The link between firm corporate social performance (CSP) and executive compensation could be driven by a sorting effect (a firm’s CSP is related to the initial levels of compensation of newly hired executives), or by an incentive effect (incumbent executives are rewarded for past firm CSP). Existing empirical work focuses exclusively on the incentive effect. In contrast, in this paper we explore the sorting effect of firm CSP on the initial compensation of newly hired executives. In doing so, we develop a novel theoretical approach based on an integration of stakeholder theory and human capital theory, suggesting a positive association between the initial compensation of executives and firm CSP strengths and concerns. It also suggests that the strength of this relationship varies between different executive roles (as a function of stakeholder-management responsibilities). We find support for this theoretical framework in a large sample of newly-hired executives employed by Standard & Poor 1500 firms.

In this article we set the context for this special issue focusing on individual and organizational reintegration in the aftermath of transgressions that violate ethical and legal boundaries. Following a brief introduction to the topic we provide an overview of each of the four articles selected for this special issue. We then present a number of potentially fruitful empirical, theoretical, and normative directions management and ethics scholars might pursue in order to further advance this evolving literature.

We explore the impact on employee attitudes of their perceptions of how others outside the organization are treated (i.e., corporate social responsibility) above and beyond the impact of how employees are directly treated by the organization. Results of a study of 827 employees in eighteen organizations show that employee perceptions of corporate social responsibility (CSR) are positively related to (a) organizational commitment with the relationship being partially mediated by work meaningfulness and perceived organizational support (POS) and (b) job satisfaction with work meaningfulness partially mediating the relationship but not POS. Moreover, in order to address limited micro-level research in CSR, we develop a measure of employee perceptions of CSR through four pilot studies. Employing a bifactor model, we find that social responsibility has an additional effect on employee attitudes beyond environmental responsibility, which we posit is due to the relational component of social responsibility (e.g., relationships with community).

Ethical research on consumption has focused mainly on the obligations, principles and values guiding consumers' actions and reasons for action. In doing so, it has concerned itself mostly with such bounded contexts as voluntary simplifiers, anti-consumption movements or so-called ‘ethical consumers,’ thereby fostering an artificial opposition between ethical and non-ethical consumption. This paper proposes virtue ethics as a more apt conceptual framework for the ethical analysis of consumption because it takes into account the developmental dynamic triggered by engagement in consumption practices. We build on MacIntyre's goods-virtues-practices-institutions framework and Beabout's concept of a domain-relative practice and argue that when engaging in consumption activities, agents may pursue goods internal to practices, further their individual life narratives and contribute to the good of their communities, thus developing virtues that perfect themselves both as consumers and as ethical agents.

People are often involuntarily laid off from their jobs through no fault of their own. Employees who are dismissed in this manner cannot always legitimately hold employers accountable for these miserable situations because the decision to implement layoffs is often the best possible outcome given the context—that is, layoffs in and of themselves may be “necessary evils.” Yet, even in circumstances in which layoffs qualify as “necessary evils,” morality demands that employers respect the dignity of those whose employment is involuntarily terminated. In this paper I argue that to preserve the dignity of employees who are involuntarily terminated, in most cases employers have a substantial reason to offer a special kind of unemployment benefit, “severance pay.” To support my claim I draw and expand upon Bernard Williams’s analysis of “agent-regret,” which I believe greatly helps to address and articulate employers’ obligations in the context of involuntary termination.

If an employee is committed to his firm—if he is “attached” or “bound” to it—then his firm may be able to obtain a discount on his labor. This paper asks: Is it wrong for firms to do so? If we understand just or fair pay solely in terms of voluntary agreements between employers and employees, the answer seems to be ‘no.’ Against this, I argue that, in some cases, it is ‘yes.’ In particular, it is wrong for firms to try to obtain discounts on their committed employees’ labor when their employees reasonably expect that they will not try to obtain them. In the process, I probe the limits of exploitation and question the relevance of contribution to fairness in compensation.

In this article, we examine how regulators, prosecutors, and courts might support and encourage the efforts of organizations to not only reintegrate after misconduct but also to improve their conduct in a way that reduces their likelihood of re-offense (rehabilitation). We explore a novel experiment in creative sentencing in Alberta Canada that aimed to try to change the behaviour of an industry by publicly airing the root causes of a failure of one the industry’s leaders. Drawing on this case and prior work, we articulate a model for a responsive and restorative approach to organizational misconduct that balances the punitive role of regulators and courts with new roles in supporting and overseeing rehabilitation.

