Some business ethicists view agency theory as a cautionary tale—a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but its unilateral focus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for a bilateral cautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our bilateral cautionary-tale formulation extends the normative boundaries of agency theory, while leaving the fundamental economic assumptions of agency theory intact.

Since seminal meta-analytical work in 2006 we have witnessed burgeoning research on ethical climates. This article offers a comprehensive review of literature examining the antecedents and outcomes of ethical climates over the last decade, as well as moderators of the relationship between ethical climates and other variables. Based on the review, an agenda for future research is also presented. In addition to highlighting the potential for incorporating alternative theoretical perspectives such as situational strength theory, trait-activation theory, social information processing theory, and institutional theory to better our understanding of ethical climates, this article highlights the need for future research to incorporate a dynamic perspective to study ethical climates, examine the curvilinear effects of ethical climates on work outcomes, extend the study of ethical climates to different levels of the organization, and examine the effects of culture on ethical climates.

Deliberative democratic theory, commonly used to explore questions of “political” corporate social responsibility (PCSR), has become prominent in the literature. This theory has been challenged previously for being overly sanguine about firm profit imperatives, but left unexamined is whether corporate contexts are appropriate contexts for deliberative theory in the first place. We explore this question using the case of Starbucks’ “Race Together” campaign to show that significant challenges exist to corporate deliberation, even in cases featuring genuinely committed firms. We return to the underlying social theory to show that this is not an isolated case: for-profit firms are predictably hostile contexts for deliberation, and significant normative and strategic problems can be expected should deliberative theory be imported uncritically to corporate contexts. We close with recent advances in deliberative democratic theory that might help update the PCSR project, and accommodate the application of deliberation to the corporate context, albeit with significant alterations.

This article examines the question of private coercion in market societies, arguing for an unconditional basic income guarantee from a classical liberal viewpoint. It proposes three main arguments. First, classical liberals view the purpose of government to be the reduction of coercion, both public and private. Second, a proper understanding of the nature of coercion indicates that parties subject to certain types of hardship are being coerced. Third, where the total amount of coercion is reduced by eliminating the hardship, the classical liberal state must do so as to fulfill its purpose. Hence, this article argues that if the total amount of coercion in society can be reduced by the state employing the amount of coercion necessary to maintain an unconditional basic income guarantee, then the classical liberal state is obligated to maintain such a guarantee by its underlying justification.

Drawing a framework from strategic stakeholder theory and using 1999 to 2010 panel data from the United Kingdom’s (UK) non-life insurance industry, we examine the effect of reinsurance on the decisions to donate to charities, and the amount given. We find that reinsurance substitutes for charitable giving as it optimizes the interests of multiple stakeholders. We further note that corporate giving is directly related to the size and age of insurers, proportion of female directorships and insider ownership, but generally inhibited by chief executive officer (CEO) bonus plans, dominant shareholders, and financial experts on the board. Interestingly, when reinsurance interacts with board-level variables we find that the donations decision is positively related to CEO bonus plans, and negatively linked with inside ownership and the proportion of female board members. Our research results could have important implications for stakeholders.

The multitude of corporate scandals has prompted research that examines factors that influence an individual’s engagement in unethical behavior. This article extends previous research by examining the psychological processes through which unethical behavior may occur. We develop and test a model that uses self-regulation theory to explain and predict how and under what circumstances individuals are likely to engage in unethical behavior. Results from data collected from 107 professionals at two points in time and 205 employees from various industries confirm that job insecurity increases emotional exhaustion, which subsequently impairs an employee’s ability to activate self-regulating processes to avoid engaging in unethical behavior. However, the link between job insecurity and emotional exhaustion as well as the mediated relationship between job insecurity and unethical behavior through emotional exhaustion are weaker for employees who have high adaptability and stronger for employees who are highly embedded in their organization.

