Organizational governance has historically focused around the perspective of principals and managers and has traditionally pursued the goal of maximizing owner wealth. This paper suggests that organizational governance can profitably be viewed from the ethical perspective of organizational followers - employees of the organization to whom important ethical duties are also owed. We present two perspectives of organizational governance: Principal Theory that suggests that organizational owners and managers can often be ethically opportunistic and take advantage of employees who serve them (...) and Principle Theory that focuses on guiding principles that are sometimes taken too far in organizations. In introducing these two new organizational governance perspectives, we offer insights into the value of rethinking ethical duties owed to organizational followers. (shrink)

Distributive, procedural, and interactional justice are constructs that are increasingly being recognized as important factors that affect individual perceptions in the workplace environment. This paper presents a theoretical perspective that suggests that justice is perceived through a subjective lens that consists of individualized beliefs and proposes that cultural attributes and demographic characteristics play an integral part in determining the perception of justice. The distinctions between these three constructs are presented in context with the core beliefs of individual employees – affected (...) by a multitude of perceptual and demographic factors that we briefly identify herein. Based on the theoretical perspective, an instrument that measures the constructs of justice as perceived by individuals was developed. With a focus on justice within the business setting, hypotheses about attitudes related to justice were tested. Survey results confirm that the three constructs of justice are distinct but correlated. Significant differences were found in the perceptions of African-American respondents with regard to procedural justice. Although the empirical findings do not support all the hypotheses, this research highlights the need for further development of measures to assess the perception of justice in business settings and at an applied level, underscores the importance of recognizing cultural attributes and demographic characteristics in understanding how justice is perceived. (shrink)

A notable feature of paradox is recognition that seemingly contradictory terms are inextricably intertwined and interrelated—holding out the hope that something new can be learned from the cognitive tension contained within. Aram has characterized the central concern of the business and society field as the paradox of interdependent relations. Our study argues that this and related paradoxes can be addressed by engaging with others and trying to gain shared insight via an interactive, developmental, exploratory sensemaking process that can inform the (...) governance of stakeholder networks. We advocate multistakeholder learning dialogues (MSLDs) as a means for both scholars and practitioners to construct meanings that can guide joint efforts to cope with messy problems that help shape complex, paradoxical relationships within stakeholder networks. (shrink)

Abstract:Previous research has identified multiple approaches to the design and implementation of corporate ethics programs (Paine, 1994; Weaver, Treviño, and Cochran, in press b; Treviño, Weaver, Gibson, and Toffler, in press). This field survey in a large financial services company investigated the relationships of the values and compliance orientations in an ethics program to a diverse set of outcomes. Employees’ perceptions that the company ethics program is oriented toward affirming ethical values were associated with seven outcomes. Perceptions of a compliance (...) orientation were associated with four of these outcomes. The interaction of values and compliance orientations was associated with employees’ willingness to report misconduct. In general, a values orientation makes a greater unique contribution to the measured outcomes when compared to a compliance orientation. (shrink)

Business and Society: Ethics and Stakeholder Management, 5th edition employs a stakeholder management framework, emphasizing business' social and ethical responsibilities to both external and internal stakeholder groups. A twin theme of business ethics to illustrate how ethical or moral considerations are included the public issues facing organizations and the decision making process of managers. The text is written from a managerial perspective that along with the twin themes of stakeholders and ethics, shows how to identify stakeholders, incorporate their concerns into (...) the organization's strategy and operations, and also integrate ethical wisdom into their decision making process. In addition, 35 case histories are included to help connect theory and practice through timely and interesting examples. (shrink)

The Greek philosopher Aristotle, writing over two thousand years before Wall Street, called people who engaged in activities which did not contribute to society "parasites." In his latest work, renowned scholar Robert C. Solomon asserts that though capitalism may require capital, but it does not require, much less should it be defined by the parasites it inevitably attracts. Capitalism has succeeded not with brute strength or because it has made people rich, but because it has produced responsible citizens and--however unevenly--prosperous (...) communities. It cannot tolerate a conception of business that focuses solely on income and vulgarity while ignoring traditional virtues of responsibility, community, and integrity. Many feel that there is too much lip-service and not enough understanding of the importance of cooperation and integrity in corporate life. This book rejects the myths and metaphors of war-like competition that cloud business thinking and develops an "Aristotelean" theory of business. The author's approach emphasizes several core concepts: the corporation as community, the search for excellence, the importance of integrity and sound judgment, as well as a more cooperative and humane vision of business. Solomon stresses the virtues of honesty, trust, fairness, and compassion in the competitive business world, and confronts the problem of "moral mazes" and what he posits as its solution--moral courage. (shrink)

