Can businesses move beyond efficiency? The shift toward effectiveness and equity in the corporate sustainability debate

The aim of this paper is to articulate to a wider practitioner and academic audience the value and importance of moving the sustainable business agenda beyond the notion of eco‐ and socio‐efficiency. This in itself is not a new development in the sustainable business literature. What are emerging are integrated models of corporate sustainability that link together the six criteria that a sustainable business will need to satisfy, namely eco‐efficiency, socio‐efficiency, eco‐effectiveness, socio‐effectiveness, sufficiency and ecological equity. At this stage these new models of corporate sustainability need further theoretical development, taking corporate sustainability beyond the business case (eco‐efficiency) towards an integrated approach that links in the social and natural cases. A new model for sustainable entrepreneurship is presented and discussed in the context of a social entrepreneur case study. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

From Taken‐for‐Granted to Explicit Commitment: The Rise of CSR in a Corporatist Country

This article contributes to a thriving line of research that examines issue interpretation and social accounts in order to study the adoption and diffusion of organizational concepts and management practices. It employs the empirical example of the rise of corporate social responsibility (CSR) in Austria between 1990 and 2005 to investigate the complex role institutional pressures and social positions of actors play in the local adoption of globally theorized ideas. More specifically, the study reveals distinct patterns in rhetorical CSR adoption that illustrate the initial hesitation and reluctance of an established elite in the Austrian business community towards the Anglo‐American notion of ‘explicit’ CSR, while non‐elite actors who were less favourably positioned in the social order readily embraced the concept. It is in such a sense that CSR is nevertheless instrumentalized to challenge, reinterpret, or explicitly evoke the autochthonous idea of institutionalized social solidarity. Conceptually, this research takes into account social structure, actors' positions in the social order, and resulting divergent adoption motivations – i.e. the individual, yet socially derived, relevance systems of actors – and relates these to mechanisms and processes of institutional change.     

Patterns of corporate governance and technical efficiency in Italian manufacturing

The purpose of this paper is to analyse the relationship between the corporate governance system and technical efficiency in Italian manufacturing. We use a non‐parametric frontier technique (DEA) to derive technical efficiency measures for a sample of Italian firms taken from nine manufacturing industries. These measures are then related to the characteristics of the corporate governance system. Two of these characteristics turn out to have a positive impact on technical efficiency: the percentage of the company shares owned by the largest shareholder and the fact that a firm belongs to a pyramidal group. Interestingly, a trade‐off emerges between these influences, in the sense that one is stronger in industries where the other is weaker. Copyright © 2007 John Wiley & Sons, Ltd.     

Confucianism,Moral Equality,and Human Rights: A Mencian Perspective

This paper attempts to show the compatibility between Confucianism and human rights, first by revisiting the moral philosophy of Mencius, a key founder of the Confucian tradition, then by reconstructing the Mencian‐Confucian idea of human rights from the perspective of his moral philosophy. One of my central claims is that not only did Mencius acknowledge core human rights—socioeconomic as well as civil‐political—justified by his foundational faith in universal moral equality and human dignity, but he further understood the right to subsistence as an essential part of Confucian‐constitutional rights. Contrary to the widely received notion that in Mencian‐Confucianism the right to subsistence has an overriding value vis‐a‐vis civil‐political rights, I argue that Mencius (and Confucians in general for that matter) never stipulated such a lexical ranking among rights. I conclude by discussing how the type of Confucian moral reasoning that Mencius employs in justifying the moral value of human rights can be re‐appropriated to produce Confucian rights suitable for today. … … … … … …     

The prospect of decent work,decent industrial relations and decent social relations in China: towards a multi-level and multi-disciplinary approach

