Non-Libertarianism and Shareholder Theory: A Reply to Schaefer

Libertarianism and the shareholder model of corporate responsibility have long been thought of as natural bedfellows. In a recent contribution to the Journal of Business Ethics, Brian Schaefer goes so far as to suggest that a proponent of shareholder theory cannot coherently and consistently embrace any moral position other than philosophical libertarianism. The view that managers have a fiduciary obligation to advance the interests of shareholders exclusively is depicted as fundamentally incompatible with the acknowledgement of natural positive duties – duties to aid others that have not been acquired by some prior commitment or transaction. I argue that Schaefer is mistaken. Positive duties are incompatible with the shareholder model only if we must contribute to their fulfilment in the corporate context; only if we have some reason to think that it is not possible or not permissible to discharge these obligations entirely in our private lives or through our various other roles and capacities. But we have no good reason to accept this. I argue that individuals are presumptively free to decide how and when to discharge their positive duties, and that buying shares does not cause this presumption to lapse. Hence a non-libertarian moral theory can be held without incoherence by a proponent of the shareholder model.     

Corporate Codes of Conduct: The Effects of Code Content and Quality on Ethical Performance

Corporate codes of conduct are a practical corporate social responsibility (CSR) instrument commonly used to govern employee behavior and establish a socially responsible organizational culture. The effectiveness of these codes has been widely discussed on theoretical grounds and empirically tested in numerous previous reports that directly compare companies with and without codes of conduct. Empirical research has yielded inconsistent results that may be explained by multiple ancillary factors, including the quality of code content and implementation, which are excluded from analyses based solely on the presence or absence of codes. This study investigated the importance of code content in determining code effectiveness by examining the relationship between code of conduct quality and ethical performance. Companies maintaining high quality codes of conduct were significantly more represented among top CSR ranking systems for corporate citizenship, sustainability, ethical behavior, and public perception. Further, a significant relationship was observed between code quality and CSR performance, across a full range of ethical rankings. These findings suggest code quality may play a crucial role in the effectiveness of codes of conduct and their ability to transform organizational cultures. Future research efforts should transcend traditional comparisons based on the presence or absence of ethical codes and begin to examine the essential factors leading to the effective establishment of CSR policies and sustainable business practices in corporate culture.     

Market Orientation,Corporate Social Responsibility,and Business Performance

This study examines the moderating effects of corporate social responsibility (CSR) on the association between market orientation and firm performance in the context of an emerging economy. The results from a sample of firms that operate in Dubai indicate that CSR has a synergistic effect on the impact of market orientation on business performance. The results of our research on the moderating effects of CSR on market orientation subsets reveal that although CSR moderates the association between customer orientation and business performance, it does not moderate the association between competitive orientation and inter-functional coordination and performance. The results of this study are discussed, and implications for practitioners and researchers are presented.     

The Global Economic Ethic Manifesto: Implementing a Moral Values Foundation in the Multinational Enterprise

The Global Economic Ethic Manifesto (“Manifesto”) is a moral framework/code of conduct which is both interactive and interdependent with the economic function of the main institutions of the economic system: markets, governments, civil society, and supranational organizations, which lays out a common fundamental vision of what is legitimate, just, and fair in economic activities. The Manifesto includes five universally accepted principles and values: the principle of humanity; the basic values of non-violence and respect for life; the basic values of justice and humanity; the basic values of honesty and tolerance; and the basic values of mutual esteem and partnership. We posit that the Manifesto provides an ethical foundation for explicitly assisting multinational enterprise's (“MNE”) executive management and boards of directors to meet the moral failures criticisms associated with the expansion of global capitalism, and similarly how the U.N. Global Compact (“Compact”) is focused on addressing complimentary market and institutional failures. In this article, we argue how the Compact and the Manifesto complement each other, explaining how the policies and guidelines of the Compact can now be implemented at the organizational/individual level through a comprehensive human resource management (HRM) plan supporting the ethical framework of the Manifesto. Finally, we have described how the Manifesto completes a comprehensive managerial framework (consisting of both the Compact and the Manifesto) for what we term an “MNE Moral Values-Based Corporate Governance Model.” Ultimately, further research is needed in understanding how much impact external and internal influences make on creating a sustainable ethical culture in MNEs.     

