It may be nearly impossible to use standard principles to make a decision about a complex ethical case. The best decision, say virtue ethicists in the Aristotelian tradition, is often one that is made by a person of good character who knows the salient facts of the case and can frame the situation appropriately. In this respect ethical decisions and strategic decisions are similar. Rationality plays a role in good ethical decision-making, but virtue ethicists emphasize the importance of intuitions and (...) emotions as well.Virtue ethics suggests a reconciliation of the factual and the normative. Virtues may explain as well as justify actions. The same is true of other psychological states and events. That psychological terms have normative implications does not render them useless in explanation. As Aristotle does not distinguish cleanly between the normative and empirical, so many moral philosophers today reject the is-ought dichotomy. They are prepared to learn from economists, psychologists, and other empirical scientists who offer information about the nature of the good life and of values. Social psychologists who study community or corporate culture suggest a close relationship between organizational and ethical features, much as Aristotle saw a close relationship between politics and ethics. We should infer from all this that in business ethics there is good reason for philosophers and organization scholars to work closely together. (shrink)

This article summarizes the multitude of empirical studies that test ethical decision making in business and suggests additional research necessary to further theory in this area. The studies are categorized and related to current theoretical ethical decision making models. The studies are related to awareness, individual and organizational factors, intent, and the role of moral intensity in ethical decision making. Summary tables provide a quick reference for the sample, findings, and publication outlet. This review provides insights for understanding organizational ethical (...) decision constructs, where ethical decision making theory currently stands, and provides insights for future empirical work on organizational ethical decision making. (shrink)

The role and ethics of professionals in business and economics have been questioned, especially after the financial crisis of 2008. Some suggest a reorientation using concepts such as craftsmanship. In this article, I will explore professional practices within the context of behavioural theory and business ethics. I suggest that scholars of behavioural theory need a strategy to deal with normative questions to meet their ambition of practical relevance. Evidence-based management (EBMgt), a recent behavioural approach, may assist business ethics scholars in (...) understanding how professionals infer ‘evidence’ to make decisions. For a professional, ethical issues are an integral part of decision-making at critical moments. As reflective practitioners, they develop insights related to ethical concerns when collecting and assessing evidence within decision-making processes. (shrink)

ABSTRACT:The ethical sensemaking approach stands as an essential alternative to the dominant rational and objectivist paradigm of ethical decision-making in organizations. From this perspective, this research explores the intrapersonal interplay of emotions and reflexivity in ethical sensemaking. We analyzed thirty-seven semi-structured interviews conducted with executive coaches sharing a critical incident about an issue they framed as ethical. Our findings show that their ethical decisions unfolded over a three-phase emotional reflexive sensemaking process, where reflexivity allowed for the management of emotions in (...) the form of emotional awareness, emotional unpacking, and emotional engagement. Therefore, we portray ethics as afabric, produced through the knitting of emotions and reflexivity. And, while ethics certainly appear to be produced by the subject, we suggest a reciprocal relationship, whereby the very fabric of ethics contributes to the production of the ethical subject. (shrink)

While business ethics has generated a great deal of research internationally over the last few decades, academic reviews of the business ethics literature remain limited. Moreover, there has been little attempt to date to analyze this literature specifically in the Greater China region, which has been experiencing rapid socioeconomic growth and dynamic evolution of business ethics in recent decades. This paper addresses this research gap by undertaking a comprehensive and critical appraisal of the business ethics literature on Greater China. In (...) particular, it maps out the existing research findings, identifies limitations in methodology, and suggests future directions for business ethics research in this region. The findings indicate that the scholarly interests cover 24 research themes, including corporate social responsibility and social performance; ethical beliefs, judgment, values, decision-making, and culture; workplace ethics and behavior; marketing ethics and consumer behavior; and sustainability. This review reveals a growing imbalance between empirical and conceptual/theoretical studies on business ethics. In addition, the published works covered in this review heavily rely on survey method and convenience sampling, with a predominant focus on a single individual level of analysis. Importantly, this study identifies four directions for future research: contextualized theoretical development, addressing multilevel research, developing research design tailored to the Chinese context, and ensuring more diversified and rigorous data collection. (shrink)

Cross-sector social partnerships (CSSPs) can produce benefits at individual, organizational, sectoral and societal levels. In this article, we argue that the distribution of benefits depends in part on the cognitive frames held by partnership participants. Based on Selsky and Parker's (J Manage 31(6):849-873, 2005) review of CSSPs, we identify three analytic "platforms" for social partnerships — the resource-dependence platform, the social-issue platform, and the societal-sector platform. We situate platforms as prospective sensemaking devices that help project managers make sense of partnerships (...) by calling attention to certain desired features or downplaying other features. We describe the three platforms and contrast them on factors that influence social benefit, including orientation, learning, and power. We provide illustrations of each platform and demonstrate how the choice of platform is consequential for practice, such as how a partnership project gets started, evolves and produces social benefits. (shrink)

