We propose that corporations should be subject to a legal obligation to identify and internalise their social costs or negative externalities. Our proposal reframes corporate social responsibility as obligated internalisation of social costs, and relies on reflexive governance through mandated hybrid fora. We argue that our approach advances theory, as well as practice and policy, by building on and going beyond prior attempts to address social costs, such as prescriptive government regulation, Coasian bargaining and political CSR.

Recently, the increasing interest in responsible leadership (RL) has produced a research field rich in theoretical and conceptual potential, with diverse research foci, theoretical foundations, and methodological approaches. While these developments have demarcated the field from other leadership-oriented disciplines, they have equally courted fragmentation and ambiguity in terms of the field’s positioning within the greater body of leadership studies. To map the theoretical, methodological, and empirical state of the art of the RL field, we outline recent developments and delineate important (...) research gaps and directions for future theory development and empirical research. We emphasize the transition of RL research from micro-level perspectives with normative roots to research spanning multiple levels of analysis, vis-à-vis both antecedents and outcomes. We discuss the implications of our mapping, highlighting the necessity of not only conceptualizing RL across multiple levels of analysis, but also to actively focus on interactions among RL antecedents and outcomes across these levels. Through these, we aim to contribute to the field by strengthening its conceptual foundations and anchoring it more clearly within leadership studies overall. (shrink)

In this conceptual paper we argue that, to date, principles of responsible management have not impacted practice as anticipated because of a disconnect between knowledge and practice. This disconnect means that an awareness of ethical concerns, by itself, does not help students take personal responsibility for their actions. We suggest that an abstract knowledge of principles has to be supplemented by an engaged understanding of the responsibility of managers and leaders to actively challenge irresponsible practices. We argue that a form (...) of moral reflexive practice drawing on an understanding of threshold concepts is central to responsible management, and provides a gateway to transformative learning. Our conceptual argument leads to implications for management and professional education. (shrink)

Current literature on ethical leadership and unethical leadership reflects a Western-based private sector perspective, pointing toward a compliance-oriented understanding of ethical and unethical leadership. As today’s executives increasingly have to ethically lead across different cultures and sectors, it becomes vitally important to develop a more holistic picture how ethical and unethical leadership is perceived in the Western and Eastern cultural cluster and the private and the public/social sector. Addressing this issue, the present study aims to identify cross-cultural and cross-sectoral commonalities (...) and differences in international executives’ perceptions of ethical and unethical leadership. Findings from in-depth interviews (N = 36) with executives from Western and Eastern cultures working in the private or the public/social sector reveal collectively held perceptions of ethical leadership (including leader honesty, integrity, concern for responsibility/sustainability, and people orientation) and of unethical leadership (referring to leader dishonesty, corruption, egocentrism, and manipulation). Results indicate limited support for a compliance-oriented perspective on ethical and unethical leadership but yield a much greater trend toward a value-oriented perspective. Concrete practice examples illustrate these different perspectives. Cultural and sectoral particularities of executive perceptions of ethical and unethical leadership are discussed. (shrink)

This research investigates the interplay between leadership styles and institutional corporate social responsibility (CSR) practices. A large-scale field survey of managers reveals that firms with greater transformational leadership are more likely to engage in institutional CSR practices, whereas transactional leadership is not associated with such practices. Furthermore, stakeholder-oriented marketing reinforces the positive link between transformational leadership and institutional CSR practices. Finally, transactional leadership enhances, whereas transformational leadership diminishes, the positive relationship between institutional CSR practices and organizational outcomes. This research highlights (...) the differential roles that transformational and transactional leadership styles play for a firm’s institutional CSR practices and has significant implications for theory and practice. (shrink)

