Islam and CSR: A Study of the Compatibility Between the Tenets of Islam and the UN Global Compact

This paper looks at whether the tenets of Islam are consistent with the ‘Ten Principles’ of responsible business outlined in the UN Global Compact. The paper concludes that with the possible exception of Islam’s focus on personal responsibility and the non-recognition of the corporation as a legal person, which could undermine the concept of corporate responsibility, there is no divergence between the tenets of the religion and the principles of the UN Global Compact. Indeed, Islam often goes further and has the advantage of clearer codification of ethical standards as well as a set of explicit enforcement mechanisms. Focusing on this convergence of values could be useful in the development of a new understanding of CSR in a global context and help avert the threatened “clash of civilisations”.     

Examining the Effects of Moral Development Level,Self-Concept,and Self-Monitoring on Consumers’ Ethical Attitudes

This study investigates the possible effects of self-concept, self-monitoring, and moral development level on dimensions of consumers’ ethical attitudes. “Actively benefiting from illegal activities,” “actively benefiting from deceptive practices,” and “no harm/no foul 1–2” are defined by factor analysis as four dimensions of Turkish consumers’ ethical attitudes. Logistic regression analysis is applied to data collected from 516 Turkish households. Results indicate that self-monitoring and moral development level predicted consumer ethics in relation to “actively benefiting from questionable practices” and “no harm/no foul” dimensions. Actual self-concept is also a predictor variable in relation to “no harm/no foul” dimension. Age and gender make significant differences in consumers’ ethical attribute dimensions.     

Understanding the Complex Relationship Between Creativity and Ethical Ideologies

The relationship between individuals’ creativity and their ethical ideologies appears to be complex. Applying Forsyth’s (1980, 1992) personal moral philosophy model which consists of two independent ethical ideology dimensions, idealism and relativism, we hypothesized and found support for a positive relationship between creativity and relativism. It appears that creative people are less likely than non-creative people to follow universal rules in their moral decision making. However, contrary to our hypothesis and the general stereotype that creative people are less caring about others, we found a positive relationship between creativity and idealism. These findings indicate that highly creative people are likely to be what Forsyth called “situationists,” individuals with both an ethic of caring and a pragmatic moral decision-making style. The finding that creative individuals tend to be situationists, and particularly that they tend to be high in idealism, appears to refute the line of reasoning that argues for a “creative personality” characterized in part by social insensitivity. Understanding the relationship between creativity and ethical ideologies has important implications for researchers, managers and teachers.     

The Global Compact Selected Experiences and Reflections

In this paper, the Executive Head of the Global Compact shares some of his own reflections on the evolution of the Global Compact initiative – United Nations Secretary-General Kofi Annan’s voluntary corporate citizenship initiative in the area of human rights, labor, the environment and anti-corruption. Two main themes are addressed. The first considers the Global Compact’s institutional context, examining how such an initiative is even possible in the historically hierarchical and traditionally business-unfriendly UN. The second concerns the voluntary nature of the initiative and how it interacts with regulatory approaches. It explains what the Global Compact has to offer as a voluntary initiative, as well as how it can make a unique and complementary contribution to regulation-backed initiatives. The paper concludes with a brief consideration of what the future holds for the Global Compact. Georg Kell Georg Kell began his career at the United Nations in 1987–1990: UN Conference on Trade and Development (UNCTAD), Geneva. 1990: he joined the New York office of UNCTAD; 1993–1997: head of the office. 1997: senior officer at the executive office of the Secretary-General responsible for fostering the cooperation with the private sector. Since 2000, executive head, Global Compact, United Nations, New York.     

MNC Strategic Responses to Ethical Pressure: An Institutional Logic Perspective

In this study, we aim to investigate how multinational corporations (MNCs) balance ethical pressures from both the home and host countries. Drawing on theories from institutional theory, international business, and business ethics, we build a theoretical framework to explain the ethical behavior of MNCs. We apply the institutional logic concept to examine how MNCs with established logics and principles that have grown in the home country respond to local ethical expectations in the host country. We differentiate the core values from the peripheral components of a MNC’s institutional logic and propose that a MNC will pursue distinctive ethical strategies under different scenarios and choose the “right” configuration of core values and peripheral components that align with institutional environment in host countries.     

