Business Ethics and Corporate Responsibilities

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Business Ethics and Corporate Responsibilities

Daniel E. Palmer Kent State University, USA (2015)

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Preface

The last few decades have witnessed an enormous expansion of interest in business ethics among aca- demics, business persons, and the general public. While there are numerous reasons for the increased attention to issues of business ethics, it is worth noting a few of them that have been particularly signifi- cant in driving contemporary interest in the field. First, this interest can be seen as a response to various cases of perceived ethical failure by businesses: ranging from earlier well-known examples such as the Ford Pinto and Union Carbide cases to more contemporary ones such as the Enron debacle, the global financial collapse, and the BP Deep Horizon oil spill. Such notorious cases show the negative impact that problematic business behavior can have upon a wide range of stakeholders. As a result, they have created a demand for more accountability on the part of business managers to act in a socially responsible manner. A second factor motivating attention to business ethics has stemmed from within business as managers have striven to preserve their own values and moral commitments within the context of an increasingly competitive global marketplace. Initiatives such as the establishment of the Caux Principles have resulted from efforts by business leaders to set standards for ethical business in this new environ- ment (Newton, 2002). A third precipitating factor in the development of increased interest in business ethics has been the growing use of information technology in business. As businesses have adapted the sophisticated tools of the digital age issues of privacy and confidentiality, intellectual property and data security have become more prominent and more difficult to respond to using old legal or regulatory paradigms. These factors have influenced the way in which business ethics has developed as a discipline as well as the areas of particular focus within the field in recent years.

For the reasons noted, and many others, interest in ethics in business has continued to grow, and business ethics is now firmly established both as a well-defined field of research and as an important aspect of managerial training and practice. Indeed, there are now numerous professional societies, academic journals, research centers, and training programs dedicated to the study and promotion of business ethics. Further, as business ethics has grown as a discipline both the focus and the scope of the field have shifted to some extent. In the early years of the establishment of business ethics as a distinct discipline, particularly in the 1970s, business ethics was primarily devoted to establishing its theoretical foundations and, in a sense, attempting to justify its very legitimacy in the face of critics who sometimes questioned the very need for business ethics. As a result, the early textbooks and journal articles in the field were primarily written by philosophers and were devoted to exploring the theoretical foundations of the field in light of various ethical theories (McMahon, 2002). Such efforts were often designed to counter skepticism about the notion of business ethics itself (i.e., the old saw that “business ethics is an oxymoron”) and to situate the concepts of business ethics within various philosophical traditions of normative theory (i.e., Kantianism, utilitarianism, etc.). While such foundational issues continue to be debated and analyzed within the field, there has also been a significant growth in both the types of issues and the variety of approaches to issues in business ethics in recent years.

First, business ethics has become much more interdisciplinary in the intervening decades. As a field of applied ethics, business ethics seeks to understand how ethical concepts and principles can be applied to issues, practices, and processes within the realm of business. However, such application entails an un- derstanding of the situations, people, and behaviors involved in business contexts, and thus, philosophical analysis must also be coupled with insights from fields as diverse as sociology, psychology, economics, management, information systems, and finance. As a result, the field of business ethics has become much more diversified with many different theoretical and empirical perspectives being developed in order to examine and respond to ethical issues in business. The increasingly interdisciplinary nature of business ethics has afforded a much more complex and rich understanding of the field. 

While the disciplinary approaches to business ethics have expanded in recent years, there has also been a concurrent expansion of the range of topics treated in business ethics as well. Not only have ethi- cal treatments of nearly all functional areas of business (accounting, finance, etc.) been developed as the field has grown, but a broader range of themes and subjects have also been examined. In particular, it is worth noting that business ethics has become much more global in its scope of inquiry as, to use Thomas Friedman’s (2005) phrasing, the business world has become increasingly flattened. Ethical is- sues pertaining to cross-cultural communication, global labor standards, multi-cultural organizations, outsourcing employment, and other transcultural issues have thus become prominent issues addressed by those currently working in the field of business ethics. Along with the increasingly global focus of business ethics, there has also been a greater interest in issues involving the environment, particularly in the face of global climate change, and on the ethical impact of technology in business. Again, these are certainly not offered as the only areas to which business ethicists have recently turned their attention, but they are meant to illustrate some of the more diverse topical areas now commonly treated within the field. A third area into which business ethics has greatly expanded since its early years is in the focus on education and training. In this arena, questions related to the practical dissemination and inculcation of ethical values and principles in business practice have become a rich field of investigation. At heart, and particularly given many of the contemporary scandals such as those involved in the recent global financial meltdown, those within the field have grown to appreciate the importance of understanding how to best foster ethical behavior among business managers and other employees. On the one hand, this has involved extensive experimentation and exploration with how to best integrate business ethics into the business curriculum, particularly at the MBA level. A number of different approaches have been explored with the goal of providing a more robust foundation for the ethical reasoning of future business leaders. On the other hand, there has also been much attention paid to ethical compliance and training programs in business organizations. Here, there again have been many different kinds of approaches that have been implemented and studied, including Ethics and Compliance Officers (ECOs), codes of ethics, ethics training programs, ethical consulting practices, and ethics hotlines. Business ethicists are of course very interested in studying the effectiveness of these programs in promoting ethical behavior and preventing unethical behavior within organizations. It should be noted that here too the interdisciplinary nature of business ethics becomes readily apparent as determining best practices in business ethics programs calls upon our understanding of such areas as interpersonal communication, moral psychology, and social and organizational culture.

