This study examines the relationship between corporate philanthropy (CP) and audit fees. Using corporate donation data from China, our investigation finds that CP is significantly positively associated with audit fees. Resource-seeking purpose and the enhanced publicity effect may be plausible channels behind this relationship. We further find that the frequency and intensity of donations reinforce this positive association. Additional analysis reveals that the resource-seeking effect exists in any type of enterprise, while the enhanced publicity effect only exists in non-SOEs. Our (...) main results remain robust to a battery of additional tests. Overall, our findings suggest that by increasing audit workload and prospective audit risk, CP could make auditors more conservative such that they charge a higher audit fee. This article emphasizes the dialectic institutional stakeholder perspective in understanding the economic consequences of CP. Both the theoretical contributions and practical implications of these findings are discussed. (shrink)

Increasingly, companies implement social and environmental standards as instruments towards corporate social responsibility in supply chains. This is based on the assumption that such standards increase legitimacy among stakeholders. Yet, a wide variety of standards with different requirement levels exist and companies might tend to introduce the ones with low exigencies, using them as a legitimacy front. This strategy jeopardizes the reputation of social and environmental standards among stakeholders and their long-term trust in these instruments of CSR, meaning that all (...) expenses for their implementation are of no avail for the companies. Therefore, this paper highlights which criteria are important for the selection, implementation and improvement in order to achieve a company's aim, but also to strengthen the legitimacy of social and environmental standards. This research is based on conceptual thought and some existing empirical research, comparing four different social and environmental standards, revealing weaknesses and strengths. It exposes the basic conditions for the success of such standards among stakeholders and identifies the need for more empirical data. (shrink)

Drawing on conservation of resources theory, we contribute to the behavioral ethics literature by examining how and why organizational socialization processes can affect newcomers’ adoption of unethical behaviors. Specifically, we contend that quality peer coaching provides newcomers with enhanced self-resources that diminishes emotional exhaustion and thus indirectly reduces newcomer unethical conduct. Conversely, peer coach unethical conduct increases newcomers’ emotional exhaustion, and thus indirectly increases newcomers’ own unethical acts. Our research also identifies newcomers’ goal orientations as important individual differences that moderate (...) the proposed mediation effects. Newcomers with high mastery orientations respond to high emotional exhaustion by harnessing more resources and identifying new work strategies, thereby engaging in less unethical conduct. Conversely, newcomers with high performance orientations give into emotional exhaustion and engage in unethical conduct as a way of outperforming others while conserving resources. We tested our theoretical model using a sample of peer coaches and newcomers from the Real Estate industry, using objective reporting of peer coaches’ and newcomers’ unethical conduct over a nine-month period. (shrink)

We contribute to the literature on intentions to report wrongdoing by examining whether Chinese internal auditors make consistent judgments when an ethical dilemma is presented in English and when the same dilemma is presented in Chinese. We invoke cultural frame switching theory, and our findings, which are based on a randomized experiment using between-subjects and within-subject mixed design, support the hypothesis that Chinese internal auditors are more likely to report wrongdoing when the ethical dilemma is presented in English than when (...) it is presented in Chinese. Our results, which demonstrate that internal auditors make inconsistent ethical judgments in English and Chinese, point to language-triggered cognitive bias resulting from cultural mindsets. We suggest practical interventions and language strategies to improve audit quality. (shrink)

This paper investigates the influence of board network centrality on corporate social responsibility decoupling. CSR decoupling refers to the gap between corporate internal and external actions in CSR practices. Specifically, we measure CSR decoupling as the difference between corporate social disclosure and corporate social performance. This paper uses a sample of Chinese A-share listed firms during 2009–2018, takes the technical dimension score and content dimension score of RKS ratings as proxies of CSD and CSP, and obtains CSR decoupling as the (...) difference between CSD and CSP. Our results show that board network centrality is positively related to over-decoupling in the pre-adoption period of the new environmental law but negatively related to over-decoupling in the post-adoption period and centrality is not related to under-decoupling in the pre-adoption period but a significantly positive related in the post-adoption period. Our finding reveals a complex role of the board network in CSR practices in China. (shrink)