Nurturing the Whole Person: The Ethics of Workplace Spirituality in a Society of Organizations

In a world which can be increasingly described as a “society of organizations,” it is incumbent upon organizational researchers to account for the role of organizations in determining the well-being of societies and the individuals that comprise them. Workplace spirituality is a young area of inquiry with potentially strong relevance to the well-being of individuals, organizations, and societies. Previous literature has not examined ethical dilemmas related to workplace spirituality that organizations might expect based upon the co-existence of multiple ethical work climates, nor has previous literature accounted for the relevance of the cosmopolitan (external, societal) source of moral reasoning in the ethical treatment of workplace spirituality. The purpose of this paper is to address these gaps by articulating two such ethical dilemmas related to workplace spirituality: the “quiet desperation” dilemma and the instrumentality dilemma. Moreover, I propose two theoretical contexts that foster “both-and” rather than “either-or” thinking, thereby mitigating (moderating) the relationships between climate combinations and conflictual aspects of the ethical dilemmas. For the “quiet desperation” dilemma, I propose a person–organization fit perspective to emphasize diversity of individual preferences instead of a managerially prescribed uniformity of spirituality. For the instrumentality dilemma, I propose a multiparadigm approach to workplace spirituality research to avoid the privileging of one research interest over another (e.g., instrumentality, individual fulfillment, societal good). I conclude with suggestions for future research.     

Ethics in Information Technology and Software Use

The emerging concern about software piracy and illegal or unauthorized use of information technology and software has been evident in the media and open literature for the last few years. In the course of conducting their academic assignments, the authors began to compare observations from classroom experiences related to ethics in the use of software and information technology and systems. Qualitatively and anecdotally, it appeared that many if not most, students had misconceptions about what represented ethical and unethical behaviors in these realms. Clearly, one can argue that if college students are uncertain about what constitutes appropriate and inappropriate behavior then this uncertainty will be carried forward into their workplaces upon graduation. Furthermore, if their workplaces don't provide ethics training as a component of a new employee orientation program, one can project a potential for unintentional violations and infringements of copyrights and law in the field. This study was conducted among graduate and undergraduate students to gain insight into their attitudes, perceptions and understanding of some of the relevant ethics issues. A questionnaire of 11 statements was employed that described ubiquitous but most likely unethical (or surely dubious) behaviors in the prevailing business and academic environments. Each respondent was asked to evaluate each statement twice (once for “self” and once for “colleague”) on a five-option highly ethical (5) to neutral (3) to highly unethical (1) scale. The statements were worded such that lower instrument score was associated with higher ethical responses. The questionnaire's two-part structure was designed to solicit honest answers. The encouraging learning from this study was that the overall sample and its various sub-samples did not consider any of the eleven behaviors to be “ethical” or “highly ethical.” It was also encouraging to note that the overall sample and all sub-samples considered “highly unethical” those behaviors associated with personal privacy or property or outright theft. This indicated that moral judgment and probity prevail. The discouraging learning was that behaviors associated with the use of enterprise property were viewed as “neutral” i.e., neither “ethical” nor “unethical.” These findings suggested confusion and lack of clarity and definition around workplace deportment as it regards ethics in software and information technology use. The current study suggests that additional research needs to be conducted to define and clarify the issues, which in turn can form the basis for programs to rectify or at least ameliorate the situation.     

Ethical Attitudes of Accounting Practitioners: Are Rank and Ethical Attitudes Related?

We address a previous finding in the business ethics literature in which accounting professionals in higher rank levels, i.e., “manager” or “partner” of auditing firms, appear to have lower moral reasoning ability than their junior counterparts. Prior investigations have relied upon a similar methodology for estimating ethical beliefs, namely testing “moral reasoning ability” using either the Moral Judgment Interview or Defining Issues Test. In the present study, we use a multiple vignettes approach to test for the existence of the inverse rank-ethical beliefs effect. With only 2 of the 30 vignettes resulting in both managers and partners being more accepting of the ethically charged behaviors, the results presented here using this alternative methodology are generally not supportive of the inverse rank-ethical beliefs phenomenon. We also use a multivariate analysis in order to control for demographic characteristics. Our results suggest that the most robust predictor of ethical attitudes among accounting practitioners is age, not rank within a firm.     