Abstract

Decent Work is a key initiative launched by the International Labour Organization in 1999. The initiative is to promote decent and productive employment with decent conditions of freedom, equality, security and human dignity. In reviewing academic literature on decent work, existing studies have been conducted primarily from a legal and political economic perspective. It is also largely situated outside any national industrial relations framework, both theoretically and practically. Decent work is an advocacy initiative of ILO, but the promotion of universal values embodied in the notion (e.g. equality, fairness, justice and dignity) needs to be tailored to specific societal contexts. Drawing on existing academic literature, this review article examines ideological, institutional and cultural distances between decent work and the reality of employment in China. It argues that achieving decent work requires an ideological transition of ‘traditional’ Chinese work ethics and a cultural transition from collectivism and altruism towards individualism and an emphasis on individual rights. This study also examines and highlights regulatory enforcement deficits and the inadequate role of the trade union in facilitating the advancement of decent work at various levels. Finally, the article argues that the study of decent work should be mainstreamed as an integral part of decent industrial relations and ultimately, decent social relations. It calls for a multi-level and multi-disciplinary approach to examining the historical, political, economic, ideological and cultural context of specific countries in fulfilling the ‘Decent Work’ agenda.     

The HRM–capital market link: Effects of securities analysts on strategic human capital

This article develops theory about an agency problem affecting the strategic human capital (SHC) of the firm. It proposes three categories of SHC‐related choices managers must make that imply a trade‐off between near‐ and long‐term performance. Dispersed shareholding, firm coverage by securities analysts, and their practice of publishing quarterly earnings forecasts are argued to entail a bias in management incentives, shifting the balance in this trade‐off toward near‐term performance. To restore the balance, securities analysts would need to distinguish transitory from recurring effects of SHC‐related choices in their valuation models (e.g., treating certain labor cost savings during cyclical downturns as transitory). Restoring the balance would also require them to anticipate long‐term effects in their long‐term earnings forecasts (e.g., long‐term positive effects of retaining employees with valuable skills during cyclical downturns). The article discusses specific transitory cost effects and long‐term effects they could potentially take into account. The skills and incentives needed by analysts to account for such effects are argued to vary across firm segments.     

Optimal targeting with entry

We study an advertising agency's optimal choice of targeting technology with endogenous market structure, namely, when targeting changes firms' entry strategies into the advertising and product market. We show that the advertising agency faces a trade‐off between demand‐expansion and profit‐dissipation: The former arises as targeting induces more entry and increases the demand for advertising; the latter refers to that targeting relaxes competition by inducing more differentiation. We show that perfect targeting is not optimal for the advertising agency. Compared to social optimum, the advertising agency underinvests in targeting when investment cost is low and overinvests when targeting is costly.     

Marketing by Controlling Social Discourse: The Fairtrade Case

A non‐conventional marketing strategy is used by the owners of a not‐for‐profit code of practice, Fairtrade. People buy Fairtrade‐branded goods because of the social discourse around it – what friends, newspapers, teachers and others tell them about what it guarantees, what it achieves and what is its social acceptability – rather than because of the advertising. The social discourse is favourable to Fairtrade but bears little relation to observable fact. Methods used by the brand owners and others to control and manipulate the social discourse are identified.     

The Progress and Poverty Centenary: Advocates and Opponents Will Enjoy and Learn from the Papers Given at One Celebration

A bstract . The Committee on Taxation. Resources and Economic Development , a group of American fiscal economists , commemorated the centenary of the publication of Henry George's classic, Progress and Poverty , with a conference reported in the book. Land Value Taxation. It raises, typically from a variety of perspectives, the major issues engendered by George's analysis and policy recommendations. Economists who are at least open-minded on George recognize him as a true progressive , a believer in the distribution of income in accordance with productive contribution and a convincing advocate of the social appropriation of economic rent on scientific and moral grounds. George was fundamentally correct in the idea that some form of land value taxation is an especially suitable mode of financing government, though the notion that this could be the single tax is and was unrealistic. The case for this as a cure for poverty is substantially exaggerated but it would remove one source of economic inequality. George, like Edward Bellamy , in promoting equality of opportunity rallied public support for the long-developing movement for pluralist economic democracy .     

Race discrimination at work: the moderating role of trade unionism in English local government

Workplace racism remains a serious issue despite over forty years of legislation alongside a raft of HRM policies. There remains limited research on the differences in employment experiences of British Black and Asian Minority Ethnic (BAME) staff and their white colleagues. There is a power imbalance at work as between individual employees and management, and this lack of equity has been traditionally counterbalanced by strong workplace trade unionism. In particular, we know little about the role of trade unionism on the perception of workplace equality among BAME employees. Using more than 2,580 valid responses from full‐time employees in highly unionised local councils, this study shows that BAME employees have a significantly lower evaluation than their white colleague of fair pay and equal work environment. The latter fully mediates the negative perception between BAME staff and fair pay; and furthermore, the perception of union commitment to equality strengthened their views of a management‐supported equal work environment.     

