Bus Ethics Research Articles

A study of the determinants of environmental disclosure quality: evidence from French listed companies

We examine the impact of various factors on the quality of environmental disclosure. Combining multi-theories in a unique framework, it focuses on factors related to the strategy and vision of the firm (environmental audit, presence of an environmental committee), diversity of and within boards (independence of the board, gender diversity) and factors related to the environment (environmental performance, degree of pollution of the company). This study involves an attempt to develop a self-constructed index to measure environmental disclosure quality using qualitative attributes as provided by IASB and GRI frameworks and following (Chauvey et al. in J Bus Ethics, 130(4):789–803, 2014). A number of econometric techniques are used including panel data specifications using a sample of French listed companies in SBF120 for the period 2009–2014. The study found that quality of disclosure remains relatively low. In addition, the findings indicate that a company’s strategy and vision (environmental audit), diversity in boards (gender diversity) and environmental performance play significant roles in explaining variations in quality of environmental disclosure. This paper sheds light on whether various factors could affect the credibility of disclosed information using a multi theory framework. Standards setters and policy makers are recommended to think about implementing a generally accepted framework of non-financial reporting to answer the demand for more transparency and accountability. This paper fills the gap in the literature by highlighting an unexplored area of literature related to the quality of non-financial reporting drawing upon the regulatory framework of financial reporting.

Truly sustainable or not? An exploratory assessment of sustainability capability of textile and apparel corporations in China from the moral responsibility perspective

Within the moral responsibility theory of corporate sustainability (MRCS) framework (Ha-Brookshire in J Bus Ethics, 2015. https://doi.org/10.1007/s10551-015-2847-2), the study examined 86 sustainability reports from top performing textile and apparel companies in China to explore their perceptions and sustainability capability implications. Content analysis of their sustainability reports was conducted to analyze whether each company (a) perceives sustainability as a perfect duty or not, (b) has clear goals toward sustainability or not, and (c) has well-defined structures toward sustainability goals or not. Results show that 66 of the 86 reports described sustainability as a perfect duty to fulfill; 11 described as an imperfect duty, and 9 described no opinions about sustainability. Of the 66 reports, 19 explicitly showed clear goals and the evidence of organizational structures toward such goals, leading us to categorize them as truly sustainable corporations as Ha-Brookshire (2015) described. Of the 66, 43 lacked clear sustainability goals, leading us to categorize them as occasionally sustainable corporations as described by Ha-Brookshire (2015). Other firms were also categorized within the MRCS framework. Findings show a spectrum of Chinese textile and apparel companies’ sustainability capability from the moral responsibility perspective.

Making Quantitative Research Work: From Positivist Dogma to Actual Social Scientific Inquiry

Researchers misunderstand their role in creating ethical problems when they allow dogmas to purportedly divorce scientists and scientific practices from the values that they embody. Cortina (J Bus Ethics. https://doi.org/10.1007/s10551-019-04195-8 , 2019), Edwards (J Bus Ethics. https://doi.org/10.1007/s10551-019-04197-6 , 2019), and Powell (J Bus Ethics. https://doi.org/10.1007/s10551-019-04196-7 , 2019) help us clarify and further develop our position by responding to our critique of, and alternatives to, this misleading separation. In this rebuttal, we explore how the desire to achieve the separation of facts and values is unscientific on the very terms endorsed by its advocates—this separation is refuted by empirical observation. We show that positivists like Cortina and Edwards offer no rigorous theoretical or empirical justifications to substantiate their claims, let alone critique ours. Following Powell, we point to how classical pragmatism understands ‘purpose’ in scientific pursuits while also providing an alternative to the dogmas of positivism and related philosophical positions. In place of dogmatic, unscientific cries about an abstract and therefore always-unobservable ‘reality,’ we invite all organizational scholars to join us in shifting the discussion about quantitative research towards empirically grounded scientific inquiry. This makes the ethics of actual people and their practices central to quantitative research, including the thoughts, discourses, and behaviors of researchers who are always in particular places doing particular things. We propose that quantitative researchers can thus start to think about their research practices as a kind of work, rather than having the status of a kind of dogma. We conclude with some implications that this has for future research and education, including the relevance of research and research methods.

