Why Do Organizations Respond Differently When Accused of Historic Crimes?

Abstract

This paper contributes to the growing literature on corporate historic crimes by challenging the ways of thinking about moral evaluation that have hitherto informed research on this topic. We do so by examining managers’ responses to the ongoing campaign for corporate reparations for slavery. In recent years, social movements such as BLM have called upon the firms that historically profited from African slavery to apologize and pay reparations. We show that these firms have responded in strikingly different ways when confronted by activists who produced irrefutable evidence that they had once profited from slavery. Some of these firms apologising profusely and announced they would spend on restorative justice measures, while other firms facing essentially similar accusations refused to apologize or even comment on the accusation. We explain this difference in response with the Social Intuitionist Model (SIM) of moral reasoning. We find that while part of the observed difference in firm responses can be easily explained by looking at their current business models, firm responses were also strongly influenced by political ideology, a factor largely ignored by the extant literature on historic corporate responsibility. In the model we develop to explain firm responses to accusations of immoral behaviour in the past, a key factor is the nature of the moral universe inhabited by the firm’s managers and stakeholders. When a firm’s core stakeholders and managers inhabit the “moral universe” associated with the present-day Anglo-American left, the firm is much more likely to apologise for its historical connections to racial slavery than if its core stakeholders and managers inhabit the moral universe associated with political conservativism. We identify important implications for business ethics researchers and practitioners.