Fourth, there have been a number of ongoing efforts to create and promote ethical standards for busi- ness on a global scale. These efforts often involve individuals from the business community as well as academics and concerned third parties. There are numerous examples of these, including the previously mentioned Caux Principles, the Global Sullivan Principles, and the CERES Principles. There are also examples of principles devoted specifically to business ethics education, such as the PRME (Principles for Responsible Management Education). Further, Non-Governmental Organizations (NGOs) have been created with the goal of promoting the adoption of ethical business practices within certain industries on a voluntary basis. Often these NGOs will provide certifications for products that meet their ethical standards. Examples of these certificating organizations include Fair Trade USA, Rainforest Alliance, and RugMark. All of these kinds of principles and certifications appeal to the idea that it is possible to formulate and promote ethical principles within the business community that go beyond mere legal and regulatory compliance. In doing so, they often appeal to consumers to consider a company’s commitment to these principles as a determining factor in their own purchasing decisions. Thus, these practices also point to another phenomenon related to the growth of business ethics: the notion of the ethical consumer. The concept of the ethical consumer refers to the idea of consumers who make purchasing decisions based at least partly on the basis of their values and moral commitments (Freestone & McGoldrick, 2008). Ethical consumers are thus often concerned with the ethical principles and practices of a company, as well as the ethical impact of their purchase, in making consumer decisions. Because of the growth of ethical consumerism, ethical consumers have, as such, become an object of research in their own right in recent years in the field of business ethics (Newholm & Shaw, 2007). The effort to determine ethi- cal principles for business is now such a widely shared endeavor that it includes academics, business people, NGOs, and ordinary consumers, illustrating just how widespread interest in business ethics has become in recent decades.

While there are certainly other areas of significant development in the field of business ethics that could be discussed, the four areas treated above do exemplify some important features of the state of the field and, perhaps even more importantly, the motivation for producing this research handbook. Indeed, this book is designed to illustrate both some of the major recent trends in business ethics as well as the richness of the field. As such, the selection of chapters for this volume was guided by several aims, many of which relate to the developments in the field addressed above. First, the goal was to provide a selection of authors that ap- proached issues from a multiplicity of perspectives and that included authors from a number of national and cultural backgrounds. The idea was to accent the interdisciplinary and global nature of contemporary business ethics. Second, the aim was to include chapters dealing with theoretical issues in business ethics as well as those concerned with more practical and educational issues in business ethics. And though the chapters are grouped in relation to these three themes, some of the chapters selected defy simple categorization as they include discussions of several of these issues at once. Business ethics is not only interdisciplinary but it is also multi-faceted in appealing to researchers, business persons, and the general public. The selections include discussions of business ethics that come at the issues from multiple orientations. Third, a guiding idea behind the selection of chapters was that they should appeal to as wide a readership as possible. As noted, business ethics is an area of concern for a wide-ranging audience. As such, the chapters deal with issues that should be of interest to readers from many different disciplines and backgrounds. Indeed, the handbook could profit- ably be read as an overview of recent developments in the field of business ethic for scholars, students, and business persons. Finally, the chapters were selected to cover as broad of a range of ethical issues in business as was reasonably possible, while still illustrating major trends in research on business ethics. As such, the chapters selected are grouped into several different sections of focus, as discussed below.