We extend the behavioral ethics literature to examining emotional labor as an antecedent to unethical behavior. We hypothesize that surface acting is positively associated with unethical behavior. In contrast, we produce competing hypotheses for the relationship between deep acting and unethical behavior. In Study 1, with a field sample of 123 full-time employees, surface acting was positively associated with unethical behavior, and emotional inauthenticity explained some of this relationship. In contrast, deep acting was not associated with unethical behavior. In Study 2, with a field sample of 117 full-time employees, we replicated the effect of surface acting in Study 1 and found a positive relationship between deep acting and unethical behavior via emotional inauthenticity. In Study 3, using a two-wave design, we replicated the results in Study 2 and found perceived fairness strengthens the relationship between surface acting and unethical behavior through emotional inauthenticity.

This article reviews four key orientations in environmental ethics that range from an instrumental understanding of sustainability to one that acknowledges the intrinsic value of sustainable behavior (i.e., sustainable resource use, conservation and preservation, rights-based perspectives, and deep ecology). It then shows that the current scholarly discourse around corporate sustainability management—as reflected in environment management (EM), corporate social responsibility (CSR), and corporate political activity (CPA)—mostly favors an instrumental perspective on sustainability. Sustainable business practices are viewed as anthropocentric and are conceptualized as a means to achieve competitive advantage. Based on these observations, we speculate about what corporate sustainability management might look like if it applied ethical orientations that emphasize the intrinsic value of nature. This discussion also includes an introduction to two articles in this special section focused on the role of the environmental manager and sustainability standards, both of which offer paths for incorporating intrinsic valuation of the environment into sustainability management.

Profit maximizers have reasons to agree with stakeholder theorists that managers may need to consider different values simultaneously in decision making. However, it remains unclear how maximizing a single value can be reconciled with simultaneously considering different values. A solution can neither be found in substantive normative philosophical theories, nor in postulating the maximization of profit. Managers make sense of the values in a situation by means of the many thick value concepts of ordinary language. Thick evaluation involves the simultaneous consideration of different values: making sense of a value always involves knowing how to engage with it given the other values in the situation. This also goes for profit: maximization is only one way of engaging with the value of profit, and grasping whether maximization is appropriate involves considering other values. We discuss some consequences of our approach for stakeholder theorists and profit maximizers.

This essay explains how intangible asset management oriented toward enhancing corporate performance increasingly embeds ethical concerns, primarily to address stakeholder expectations. We discuss how ethical dimensions in intangible asset management may be co-constructed and intertwined in organization-stakeholder interactions to generate collaborative meaning making according to a stakeholder-centric view of the firm. In so doing, we adopt an ethical view that acknowledges that stakeholders beyond the firm have equal status and agency to engage in a social construction process of intangible assets nurtured by ongoing dialogue and reciprocal understanding between organization and stakeholders. The essay concludes by envisioning how the dialogic process of social construction of intangible assets involving both organization and stakeholders is best conceived as a social contract between the two that enacts a cultural bond between intangible assets together with ethical and societal resources that are collectively generated, owned, and maintained.

This article reviews a conversation between business ethicists and feminist scholars begun in the early 1990s and traces the development of that conversation in relation to feminist theory. A bibliographic analysis of the business ethics (BE) and corporate social responsibility (CSR) literatures over a twenty-five-year period elucidates the degree to which gender has been a salient concern, the methodologies adopted, and the ways in which gender has been analyzed (by geography, issue type, and theoretical perspective). Identifying significant limitations to the incorporation of feminist theory in these literatures, we discuss how feminist scholarship relating to behavior (through psychology and related fields), organizations (through feminist organization studies), and economics (through feminist economics) could be integrated. We suggest that a better integration of feminist theory would strengthen BE/CSR research, and point to new research directions and agendas arising from our approach.

Sustainability standards are important governance tools for addressing social and environmental challenges. Yet, such tools are often criticized for being either too open-ended or too restrictive, thereby failing to contribute significantly to the development of sustainable practices. Both dimensions of the critique, however, miss the point. While all standards in principle combine elements of openness and closure, both of which are necessary to keep the sustainability agenda relevant and adaptive, sustainability standards often operate in contexts that favor closure. In this article, we draw on a research tradition that views communication as constitutive of organization to emphasize the significance of communicative mechanisms that stimulate organizational openness in the application of standards. With the notion of “license to critique,” we present a managerial philosophy designed to involve managers and employees, mobilize and develop their knowledge about sustainability and bring it forward for the benefit of both the organization and the environment.