This review summarizes the research on ethical decision-making from 2004 to 2011. Eighty-four articles were published during this period, resulting in 357 findings. Individual findings are categorized by their application to individual variables, organizational variables, or the concept of moral intensity as developed by Jones :366–395, 1991). Rest’s four-step model for ethical decision-making is used to summarize findings by dependent variable—awareness, intent, judgment, and behavior. A discussion of findings in each category is provided in order to uncover trends in the (...) ethical decision-making literature. A summary of areas of suggested future research is provided. (shrink)

I propose a theory aimed at advancing scholarly research in social entrepreneurship. By highlighting the key trade-off between value creation and value capture and explaining when situations of simultaneous market and government failure may arise, I suggest that social entrepreneurship is the pursuit of sustainable solutions to neglected problems with positive externalities. I further discuss the situations in which problems with externalities are likely to be neglected and derive the central goal and logic of action of social entrepreneurs, in contrast (...) to commercial entrepreneurs. Overall, this article provides a conceptual framework that allows understanding the growing phenomena of social entrepreneurship and its role in the functioning of modern society. (shrink)

Research on moral judgment has been dominated by rationalist models, in which moral judgment is thought to be caused by moral reasoning. The author gives 4 reasons for considering the hypothesis that moral reasoning does not cause moral judgment; rather, moral reasoning is usually a post hoc construction, generated after a judgment has been reached. The social intuitionist model is presented as an alternative to rationalist models. The model is a social model in that it deemphasizes the private reasoning done (...) by individuals and emphasizes instead the importance of social and cultural influences. The model is an intuitionist model in that it states that moral judgment is generally the result of quick, automatic evaluations (intuitions). The model is more consistent than rationalist models with recent findings in social, cultural, evolutionary, and biological psychology, as well as in anthropology and primatology. (shrink)

How do business leaders make ethical decisions? Given the significant and wide-spread impact of business people’s decisions on multiple constituents, how they make decisions matters. Unethical decisions harm the decision makers themselves as well as others, whereas ethical decisions have the opposite effect. Based on data from a study on strategic decision making by 16 effective chief executive officers, I propose a model for ethical decision making in business in which reasoning and intuition interact through forming, recalling, and applying moral (...) principles necessary for long-term success in business. Following the CEOs in the study, I employ a relatively new theory, rational egoism, as the substantive content of the model and argue it to be consistent with the requirements of long-term business success. Besides explaining the processes of forming and applying principles, I briefly describe rational egoism and illustrate the model with a contemporary moral dilemma of downsizing. I conclude with implications for further research and ethical decision making in business. (shrink)

This paper reviews the development of socially responsible investment (SRI) over recent years and highlights the prospects for an increasingly strong connection with the practice of corporate social responsibility. The paper argues that not only has SRI grown significantly, it has also matured. In particular, it has become an investment philosophy adopted by a growing proportion of large investment institutions. This shift in SRI from margin to mainstream and the position in which institutional investors find themselves is leading to a (...) new form of SRI shareholder pressure. Although this bears some resemblance to lobbying campaigns which might take advantage of shareholder rights, we seek to distinguish it as an important phenomenon in its own right — one to which corporate executives are likely to be paying increasing attention in the years to come. We further argue that this approach potentially meets some of the earlier ethical criticisms of certain forms of SRI but, ironically, probably owes its existence to those pioneering approaches. We conclude with some suggestions for further research to inform discussion of the issues highlighted in the paper. (shrink)

The role and ethics of professionals in business and economics have been questioned, especially after the financial crisis of 2008. Some suggest a reorientation using concepts such as craftsmanship. In this article, I will explore professional practices within the context of behavioural theory and business ethics. I suggest that scholars of behavioural theory need a strategy to deal with normative questions to meet their ambition of practical relevance. Evidence-based management, a recent behavioural approach, may assist business ethics scholars in understanding (...) how professionals infer ‘evidence’ to make decisions. For a professional, ethical issues are an integral part of decision-making at critical moments. As reflective practitioners, they develop insights related to ethical concerns when collecting and assessing evidence within decision-making processes. (shrink)

The relationship between mental models and ethical decision making, along with the mechanisms through which mental models affect EDM, are not well understood. Using the sensemaking approach to EDM, we empirically tested the relationship of mental models to EDM. Participants were asked to depict their mental models in response to an ethics case to reveal their understanding of the ethical dilemma, and then provide a response, along with a rationale, to a different ethical problem. Findings indicated that complexity of respondents’ (...) mental models was related to EDM, and that this relationship was mediated by sensemaking processes. The implications of these findings for improving integrity training in organizations, as well as ultimately understanding the role of mental models in EDM, are discussed. (shrink)

