This chapter contains sections titled: Background: mapping the field of business ethics The evolution of social contract approaches to business ethics Integrative social contracts theory (ISCT) Remaining issues and promising research directions for contractarian business ethics.

Research on employees’ responses to corporate social responsibility has recently accelerated and begun appearing in top-tier academic journals. However, existing findings are still largely fragmented, and this stream of research lacks theoretical consolidation. This article integrates the diffuse and multi-disciplinary literature on CSR micro-level influences in a theoretically driven conceptual framework that contributes to explain and predict when, why, and how employees might react to CSR activity in a way that influences organizations’ economic and social performance. Drawing on social identity (...) theory and social exchange theory, we delineate the different but interdependent psychological mechanisms that explain how CSR can strengthen the employee–organization relationship and subsequently foster employee-related, micro-level outcomes. Contributions of our framework to extant literature and potential extensions for future research are then discussed. (shrink)

One of the new ways used by companies to demonstrate their social responsibility is to encourage employee volunteering, whereby employees engage in socially beneficial activities on company time, while being paid by the company. The reasoning is that it is good for employee motivation (internal effects) and good for the company reputation (external effects). This article reports an empirical investigation of the internal effects of employee volunteering conducted amongst employees of the Dutch ABN-AMRO bank. The study showed that (a) socio-demographic (...) characteristics from employee volunteers markedly differ from those of non-volunteers and community volunteers and (b) employee volunteering seems to have positive effects on attitudes and behavior towards the organization. (shrink)

Extant research provides compelling conceptual and empirical arguments that company-external as well as company-internal CSR efforts positively affect employees, but does so largely in studies assessing effects from the two CSR types independently of each other. In contrast, this paper investigates external–internal CSR jointly, examining the effects of consistent external–internal CSR strategies on employee attitudes, intentions, and behaviors. The research takes a social and moral identification theory view and advances the core hypothesis that inconsistent CSR strategies, defined as favoring external (...) over internal stakeholders, trigger employees’ perceptions of corporate hypocrisy which, in turn, lead to emotional exhaustion and turnover. In Study 1, a cross-industry employee survey indicates that inconsistent CSR strategies with larger external than internal efforts increase employees’ turnover intentions via perceived corporate hypocrisy and emotional exhaustion. In Study 2, a multi-source secondary dataset demonstrates that inconsistent CSR strategies increase firms’ actual employee turnover. Combined, the two studies demonstrate the importance of taking into account the interests of both external and internal stakeholders of the firm when researching and managing CSR. (shrink)

This study proposes two identification cuing factors to understand how corporate social responsibility relates to employees’ identification with their firm. The results reveal that a firm’s CSR initiatives increase employee–company identification. E–C identification, in turn, influences employees’ commitment to their company. However, CSR associations do not directly influence employees’ identification with a firm, but rather influence their identification through perceived external prestige. Compared to CSR associations, CSR participation has a direct influence on E–C identification. On the basis of these findings, (...) it is argued that CSR performance can be an effective way for companies to maintain a positive relationship with their employees. (shrink)

Social contract theory has been criticized as a “theory in search of application.” We argue that incorporating the nano, or individual, level of analysis into social contract inquiry will yield more descriptive theory. We draw upon the psychological contract perspective to address two critiques of social contract theory: its rigid macro-orientation and inattention to the process of contract formation. We demonstrate how a psychological contract approach offers practical insight into the impact of social contracting on day-to-day human interaction. We then (...) articulate several potentially testable propositions that emerge from this nano-level perspective. (shrink)

Differences in ethical ideology are thought to influence individuals'' reasoning about moral issues (Forsyth and Nye, 1990; Forsyth, 1992). To date, relatively little research has addressed this proposition in terms of business-related ethical issues. In the present study, four groups, representing four distinct ethical ideologies, were created based on the two dimensions of the Ethical Position Questionnaire (idealism and relativism), as posited by Forsyth (1980). The ethical judgments of individuals regarding several business-related issues varied, depending upon their ethical ideology.