Our literature review reveals a call for changes in business education to encourage responsible management. The Principles for Responsible Management Education were developed in 2007 under the coordination of the United Nations Global Compact, AACSB International, and other leading academic institutions for the purpose of promoting responsible management in education. Literature review shows that responsible management as such remains undefined. This gap in literature leads potentially to an absence of clarity in research, education, and management, regarding responsible management among scholars (...) and practitioners. The aim of this research is to develop a preliminary definition of responsible management, exploring the use of the term in literature and practice. Its objective is to define the main characteristics of responsible management aimed at creating a platform for discussion so as to help organizations clarify their own vision of responsible management. It builds on preliminary findings from literature review that responsible management remains undefined. As business school students are primary stakeholders in management education and are future management leaders, and as there have not been empirical studies to date that examine business school students’ understanding of responsible management, a qualitative study was conducted with European business school students concerning their understanding of the term. A framework summarizing perceptions of responsible management characteristics and broad approach of responsible management definition were created and used to introduce a draft theoretical platform for discussion on this topic. (shrink)

This study argues that actions taken during a crisis within the responsibility compass impacts reputation. The lens of responsible leadership was chosen from among the different foci of leadership scholarship because of its emphasis on relational and ethical dimensions. The focus of this study was the actions undertaken by the CEOs of United and Delta Airlines after the forceful removal of the passengers and its influence on the reputation capital as measured by the changes in the respective share prices of (...) the airlines. The overarching question was whether there was clear statistical evidence that linked the actions undertaken as part of the crisis management efforts and the reputation of the airlines. Findings from this study suggest that actions taken as part of responsible leadership compass explained the variations in the share prices. In the case of United Airlines almost 70% of the variations in the share prices could be explained by responsible leadership, whereas in the case Delta airlines only 50.6% of the variations in the share value could be predicted based on the role of leadership in crisis management. (shrink)

Why has responsible management been so difficult and why is the chorus of stakeholders demanding such responsibility getting louder? We argue that management learning has been framed within the narrative of economism. As such, we argue that managers need to be aware of the paradigmatic frame of the dominant economistic narrative and learn to transcend it. We also argue that for true managerial responsibility, an alternative humanistic narrative is more fit for purpose. This humanistic narrative is based on epistemological metaphors (...) and ontological insights that integrate the latest insights from evolutionists suggesting that humans only survived by being responsible. This understanding has consequences for responsible management learning in that it focuses on dignity literacy, balance orientation, as well as creativity and innovation for the common good. We argue that managerial learning within a humanistic paradigm is more likely to lead to ethical and sustainable business conduct. (shrink)

This paper examines the growing number of publications on multinational enterprise management of sustainability issues. Based on an integrative literature review and thematic analysis, the paper analyses and synthesises the current state of knowledge about main issues arising. Key issues identified include the following: choice of sustainability strategies; management of the views of headquarters towards sustainability; local cultural sustainability perspectives in developed and developing host countries; MNEs with home in developing/emerging countries; and resource availability for implementing sustainability initiatives. Findings indicate (...) that although the literature is tending towards growing acceptance about sustainability and its challenges most researchers have focused on corporate social responsibility and investigate their own niche problem, industry, and country, using their own chosen theory and do not consider the need for consolidation and integration of social, environmental and economic performance. Avenues for future research are identified which will provide a means for the ethical foundations of theory and practice to be improved. (shrink)

Business leaders are increasingly responsible for the societal and environmental impacts of their actions. Yet conceptual views on responsible leadership differ in their definitions and theoretical foundations. This study attempts to reconcile these diverse views and uncover the phenomenon from a business leader’s point of view. Based on rational egoism theory, this article proposes a formal mathematical model of responsible leadership that considers different types of incentives for stakeholder engagement. The analyses reveal that monetary and instrumental incentives are neither sufficient (...) nor necessary for business leaders to consider societal and environmental stakeholder needs. Non-monetary and non-instrumental incentives, such as leaders’ values and authenticity, as well as their planning horizons, counterbalance pure monetary and instrumental orientations. The model in this article complements the growing body of research on responsible leadership by reconciling its various conceptual views and providing a foundation for future theory development and testing. (shrink)

