When in Rome ... Moral Maturity and Ethics for International Economic Organizations

A number of multinational enterprises have come under ethical scrutiny over the recent decades. In some cases, this may be due to a lack of maturity of corporate moral reasoning. The article is based on a framework developed by Lawrence Kohlberg. He suggested three main stages of moral development: They are (1) pre-conventional moral reasoning, (2) conventional and (3) post-conventional moral reasoning. The article places different approaches to business ethics into the framework developed by Kohlberg. It is argued that the first two stages form an insufficient basis for ethical guidance for multinational organizations. Five post-conventional ethical perspectives are presented to assist MNC's in their analysis in order to uncover the possible dilemmas, to avoid harming others and also to avoid costly embarrassment at the hands of critics.     

Beyond Credibility of Doing Business in China: Strategies for Improving Corporate Citizenship of Foreign Multinational Enterprises in China

This study examines the perceptions of Chinese executives concerning corporate social responsibilities in their Chinese subsidiaries of foreign multinational corporations in China. These Chinese subsidiaries are found in the elementary stage of corporate citizen development even though their headquarters are in the advanced stage. The key challenges of moving Chinese subsidiaries to be better corporate citizens in China are specific Chinese business culture, intellectual property rights, internal due process, insufficient Chinese government support, and lack of knowledge of Chinese subsidiaries. Through this study, foreign multinational corporations need to invest in social capital that facilitates the transfer of knowledge of comprehensive corporate responsible practices from the headquarters to their Chinese subsidiaries, and to encourage their Chinese subsidiaries to be more actively engaged with external business partners that support corporate social responsibility.     

The Reasons Behind Non-Ethical Behaviour in Business and Entrepreneurship

Despite the recent increase in interest in corporate social responsibility and the propagation of corporate governance in both business and academic literature, from observations of actual practice, the author has seen at all company levels, in everyday operations, instances of non-ethical behaviour vis-à-vis the whole gamut of stakeholders. This state of affairs is linked with: pressure from stakeholders, short-term tactics, hegemony of financial considerations, ‘juridisation’ of business, the tyranny of communications and the media and the difficulties in translating strategy into practical implementation. The paper scrutinises the motivation and the psychology of entrepreneurs and business people, and their behaviour is compared to other professional groups and confronted with the decline in ethics in society as described by some important observers. The conclusion drawn is that the recent positive evolutions do not provide sufficient ethical guidelines for the day-to-day activities of middle managers and entrepreneurs in the present competitive environment. Managers will always be confronted by difficult choices with ethical dilemmas. There will always be a tension between theory and pragmatism, but progress can be made with the effective implementation of the ethical discourse in companies. To achieve this, ethical management should not be confined to the large strategic issues but also applied to the small practical matters of everyday business life. Ethics in business and entrepreneurship requires more than corporate governance and corporate social responsibility (CSR).     

Ethical Challenges in the Two Main Segments of the Insurance Industry: Key Considerations in the Evolving Financial Services Marketplace

Based on the findings of several research studies of professionals in both the property-liability insurance industry and the life insurance industry, the paper makes and supports several important points. First, ethical challenges in the insurance industry involve not only a series of ethical dilemmas frequently faced by those working in the business, but also a variety of factors that hinder those working in the industry as they seek to resolve the ethical dilemmas encountered in the course of their work. Both of these two components of ethical challenges must be understood by those in the financial services industry who will deal with insurance operations in the future. Second, whereas the life insurance business and the property-liability insurance business have traditionally been viewed as being quite different from one another and still are in terms of operations and regulation, the research findings show that they are no longer very different in terms of the key ethical challenges faced by those working in the two segments of the industry. The paper shows how during the past decade the ethical challenges in the property-liability insurance industry have become quite similar to those in the more troubled life insurance industry.     

Leadership and Business Ethics: Does It Matter? Implications for Management

This paper reviews the relationship between organisational leadership, corporate governance and business ethics, and considers the implications for management. Business ethics is defined, and the causes and consequences of unethical behavior are discussed. Issues pertaining to leadership, subordinate and organisation responsibility for business ethics are considered. The changing role of business leaders and the new concept of 'corporate governance' are examined, with an increasing importance being placed on ethical and socially responsible attitudes towards business. Organisational effectiveness and organisational efficiency, formerly central issues for practising managers, with directors thinking in terms of goal achievement for their respective organisations, have now been augmented by an awareness of issues in business ethics, and a requirement for members of the corporate governance to behave in more socially responsible ways. A secondary aim of the paper is to introduce an approach which illustrates how corporate governance and management could deal with some of the moral dilemmas that they may have to face.     

