSR. These findings are significant for social enterprise leaders seeking to encourage their organizations’ socially responsible behavior. (shrink)

Ethics has recently gained importance in the debate over social capital creation. The goal of this study is to empirically examine the ethical work context of the firm as an antecedent of the firm’s internal social capital. We build on person–situation interactionist theory to argue that individuals can learn standards of appropriate behavior induced by the ethical work context in which they are embedded. By creating an ethical work context, managers can facilitate the process through which employees learn to feel (...) empathy toward others and establish profound affective relationships with them. Data were collected from 1,817 individuals in 36 business units of 7 Spanish, French, and Portuguese corporations. Using structural equation and hierarchical linear modeling techniques, our results reveal three phenomena. First, we show that a business unit’s ethical work context exerts significant influence on the structural, relational, and cognitive dimensions of internal social capital. Second, the managerial practices that constitute the ethical work context are not equally important across the seven corporations; in particular, managerial practices are more influential in those corporations that belong to knowledge-intensive industries. Third, a business unit’s internal social capital is influenced not only by the business unit’s ethical work context, but also by the ethical work context of the corporation to which it belongs. (shrink)

Social capital has as its key element the value of social relationships to generate positive outcomes, both for the key parties involved and for wider society. Some authors have noted that social capital nevertheless has a dark side. There is a moral element to such a conceptualisation, yet there is scarce discussion of ethics within the social capital literature. In this paper ethical theory is applied to four traditions or approaches to economic social capital: neo-capitalism; network/reputation; neo-Tocquevellian; and development. Each (...) is considered in detail and subject to ethical analysis by the application of utilitarianism, Kantianism, justice and rights, and ethic of care. Accordingly, the assumption that social capital is either value-neutral or a force for good is critiqued, and a framework for understanding social capital from an ethics perspective is presented. (shrink)

This article explores the hypothesis that third parties are motivated to seek information about agents who have behaved unethically in the past, even if the agent and available information are irrelevant to the third parties’ goals and interests. We explored two possible motives for this information seeking behavior: deonance, or the motive to care about ethics and justice simply for the sake of ethics and justice, and distrust-based threat monitoring. Participants in a consumer decision task were found to seek out (...) information about an agent who had behaved unethically even when the agent was explicitly excluded from the task; there were no intentions to purchase from the agent; performance expectations for the agent’s product were low; the information that could be sought was non-diagnostic, redundant or irrelevant to an ethical judgment; and alternatives in the market offered as good or better value as the unethical agent. Critically, this information seeking took place even when the observer could disengage from and was not vulnerable to the agent. The findings are discussed in terms of third party information seeking and its effects on ethical behavior in the marketplace. (shrink)

Drawing on social exchange theory, this study examines a mechanism, namely organizational social capital, through which self-sacrificial leadership is related to two types of employee behaviours: organizational citizenship behaviours and counterproductive behaviours. The results of two different studies in Egypt showed that self-sacrificial leadership is positively related to OSC which, in turn, is positively related to OCBs and negatively related to CPBs. Overall, the findings suggest that self-sacrificial leaders are more likely to achieve desirable employee behaviours through improving the quality (...) of social relationships among employees. (shrink)

Using a signaling framework, we argue that ethical behavior as evidenced by charitable donations is viewed more positively by investors when seen not to be based on self-serving motives but rather on authentic generosity that builds moral capital. The affirmed religiosity of CEOs may make their ethical position more credible, while their embeddedness within a family business suggests that CEOs are backed by powerful owners with long-time horizons and a desire to build moral capital with stakeholders. We find in a (...) study of market responses to 1572 corporate donations by S&P 1500 firms that financial markets react more positively to charitable initiatives from firms with religion-declared CEOs, but only if these are family businesses. (shrink)

Moral licensing theory suggests that observers may liberate actors to behave in morally questionable ways due to the actors’ history of moral behaviors. Drawing on this view, a scenario experiment with a 2 (high vs. low ethical)×2 (internal vs. external motivation) between-subject design (N = 455) was conducted in the current study. We examined whether prior ethical leader behaviors cause subordinates to license subsequent abusive supervision, as well as the moderating role of behavior motivation on such effects. The results showed (...) that when supervisors demonstrated prior ethical behaviors, subordinates, as victims, liberated them to act in abusive ways. Specifically, subordinates showed high levels of tolerance and low levels of condemnation towards abusive supervision and seldom experienced emotional responses to supervisors’ abusive behaviors. Moreover, subordinates tended to attribute abusive supervision, viewed as a kind of mistreatment without an immediate intent to cause harm, to characteristics of the victims and of the organization rather than of the supervisors per se. When supervisors behaved morally out of internal rather than external motivations, the aforementioned licensing effects were stronger. (shrink)

Whether, how and when do leaders engage in ethical leadership as a response to status threat? We propose that leaders facing status threat are likely to develop ethical leadership behaviors toward subordinates. Drawing on power dependence theory, we theorize that experiencing status threat augments leaders’ dependence on subordinates who can provide them with status-relevant resources. Dependence on subordinates further motivates leaders to absorb the resource constraints through displaying ethical leadership. However, if leaders are able to obtain alternative resources to cope (...) with status threat, their dependence on subordinates is weakened. We conducted two studies to test the predictions. Using a moderation-of-process design, Study 1 found that when participants experienced status threat, they displayed more ethical leadership behaviors, but particularly so when their reward structure was team- rather than individual-based. Study 2 was a field study using a sample of 104 teams from two Chinese firms listed in the “Top 500 private enterprises in China.” We found that leaders who experienced more status threat were perceived to be more ethical by their subordinates, which was mediated by leaders’ perceptions of dependence on subordinates. The mediated effect was stronger for leaders who were less skilled in networking. Implications for theory on the contextual factors of ethical leadership, dependence, and status threat are discussed. (shrink)

There is a need for further research to understand how social capital in the workplace can be promoted. This article studies the generation of social capital from a comprehensive perspective that integrates ethics and general management. We propose the concept of “ethical work context” as an influential antecedent of the social capital in the firm. The ethical work context, which is aligned with the “humanizing culture” approach proposed by Melé ( Journal of Business Ethics 45 (1), 3–14, 2003a ), allows (...) a broader comprehension of the concrete management practices and organizational dynamics that generate organizational social capital. It is argued that social capital, understood as a by-product of the ethical work context, results both from organizational design and ongoing managerial activity. Creating an ethical work context brings ethics and social capital into the realm of the general manager; a figure that has remained absent from the social capital literature. (shrink)

Ethics has recently gained prominence in debates surrounding social capital creation. Despite the significant theoretical progress in this field, it still lacks empirical research. The goal of this study is to empirically explore the ethical leadership of supervisors as an antecedent of the firm’s social capital. We build on social learning theory to argue that employees can learn standards of appropriate behavior by observing the behavior of role models. By displaying and enforcing ethical behavior, supervisors can facilitate the process through (...) which employees learn to feel empathy toward others and establish profound affective relationships with them. Data were collected from 408 Spanish, French, and Portuguese part-time MBA students. Using structural equation modeling techniques, we show that the ethical leadership of supervisors exerts a significant influence on the structural, relational, and cognitive dimensions of social capital. (shrink)