On the Whys and Hows of Quantitative Research

For this issue of JBE, Zyphur and Pierides (J Bus Ethics 143(1):1–16, 2017) have written a paper on a concept that they have labeled relational validity. The purpose of the paper and of their advocacy for the concept of relational validity is to improve the way that quantitative research (QR) is done by expanding our understanding of its ethics-laden aspects. I agree entirely with the authors that every decision regarding QR is an ethics-laden one and that our research as a whole would be improved by recognition of this fact. I disagree with the authors regarding some of the ways that this improvement might be brought about.

Mitigating Stakeholder Marginalisation with the Relational Self

Stakeholder theory has been an incredibly powerful tool for understanding and improving organisations, and their relationship with other actors in society. That these critical ideas are now accepted within mainstream business is due in no small part to the influence of stakeholder theory. However, improvements to stakeholder engagement through stakeholder theory have tended to help stakeholders who are already somewhat powerful within organisational settings, while those who are less powerful continue to be marginalised and routinely ignored. In this paper, we argue that one possible obstacle preventing less powerful stakeholders from speaking up and/or being heard by organisations is found at the ontological level, where we have identified an ‘essentialist self’ underpinning the stakeholder concept. By deconstructing the stakeholder concept through how it is defined, discussed and debated, and linking this back to the practical consequences of the theory for the least powerful stakeholders, we are able to make three contributions. One, through our deconstruction, it is clear that at an ontological level, stakeholder theory is underpinned by an implicit, and problematic, assumption of the ‘essentialist self’, where the organisation is treated as the ‘natural, universal self’, and anyone not closely resembling this narrow (and unrealistic) view of self is treated as ‘other’. Two, we build on the work of authors such as Wicks et al. (Bus Ethics Q 4(4):475–497, 1994), who highlight the need for consideration of the self within stakeholder theory. We thus take our findings from contribution one and begin to build a more holistic view of the self within the stakeholder concept, where each self is encouraged to recognise common selves outside and inside the corporation. Third, we link the theoretical discussion to the practical by discussing some imperfect ways in which a more holistic, enriched stakeholder concept might begin to help mitigate marginalisation for some stakeholders.

The Dynamics of Legitimacy in Multi-stakeholder Initiatives: Insights from the RSPO case

Multi-stakeholder Initiatives (MSIs) fill an important role in governing Corporate Social responsibility (CSR) issues but need to be legitimate if they are to be effective in influencing business practices. To address this relevant issue Mena and Palazzo (Bus Ethics Quarterly, 22(3): 527-56, (2012)) conceptualized MSI legitimacy identifying its dimensions (input and output), related criteria and how these can be operationalized. Based on an in-depth study of the Roundtable on Sustainable Palm Oil (RSPO) this research provides a refinement to Mena and Palazzo’s (2012) framework. We propose two new criteria of MSI legitimacy; participation and adoption. We also refine two existing criteria by identifying that transparency consists of inward and outward transparency and that for efficacy, ideological and practical objectives are necessary. Moreover the paper adds a dynamic dimension to the framework, illustrating interdependences between and across input and output legitimacy criteria. Results highlight that to maintain legitimacy, MSIs should set both practical and ideological objectives, manage inward and outward communication and ensure both member participation in decision-making and substantial adoption of standards and rules. We also highlight the interdependencies between legitimacy criteria noting that a weakness in one criterion is likely to impact other facets of MSI legitimacy.