Seven Pillars of Business Ethics: Toward a Comprehensive Framework

This article first addresses the question of “why” we teach business ethics. Our answer to “why” provides both a response to those who oppose business ethics courses and a direction for course content. We believe a solid, comprehensive course in business ethics should address not only moral philosophy, ethical dilemmas, and corporate social responsibility – the traditional pillars of the disciple – but also additional areas necessary to make sense of the goings-on in the business world and in the news. These “new pillars,” that we advocate include moral psychology, organizational design and behavior, motivational theory, and a unit on how society, business, and law interact. This last unit builds upon the work of Francis P. McHugh (1988) who urged an integration of “disciplines related to business ethics.” Our seventh pillar would encompass an integration of law, socio-political theory, and policy to demonstrate how business helps construct its own regulatory framework. The concluding recommendation is for a comprehensive “Seven Pillars” of business ethics approach. William Arthur Wines holds a B.S.B.A. with distinction from Northwestern University and a J.D. from the University of Michigan. He is admitted to the practice of law in Minnesota and the State of Washington. His research has appeared in over three dozen journals including the American Business Law Journal, Arizona Law Review, Economics of Education Review, Delaware Journal of Corporate Law, Denver Journal of International Law and Policy, Journal of Business Ethics, Labor Law Journal, Marquette Law Review, Nebraska Law Review, and The William and Mary Journal of Women and the Law. He is the author of two volumes of readings in business ethics and “Ethics, Law, and Business”, published by Lawrence Erlbaum Associates, Inc. in 2006. This material is subject to various copyright laws. Please do not transmit electronically, quote, or copy without the prior written permission of the author.     

Why Wine is not Glue? The Unresolved Problem of Negative Screening in Socially Responsible Investing

The purpose of socially responsible investing (SRI) is to: (1) allow investors to reflect their personal values and ethics in their choices, and (2) encourage companies to improve their ethical, social, and environmental performance. In order to achieve these ends, the means SRI fund managers employ include the use of negative screening, or the exclusion of companies involved in “sinful” industries. We argue that there are problems with this methodology, both at a theoretical and at a practical level. As a consequence, current SRI offerings cannot accurately reflect the values and ethical beliefs they propose to represent. Moreover, the use of a␣priori criteria is potentially misleading, as we show by discussing examples of glue and wine making. Applying this flawed approach SRI funds fail to influence the direction of the firms they deem most in need of re-directing. Rather than engaging in the simple a␣priori assumption that some industries are “saints” while others are “sinners” (Freeman, 2007) we suggest a new framework upon which the SRI screening methodology could be grounded. Embracing the philosophical tradition of American pragmatism, we suggest that SRI methodology could be improved by engaging in an analysis based on (1) the actual impacts of the company’s products and services, (2) the company’s relationships with its specific, real stakeholders, and (3) the contingent environment (social, economic, political, legal, and cultural) in which the business operates.     

Consumer Trust,Social Marketing and Ethics of Welfare Exchange

The global corporate scandals such as Enron, Worldcom and Global Crossing have raised fundamental issues of business ethics as well as economic, social and anthropological questions concerning the nature of business competition and global capitalism. The purpose of this conceptual paper is to introduce the concept of “welfare exchange” to the existing notions of economic, social and anthropological notions of business and exchange in markets and society in the 21st century. Global competition and business success in the 21st century continue to raise the nature of economic value and the interaction among diverse actors in international markets, institutions and society. We believe that the nature of such exchange between consumers and organizations, which can also be termed social marketing, need to increasingly take into account a welfare and ethical component. In this paper, we introduce our concept of welfare exchange to emphasize the importance of such welfare and ethical issues in the global business environment of the 21st century.     

An economic analysis of the East Asia crisis

Since the summer of 1997, the East Asian “tiger” nations have suffered an unprecedented bout of weakness, plunging what had been vigorously expanding economies into a deep crisis. A number of domestic economic problems joined forces with turbulence on the foreign exchanges to generate a crisis of confidence on a grand scale. The crisis was triggered off by fundamental imbalances, with a key role being played by the “moral hazard” effect: domestic enterprises had been backed by implicit state guarantees, and it was always assumed that the IMF would assist if necessary. Then a destabilizing wave of speculation ran through the financial markets, pushing even countries with sound economic structures into difficulties. This article highlights the sequence of developments in the East Asian crisis, providing an economic explanation of the phenomenon.     