Quality is commonly applied to products and processes, but we can also define human quality in dealing with people. This requires first establishing what treatment is appropriate to the human condition. Through an inquiry into the characteristics that define the human being and what ethical requirements constitute a good treatment, we define “Human Quality Treatment” as dealing with persons in a way appropriate to the human condition, which entails acting with respect for their human dignity and rights, caring for their (...) problems and legitimate interests, and fostering their personal development. With this in mind, we can distinguish between five different levels or degrees of HQT in organizations which can be characterized by the following terms: maltreatment, indifference, justice, care, and development. (shrink)

The emerging field of responsible leadership holds various possibilities for business and society. The wide range of conceptualizations, definitions, and theorizations of RL as a distinctive or unique leadership construct has not previously been investigated through a systematic review. To conceptualize the intrinsic meaning of responsible leadership as a distinct leadership construct, and to bring coherence to the expanding body of literature on responsible leadership, evidence from 162 peer‐reviewed journal articles on responsible leadership, ethical leadership, servant leadership, authentic leadership, transformational (...) leadership, and values‐based leadership have been analyzed through a systematic review. The aim was to synthesize a coherent and intrinsic meaning of responsible leadership in order to identify the place of responsible leadership in the leadership domain. The findings suggest that responsible leadership is not an independent leadership construct, but largely builds on and leverages other leadership theories and approaches. However, the findings indicate that the core meaning of responsible leadership is distinctive in its relational focus on, and accountability for, the active engagement of stakeholders; the balancing of stakeholder interests; the building of social capital; and the assurance of long‐term sustainability of society and the natural environment, beyond responsibilities to internal stakeholders. (shrink)

In many organizations, subsidiary performance goals are developed remotely by optimistic leaders back at headquarters, leaving deployed managers vulnerable to unrealistic operational expectations on the frontline, unable to follow orders. Most management research categorizes employees’ failure to follow workplace directives as deviant behavior. In contrast, I argue that in some circumstances ‘disobeying orders’ should be considered a virtuous, responsible leadership strategy when facing unachievable tasks. Through a historical analysis of the surrender of the British colony Singapore to Japan during World (...) War II, this paper links pro-social rule breaking, productive resistance, and responsible leadership literatures, developing a process model that explains how some deployed leaders cope with ethical dilemmas in virtuous ways by ‘disobeying orders’. (shrink)

Through their sociopolitical activism, business leaders increasingly call for citizens to become more politically engaged in favor of a partisan position. This research develops and tests a framework that reveals that corporate sociopolitical activism can indeed elicit such political engagement but runs the risk of simultaneously inciting backlash from citizens who oppose the company’s envisioned political ends. Whereas politically congruent citizens perceive a company’s activism to be morally courageous and are thus inspired to support the company’s stance, politically incongruent citizens (...) feel threatened by the company’s activism and become politically engaged in protection of their political identity. Companies may, however, succeed in increasing moral courage attributions without simultaneously affecting citizens’ political identity threat by acting as first movers in their activism. A series of experiments, including a stimulus sampling approach with 30 real cases of corporate sociopolitical activism, lend support for this framework. The results provide several implications for the political responsibilities of business leaders in contemporary democracies. (shrink)

AbstractIn this extended case study, we examine how business leaders translate a responsible leadership mindset into practice. By studying the leadership team and stakeholders of a large US college dining provider, we found that organization executives leverage the lenient market category of local food to successfully connect with and satisfy the interests of different stakeholder groups. We show that lenient categories, those with ambiguity and unclear boundaries, could be used by organizations as strategic devices to integrate the diverse needs of (...) their stakeholders and foster positive stakeholder relationships. Based on our findings, we develop a theoretical model to illustrate how responsible leaders take advantage of meaning structures of the market category they have adopted to achieve both financial and social benefits for a broad range of stakeholders. (shrink)

