This week we look at the role virtue ethics can play in helping business run more effectively and efficiently.

Practical wisdom: Management’s no longer forgotten virtue 
The ancient virtue of practical wisdom has lately been enjoying a remarkable renaissance in management literature. The purpose of this article is to add clarity and bring synergy to the interdisciplinary debate.

In a review of the wide-ranging field of the existing literature from a philosophical, theological, psychological, and managerial perspective, we show that, although different in terms of approach, methodologies, and justification, the distinct traditions of research on practical wisdom can indeed complement one another.

We suggest a conciliatory conception of the various features of practical wisdom in management. This we take as a point of departure for a discussion of the significant implications of the subject for the theory and practice of management and for the direction of further research in the field.

Claudius Bachmann, André Habisch and Claus Dierksmeier. 2018. Practical Wisdom: Management’s No Longer Forgotten Virtue. 
Journal of Business Ethics, 153(1), 147–165.


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.

Patricia Grant, Surendra Arjoon and Peter McGhee. 2018. In Pursuit of Eudaimonia: How Virtue Ethics Captures the Self-Understandings and Roles of Corporate Directors. 
Journal of Business Ethics, 153(2), 389–406.


Religiosity and voluntary simplicity via spiritual well-being
Although there has been considerable theoretical support outlining a positive relationship between religiosity and voluntary simplicity, there is limited empirical evidence validating this relationship.

This study examines the relationships among religious orientations (Allport and Ross in J Pers Soc Psychol 5(4):432–443, 1967) and voluntary simplicity in a sample of Australian consumers. The results demonstrate that intrinsic religiosity is positively related to voluntary simplicity; however, there is no relationship between extrinsic religiosity and voluntary simplicity.

Furthermore, this research investigates the processes through which intrinsic religiosity affects voluntary simplicity. The relationship between intrinsic religiosity and voluntary simplicity is sequentially mediated by communal/personal well-being and environmental well-being.

The findings not only identify a prosocial role of intrinsic religiosity in motivating voluntary simplicity, but also indicate that secular pursuits that enhance communal/personal well-being and environmental well-being may also motivate voluntary simplicity.

Rafi M. M. I. Chowdhury. 2018. Religiosity and Voluntary Simplicity: The Mediating Role of Spiritual Well-Being. 
Journal of Business Ethics, 152(1), 149–174.


The moderating role of context in determining unethical managerial behaviour 
We examine the moderating role of the situational and organisational contexts in determining unethical managerial behaviour, applying the case-survey methodology. On the basis of a holistic, multiple-antecedent perspective, we hypothesise that two key constructs, moral intensity and situational strength, help explain contextual moderating effects on relationships between managers’ individual characteristics and unethical behaviour.

Based on a quantitative analysis of 52 case studies describing occurrences of real-life unethical conduct, we find empirical support for the hypothesised contextual moderating effects of moral intensity and situational strength.

By examining these complex contextual moderators, we aim to contribute to organisational ethics research as we shed light on the critical role that context may play in influencing unethical managerial behaviour.

Read this Open Access article for free online

Christof  Miska, Günter K. Stahl and Matthias Fuchs. 2018. The Moderating Role of Context in Determining Unethical Managerial Behavior: A Case Survey.
Journal of Business Ethics, 153(3), 1–20.


Role of ethical organisational culture in managerial turnover 
The aim of the present longitudinal study was to quantitatively examine whether an ethical organisational culture predicts turnover among managers. To complement the quantitative results, a further important aim was to examine the self-reported reasons behind manager turnover, and the associations of ethical organisational culture with these reasons.

The participants were Finnish managers working in technical and commercial fields. Logistic regression analyses indicated that, of the eight virtues investigated, congruency of supervisors, congruency of senior management, discussability, and sanctionability were negatively related to manager turnover.

The results also revealed that the turnover group is not homogeneous, and that there are several different reasons for leaving. The reasons given for turnover were grouped into five different categories: (1) lay-off, (2) career challenges, (3) dissatisfaction with the job or organisation, (4) organisational change, and (5) decreased well-being/motivation.

ANCOVA analyses showed that those managers who stayed in their organisation perceived their ethical culture to be stronger than those in turnover groups, and especially compared to groups 3 and 5.

The results acquired through different methods complemented and confirmed each other, showing that by nurturing ethical virtues an organisation can decrease job changes and encourage managers and supervisors to want to remain in their organisation.

Maiju Kangas, Muel Kaptein, Mari Huhtala, Anna-Maija Lämsä, Pia Pihlajasaari and Taru Feldt. 2018. Why Do Managers Leave Their Organization? Investigating the Role of Ethical Organizational Culture in Managerial Turnover.
Journal of Business Ethics, 153(3), 707–723.


 “Just a Little Respect”: Effects of a Layoff Agent’s Actions on Employees’ Reactions to a Dismissal Notification Meeting 
A layoff is a threatening yet common event which employees might face at some point in their working lives. In two scenario-based experiments (total N = 344), we investigated which actions of a layoff agent (i.e., who delivers the layoff notice) during a dismissal notification meeting may contribute to laid-off employees’ fairness judgments and negative attitudes toward the employer.

