Corporate Ethical Identity as a Determinant of Firm Performance: A Test of the Mediating Role of Stakeholder Satisfaction

In this article, we empirically assess the impact of corporate ethical identity (CEI) on a firm’s financial performance. Drawing on formulations of normative and instrumental stakeholder theory, we argue that firms with a strong ethical identity achieve a greater degree of stakeholder satisfaction (SS), which, in turn, positively influences a firm’s financial performance. We analyze two dimensions of the CEI of firms: corporate revealed ethics and corporate applied ethics. Our results indicate that revealed ethics has informational worth and enhances shareholder value, whereas applied ethics has a positive impact through the improvement of SS. However, revealed ethics by itself (i.e. decoupled from ethical initiatives) is not sufficient to boost economic performance. Pascual Berrone is a PhD candidate of the Business Administration and Quantitative Methods Ph.D. program at the Universidad Carlos III de Madrid. His current research interests focus on business ethics, stakeholder theory, and various aspects of the interface between corporate governance mechanisms and corporate social responsibility. His interests also include ethical, environmental and social issues and their impact on firms' overall performance. Dr. Jordi Surroca is an Assistant Professor of Management at the Department of Business Administration at the Universidad Carlos III de Madrid. He holds a PhD in Business Administration and a Licentiate Degree in Business and Economics from Universitat Autònoma de Barcelona. His research interests center on stakeholder management, firm strategy, innovation, and corporate governance. Dr. Josep A. Tribó is Associate Professor of Finance in the Department of Business Administration at the Universidad Carlos III de Madrid. He has a PhD in Economic Analysis from the Universitat Autònoma de Barcelona and a Licenciate Degree in Theoretical Physics by Universitat de Barcelona. His research interests are Corporate Finance and the financing of R&D. His work has been published in journals such as Applied Economics, International Journal of Production Economics.     

Corporate Sponsorships in Schools: Altruism and Ethical Judgments

Over the last several years corporate sponsorships have become prevalent within the U.S. K–12 school system. For corporations, sponsorships can be an effective method for targeting young consumers. For schools, corporate sponsorships are an opportunity to replace state funding that has been lost since the 2007 financial crisis. However, many people have voiced concerns about the ethicality of corporate involvement in schools. Accordingly, the purpose of this quasi-experimental study was to examine parents’ views of corporate-school sponsorships. Results indicate that altruism is a key factor; that is, sponsorships that provide direct benefits to students are viewed more favorably, and that parents who are critical of children's advertising tend to view corporate-school sponsorships less favorably.     

Corporate Ethical Values,Group Creativity,Job Satisfaction and Turnover Intention: The Impact of Work Context on Work Response

A corporate culture strengthened by ethical values and other positive business practices likely yields more favorable employee work responses. Thus, the purpose of this study was to assess the degree to which perceived corporate ethical values work in concert with group creativity to influence both job satisfaction and turnover intention. Using a self-report questionnaire, information was collected from 781 healthcare and administrative employees working at a multi-campus education-based healthcare organization. Additional survey data was collected from a comparative convenience sample of 127 sales and marketing employees working for a variety of firms operating in the south-central United States. The results indicated that group creativity and corporate ethical values were positively related, and that both variables were associated with increased job satisfaction. Conversely, corporate ethical values and job satisfaction were associated with decreased turnover intention. Sales managers should create work cultures that precipitate increased ethical values and group creativity, and suggestions about how they may institutionalize these factors are provided.     

Ethical Culture and Employee Outcomes: The Mediating Role of Person-Organization Fit

We build on limited research concerning the mediation processes associated with the relationship between ethical culture and employee outcomes. A multidimensional measure of ethical culture was examined for its relationship to overall Person-Organization (P–O) fit and employee response, using a sample of 436 employees from social economy and commercial banks in Spain. In line with previous research involving unidimensional measures, ethical culture was found to relate positively to employee job satisfaction, affective commitment, and intention to stay. New to the literature, ethical culture was also found to be associated positively with employee willingness to recommend the organization to others. These effects were observed even when perceptions of P–O fit were controlled. Importantly, ethical culture was also positively related to overall P–O fit, which in turn, partially mediated the relationship between ethical culture and employee outcomes. Our findings add to studies that focus on the importance of the degree of ethical congruence between the individual employee and the organization. They suggest that ethical culture, with its expected impact on virtuousness and emotional well-being, will positively influence outcomes independently of the degree to which there is a match between employee and organizational values.     