The world is looking toward organizations for social responsibility to contribute to a sustainable environment. Employees’ organizational citizenship behavior for the environment is a voluntary environmental-oriented behavior that is important for organizations’ environmental performance. Based on social learning theory, this study examined the effects of responsible leadership in connection with OCBE by using a sample of 520 employees in the manufacturing and service sectors in China including engine manufacturing, petroleum plants, banking, and insurance sector organizations. Further, the roles of psychological (...) ownership and employee environmental commitment were used as mediators and moderators simultaneously. The direct, mediation, and moderation model results exposed a positive relationship between responsible leadership and OCBE via employee psychological ownership and employee environmental commitment. The study also revealed that the indirect effect is stronger when employees hold a higher employee environmental commitment. The theoretical and practical implications for environmental sustainability in respect of organizations as well as future research directions are discussed. (shrink)

This paper brings empirical and theoretical studies of ethical leadership into conversation with one another in an effort to determine the antecedent(s) to perceived ethical leadership. Employing a Levinasian perspective, I argue that ethical leadership entails being faced with the impossible task of realizing the needs of many individual others. For this reason, I argue, perceived ethical leadership is grounded in an employee’s perception that a leader struggles to make decisions based on the conflicting demands placed upon her. More important (...) than the result of a leader’s decision is the degree to which the leader demonstrates concern for the well-being of others in her decision-making process. I ground my discussion through reference to results of empirical studies on behaviors associated with ethical leadership, including Brown, Treviño, and Harrison (2005), Kalshoven, Den Hartog, and De Hoogh (2011a), and Treviño, Hartman, and Brown (2000). I identify several mediating factors which may influence employee perception of ethical leadership, proposing avenues for further research which can help to clarify the relationship between concrete leadership behaviors and perceived ethical leadership. (shrink)

Despite a long history in eastern and western culture of defining leadership in terms of virtues and character, their significance for guiding leader behavior has largely been confined to the ethics literature. As such, agreement concerning the defining elements of virtuous leadership and their measurement is lacking. Drawing on both Confucian and Aristotelian concepts, we define virtuous leadership and distinguish it conceptually from several related perspectives, including virtues-based leadership in the Positive organizational behavior literature, and from ethical and value-laden leadership. (...) Then, two empirical studies are presented that develop and validate the Virtuous Leadership Questionnaire, an 18-item behaviorally based assessment of the construct. Among other findings, we show that the VLQ accounts for variance in several outcome variables, even after self-assessed leader virtue and subordinate-rated social and personalized leader charisma are controlled. (shrink)

This study explores the role and potential of benevolent leadership in creating virtuous and compassionate organizations. A number of small and medium enterprises in Turkey, also called “The Anatolian Tigers”, have been experimenting with new ways of incorporating care and compassion at work. The study uses narrative inquiry to explore how benevolent leadership enhances collective performance and wellbeing in Anatolian Tigers. The paper reviews and integrates four streams of research associated with creating common good in organizations: Spirituality, morality, positivity, and (...) community, and links each of these elements to creating virtuous and compassionate organizations through narrative inquiry. The paper proposes that benevolent leadership can contribute to the long-term health and sustainability of organizations through its four elements: spiritual depth, ethical sensitivity, positive engagement, and community responsiveness. (shrink)

A country known for its longstanding struggle with corruption and dubious governments may not be the obvious venue for a socio-economic revolution that is expected to play an important role in the elimination of global poverty. However, Paraguay, an 'island without shores', as the writer Augusto Roa Bastos once described it, is home to one of the world's most innovative social enterprises—the Fundación Paraguaya. While its achievements and success are the result of a team effort, its remarkable development can be (...) largely attributed to Martín Burt, the founder and chief executive. We study the case of Fundación Paraguaya—the first and longest-running non-governmental organisation in Paraguay—with two primary research objectives: (1) to analyse the organisation's pioneering way of solving social problems under difficult socioeconomic circumstances and its increasingly global outreach to eradicate poverty; (2) and to analyse the responsible leadership of Martín Burt. (shrink)

