Humanism in Business – Towards a Paradigm Shift?

Management theory and practice are facing unprecedented challenges. The lack of sustainability, the increasing inequity, and the continuous decline in societal trust pose a threat to ‘business as usual’ (Jackson and Nelson, 2004). Capitalism is at a crossroad and scholars, practitioners, and policy makers are called to rethink business strategy in light of major external changes (Arena, 2004; Hart, 2005). In the following, we review an alternative view of human beings that is based on a renewed Darwinian theory developed by Lawrence and Nohria (2002). We label this alternative view ‘humanistic’ and draw distinctions to current ‘economistic’ conceptions. We then develop the consequences that this humanistic view has for business organizations, examining business strategy, governance structures, leadership forms, and organizational culture. Afterward, we outline the influences of humanism on management in the past and the present, and suggest options for humanism to shape the future of management. In this manner, we will contribute to the discussion of alternative management paradigms that help solve the current crises.     

Environmental and Economic Dimensions of Sustainability and Price Effects on Consumer Responses

The lack of attention to sustainability, as a concept with multiple dimensions, has presented a developmental gap in green marketing literature, sustainability, and marketing literature for decades. Based on the established premise of customer–corporate (C–C) identification, in which consumers respond favorably to companies with corporate social responsibility initiatives that they identify with, we propose that consumers would respond similarly to companies with sustainability initiatives. We postulate that consumers care about protecting and preserving favorable economic environments (an economic dimension of sustainability) as much as they care about natural environments. Thus, we investigate how two sustainability dimensions (i.e., environmental and economic) and price can influence consumer responses. Using an experimental method, we demonstrate that consumers favor sustainability in both dimensions by giving positive evaluations of the company and purchase intent. In addition, consumers respond more negatively to poor company sustainability than to high company sustainability. In comparison, consumers respond more negatively to the company’s poor commitment to caring for the environment than to the company’s poor commitment to economic sustainability. We also find that consumers do not respond favorably to low prices when they have information about the firm’s poor environmental sustainability. Finally, we find support for an interaction effect between consumer support for sustainability and corporate sustainability; that is, consumers evaluate a company more favorably if the company shares the consumers’ social causes. Overall, we conclude, from our empirical study, support for the idea that consumers do respond to multiple dimensions of sustainability.     

Moving Forward with the Concept of Responsible Leadership: Three Caveats to Guide Theory and Research

Integrating corporate social responsibility (CSR) initiatives in business is one of the great challenges facing firms today. Societal stakeholders require much more from the firm than pursuing profitability and growth. But these societal stakeholders often simply assume that increased societal expectations can easily be accommodated within efficiently run business operations, without much attention devoted to process issues. We build upon the core–periphery thesis to explore potential avenues for firms to add recurring CSR initiatives to their existing business practices. Based on Siggelkow’s (Admin Sci Quart 47:125–159, 2002) analysis of organizational change, we conceptualize seven major patterns of CSR initiative adoption. We develop a new organizing framework showing how a firm can integrate CSR initiatives in business. Within the new framework, each of the seven patterns represents an idiosyncratic path through which recurring CSR initiatives can be included as practices into conventional operations. We also explore the nature of the resulting internal fit between recurring CSR initiatives and business practices.     

Investigating the Relationship Between Protestant Work Ethic and Confucian Dynamism: An Empirical Test in Mainland China

This study examined the relationship between the Protestant Work Ethic (PWE) and Confucian Dynamism in a sample of 1,757 respondents from several provinces in mainland China. Mirels and Garrett’s (J Consult Clin Psychol 36:40–44, 1971) PWE Scale and Robertson’s (Manag Int Rev 40:253–268, 2000) Confucian Dynamism Scale were used to measure the work ethics. The 16 items of the PWE Scale and eight items of the Confucian Dynamism Scale were initially subjected to a principal components analysis. Factor analysis produced four factors of the PWE, which were labeled as follows: hard work, internal motive, admiration of work itself, and negative attitude to leisure; and three factors of the Confucian Dynamism, which were labeled: long-term orientation, short-term orientation, and guanxi orientation. The results of a multiple regression analysis indicated that all the dimensions of PWE were positively related to Confucian Dynamism, but negatively to guanxi orientation. The results also indicated that three PWE dimensions (“hard work,” “internal motive,” and “admiration of work itself”) were positively and significantly related to long-term orientation, but two of them were related negatively and significantly to the short-term orientation of Confucian Dynamism. In addition, the results showed that the dimension—admiration of work itself—of PWE was significantly and negatively associated with the guanxi orientation, but significantly and positively to the short-term orientation.     