Supervisor Role Modeling,Ethics-Related Organizational Policies,and Employee Ethical Intention: The Moderating Impact of Moral Ideology

The moral ideology of banking and insurance employees in Spain was examined along with supervisor role modeling and ethics-related policies and procedures for their association with ethical behavioral intent. In addition to main effects, we found evidence supporting that the person–situation interactionist perspective in supervisor role modeling had a stronger positive relationship with ethical intention among employees with relativist moral ideology. Also as hypothesized, formal ethical polices and procedures were positively related to ethical intention among those with universal beliefs, but the relationship was much weaker among relativists. Thus, firms wishing to optimally promote ethical attitudes and behavior must tailor their organization-based initiatives to the individual characteristics of their employees.     

CSR and Service Brand: The Mediating Effect of Brand Identification and Moderating Effect of Service Quality

This article examines the mediation effect of brand identification and the moderating effect of service quality (SQ) on the effects of corporate social responsibility (CSR) association on service brand performance. A survey of customers of mobile telecommunications services was conducted. The study finds, first, that both CSR and SQ have direct effects on brand identification and customer satisfaction and indirect effects on customer satisfaction (via brand identification) and on service brand loyalty (via customer satisfaction and via “brand identification/customer satisfaction”). Second, SQ enhances the effect of CSR on brand identification. This study contributes to the literature by incorporating three perspectives of service brand performance – CSR association, SQ, and brand identification – into one general framework that stresses (a) the mediating role of brand identification in predicting customer satisfaction and service brand loyalty; and (b) the interactive effect of CSR and SQ in predicting brand identification.     

Australian Socially Responsible Funds: Performance,Risk and Screening Intensity

We investigate the performance and risk of Socially Responsible Investment (SRI) equity funds in the Australian market and find no significant difference between the returns of SRI and conventional funds. In an extension to prior literature, we examine the impact of the number of positive, negative and total screens funds impose on performance and risk. We find little evidence of positive or negative screening impacting total return, but find weak evidence that funds with more screens overall provide better risk-adjusted performance. Positive screening significantly reduces funds’ risk. However, negative screening significantly increases risk and reduces funds’ abilities to form diversified portfolios.     

Moral Judgment and its Impact on Business-to-Business Sales Performance and Customer Relationships

For many years, researchers and practitioners have sought out meaningful indicators of sales performance. Yet, as the concept of performance has broadened, the understanding of what makes up a successful seller, has become far more complicated. The complexity of buyer–seller relationships has changed therefore as the definition of sales performance has expanded, cultivating a growing interest in ethical/unethical actions since they could potentially have impacts on sales performance. Given this environment, the purpose of this study is to explore the impact of moral judgment on sales performance and sellers engaging in a customer-oriented selling approach. Specifically, by utilizing a sample of 345 business-to-business salespeople, this study examines the relationships between moral judgment, customer-oriented selling, and outcome and behavior based performance. Results, managerial implications, and opportunities for future research are provided.     

The Impact of Ethical Ideologies,Moral Intensity,and Social Context on Sales-Based Ethical Reasoning

Previous research indicates that ethical ideologies, issue-contingencies, and social context can impact ethical reasoning in different business situations. However, the manner in which these constructs work together to shape different steps of the ethical decision-making process is not always clear. The purpose of this study was to address these issues by exploring the influence of idealism and relativism, perceived moral intensity in a decision-making situation, and social context on the recognition of an ethical issue and ethical intention. Utilizing a sales-based scenario and multiple ethics measures included on a self-report questionnaire, data were collected from a regional sample of business students, most of whom had modest work experience. The results indicated that perceived moral intensity was associated with increased ethical issue recognition and ethical intention. Idealism was also associated with increased ethical issue recognition, and relativism was associated with decreased ethical intention. Social consensus was positively related to ethical issue recognition and intention, while competitive context was inversely related to ethical intention. Finally, ethical issue recognition was associated with increased ethical intention. Idealism, moral intensity, social consensus, and work experience worked together as predictors of ethical issue recognition, whereas recognition of an ethical issue, relativism, moral intensity, social consensus, and competitive context worked together to predict ethical intention.