‘Whistleblowing Triangle’: Framework and Empirical Evidence

This work empirically tests the concept of the ‘whistleblowing triangle,’ which is modeled on the three factors encapsulated by the fraud triangle (pressure or financial incentives, opportunity and rationalization), in the Indonesian context. Anchored in the proposition of an original research framework on the whistleblowing triangle and derived hypotheses, this work aims to expand the body of knowledge on this topic by providing empirical evidence. The sample used is taken from audit firms affiliated with both the big 4 and non-big 4 companies operating in Indonesia. The results of analysis using the PLS-PM method found a significant relationship between the components of the whistleblowing triangle and the intention of blowing the whistle. We found that financial incentives are the most significant predictor of auditors’ intention to blow the whistle in Indonesia. Other components, such as opportunity and rationalization, also play an important role in supporting auditors’ intention to blow the whistle. Our findings also suggest that related pressures are the top priority for audit firms in Indonesia to consider in increasing whistleblowing intention. We expand the previous literature on whistleblowing which has been derived from the components of the fraud triangle (Brown et al. in Account Public Interest 16(1):28–56, 2016; Smaili and Arroyo in J Bus Ethics, https://doi.org/10.1007/s10551-017-3663-7 , 2017) by adding empirical evidence.

Misleading Country Rankings Perpetuate Destructive Business Practices

Countries are ranked on many criteria, the results of which can have far-reaching ethical and practical implications, particularly for emerging nations seeking role models. One highly influential ranking, the World Economic Forum’s Global Competitiveness Report (GCR), has been criticized for containing multiple methodological, conceptual, and logical flaws that bias competitiveness rankings toward countries that favor neoliberalism. Using datasets not afflicted by such flaws, we examine Bergsteiner and Avery’s (J Bus Ethics 109(4):391–410, 2012) prediction that competitiveness scores of the USA and the UK are substantially overstated. Results of re-ranking 104 countries using 29 economic, environmental, and social datasets from reputable sources support this assertion, with the USA showing the greatest discrepancy on a 100-point scale between its 2013–2014 GCR score (5) and our study’s 2013 score (57), and the UK falling from GCR score 9 to 40. We explore reasons for this discrepancy, including examining the relationship between a country’s neoliberal traditions and its rankings on the indicators.

How Can Responsible Family Ownership be Sustained Across Generations? A Family Social Capital Approach

Responsible family ownership (RFO) is a combination of the family’s commitment to the family-firm’s (FF’s) stakeholders in the long term and the explicit behaviour of the family members associated with the firm. However, families are not individuals but rather a system of relationships among family members. In such a context, misunderstandings in communication, anachronistic mentalities and different value systems can block the intergenerational transmission of RFO. Consequently, the responsibility of the family towards the FF’s stakeholders may be damaged and the firm’s socially responsible behaviour hindered. This paper aims to identify how RFO is transferred across generations and to ascertain the role that family social capital (FSC) plays in preserving the transmission of RFO from generation to generation. Our research is based on three in-depth case studies of Mexican family-owned small- and medium-sized enterprises. First, the paper identifies and contrasts a set of FSC-specific factors and problems which play a relevant role in the transmission of RFO while recognizing the influence of the mutually reinforcing dynamics of FSC dimensions. Secondly, the family’s honourableness (Aβländer in J Bus Ethics 116(4):751–767, 2013) is identified as a key driver for sustaining the transmission of RFO. Finally, the paper identifies RFO institutionalization required to face the intrinsic problems of transmitting RFO in growing families.

The Risk of Fraud in Family Firms: Assessments of External Auditors

There is a dearth of business ethics research on family firms, despite the importance of such firms to the US economy (Vazquez in J Bus Ethics, 2016. doi: 10.1007/s10551-016-3171-1 ). We answer Vazquez’s (2016) call to examine the intersection of family-firm research and business ethics, by investigating whether external auditors assess higher risk of fraud in family firms. We test the contradictory predictions of two dominant theoretical perspectives in family-firm research—entrenchment theory and alignment theory. We conduct an experiment with highly experienced external audit professionals, who assess the risk of fraud and make client acceptance decisions for family firms versus non-family firms with different strength of corporate governance: strong versus weak audit committees (ACs). We find that auditors assess the risk of fraud as higher for family firms than for non-family firms, consistent with the predictions of entrenchment theory. Auditors are also less likely to make client acceptance recommendations for family firms. The strength of the AC moderates the family-firm effect, whereby auditors assess family firms with weak ACs to have the highest fraud risk and to be the least desirable audit clients. Our findings suggest that auditors perceive more severe agency conflicts to be present in family firms than in non-family firms, consistent with entrenchment theory, according to which family members may behave opportunistically to extract rents and potentially expropriate the firm’s resources at the expense of minority shareholders.

