The aim of this article is to undertake a systematic literature review (SLR) of empirical research that uses multi‐source methods for collecting data about Ethical Leadership (EL). Research on this sensitive subject benefits from the inclusion of data from more than one source, in order to be better supported, and thus contribute to a deeper understanding of leadership and business ethics issues. The search strategy retrieved a total of 50 multi‐source empirical studies on the topic of EL, published until December (...) 2017. This SLR shows that (a) research on EL has focused mostly on the perceptions of followers, possibly because they are the most accessible target of its outcomes, thus restricting the scope of this body of research; (b) EL is studied mainly through consideration of its consequences, a restriction that hinders explanation of the causal processes involved in ethical leadership, which remains a research arena in need of development. The systematic inclusion of other stakeholders in multi‐source methods is advanced as a way to further develop the field. (shrink)

Why does scholarship on transnational labor regulation (TLR) consistently fails to search for improvements in working conditions, and instead devotes itself to relentless efforts for identifying administrative processes, semantics, and amalgamations of stakeholders? This article critiques TLR from a pro-worker perspective, through the philosophical work of Georg Lukács, and the concepts of reification and commodification. A set of theoretically grounded criteria is developed and these are applied against selected contemporary cases of TLR. In the totality that is capitalism, reification of (...) social relations of production conceals completely the experiences of workers. In TLR, managerialist and process-oriented scholarship is dominant, verifiable outcomes and positive improvements in conditions of employment are not sought, and worse, meaningless procedures are celebrated as positive achievements. (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)

This article aims to focus on how signatories versus nonsignatories in the U.S. pharmaceutical sector compare with respect to the internal and external stakeholders and principles of the United Nations Global Compact (UNGC). We seek to answer the question: Do signatories to the UNGC walk the talk better than nonsignatories as determined by a variety of published rankings and data? This research presents an innovative approach to the evaluation of UNGC signatories. It uses several objective and independent data sources to (...) assess a matched group of signatories versus nonsignatories in the U.S. pharmaceutical sector. Signatory organizations in the same sector as determined by SIC codes were matched with nonsignatories on variables such as size and number of employees in U.S. pharmaceutical companies. Then both types of organizations were compared on the following data sources: Coalition for Environmentally Responsible Economies ratings, ratings by external stakeholders, ratings by employees, unionization data, financial measures, and annual reports to shareholders. Using nonparametric testing the research found there are differences between signatories and nonsignatories in the U.S. pharmaceutical sector for some of the external stakeholder measures and no differences were found for the internal stakeholder measures. (shrink)

The United Nations Global Compact has difficulties in attracting new voluntary members and inciting them to implement its ten principles. The present article analyzes this implementation deficit from the perspective of Lockean social contract theory and derives new strategies for reducing it. On this view, the UNGC presents itself as the attempt to realize a set of moral norms, typically enforced by an impartial minimal state, protecting its citizens from violations of their natural rights, negative externalities and discrimination by bribed (...) officials. It will only succeed in facilitating the realization of those norms on a strictly voluntary basis, if it manages to overcome the underlying n-person prisoner’s dilemma. This requires the existence of a critical mass k < N of conditionally moral firms, which are willing to observe the UNGC principles and to resist the temptation to free ride on their observance by others, if it does not disadvantage them in comparison to their situation in a state of universal non-observance. Four contracting problems can impede the conclusion of this Lockean social contract. The UNGC has a slim chance of overcoming its implementation deficit on a non-coercive basis by cultivating four institutional capabilities assisting conditionally moral firms in surmounting those four problems of voluntary norm compliance. (shrink)

In this paper, I aim to critically examine a set of assumptions that pervades human resource management and HR practices. I shall argue that they experience a remarkable ethics deficit, explain why this is so, and explore how the UN Global Compact labor principles may help taking ethics seriously in HRM. This paper contributes to the understanding and critical examination of the undisclosed beliefs underlying theory and practice in human resource management and to the examination of how the UN Global (...) Compact’s ideal of “decent work” may offer some promising avenues for the development of ethics in HRM. (shrink)