Progressive Taxes and the Labour Market: Is the Trade–off Between Equality and Efficiency Inevitable?

Does an income tax harm economic efficiency more the more progressive it is? Public economics provides a strong case for a definite ‘yes’. But at least three forces may pull in the other direction. First, low–wage workers may on average have more elastic labour supply schedules than high–wage workers, in which case progressive taxes contribute to a more efficient allocation of the total tax burden. Second, in non–competitive labour markets, progressive taxes may encourage wage moderation, and hence reduce the equilibrium level of unemployment. And third, if wage setters have egalitarian objectives, progressive taxes may reduce the need for redistribution in pre–tax wages, and hence increase the demand for low–skilled workers. This paper surveys the theoretical, as well as the empirical literature about labour supply, taxes and wage setting. We conclude that in a second best world, the trade–off between equality and efficiency is not always inevitable.     

Impact at the ‘Bottom of the Pyramid’: The Role of Social Capital in Capability Development and Community Empowerment

Rooted in the notion of inclusive capitalism, the Bottom‐of‐the‐Pyramid (BoP) approach argues for the simultaneous pursuit of profit and social welfare by creating markets for the poor. This idea has been both celebrated and criticized in the literature. We do neither in this paper. Instead, by leveraging insights from Amartya Sen's work on capability development and the literature on social capital, we offer a more socially embedded and community‐centric BoP approach. By redefining poverty not just as a lack of income, but also as a lack of ‘capabilities’ in Sen's sense that can be developed through leveraging social capital, we offer a systemic framework for understanding the societal impact of business‐driven ventures in the BoP and empowering BoP communities through these ventures. Specifically, we argue that any business initiative in the BoP ought to be evaluated on the basis of whether it advances capability transfer and retention by (a) enhancing the social capital between a particular community and other more resource rich networks, and (b) preserving the existing social capital in the community.     

Concentration behavior of the penalized least squares estimator

Consider the standard nonparametric regression model and take as estimator the penalized least squares function. In this article, we study the trade‐off between closeness to the true function and complexity penalization of the estimator, where complexity is described by a seminorm on a class of functions. First, we present an exponential concentration inequality revealing the concentration behavior of the trade‐off of the penalized least squares estimator around a nonrandom quantity, where such quantity depends on the problem under consideration. Then, under some conditions and for the proper choice of the tuning parameter, we obtain bounds for this nonrandom quantity. We illustrate our results with some examples that include the smoothing splines estimator.     

Endogenous Social Comparisons and the Internal Organization of Firms

Should workers of a firm be organizationally integrated to realize benefits from benchmarking? Or should they be separated to preclude horizontal social comparisons? This paper highlights a trade‐off that arises if social comparisons in firms are endogenous. We analyze a principal multi‐agent model in which the principal trades off the reduction of agents' risk exposures by use of relative performance evaluation and the thereby induced social comparisons for which agents must be compensated. Contrary to standard theoretical predictions, relative performance evaluation is optimal only if the performance measures are sufficiently correlated relative to the agents' regard for others. Copyright © 2011 John Wiley & Sons, Ltd.     

Strategic Decision Making for the Triple Bottom Line

Corporate social responsibility (CSR) has become a mandate for strategic managers and is often an important element of a differentiation strategy, but there is little research on how managers can make socially responsible decisions within the context of competitive strategy. In this study we explain how data envelopment analysis (DEA) results can be used to determine the trade‐offs inherent in managing the triple bottom line of profits, people and the planet. Once the trade‐offs are well understood, managers can implement sustainable competitive strategies that incorporate socially responsible decisions. Using public data from the electric power generation industry, we demonstrate how DEA can be utilized to determine the trade‐offs between efficiency, costs and pollution reduction, allowing managers to make and champion socially responsible decisions. We discuss the general applicability of our method for making strategic decisions incorporating the triple bottom line. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Equity–Efficiency Optimizing Resource Allocation: The Role of Time Preferences in a Repeated Irrigation Game

We study repeated water allocation decisions among small scale irrigation users in Tanzania. In a treatment replicating water scarcity conditions, convexities in production make that substantial efficiency gains can be obtained by deviating from equal sharing, leading to an equity–efficiency trade‐off. In a repeated game setting, it becomes possible to reconcile efficiency with equity by rotating the person who receives the largest share, but such a strategy requires a longer run perspective. Correlating experimental data from an irrigation game with individual time preference data, we find that less patient irrigators are less likely to use a rotation strategy.     