The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation (type I democracy) and a principle of legitimation that draws on consent (type II democracy). Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I democracy notions of participation and often take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging (and further improving) the legitimacy of both capitalistic firms and competitive markets.

This paper argues that attempts to apply Alasdair MacIntyre’s positive moral theory to business ethics are problematic, due to the cognitive closure of MacIntyre’s concept of a practice. I begin by outlining the notion of a practice, before turning to Moore’s attempt to provide a MacIntyrean account of corporate governance. I argue that Moore’s attempt is mismatched with MacIntyre’s account of moral education. Because the notion of practices resists general application I go on to argue that a negative application, which focuses on regulation, is more plausible. Large-scale regulation, usually thought antithetical to MacIntyre’s advocacy of small-scale politics, has the potential to facilitate practice-based work and reveals that MacIntyre’s own work can be used against his pessimism about the modern order. Furthermore, the conception of regulation I defend can show us how management is more amenable to ethical understanding than MacIntyre’s work is often taken to imply.

This article considers the economic case for so-called sweatshop wages and working conditions. My goal is not to defend or reject the economic case for sweatshops. Instead, proceeding from a broadly pluralist understanding of value, I make and defend a number of claims concerning the ethical relevance of economic analysis for values that different agents utilize to evaluate sweatshops. My arguments give special attention to a series of recent articles by Benjamin Powell and Matt Zwolinski, which represent the latest and best defense of the economic case for sweatshops. In the process, I challenge Zwolinski’s “non-worseness claim” (NWC), and the idea that opposition to sweatshop wages and working conditions fails to respect that the autonomy of would-be sweatshop workers. Ultimately, I conclude that even if the economic case for sweatshops rests on a solid empirical foundation, agents possess good reason to advocate for better wages and working conditions for sweatshop workers, and to prefer less exploitative or coercive relationships. Sweatshop labor undermines a compelling vision of free markets, according to both Kantian and republican conceptions of freedom, and the relationships formed by those who participate in such markets.

This paper presents a holistic, contextualised case study of reintegration and trust repair at a UK utilities firm in the wake of its fraud and data manipulation scandal. Drawing upon conceptual frameworks of reintegration and organizational trust repair, we analyze the decisions and actions taken by the company in its efforts to restore trust with its stakeholders. The analysis reveals seven themes on the merits of proposed approaches for reintegration after an integrity violation (including open investigations, accurate explanations, apologies, penance, and systemic reforms), and novel insights on the role of organizational identity, “changing of the guard” and cultural reforms alongside procedural modifications. The case further supports the dynamic nature of stakeholder salience across the reintegration process. The study both supports propositions from existing frameworks and suggests novel theoretical extensions for future research.

U.S. Organizational Sentencing Guidelines provide firms with incentives to develop formal ethics programs to promote ethical organizational cultures and thereby decrease corporate offenses. Yet critics argue such programs are cosmetic. Here we studied bank employees before and after the introduction of formal ethics training—an important component of formal ethics programs—to examine the effects of training on ethical organizational culture. Two years after a single training session, we find sustained, positive effects on indicators of an ethical organizational culture (observed unethical behavior, intentions to behave ethically, perceptions of organizational efficacy in managing ethics, and the firm’s normative structure). While espoused organizational values also rose in importance post-training, the boost dissipated after the second year which suggests perceptions of values are not driving sustained behavioral improvements. This finding conflicts with past theory which asserts that enduring behavioral improvements arise from the inculcation of organizational values. Implications for future research are discussed.

After a transgression has occurred within an organization, a primary concern is the reintegration of the affected parties (namely offenders and victims) back into the organizational community. However, beyond offenders and victims, reintegration depends on the views of organizational peers and their desire to interact with these parties. In two studies, we demonstrated that offender amends and victim forgiveness interact to predict peer reintegrative outcomes. We found evidence of backlash against unforgiving victims: Peers wanted to work the least with victims who rejected appropriate amends, thus penalizing them for their failure to contribute to the restoration process. This backlash effect was due to decreased liking of the victim and the perceived failure to repair the offender-victim relationship. These findings demonstrate that peers expect both offenders and victims to do their part to achieve reconciliation following transgression, and both may suffer the consequences of failing to meet peer expectations. Implications for reintegration within organizations are discussed.