Exploring “Embodied Care” in Relation to Social Sustainability

Although there has been a proliferation of interest in sustainable business practice, recent research has identified concerns with the relative neglect of the social versus environmental aspects of sustainability. It is argued here that due to its reliance on internally held, concrete and intrinsically motivated forms of responsiveness, as well as its ability to be authentically social versus parochial in nature, that the ethical construct of “embodied care” (Hamington, Embodied Care: Jane Addams, Maurice Merleau-Ponty, and Feminist Ethics, 2004) has particular relevance as one path through which responsiveness to the human aspects of sustainable business practice might occur. Consideration is given to care as both an individual and organizational level construct. Business case examples are offered and directions for future research described.     

Impact of founder experience on exit intentions

Entrepreneurial exit—the process by which the founders of privately held firms leave the firm they helped to create (DeTienne, J Bus Venturing, 2010)—is an important component of the entrepreneurial process, yet researchers know very little about it. We examine entrepreneurs’ intentions to exit by a range of possible exit paths [acquisition, initial public offering (IPO), family succession, employee buyout, independent sale, liquidation], building on Gimeno et al.’s (Adm Sci Q 42:750–783, 1997) notion of thresholds as they apply to a simple survival/exit dichotomy, and expanding this to include different intended paths of exit. Our results indicate that entrepreneurs intend to pursue different exit paths based on previous entrepreneurial experience, industry experience, age, and education level. Our findings provide preliminary evidence that differences between intended exit and failure are underspecified in the literature, since exit consists of many unique paths. Also, in support of threshold theory, we find that the intended exit path is driven by factors other than firm performance.     

Morals,Markets and Sustainable Investments: A Qualitative Study of ‘Champions’

Sustainable investment (SI), which integrates social, environmental and ethical issues, has grown from a niche market of individual ethical investors to embrace institutional investors (e.g. pension funds) resulting in ￡764 billion in assets under management in the UK alone [Eurosif, 2008: ‘European SRI Study 2008’ (Eurosif, Paris)]. Explaining this growth is complex, involving shifts in personal and collective values, reactions to corporate scandals, scientific and media pronouncements about climate change, Government initiatives, responses from financial markets and the influence of SI innovators in The City of London. The article examines the influence of human agency through interviews with 14 SI champions who have variously been responsible for launching SI funds and changing investment processes and organisational structures in order to enhance SI. Interviewees were asked about their motivations and persuasive strategies, the obstacles they faced and how they overcame them as well as broader implications of SI for financial markets. The following key categories inform the results and the discussion: Values; Conservatism, Antipathy and Incredulity; Optimism and Sympathy from Insiders; The Social and Political Context; The Business Case; Organisational Constraints; Inappropriate forms of Remuneration; Short-termism; The Nature of Capitalism. Three discourses were also identified. The first is the necessity to make a business case for SI; the second is the benefits that SI can bring to the quest of overcoming short-termism; the third is a belief that for SI to have a significant influence, greater government intervention is required.     

Cultural Distance and the US Immigrant–Trade Link

Using data from the World and the European Values Surveys, we calculate cultural distances between the US and 54 immigrant home countries and examine the influences of cultural distance and immigrant populations on US imports from and exports to immigrants’ home countries during the years 1997–2004. Our study indicates that, for both US imports and exports, the trade‐enhancing effect of immigrants partially offsets the trade‐inhibiting effect of cultural distance. Further, decomposing our measure of cultural distance into two component dimensions and revisiting the immigrant–trade relationship, we find significant variation in the extent to which immigrants counter the trade‐inhibiting influences of the underlying dimensions of culture for both US imports and exports. Our findings have the implication that by countering the trade‐inhibiting influences of cultural differences between their home and host countries, immigrants exert pro‐development effects.     

Does the Market Value Corporate Philanthropy? Evidence from the Response to the 2004 Tsunami Relief Effort

This study investigates the market reaction to corporate press releases announcing donations to the relief effort following the December, 2004 tsunami in Southeast Asia. Based on a sample of 79 U.S. companies, results indicate a statistically significant positive 5-day cumulative abnormal return. While differences in the timing of the press releases do not appear to have influenced market reactions, the amount of the donations did. Overall, the results appear to support Godfrey’s (Academy of Management Review 30, 777–798; 2005) assertion that philanthropic giving must be perceived as being a genuine manifestation of the firm’s underlying social responsiveness in order to increase firm value.     