Given the groundswell of corporate misconduct, the need for better business ethics education seems obvious. Yet many business schools continue to sidestep this responsibility, a policy tacitly approved by their accrediting agency, the Association to Advance Collegiate Schools of Business (AACSB). Some schools have even gone so far as to cut ethics courses in the wake of corporate scandals. In this essay I discuss some reasons for this failure of business school responsibility and argue that top university officials must go (...) beyond weak accrediting standards to insist that ethics courses be required in business school curriculum. Otherwise, students will continue to get the message that practicing managers have little or no legal and ethical responsibilities to society. (shrink)

Distributive, procedural, and interactional justice are constructs that are increasingly being recognized as important factors that affect individual perceptions in the workplace environment. This paper presents a theoretical perspective that suggests that justice is perceived through a subjective lens that consists of individualized beliefs and proposes that cultural attributes and demographic characteristics play an integral part in determining the perception of justice. The distinctions between these three constructs are presented in context with the core beliefs of individual employees – affected (...) by a multitude of perceptual and demographic factors that we briefly identify herein. Based on the theoretical perspective, an instrument that measures the constructs of justice as perceived by individuals was developed. With a focus on justice within the business setting, hypotheses about attitudes related to justice were tested. Survey results confirm that the three constructs of justice are distinct but correlated. Significant differences were found in the perceptions of African-American respondents with regard to procedural justice. Although the empirical findings do not support all the hypotheses, this research highlights the need for further development of measures to assess the perception of justice in business settings and at an applied level, underscores the importance of recognizing cultural attributes and demographic characteristics in understanding how justice is perceived. (shrink)

Work-family conflict has been examined quite often in human resources management and industrial/organizational psychology literature. Numerous statistics show that the magnitude of this employment issue will continue to grow. As employees attempt to balance work demands and family responsibilities, organizations will have to decide to what extent they will go to minimize this conflict. Research has identified numerous negative consequences of work-family stressors for organizations, for employees and for employees' families. There are however many options to reduce this strain, each (...) with advantages and disadvantages. An ethical analysis, from a virtue ethics perspective, is applied to this timely issue to present an alternative view in addressing this critical business decision. In addition, a strong connection between the virtue ethics analysis and a well-known management theory is given to provide a foundation for managerial implications for resolving work-family conflict. (shrink)

Corporate citizenship challenges the foundations and working of the basic institutions market, state and civil society. These institutional changes complicate the work of the manager, because the responsibilities of management are not only increasing, they are also becoming vaguer and more elusive. In this paper, I will analyze the new, complex responsibilities of management in terms of the scope and the legitimizationof corporate citizenship. What may we expect of individual organizations? Which wishes of which stakeholders should be honored? How can (...) we legitimize the new societal and public role of business firms? The outcome of this analysis will be translated to the practice of management; how can we strengthen the social responsibility of managers? Four options will be discussed. (1) Market regulation, which binds the actions of managers. (2) Professionalization of management, which seeks for better information. (3) Moral management, which incorporates norms and values from outside the market. (4) Stakeholder management, which leaves room for the participation of stakeholders. These options can be schematized according to an internal-external axis and an objective-subjective axis. I will show that stakeholder management fits the best with the idea of corporate citizenship, but has serious risks of failing. (shrink)

Theories of leadership have traditionally focused on leadership traits, styles, and situational factors that influence leader behaviors. We propose that The Four Umpires Model described herein, which examines how four leadership types view reality and perception, provides a useful example of an effective steward leader. We use the Five Beliefs Model identified by Edgar Schein and Peter Senge to frame the implicit assumptions underlying the core beliefs and mental models of each of the four umpires. We suggest that the stewardship (...) model of Umpire Number Four, the Facilitating Idealist, is the best model for leadership of the four umpires described. In our review of the Four Umpires Model we also explain why it is importance for every leader to thoughtfully assess the assumptions that form the ethical basis for leadership decisions and actions. (shrink)

Calls for increasing integration of ethical considerations into business education are well documented. Business graduates are perceived to be ethically naive at best, and at worst, constrained in their moral development by the lack of ethical content in their courses. The pedagogic concern is to find effective methods of incorporating ethics into the fabric of business education. The purpose of this paper is to suggest and illustrate role play as an appropriate method for integrating ethical concerns.