Generational Differences in Definitions of Meaningful Work: A Mixed Methods Study

The search for meaningful work has been of interest to researchers from a variety of disciplines for decades and seems to have grown even more recently. Much of the literature assumes that employees share a sense of what is meaningful in work and there isn’t much attention given to how and why meanings might differ (Rosso et al. in Res Organ Behav 30:91–127, 2010). Researchers have not only called for more research studying demographic differences in definitions of meaning (e.g., Michaelson et al. in J Bus Ethics 121(1):77–90, 2014), but also more research utilizing mixed methods to study psychological concepts like meaningful work (e.g., Eid and Diener, in Eid, Diener (eds) Handbook of multimethod measurement in psychology, American Psychological Association, Washington, 2006). This study specifically examines differences across generational cohorts on their prioritization of sources of meaningful work through qualitative, in-depth interviews followed by a more generalizable, quantitative survey. Findings from the qualitative study show that generational cohorts define the meaning in their jobs differently, and they hold negative perceptions about the lack of desire for meaning in each of the other cohorts. Study 2 maps generational cohorts on the comprehensive model of meaningful work designed by Lips-Wiersma and Morris (J Bus Ethics 88(3):491–511, 2009) to reveal that although there are some differences in prioritization of sources of meaningful work, all generational cohorts share similar desire to “develop and become themselves” when asked about their definitions of meaningful work. Implications and future research are discussed.

Can Social Norm Activation Improve Audit Quality? Evidence from an Experimental Audit Market

We assert that audit quality can be improved to the extent that social norms for honesty and responsibility are activated in the auditor. To test this assertion, we use an experimental audit market setting found in the literature and manipulate factors expected to activate honesty and responsibility norms in the auditor. We find that auditor misreporting is reduced when the investor is another participant in the experiment rather than computer simulated, and thus, the interests of third-party investors are salient to the auditor. We also find that auditor misreporting is reduced when the auditor is required to sign-off on the audit report, but only when the investor is another participant in the experiment. Consistent with our underlying theory, we find that pre-experimental measures of sensitivity to honesty and responsibility norms help explain the effects of our manipulated variables. Finally, we find that these measures of social norm sensitivity are associated with the moral judgment that auditor misreporting is unethical. Our study helps explain previous anomalous findings in the literature and answers the call in Blay et al. (J Bus Ethics 2017. doi: 10.1007/s10551-016-3286-4 ) for empirical researchers to use social norm theory to develop stronger tests of moral reasoning in the market for auditing services.

Ethical Awareness, Ethical Judgment and Whistleblowing: A Moderated Mediation Analysis

This study aims to examine the ethical decision-making (EDM) model proposed by Schwartz (J Bus Ethics, 2015. doi:10.1007/s10551-015-2886-8), where we consider the factors of nonrationality and aspects that affect ethical judgments of auditors to make the decision to blow the whistle. In this chapter, we argue that the intention of whistleblowing depends on ethical awareness (EAW) and ethical judgment (EJW) as well as there is a mediation-moderation due to emotion (EMT) and perceived moral intensity (PMI) of auditors. Data was collected using an online survey with 162 external auditors who worked in audit firms in Indonesia as well as 173 internal auditors working in the manufacturing and financial services. The result of multigroup analysis shows that emotion (EMT) can mediate the relationship between EAW and EJW. The nature of this relationship is more complex, so we then tested it by adding moderating variables using consistent partial least squares (PLSc) approach. We found that EMT and PMI can improve the relationship between ethical judgments and whistleblowing intentions. These findings indicate that internal auditors are more likely to blow the whistle than external auditors, and reporting wrongdoing internally and anonymously is the preferred way of professional accountants to blow the whistle in Indonesia.