The Effects of Religiosity on Ethical Judgments

The relationship between religiosity and ethical behavior at work has remained elusive. In fact, inconsistent results in observed magnitudes and direction led Hood et al. (The psychology of religion: An empirical approach, 1996) to describe the relationship between religiosity and ethics as “something of a roller coaster ride.” Weaver and Agle (Acad Manage Rev 27(1):77–97, 2002) utilizing social structural versions of symbolic interactionism theory reasoned that we should not expect religion to affect ethical outcomes for all religious individuals; rather, such a relationship likely depends on specific religious attitudes including religious motivation orientation (intrinsic RMO vs. extrinsic RMO), perceived sacred qualities of work (job sanctification), and views of God (VOG, loving vs. punishing). We examined the effects of these three religious attitudes on participants’ judgments of 29 ethically questionable vignettes. Consistent with symbolic interactionism theory, intrinsic RMO and having a loving view of God were both negatively related to endorsing ethically questionable vignettes, whereas extrinsic RMO was positively related to endorsing the vignettes. Unexpectedly, job sanctification was positively related to endorsing the vignettes. However, both intrinsic and extrinsic RMO moderated this relationship such that sanctifying one’s job was related to ethical judgments only for those who were: (a) low in intrinsic RMO or (b) high in extrinsic RMO. We reasoned based on symbolic interactionism theory that intrinsically motivated participants, in contrast to extrinsically motivated participants, may have utilized their religious beliefs as a guiding framework in making ethical judgments.     

Religiousness, Love of Money, and Ethical Attitudes of Malaysian Evangelical Christians in Business

Recent research suggests there may be a link between religiousness and business ethics. This study seeks to add to the understanding of the relationship through a questionnaire survey on Malaysian Christians in business. The questionnaire taps into three different constructs. The religiousness construct is reflected in the level of participation in various common religious activities. The love of money construct is captured through the Love of Money Scale as used in Luna-Arocas and Tang [Journal of Business Ethics 50 (2004) 329]. Response to 25 business vignettes taken from Conroy and Emerson [Journal of Business Ethics 50 (2004) 383] would surface ethical attitudes. A convenience sample of 300 was drawn from three large churches in the Kuala Lumpur area each with a congregation exceeding 1000 together with some representation from the smaller churches. The study finds some differences in the ethical attitudes of Malaysian Christians in business with different levels of religiousness. The study also finds that those longer in the faith are less accepting of unethical behavior. As such it can be concluded that there are ethical attitude differences between Christians in business with different levels of religiousness. This lends support to the claim of a positive relationship between religion and business ethics. The more significant finding is that even within a somewhat homogenous religious group there are different love of money profiles resulting in significant differences in ethical attitudes. This suggests that moderating money attitudes can contribute towards stronger ethical attitudes. Hong Meng Wong BEcons(Hons)(Malaya), MBA(Cranfield), DBA(UniSA), FCA, ACIS, is the National Secretary of the Full Gospel Business Men's Fellowship Malaysia. His more than 30 years of professional experience had been in management consulting, merchant banking, commercial banking and stock broking. Since becoming a Christian in 1981 he has been actively involved in ministering to men in the marketplace. His burden is to help improve the ethics of Christians in business.     

A Cross-Cultural Comparison of the Deliberative Reasoning of Canadian and Chinese Accounting Students

