Does the Ethical Culture of Organisations Promote Managers’ Occupational Well-Being? Investigating Indirect Links via Ethical Strain

The present study had two major aims: first, to examine the construct validity of the Finnish 58-item Corporate Ethical Virtues scale (CEV; Kaptein in J Org Behav 29:923–947, 2008) and second, to examine whether the associations between managers’ perceptions of ethical organisational culture and their occupational well-being (emotional exhaustion and work engagement) are indirectly linked by ethical strain, i.e. the tension which arises from the difference in the ethical values of the individual and the organisation he or she works for. The sample consisted of 902 managers from different organisations, in middle and upper management levels, aged 25–68 years. The results of the confirmatory factor analysis (CFA) provided support to the hypothesised eight-factor structure of the CEV scale; i.e. the scale contained the factors of clarity, congruency of supervisors, congruency of senior management, feasibility, supportability, transparency, discussability and sanctionability. In addition, it emerged from the CFAs that the high intercorrelations of these factors can be explained by the second-order factor of ethical culture. The managers’ perceptions of the ethical culture prevailing in their organisations were associated with their occupational well-being both directly (high-work engagement) and indirectly via a low level of ethical strain (low-emotional exhaustion). Thus, the findings indicated that the ethical culture of organisations plays a major role in managers’ occupational well-being.     

Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy

Do firms gain environmental legitimacy when they conform to external expectations regarding the natural environment? Drawing on institutional logic and signaling theory, we investigate sources of heterogeneity in the impacts of environmental actions on environmental legitimacy. Longitudinal data (1997–2001) about 325 publicly traded U.S. firms in polluting industries support the notion that environmental actions help firms gain environmental legitimacy. However, some actions instead can harm this legitimacy if environmental performance deteriorates and the firm is subject to intense scrutiny from nongovernmental organizations. Thus, an important contribution of this research is to identify conditions under which greenwashing can backfire.     

Examining the Cognitive and Affective Trust-Based Mechanisms Underlying the Relationship Between Ethical Leadership and Organisational Citizenship: A Case of the Head Leading the Heart?

In this paper, we investigate the trust-based mechanisms underlying the relationship between ethical leadership and followers’ organisational citizenship behaviours (OCBs). Based on three-wave survey data obtained from 184 employees and their supervisors, we find that ethical leadership leads to higher levels of both affective and cognitive trust. In addition, we find support for a three-path mediational model, where cognitive trust and affective trust, in turn, mediate the relationship between ethical leadership and follower OCBs. That is to say, we found that ethical leadership leads to the development of cognitive trust, which subsequently influences the development of affective trust. Affective trust, in turn, induces followers to exhibit OCBs as a means of reciprocating the leader’s favourable behaviour. Our findings suggest that both affective and cognitive trust plays an important role in the social exchange processes that underlie the relationship between ethical leadership and the discretionary behaviour of followers.     

Pay Inversion at Universities: Is it Ethical?

This paper examines an important issue facing academia-pay inversion. It discusses how inversion is accompanied by ethical issues including secrecy, moral dilemmas for faculty, honesty, and keeping promises. It then examines this issue from five ethical viewpoints: a legalistic perspective, ethical egoism, utilitarianism, distributive justice, and Kants deontological approach. As part of the discussion, the effect of the moral philosophy on the universitys corporate culture is examined, with attention given to morale and productivity. Finally, alternatives to pay inversion that universities may want to consider are discussed.     

Beyond “Does it Pay to be Green?” A Meta-Analysis of Moderators of the CEP–CFP Relationship

Review of extant research on the corporate environmental performance (CEP) and corporate financial performance (CFP) link generally demonstrates a positive relationship. However, some arguments and empirical results have demonstrated otherwise. As a result, researchers have called for a contingency approach to this research stream, which moves beyond the basic question “does it pay to be green?” and instead asks “when does it pay to be green?” In answering this call, we provide a meta-analytic review of CEP–CFP literature in which we identify potential moderators to the CEP–CFP relationship including environmental performance type (e.g., reactive vs. proactive performance), firm characteristics (e.g., large vs. small firms), and methodological issues (e.g., self-report measures). By analyzing these contingencies, this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the CEP–CFP research. Some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms, US firms seem to benefit more than international counterparts, and environmental performance seems to have the strongest influence on market-measures of financial performance.     

Does Nutrition Information Contribute to Grocery Shoppers’ Willingness to Pay?

An experimental auction and the eye-tracking technology are used to detect the relationship between consumers’ understanding of the nutrition information and their willingness to pay for food items. Additional attention is given to health-conscious individuals. Salad mix and apple juice are selected for the experiment. A Tobit model is used for the analysis. The results show that nutrition information has some effect on consumers’ purchasing decision. Shoppers are willing to pay less for fat and mineral information, but more for ingredient, protein, sodium, and carbohydrate information of salad mix. As for apple juice, shoppers care only for energy and other nutrient information, as well as the health claim “vitamin C naturally high.” Further, health-conscious individuals are more responsive to the nutrition claims, such as “high in fiber” (salad mix) and “vitamin C naturally high” (orange juice). A possible limitation of the conclusion exists due to the small sample size.     