Engaging values in international business practice

Managerial decisions and behaviors in the international business arena have ethical implications across cultures and countries. The need for ethics and core values in business practice has been heightened by continued business scandals and ethical managerial lapses that have violated public trust. Global businesses can offer practical guidance and set ethical examples for others to follow by establishing corporate values beyond written business codes. Four key work values (Honesty, Fairness, Concern of Others, and Achievement) known to be present in businesses across cultures, are put forth as a baseline start for multinational corporation leaders. Offered is a process for making the core values unique to an organization, and for adopting and training managers in the use of core values. Presented is evidence of managerial implementation of the core work values, and managers’ alignment of work values with organizational strategies. By addressing the values and principles of their workplaces, international businesses can achieve cross-cultural ethical practices, managerial alignment, and global social responsibility.     

Institutional work to navigate ethical dilemmas: Evidence from a social enterprise

Social entrepreneurs encounter ethical dilemmas while addressing their social and commercial missions. The literature has implicitly acknowledged the ethical dilemmas social entrepreneurs face; however, the nature and implications of these ethical dilemmas and how social entrepreneurs navigate them are underexplored and undertheorized. We address this by conducting a 36-month field study of a social enterprise operating in a rural resource-constrained environment in India and dealing with a stigmatized product. We found four categories of ethical dilemmas faced by social entrepreneurs: challenges in engaging the community (equality vs. efficiency and fairness vs. care), challenges related to spillover effects (right vs. responsibilities), challenges in balancing diverse stakeholders (emotionally detached vs. emotionally engaged), and challenges related to cross-subsidization efforts (utilitarianism vs. fairness). Further, we identified three types of institutional work social entrepreneurs engage in to address ethical dilemmas: recognition work, responsibilization work, and reflective judgment work. We label these three institutional works as inclusion work - purposive actions of an entity to address ethical dilemmas by implementing its program in a way that supports the most marginalized. Our study makes an important contribution to the literature on ethics in the context of social entrepreneurship by identifying specific ethical dilemmas social entrepreneurs face in managing hybridity (balancing social-commercial objectives) and enhancing social impact (managing social-social objectives). Moreover, through the concept of inclusion work, our research not only integrates insights from ethics and institutional theories but also responds to the recent call to address grand societal challenges through institutional work.     

The promise and problems of price subsidization in social entrepreneurship

Social entrepreneurship research has often focused on the benefits and challenges of designing hybrid organizations that integrate competing institutional logics to tackle social problems using market-based methods, especially in developing economies. Drawing on case evidence from the Safe Water for Africa program, we show how and why pricing new products at other than market prices offers a seductive but dangerous mechanism for managers seeking to pursue dual objectives in hybrid organizations. We identify five strategic and operational challenges with ethical implications that manifest as pricing dilemmas and show how and why they are likely to elicit moral dilemmas among stakeholders of social entrepreneurship who are not equally committed to both social and economic objectives.     

Doing Business with Rights Violating Regimes Corporate Social Responsibility and Myanmar’s Military Junta

Whether to do business with rights violating regimes is one of many dilemmas faced by socially responsible corporations. In this article the difficult case of Myanmar is considered. Ruled for decades by a closed and sometimes brutal military elite, the country has long been subject to informal and formal sanctions. However, as sanctions have failed to trigger political reform, it is necessary to review the policy options. The focus here is on the contribution socially responsible corporations might make to change. The article sketches contextual features of the case, examines the recent history and present pattern of business links with Myanmar, and assesses whether current approaches can stimulate reform. Concluding that they cannot, it considers fresh possibilities for corporate engagement. The argument is that socially responsible corporations, committed to improving individual life chances through engagement with developing societies, should undertake collaborative and principled direct investment in Myanmar. The underlying strategy and problems of codification and implementation are all analyzed. To close, the article contends that, by doing business with Myanmar’s rights violating regime, multinational corporations can extend the frontiers of global corporate social responsibility. Ian Holliday is Professor of Policy Studies and Dean of the Faculty of Humanities and Social Sciences, City University of Hong Kong     

Tales from the Front-Line: Examining the Potential of Critical Incident Vignettes

In common with many areas of the business andmanagement curriculum, the case study methodplays a significant role in business ethicseducation. However, case study material incommon use is dominated by well-publicisedincidents of corporate misconduct oftenproviding a limited insight intodecision-making affecting front-line stafffacing personal dilemmas in their workinglives. This paper gives examples of, andexamines how, critical incident vignettes(CIVs), derived from the personal reflectionsof students, can provide an alternative totraditional ``disaster style' corporate cases.CIVs illustrate the real-life ethical dilemmasthat confront front-line employees, oftenoperating in an environment with low-levels ofpersonal autonomy. They also highlight thefactors that contribute to decision-making insuch an environment, the transitory andtransactional nature of many employmentrelationships and the evasion of moralresponsibility to which this can give rise.     