Prior research on the impact of ethics education within the business curriculum has yielded mixed results. Although the impact is often found to be positive, it appears to be both small and short-lived. Interpretation of these results, however, is subject to important methodological limitations. The present research employed a longitudinal methodology to evaluate the impact of an M.B.A. program versus a law program on the values and ethical decision making behavior of a cohort of students at two major universities in (...) the northeast. The results suggest that the M.B.A. curriculum remains a value-neutral experience for most students. In contrast, the law school program had a significant impact on both values and ethical decision making. (shrink)

Behavioral ethics research has focused predominantly on how the attributes of individuals influence their ethicality. Relatively neglected has been how macro-level factors such as the behavior of firms influence members’ ethicality. Researchers have noted specifically that we know little about how a firm’s CSR influences members’ behaviors. We seek to better merge these literatures and gain a deeper understanding of the role macro-level influences have on manager’s ethicality. Based on agency theory and social identity theory, we hypothesize that a company’s (...) commitment to CSR shifts managers’ focus away from self-interests toward the interests of the firm, bolstering resistance to temptation. We propose this occurs through self-categorization and collective identification processes. We conduct a 2 × 2 factorial experiment in which managers make expense decisions for a company with commitment to CSR either present or absent, and temptation either present or absent. Results indicate that under temptation, managers make decisions consistent with self-interest. More importantly, we find when commitment to CSR is present, managers are more likely to make ethical decisions in the presence of temptation. Overall, this research highlights the interactive role of two key contextual factors—temptation and firm CSR commitment—in influencing managers’ ethical decisions. While limited research has highlighted the positive effects that a firm’s CSR has on its employees’ attitudes, the current results demonstrate CSR’s effects on ethical behavior and imply that through conducting and communicating its CSR efforts internally, firms can in part limit the deleterious effects of temptation on managers’ decisions. (shrink)

Scholars have advocated for the inclusion of metacognition in our understanding of the ethical decision making process and in support of moral learning. An instrument to measure metacognition as a domain-specific capacity related to ethical decision making is not found in the current literature. This research describes the development and validation of the 20-item Moral Metacognition Scale. Psychometric properties of the scale were assessed by exploration and confirmation of the factor structure, and the demonstration of convergent, discriminant, and predictive validity. (...) Moral metacognition, as measured by the MMS, was significantly correlated with ethical awareness and ethical judgment. Limitations of our research, suggestions for future exploration, and practical implications are discussed. (shrink)

This comparative field study evaluated the choices made by U.S., Portuguese, and Hong Kong Chinese evening MBA and graduating university business students when resolving business-related moral dilemmas. The authors developed hypotheses at the country level based on Hofstede’s ratings of each country’s national culture dimensions of power distance, uncertainty avoidance, individualism, and masculinity. The more individualistic U.S. respondents resolved the dilemmas with choices indicating less self-interest and more concern for unidentified others than did their Portuguese and Hong Kong Chinese counterparts, (...) who are from more collectivist societies. The authors discuss implications for future cross-cultural research on business dilemmas and for cooperative interactions among managers from these and other countries. (shrink)

One of the new ways used by companies to demonstrate their social responsibility is to encourage employee volunteering, whereby employees engage in socially beneficial activities on company time, while being paid by the company. The reasoning is that it is good for employee motivation (internal effects) and good for the company reputation (external effects). This article reports an empirical investigation of the internal effects of employee volunteering conducted amongst employees of the Dutch ABN-AMRO bank. The study showed that (a) socio-demographic (...) characteristics from employee volunteers markedly differ from those of non-volunteers and community volunteers and (b) employee volunteering seems to have positive effects on attitudes and behavior towards the organization. (shrink)

Company support for employee volunteerism (CSEV) benefits companies, employees, and society while helping companies meet the expectations of corporate social responsibility (CSR). A nationally representative telephone survey of 990 Canadian companies examined CSEV through the lens of Porter and Kramer's (2006, 'Strategy and society: the link between competitive advantage and corporate social responsibility', Harvard Business Review, 78-92.) CSR model. The results demonstrated that Canadian companies passively support employee volunteerism in a variety of ways, such as allowing employees to take time (...) off without pay (71%) or adjusting their work schedules (78%). These Responsive CSR efforts contribute to the company's value chain by enhancing employee morale, a perceived CSEV benefit. More active forms of support requiring company time or money are less common; for example, 29% allow time off with pay. Companies perceive that support for employee volunteering enhances their public image, a Responsive CSR strategy when employed to ameliorate a damaged reputation or a Strategic CSR strategy when contributing to a competitive position. A minority perceive challenges like covering the workload. Many companies target and/or exclude particular causes and link CSEV efforts with other philanthropic donations, suggesting a Strategic CSR application of CSEV. Where programs exist, they frequently are neither tracked nor evaluated, suggesting that companies are not using these programs as strategically as they might. (shrink)