Does the Type of Family Control Affect the Relationship Between Ownership Structure and Firm Value?

Our objective is to disentangle which family business characteristics enable family ownership to be an effective corporate governance mechanism. To this aim, we investigate whether the relationship between ownership concentration and firm value is moderated by the type of family influence. This study shows that family control positively affects performance, primarily when family members serve on the board and when the founder is still influential. Our findings hold when we control for the general blockholder effect and they are robust to a battery of tests. We conclude that the impact of ownership concentration on firm value differs across family firms.     

To Pay or Not to Pay? Dynamic Transparency and the Fight Against the Mafia’s Extortionists

This article presents the results of the longitudinal study of Addiopizzo, a successful anti-bribery organization founded in Sicily in 2004. It analyzes how this organization has used information disclosure as a strategy to fight adverse environmental conditions and the immoral activities of the Sicilian Mafia. This article extends the business ethics and corporate social responsibility literature by showing how multi-level strategic information disclosure processes can help gain organizational legitimacy in adverse social environments and successfully fight against social resistance to change, low levels of moral imagination and attacks from criminal organizations. This article provides an additional contribution to the literature by linking the three research streams on corporate transparency, the fight against corruption, and organizational legitimacy. The results of this research also contribute to the special issue of the EBEN AC 2010, “Which values for which organizations”, since it provides a unique example of an organization capable of spreading the values of social justice and honesty in a difficult social environment plagued by Mafia.     

Does a Consumer’s Religion Really Matter in the Buyer–Seller Dyad? An Empirical Study Examining the Relationship Between Consumer Religious Commitment,Christian Conservatism and the Ethical Judgment of a Seller’s Controversial Business Decision

Religion is an important cultural and individual difference variable. Yet, despite its obvious importance in consumers’ lives, religion in the United States has been under-researched. This study addresses that gap in the literature and investigates the influence of consumer religion in the buyer–seller dyad. Specifically, this study examines the influence of consumer religious commitment and a Christian consumer’s conservative beliefs in the United States on store loyalty when retailers make business decisions which are potentially reli- gious objectionable. This study uses structural equation modeling and applies Anderson and Gerbing’s (Psychol Bull 103(3):411–423, 1988) two-step approach to exam- ine data obtained from a national sample of 531 consumers. The results from this study suggest that consumers evaluate seller’s actions and form ethical judgments. These judgments are a major explanatory variable in consumer store loyalty intentions.     

The Impact of Perceived Ethical Culture of the Firm and Demographic Variables on Auditors’ Ethical Evaluation and Intention to Act Decisions

Studies into corporate social responsibility (CSR) in small and medium-sized enterprises (SMEs) have suggested that small businesses are different to the large companies on which CSR research usually focusses. Extending this argument, this article raises the question what differences in approaches to CSR there are within the SME category. Analysing the CSR strategy and performance of a medium-sized fashion retailer in the United Kingdom through manager interviews as well as customer and employee surveys, the article develops an analytical framework of CSR in small, medium and large firms. The argument is developed that medium-sized firms occupy a transition stage, where some CSR features that are reminiscent of small enterprises are still important but get overlaid with aspects that are more typical of large companies.     

Does Ethical Leadership Lead to Happy Workers? A Study on the Impact of Ethical Leadership,Subjective Well-Being,and Life Happiness in the Chinese Culture

Business ethics has been emphasized throughout the past decade and organizations are aware of the influence it has on the organization’s performance. As a result, ethical leadership is important as it influences the employees profoundly. This study aims to address this issue and explore the influence ethical leadership has on employees by examining job satisfaction, subjective well-being at work, and life satisfaction. Two groups of independent data were collected and a multi-group analysis was conducted before pooling together for a two-step structural equation modeling test. The results revealed that ethical leadership has a negative direct effect on employee well-being which offers significant findings for the meaning of ethical leadership in the Chinese culture. Useful managerial implications are provided for managers and supervisors at the end of this study.     

Does Firm Size Comfound the Relationship Between Corporate Social Performance and Firm Financial Performance?

There has been some theoretical and empirical debate that the positive relationship between corporate social performance (CSP) and firm financial performance (FFP) is spurious and in fact caused by a third factor, namely large firm size. This study examines this question by integrating three meta-analyses of more than two decades of research on (1) CSP and FFP, (2) firm size and CSP, and (3) firm size and FFP into one path-analytic model. The present study does not confirm size as a third factor which would confound the relationship between CSP and FFP. That is, even if firm size is controlled for across studies (comprising, on average, over 15 000 observations), CSP and FFP remain positively correlated, showing a "true-score" corrected path coefficient p of 0.37.     

The Trade-Off Between Supervision Cost and Performance Based Pay: Does Gender Matter?

The study adds to the literature by providing new empirical evidence consistent with efficiency wage theory,and by providing estimates of the average cost of supervising a worker by industry. This research uses the 1996 wave of the NLSY and incorporates estimates of supervision cost computed from industry classifications. We further detect presence of no gender differences neither in risk-averseness nor in productivity gains associated with cost of supervision and performance-based pay. While the findings imply that employers should consider the incentive effects of supervision and performance based pay when constructing pay schemes, there is no need for employers to devote resources to constructing gender-specific payment mechanisms. Our evidence suggests that profit-maximizing firms should treat males and females equally and develop gender-neutral pay schemes.     