This study involved using a mixed method research design to examine the moral philosophy difference between the ethical decision-making process of CEOs in U.S.-led and non-U.S.-led within the luxury goods industry. The study employed a MANOVA to compare the ethical profiles between the two leader types and a phenomenological qualitative process to locate themes that give indication as to the compatibility of the luxury strategy values and practices with the principles and concepts of responsible leadership and conscious capitalism. As the (...) luxury goods industry is facing the first slowdown since 2000, pressure to achieve sales targets in the U.S. to make up for losses in other markets will place these CEOs under extreme pressure from their headquarters. These leaders must possess the ethical decision-making capability to balance legal and moral dilemmas unique to multinational luxury goods organizations while delivering business results in a challenging environment. Results of the study show no evidence of difference in the ethical decision-making profiles between the two groups of leaders. The themes and emergent findings resulting from the qualitative analysis indicate a profound incompatibility between the values informing decision-makers using the luxury strategy and those employed by leaders operating within the principles and parameters of responsible leadership and conscious capitalism. Recommendations for future research include replicating the study with a larger sample, within a different geographic region or comparing leaders using the luxury strategy to those using conscious capitalism. (shrink)

A recent conference had as a theme, Ethics in the Fractured State. That theme presumes that there is a fractured state – if not everywhere then somewhere, if not now, then soon. This paper looks at the nature of the fracture and at the implications for the teaching of ethics. Three important lines of fracture – plural, secular, anti-business – are considered in the paper, each described and distinguished separately. The fracture makes ethics more relevant not only in business schools (...) but also in professional faculties such as engineering and pharmacy. The recent rise in anti-business sentiment and its potential impact for the teaching of ethics, especially business and professional ethics, is discussed. The focus is on the implications for the teaching of applied ethics. (shrink)

ABSTRACT:Relational leadership invokes an ethics involving a leader’s affective engagement and genuine concern with the interests of others. This ethics faces practical difficulties given it implies a seemingly limitless responsibility to a set of incommensurable ethical demands. This article contributes to addressing the impasse this creates in three ways. First, it clarifies the nature of the tensions involved by theorising relational leadership as caught in an irreconcilable bind between an infinitely demanding ethics and the finite possibilities of a response to (...) those demands. Second, it examines this ethical challenge in acknowledgement of the hierarchical discourses and power dynamics in which leadership relationships are constrained and enacted. Third, it proposes “ethical irony” as a way leaders can respond to the demand for ethics without resulting in either an escape from ethics, or being crushed by its burden. Three dimensions of ethical irony are examined: ironic perspective, ironic performance, and ironic predilection. (shrink)

Does responsible leadership matter when assembling an inclusive supply chain at the Base-of-the-Pyramid? Current literature implicitly assumes that it does not. BOP scholars initially focused on the importance of shaping innovative and disruptive offerings, with radically improved price–performance ratios. Subsequent studies tended to focus on barriers to implementation of large-scale ventures at the BOP. Their common characteristic was the fact that the attributes and roles of the individuals involved were deemed unimportant. If the opportunity was there, provided barriers were removed (...) and the right value proposition was offered, the inclusive venture should take off. We evaluate three cases of leaders who succeeded in building inclusive ventures at the BOP, in contexts marked by institutional voids—where formal markets were weakly structured or nonexistent. Building a viable business under those circumstances entailed two tasks: imagining what is possible and then turning that vision into a reality. We found that, in carrying out those tasks, individuals do matter. Sampled cases show that working with nontraditional partners in inclusive supply chains requires more than aligning material incentives. Our analysis suggests that responsible leadership with a strong ethical foundation can provide powerful leverage to ensure buy-in and commitment from the various actors involved. We show how RL can impact organizations and external stakeholders through positive upward spirals. Our analysis contributes to the literature on BOP and RL by confirming, extending, and challenging existing knowledge. We propose two novel attributes and argue that context matters, influencing how RL is operationalized and defined. Understanding the critical role of RL in the construction of inclusive supply chains adds a critical missing link that sheds light into the micro level of new business creation, development, and consolidation at the BOP. (shrink)