Mental Models and Ethical Decision Making: The Mediating Role of Sensemaking

This study examines whether sanctions imposed by the China Securities Regulatory Commission (CSRC) against individual auditors result in greater auditor conservatism. Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary accruals in the post-sanction period than in the pre-sanction period when compared to a matched control group of clients audited by individual auditors who were not sanctioned. Our findings suggest that sanctions imposed by the CSRC on individual auditors can lead to improvements in audit quality by increasing the conservatism of the sanctioned auditors. That is, individual auditors are more likely to resist their clients’ income-increasing accounting manipulations after being sanctioned by the CSRC.     

Guanxi with Supervisor and Counterproductive Work Behavior: The Mediating Role of Job Satisfaction

This study aims to explore the role of informal leader–member interactions in managing counterproductive work behavior (CWB) in a non-Western context. We propose that under the Chinese background, guanxi with supervisor increases employees’ job satisfaction, which further reduces their CWB. Partial least square structural equation modeling with a sample of 272 Chinese employees confirms this mediating effect of job satisfaction. However, we also find that job satisfaction passes the effect of guanxi with supervisor on to CWB targeting people, but not to CWB targeting the organization. Implications for research on CWB and guanxi with supervisor are discussed.     

The Mediating Role of Anticipated Guilt in Consumers’ Ethical Decision-Making

In this paper, we theorize that the anticipation of guilt plays an important role in ethically questionable consumer situations. We propose an ethical decision-making framework incorporating anticipated guilt as partial mediator between consumers’ ethical beliefs (anteceded by ethical ideology) and intentions. In the first study, we compared several models using structural equation modeling and found empirical support for our research model. A second experiment was set up to illustrate how these new insights may be applied to prevent consumers from taking advantage of the seller. Results showed that enhancing the anticipation of guilt (by making the interpersonal consequences of the unethical act more salient) increased consumers’ ethical intentions, controlling for ethical beliefs. Together these two studies might have important theoretical and managerial contributions.Sarah Steenhaut is research assistant and doctoral candidate at Ghent University, Faculty of Economics and Business Administration, Research Center for Consumer Psychology and Marketing (Belgium). Her research interests lie in the area of ethical aspects and marketing, more specifically, consumers’ ethical beliefs, attitudes and behavior. She has recently published in Journal of Business Ethics.Patrick Van Kenhove is Professor of Marketing at Ghent University, Faculty of Economics and Business Administration, Department of Marketing (Belgium). He has recently published in Journal of Business Ethics, Psychology & Marketing, Journal of Retailing, Advances in Consumer Research, Journal of Economic Psychology, Journal of Health Communication and The International Review of Retail, Distribution and Consumer Research.     

Ethical Leadership and Subordinate Outcomes: The Mediating Role of Organizational Politics and the Moderating Role of Political Skill

This paper posits that ethical leadership increases important organizational and individual outcomes by reducing politics in the workplace. Specifically, we propose that perceptions of organizational politics serve as a mechanism through which ethical leadership affects outcomes. We further argue that the modeled relationships are moderated by political skill. By means of data from 136 matched pairs of supervisors and subordinates employed by a state agency in the southern US, we found support for our predictions. Specifically, we found that perceptions of organizational politics fully mediated the relationship between perceptions of ethical leadership and helping and promotability ratings. In addition, political skill was found to moderate the direct and indirect effects.     