The implementation of corporate social responsibility is crucial for the legitimacy of an organization in today’s globalized economy. This study aims to enrich our knowledge of the implementation of the largest voluntary CSR initiative—the UN Global Compact. Drawing on insights from stakeholder, network, and institutional theory, I derive a positive impact of UNGC participation duration on the implementation level of the UNGC principles, despite potential weaknesses in the initiative’s accountability structure. Moreover, I scrutinize the validity of the newly introduced UNGC (...) “Differentiation Programme” before applying this framework in the empirical analysis. Results from ordinal, linear, and instrumental variable regression models suggest that, contrary to claims made by UNGC critics, the duration of UNGC participation does affect the level of UNGC implementation. However, this effect appears to be much smaller than previous practitioner studies have suggested. Moreover, strong local UNGC networks affect the implementation level of the UNGC positively. Their hypothesized moderating role between UNGC participation duration and UNGC implementation level, however, is only significant in networks with activities of high quality rather than high quantity. (shrink)

“Political” corporate social responsibility involves businesses taking a political role to address “regulatory gaps” caused by weak or insufficient social and environmental standards and norms. The literature on political CSR focuses mostly on how large multinational corporations can address environmental and social problems that arise globally along their supply chains. This article addresses political CSR of small- and medium-sized enterprises. SMEs represent a major share of economic value creation worldwide and are increasingly exposed to regulatory gaps. Although SMEs differ substantially (...) from MNCs in terms of organizational characteristics, behavioral guiding principles, and financial and human resources, they should still tackle such regulatory gaps by accepting a political role. Drawing on Zadek’s model of CSR-based organizational learning and Young’s concept of social connection, this study develops a conceptual framework as the basis for discussing why SMEs should become involved in political CSR, how they can manage political CSR internally and systematically, and how their progress can be assessed by third-party observers externally. (shrink)

The consequences of foreign direct investment (FDI) for human rights protection are poorly understood. We propose that the impact of FDI varies across industries. In particular, extractive firms in the oil and mining industries go where the resources are located and are bound to such investment, which creates a status quo bias among them when it comes to supporting repressive rulers (“location-bound effect”). The same is not true for nonextractive multinational corporations (MNCs) in manufacturing or services, which can, in comparison, (...) exit problematic countries more easily. We also propose that strong democratic institutions can alleviate negative impacts of extractive FDI on human rights (“democratic safeguard effect”). Using U.S. FDI broken up into extractive and nonextractive industries in 157 host countries (1999–2015), we find support for these propositions.1 Extractive FDI is associated with more human rights abuse, but nonextractive FDI is associated with less abuse, after controlling for other factors, including concerns about endogeneity. We find also that the negative human rights impact of extractive FDI vanishes in countries where democratic institutions are stronger. Our results are robust to a range of alternative estimation techniques. (shrink)

This article analyzes the United Nations Global Compact under the conceptual framework of explicit versus implicit corporate social responsibility to better understand the operational and governance challenges behind this voluntary global initiative. Using institutional logics theory, we show how the UNGC is a practice that embodies seemingly competing logics. We suggest mechanisms to facilitate the interplay of implicit/explicit CSR and the co-existence of logics that might allow the UNGC to move forward while addressing its critics. We argue that failure to (...) conceptualize the UNGC as a combination of explicit and implicit CSR leaves the UNGC subject to criticism that might be better directed toward organizations that fail to practice explicit CSR. While viewing the UNGC through an integrated CSR framework may not immediately reconcile its critics and proponents, combining elements of both may provide opportunities to posit collaborative solutions to improve the quality, outcome, and legitimacy of UNGC initiatives. (shrink)

Companies that have joined the United Nations Global Compact are required to submit a Communication on Progress, which is an environmental, social, and governance report, to the UNGC every year. If they fail to do so, they are marked and listed as non-communicating on the UNGC website. Using the event study methodology, this study shows that a company that fails to report to the UNGC is penalized in the financial markets with an average cumulative abnormal return of −1.6% over a (...) period of 5 trading days around the event. Although a major critique against the UNGC is that the initiative’s voluntary nature and its lack of external monitoring and sanction mechanisms render it ineffective in terms of the business participants’ implementation of the UNGC principles into their operations, this result suggests that investors may be able to pressure UNGC business participants to increase their compliance with the UNGC requirements and to “walk the talk.”. (shrink)