How does the state influence stakeholder legitimacy? And how does this process affect an industry’s ethical challenges? Stakeholder theory adopts a forward-looking perspective and seeks to understand how managers can address stakeholders’ claims to improve the firm’s ability to create value. Yet, existing work does not adequately address the role of the state in defining the stakeholder universe nor the implications this may have for subsequent ethical challenges managers face. This article develops a political stakeholder theory (political ST) by weaving together the political economy, stakeholder theory, and legitimacy literatures. Political ST shows how state policies influence stakeholder legitimacy and, in turn, affect an industry’s ethical challenges. This article integrates the concept of agonism to address the perennial tension between markets and states and its implications for firms and their managers. Political ST is then applied to the case of microfinance, followed by a discussion of the contributions of this approach.

Programs aimed at increasing women’s entrepreneurship are a rapidly proliferating class of CSR initiatives across the globe with participation by many of the world’s largest corporations. The gendered nature of this phenomenon suggests that feminist approaches to CSR may offer a particularly salient mode of their analysis. In this article, I argue that insights from feminist economics regarding the historically prevalent—but narrow and gendered—definition of work, which artificially separates production from reproduction, provide fruitful tools for theory building when conceptualizing gender through the lens of CSR. I demonstrate that the gendered separation of production and reproduction is typically taken as given in entrepreneurship, and that mainstream CSR research has not sufficiently challenged this perspective. I present a conceptual framework of what is to be gained by examining the CSR, entrepreneurship, and feminist economics literatures in combination, and demonstrate how researchers might use this framework for future research.

We explore the essential contestedness of corporate social responsibility (CSR) by framing the interplay between CSR activities and stakeholder evaluations as a contest for jurisdiction over what it means to be socially responsible. This contest arises because firms and stakeholders are often guided by incompatible sensemaking systems. To show why context matters we show how stakeholders evaluate the authenticity of CSR activities on the basis of schemas for responsible behavior on one hand and their perceptions of firm identity on the other. This process can generate complex evaluations whose meaning depends on the distribution of power in fields and the extent to which pluralistic sensemaking systems are compatible. By positioning authenticity evaluations within a framework that describes the state of power and pluralism within which they are produced, we are able to present a systematic explanation of how and why stakeholder responses to CSR vary over a range of settings.

Firms face a variety of institutional logics and one important question is how individuals within firms manage these logics. Environmental managers in particular face tensions in reconciling their firms’ commercial fortunes with demands for greater environmental responsiveness. We explore how institutional work enables environmental managers to respond to competing institutional logics. Drawing on repeated interviews with 55 firms, we find that environmental managers face competition between a market-based logic and an emerging environmental logic. We show that some environmental managers embed the environmental logic alongside the market logic through variations of creation and disruption, thus over time creating institutional change, which can result in blended logics. Others, however, pursue a strategy of status quo or disengagement through maintenance or other forms of disruption, where the two logics coexist in principle but not in practice; instead the market logic retains its dominance. We discuss the implications of our findings for research.

This study aims to develop an ethical branding framework that determines whether a corporate brand’s functional and emotional values, that is, product, service quality, and perceived price (antecedents), influence ethical branding and, consequently, company reputation and brand loyalty (consequences) among industrial buyers of electronic office equipment in Malaysia. Using structural equation modelling, the article demonstrates the effects of perceived price, quality of product and service on ethical branding, company reputation, and brand loyalty. The results reveal that product quality directly influences ethical brand perceptions and, consequently, company reputation. Perceived price and service quality do not directly affect company reputation; instead, they affect its identification through ethical branding. The findings thus demonstrate that product quality, perceived price, and service quality affect company reputation through the mediation of ethical branding. This highlights that an ethical brand is effective for companies to maintain their reputation among industrial buyers.