A selection of interesting articles we found recently about corporate moral behaviour.

MNE subsidiaries’ strategic commitment to CSR in emerging economies
Multinational enterprises (MNEs) venturing into emerging economies operate in relatively unfamiliar environments that, compared with their home countries, often display a high degree of administrative distance (i.e., differences in social rules, regulations, and governmental control and enforcement mechanisms). At the same time, many MNEs face the question of how intensely to commit to corporate social responsibility (CSR) in emerging economies, given the often relatively lower social standards in those countries. This research addresses the question of how administrative distance, MNE subsidiary size, and experience in the host country relate to the extent to which MNEs strategically commit to CSR in their emerging economy subsidiaries.

The researchers argue that the greater the administrative distance between MNEs’ home and host countries, the lesser the MNE subsidiaries strategically commit to CSR. At the same time, the writers predict that the larger the size of MNE subsidiaries (as a proxy for local subsidiaries’ available resources), and the longer their experience in the host country, the more the MNE subsidiaries strategically commit to CSR. To test these hypotheses, the authors use data from a large-scale, cross-industry survey of 213 subsidiaries of Western MNEs in Asia, Eastern Europe, and Latin America. They complement the survey data with country-level data from the World Bank Governance Indicators.

Further details are at: Felix Reimann, Johan Rauer & Lutz Kaufmann. 2015. MNE Subsidiaries’ Strategic Commitment to CSR in Emerging Economies: The Role of Administrative Distance, Subsidiary Size, and Experience in the Host Country.
Journal of Business Ethics, 132(4), 845-857.

Are philanthropists ethical leaders?
Philanthropic giving among leaders is often assumed to be an expression of ethical leadership in both academic and media discourses; however, this assumption can overlook the ways in which philanthropy produces and is underpinned by inequality. In order to extend current understandings of ethical leadership, this study employs a critical discourse analytic approach to examine how the link between philanthropy and ethical forms of leadership is verbally and visually constructed in the media.

Based on the analysis, the article demonstrates how the construction of Australian philanthropists as ethical leaders is achieved through their representation via three paradoxical identities: Aristocratic Battlers; Caring Controllers; and Publicity-Shy Celebrities. These discourses are mediated by Australian cultural norms and serve to conceal yet ultimately reinforce social and economic inequality. The article proposes that a critical discursive approach to understanding leadership ethics can help to explore the hidden or adverse effects of ostensibly ethical practices.

See more at: Helena Liu & Christopher Baker. 2016. Ordinary Aristocrats: The Discursive Construction of Philanthropists as Ethical Leaders.  
Journal of Business Ethics, 133(2), 261-277.

Late disclosure of insider trades: Who does it and why?
Millicent Chang & Yilin Lim attempt to understand the personal incentives that motivate corporate insiders to engage in unethical behaviour such as delayed trade disclosure. Delayed disclosure affects corporate transparency and other shareholders in the firm potentially suffer investment losses because they are unaware of insiders’ activities.

Using archival data from the 300 largest Australian firms between 2007 and 2011, the results show that risk factors such as insider age and tenure and wealth effects in the form of insider shareholdings affect the likelihood of delayed reporting. Governance positions such as committee membership mitigate this behaviour. This study highlights the importance of considering individual insider’s wealth and risk factors. The self-monitoring role of governance positions is also indicative of the effectiveness of internal corporate governance in the prevention of illegal insider behaviour.

Read more in: Millicent Chang & Yilin Lim. 2016. Late Disclosure of Insider Trades: Who Does It and Why?
Journal of Business Ethics, 133(3), 519-531.

Do older CEOs disengage from CSR? If so, when?
This paper examines the influence of CEO career horizon problems on corporate social responsibility (CSR). The authors assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. Won-Yong Oh, Young Kyun Chang & Zheng Cheng further argue that high levels of industry-level discretion (ILD) and blockholder ownership amplify the negative effects of CEO age on CSR.

Using a panel sample of US-based firms over 2004–2009, they did not find the main effect of CEO age on CSR, but found support for the moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when (1) CEOs have sufficient discretion over the firm’s strategic decisions and (2) outside blockholders put more pressure on CEOs to engage in financial earning management.

