What effects do CEOs, regulations, entrepreneurship, national culture and algorithms have on ethical attitudes?  See this week’s articles to find out more.

Multiple factors influence ethical attitudes 
Ethical attitudes and behaviour are complex. This complexity extends to the influencers operating at different levels both outside and within the organisation, and in different combinations for different individuals. There is hence a growing need to understand the proximal and distal influencers of ethical attitudes, and how these operate in concert at the individual, organisational, and societal levels.

Few studies have attempted to combine these main research streams and systematically examine their combined impact. The minority of studies that have taken a combined approach have often done so using conventional statistical and analytical techniques which imply linearity between variables—a situation that rarely exists in business settings and is likely to lead to simplistic or even erroneous conclusions.

Applying a fuzzy-set qualitative comparative analysis approach, this paper reports on the mutual and simultaneous influence of individual demographic factors (gender, education), as well as proximal and distal factors stemming from within and outside the work environment (e.g. treatment by one’s supervisor, country-level indicators of corruption perceptions) to understand individuals’ ethical views within the workplace (n = 525).

The multiple configurations that emerged reveal the complex nature of influencers of ethical attitudes and reinforce the view that “one size does not fit all”. The authors discuss these implications together with managerial recommendations and future research directions.

Nicole A. Celestine, Catherine Leighton and Chris Perryer. 2020. A Multifocal and Integrative View of the Influencers of Ethical Attitudes Using Qualitative Configurational Analysis.  
Journal of Business Ethics, 162(1), 103–122.

 

CEOs: Is corporate intergroup responsibility part of CEOs’ ethical leadership? 
Is reducing large-scale intergroup conflict the business of corporations? Although large corporations can use their power and prominence to reduce intergroup conflict in society, it is unclear to what extent stakeholders support corporate Intergroup Responsibility (CIR).

Study 1 showed that support for CIR correlates in theoretically meaningful ways with relevant economic, social, and moral attitudes, including fair market ideology, consumer support for corporate social responsibility (CSR), social dominance orientation, symbolic racism, and moral foundations. Studies 2 and 3 employed experimental designs to test the hypothesis that business leaders who advocate for intergroup tolerance boost perceptions of corporations and their leaders as moral, just, and fair, which in turn, increases stakeholders’ support for CIR.

The authors found support for this hypothesis across two highly publicised and contentious events related to racial conflict in the U.S.: The White supremacy rally in Charlottesville and the federal government’s announcement about the planned rescinding of the Deferred Action for Childhood Arrivals (DACA) immigration policy.

Specifically, exposing participants to real-world tweets by CEOs who advocated intergroup tolerance following these events increased participants’ support for CIR. This effect was mediated by heightened perceptions of corporations and their leaders as moral, just, and fair. Taken together, these findings enhance understanding of the factors that shape stakeholders’ reactions to CIR; highlight intergroup conflict as an emerging arena for CSR; and illustrate the power of ethical intergroup leadership.

Nir Halevy, Sora Jun and Eileen Y. Chou. 2020. Intergroup Conflict is Our Business: CEOs’ Ethical Intergroup Leadership Fuels Stakeholder Support for Corporate Intergroup Responsibility. 
Journal of Business Ethics, 162(1), 229–246.

 

Regulations: Getting to a legitimate compliance culture in the UK financial service sector
Over the last decade, scandals within the UK Financial Service sector have impacted their legitimacy and raised questions whether a compliance culture exists or not. Several institutional changes at the regulatory and normative levels have targeted stakeholders’ concerns regarding compliance culture and led to changes in the legitimation process.

This paper attempts to address a gap in the literature by asking the following question: How is the UK financial institutions’ compliance culture shaped by the institutional environment and changing legitimacy claims? Towards achieving this objective, the paper draws on the institutional theory and pays attention to the various configurations of the legitimacy notion (property vs process Suddaby et al. Acad Manag Ann 11(1):451–478; 2017).

The paper utilises a longitudinal interpretive design and undertakes a qualitative content analysis of fines issued by the UK regulator and the communicated response of violating firms as well as non-sanctioned firms. The findings indicate that there is a cyclical ‘evolutionary compliance’ rather than the more widely recognised state of ‘compliance culture’.

This culture is fuelled by interchangeable isomorphic forces where the majority of violating firms are seen to issue similar responses to the regulators sanction to maintain their reputation and legitimacy in the market. Notably, legitimacy is now defined within an interactive process between the regulator and firms rather than being static and achieved by ticking the box.