Drawing on existing theory in the fields of business ethics, entrepreneurship, and psychology, this research provides an initial empirical exploration of whether entrepreneurs use cognitive reasoning processes which reflect a higher level of moral development than the level of moral development that has been empirically observed either in middle-level managers or in the general adult population. The Defining Issues Test was used to measure the level of moral reasoning skill of the entrepreneurs in this study. Although the study was limited (...) by a small sample size and the inherent difficulty of making accurate comparisons across other empirical studies, the results of this study suggest that entrepreneurs may exhibit moral reasoning skills at a slightly higher level than middle-level managers or the general adult population. (shrink)

This article furthers the argument for a stakeholder theory that integrates into managerial decision-making the relationship between business organizations and the natural environment. The authors review the literature on stakeholder theory and the debate over whom or what should count as a stakeholder. The authors also critique and expand the stakeholder identification and salience model developed by Mitchell and Wood (1997) by reconceptualizing the stakeholder attributes of power, legitimacy, and urgency, as well as by developing a fourth stakeholder attribute: proximity. (...) In this way, the authors provide a stronger basis for arguing for the salience of the natural environment as the primary and primordial stakeholder of the firm. (shrink)

This book takes a multi-disciplinary critique of economics' first principles: the fundamental and inter-related structuring assumptions that underlie the neo-classical paradigm. These assumptions, that economic agents are rational, self-interested individuals, continue to influence the teaching of economics, research agendas and policy analyses. The book argues that both the theoretical understanding of the economy and the actual working of real-world market economies diminish the scope for thinking about the relation between ethics, economics, and the economy. It highlights how market economies may (...) "crowd out" ethical behavior and our evaluation of them elides ethical reflection. The book calls for a more pluralistic and richer approach to economic theory, one that allows ample room for ethical considerations. It provides insight into understanding human motivations and human flourishing and how a good economy requires reflection on the ethical relations between the self, world, and time. (shrink)

The relationship between entrepreneurship and ethics has largely been characterized as antithetical. In this article we develop a conceptual model integrating pragmatism, a philosophical approach that emphasizes experimentation and action characteristic of entrepreneurial leadership, with ethics to suggest that the two are not incompatible and that sustaining entrepreneurial leadership for value creation necessitates ethical action to build legitimacy. Case studies from the United States and India highlight the necessity of infusing pragmatism with ethics for sustainable entrepreneurial leadership.

Taking the lead from Susan Wolf's and Linda Emanuel's work on systems thinking, and developing ideas from Moberg's, Seabright's and my work on mental models and moral imagination, in this paper I shall argue that what is often missing in management decision-making is a systems approach. Systems thinking requires conceiving of management dilemmas as arising from within a system with interdependent elements, subsystems, and networks of relationships and patterns of interaction. Taking a systems approach and coupling it with moral imagination, (...) now engaged on the organizational and systemic as well as individual levels of decision-making, I shall conclude, is a methodology that encourages managers and companies to think more imaginatively and to engage in integrating moral decision-making into ordinary business decisions. More importantly this sort of thinking is a means to circumvent what often appear to be intractable problems created by systemic constraints for which no individual appears to be responsible. (shrink)

The current study uses a sensemaking model and thinking strategies identified in earlier research to examine ethical decision making. Using a sample of 163 undergraduates, a low-fidelity simulation approach is used to study the effects personal involvement (in causing the problem and personal involvement in experiencing the outcomes of the problem) could have on the use of cognitive reasoning strategies that have been shown to promote ethical decision making. A mediated model is presented which suggests that environmental factors influence reasoning (...) strategies, reasoning strategies influence sensemaking, and sensemaking in turn influences ethical decision making. Findings were mixed but generally supported the hypothesized model. It is interesting to note that framing the outcomes of ethically charged situations in terms of more global organizational outcomes rather than personal outcomes was found to promote the use of pro-ethical cognitive reasoning strategies. (shrink)

Recently, there has been much talk of impact investing. Around the world, specialized intermediaries have appeared, mainstream financial players and governments have become involved, renowned universities have included impact investing courses in their curriculum, and a myriad of practitioner contributions have been published. Despite all this activity, conceptual clarity remains an issue: The absence of a uniform definition, the interchangeable use of alternative terms and unclear boundaries to related concepts such as socially responsible investment are being criticized. This article aims (...) to contribute to a better understanding of impact investing, which could help foster this specific investment style and guide further academic research. To do so, it investigates a large number of academic and practitioner works, highlighting areas of similarity and inconsistency on three levels: definitional, terminological, and strategic. Our research shows that, on a general level, heterogeneity—especially definitional and strategic—is less pronounced than expected. Yet, our research also reveals critical issues that need to be clarified to advance the field and increase its credibility. First and foremost, this includes the characteristics required of impact investees, notably whether they need to be organizations that prioritize their non-financial mission over the business side. Our results indicate that there may be different schools of thoughts concerning this matter. (shrink)

