ABSTRACT:The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement (SSE) purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in (...) pursuit of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature. (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)

People are often involuntarily laid off from their jobs through no fault of their own. Employees who are dismissed in this manner cannot always legitimately hold employers accountable for these miserable situations because the decision to implement layoffs is often the best possible outcome given the context—that is, layoffs in and of themselves may be “necessary evils.” Yet, even in circumstances in which layoffs qualify as “necessary evils,” morality demands that employers respect the dignity of those whose employment is involuntarily (...) terminated. In this paper I argue that to preserve the dignity of employees who are involuntarily terminated, in most cases employers have a substantial reason to offer a special kind of unemployment benefit, “severance pay.” To support my claim I draw and expand upon Bernard Williams’s analysis of “agent-regret,” which I believe greatly helps to address and articulate employers’ obligations in the context of involuntary termination. (shrink)

This study draws on and extends contingency theory, in relation to stakeholder theory to understand the corporate social performance and financial performance link, by evaluating under what circumstances CSP influences CFP. Contingencies include stakeholder configurations/salience and crisis conditions. Using differentiated measures of CSP, this study examined financial effects of various specific stakeholder facing activities pre- and post-crisis in the food/beverage and pharmaceutical industries, and in firms selling search versus experience goods. The results indicate that pre-crisis CSP is related to post-crisis (...) financial effects, but the relationships are dependent on the interactions among the contingencies studied, so investments in certain social areas improve CFP, whereas others may hurt it. This confirms that a finer grained approach should be taken to the examination of CSP and CFP. On a practical basis, it shows that deep stakeholder knowledge and attention to complementary factors to CSP, such as advertising, must be understood, so CSP activities are of benefit to the firm. (shrink)

ABSTRACT:We explore the impact on employee attitudes of their perceptions of how others outside the organization are treated above and beyond the impact of how employees are directly treated by the organization. Results of a study of 827 employees in eighteen organizations show that employee perceptions of corporate social responsibility are positively related to organizational commitment with the relationship being partially mediated by work meaningfulness and perceived organizational support and job satisfaction with work meaningfulness partially mediating the relationship but not (...) POS. Moreover, in order to address limited micro-level research in CSR, we develop a measure of employee perceptions of CSR through four pilot studies. Employing a bifactor model, we find that social responsibility has an additional effect on employee attitudes beyond environmental responsibility, which we posit is due to the relational component of social responsibility. (shrink)

ABSTRACT:Despite 40 years of equal opportunities policies and more than two decades of government and organization initiatives aimed at helping women reach the upper echelons of the corporate world, women are seriously underrepresented on corporate boards. Recently, fifteen countries sought to redress this imbalance by introducing gender quotas for board representation. The introduction of board gender quota legislation creates ethical tensions and dilemmas which we categorize in terms of motivations, legitimacy, and outcomes. We investigate these tensions through four overarching theoretical (...) perspectives: institutional, stakeholder, social identity, and social capital. We outline a future research agenda based on how these tensions offer greater focus to research on quotas and more broadly to ethics and diversity in organizations in terms of theory, anticipated ethical tensions, data, and methodology. In sum, our review seeks to synthesize existing multidisciplinary research and stimulate future enquiry on this expanding set of legislation. (shrink)

This study revisits the relation between corporate performance and corporate social responsibility in the context of a major shift in firms’ credit risk status. Relying on corporate credit rating as a performance indicator, we examine whether firms under the scrutiny of rating agencies trade-off CSR engagement for credit quality improvement. To explore whether firms adjust their CSR engagement after a focal rating change, we focus on the investment–speculative grade threshold because of its importance in accessing the public debt market. We (...) find that firms that lose the investment grade rating subsequently increase CSR engagement. We also uncover that improving CSR engagement helps firms restore their credit ratings ex post. Our findings support the view of CSR engagement as a valuable risk management strategy. (shrink)

ABSTRACTSome firms are initiating pro-stakeholder activities and policies that transcend conventional corporate social responsibility conceptions and seem inconsistent with their business interests or economic responsibilities. These initiatives, which are neither legally nor morally obligatory, are responding to calls for a more active role of business in society and for a broader interpretation of CSR. In fact, they benefit stakeholders in a superior and an innovative way and are difficult to reconcile with commonly used rationales in the extant CSR literature, such (...) as win-win opportunities, creating shared value, or corporate philanthropy. For better insight, we develop a qualified account of the concept of supererogation from ethical theory. This account, which examines voluntary responses to moral obligations from which a business is normally excused, is applied to identify the unique features of the initiatives that are not readily understood within conventional reasoning, which is generally focused on a business case. (shrink)

The renaissance of Aristotelian virtue ethics has produced an extensive philosophical literature that criticizes markets for a lack of virtues. Drawing on Michael Sandel’s virtue-ethical critique of price gouging during natural disasters, we (1) identify and clarify serious misunderstandings in recurring price-gouging debates between virtue-ethical critics and economists. Subsequently, (2) we respond to Sandel’s call for interdisciplinary dialogue. However, instead of solely calling on economics to embrace insights from virtue ethics, we prefer a two-sided version of interdisciplinary dialogue and argue (...) that virtue ethics should embrace economic insights. In particular, we argue that if virtue ethics is to preserve its social relevance under modern conditions, it should re-conceptualize its notion of virtue and re-evaluate the self-interested but effective—and in this sense solidary—help among strangers via markets as virtuous rather than devaluate it as greed, that is, as vicious price gouging. (shrink)

ABSTRACT:In this article we investigate a philosophical problem for normative business ethics theory suggested by a phenomenon that contemporary psychologists call “bounded ethicality,” which can be identified with the putative fact that well-intentioned people, constrained by psychological limitations, make ethical choices inconsistent with their own ethical beliefs and commitments. When one combines the idea that bounded ethicality is pervasive with the idea that a person morally ought to do something only if she can, it raises a doubt about the practical (...) relevance of the moral principles that business ethics theory prescribes. We call this doubt the Radical Behavioral Challenge. It consists in the idea that people cannot generally conform to the normative ethical principles that business ethics theorists prescribe, and that these principles are therefore practically irrelevant. We answer the Radical Behavioral Challenge and explore normative implications of our answer. (shrink)