This paper explores the relationship between accountability, trust and corporate reputation building. Increasing numbers of corporations are mobilising themselves to put more and more information out into the public domain as a way of communicating with stakeholders. Corporate social accounting and stakeholder engagement is happening on an unprecedented scale. Rather than welcoming such initiatives, academics have been quick to pick faults with contemporary social auditing and reporting, claiming that in its current form it is not about demonstrating accountability at all, (...) but rather about building corporate reputation. Academics argue that ‘accountability should hurt’, that if accountability is an enjoyable process, then the organisation isn’t doing it right. For organisations that are currently engaging with stakeholders and ostensibly becoming more transparent about their corporate social performance, this kind of critique is likely to be bewildering. This paper argues that central to the notion of accountability and to contemporary social accounting practice is the concept of trust. Accountability is based upon a distrust of corporate management, whereas corporate reputation building is about strategically seeking to establish trust in stakeholder relationships in order to negate formal accountability requirements. Using a split trust continuum, the paper seeks to explain and synthesise what seem to be two very different paradigms of organisational transparency. (shrink)

Making use of facilitating payments is a very widespread form of corruption. These consist of small payments or gifts made to a person – generally a public official or an employee of a private company – to obtain a favour, such as expediting an administrative process; obtaining a permit, licence or service; or avoiding an abuse of power. Unlike the worst forms of corruption, facilitating payments do not usually involve an outright injustice on the part of the payer as they (...) are entitled to what they request. This may be why public opinion tends to condone such payments; often they are assumed to be unavoidable and are excused on the grounds of low wages and lack of professionalism among public officials and disorganisation in government offices. Many companies that take the fight against “grand” corruption very seriously are inclined to overlook these “petty” transgressions, which are seen as the grease that makes the wheels of the bureaucratic machine turn more smoothly. Despite this, facilitating payments have a pernicious effect on the working of public and private administrations: all too often they are the slippery slope to more serious forms of corruption; they impose additional costs on companies and citizens; and in the long run they sap the ethical foundations of organisations. Although many articles on corruption mention facilitating payments, there have been no systematic studies from a company’s point of view. This article thus focuses on facilitating payments from the point of view of the company that makes the payment, either as the active partner (when it is the company that takes the initiative) or as the passive partner (when the official or employee is the instigator). (shrink)

The Principles of Corporate Governance require that business conduct conform to the law. In recent years, news reports of business misconduct have cast doubt on a conclusion that conformity is the prevalent practice. This article explores the influence of law on business conduct by comparing the law’s requirements and purposes with actual business conduct in the market. Specifically, it explores whether certain legal regimes are more effective than others in inducing greater commitment to legal compliance by corporate actors. The conclusion (...) drawn is that the prevalent legal regime – a vague common law or legislative mandate – is typically associated with corporate conduct that evades or ignores the law’s mandate or its underlying purpose. (shrink)

This paper explores the relationship between accountability, trust and corporate reputation building. Increasing numbers of corporations are mobilising themselves to put more and more information out into the public domain as a way of communicating with stakeholders. Corporate social accounting and stakeholder engagement is happening on an unprecedented scale. Rather than welcoming such initiatives, academics have been quick to pick faults with contemporary social auditing and reporting, claiming that in its current form it is not about demonstrating accountability at all, (...) but rather about building corporate reputation. Academics argue that ‘accountability should hurt’, that if accountability is an enjoyable process, then the organisation isn’t doing it right. For organisations that are currently engaging with stakeholders and ostensibly becoming more transparent about their corporate social performance, this kind of critique is likely to be bewildering. This paper argues that central to the notion of accountability and to contemporary social accounting practice is the concept of trust. Accountability is based upon a distrust of corporate management, whereas corporate reputation building is about strategically seeking to establish trust in stakeholder relationships in order to negate formal accountability requirements. Using a split trust continuum, the paper seeks to explain and synthesise what seem to be two very different paradigms of organisational transparency. (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)

By focusing on the reasoned debate in the discourse -ethical approach to business ethics, this paper discusses the possibilities and limitations of moral reasoning as well as applied economic and business ethics. Business ethics, it is contended, can be looked at from the standpoint of two criteria: justification and application. These criteria are used to compare three approaches: the Integrative Business Ethics, developed by Swiss philosopher Peter Ulrich, the Cultural Business Ethics of the Nuremberg School in German business ethics, and (...) the concept of “Good Conservation” by Frederick Bird. It is argued that discourse -ethical approaches can be called upon for justifying moral principles. Improving the chances of their application, however, necessitates a good understanding of lifeworlds and culturally developed institutional settings. Bearing this in mind, further research perspectives stressing a linkage between discourse -ethical and critical approaches in social sciences are suggested. (shrink)

While companies are increasingly convinced of the relevance of CSR, many are still struggling to define their responsibility. Part of the answer to this question can be found in the dual approach towards CSR. The authors unravel the concept of CSR into two components: responsibility and responsiveness. Regarding the firm's responsiveness towards society, companies can adopt two positions. They might adopt an inside‐out approach towards CSR and emphasise their own ambitions. Alternatively, they can approach stakeholders from an outside‐in perspective, wherein (...) stakeholder claims dominate. The authors argue that both perspectives are inadequate with regard to complex societal issues. Therefore, a third approach towards societal interaction is proposed. This is characterised by a process of collective sensemaking, aimed at understanding the issue and defining responsibilities. (shrink)

This paper draws on Weber’s theodicy problem to define organizational corruption as the emerging discrepancy between experience and normative expectation. Theodicy describes the attempts to explain this discrepancy. The paper presents four normative principles enlisted by observers to respond to perceived corruption: moral dilemma, detachment, systematic regulation, and normative controls. Consistent with social construction, these justifications work to either reaffirm or challenge prevailing social norms in the face of confusing events. An exemplar case involves perceived corruption in the business of (...) mountain climbing as represented through the 1996 Mt. Everest climbing disaster. The events illustrate how theodicy informs descriptive accounts of corruption and expose two limitations of normative models of ethics. (shrink)

While companies are increasingly convinced of the relevance of CSR, many are still struggling to define their responsibility. Part of the answer to this question can be found in the dual approach towards CSR. The authors unravel the concept of CSR into two components: responsibility and responsiveness. Regarding the firm's responsiveness towards society, companies can adopt two positions. They might adopt an inside‐out approach towards CSR and emphasise their own ambitions. Alternatively, they can approach stakeholders from an outside‐in perspective, wherein (...) stakeholder claims dominate. The authors argue that both perspectives are inadequate with regard to complex societal issues. Therefore, a third approach towards societal interaction is proposed. This is characterised by a process of collective sensemaking, aimed at understanding the issue and defining responsibilities. (shrink)

Multi-national corporations (MNCs) have been criticised for not behaving ethically in some situations, which could have a negative effect on their reputation. This study examines the ethics of a large MNC in its relationship with its suppliers. A brief literature review of corporate identity, business ethics and buyer–supplier relationships is undertaken. The views and perceptions of the buying staff and the suppliers to a large South African MNC are obtained and discussed. The results indicate that this MNC has a good (...) corporate reputation among both its suppliers (an important stakeholder) and its own buying department. The existence and implementation of formal codes of ethics was found to be a necessary, but not sufficient condition for good ethical practice. Candid relationships with suppliers emerged as a second and important factor. Ethical perceptions of buyers by suppliers are driven by the management of corporate identity, through the elements of ethical standards and candid relationships. We present a model of corporate identity/reputation in Buyer–Supplier Relationships. (shrink)