In this article I inquire into Confucian ethics from a non-ideal stance investigating the complex interaction between Confucian ideals and the reality of the modern workplace. I contend that even Confucian workers who regularly engage in social rites at the workplace have an internal, Confucian reason to appreciate the value of rights at the workplace. I explain, from a Confucian non-ideal perspective, why I disagree with the presumptuous idea that labor (or workplace) rights are necessarily incompatible with Confucian ideals and values. Specifically, I argue that if managers were “sages,” the highest moral exemplars and authorities in the Confucian tradition, they would perceive that social rituals alone are often not a contextually intelligent and valued response for the development of intimate communities in the modern workplace. The sage perspective will lead Confucian managers to realize, from their own moral perspective, that they have good reason to balance rites with rights, so long as the adoption is extrinsically valuable and consistent with the Confucian ideal. This article contributes to the debates about Confucianism's compatibility with rights, helps Western human rights scholars better contextualize their arguments in Confucianism-influenced cultures, and contributes to the development of a Confucian or Chinese approach to business ethics.

This article examines the issue of gender equality within Islam in order to develop an ethical framework for businesses operating in Muslim majority countries. We pay attention to the role of women and seemingly inconsistent expectations of Islamic and Western societies with regard to appropriate gender roles. In particular, we contrast a mainstream Western liberal individualist view of freedom and equality—the capability approach, used here as an illustration of mainstream Western liberalism—with an egalitarian Islamic view on gender equality. While the article identifies an opportunity for this particular approach to reform patriarchal interpretations and practices of Islam toward gender egalitarian interpretations and practices, it also contests the notions of adaptation and well-being inherent within the capability approach. We suggest that a dialectical approach to understanding the relationships among religion, culture, and business provides a better guide to responsible business action in Muslim Majority countries than does the capability approach.

The authors provide this addendum to the following article to provide corrections to the results reported and further explanation of the structural equation modeling techniques utilized: Sean T. Hannah, Bruce J. Avolio, and Fred O. Walumbwa, “The Relationships between Authentic Leadership, Moral Courage, and Ethical and Pro-Social Behaviors,” Business Ethics Quarterly 21:4 (October 2011): 555–78.

Although prior work has shown that employees with ethical leaders are less likely to engage in deviant or unethical behaviors, it is unknown whether all employees respond this way or to the same extent. Drawing on social learning theory as a conceptual framework, this study develops and tests hypotheses suggesting that two follower characteristics—conscientiousness and core self-evaluation—moderate the negative relationship between ethical leadership and workplace incivility. Data from employees of a U.S. public school district supported our predictions. Implications and future research directions are discussed.

Workplace transgressions elicit a variety of opinions about their meaning and what is required to address them. This diversity in views makes it difficult for managers to identify a mutually satisfactory response and to enable repair of the relationships between the affected parties. We develop a conceptual model for understanding how to bridge these diverging perspectives and foster relationship repair. Specifically, we argue that effective relationship repair is dependent on the parties’ reciprocal concern for others’ viewpoints and collective engagement in the justice repair process. This approach enhances our understanding of the interdependency between justice and reconciliation/reintegration, while also providing theoretical insight into the processes underlying restorative conferencing, innovations that promise to help managers heal damaged organizational bonds.

If the ultimate purpose of ethical argument is to persuade people to act a certain way, the point of doing business ethics is to persuade others about what constitutes proper ethical behavior. Given that teleological perspective, the role of the business ethicist is to be an orator or rhetorician. Further, since one cannot expect more certitude than the subject warrants, from Aristotle’s perspective,while rhetoric is the most persuasive means of arguing, it is not scientific demonstration. Rhetoric uses examples and enthymemes. Such an approach answers the postmodern claim that ethical argument cannot lead to certitude and shows how the use of rhetoric helps avoid relativism and leads to more effective persuasion. According to Aristotle, rhetoric involves gaining truth with a “rough and general sketch.” This rhetorical approach allows the listener to “see as” the persuader sees, by attending to aspects of our shared experience and language. This mirrors insights of Kant’s reflexive judgment in his third critique as well as the later Wittgenstein, who compares ethics to aesthetics.