A selection of interesting research and articles we found recently on ethical contexts to business actions.
Top Management Ethical Leadership and Firm Performance: Mediating Role of Ethical and Procedural Justice Climate
Authors: Yuhyung Shin, Sun Young Sung, Jin Nam Choi and Min Soo Kim
Despite the prevailing discourses on the importance of top management ethical leadership, related theoretical and empirical developments are lacking. Drawing on institutional theory, we propose that top management ethical leadership contributes to organisational outcomes by promoting firm-level ethical and procedural justice climates. This theoretical framework was empirically tested using multi-source data obtained from 4,468 employees of 147 Korean companies from various industries.
The firm-level analysis shows that top management ethical leadership significantly predicts ethical climate, which then results in procedural justice climate that fully mediates the effects of top management ethical leadership on two organisational outcomes, namely, firm-level organisational citizenship behaviour and firm financial performance. The present study provides a plausible theoretical account and empirical validation of a mechanism through which top management ethical leadership enhances organisational performance.
Journal of Business Ethics, 2015, 129(1), 43-57.
Do as I Say (and Do): Ethical Leadership Through the Eyes of Lower Ranks
Author: John Pucic
This research expands what is currently known in the organisational sciences about the causes, consequences and unique role of ethical leadership in the workplace. In two different studies and two independent samples of approximately 1,500 workers each in field settings, ethical leadership was positioned as an antecedent, mediator and outcome of variables of pragmatic importance to the workplace. Ethical leadership was the central concept modelled across both studies. Social cognitive theory, social identity theory and leadership categorisation theory were used to support a model of how follower’s rank influences workplace outcomes through the mediating effect of ethical leadership.
In addressing the ethical imperative of the employment relationship, these studies contribute to ethical leadership research in two ways. First, findings indicated that a follower’s rank was positively associated with perceptions of ethical leadership, and second, that ethical leadership functioned as a partial mediator between rank/status and desirable workplace outcomes such as organisational fairness climate, career satisfaction and follower affective commitment. Implications for theory and practice are discussed.
Journal of Business Ethics, 2015, 129(3), 655-671.
Does an Ethical Work Context Generate Internal Social Capital?
Authors: David Pastoriza, Miguel A. Arino, Joan E. Ricart and Miguel A. Canela
Ethics has recently gained importance in the debate over social capital creation. The goal of this study is to empirically examine the ethical work context of the firm as an antecedent of the firm’s internal social capital. The authors build on person–situation interactionist theory to argue that individuals can learn standards of appropriate behaviour induced by the ethical work context in which they are embedded. By creating an ethical work context, managers can facilitate the process through which employees learn to feel empathy toward others and establish profound affective relationships with them. Data were collected from 1,817 individuals in 36 business units of 7 Spanish, French, and Portuguese corporations.
Results reveal three phenomena. First, that a business unit’s ethical work context exerts significant influence on the structural, relational, and cognitive dimensions of internal social capital. Second, the managerial practices that constitute the ethical work context are not equally important across the seven corporations; in particular, managerial practices are more influential in those corporations that belong to knowledge-intensive industries. Third, a business unit’s internal social capital is influenced not only by the business unit’s ethical work context, but also by the ethical work context of the corporation to which it belongs.
Journal of Business Ethics, 2015, 129(1), 77-92.
Reoccurring instances of unethical employee behaviour raises the question of the effectiveness of organisation’s employee ethics training programs. This research seeks to examine employee ethics training programs among US-based global organisations by asking members of the Ethics and Compliance Officer Association to describe various elements of their organisations’ ethics training programs. This investigation and assessment reveal that there are some effective aspects of ethics training but five serious concerns are identified and discussed as potential contributions to the lack of ethics among business organisations’ employees.
Journal of Business Ethics, 2015, 129(1), 27-42.
Adam Smith’s Contribution to Business Ethics, Then and Now
Author: Michael Gonin
Adam Smith defines the business enterprise primarily as the endeavor of an individual who remains fully embedded in the broader society and subject to its moral demands. For him, the conceptions of the local community and its normative framework, of the enterprise, and of the individuals within it needed to be aligned with each other and developed together. Over time, four processes have, however, led to a widening gap between the business world and the local community. These are
(1) the dissemination of the corporate model,
(2) the transformation of the entrepreneurial role toward an agency role,
(3) changes in the ownership structure, and
(4) changes in the relationship with the local community.
This article presents Smith’s integrative conception of business and its contributions to the development of integrative theories of organisations and of business–society relations in the twenty-first century. Among others, it discusses the necessity to develop a normative-relational dimension of organisations that addresses the relations between the organisation, its members (e.g., owners and managers), and the normative framework of the local community. This integrative approach of business–society relations challenges current business ethics research which often suggests that solutions to the current scandals lie either within the framework, the organisation, or the individuals.
Journal of Business Ethics, 2015, 129(1), 221-236.