Ethical Entrepreneurship and Fair Trade

Due to several recent scandals, Business Ethics is now firmly embraced. Whereas in the 1980s and early 1990s there were serious doubts expressed about combining ethics and business, the link now seems to have become self-evident. Fundamental questions about the tensions between business and ethics however continue to receive little attention. In this paper, based upon a debate concerning the Fair Trade company, the strains between business and ethics are analyzed. The article shows how several great thinkers have already considered this tension. Three ways to conceptualize the tension between business and ethics have been distinguished, and these are outlined in the paper. In one approach, ethical entrepreneurship, value tensions are perceived as a source for entrepreneurship. However, this approach presupposes pluralistic ethics. Thinking only in terms of black and white is seen as blocking the ability to adequately handle the tension between business and ethics. Opting for ‘‘ethical entrepreneurship’’, as by Fair Trade, has fundamental and important consequences for the company’s communication policy.     

An Economic Approach to Business Ethics: Moral Agency of the Firm and the Enabling and Constraining Effects of Economic Institutions and Interactions in a Market Economy

The paper maps out an alternative to a behavioural (economic) approach to business ethics. Special attention is paid to the fundamental philosophical principle that any moral ‘ought’ implies a practical ‘can’, which the paper interprets with regard to the economic viability of moral agency of the firm under the conditions of the market economy, in particular competition. The paper details an economic understanding of business ethics with regard to classical and neo-classical views, on the one hand, and institutional, libertarian thought, on the other hand. Implications are derived regarding unintentional and passive intentional moral agency of the firm. The paper moves on to suggest that moral agency can be economically viable in competitive ‘market’ interactions, which is conventionally disputed by classical/neo-classical and institutional, libertarian economics. The paper here conceptualises active moral agency of the firm as the utilisation of ethical capital in firm--stakeholder interactions. This yields a reinterpretation of instrumental stakeholder theory.     

Towards Authenticity: A Sartrean Perspective on Business Ethics

Taking a Sartrean existentialist viewpoint towards business ethics, in particular, concerning the question of the nature of businesspersons’ moral character, provides for a dramatically distinct set of reflections from those afforded by the received view on character, namely that of Aristotelian-based virtue ethics. Insofar as Sartre’s philosophy places human freedom at center stage, I argue that the authenticity with which a businessperson approaches moral situations depends on the degree of consciousness he or she has of the various choices at stake. Finally, I consider some practical changes in business ethics education, managerial decision-making, and business organizations that Sartrean reflections might prompt.     

An Empirical and Theoretical Exploration of Disconnections Between Leadership and Ethics

A comparison of two groups of college students, at a public state university and a private religious school, yields the same results: undergraduates’ interpretations of recent business scandals make distinctions between public and private behavior. Students admire “family men” even when they are caught at fraud. The students’ interpretations illustrate a significant gap in ethical theories: the benefits of a group perspective for corporate citizenship versus individual family values. Most leadership theories, including stakeholder theories, do not address this disjunction. This article describes the phenomenon and maps the ethics literature to locate the dynamic forces underlying the empirical and theoretical disconnections between leadership and ethics.     

Balancing Ethical Responsibility among Multiple Organizational Stakeholders: The Islamic Perspective

In spite of a renewed interest in the relationship between spirituality and managerial thinking, the literature covering the link between Islam and management has been sparse – especially in the area of ethics. One potential reason may be the cultural diversity of nearly 1.3 billion Muslims globally. Yet, one common element binding Muslim individuals and countries is normative Islam. Using all four sources of this religion’s teachings, we outline the parameters of an Islamic model of normative business ethics. We explain how this ethics model seeks to balance the needs of multiple stakeholders, and discuss its enforcement mechanisms. This Islamic approach to business ethics is centered around criteria that are in common with stakeholder theory such as justice and balance, and includes unique additional criteria such as trust and benevolence.     