The Role of Ethical Values in an Expanded Psychological Contract

Social values and beliefs systems are playing an increasingly influential role in shaping the attitudes and behavior of individuals and organizations towards the employment relationship. Many individuals seek a broader meaning in their work that will let them feel that they are contributing to the broader community. For many organizations, a willingness to behave ethically and assume responsibility for social and environmental consequences of their activities has become essential to maintaining their ‹license to operate.’ The appearance of these trends in individual and organizational behavior towards outcomes that are more explicitly congruent with ethical and social values has significant implications for understanding the psychological contracts being created today. In this paper, we examine issues associated with the psychological contract and ethical standards of behavior, focusing on both the individual and organizational levels.     

Corporate Social Responsibility and Team Performance: The Mediating Role of Team Efficacy and Team Self-Esteem

This study examines the influence of three components of corporate social responsibility on team performance. In the proposed model of this study, team performance is indirectly affected by three dimensions of perceived corporate citizenship (i.e., economic, legal, and ethical citizenship) via the mediation of team efficacy and team self-esteem. Surveying members of 172 teams confirms most of our hypothesized effects. Our results show that economic citizenship influences team performance via the mediation of both team efficacy and team self-esteem. However, legal citizenship influences team performance via team efficacy alone, whereas ethical citizenship influences team performance only via team self-esteem. We discuss the theoretical and managerial implications of our findings.     

Exploring the Process of Ethical Leadership: The Mediating Role of Employee Voice and Psychological Ownership

The study of ethical leadership has emerged as an important topic for understanding the effects of leadership in organizations. In a study with 845 working adults across multiple organizations, the relationships between ethical leadership with positive employee outcomes were examined. Results suggest that ethical leadership is related to both psychological well-being and job satisfaction in employees, but the processes are different. Employee voice mediated the relationship between ethical leadership and psychological well-being. Feelings of psychological ownership mediated the relationship between ethical leadership and job satisfaction. A discussion of theoretical and practical implications concludes the article.     

How Perceived Corporate Social Responsibility Affects Employee Cynicism: The Mediating Role of Organizational Trust

This study examines to what extent perceived corporate social responsibility (CSR) reduces employee cynicism, and whether trust plays a mediating role in the relationship between CSR and employee cynicism. Three distinct contributions beyond the existing literature are offered. First, the relationship between perceived CSR and employee cynicism is explored in greater detail than has previously been the case. Second, trust in the company leaders is positioned as a mediator of the relationship between CSR and employee cynicism. Third, we disaggregate the measure of CSR and explore the links between this and with employee cynicism. Our findings illustrate that the four distinct dimensions of CSR of Carroll (economic, legal, ethical, and discretionary) are indirectly linked to employee cynicism via organizational trust. In general terms, our findings will help company leaders to understand employees’ counterproductive reactions to an organization, the importance of CSR for internal stakeholders, and the need to engage in trust recovery.     

Explaining Consumer Reactions to Corporate Social Responsibility: The Role of Gratitude and Altruistic Values

Although a lot of research establishes consumer reactions to corporate social responsibility (CSR), little is known about the theoretical mechanisms for these reactions. We conduct a field experiment with adult consumers to test the hypothesis that the effects of perceived CSR on consumer reactions are mediated by felt gratitude and moderated by the magnitude of altruistic values held by consumers. Two classes of consumer reactions are considered: intentions to (1) say positive things about the company, and (2) participate in advocacy actions benefiting the company.     

Governmental and Corporate Role in Diffusing Development Technologies: Ethical Macromarketing Imperatives

SUMMARY

Despite the recent growth and globalization of production and trade, global income inequalities are widening, especially among the developing nations and global sustainability is weakening. We suggest a macromarketing approach to resolve this situation. It is in the best interest of the governments and the multinational corporations of the developed world to offer and diffuse their development technologies among the developing nations. We apply the theories of economic resources, development technologies, global sustainability and distributive justice to characterize the nature, structure and ethics of such developmental interventions.     

