Moral Awareness in Family Business: An Issue-Contingent, Socio-Cognitive Explanation

Abstract

While the growth of family firms is widely recognized as important to the prosperity of free-market economies (Family Enterprise USA, 2011), a growing body of stakeholder research finds that family business ethics is important to advancing a society’s moral progress. Yet, due to limits in cognition, family businesses cannot attend to moral issues that account for the interests of all societal stakeholders. Specifically, Jones (1991) and others (Butterfield et al., 2000; Mitchell et al., 2011) argue that the salient attributes surrounding a moral issue influence a decision maker’s attention to a moral issue. Stakeholder salience research has subsequently argued that moral issues can arise from the conflicting goals and interest of different stakeholders in which family businesses prioritizes on only those stakeholders that count (Mitchell et al., 2011). This study propose an issue contingent model of moral awareness where a family business’ moral awareness is not contingent on the salient attributes surrounding a moral issue but is contingent on a moral agent’s heuristic response to resolving complex and novel source of family conflict. Unlike previous issue contingent models of moral awareness, this model introduces a salience that is directly rooted in the cognitive processes of the moral agent rather than to the salience attributes that surround a moral issue.