Political actions in business networks a Swedish case

In international business studies, as well as in political science, the influence of political rules on business firms is assumed to be homogeneous and unidirectional. However, if the relationship between the political and the business actors is seen as an interaction, a different conclusion will be reached. We would like to add more knowledge to international business studies by analysing the interaction between governmental bodies and business units using a network model. In this paper, we study a ‘political case’ — the Bofors-India case — and analyse how this affair influenced other Swedish companies and their way of doing business in India. The question addressed is how the interaction between some parts of the government and a company — the development of one business relationship — is interwoven with other relationships. One conclusion reached is that a political act toward one MNC will affect other companies, although not in the same way. The degree to which and the way in which the other companies will be influenced depends on where they are positioned within the networks in relation to the problematic relationship.     

The Relevance of Ancient Greeks to Modern Business? A Dialogue on Business and Ethics

What follows is a dialogue, in the Platonic sense, concerning the justifications for "business ethics" as a vehicle for asking questions about the values of modern business organisations. The protagonists are the authors, Gordon Pearson – a pragmatist and sceptic where business ethics is concerned – and Martin Parker – a sociologist and idealist who wishes to be able to ask ethical questions of business. By the end of the dialogue we come to no agreement on the necessity or justification for business ethics, but on the way discuss the uses of philosophy, the meanings of integrity and trust, McDonald's, a hypothetical torture manufacturer and various other matters.     

Internationalizing the business ethics curriculum: A survey

This article reports on a telephone survey of business school faculty in the United Kingdom, Asia and North America concerning efforts to internationalize the teaching of business ethics. International dimensions of business ethics are currently given only limited coverage in the business school curriculum with over half of the faculty surveyed indicating that less then 10% of their ethics teaching focuses on global issues. Teaching objectives vary widely with some faculty emphasizing a relativistic, diversity oriented perspective while others stress the universality of values. The respondents identified a great need to develop teaching materials based upon non-U.S. corporations and/or non-U.S. incidents.Christopher J. Cowton is University Lecturer in Management Studies at the University of Oxford and a Fellow of Templeton College. An author on many facets of management, his previous paper in theJournal of Business Ethics was on corporate philanthropy in the United Kingdom. Current research interests include the implications of just-in-time production for accounting, and ethical (or socially responsible) investment.Thomas W. Dunfee is the Kolodny Professor of Social Responsibility at the Wharton School of the University of Pennsylvania. He was President of the American Business Law Association 1989–1990, served as Editor-in-Chief of theAmerican Business Law Journal 1975–1977 and is a member of the Executive Committee of the Society for Business Ethics. He has published articles in theAcademy of Management Review, Business Ethics Quarterly, theBusiness and Professional Ethics Journal, and theJournal of Social Philosophy in addition to a variety of business and legal journals.     

Debriefing Experiential Learning Exercises in Ethics Education

The major conclusion of this paper is that to obtain optimum pay-off from using experiential learning exercises in teaching business ethics, faculty must pay close attention to debriefing. The paper presents an approach based on a conceptual model for systematic and analytical debriefing of experiential learning exercises in ethics education. The paper also suggests that faculty must provide structure and ambiguity so that students can personalize the learning – experiencing meaningfulness (i.e., usefulness) in its application – so that learning is r0elevant to the individual.     

The Only Solution to the Decline in Business Ethics: Ethical Managers

This paper defines business ethics as a seriesof behaviors that adhere to values held by theindividual manager, the manager's supervisorsand subordinates, general society and, mostimportantly, the manager's customers andclients. The concept of business ethics isexplored through several levels of businessorganizations and operating environments.The paper then examines recent evidence of thedecline in business ethics by noting a fewexamples involving Beech-Nut, Hertz, MichaelMilken, E.F. Hutton, Sears, Salomon Brothers,Dalkon Shield, Exxon Valdez, S&L scandal,brokerage analysts. Surveys are cited toindicate that the American public believes thatbusiness ethics are declining.To further analyze the topic, the authorreports on a series of structured interviewswith managers in a variety of organizations.Fourteen senior managers were interviewed: 4from large county government, 3 from stategovernment, 4 from large corporations, 3 fromsmall businesses. The managers were asked theiropinions concerning the decline of businessethics, and for their recommendations topossibly retard the decline. All managers saidthey believed that ethics are in decline andthat the public believes ethics are declining.The recommendations for retarding or reversingthe decline yielded several suggestions: teachethics in schools and business organizations,develop and enforce Codes of Ethical Conductwithin all organizations, establish bettermonitoring and reporting mechanisms, and hireethical managers.The paper builds on theinterview results by coupling the managers'remarks with admonitions from many authors:while teaching ethics and Codes of EthicalConduct are important, the most importantfactor is the ethical behavior of managers(leaders). Ethical leadership is fundamentalsince ethical behavior is an individual – not acorporate – matter. In practice, ethics is notsomething that a manager ``does'; it issomething that the manager ``is.'     