In light of grand societal challenges, most recently the global Covid-19 pandemic, there is a call for research on responsible leadership. While significant advances have been made in recent years towards a better understanding of the concept, a gap exists in the understanding of responsible leadership in emerging countries, specifically how leaders resolve prevalent moral dilemmas. Following Werhane, we use moral imagination as an analytical approach to analyze a dilemmatic stakeholder conflict through the lense of different responsible leadership mindsets and (...) in light of different ethical principles and moral background theories. Based on this analysis, we arrive at a tentative moral judgement, concluding that the instrumental approach is morally inferior and recommending the integrative approach as the morally superior choice. In the subsequent discussion—focussed on what “could” be done, we apply the integrative script and use moral imagination as a pathway for generating morally justifiable solutions. Through this analysis, we provide novel insights on how to apply an integrative responsible leadership approach to a stakeholder conflict situation, using the single case study to expand the responsible leadership discussion to emerging markets. (shrink)

Earth’s life-support system is facing megaproblems of sustainability. One important way of how these problems can be addressed is through innovation. This paper argues that responsible innovation that contributes to sustainable development consists of three dimensions: innovations avoid harming people and the planet, innovations ‘do good’ by offering new products, services, or technologies that foster SD, and global governance schemes are in place that facilitate innovations that avoid harm and ‘do good.’ The paper discusses global governance schemes based on deliberation (...) as a means to foster such responsible innovation. These schemes can provide voluntary soft-law regulations that complement and extend national and international hard-law regulations and facilitate collective innovation that contributes to SD goals. The article addresses the facilitative role of governments and international organizations in overcoming problems of deliberation and offers illustrative examples of such governance schemes. (shrink)

Sethi and Schepers have identified an important issue for the global economy: Providing some mechanism for requiring assurance that environmental, social, and corporate governance information provided by a business is accurate and objective. Where they have gone wrong is in trying to change the mission of the United Nations Global Compact. From its inception, the UNGC has been clear that its mission is not to provide such assurance. This article first outlines the background for the historic announcement of the UNGC (...) by the then Secretary-General of the UN, Kofi Annan. Then a summary of the major criticisms of the initiative is provided with a focus on the Sethi–Schepers article. Finally, I argue that the mission of the UNGC, to gain consensus in the global community on the shared values and moral norms that will guide the global economy, is being accomplished, although it is a work in progress. (shrink)

The United Nations Global Compact is one of the largest transnational governance schemes. Its success or failure, however, is a matter of debate. Drawing on research in cognitive linguistics, we argue that when evaluators discuss the UNGC, they apply the metaphorical concept of the family: the UNGC corresponds to the “family,” the UNGC headquarter to the “parent” and the business participants of the UNGC to the “children” of the family. As a corollary, evaluators’ implicit understanding of how a family is (...) best organized sets different benchmarks against which the governance structure of the UNGC is assessed. We describe two ideal models of “educating” UNGC business participants. Critics of the UNGC adopt a “strict father” model of transnational governance based on the idea that the proper education of inherently “bad” business firms necessitates obedience, discipline and punishment in case firms are non-compliant. In contrast, the UNGC’s advocates follow a “nurturant parent” model, which prioritizes empathy, learning and nurturance to support the moral development of “good” business firms. We develop the “UNGC-as-family” metaphor, explore its implications for transnational governance and discuss under what conditions these idealized models can serve as appropriate guidelines for TGSs. Specifically, we posit that following the behavioral prescriptions of the “strict father” model may, under certain conditions, jeopardize the organizational embedding and institutionalization of UNGC principles, and explain when and why it may be in the best interest of the UNGC and civil society to embrace the instructions of the “nurturant parent” model of transnational governance. (shrink)

The proliferation of multistakeholder initiatives (MSIs) over the past years has sparked an intense debate on the political role of corporations in the governance of global business conduct. To gain a better understanding of corporate political behavior in multistakeholder governance, this article investigates how firms construct a political identity when participating in MSIs. Based on an in-depth case study of the Accord on Fire and Building Safety in Bangladesh—an MSI established after the collapse of the Rana Plaza garment factory complex (...) in 2013 to improve working conditions in the Bangladeshi garment industry—we introduce the construct of a political CSR (corporate social responsibility) identity (PCSRI) and explore how firms construct their PCSRIs in MSIs. Employing a qualitative, inductive theory-building method, we analyze interviews and archival data to develop a framework that elucidates how companies construct their PCSRIs within a continuum ranging from conservative to progressive. We show that constructing a PCSRI involves enacting specific, yet interrelated, political strategies that are themselves shaped by several forces over time. This article contributes to the literature by providing a political perspective on organizational identity construction that extends the emerging integrative perspective in political corporate social responsibility (PCSR) research. We suggest that MSIs should be conceptualized as inherently political governance mechanisms that are driven by multidirectional and dynamic political processes of identity construction. Our study shows that corporate political engagement in MSIs is a more nuanced and complex phenomenon than presently theorized. (shrink)