  

Table of Contents

Preface.............................................................................................................................................vii
Acknowledgment............................................................................................................................xxv
Section 1
Foundational Issues: Theoretical Issues and Models


Chapter 1
Can Management Have Multi-Fiduciary Stakeholder Obligations?........................................................ 1
Abe Zakhem, Seton Hall University, USA
Chapter 2
Business Ethics in the Information Age: The Transformations and Challenges of E-Business............ 15
Daniel E. Palmer, Kent State University, USA
Chapter 3
Game-Theoretic Insights Concerning Key Business Ethics Issues Occurring in Emerging
Economies............................................................................................................................................. 34
Duane Windsor, Rice University, USA
Chapter 4
Exploring Ethics in Innovation: The Case of High-Fructose Corn Syrup............................................. 56
Leticia Antunes Nogueira, Aalborg University, Denmark
Tadeu Fernando Nogueira, Aalborg University, Denmark

Chapter 5
Business Ethics, Strategy, and Organizational Integrity: The Importance of Integrity as a Basic
Principle of Business Ethics that Contributes to Better Economic Performance.................................. 91
Jacob Dahl Rendtorff, Roskilde University, Denmark
Chapter 6
Entrepreneurial Ethical Decision Making: Context and Determinants............................................... 106
Gizem Öksüzoğlu-Güven, University of Mediterranean Karpasia, Cyprus

Chapter 7
Bridging the Foundational Gap between Theory and Practice: The Paradigm on the Evolution of
Business Ethics to Business Law......................................................................................................... 123
Ben Tran, Alliant International University, USA

Section 2
Business Ethics Education: Integrating Ethics into the Business Curriculum

 

Chapter 8
Ethics for Students Means Knowing and Experiencing: Multiple Theories, Multiple Frameworks,
Multiple Methods in Multiple Courses................................................................................................ 153
Cynthia Roberts, Purdue University North Central, USA
Carolyn D. Roper, Purdue University North Central, USA

Chapter 9
Identifying Corporate Social Responsibility (CSR) Curricula of Leading U.S. Executive MBA
Programs............................................................................................................................................. 179
Robin James Mayes, University of North Texas, USA
Pamela Scott Bracey, Mississippi State University, USA
Mariya Gavrilova Aguilar, University of North Texas, USA
Jeff M. Allen, University of North Texas, USA

Chapter 10
Globally Responsible Management Education: From Principled Challenges to Practical
Opportunities...................................................................................................................................... 196
Marco Tavanti, University of San Francisco, USA
Elizabeth A. Wilp, Sustainable Capacity International Institute, USA
Chapter 11

Techniques for Preparing Business Students to Contribute to Ethical Organizational Cultures......... 221
William Irvin Sauser Jr., Auburn University, USA
Ronald R. Sims, College of William and Mary, USA

Chapter 12
Voicing Possibilities: A Performative Approach to the Theory and Practice of Ethics in a
Globalised World................................................................................................................................ 249
Mark G. Edwards, University of Western Australia, Australia
David A. Webb, University of Western Australia, Australia
Stacie Chappell, Western New England University, USA
Nin Kirkham, University of Western Australia, Australia
Mary C. Gentile, Babson College, USA

Chapter 13
Mainstreaming Corporate Social Responsibility at the Core of the Business School Curriculum..... 276
Dima Jamali, American University of Beirut, Lebanon
Hanin Abdallah, American University of Beirut, Lebanon

Section 3
Business Ethics at Work: Understanding and Implementing Ethics in the Business

World

Chapter 14
The Starbucks Culture: Responsible, Radical Innovation in an Irresponsible, Incremental World..... 302
Joan Marques, Woodbury University, USA
Angelo A. Camillo, Woodbury University, USA
Svetlana Holt, Woodbury University, USA

Chapter 15
Leading Ethically in a Culturally Diverse Global Environment.......................................................... 313
Laurie A. Yates, Eastern Oregon University, USA
Chapter 16
Sustainability and Competitive Advantage: A Case of Patagonia’s Sustainability-Driven
Innovation and Shared Value............................................................................................................... 330
Francesco Rattalino, ESCP Europe, Italy
Chapter 17
Ethical Healthiness: A Key Factor in Building Learning Organizations............................................. 356
Alexis Jacobo Bañón-Gomis, Universitat Politècnica de València, Spain
Chapter 18
Facilitating Trust: The Benefits and Challenges of Communicating Corporate Social
Responsibility Online.......................................................................................................................... 373
Mary Lyn Stoll, University of Southern Indiana, USA
Chapter 19
Privacy, Trust, and Business Ethics for Mobile Business Social Networks........................................ 390
István Mezgár, Budapest University of Technology and Economics, Hungary & Hungarian
Academy of Sciences, Hungary
Sonja Grabner-Kräuter, Alpen-Adria-Universität Klagenfurt, Austria

Chapter 20
Adoption of Supply Chain Sustainability in Developing Countries: An Empirical Investigation....... 420
Mohamed Gamal Aboelmaged, Ain Shams University, Egypt & AGU University, UAE
Ibrahim El Siddig Ahmed, AGU University, UAE

Compilation of References................................................................................................................ 444
About the Contributors.................................................................................................................... 498
Index................................................................................................................................................... 506

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