Does It Pay to Promote on eBay?

Promotional upgrades to auction listings are now a ubiquitous feature of auction Web sites. We examine 705 auctions of a single consumer-electronic product on eBay and test whether use of various promotions results in a greater probability of sale or a higher realized price. We find that promotions that focus on display enhancements, such as border, bold, or highlight, are not worth the cost. However, the subtitle promotional tool is effective and worth the cost. We also find interesting results regarding seller reputation: although seller reputation does not increase the probability of a sale overall, it can result in higher realized price if a reputable seller is selected. Implications for promoting on eBay are discussed.     

Does Trust Matter? The Relationship Between Equity Sensitivity and Perceived Organizational Justice

The present research study was designed to extend our knowledge about issues of relevance for business ethics by examining the role of equity sensitivity and perceived organizational trust on employees perceptions of procedural and interactional justice. A model was developed and tested, and results revealed that organizational trust and respect mediated the relationship between an employees equity sensitivity and perceptions of procedural, interactional, and social accounts fairness. A discussion of issues related to perceptions of trust and fairness is presented, as well as recommendations for leaders and future scholarship.Jill Kickul, Ph.D., is the Elizabeth J. McCandless Professor in Entrepreneurship at the Simmons School of Management. She teaches courses on Entrepreneurship the New Venture Management, Contemporary Entrepreneurial Opportunities, and Strategic Analysis for Competing Globally. She has taught entrepreneurship internationally for the Helsinki School of Economics and for the International Bank of Asia (Hong Kong MBA Program). Her research interests include entrepreneurial intentions and behavior, strategic and innovation processes in start-up ventures, and women in entrepreneurship. Her articles have appeared in publications such as Journal of Management, Frontiers of Entrepreneurship Research, Journal of Small Business Management, and International Journal of Entrepreneurship and Innovation.Lisa Gundry, Ph.D., is Professor of Management in the Charles H. L. Kellstadt Graduate School of Business at DePaul University where she teaches courses in Creativity in Business and Entrepreneurship Strategy. She has authored three books on entrepreneurship and innovation, and written numerous journal articles for publications including Journal of Business Venturing, Journal of Small Business Management, Journal of Management, Human Relations, Organizational Dynamics, Journal of Developmental Entrepreneurship and Family Business Review. Her research interests focus on entrepreneurship strategy and growth, and creative and innovative processes in organizations. She is Director of the Leo V. Ryan Center for Creativity and Innovation at DePaul University.Margaret Posig, Ph.D., is an Associate Professor in the Charles H. Kellstadt Graduate School of Business at DePaul University, where she teaches courses in Leadership and Change Management. Her research interests are in the areas of organizational leadership and change management, workplace stress, and women in leadership. Her publications appear in the Journal of Occupational Health Psychology, Women in Management Review, Journal of Managerial Issues, and Journal of Business and Entrepreneurship, among others. Dr. Posig is an Industrial/Organizational psychologist, with a Ph.D. from DePaul University, and directs the Leadership and Change Management concentration. Her consulting focuses on management development and workplace stress management.     

The Relationship Between Competition and Incumbent’s Innovation

A static model is developed to analyse the incumbent’s innovation strategy under monopoly and duopoly. A number of potential objectives for the incumbent are modelled here, including the maximization of revenue, profit, and welfare (which are common among the network industries). Its marginal cost depends upon investment in new technologies and processes. The incumbent chooses its price and its level of investment in innovation. The incumbent’s elasticity of demand under both market structures and the incumbent’s market share under duopoly determine which market structure creates more incentives to innovate. For certain values of these variables, duopoly provides more incentives to innovate than monopoly. As expected, the incentives to innovate increase when the incumbent places greater weight on social welfare.     

Does Sustainability Pay? Evidence from the Food Sector

This research investigates sustainability concepts, linking them with social, environmental, and operational activities in the food supply chain. Building on the literature treating social sustainability as an antecedent of environmental sustainability, we present the effects of environmental sustainability on operational performance using constructs that reflect flexibility, quality, and responsiveness. For this purpose, manufacturing companies in the Turkish food industry are surveyed and 101 responses are collected. A partial least squares structural equation model (PLS-SEM) is constructed to test the reliability and the validity of the measurement model and the structural model. The results show that social sustainability is positively associated with environmental sustainability. Moreover, environmental sustainability has a positive influence on operational performance measures: flexibility, quality, and responsiveness with effect sizes that range from medium to large. Organizations in the food supply chain should consider not only the economic, but also the social and the environmental aspects of sustainability. To do this, governments could inform manufacturers in the food sector about the importance of sustainability and encourage them with different incentives towards more sustainable operational practices. This work establishes that investing in social and environmental sustainability returns increased operational performance. The limitation of the research is the size of the sample. In the future, the questionnaire can be used to compare results from other countries and other sectors.