Giving Voice in a Culture of Silence. From a Culture of Compliance to a Culture of Integrity

This article argues that attempting to overcome moral silence in organizations will require management to move beyond a compliance-oriented organizational culture toward a culture based on integrity. Such cultural change is part of good corporate governance that aims to steer an organization to enhance creativity and moral excellence, and thus organizational value. Governance mechanisms can be either formal or informal. Formal codes and other internal formal regulations that emphasize compliance are necessary, although informal mechanisms that are based on relationship-building are more likely to achieve moral excellence. Such a shift can be viewed as a transformative strategy for overcoming the destructive side effects and business risks of the tendency within corporate cultures to remain mute when faced with issues that violate personal or corporate values. Genuine dialogues and appropriate ethical decision-making training can deepen the understanding and create a mindful awareness (of ethical values) and induce trust that embrace both complying with rules and regulations, as well as inciting creative “ethical innovation” with respect to human interaction in multinational companies.     

Moral Agency,Profits and the Firm: Economic Revisions to the Friedman Theorem

The paper reconstructs in economic terms Friedman’s theorem that the only social responsibility of firms is to increase their profits while staying within legal and ethical rules. A model of three levels of moral conduct is attributed to the firm: (1) self-interested engagement in the market process itself, which reflects according to classical and neoclassical economics an ethical ideal; (2) the obeying of the “rules of the game,” largely legal ones; and (3) the creation of ethical capital, which allows moral conduct to enter the market process beyond the rules of the game. Points (1) and (2) position the Friedman theorem in economic terms while point (3) develops an economic revision of the theorem, which was not seen by Friedman. Implications are spelled out for an instrumental stakeholder theory of the firm. Dr. Sigmund Wagner-Tsukamoto is researcher in business ethics at the School of Management of the University of Leicester, UK. He holds two doctorates, one in social studies from the University of Oxford, UK, and one in economic studies from the Catholic University of Eichstaett, Germany. He has widely published on green consumerism and institutional economic issues that concern organization theory and business ethics theory. His publications include the books Understanding Green Consumer Behaviour (Routledge, 1997 & 2003) and Human Nature and Organization Theory (Edward Elgar, 2003).     

Clearing Up the Egoist Difficulty with Loyalty

This paper seeks to analyze and to motivate a trend toward virtue ethics and away from deontology in the business ethics account of organizational loyalty. Prevailing authors appeal to “transcendent” values (deontology), skepticism (there is no loyalty), or Aristotelianism (loyalty is seeking mutual self-interest). I argue that the “Aristotelian” view clears up the “egoist” difficulty with loyalty. Briefly, critics feel we must “transcend,” “replace,” “overcome” and most especially sacrifice self-interest on the altar of ethics and loyalty. I argue that few things can be more ethical than loyalty to shared values. When a company and I both pursue the same value X, there becomes no difference between my seeking my best interest and my seeking the best interest of the company (and vice versa). Hence, the way out of the egoist difficulty with loyalty is seeing a company’s interests as my own (Aristotle’s third stage of friendship).     

Ethical Issues Related to the Mass Marketing of Securities

This paper examines ethical issues involved in the mass marketing of securities to individuals. The marketing of products deemed “socially questionable” or “sinful” (like tobacco and alcohol) has long been recognized as posing special ethical challenges (Kotler, P. and S. Levy: 1971, Harvard Business Review 49, 74–80; Davidson, D. K: 1996, Selling Sin: The Marketing of Socially Unacceptable Products (Quorum Press, Westport). We contend that marketers should consider securities (i.e. common stock, options) in a similar vein, as a potentially dangerous product. Given the inherent volatility of equity prices, responsible marketers need to exercise caution and restraint in promoting securities. We evaluate whether the NYSE’s current guidelines adequately encourage ethical marketing practices and deter unethical ones. Using recent examples of controversial brokerage advertisements, we expose weaknesses in the Exchange’s vague injunction that members not “mislead” reasonable people by making “exaggerated claims” in their communications. From a moral perspective, we find it troublesome that intentionality need not be present for a promotion to be considered misleading. Also problematic is the continued invocation of the reasonable person standard to judge the propriety of advertisements. We close with some thoughts on improving the quality of securities marketing. We suggest that the NYSE, in the interests of fostering higher ethical behavior among member marketers, may need to revive a marketing code of conduct prevalent on Wall Street in an earlier era.     