In Pursuit of Eudaimonia: How Virtue Ethics Captures the Self-Understandings and Roles of Corporate Directors

A recent special issue in the Journal of Business Ethics gathered together a variety of papers addressing the challenges of putting virtue ethics into practice (Fontrodona et al in J Bus Ethics 113(4):563–565, 2013). The editors prefaced their outline of the various papers with the assertion that exploring the practical dimension of virtue ethics can help business leaders discover their proper place in working for a better world, as individuals and within the family, the business community and society in general (Fontrodona et al in J Bus Ethics 113(4):563–565, 2013). Scholars are yet to explore the role of virtuous organisational leaders in the pursuit of Eudaimonia. This paper is a qualitative study which considered company directors’ self-understandings in light of a virtue ethics conceptual framework. The aim of the study is to explore whether virtue ethics rather than deontology and consequentialism is a better vehicle for expressing directors’ self-understandings about their ideals and role.

“Apple: Good Business, Poor Citizen”: A Practitioner’s Response

This paper was written in response to Etzioni’s “Apple: Good Business Poor Citizen” (J Bus Ethics, 2016, doi: 10.1007/s10551-016-3233-4 ). It argues that Etzioni is correct in seeing the recent conflict between Apple and the FBI over cracking the San Bernardino shooter’s iPhone as requiring that considerations of national security be balanced against the rights of those it might impact. There are nonetheless critical questions about one must still ask: whose rights are curbed, to what degree, and how does a society decide which side to favor? More attention needs to be paid to the privacy of other iPhone users and, importantly, the burden that hacking the phone might impose on Apple, either impairing its brand value or compromising its business potential. Finally, by asking ‘who judges the balance?’, it questions whether labeling Apple a poor citizen is premature, as they had only begun challenging the FBI’s judgment through the judicial process.

Discursive Tensions in CSR Multi-stakeholder Dialogue: A Foucauldian Perspective

Corporate social responsibility is a complex discipline that not only demands responsible behavior in production processes but also includes the concepts of communicative transparency and dialogue. Stakeholder dialogue is therefore expected to be an integrated part of the CSR strategy (Morsing and Schultz in Bus Ethics: A Eur Rev 14(4):323–338, 2006). However, only few studies have addressed the practice of CSR stakeholder dialogue and the challenges related hereto. This article adopts a postmodern perspective on CSR stakeholder dialogue. Based on a comprehensive single case study on stakeholder dialogue in a global dairy company, we focus on the complexity of CSR dialogue with multiple stakeholders. Drawing on a critical reflexive methodology (Alvesson and Karreman in Acad Manag Rev 32(4):1265–1281, 2007), we develop the research question: How is CSR multi-stakeholder dialogue practiced, experienced, and articulated in an empirical context? The purpose is to understand the underlying assumptions, expectations, and principles guiding CSR multi-stakeholder dialogue in an empirical setting, as we focus on how key stakeholders articulate and anticipate the values of stakeholder dialogue and how the actual stakeholder dialogues are enacted. The findings of the study differ significantly from the ideals of transparent and agenda-free stakeholder dialogue. Rather, the study shows an overall tension between ideal and practice, supporting the progressive importance of the dialogue process in itself as an essential part of the end goal. The implication of this is a growing pressure on creating transparency about the (re)positioning and negotiation of roles throughout the dialogue process.

The Usefulness of Social Norm Theory in Empirical Business Ethics Research: A Review and Suggestions for Future Research