This study examines the impact of top management team media exposure on corporate social responsibility and the moderating effect of TMT characteristics based on the upper echelons theory and stakeholder theory. Based on the observations of 5,352 firms between 2010 and 2019, multiple regression analysis is conducted to empirically test whether TMT media exposure can promote CSR. TMT media exposure is further divided into paper media and online media to reveal the impact of different types of TMT media exposure on (...) CSR. Some robustness tests are also conducted to strengthen the regression results. The results found that a high level of TMT media exposure promotes social responsibility. In addition, the TMT power and political connections negatively moderate the relationship between TMT media exposure and CSR. The main contribution of this study is to develop a TMT media exposure model to assess the impact of TMT media exposure on CSR, providing a theoretical contribution to the existing literature and enriching the research in the CSR context from the perspective of the TMT characteristic moderating role. (shrink)

The state plays a major role in corporate social responsibility in emerging and transitional economies and often influences firms through political connection, and hence knowing how firms respond to the state’s CSR initiatives can inform policy making and has important implication on the sustainability of society and environment. However, existent studies show conflicting results on politically connected firms’ CSR participation. We examine the relationship between political endorsement and firms’ engagement in different types of CSR simultaneously. Using a representative sample of (...) more than 1,000 private firms in the early 2000s, we find that politically endorsed firms engage more in philanthropic donation, but less in environmental practices, which impose higher costs and constraints than philanthropy. This is consistent with our explanation that they attempt to maintain legitimacy and discretion through selective engagement in CSR. Our study contributes to research on CSR in transitional economies by reconciling conflicting findings about the CSR engagement of politically connected firms, provides a new lens to illuminate firms’ strategic response in CSR, and has important policy implications. (shrink)

This article explores impact investing within the renewable energy sector. Drawing on ethical decision making and sensemaking, this article contributes to an enhanced understanding of the complex ethical sensemaking process of impact investors when facing plausible situations in a world of contested truths. Addressing the ethical tensions faced by impact investors with mixed motives, this study investigates the way decision makers use context-specific reasons to make sense of and shape the renewable energy investment process. This represents an initial attempt to (...) understand ethical sensemaking in impact investing made within the renewable energy sector using a multi-stakeholder approach. Our findings show that prosocial, personal, reputational, and economic motives are the main drivers of REI, with prosocial and personal motives being value-based, and reputational and economic motives being evidence-based. We find three different modes of ethical sensemaking, allowing for the construction of the four motives noted above. These motives are based on the context-specific reasons of impact investing decision makers in the RE sector. This article contributes to the academic discourse on ethical sensemaking with some key processes involved in ethical decision making, and a better understanding of the underlying motivations of impact investing in the RE sector. (shrink)

This study investigates the teaching, research, and training of business ethics in Mainland China over the period of 2011–2023 and compares it with those prior to 2011. The results from the questionnaire survey of 43 experts, desktop research, and personal observations reveal that (1) in Mainland China, the field of business ethics has grown stronger over the last decade, which is evident in more academic associations, publications in terms of books and journal articles, projects funded, courses offered, and so forth; (...) (2) CSR seems to be the most popular theme in the business ethics–related teaching, research, and training; (3) Chinese experts are optimistic about the teaching, research, and training on business ethics for the next 5 years; (4) it is anticipated that the business ethics–related teaching, research, and training in Mainland China will encounter some obstacles for the next 5 years, which need to be overcome. (shrink)

Despite its prevalence in emerging economies, everyday-life business deviance and its antecedents have received surprisingly little research attention. Drawing on strain theory and the business-ethics literature, we develop a socio-psychological explanation for this deviance. Our analysis of 741 owners of Chinese small- and medium-sized enterprises suggests that materialism and trust in institutional justice affect EBD both directly and indirectly in a relationship mediated by the ethical standards of SME owners. These findings have important implications for researching deviant business behavior within (...) SMEs. (shrink)

This article introduces a non-Anglophone concept of gong qi as a metaphor for ‘corporation’. It contributes an endogenous perspective from a Sino-Japanese organizational context that enriches mainstream business ethics literature, otherwise heavily reliant on Western traditions. We translate the multi-layered meanings of gong qi based on analysis of its ideograms, its references into classical philosophies, and contemporary application in this Japanese multinational corporation in China. Gong qi contributes a perspective that sees a corporation as an inclusive and virtuous social entity, (...) and also addresses the elusive, implicit, and forever evolving nature of organizational life that is rarely noticed. We propose gong qi can be applied in other organizations and wider cultural contexts to show a new way of seeing and understanding business ethics and organization. Rather than considering virtue as a list of definable individual qualities, we suggest that the metaphor of gong qi reveals how virtue can be experienced as indeterminate, yet immanently present, like the substance of emptiness. This, then allows us to see the virtue of immanence, the beauty of implicitness, and hence, the efficacy of gong qi. (shrink)