The Mediating Role of Postrecovery Satisfaction in the Relationship between Justice Perceptions and Customer Attitudes

ABSTRACT

The present study advances the literature by examining the meditating roles of postrecovery satisfaction in the relationships between distributive and interactional justices, and postrecovery attitudes. The model is empirically tested using survey data collected from 600 telecommunications service customers; and analyzed using partial least squares technique. Results indicate that postrecovery satisfaction partially mediates the perceptions of justice in the recovery process and service quality as well as repurchase intention. It is the first study to examine postrecovery satisfaction as a mediator in understanding the impact of recovery justice (antecedent) on service quality (consequence) in the telecommunications service context.     

The Effects of Corporate Ethical Values and Personal Moral Philosophies on Ethical Intentions in Selling Situations: Evidence from Turkish, Thai, and American Businesspeople

The goals of this study are to test a pattern of ethical decision making that predicts ethical intentions of individuals within corporations based primarily on the ethical values embedded in corporate culture, and to see whether that model is generally stable across countries. The survey instrument used scales to measure the effects of corporate ethical values, idealism, and relativism on ethical intentions of Turkish, Thai, and American businesspeople. The samples include practitioner members of the American Marketing Association in the U.S., and full-time businesspeople enrolled in executive MBA programs in Thailand and Turkey. The study is positioned within a fairly new stream that assesses patterns across countries, rather than differences between them, in a way that might be called “culture free.” The results show a generally positive influence between cultural ethical values and ethical intentions. The results also indicate that the positive effect of corporate ethical values on ethical intentions is greater for managers with low idealism and high relativism. We also discuss the implications of our results for managers of international businesses.     

The Ethical Backlash of Corporate Branding

Past decades have witnessed the growing success of branding as a corporate activity as well as a rise in anti-brand activism. While appearing to be contradictory, both trends have emerged from common sources – the transition from industrial to post-industrial society, and the advent of globalization – the examination of which might lead to a socially grounded understanding of why brand success in the future is likely to demand more than superior product performance, placing increasing demand on corporations with regard to a broader envelop of socially responsible behavior. Directions for strategic and managerial options are suggested. Guido Palazzo is Assistant Professor for Business Ethics at the University of Lausanne. He graduated in Business Administration at the University of Bamberg and earned his Ph.D. in Political Philosophy from the University of Marburg. His research interests are in Corporate Social Responsibility, Corporate Branding, Democratic Theory, and Organizational Ethics. Kunal Basu is a University Reader in Marketing at Said Business School, University of Oxford. He earned his Ph.D. in Marketing from the University of Florida. His research interests are in Corporate Social Responsibility Strategy and Brand Management.     

Restorying a Culture of Ethical and Spiritual Values: A Role for Leader Storytelling

In this paper, we outline some of the connections between the literatures of organizational storytelling, spirituality in the workplace, organizational culture, and authentic leadership. We suggest that leader storytelling that integrates a moral and spiritual component can transform an organizational culture so members of the organization begin to feel connected to a larger community and a higher purpose. We specifically discuss how leader role modeling in authentic storytelling is essential in developing an ethically and spiritually based organizational culture. However, we also acknowledge a potential dark side to leader storytelling. Implications for authentic storytelling research and practice are discussed. An early draft of this paper was presented at the 2004 Academy of Management Conference in New Orleans. Cathy Driscoll received her Ph.D. in organizational behavior and marketing from Queen's University in 1994. Currently, she is an associate professor in the Department of Management in the Sobey School of Business at Saint Mary's University. Prior to coming to SMU, she worked as a project manager and policy advisor with the National Round Table on the Environment and the Economy in Ottawa. She has published articles in The Journal of Business Ethics and Business and Society. Margaret McKee is in her fourth year of doctoral studies at the Sobey School of Business. She was recently awarded a two year Doctoral Fellowship from the Social Sciences and Humanities Research Council of Canada (SSHRC) to conduct her dissertation research. She has taught a variety of management and communications courses at Mount Saint Vincent, Sobey School of Business, and Dalhousie University. Her research interests are leadership and values based organizational cultures.