In response to recent calls to extend the underlying theories used in the literature (O’Fallon and Butterfield in J Bus Ethics 59(4):375–413, 2005; Craft in J Bus Ethics 117(2):221–259, 2013), we review the usefulness of social norm theory in empirical business ethics research. We begin by identifying the seeds of social norm theory in Adam Smith’s (in: Raphael and Macfie (eds) The Theory of Moral Sentiments, the Glasgow Edition, Oxford University Press, Oxford, 1759/1790) seminal work, The Theory of Moral Sentiments. Next, we introduce recent theory in social norm activation by Bicchieri (The grammar of society: The nature and dynamics of social norms, Cambridge University Press, New York, 2006) and compare the new theory to two theoretical frameworks found in the literature: Kohlberg’s (in: Goslin (ed) Handbook of socialization theory and research, Rand McNally, Chicago, IL, 1969; in: Lickona (ed) Moral development and behavior, Holt, Rinehart & Winston, New York, 1976) theory of moral development and Cialdini and Trost’s (in: Gilbert et al. (eds) The handbook of social psychology, Oxford University Press, Boston, 1998) taxonomy of social norms. We argue that the new theory provides useful insights by emphasizing the ability of situational cues and information to generate common expectations for social/moral norms. The theory is particularly useful for empirical research in business ethics because it gives both organizational and individual factors a role in motivating norm-based behavior. To demonstrate this usefulness, we present examples where the theory has been effectively applied in experimental accounting research to generate new insights. We conclude by citing specific examples where the theory may prove useful in empirical business ethics research.

Discussion of “Recognizing Ethical Issues: An Examination of Practicing Industry Accountants and Accounting Students”

In public accounting, it is well documented that auditors’ focus on the financial/profitability aspects of their work (i.e., commercialism) creates ethical challenges that can compromise the auditors’ ability to uphold the public interest (see, e.g., Bailey, in Curr Issues Audit 2(1):C28–C36, 2008; Chow et al., in Res Prof Responsib Ethics Account 17:97–138, 2013; Fogarty and Rigsby, in J Account Org Change 6(3):300–329, 2010; Gendron, in Contemp Account Res 18(2):283–310, 2001; Account Org Soc 27(7):659–684, 2002; Lampe and Garcia, in Res Prof Responsib Ethics Account 17:1–45, 2013; Wyatt, in Account Horiz 18(1):45–53, 2004; Zeff, Account Horizons 17(3):189–205, 2003a; Account Horizons 17(4):267–286, 2003b). Less well-studied are other accounting settings (cf., Bampton and Cowton, in J Bus Ethics, 114(3):549–563, 2013; Jones et al., in J Account Literature 22:45–103, 2003). In their paper, Fiolleau and Kaplan (J Bus Ethics (Forthcoming), 2016) address the void by providing insight into the impact of corporate reward structure (context) on the ethical sensitivity of accountants practicing in industry and accounting students (non-auditors). Further, they contribute to the literature by measuring ethical sensitivity using a novel funnel questioning technique, which addresses methodological challenges associated with studying ethical sensitivity. In these comments, I discuss my perspective on Fiolleau and Kaplan’s (J Bus Ethics (Forthcoming), 2016) key contributions to the literature and provide suggestions for moving the research forward in the future.

Discussion of “Does the Accounting Profession Discipline Its Members Differently after Public Scrutiny?” by D. F. Mescall, F. Phillips, and R. N. Schmidt

The paper by Mescall et al. (J Bus Ethics, 2016) provides an opportunity to consider the meaning of “accounting professionalism” in the twenty-first century. To examine the paper, this discussion focuses on three areas, the research question Mescall et al. addresses, contributions of their paper, and what the paper tells us about accounting professionalism.

Sweatshops: Economic Analysis and Exploitation as Unfairness

The economic and moral defense of sweatshops given by Powell and Zwolinski (J Bus Ethics 107:449–472, 2012) has been criticized in two recent papers. Coakley and Kates (J Bus Ethics 117:553–558, 2013) focus on putative weaknesses in the logic of Powell’s and Zwolinski’s argument. Preiss (Bus Ethics Quart 24(1):55–82, 2014) argues that, even granting the validity of their economic argument, Powell’s and Zwolinski’s defense is without force when viewed from a Kantian republican viewpoint. We are concerned that sweatshop critics have misinterpreted the economic literature and overstated the conclusions that follow from their ethical premises. We show that the best understanding of the current economic literature supports Powell’s and Zwolinski’s conclusions about the negative effects of sweatshop wage regulation, and that it is unreasonable to reject economic analysis in moral argument against sweatshops even from a Kantian perspective. Additionally, we defend the theory of exploitation as unfairness given by Wertheimer (Exploitation, 1996), and show how economic analysis can be applied to that theory to identify cases of sweatshop exploitation.