Our research tidbits this week explore whether improved rule-based approaches can assist in preventing organisational wrongdoing.

Motivations of external whistleblowers
The purpose of this study was to explore the motivational structures of external whistleblowers involved in the decision to blow the whistle by applying MEC theory and the laddering technique.

Using both soft and hard laddering methods, data were collected from 37 Korean external whistleblowers. Results revealed that the means-end chain of external whistleblowers was the hierarchical linkage among two concrete attributes (the power of external whistleblowing to make changes and its warning about the seriousness of wrongdoing to the public), two functional consequences (correcting a wrongdoing and making those who violated laws admit their offenses), and one terminal value (the truth).

The extant whistleblowing literature has either made assumptions about whistleblowers’ motivations when developing models or has drawn indirect inferences from measures of other variables. This study is the first with an explicit and empirical focus on whistleblowers’ motivations. The findings provide evidence of the motivational structures of external whistleblowers that consist of a set of complex paths linked by multi-layered motivators. This research will be helpful in designing and reviewing whistleblowing programs for organisations, regulatory agencies, and journalists.

Heungsik Park, Wim Vandekerckhove, Jaeil Lee & Joowon Jeong. 2020. Laddered Motivations of External Whistleblowers: The Truth About Attributes, Consequences, and Values..

Journal of Business Ethics, 165(4), 565–578.

Who calls out organisational moral failure?
In recent years, research on morality in organisational life has begun to examine how organisational conduct comes to be socially constructed as having failed to comply with a community’s accepted morals.

Researchers in this stream of research, however, have paid little attention to identifying and theorising the key actors involved in these social construction processes and the types of accounts they construct. In this paper, the authors explore a set of key structural and cultural dimensions of apparent noncompliance that enable us to distinguish between four categories of actors who engage in constructing the label of moral failure: dominant insiders, watchdog organisations, professional members, and publics.

The analysis further clarifies which category of actor is more likely to succeed in constructing the label of moral failure under which circumstances, and what accounts they are likely to use, namely scapegoating, prototyping, shaming, and protesting.

Masoud Shadnam, Andrew Crane & Thomas B. Lawrence. 2020. Who Calls It? Actors and Accounts in the Social Construction of Organizational Moral Failure.

Journal of Business Ethics, 165(4), 699–717.

CSR dysfunctionalities and capitalism
In this article, the authors draw on established views of CSR dysfunctionalities to show how and why CSR is regularly observed to be both shaped by and supportive of capitalism.

The authors proceed to show that these dysfunctionalities are maintained by both the pro- and anticapitalist approaches to CSR, both of which imply an ill-defined separation of the economy and society as well an overly strong problem or solution focus on political and economic issues.

Finally, the authors present a post-capitalist approach to CSR that overcomes (1) the ill-defined separation of the economy and society, (2) the capitalist bias towards economic rationalities, and (3) the overidentification of society with its political system; this approach thus helps to manage the abovementioned CSR dysfunctionalities.

Steffen Roth, Vladislav Valentinov, Markus Heidingsfelder & Miguel Pérez-Valls.2020. CSR Beyond Economy and Society: A Post-capitalist Approach.

Journal of Business Ethics 165(3), 411–423.

Exploring a public interest definition of corruption
As conventionally understood, corruption relies on a set of universally agreed rules that determine what constitutes the appropriate allocation of organisational resources.

This article explores whether rule-based approaches to corruption are applicable where business organisations, such as public private partnerships (PPPs), and the public fundamentally disagree about what constitutes an appropriate allocation of resources. Drawing on empirical research about PPPs in Vietnam, this article compares how government, business organisations, and the public conceptualise the transfer of public assets into private ownership. It argues that a public interest approach to corruption is needed where PPPs privatise public assets within the law, but against the express wishes of the public.

John Gillespie, Thang Van Nguyen, Hung Vu Nguyen & Canh Quang Le. 2020. Exploring a Public Interest Definition of Corruption: Public Private Partnerships in Socialist Asia.

Journal of Business Ethics, 165, 579–594.

Collusive rogue trading in banks
Recent history reveals a series of rogue traders, jeopardising their employers’ assets and reputation. There have been instances of unauthorised acting in concert between traders, their supervisors and/or firms’ decision makers and executives, resulting in collusive rogue trading.

The authors explore organisational misbehaviour theory and explain three major collusive rogue trading events at National Australia Bank, JPMorgan with its London Whale and the interest reference rate manipulation/LIBOR scandal through a descriptive model of organisational/structural, individual and group forces.

Their model draws conclusions on how banks can set up behavioural risk management and internal control frameworks to mitigate potential collusive rogue trading.

Hagen Rafeld, Sebastian G. Fritz-Morgenthal & Peter N. Posch. 2020. Whale Watching on the Trading Floor: Unravelling Collusive Rogue Trading in Banks.

Journal of Business Ethics, 165, 633–657.

Aggressive tax avoidance by multinational companies violates managers’ moral duty to obey the law
Managers of multinational companies often favour an aggressive tax avoidance strategy that pushes the legal limits onto the advantage of shareholders and the disadvantage of the spirit of democratically legitimised tax laws. The public and media debate whether such aggressive behaviour is immoral.

Aggressive tax avoidance is a subset of the aggressive legal interpretations potentially observable in all fields which places little weight on the will of a democratically legitimised legislation. A thorough ethical analysis based on the deontological approach of Kant demonstrates that aggressive tax avoidance as a special case of operating on the edge of legal boundaries is potentially immoral.

Applying the Kantian “contradiction of conception or will” test shows that this maxim might not be conceived or willed as a general law of nature. If all natural or legal persons aggressively interpret laws on all subjects and in every imaginable situation, then central principles of the system of law we all rely upon would be severely compromised. Therefore, aggressive tax avoidance by managers of multinational companies may violate the managers’ moral duty to obey not only the letter but also the intention or spirit of the law.

The validity of the argumentation depends critically on the formulation and interpretation of the respective maxims and on assumptions about the legal system. Preserving central elements of Kantian philosophy, the article demonstrates the complexity of a philosophical argumentation which tries to justify the moral intuitions that underpin the common negative evaluation of aggressive legal strategies in business.

Hansrudi Lenz. 2020. Aggressive Tax Avoidance by Managers of Multinational Companies as a Violation of Their Moral Duty to Obey the Law: A Kantian Rationale.

Read this Open Access article online for free

Journal of Business Ethics, 165, 681–697.