As forms of private self-regulation, multi-stakeholder initiatives have emerged as an important empirical phenomenon in global governance processes. At the same time, MSIs are also theoretically intriguing because of their inherent double nature. On the one hand, MSIs spell out CSR standards that define norms for corporate behavior. On the other hand, MSIs are also the result of corporate and stakeholder behavior. We combine the perspectives of institutional theory and club theory to conceptualize this double nature of MSIs. Based on (...) a stage model that looks at the interplay of actor and institutional dynamics, we generate insights into why actors join a voluntary MSI, how the various motivations and intentions of the actors influence the standard development, and how these as well as the MSI design are subsequently influenced by both external and internal dynamics. (shrink)

Meta-governance is Earth system governance for dealing with the global commons. This article develops a whole network approach to meta-governance to explore the potential for collective action for sustainable development by a loosely coupled network of networks. Networked corporate social responsibility governance has emerged around corporate sustainability and responsibility in the first years of the 21st century. Growing agreements and interactions among CSR initiatives suggest the development, structure, and governance of networked CSR governance as a network that can analytically be (...) viewed as a whole and as a platform for learning about systemic change. Using the evolution of CSR initiatives from about 1990 to 2014, the authors differentiate four developmental stages: independent and fragmented multistakeholder networks as CSR governance, collaborative CSR governance, networked CSR governance, and integrated networked CSR governance. The authors then present a framework to analyze networked CSR governance as a whole network experimenting with meta-governance. (shrink)

ABSTRACT:The transition from modern to postmodern society leads to changing expectations about the purpose and responsibility of leadership. Habermas’s social theory provides a useful analytical tool for understanding current societal transition processes and exploring their implications for the responsibility of business vis-à-vis society. We argue that integrative responsible leadership, in particular, can contribute to the reconciliation of business with societal goals. Integrative responsible leadership understood in a Habermasian way is not only a strategic endeavor but also a communicative endeavor. An (...) essential part of integrative responsible leadership in light of the current societal transformation processes is the facilitation of discourses about a shared base of norms and values. This is exemplified alongside current societal developments like the European migration crisis or the emerging nationalist and fundamentalist movements in some countries. We specify how and when leadership should resort to communicative action and discuss the implications for leadership. (shrink)

The object of this article is to demonstrate how stakeholder theory can be enlarged and enhanced by two communications theories, media systems dependency and community infrastructure theory. The stakeholder perspective is often represented by a diagram in which a firm is centrally positioned, surrounded by stakeholders. However, relationships between stakeholders are given relatively little attention, the various groups theoretically encompassed by the term “community” remain relatively undefined, and other marginalized stakeholders often go unrecognized. MSD and CIT can enable us to (...) conceptualize the stakeholder model more clearly, to develop research projects that more adequately capture the dynamic quality of stakeholder relationships, to tailor management strategies to particular stakeholder characteristics, and to understand corporate social responsibility messages. As an example, stakeholder theory, combined with MSD and CIT, is applied to California’s cannabis/marijuana industry. (shrink)

In the current literature, institutional adoption of Corporate Social Responsibility (CSR) governance standards is mainly understood in a binary sense (adoption versus no adoption), and existing research has hitherto focused on inducements as well as on barriers of related organizational change. However, little is known about often invisible internal adoption patterns relating to institutional entrepreneurship in the field of CSR. At the same time, additional information about these processes is relevant in order to systematically assess the outcomes of institutional entrepreneurship (...) and to differentiate between substantive versus symbolic implementation. In this paper, we contribute a comparative intraorganizational differentiation of institutional adoption processes in the field of CSR, and we distinguish between broad and narrow organizational institutional adoption across different management functions relating to institutions of a similar type. Our study is based on a quantitative survey among members of the United Nations Global Compact Network Germany, as well as on qualitative interviews. We analyze different institutional adoption patterns and derive ten theoretical predictors of diverse institutional adoption choices and thereby inform the literatures on institutional entrepreneurship, CSR governance, and Multi-Stakeholder Initiatives. Besides our theoretical contributions, our findings serve as a source of information for practitioners engaged in CSR governance as they provide new insights into the managerial perception and assessment of different CSR standards and initiatives. (shrink)