Absract  Using Hofstede’s culture theory (1980, 2001, Culture’s Consequences: Comparing Values, Behaviours, Institutions, and Organizations Across Nation. Sage, NewYork), the current study incorporates the moral development (e.g. Thorne, 2000; Thorne and Magnan, 2000; Thorne et al., 2003) and multidimensional ethics scale (e.g. Cohen et al., 1993; Cohen et al., 1996b; Cohen et al., 2001; Flory et al., 1992) approaches to compare the ethical reasoning and decisions of Canadian and Mainland Chinese final year undergraduate accounting students. The results indicate that Canadian accounting students’ formulation of an intention to act on a particular ethical dilemma (deliberative reasoning) as measured by the moral development approach (Thorne, 2000) was higher than Mainland Chinese accounting students. The current study proposes that the five factors identified by the multidimensional ethics scale (MES), as being relevant to ethical decision making can be placed into␣the three levels of ethical reasoning identified by Kohlberg’s (1958, The Development of Modes of Moral Thinking and Choice in the Years Ten to Sixteen. University of Chicago, Doctoral dissertation) theory of cognitive moral development. Canadian accounting students used post-conventional MES factors (moral equity, contractualism, and utilitarianism) more frequently and made more ethical audit decisions than Chinese accounting students. Lin Ge is an accountant at Guest-tek Interactive Entertainment Ltd. Her research interest includes ethics and judgment of accountants and auditors, cross-cultural studies and international business. Stuart Thomas, Ph.D., is associate professor of accounting in the Faculty of Management at the University of Lethbridge, Alberta, Canada. He has published in the Journal of Business Ethics, Business and Society, Research on Professional Responsibility and Ethics in Accounting, Advances in Management Accounting and the Journal of Accounting Case Research. His research interests focus on ethical decision making and the effects of pay schemes on performance and standard setting.     

Misleading Forecasts in Accounting Estimates: A Form of Ethical Blindness in Accounting Standards?

Drawing from research on strategic choice, this study investigates the relationship between market turbulence and firms’ sustainable behavior, in the context of sustainability-related institutional adversity. It argues that the relationship between market turbulence and sustainability is mediated by network embeddedness, and this mediating role in turn is moderated by a firm’s innovative orientation. Data collected from a sample of Ontario restaurants inform predictions about firms’ propensity to adopt local wines in their portfolios, despite the limited market and normative support that these wines receive compared with imported wines. The study shows that market turbulence enhances sustainable firm behavior, through the development of strong network relationships. Furthermore, the mediating effect of network embeddedness is particularly salient among firms that exhibit a stronger innovative orientation. These findings reveal how and when turbulent market conditions can contribute to a firm’s sustainable behaviors in the presence of limited institutional support for such behaviors.     

Psychological Pathways to Fraud: Understanding and Preventing Fraud in Organizations

In response to calls for more research on how to prevent or detect fraud (ACAP, Final Report of the Advisory Committee on the Auditing Profession, United States Department of the Treasury, Washington, DC, 2008; AICPA, SAS No. 99: Consideration of Fraud in a Financial Statement Audit, New York, NY, 2002; Carcello et al., Working Paper, University of Tennessee, Bentley University and Kennesaw State University, 2008; Wells, Journal of Accountancy, 2004), we develop a framework that identifies three psychological pathways to fraud, supported by multiple theories relating to moral intuition and disengagement, rationalization, and the role played by negative affect. The purpose of developing the framework is twofold: (1) to draw attention to important yet under-researched aspects of ethical decision-making, and (2) to increase our understanding of the psychology of committing fraud. Our framework builds on the existing fraud triangle (PCAOB, Consideration of fraud in a financial statement audit. AU Section 316, , 2005) which is used by auditors to assess fraud risk. The fraud triangle is composed of three factors that, together, predict the likelihood of fraud within an organization: opportunity, incentive/pressure, and attitude/rationalization. We find that, when faced with the opportunity and incentive/pressure, there are three psychological pathways to fraud nestled within attitude/rationalization: (1) lack of awareness, (2) intuition coupled with rationalization, and (3) reasoning. These distinctions are important for fraud prevention because each of these paths is driven by a different psychological mechanism. This framework is useful in a number of ways. First, it identifies certain insidious situational factors in which individuals commit fraud without recognizing it. Second, it extends our knowledge of rationalization by theorizing that individuals use rationalization to avoid or reduce the negative affect that accompanies performing an unethical behavior. Negative affect is important because individuals wish to avoid it. Third, it identifies several other methods fraudsters use to reduce negative affect, each of which could serve as potential “psychological red flags” and helps predict future fraudulent behavior. Finally, our framework can be used as a theoretical foundation to explore several interventions designed to prevent fraud.     

