Research tidbits this week looks at some strategies for when ethics fail.

Ethics and justice failure 
This paper offers the concept of “justice failure,” as a counterpart to the familiar idea of market failure, in order to better understand managers’ ethical obligations. This paper takes the “market failures approach” (MFA) to business ethics as its point of departure.

The success of the MFA, the author argues, lies in its close proximity with economic theory, particularly in the idea that, within a larger scheme of social cooperation, markets ought to pursue efficiency and leave the pursuit of equality to the welfare state. As a result, the core ethical responsibility of business actors is to avoid profiting off of market failure.

After reviewing this approach, the author challenges its emphasis on efficiency. The author argues that just as we note the suboptimal efficiency of actual markets (market failure), we should also take seriously the suboptimal equality of actual welfare states (what the author calls “justice failure”). Taking this idea seriously results in a whole other set of ethical responsibilities for businesses to take into account; in addition to market imperfections and regulatory lacunae, managers should also avoid profiting from, and exacerbating, structural inequalities and injustices.

The author offers an outline of the kinds of injustices and inequalities that would have bearing on business ethics, and the kinds of ethical responsibilities that this approach suggests that business actors should take into account.

Abraham Singer. 2018. Justice Failure: Efficiency and Equality in Business Ethics. 
Journal of Business Ethics, 149(1), 97–115.


The Rehabilitation of Adam Smith for Catholic Social Teaching 
Catholic Social Teaching (CST) takes a rather cautious view toward the value of the ideas of Adam Smith, due to his emphasis on negative political and economic liberty. Detractors of Smith within CST point to what they consider to be deficiencies within his works: an impoverished moral anthropology, a lack of concern for the common good, and markets untethered to human needs. Defenders of Smith within CST tend to emphasise the material benefits that derive from Smithian institutions, such as economic growth, improvements in standards of living, and the new opportunities that arise from cultures focused on innovation.

This paper argues that Smith’s ideas have real value for CST. However, this value primarily lies in his moral psychology. While not denying the dangers of business activity for our moral lives, Smith also helps us to understand the possibility of the moral corruption of those who wield political power, thus providing an indirect defence of political and economic liberty that coheres with important Christian ethical notions found in CST.

This is the case even though CST does not consistently recognise concerns surrounding the dangers of wielding political power—and thus Smith’s arguments offer real challenges to CST as well. This paper further suggests that these basic insights are relevant regardless of one’s favoured institutional arrangements.

Gregory Wolcott. 2018. The Rehabilitation of Adam Smith for Catholic Social Teaching. 
Journal of Business Ethics, 149(1), 57–82.


Workplace malfeasance from a Triarchic Psychopathy Model perspective
Research has shown that individuals with high levels of psychopathic personality traits are likely to cause harm to others in the workplace. However, there is little academic literature on the potentially adaptive outcomes of corporate psychopathy, particularly because the “boldness” psychopathy domain has largely been under-acknowledged in this literature.

This study aimed to elaborate on past findings by examining the associations between psychopathy, as operationalised using scales from the relatively new triarchic model of psychopathy (boldness, meanness, and disinhibition), and both adaptive and maladaptive workplace behaviours. Participants were 343 working community adults who completed a series of self-report questionnaires that measured psychopathy and various workplace behaviours, including counterproductive work behaviours (CWB), tactics of influence, unethical decision-making, leadership strategies, team play, and creativity.

Structural equation modelling was used to estimate the associations between latent constructs of boldness, meanness, and disinhibition, and the eight different constructs related to workplace behaviours. It was found that boldness preferentially predicted the use of soft tactics of influence, adaptive leadership, and team play, and negatively predicted passive leadership. Meanness predicted unethical decision-making, poor team play, and hard tactics of influence. Disinhibition positively predicted CWB and passive leadership. Meanness also moderated the association between disinhibition and CWB, in that greater scores on both psychopathy domains indicated greater levels of CWB.

These findings provide conceptual support for the triarchic model, including the “boldness” domain, which measures adaptive aspects of psychopathy in addition to maladaptive ones, as well as suggest that not all individuals high on psychopathy would be an overt menace to the workplace. The different psychopathy traits may also interact with each other to predict different types or levels of workplace behaviours.

Bryan Neo, Martin Sellbom, Sarah F. Smith and Scott O. Lilienfeld. 2018. Of Boldness and Badness: Insights into Workplace Malfeasance from a Triarchic Psychopathy Model Perspective. 
Journal of Business Ethics, 149(1), 187–205.