Reviving brand loyalty: A reconceptualization within the framework of consumer-brand relationships

This paper uses the perspective of interpersonal relationship theory to critically examine, reposition, and extend the notion of brand loyalty. Depth interviews among eight coffee-consuming adults who qualified as brand loyal by traditional criteria provide the data. The result is a deeper appreciation of the character of loyal consumer-brand relations and a sharper awareness of the limitations to understanding that current theoretical frameworks impose. Specifically, the authors suggest that: (1) not all loyal brand relationships are alike, in strength or in character; (2) many brand relationships not identified as ‘loyal’ according to dominant theoretical conceptions are especially meaningful from the cunsumer's point of view; and (3) current approaches to classification accept some brand relationships that, upon close scrutiny, do not possess assumed characteristics of ‘loyalty’ or ‘strength’ at all. Ideas stemming from a reframing of loyalty as one component in a multifaceted construct of relationship strength are put forth, encouraging a move from the metaphor of ‘loyalty’ to the broader notion of ‘relationships’ that encompasses it.     

Business Ethics in China

First I briefly review the emergence and development of business ethics, following three stages (1978–1984; 1984–1994; 1994 to the present) and driven by four factors: the inheritance of Chinese traditional ethics; the influence of Marxist philosophy and ethics; the reflections on the economic reform; and the influence of business ethics from abroad. Then, from a practical and a theoretical perspective, I discuss the main challenges for business ethics in China: issues of the economic system, of corporate ethics, and of management. After commenting on the role of business ethics for the social development in China, I offer some reflections about what China can contribute to, and learn from, other peoples.     

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).     

Confucian Business Ethics and the Economy

Confucian ethics as applied to the study of business ethics often relate to the micro consideration of personal ethics and the character of a virtuous person. Actually, Confucius and his school have much to say about the morals of the public administration and the market institutions in a more macro level. While Weber emphasizes the role of culture on the development of the economy, and Marx the determining influence of the material base on ideology, we see an interaction between culture – specifically Confucian business ethics – and the economy. In this paper, we are going to study this interaction in several crucial stages of development of Confucianism. The paper concludes by postulating the relevance of Confucian business ethics to the global knowledge economy.     

Information and Transformation in Teaching Businesses Ethics

Teaching in business ethics has conformed to the dominant Western model of pedagogy whereby students are provided with information about ethics but rarely asked to analyse their own behaviour. There is no evidence that this approach has any practical impact on future behaviour and much reason to doubt its potential in this regard. The pedagogical traditions of India offer an alternative approach to ethical improvement – one based in self-reflection and personal transformation. The following paper considers the potential of this tradition and offers practical suggestions for its integration into Western teaching practice.     

The effect of experience and absorptive capacity on foreign market knowledge

Learning about foreign markets often occurs through collaboration with other firms who have this knowledge. In this paper, we focus on one aspect of foreign market knowledge, which is the knowledge a partner in a dyadic relationship, has of the other partner and of their respective business network relationships. The concept ‘absorptive capacity’ [Admin. Sci. Q. 35 (1990) 128] is used to describe the firm’s ability to use its prior related knowledge and diverse background to identify the value of new information and to develop this into something creative. We develop and empirically test a model of how depth and diversity of experience affect absorptive capacity, and how this absorptive capacity affects the way a lack of foreign market knowledge is perceived as an obstacle in carrying out the ongoing business activity.The results show that the lack of foreign market knowledge in the ongoing business is determined both by the firm’s absorptive capacity generated in dyadic relationships with foreign customers and the customer’s network. The dyadic and network absorptive capacities, however, appear to be used differently in the ongoing business. Dyadic absorptive capacity seems to decrease the lack of foreign market knowledge, whereas customer network absorptive capacity seems to increase it.     