Twenty Years of European Business Ethics – Past Developments and Future Concerns

Over the past 20 years business ethics in Europe witnessed a remarkable growth. Today business ethics is faced with two challenges. The first comes from the social sciences and consultants who have both reclaimed the topics of business ethics, regretfully often at the loss of the proper ethical perspective. The second comes from the remarkable rise of corporate social responsibility which has pushed aside the mainstream business ethics methodology with its emphasis on moral deliberation by the individual. These challenges can be tackled by an institutional transformation in business ethics that links up to the long-standing European tradition of institutional analysis of the market. The second remedy is an enlargement of the research agenda in business ethics by coming closer to other parts of applied ethics where the business ethics view is at this moment grossly neglected.     

Focusing on individuals' ethical judgement in corporate social responsibility curricula

Adequate discussion of individuals' moral deliberation is notably absent from much of the literature on corporate social responsibility (CSR). We argue for a refocusing on the role of the individual in that context. In particular we regard this as important in CSR course design, for practical, pedagogical and moral reasons. After addressing some of the theoretical background to our argument, and noting some respects in which individual action features in the context of CSR, we consider the usefulness (or otherwise) of academic ethical theory in relation to CSR issues and dilemmas in practice. It is suggested that, without dispensing entirely with ethical theory, emphasis should be placed on informed debate and moral judgement among members of organisations (or seminar groups) and some short case examples are provided. Finally we suggest that such approaches may be appropriate if trends towards ‘mainstreaming’ concern for CSR throughout business school curricula are realised.     

Challenges in Teaching Business Ethics: Using Role Set Analysis of Early Career Dilemmas

Emphasis in business ethics texts and courses has generally focused on corporate and other relatively high-level ethical issues. However, business school graduates in early career stages report ethical dilemmas involving individual-level decisions, often including influence attempts from one or more members of their work role sets. This paper proposes the use of role set analysis as a pedagogical technique for helping individuals to anticipate and deal with early-career ethical issues.     

Ethical perceptions of business students in a New Zealand university: do gender,age and work experience matter?

Ethical issues at the workplace have once again become topical and important due to considerable adverse publicity surrounding reports of unethical business practices by corporate managers. Accordingly, this paper re‐visits the question of whether gender, age and work experience do have an effect on ethical judgement, using 655 business students as respondents. This is necessary as business students are likely to become managers during their career and will face complex ethical concerns and dilemmas in their daily, routine affairs. The findings currently demonstrate that females are more ethically aware than their male counterparts – that is, there are differences between males and females regarding ethical judgement. There is also evidence to suggest that age is a factor that does impact on ethical judgement. However, we also found evidence to suggest that in some cases, the age factor does not necessarily have a significant impact on ethical awareness. The results further indicate that there is a difference in ethical judgement related to work experience. However, at the same time, in one question there is no evidence to suggest the claim that work experience does impact significantly on ethical judgement. Overall, it appears that ethical awareness does increase alongside work experience.     

Explicating Ethical Corporate Marketing. Insights from the BP Deepwater Horizon Catastrophe: The Ethical Brand that Exploded and then Imploded

Ethical corporate marketing—as an organisational-wide philosophy—transcends the domains of corporate social responsibility, business ethics, stakeholder theory and corporate marketing. This being said, ethical corporate marketing represents a logical development vis-a-vis the nascent domain of corporate marketing has an explicit ethical/CSR dimension and extends stakeholder theory by taking account of an institution’s past, present and (prospective) future stakeholders. In our article, we discuss, scrutinise and elaborate the notion of ethical corporate marketing. We argue that an ethical corporate marketing positioning is a prerequisite for corporations which claim to have an authentic ethical corporate identity. Our article expands and integrates extant scholarship vis-a-vis ethical corporate identities, the sustainable entrepreneur and corporate marketing. In delineating the breadth, significance, and challenges of ethical corporate marketing we make reference to the BP Deepwater Horizon (Gulf of Mexico) catastrophe of 2010.     

Teaching Managers to Respond Ethically to Organizational Crises: an inquiry into the case method

Many managers now routinely receive training in business ethics using the case method. However the efficacy of this training has not been studied. Organizational crises, in the form of cases which present managers with ethical dilemmas, are commonly used to illustrate principles in business ethics courses. As illustrated in the classroom, these organizational ethical crises often result in severe financial consequences for the organization involved such as litigation or bankruptcy. The present study assessed the potential of the case method for teaching managers to respond ethically to organizational crisis. The author also assessed the role of organizational and ideographic factors in determining which managers would choose to act. Managers who had received classroom training in ethical case analysis were compared to those who had not. The majority in both groups of managers chose to take action when confronted with ethical dilemmas. However, managers who had received ethical training were more likely to act in some ethical situations than managers who had not. The ethical culture of an organization and the gender of the managers was also found to influence managerial action in response to ethical dilemmas.     