Few industries have been pressured to develop corporate social responsibility standards and policies like oil and gas. This has translated into the creation of non-governmental organizations and branches of the oil and gas firms focused on CSR. However, given the intrinsic complex characteristics of this industry, its global reach, and the fact that its operations affect and involve a wide variety of stakeholders, CSR issues cannot be defined and implemented exclusively at the industry or firm levels, but require the participation (...) of other actors affected directly or indirectly by oil and gas activities. In this paper we argue, first, that oil and gas CSR issues are collectively constructed through meta-organizations, and, second, that the complexity and variety of CSR issues require companies to build industry-specific and non-industry-specific collective actions. Based on how oil and gas firms participate in this multi-level co-construction of CSR issues, we created a typology of meta-organizations as infra-sectoral, sectoral, cross-sectoral, and supra-sectoral meta-organizations. (shrink)

This article provides a review of scholarly approaches to assessing the impact of certification standards for sustainability. While we observe that some theoretical advances have afforded a better understanding of the potential impacts of adopting such standards, we also find that progress has been constrained due to a strong emphasis on assessing impact via linear causal pathways. This linear focus on the net effects for single stakeholders, such as farmers and producers, local communities and ecosystems, falls short of adequately capturing (...) the broader impact of certifications across social and ecological dimensions. Inspired by theories on complex systems thinking, we present a framework based on a systems-based impact logic that better captures and assesses the impacts of certification standards within broader social-ecological systems. Our framework can be used as a heuristic to design impact-related studies and assess the impact of certification standards across disciplinary vantage points and empirical contexts. (shrink)

The article discusses the role of the UN Global Compact in the emerging global corporate social responsibility infrastructure. It evaluates the debate around the effectiveness and legitimacy of the UNGC alongside the arguments of its supporters and critics and thereby introduces the Thematic Symposium contributions. The article further identifies three theoretical perspectives that are used by scholars to discuss the performance of the UNGC: economic, socio-historical, and normative. It proposes that these perspectives can serve as generic distinctions with direct relevance (...) for the evaluation of the UNGC. Once the perspective is chosen, it drives towards a certain purpose which implies assumptions and design features with regard to the UNGC. Finally, the article offers a future research agenda, emphasising the research needed on the UNGC in four areas: the identification of processes and influence mechanisms; legitimacy and effectiveness; local networks and regional development; and the interface of the UNGC and responsible leadership. (shrink)

The global spread of corporate social responsibility (CSR) practices is widely explained in institutional-isomorphic terms: Corporations worldwide adopt CSR in reaction to isomorphic pressures exerted on them by a pro-CSR global environment, including normative calls for CSR, activist targeting, civil regulation frameworks, and educational activities. By contrast, this article considers the proactive agency of corporations in CSR diffusion, which is informed by nonmarket strategies that seek to instrumentally reshape the political and social environment of corporations. Applying a “channels-of-diffusion” perspective, we (...) show that in the initial phase of CSR’s transnational diffusion—as exemplified by the cases of Venezuela (1962-1967) and Britain (1977-1981)—CSR traveled through learning exchanges between business elite “exporters” and “importers” whose engagement in diffusion addressed crisis-enhanced political threats and opportunities in the receiving country. The focal agents established national CSR business associations, which disseminated among local corporations CSR practices adapted to confront the challenges at hand. We identify the features of such “business-led cross-national diffusions of CSR”; formulate propositions regarding their conditions, dynamics, and effects; and suggest that further research of this mode of diffusion would advance a more nuanced and balanced understanding of CSR’s globalization. (shrink)

According to surveys of companies, branding is one of the main objectives of their corporate social responsibility. With advantageous data from Brand Finance, we address three contextual factors that may condition the relationship between CSR and brand value. First, we hypothesize that the relationship between CSR and brand value obtains across major world regions and industrial sectors. Second, we hypothesize that the relationship has weakened with time, as companies have had increasing difficulty using CSR to differentiate their brands in a (...) sea of CSR-espousing competitors. Third, we hypothesize that the relationship between CSR and brand value is weaker where a brand’s identity is different from that of its corporate owner, which may make it difficult for observers to readily link CSR with its potential brand beneficiaries. We support these hypotheses with random-effects, fixed-effects, and instrumental-variable regressions before ending with contributions, limitations, implications, and potential next steps. (shrink)