Read this Open Access article online for free

 

Wendy Mason Burdon and Mohamed Karim Sorour. 2020. Institutional Theory and Evolution of ‘A Legitimate’ Compliance Culture: The Case of the UK Financial Service Sector. 
Journal of Business Ethics, 162(1), 47–80.

 

Entrepreneurship: Ethics in the sharing economy
The advent of the sharing/gig economy has created new forms of employment embedded in new labour practices. Advocates of the sharing economy frame it in salutary terms, lauding its sustainability, decentralization, and employment-generation capabilities.

The workers of the gig economy are seen as independent contractors under law rather than employees, and the owners of the gig economy platforms celebrate this categorization as a form of entrepreneurship. In this paper, the authors use insights from the entrepreneurship literature to examine this claim critically. Taking Uber as an exemplar, the authors look at the arguments behind the company’s contention that its drivers are actually “partners” who are engaged in entrepreneurship, and demonstrate why these claims are problematic.

The authors utilise a stakeholders’ theory framework that initiates a dialogue between ethics and entrepreneurship in order to focus on the mechanisms that help ensure ethical practices in the sharing economy and to examine the efficacy of these mechanisms. The authors also discuss the role of the entrepreneurship literature in promoting entrepreneurial behaviours that lead to income inequality.

The authors conclude by arguing that the sharing economy reflects the intensification of an ongoing neoliberal trend that misuses the concept of entrepreneurship in order to justify certain forms of employment practices, and make a case for regulatory oversight.

Mujtaba Ahsan. 2020. Entrepreneurship and Ethics in the Sharing Economy: A Critical Perspective. 
Journal of Business Ethics, 161(1), 19–33.

 

National culture: Effects on corruption, GDP and human development
The evidence of culture’s impact on corruption and its consequences is still inconclusive despite several investigations:
(1) Sometimes, theory is lacking and causes and consequences seem exchangeable. Based on psychological research on the distribution and use of power, the authors predicted that a steeper distribution of power induces more corruption and elaborated its negative consequences in a complex causal model.
(2) For measuring power distribution, pervading national culture, the authors augmented Hofstede’s ‘Power Distance’ with three additional indicators into a reversed, more reliable and valid culture composite called “Power Balanced Freedom” (PBF).
(3) Instead of the usual regression and instrument approaches, which cannot estimate multiple causal chains including causal feedback, a non-recursive path analysis was employed with data from 85 nations. PBF predicted less national Corruption (62%), with positive effects on Gross Domestic Product (GDP, 72%) and Inequality Adjusted Human Development (IHDI, 66%, including Life Expectancy, Income, and Education).

The often expected reverse effect of GDP on Corruption was not significant. Contrary to influential authors from economics, culture variables are the most important predictors of corruption and its consequences. Nonetheless, the extended model supports the main thrust of their ideas and adds more precision.

The conceptual distinction of the uses of power and the empirical measure PBF reflect Kant’s ethical imperative: freedom and autonomy for everyone. Widely shared life chances as measured by IHDI reflect utilitarian, consequentialist ideas. These different ethical approaches are connected in the confirmed causal model, in line with Rawls’ first and second principle of justice.

Wolfgang Scholl and Carsten C. Schermuly. 2020. The Impact of Culture on Corruption, Gross Domestic Product, and Human Development. 
Journal of Business Ethics, 162(1), 171–189.

 

Algorithms: Ethical implications and accountability of algorithms
Algorithms silently structure our lives. Algorithms can determine whether someone is hired, promoted, offered a loan, or provided housing as well as determine which political ads and news articles consumers see. Yet, the responsibility for algorithms in these important decisions is not clear.

This article identifies whether developers have a responsibility for their algorithms later in use, what those firms are responsible for, and the normative grounding for that responsibility. The author conceptualises algorithms as value-laden, rather than neutral, in that algorithms create moral consequences, reinforce or undercut ethical principles, and enable or diminish stakeholder rights and dignity.

In addition, algorithms are an important actor in ethical decisions and influence the delegation of roles and responsibilities within these decisions. As such, firms should be responsible not only for the value-laden-ness of an algorithm but also for designing who-does-what within the algorithmic decision. As such, firms developing algorithms are accountable for designing how large a role individual will be permitted to take in the subsequent algorithmic decision.

Counter to current arguments, the author finds that if an algorithm is designed to preclude individuals from taking responsibility within a decision, then the designer of the algorithm should be held accountable for the ethical implications of the algorithm in use.

Read this Open Access article online for free

 

Kirsten Martin. 2019. Ethical Implications and Accountability of Algorithms. 
Journal of Business Ethics, 160(4), 835–850.