The Relevance of Stakeholder Theory and Social Capital Theory in the Context of CSR in SMEs: An Australian Perspective

The concept of business responsibility, usually termed as corporate social responsibility (CSR), originated in the early 1930s after the Wall Street crash of 1929 exposed corporate irresponsibility in large organisations. The understanding of CSR has evolved since then and its scope has now broadened from mere compliance to corporate laws to active alignment of internal business goals with externally set societal aspirations. Unfortunately, the significance of this multidimensional concept within the small and medium enterprise (SME) sector has continued to be overshadowed by its application in large and multinational organisations. More importantly, this has led to the practice of judging SMEs, which are experiencing increasing pressure to engage in social activities, as if they are no different from their larger counterparts. This study therefore investigates CSR from the perspective of SMEs in Australia without any theoretical presumptions and then comments on the relevance and applicability of the two theories that have been commonly used to investigate business responsibility, namely, stakeholder theory (ST) and social capital theory (SCT). The research findings indicate that CSR within the SME sector is more aligned to the fundamentals of SCT, mainly owing to the unique resource and survival challenges that they face, and which are, arguably, not so pronounced in large organisations.     

Conflicting obligations,moral dilemmas and the development of judgement through business ethics education

Learning to address moral dilemmas is important for participants on courses in business ethics and corporate social responsibility (CSR). While modern, rule‐based ethical theory often provides the normative input here, this has faced criticism in its application. In response, post‐modern and Aristotelian perspectives have found favour. This paper follows a similar line, presenting an approach based initially on a critical interpretation of Ross's theory of prima facie duties, which emphasises moral judgement in actual situations. However, the retention of a modern element is suggested, with an invitation to hypothetically universalise detailed proposals for action, following Hare. This further step may reassure students/managers who seek additional closure in their decision‐making. Some pedagogical implications are also briefly raised regarding the use of case material and the need to recognise questions of social interaction and personal character as features of dilemma resolution in actual organisational contexts.     

Parrèsiastic Stakeholders: A Different Approach to Ethical Institutions

Are we really in need of (new) ethical institutions that regulate and control the ethical quality of corporate behavior? The various scandals (Enron, WorldOnline, Ahold) prove that ethical institutions, as well as deontological codes, public social commitments, social annual reports directly linked to financial overviews, are not enough to prevent fraud, corruption or bribery. Does the existence of those institutions partly provoke and legitimize the unbridled and immense power of organizational and CEO-(non-ethical) behavior and window-dressing? Do we need more separate ethical institutions? Is it possible to outsource the competence of an ethical corporate and personal moral responsibility to another, separate institution? Do people and corporations still feel the confrontation with moral dilemmas with the institutionalizing of a part of that responsibility to an anonymous body? And won't this ethical control lead to a further alienation of the micro level personal responsibility to the macro performance of the market and organizations? This article focuses on the counterpart of the institution: tomorrow's stakeholder. The stakeholder of tomorrow (the manager, the CEO, the consumer, the employee, the civil servant...) embodies the complexity of the multi-paradigmatic business ethics debate. Two aspects of tomorrow's stakeholders' presence will be discussed: their moral attitude and emancipative communication.     

Developing Reflective Students: Evaluating the Benefits of Learning Logs within a business Ethics Programme

The paper presents a rationale for the inclusion of a learning log within a business ethics programme drawing on the results of a pilot with a group of undergraduate students. Learning logs were found to serve as a valuable means of helping students connect theory with familiar working practice and also enabled them to reflect on their own personal development and understanding of ethics over time. Comparison between the first and final log entries indicate that students were able to critically re-evaluate many of their initial assumptions about business ethics. While the first log entries were characterised by scepticism and relativist attitudes to business ethics, the final entry indicated that many students now rejected the notion that ethics are only relevant to private life. Moreover, there was evidence of increased understanding of the scope of ethical issues and the complexity of decision-making. Critical workplace incidents, reported in the third log entry, illustrated a wide range of ethical dilemmas facing young and inexperienced service workers. Integrating the use of such critical incidents, written from the perspective of a front-line worker, within a business ethics programme may also serve as a valuable counter-weight to the traditional emphasis on large corporate case studies which cast students in the role of a middle or senior manager.