Lessons from a recent issue of the Journal of Business Ethics focusing on organisational virtue.

Adam Smith: Economics as moral imagination 
The paper takes a fresh look at two essays that Adam Smith wrote at the very beginning of his career. In these essays, Smith explains his philosophy of science, which is social constructivist.

A social constructivist reading of Smith strengthens the scholarly consensus that The Wealth of Nations (WN) needs to be interpreted in light of the general moral theory he explicates in The Theory of Moral Sentiments (TMS), as the two essays and TMS stress the importance of the same concepts: e.g., moral imagination, the socially embedded individual, and humility.

The connecting tissue between all three works is made up of sentiments and values. Smith regards the socially embedded human as the agent in all three realms (knowledge creation, morality, economics), and humans are always driven by values. Smith not only conceives of economics as an applied moral philosophy, but also bases both research areas on a view of knowledge creation that stresses specific epistemic values.

If mainstream economic theory (and business theory that is based on it) wants to have any claim to Adam Smith, it would have to change not only what it argues but also how it argues. Economists would have to replace the language of mathematics with the language and logic of moral philosophy and give values centre stage.

Matthias P. Hühn. 2019. Adam Smith’s Philosophy of Science: Economics as Moral Imagination. 
Journal of Business Ethics, 155(1), 1–15.


Virtues and ethical values in the financial services sector 
In his important recent book, Ethics and the Global Financial Crisis: Why Incompetence is Worse than Greed (2015), Boudewijn de Bruin argues that a key element of the global financial crisis of 2007–2008 was a failure of epistemic (i.e. knowledge-based) virtue. To improve matters, then, de Bruin argues we need to focus on the acquisition and exercise of epistemic virtues, rather than to focus on a more ethical culture for banking per se.

Whilst this is an interesting suggestion and it is indeed very plausible that an increased focus on proper knowledge-related behaviour will be part of a solution, the authors are sceptical both about de Bruin’s overarching theoretical claims and about his practical suggestions for change.

Instead the authors argue that change in this sector is best promoted by reconceiving of the relationship between financial institutions and the societies they serve, and that this is fundamentally not an epistemic but a moral issue.

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Emma Borg and Bradford Hooker. 2019. Epistemic Virtues Versus Ethical Values in the Financial Services Sector. 
Journal of Business Ethics, 155(1), 17–27.


How virtuous do global firms say they are? 
This study compares the different emphases on virtuous characters presented in their values, across global firms considering country and industry of origin. It presents a content analysis of the 122 codes of conduct statements from Fortune Global 500 firms, drawn from four sectors and using correspondence analysis.

American firms tend to emphasise courage, while European firms emphasise integrity and empathy, surprisingly with Asian firms being closer to European ones. Retailers and pharmaceutical firms emphasise empathy, while banks and petroleum emphasise courage.

This study extends the newly emerging strategic paradigm of organisational virtue, by introducing an empirical study of ethical values. Implications for multinational companies are then discussed.

Rosa Chun. 2019. How Virtuous Global Firms Say They Are: A Content Analysis of Ethical Values.
Journal of Business Ethics, 155(1), 57–73.


Ethical organisation culture and middle managers’ moral agency in ethical problems
This paper investigates qualitatively the significance of different dimensions of ethical organisation culture for the exercise of middle managers’ moral agency in ethical problems. The research draws on the social cognitive theory of morality and on the corporate ethical virtues model.

This study broadens understanding of the factors which enable or constrain managers’ potential for moral agency in organisations, and shows that an insufficient ethical organisational culture may contribute to indifference towards ethical issues, the experiencing of moral conflicts, lack of self-efficacy and morally disengaged reasoning.

In contrast, a healthy ethical culture can contribute to motivation to tackle ethical problems, an increased capacity for self-regulation and ultimately ethical behaviour.

Minna-Maaria Hiekkataipale and Anna-Maija Lämsä. 2019. (A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for Middle Managers’ Exercise of Moral Agency in Ethical Problems. 
Journal of Business Ethics, 155(1), 147–161.


From Homo-economicus to Homo-virtus: Moral self-awareness 
There is growing concern that a global economic system fueled predominately by financial incentives may not maximise human flourishing and social welfare externalities. If so, this presents a challenge of how to get economic actors to adopt a more virtuous motivational mindset.

Relying on historical, psychological, and philosophical research, the authors show how such a mindset can be instilled. First, the authors demonstrate that historically, financial self-interest has never in fact been the only guiding motive behind free markets, but that markets themselves are representations of our individual and collective moral identities.

Building on this understanding, the authors review the research on how economic incentives crowd out virtue-oriented concerns. The authors then introduce the concept of moral self-awareness (MSA), an evolving mindset informed by reflection on moral identity, namely what one’s actions say about oneself given the impacts (positive or negative) on others or society that one’s action may effect.

MSA comprises three fundamental aspects of virtue-oriented reasoning: pride, shame, and guilt. Finally, the authors offer a four-stage model anchored in systems theory, yielding ever more refined motivating strategies for maximizing human flourishing and social welfare externalities.

Julian Friedland and Benjamin M. Cole. 2019. From Homo-economicus to Homo-virtus: A System-Theoretic Model for Raising Moral Self-Awareness.
Journal of Business Ethics, 155(1), 191–205.


The deliberative test for ethical decision making
Integrative Social Contracts Theory (ISCT) is a popular framework to assist managers in making decisions on international moral dilemmas. Although the theory has been praised for its comprehensiveness and sophistication, commentators have raised concerns regarding the justification and identification of substantive hypernorms, fundamental moral principles valid across cultures.

This paper introduces the deliberative test, a new method for testing the cross-cultural validity of ethical norms in ISCT. The test relies on the concept of Deliberative Capacity, arising from new developments in system-level deliberative democracy research, which studies deliberation at the level of national societies and over time.

Based on this recent stream of research, the deliberative test has the potential of providing better guidance for managers to decide which norms to follow in case of conflicting standards between home and host countries.

Federico Ast. 2019. The Deliberative Test, a New Procedural Method for Ethical Decision Making in Integrative Social Contracts Theory. 
Journal of Business Ethics, 155(1), 207–221.


Organisational ethical virtues and innovativeness 
This study participates in the discussion of the ethical culture of organisations by deepening the knowledge and understanding of the meaning of organisational ethical virtues in organisational innovativeness.

The aim in this study was to explore how an organisation’s ethical culture and, more specifically, organisation’s ethical virtues support organisational innovativeness. The ethical culture of an organisation is defined as the virtuousness of an organisation. Organisational innovativeness is conceptualised as an organisation’s behavioural propensity to produce innovative products and services.

The empirical data consisted of a total of 39 interviews from specialist organisations. Qualitative content analysis was used to analyse the data. The findings indicate that the organisational ethical virtues of feasibility, discussability, supportability, and congruency of management are those that support organisational innovativeness.

The findings also show which specific elements of these virtues and related organisational practices are important to innovativeness. In addition, this study showed that the features of organisational innovativeness are not necessarily dichotomous but rather follow the ideas of virtues and are versatile in nature.

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Elina Riivari and Anna-Maija Lämsä. 2019. Organizational Ethical Virtues of Innovativeness. 
Journal of Business Ethics, 155(1), 223–240.