Read further at: Won-Yong Oh, Young Kyun Chang & Zheng Cheng. 2016. When CEO Career Horizon Problems Matter for Corporate Social Responsibility: The Moderating Roles of Industry-Level Discretion and Blockholder Ownership.
Journal of Business Ethics, 133(2), 279-291.

Ethical climate and employee compassion in the hospitality industry
The model emphasizes the ethical dynamics of compassion in hospitality settings by suggesting that under an organizational ethical climate, the hotel staff will be more morally aware of peers’ pain and suffering, and motivated to participate in delivering compassion. Based on the positive psychology focus on compassion as individual states and traits supporting interpersonal dealings, the paper operationalizes compassion based on four individual factors involved in the compassionate process:

(a) empathic concern, or an other-oriented emotional response elicited by and congruent with the perceived welfare of a person in need;
(b) mindfulness, a state of consciousness in which attention is focused on present-moment phenomena occurring both externally and internally;
(c) kindness, or understanding the pain or suffering of others; and
(d) common humanity, or seeing others’ experiences as part of the larger human experience.

Data were collected from 280 employees at ten hotels in the Canary Islands (Spain). With the exception of self-interest, results of multiple linear regressions demonstrate that each of the six interpreted factors of ethical climate has substantive effects on any of the studied elements of staff compassion. The egoistic-related and principle-related climate factors generated a more consistent and intense compassionate reaction, suggesting that the staff is moved to act out of compassion either to assure that the team succeeds or to support each other out of moral obligation.

For more detail: Pablo Zoghbi-Manrique-de-Lara & Rita Guerra-Baez. 2016. Exploring the Influence of Ethical Climate on Employee Compassion in the Hospitality Industry.
Journal of Business Ethics, 133(3), 605-617.

Positive case: Business focus on gender and poverty alleviation for Brazilian women

Successful entrepreneurs of a large retail chain for clothing—the Lojas Renner, decided to address gender, as well as job and income generation issues, in a challenging experience that involved several stakeholders in the new markets where they established their business. In 2007 they launched the ‘Mais Eu’ (More me) social campaign aligned with the business, aiming to increase women’s professional qualifications, job and income generation.

The key concern relied upon the content of the communication, in order to promote a deep adaptation to regional tastes and habits, respecting the different lifestyles. The institutional advertising campaign focused on the concept of woman and her relationship with important symbols such as family, considering different phases of her life-cycle (teenager, mother with children, and housewife in her home routine) and different women’s styles. This approach nationalized the concept and the importance of women from all Brazilian regions, enabling identification and awareness. The objectives of this paper are:
(a) to present the campaign, as it could serve as a model to be replicated by other companies, in emergent or developing countries; and
(b) to analyze the campaign using the theoretical framework of the Ethics of Care.

Read more at: Maria Cecilia Coutinho de Arruda & Gabriel Levrini. 2015. Successful Business Leaders’ Focus on Gender and Poverty Alleviation: The Lojas Renner Case of Job and Income Generation for Brazilian Women.
Journal of Business Ethics, 132(3), 627-638.

How product market competition affects corporate environmental responsibility

Although the mainstream of current thinking in the business literature recognises that firms should invest in environmental responsibility, the theory on how product market competition affects firms’ environmental responsibility remains undeveloped. Using cost-benefit analysis, the authors hypothesise that the relationship between product market competition (i.e., differential industry-level competition and heterogeneous firm-level market power) and corporate environmental responsibility (CER) will be curvilinear.

They find support for this hypothesis through an empirical test on a panel of 792 listed manufacturing companies from 2006 to 2008 in China. The results show that (1) either too much or too little industrial competition and (2) either too much or too little firm-level market power lead to lower environmental responsibility. These results reveal that CER is strategically chosen and related to competitive situations.

Read more at: X. H. Meng, S. X. Zeng, X. M. Xie & G. Y. Qi. 2016. The impact of product market competition on corporate environmental responsibility.
Asia Pacific Journal of Management, 33(1), 267-291.