This paper presents the ‘rationality‐of‐ends/market‐structure grid’. With this grid, the article contrasts, in economic terms, different approaches to business ethics and addresses the question how far and what type of business ethics is feasible. Four basic scenarios for business ethics are outlined that imply different conceptualizations of business ethics. The grid interrelates a rationality‐of‐ends dimension with a market‐structure dimension. The rationality‐of‐ends dimension ranges from opportunism and self‐interested egoism to self‐interested altruism and ultimately to authentic altruism. The market‐structure dimension ranges from (...) perfect competition/no information problems/perfectly dispersed market power to imperfect competition/high information problems/concentrated power. Rather than presenting economic, legal, ethical and discretionary issues in a hierarchical fashion, the grid interrelates these issues. Conclusions are spelled out regarding the empirical observance of business ethics and the programmatic, ‘theoretical’ positions that are behind empirical observations. Practical implications for managers and public policy makers are outlined. (shrink)

This paper reviews studies of corporate ethical codes published since 2000 and concludes that codes be can effective instruments for shaping ethical behavior and guiding employee decision-making. Culture and effective communication are key components to a code’s success. If codes are embedded in the culture and embraced by the leaders, they are likely to be successful. Communicating the code’s precepts in an effective way is crucial to its success. Discussion between employees and management is a key component of successful ethical (...) codes. (shrink)

The Academy of Management formally adopted a Code of Ethical Conduct in 1990. During the subsequent 15 years, almost nothing had been published about it and its value as a formal document meant to guide professional practice. Rather surprisingly then, in December 2005 an entirely new Code of Ethics was introduced by the Academy’s Board, to take effect in February 2006. Why was a new code promulgated? More broadly, what do the contents of these codes, the processes of their promulgation, (...) and their expressed purposes, suggest about the value of such codes for similarly situated professional associations, in general? This article seeks to identify key strengths and weaknesses of the original code, begin an assessment of the potential value of the new code, and so stimulate debate. Further, not only is this a call to the members of the Academy to engage in some thoughtful debate and possible amendment of its new code, but also a caution to all such associations to take seriously the hurdles that must be jumped before any code can be developed and promulgated to worthwhile effect. (shrink)

In the last two decades, there has been a pronounced growth of CSR rating agencies that assess corporations based on their social and environmental performance. This article investigates the impact of CSR ratings on the behavior of individual corporations. To what extent do corporations adjust their behavior based on how they rank? Our primary finding is that being dropped from a CSR ranking appears to do little to encourage firms to acknowledge and address problems related to their social and environmental (...) performance. Specific rankings appear not to have a widespread effect of influencing firms to acknowledge negative CSR events and publicly present plans and actions to address them. Whether firms are well or poorly ranked, they appear to focus on and publicly discuss their “positive” CSR activities. We discuss the wider significance of these results as well as the overall significance of CSR rankings for a global economy. (shrink)

We review and synthesize over two decades of research on ethical culture in organizations, examining eighty-nine relevant scholarly works. Our article discusses the conceptualization of ethical culture in a cross-disciplinary space and its critical role in ethical decision-making. With a view to advancing future research, we analyze the antecedents, outcomes, and mediator and moderator roles of ethical culture. To do so, we identify measures and theories used in past studies and make recommendations. We propose, inter alia, the use of validated (...) measures, application of a wider range of theories, adoption of longitudinal studies, and study of group-level data in organizations. We explore research possibilities in new and emergent forms of organizations, ways of organizing work, and technology in ethical decision-making, such as the role of artificial intelligence. We also recommend the study of a broad range of leadership styles and their influence in shaping ethical cultures in organizations. (shrink)

The proposed adoption of International Financial Reporting Standards (IFRS) in the United States has ignited a debate as to whether the principles‐based nature of these standards better serves the interests of investors. While it is argued that these principled‐based standards will encourage more transparent financial reporting than the current rules‐based U.S. standards, critics argue that IFRS will invite more aggressive financial reporting through the liberal exercising of professional judgment. This empirical study aims to understand what individual and organizational factors may (...) affect aggressiveness when making accounting judgments. In particular, we examine the influence that prior ethics training, codes of ethics and an individual's predominant moral reasoning schema have on adherence to company policy in an accounting‐related (depreciation) judgment. Results of the study show that respondents with prior ethics training are more likely to adhere to company accounting policy than those who have not had formal ethics education. Respondents presented with a company ethics code also were less aggressive in their accounting judgments than those who were not presented with a code prior to reading the scenario. Finally, decision aggressiveness was moderated by individuals who used conventional moral reasoning schemas. (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)