Business ethics in context: Researching with case studies

This paper discusses criticisms of survey research in business ethics as conceptually naive and methodologically unsound. A query is raised about the neglect of case-study methods by business ethics researchers — probably for prudential and ideological reasons. It is argued that the case-study approach is more appropriate to inquiries into the complex, diverse contents and contexts of business ethics. Investigatory case study in particular can do much to rectify the inadequacies of the prevailing positivist paradigm by evolving grounded theoretical questions for further research. Case study offers an alternative to the measurement of ethical behaviour, i.e., naturalistic generalisation which is rooted in the context of organisational cultures and economic systems. It results in enhanced conceptual understanding of the interaction between ethical beliefs of individuals and corporate and market pressures on business decision-taking.Stephen Brigley has taught professional and business ethics at universities and colleges in the UK. Currently, he is researching and teaching business ethics at the University of Bath (UK). His previous research interests and publications include school management, governance and accountability (doctoral thesis), moral and social education and research methodology.     

Profiling consumers of own brands and national brands using human personality

Traditional methods of market segmentation based on demographic variables have shown mixed results in differentiating between those who are more likely to buy own brand products and those who prefer national brands. Taking advantage of the emerging convergence in human personality research on the Big Five dimensions, we focus on the potential of human personality as a method of identifying different customer segments. Two types of own brands are considered, those labelled with the retailer's corporate name and those labelled with a name independent of the retailer. Two product categories are included, cola as an example of a low-involvement product and cosmetics as an example of a high-involvement product. The personality profiles of buyers of these and the leading national brands in each category are compared. Stepwise regression is used to identify those aspects of shopper personality that predict purchase rates of all products. Individuals who are more ‘open to experience’ report higher purchases of corporately named products, while individuals who are more ‘extrovert’ report higher purchases of national brands. Those reporting higher rates of purchase for own brands with independent names tend to be more ‘agreeable’ and ‘extrovert’. The positioning of the three types of brands against the 5 dimensions of human personality is illustrated using correspondence analysis. The clear potential to use human personality to segment and profile markets for own brands and national brands is discussed.     

Are You Ethical? Please Tick Yes □ Or No □ On Researching Ethics in Business Organizations

This paper seeks to explore the empirical agenda of business ethics research from a methodological perspective. It is argued that the quality of empirical research in the field remains relatively poor and unconvincing. Drawing on the distinctions between the two main philosophical positions from which methodologies in the social sciences are derived – positivism and interpretism – it is argued that it is business ethics' tradition of positivist, and highly quantitative approaches which may be at the root of these epistemological problems. Six distinct aspects of business ethics research are identified and assessed according to their methodological impact. Accordingly, it is argued that more interpretive approaches may offer substantial liberating potential in the development of a stronger and more theory-rich empirical base. The author concludes by arguing for greater plurality and diversity in empirical research methodologies in the business ethics field.     

Designing and Delivering Business Ethics Teaching and Learning

The recent corporate scandals in the United States have caused a renewed interest and focus on teaching business ethics. Business schools and their faculties are reexamining the teaching of business ethics and are reassessing their responsibilities to produce honest and truthful managers who live lives of integrity and ethical accountability. The authors recognize that no agreement exists among business schools and their faculties regarding what should be the content and pedagogy of a course in business ethics. However, the authors hold that regardless of one’s biases regarding the content and pedagogy, the effective teaching of business ethics requires that the instructor in designing and delivering a business ethics course needs to focus particular attention on four principal questions: (1) what are the objectives or targeted learning outcomes of the course? (2) what kind of learning environment should be created? (3) what learning processes need to be employed to achieve the goals? and (4) what are the roles of the participants in the learning experience? The answers to these questions provide the foundations for any business ethics course. The answers are major determinants of the impact of a business ethics course on the thinking of students and the views on the ethical and professional accountabilities and responsibilities of managers in the workplace.