When Deontology and Utilitarianism Aren’t Enough: How Heidegger’s Notion of “Dwelling” Might Help Organisational Leaders Resolve Ethical Issues

This paper offers an alternative to deontological and utilitarian approaches to making ethical decisions and taking good actions by organisational leaders. It argues that the relational and context-dependent nature of leadership necessitates reference to an ethical approach which explicitly takes these aspects into account. Such an approach is offered in the re-conceptualisation of ethical action on the part of leaders as a process of “coming into right relation” vis-à-vis those affected by their decisions and actions. Heidegger’s notion of “dwelling” is explored as a means of “coming into right relation”. Three aspects of dwelling: “staying with”, “comportment” and “active engagement” are described and ways in which they might be practically enacted by leaders are suggested. The paper concludes by reflecting on the ways adopting a “dwelling” approach to resolving ethical issues implies a re-conceptualisation of leadership itself.     

An Exploration into the Developmental Psychology of Ethical Theory with Implications for Business Practice and Pedagogy

This article is an attempt to understand ethical theory not just as a set of well-developed philosophical perspectives but as a range of moral capacities that human beings more or less grow into over the course of their lives. To this end, we explore the connection between formal ethical theories and stage developmental psychologies, showing how individuals mature morally, regarding their duties, responsibilities, ideals, goals, values, and interests. The primary method is to extract from the writings of Kohlberg and his students the cues that help to flesh out a developmental picture of a wide range of ethical perspectives. Thus, developmental psychology benefits from gaining a broader understanding of “morality” and “ethics,” and ethical theory benefits from a richer understanding of how moral maturity arises from youthful beginnings in juvenile and adolescent thinking. Results of this study offer insight into the difficulty of teaching ethics and a refined ability to assess moral maturity in business activity. F. Neil Brady is the Jack R. Wheatley Professor of Management Ethics in the Romney Institute of Public Management and a member of the Ethics Group at the Marriott School of Management at Brigham Young University. He has published over thirty articles on ethics in a variety of journals including the Academy of Management Review, Administration & Society, and the Journal of Public Administration Research and Theory. He has authored Ethical Managing (Macmillan 1990) and edited Ethical Universals in International Business (Springer Verlag 1996). For twenty years, his research has focused on the application of ethical theory to managerial decisions. David W. Hart is assistant professor of public management in the Romney Institute of Public Management and a member of the Ethics Group at the Marriott School of Management at Brigham Young University. He received his PhD from the State University of New York at Albany. His current research focuses on administrative ethics, business-government interaction, and the external environment of organizations. He has published in a variety of journals and is the co-author of a book. Wall Street Polices Itself: How Securities Firms Manage the Legal Hazards of Competitive Pressures (Oxford University Press, 1998).     

Stakeholder Perspectives on CSR of Mining MNCs in Argentina

This article examines the conceptualisation of corporate social responsibility (CSR) in the context of mining multinationals (MNCs) in Argentina. It explores the suitability of CSR for addressing social, environmental and economic issues associated with mining in the country. The study is based on interviews with four stakeholder groups in the country: government, civil society, international financial organisations, and mining industry. These are analysed using content and interpretative techniques and supplemented by the content analysis of secondary data from headquarters of mining MNCs. Using the concept of corporate social responsibility orientation (CSRO), the study contrasts the perceptions of major stakeholders and examines adaptation of mining companies’ CSRO to local context. It reveals that the CSRO of mining managers in Argentina differs from CSRO developed by global headquarters; and in Argentina companies “negotiate” economic, environmental and legal dimensions of CSR with the government. Although companies “negotiate” philanthropic responsibilities with the communities, ethical responsibilities are defined by the headquarters and not negotiated locally. The analysis suggests that environmental duties are the critical element of CSR in the mining sector in Argentina. This study treats environment as a separate dimension of corporate responsibility defined as to do “what is safe for the environment”.     

Ethical leadership in Chinese organizations: Developing a scale

In light of a series of ethical scandals in China in recent years, this research aims to develop a reliable and valid scale to measure ethical leadership, namely the “ethical leadership measure (ELM).” Our results show that ELM is strongly and positively correlated with scales for authentic leadership, ethical leadership, idealized influence, and a recently-developed leadership virtues questionnaire (LVQ); and negatively correlated with laissez-faire leadership and passive management by exception. ELM is also found to be positively related to followers’ job satisfaction, affective commitment, trust in leader, organizational citizenship behavior, and moral identity, and negatively related to followers’ intention to quit.