1. Globalization and Violence: The Challenge to Ethics

Despite its many benefits, globalization has proven to harbor a good deal of violence. This is not only a matter of the proliferation of weapons of mass destruction inaugurated by the atomic bombing of Hiroshima, but includes many forms of indirect or “structural violence” resulting from the routine of economic and political institutions on the global scale. In this essay, the multifaceted phenomena of violence are approached from the standpoint of ethics. The prevailing political thinking associated with “realism” fails to address the problems of militarism and of hegemonic unilateralism. In contrast, many philosophers are critically rethinking the problem of global violence from different ethical perspectives. Despite sharing similar concerns, philosophers nevertheless differ over the role of philosophical reflection and the potentials of reason. These differences appear in two contrasting approaches associated with postmodern philosophy and discourse ethics. In the analysis of discourse ethics, attention is paid to Karl‐Otto Apel's attempt of philosophically grounding a macroethics of planetary co‐responsibility. At the heart of the essay is the analysis of the problem of violence, including terrorism, by Jürgen Habermas, who explains the phenomenon of violence in terms of the theory of communicative action as the breakdown of communication. Jacques Derrida's deconstruction of the notion of “terrorism” also is analyzed. According to the principle of discourse ethics, all conflicts between human beings ought to be settled in a way free of violence, through discourses and negotiations. These philosophers conclude that the reliance on force does not solve social and global problems, including those that are the source of violence. The only viable alternative is the “dialogical” multilateral relations of peaceful coexistence and cooperation among the nations for solving social and global problems. They emphasize the necessity of strengthening the international rule of law and institutions, such as a reformed United Nations.     

Narrating the Power of Non‐Standard Employment: The Case of the Israeli Public Sector*

abstract Applying a critical discourse analysis approach, this study shows how the argument equating non‐standard employment (NSE) with organizational efficiency gains dominance over the contesting argument that views NSE as reducing organizational efficiency. We interviewed 24 senior‐level HR managers in the Israeli public sector, where NSE is used extensively, in order to shed light on the discursive order and the power struggle between these contesting arguments. Findings point to two story‐lines that helped discredit the argument in which NSE reduces organizational efficiency: (1) a statement of loyalty to organizational efficiency, accompanied by a gesture of concern for employees in non‐standard arrangements; and (2) subordinating an implied preference for eliminating NSE to organizational constraints.     

Social Circumstances and Rationality:

Abstract Upon the uniformity in individuals’ decision‐making mechanism rests a great deal of the legitimacy of natural liberty. As we are all equally sovereign (cognitive‐wise), we only strike deals that inevitably make us better off. We all gain from trade and thus, as everyone is better off, so must be the whole of society. But could it be that people are rational yet not equally sovereign? In this paper, we examine Smith's interpretation of rationality, and we find that it is fundamentally a social concept. As such, the manifestation of rationality in individual behavior depends on how sophisticated is individuals’ access to public opinion. Consequently, individuals who are equally self‐interested may face very different sets of options, which are determined by their social circumstances. This difference may suggest that, although all agents may be motivated by the same objective, they cannot be considered as equally sovereign.     

Efficiency Wages and the Economic Effects of the Minimum Wage: Evidence from a Low‐Wage Labour Market*

This article exploits a natural experiment provided by the 1999 introduction of the UK National Minimum Wage (NMW) to test for efficiency wage considerations in a low‐wage sector, the UK residential care homes industry. The empirical results provide support to the wage‐supervision trade‐off prediction of the shirking model and suggest that the NMW may have operated as an efficiency wage in the care homes sector, leading to a reduction in supervision costs. These findings can explain earlier evidence suggesting that although the NMW introduction increased wages dramatically in the care homes sector, it generated only moderate negative employment effects.