In general, the extent to which layoff victims were treated with respect was consistently found to increase perceptions of interpersonal and procedural fairness and to mitigate negative attitudes toward the employer.

Further results showed that layoff victims preferred to be given an adequate (vs. inadequate) explanation of the reasons for the layoff and to receive notice from the direct supervisor (vs. an external consultant).

Relationships between the layoff agent’s actions and layoff victims’ negative attitudes toward the employer were mediated by perceptions of procedural fairness. In addition, delegating the layoff agent’s task to an external consultant increased perceived psychological contract breach.

Our findings have important implications for organisational justice research and for the managerial practice of implementing fair layoffs. In particular, small actions, such as treating employees with respect, might be of benefit both to humans and organisations.

Manuela Richter, Cornelius J. König, Marlene Geiger, Svenja Schieren, Jan Lothschütz and Yannik Zobel. 2018. “Just a Little Respect”: Effects of a Layoff Agent’s Actions on Employees’ Reactions to a Dismissal Notification Meeting. 
Journal of Business Ethics, 153(3), 741–761. 


What regulates employees behaviour in subtle conflicts of interest situations?
Growing recognition in both the psychological and management literature of the concept of “good people” has caused a paradigm shift in our understanding of wrongful behaviour: Wrongdoings that were previously assumed to be based on conscious choice—that is, deliberate decisions—are often the product of intuitive processes that prevent people from recognizing the wrongfulness of their behaviour.

Several leading scholars have dubbed this process as an ethical “blind spot.” This study explores the main implications of the good people paradigm on the regulation of employees’ conflicts of interest. In two experiments, we examined the efficacy of traditional deterrence- and morality-based interventions in encouraging people to maintain their professional integrity and objectivity at the cost of their own self-interest.

Results demonstrate that while the manipulated conflict was likely to “corrupt” people under intuitive/automatic mindset (Experiment 1), explicit/deliberative mechanisms (both deterrence- and morality-based) had a much larger constraining effect overall on participants’ judgment than did implicit measures, with no differences between deterrence and morality (Experiment 2).

The findings demonstrate how little is needed to compromise the employees’ ethical integrity, but they also suggest that a modest explicit/deliberative intervention can easily prevent much of the wrongdoing that may otherwise result.

Yuval Feldman and Eliran Halali. 2019. Regulating “Good” People in Subtle Conflicts of Interest Situations. 
Journal of Business Ethics, 154(1), 65–83.


Do local Protestant values affect corporate cash holdings?
This study examines how local Protestant belief, as one type of social norms, affects corporate cash policies. We find that firms located in areas with more Protestants hold less cash reserves.

The influence of local Protestant belief on cash holdings is more profound for firms with weak corporate governance and firms with one geographic segment. In addition, we find that the difference in cash deployment is reflected in the difference in firms’ investment and payout policies.

Overall, our study shows that local Protestant belief is an important factor in determining corporate cash policies and helps to mitigate the potential free cash flow problem.

Huajing Hu, Yili Lian and Wencang Zhou. 2019. Do Local Protestant Values Affect Corporate Cash Holdings? 
Journal of Business Ethics, 154(1), 147–166.


Does ethical leadership motivate followers to deliver compassion?
Little is known about whether followers who perceive ethical leadership are more easily moved to act compassionately with peers. This study hypothesises four compassionate feelings as mediators of the relationship between ethical leadership and interpersonal citizenship behaviour directed at peers:
(a) empathic concern or an other-oriented emotional response elicited by and congruent with the perceived welfare of a peer in need;
(b) mindfulness, a state of consciousness in which attention is focused on present-moment phenomena;
(c) kindness, understanding the pain or suffering of peers; and
(d) common humanity, viewing peers’ experiences as part of the larger human experience.

Data were obtained from 300 followers working in three-member groups with a common leader in each of 100 investment banks in the city of London. Results indicated that:
(a) ethical leadership was significantly and positively linked to compassion and peer-focused citizenship and
(b) common humanity is the only compassionate feeling that mediates the link between ethical leadership and peer-focused citizenship.

Findings suggest that supervisors who act morally more easily move their followers to become sensitised to peers’ setbacks and misfortunes and take action in the form of interpersonal OCBs to lessen or relieve their suffering.

Pablo Zoghbi-Manrique-de-Lara and Mercedes Viera-Armas. 2019. Does Ethical Leadership Motivate Followers to Participate in Delivering Compassion? 
Journal of Business Ethics, 154(1), 195–210.


Virtues beat management control systems on relationship quality and performance 
In this study, we evaluate how individual virtues and inter-organisational management control systems (IOMCS) influence buyer–supplier performance through relationship quality.

Results from a sample of 232 firms confirm that virtues and IOMCS relate positively to relationship quality and performance, respectively. However, IOMCS lose their positive influence on relationship quality when considered along with virtues. That is, when both variables enter the regression model simultaneously, virtues win.

This interesting finding has particular resonance at a time when research on ethics still needs to reinforce its positive effects on the practice of management.

Carole Donada, Caroline Mothe, Gwenaëlle Nogatchewsky and Gisele de Campos Ribeiro. 2019. The Respective Effects of Virtues and Inter-organizational Management Control Systems on Relationship Quality and Performance: Virtues Win. 
Journal of Business Ethics, 154(1), 211–228.