Ethical or socially responsible investment is one of the most rapidly growing areas of finance. New government regulations mean that all pension funds are obliged to take such considerations into account. However, this phenomenon has received little critical attention from business ethicists, and a clear conceptual framework is lacking. This paper, by a practitioner in the field, attempts to fill this analytical gap. It considers what difference, if any, lies between the terms ‘ethical’, ‘green’, or ‘socially responsible’. It also tackles (...) the difficult question of how any public form of investment can be called ‘ethical’ in an overtly pluralistic society. The paper provides an account of the historical development of ethical investment, and traces the evolution of the varying terms used to describe it. This is followed by a conceptual analysis of these terms, and a description of ethical decision‐making in this context. The paper ends by considering the role of shareholder action within ethical investment, and assesses the utility of the stakeholder model as a theoretical justification. (shrink)

In spite of the wide variety of approaches to ethics training it is still debatable which approach has the highest potential to enhance professionals’ integrity. The current effort assesses a novel curriculum that focuses on metacognitive reasoning strategies researchers use when making sense of day-to-day professional practices that have ethical implications. The evaluated trainings effectiveness was assessed by examining five key sensemaking processes, such as framing, emotion regulation, forecasting, self-reflection, and information integration that experts and novices apply in ethical decision-making. (...) Mental models of trained and untrained graduate students, as well as faculty, working in the field of physical sciences were compared using a think-aloud protocol 6 months following the ethics training. Evaluation and comparison of the mental models of participants provided further validation evidence for sensemaking training. Specifically, it was found that trained students applied metacognitive reasoning strategies learned during training in their ethical decision-making that resulted in complex mental models focused on the objective assessment of the situation. Mental models of faculty and untrained students were externally-driven with a heavy focus on autobiographical processes. The study shows that sensemaking training has a potential to induce shifts in researchers’ mental models by making them more cognitively complex via the use of metacognitive reasoning strategies. Furthermore, field experts may benefit from sensemaking training to improve their ethical decision-making framework in highly complex, novel, and ambiguous situations. (shrink)

Ethical decision making measures are widely applied as the principal dependent variable used in studies of research integrity. However, evidence bearing on the internal and external validity of these measures is not available. In this study, ethical decision making measures were administered to 102 graduate students in the biological, health, and social sciences, along with measures examining exposure to ethical breaches and the severity of punishments recommended. The ethical decision making measure was found to be related to exposure to ethical (...) events and the severity of punishments awarded. The implications of these findings for the application of ethical decision making measures are discussed. (shrink)

Organizational leaders face environmental challenges and pressures that put them under ethical risk. Navigating this ethical risk is demanding given the dynamics of contemporary organizations. Traditional models of ethical decision-making (EDM) are an inadequate framework for understanding how leaders respond to ethical dilemmas under conditions of uncertainty and equivocality. Sensemaking models more accurately illustrate leader EDM and account for individual, social, and environmental constraints. Using the sensemaking approach as a foundation, previous EDM models are revised and extended to comprise a (...) conceptual model of leader EDM. Moreover, the underlying factors in the model are highlighted—constraints and strategies. Four trainable, compensatory strategies (emotion regulation, self-reflection, forecasting, and information integration) are proposed and described that aid leaders in navigating ethical dilemmas in organizations. Empirical examinations demonstrate that tactical application of the strategies may aid leaders in making sense of complex and ambiguous ethical dilemmas and promote ethical behavior. Compensatory tactics such as these should be central to organizational ethics initiatives at the leader level. (shrink)

Ethical principles and ethical decision making -- Ethics, society, and individuals -- Individuals, expectations, and groups -- Institutions, norms and ethics -- A hypothetical case : endeavour organisation -- Conflicts of obligations -- Obligations, exploitation, and identity -- Decisions, groups, and reasons.

This paper explores the relationship of various trait emotions to the ethical choices of 189 college students who completed a managerial decision-making task as part of an in-basket exercise in a laboratory setting. Prior research regarding emotion influences on ethical decision-making and linkages between emotions and cognition informed hypotheses about how different types of emotions impact ethical choices. Findings supported our expectations that positive and negative emotions classified as active would be more strongly related to interpersonally-directed ethical choices than to (...) organizationally-directed ones, and that passive emotions would be less related to ethical choices than active emotions. Implications for ethical decision-making research and organizational practices are discussed. (shrink)

This volume breaks new ground by approaching Socially Responsible Investment as an explicitly ethical practice in financial markets. The work explains the origins and conceptual structure of SRI and links its pursuit to both its deeper philosophical foundations and the broader, multi-dimensional global movement towards greater social responsibility in global markets.