Although the foundation of financial accounting and auditing has traditionally been based upon a rule-based framework, the concept of a principle-based approach has been periodically advocated since being incorporated into the AICPA Code of Conduct in 1989. Recent high profile events indicate that the accountants and auditors involved have followed rule-based ethical perspectives and have failed to protect investors and stakeholders – resulting in a wave of scandals and charges of unethical conduct. In this paper we describe how the rule-based (...) traditions of auditing became a convenient vehicle that perpetuated the unethical conduct of firms such as Enron and Arthur Andersen. We present a model of ten ethical perspectives and briefly describe how these ten ethical perspectives impact rule-based and principle-based ethical conduct for accountants and auditors. We conclude by identifying six specific suggestions that the accounting and auditing profession should consider to restore public trust and to improve the ethical conduct of accountants and auditors. (shrink)

Abstract:Previous research has identified multiple approaches to the design and implementation of corporate ethics programs (Paine, 1994; Weaver, Treviño, and Cochran, in press b; Treviño, Weaver, Gibson, and Toffler, in press). This field survey in a large financial services company investigated the relationships of the values and compliance orientations in an ethics program to a diverse set of outcomes. Employees’ perceptions that the company ethics program is oriented toward affirming ethical values were associated with seven outcomes. Perceptions of a compliance (...) orientation were associated with four of these outcomes. The interaction of values and compliance orientations was associated with employees’ willingness to report misconduct. In general, a values orientation makes a greater unique contribution to the measured outcomes when compared to a compliance orientation. (shrink)

Abstract:In this article we first review the development of the concept of global business citizenship and show how the libertarian political philosophy of free-market capitalism must give way to a communitarian view in order for the voluntaristic, local notion of “corporate citizenship” to take root. We then distinguish the concept of global business citizenship from “corporate citizenship” by showing how the former concept requires a transition from communitarian thinking to a position of universal human rights. In addition, we link global (...) business citizenship to global business strategy and to three analytical levels of ethical norms. Finally, we trace a process whereby global businesses can implement fundamental norms and learn to accommodate to legitimate cultural differences. (shrink)

We propose extending business ethics education beyond the formal curriculum to the hidden curriculum where messages about ethics and values are implicitly sent and received. In this meta-learning approach, students learn by becoming active participants in an honorable business school community where real ethical issues are openly discussed and acted upon. When combined with formal ethics instruction, this meta-learning approach provides a framework for a proposed comprehensive program of business ethics education.

This paper presents conceptual arguments to suggest that trust within organizations and trustworthiness of organizations are built through ethical governance mechanisms. We ground our analysis of trust, trustworthiness, and stewardship in the business literature and provide the context of business school governance as the focus of our paper. We present a framework that highlights the importance of knowledge, resources, performance focus, transparency, authentic caring, social capital and citizenship expectations in creating a basis for the ethical governance of organizations.

Although trust has been widely recognized as a vital component ofrelationships and a critical element to the success of organizations,the literature describing trust and trustworthiness is known for itsvarying perspectives and its inconsistencies. Trustworthiness has beenidentified as a condition precedent to the development of trust.Building upon the established constructs of interpersonaltrustworthiness, we propose a related model containing the sevenconstructs of Competence, Legal Compliance, Responsibility to Inform,Quality Assurance, Procedural Fairness, Interactional Cour-tesy, andFinancial Balance. Citing evidence from trust-related literature, weidentify the utility (...) of these seven constructs in encompassingorganizational trustworthiness as a subjectively perceived aspect oforganizational effectiveness. We analyzed questionnaire data andconducted comparative world-region analyses. (shrink)

The concept of corporate social responsibility (CSR) is being supplanted by a new term—corporate citizenship (CC). For many reasons, it’s not a bad idea to replace the CSR term. But the core content of CSR is also gradually being replaced in a significant portion of the literature by a narrower, voluntaristic concept of corporate community service. This is not a viable replacement for the broad ethics-based and problem-solving norms of social reciprocity that are represented by CSR. A more legitimate successor-term (...) is needed so that corporate community relations and philanthropy take their rightful place among the larger set of rights, duties, stakeholder relationships, and opportunities accruing to business organizations.Therefore, we develop a working theory of business citizenship (BC), a more palatable term, and a concept designed to capture the core moral and social content of CSR. In this article we extract and synthesize several key ideas about individual citizenship that have evolved over several thousand years. We then transpose these ideas from the level of individual members of a polity to the level of organizations within society. In a companion article, we extend the business citizenship concept from its single-polity boundaries to the institutional and global levels of analysis. This approach allows a view of business citizenship that accommodates strong moral guidance, structural and institutional realities, and the flexibility necessary to respond to the structures and dynamics of particular company-stakeholder relationships. (shrink)

The raging cynicism felt toward businesses and business leaders is a by-product of perceived violations in the social contracts owed to the public. Business schools have a unique opportunity to make a significant impact on present and future business leaders, but ‘practicing what we teach’ is a critical condition precedent. This paper presents frameworks for ethical practices for assessing the social contracts owed by business schools in their role as citizens in the larger community. We identify the ethical implications of (...) business school practices to guide the development of tools for self-assessment and to focus on delivering the implied duties owed to the stakeholders of business schools. (shrink)