When fairness is not enough 
Extant research indicates a positive and significant relationship between corporate ethical values and employees’ job performance. Furthermore, past studies have empirically demonstrated that perceived fairness moderates the influence of corporate ethical values (CEV) on employee performance. In other words, high congruity between employees’ and an organisation’s ethical values will result in superior employee performance outcome.

This research aims to develop a broader perspective on the complex relationship between CEV and employee outcomes. The article will first examine the direct influence of CEV on organisational citizenship behaviours (OCBs) and alienation from work (AFW), and then the moderating role of perceived fairness.

The researcher found a significant direct effect of CEV on both OCBs and AFW, but that perceived fairness does not moderate these relationships. A key implication of findings of this research is that although perception of fairness may suppress the impact of organisational ethical transgressions on employee performance in the short run, as earlier studies have demonstrated, but in the long term, implications of perceived fairness are multifold.

Dheeraj Sharma. 2018. When Fairness is Not Enough: Impact of Corporate Ethical Values on Organizational Citizenship Behaviors and Worker Alienation.
Journal of Business Ethics, 150(1), 57–68.


The link between (not) practising CSR and corporate reputation
It is often assumed that corporate social responsibility (CSR) is a very promising way for corporations to improve their reputations, and a positive link between practicing CSR and corporate reputation is supported by empirical evidence. However, little is known about the mechanisms that underlie this relationship. In addition, the effects of not practicing CSR on corporate reputation have received little attention thus far.

This paper contributes to the literature by analysing the cause-and-effect relationships between (not) practicing CSR and corporate reputation. To this end, the paper draws on a psychological framework, in particular, on insights from expectancy violations theory and attribution theory.

Building on the ideal-type distinction between CSR in terms of voluntary engagement for society (“doing good”) and the prevention of irresponsible behaviour (“avoiding bad”), the paper develops four propositions that unveil some fundamental cause-and-effect relationships between (not) practicing CSR, irresponsible behaviour, and corporate reputation. In doing so, it also addresses the question under which conditions CSR leads to a buffering or backfiring effect on corporate reputation in the event of irresponsible behaviour.

Nick Lin-Hi and Igor Blumberg. 2018. The Link Between (Not) Practicing CSR and Corporate Reputation: Psychological Foundations and Managerial Implications. 
Journal of Business Ethics, 150(1), 185–198.


Applicants with a tarnished past 
Prior negative performance and wrongdoing are difficult for applicants to overcome during their job search. The result has often been that they resort to lies and deception in order to obtain employment. The present study examines “stealing thunder” as a trust repair tactic that might be useful for overcoming prior indiscretions when it is used by applicants during the selection interview process.

Stealing thunder refers to the self-disclosure of negative information that pre-empts allegations of wrongdoing by third parties such as hiring managers. Data were collected (n = 184) using a scenario-based 2 (accept responsibility; blame others) X 2 (low, high likelihood of discovery) experimental design in which perceptions of integrity, trust, and employability were measured.

Results indicated that a stealing thunder strategy that involved accepting responsibility under a low likelihood of transgression discovery led to higher ratings of trust than blaming others when discovery of wrongdoing was imminent. The stealing thunder strategy was somewhat more effective than when a traditional, post-allegation apology was used. But stealing thunder did not lead to higher levels of an overall willingness to hire the applicant.

Ksenia O. Krylova, Teri Elkins Longacre and James S. Phillips. 2018. Applicants with a Tarnished Past: Stealing Thunder and Overcoming Prior Wrongdoing. 
Journal of Business Ethics, 150(3), 793–802.


The effects of compensation on managers’ decisions to blow the whistle 
Recent research indicates that compensation structure can be used by firms to discourage their employees from whistleblowing. The authors extend the ethics literature by examining how compensation structures and financial rewards work together to influence managers’ decisions to blow the whistle.

Results from an experiment indicate that compensation with restricted stock, relative to stock payments that lack restrictions, can enhance the likelihood that managers will blow the whistle when large rewards are available. However, restricted stock can also threaten the effectiveness of whistleblowing systems without the presence of large financial rewards for whistleblowing. Thus, the large potential rewards for whistleblowing enacted by the Dodd–Frank Act appear timely as firms are moving toward compensation agreements that include greater proportions of restricted stock.

Jacob M. Rose, Alisa G. Brink and Carolyn Strand Norman. 2018. The Effects of Compensation Structures and Monetary Rewards on Managers’ Decisions to Blow the Whistle. 
Journal of Business Ethics, 150(3), 853–862.