Moral Differentiation: Exploring Boundaries of the “Monkey See,Monkey Do” Perspective

Research in ethical decision making has consistently demonstrated a positive relationship between others’ unethical behavior and observers’ unethical behavior, providing support for the “Monkey See, Monkey Do” perspective (e.g., Robinson and O’Leary-Kelly, Acad Manage J 41:658–672, 1998). However, the boundaries of this relationship have received little research attention. Guided by theory and research in interpersonal distancing, we explore these boundaries by proposing and examining “moral differentiation,” the set of individual and situational characteristics that affect the degree to which one is willing to be influenced by others’ unethical behavior. Using data from 655 undergraduate business students in two U.S. universities, we test moderating hypotheses regarding the influence of moral differentiation characteristics on the relationship between others’ unethical behavior and observers’ unethical behavior. Results suggest that strong moral identity, low need for affiliation, and extraversion weaken the relationship between others’ unethical behavior and observers’ unethical behavior. Implications for managers and future research are discussed.     

Two Independent Value Orientations: Ideal and Counter-Ideal Leader Values and Their Impact on Followers’ Respect for and Identification with Their Leaders

Traditionally, conceptualizations of human values are based on the assumption that individuals possess a single integrated value system comprising those values that people are attracted by and strive for. Recently, however, van Quaquebeke et al. (in J Bus Ethics 93:293–305, 2010) proposed that a value system might consist of two largely independent value orientations—an orientation of ideal values and an orientation of counter-ideal values (values that individuals are repelled by), and that both orientations exhibit antithetic effects on people’s responses to the social world. Following a call for further research on this distinction, we conducted two studies to assess the independent effects of ideal and counter-ideal values in leadership settings. Study 1 (N = 131) finds both value orientations to explain unique variance in followers’ vertical respect for their leaders. Study 2 (N = 136) confirms these results and additionally shows an analogous effect for followers’ identification with their leaders. Most importantly, we find that both value orientations exhibit their effects only independently when the content of the two orientations pertain to different value types in Schwartz’s (in J Soc Issues 50:19–46, 1994) circumplex model. Implications for theory and practice are discussed.     

Attitudes About Corporate Social Responsibility: Business Student Predictors

Four predictors were posited to affect business student attitudes about the social responsibilities of business, also known as corporate social responsibility (CSR). Applying Forsyth’s (1980, Journal of Personality and Social Psychology 39, 175–184, 1992, Journal of Business Ethics 11, 461–470) personal moral philosophy model, we found that ethical idealism had a positive relationship with CSR attitudes, and ethical relativism a negative relationship. We also found materialism to be negatively related to CSR attitudes. Spirituality among business students did not significantly predict CSR attitudes. Understanding the relationship between CSR attitudes and the significant predictors has important implications for researchers and teachers in particular.     

Practitioner-Based Theory Building in Organizational Ethics

Understanding of organizational ethics phenomena requires complex understanding of organizational practices in their real world contexts. We can try to understand and build theory about these complex real world practices from the points of view of: (1) a traditional deductive, ethics literature-based, literature gap formulation approach; or, (2) an inductive, practitioner-based literature gap formulation approach. This consideration of inductive, practitioner-based versus deductive, literature-based literature gap formulation is related to the discussion concerning “engaged scholarship” and relationships and gaps between theory and practice in organization studies [Van De Ven, 2007, Engaged Scholarship: A Guide for Organizational and Research Knowledge (Oxford University Press, NY)]. However, there is an important difference with respect to the key issue of ethics literature versus practitioner-based literature gap formulation. This article offers examples of the two different approaches and makes comparisons between them. Implications for practice-based organizational ethics theory building, Ph.D. education, and public intellectual work are considered.     

Ethical Judgments in Business Ethics Research: Definition,and Research Agenda

Decades of empirical and theoretical research has produced an extensive literature on the ethical judgments construct. Given its importance to understanding people’s ethical choices, future research should explore the psychological processes that produce ethical judgments. In this paper, the authors discuss two steps needed to advance this effort. First, they note that the business ethics literature lacks a single, generally accepted definition of ethical judgments. After reviewing several extant definitions, the authors offer a definition of the construct and discuss its advantages. Second, future ethical judgment research would benefit from greater integration between theories of ethical decision making and theories of social cognition. Drawing upon the Hunt–Vitell (Journal of Macromarketing 6(Spring), 5–15, 1986; In: N. C. Smith and J. A. Quelch (eds.), Ethics in Marketing. Irwin, Homewood, IL, pp. 775–784, 1992) model and the heuristic-systematic model (Chaiken, Journal of Personality and Social Psychology 39(November), 752–766, 1980), the authors present a brief research agenda intended to stimulate research on the psychological processes behind ethical judgments.