The marketing of infant formula in third-world countries in the 1970s by Nestlé S.A. gave rise to a consumer boycott that came to be a widely taught case study in the field of Business Ethics. This article extends that case study by identifying three specific individuals who were associated with managing Nestlé’s response to that boycott. It reveals their subsequent direct involvement in a number of additional “classic” 1980s business scandals (some of which ended with major criminal trials and the (...) imprisonment of eminent business figures)—and describes tangential linkages to other business scandals of the time. The article discloses a behind-the-scenes pattern of business villainy, adding both depth and breadth to previous accounts of these scandals. The article offers a conceptual framework that goes beyond personal greed as an explanatory factor for such unethical behavior in the business world, suggesting the presence of personal and organizational networks of intrigue and opportunity. The linkages between the scandals suggest an epidemiological process with the plotters acting as “virus” carriers contaminating various corporate cultures. (shrink)

Regulatory schema has shifted from government to governance-based systems. One particular form that has emerged at the international level is the multi-stakeholder voluntary code of conduct (MSVC). We argue that such codes are not only simply mechanisms by which various stakeholders attempt to govern the action of the corporation but also systems by which each stakeholder attempts to gain or retain some legitimacy goal. Each stakeholder is motivated by strategic legitimacy goal to join the code, and once a member, is (...) also required to assist in maintaining the institutional legitimacy of the code, resulting in “networked legitimacy.” We begin our analysis of these systems by first exploring the growth and structure of such MSVCs, and then building an analytical framework using strategic and institutional legitimacy as they apply to such MSVCs. We contribute to the codes of conduct literature by developing the construct of networked legitimacy from strategic and institutional legitimacy. We then apply our framework to the United Nations Global Compact, one of the predominant MSVCs today. In doing so, we: (1) demonstrate how different stakeholders are pursuing different types of legitimacy through their participation in the code, (2) examine the specific opportunities and risks in terms of what we have called “networked legitimacy” posed by the institutional design of actual MSVCs, and (3) create an argument for three pillars supporting the legitimacy of MSVCs. (shrink)

Confidence in Australian business was severely shaken by the corporate scandals and collapses of the 1980s. Many commentators called for more emphasis on ethics education. This paper surveys the initiatives of Australian business schools and professional bodies and finds them superficial and ineffective. It then presents a case study in Quality Improvement which highlights the need to take a strategic and integrated approach to the development of core values such as quality, trust, ethics and social responsibility. In exploring the process (...) of cultural change, the paper identifies a number of key leadership roles, responsibilities and competencies which are distinguished from the more traditional management functions. (shrink)

Multinational corporations' international staffing policies have been evaluated in terms of cost and efficiency arguments. Research has not addressed, however, the ethical impact of these policies on diverse stakeholder groups. This paper presents a conceptual framework by which ethnocentric, polycentric and geocentric staffing policies are theoretically linked to underlying decision-making modes of instrumentality, bounded rationality and economic rationality, respectively. It goes on to describe the ethical rationales associated with each policy type, namely, distributive justice, moral rights of man, and utilitarianism. (...) An investigation of resulting ethical dilemmas affecting relevant MNC stakeholder groups is incorporated and offered as a tool for analyzing the true and full costs of trade-offs when choosing one policy over another. The paper concludes with a discussion of the implications of the conceptual framework for theory and practice and directions for future research. (shrink)

This paper marks a radical diversion from the large body of prevailing literature in business ethics which primarily views the issue in individual-personal terms, i.e., corporate executive and employee, and suggests that making corporations more ethical would primarily come through changes in executive behavior. While this approach has strong intellectual roots in moral philosophy and religion, it fails in explaining the persistence of unethical and illegal behavior among corporations of all sizes, financial health, competitive market conditions, and, level of individual (...) executive compensation. This paper argues for a fundamentally different approach to understanding ethical behavior, or lack thereof, among corporations and their executives. It is asserted that an overwhelmingly large rationale and/or inducement for proactive ethical business behavior is rooted in competitive aspects of particular markets, and industry structures prevailing in those markets. Furthermore, while highly competitive markets may promote efficiency, they do not guarantee ethical behavior and may indeed provide greater opportunities and incentives for unethical business behavior. Thus, by following the current prognosis, we could be wasting enormous resources in terms of teaching business ethics, and creating and imposing corporate codes of conduct. We assert that these approaches would at best make a marginal improvement in the ethical performance of corporations while at the same time exacerbate the problem by ignoring more fundamental, structural issues. Imperfect markets, with their above-market profits, are a necessary but insufficient condition for corporations to behave ethically. It is only under conditions of imperfect markets that individual executives can play an important role in guiding their corporations toward greater ethical norms. These are undertaken for a variety of reasons, including, protecting a corporation''s good name, public expectations, competitive norms, and, corporate culture and individual executive''s predilections, to name a few. (shrink)