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In this study, we propose and test a model of the effects of organizational ethical culture and organizational architecture on the perceived unethical behavior of employees towards customers. This study also examines the relationship between organizational ethical culture and moral acceptability judgment, hypothesizing that moral acceptability judgment is an important stage in the ethical decision-making process. Based on a field study in one of the largest financial institutions in Europe, we found that organizational ethical culture was significantly related to the perceived frequency of unethical behavior towards customers and to the moral acceptability judgment of this type of unethical behavior. No support was found for the claim that features of organizational architecture are associated with the perceived frequency of unethical behavior towards customers. This is the first study to document the differential effects of organizational architecture and organizational ethical culture on perceived unethical behavior of employees towards customers, in wholesale banking. Implications for managers and future research are discussed.

Social capital has as its key element the value of social relationships to generate positive outcomes, both for the key parties involved and for wider society. Some authors have noted that social capital nevertheless has a dark side. There is a moral element to such a conceptualisation, yet there is scarce discussion of ethics within the social capital literature. In this paper ethical theory is applied to four traditions or approaches to economic social capital: neo-capitalism; network/reputation; neo-Tocquevellian; and development. Each is considered in detail and subject to ethical analysis by the application of utilitarianism, Kantianism, justice and rights, and ethic of care. Accordingly, the assumption that social capital is either value-neutral or a force for good is critiqued, and a framework for understanding social capital from an ethics perspective is presented.

This study focuses on the prediction of the engagement of small- and medium-sized enterprises (SMEs) in environmental management practices, based on a random sample of 689 SMEs. The study finds that several endogenous factors, including tangibility of sector, firm size, innovative orientation, family influence and perceived financial benefits from energy conservation, predict an SME’s level of engagement in selected environmental management practices. For family influence, this effect is found only in interaction with the number of owners. In addition to empirical research on SMEs’ environmental behavior, this article draws on the ecological modernization literature as well as the theory of planned behavior.

PurposeThis paper aims to clarify that corporate social responsibility (CSR) has come a long way by the prevailing business case approach, but increasingly hits a glass ceiling. The glass ceiling metaphor refers to the inherent limitations created by a business case approach towards CSR.Design/methodology/approachThe main findings are based on an analysis of existing literature on strategies for CSR. The findings are illustrated with a case from the Dutch National Research Program on CSR.FindingsThe very term corporate social responsibility suggests that the debate about CSR is all about responsibilities of corporations. Maybe it once was, but nowadays it is much more about new market opportunities and a business‐wise approach to ecological and social problems. CSR has evolved into a marketable asset of companies, in which profit‐oriented managers and entrepreneurs are willing to invest. This “commodification” of CSR has helped to make it acceptable in the business world, but this comes at a considerable price from the perspective of the social responsibility of business. It is especially argued in the paper that a business case approach results in opportunism, leaves institutional blockades intact and drives out the intrinsic motivation for engaging in CSR.Research limitations/implicationsBecause of the chosen conceptual research approach, the propositions put forward in the paper need further grounding in empirical research.Practical implicationsIn order to shatter this glass ceiling, managers have to deal with a paradoxical situation. They should maintain their appreciation of economic constraints and at the same time combine this with a sincere recognition of moral values. This at least requires that managers should show commitment to certain social values, be able to defend it in good and bad times and prepare all employees to deal with the inherent dilemmas of bearing different responsibilities.Originality/valueAlthough the paper builds on earlier articles on limitations of a business case approach, it is the first paper to argue for a glass ceiling of CSR created by the inherent limitations of such an approach.

Purpose – This paper aims to explore new forms of control that can address the legitimacy problems of globally‐integrated enterprises.Design/methodology/approach – In a conceptual analysis the characteristics of the globally‐integrated enterprise are used to put forward apt strategies of control. These proposals are examined and illustrated in a case study of the strategies in use in the athletic footwear industry.Findings – This paper argues that command‐and‐control strategies will be ineffective for globally‐integrated enterprises. In order to behave like a global corporate citizen companies need to stress controls based on belief systems and interactive systems. Certain features of this shift in control are visible within the athletic footwear industry although many strategies in use are still based on thinking like a multinational.Research limitations/implications – This paper is explorative in nature. More empirical research is needed to test the proposals this paper puts forward.Practical implicatio...

This article presents a response to the following papers: "Ethical Marketing," by P.E. Murphy, G.R. Laczniak, N.E. Bowie, and T.A. Klein, "Marketing Ethics: Cases and Readings," edited by P.E. Murphy and G.R. Laczniak, "Advertising Ethics" by E.H. Spence and B. van Heekeren, and "Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause," by P. Kotler and N. Lee. This article evaluates the new developments in marketing ethics that can be found in these four new texts on the topic.

Exploring the concept of citizenship from the history of political philosophy provides suggestions about what corporate citizenship could mean. The metaphor of corporate citizenship suggests an institutional approach to corporate social responsibility. Citizenship is a social role, characterized by an orientation towards the social contract, collective and active responsibility, as well as a positive attitude towards the juridical state. By analogy, corporate citizenship is a social role, characterized by the social contract of business, a participatory ethics of business, the precautionary principle and the promotion of just international institutions. It is considered that corporate citizenship depends on a number of interacting institutional conditions that hold society partly responsible for the social performance of their companies. Finally, the problem of the dissolution of corporate social responsibility is reviewed in an institutional environment where everyone is considered responsible.

Companies have a share in our common responsibility to future generations. Hitherto, this responsibility has been all but neglected in the business ethics literature. This paper intends to make up for that omission. A strong case for our moral responsibility to future generations can be established on the grounds of moral rights theory, utilitarianism and justice theory. The paper analyses two practical cases in environmental policy, in order to come to grips with the complicated ethical issues involved in the responsibility to future generations. The cases deal with the management of finite energy sources and of vulnerable resources of biodiversity. The ethical issues involved in these cases have an important bearing on business ethics: future generations should be included among the stakeholders of the firm. The paper concludes with a plea to institutionalize a “third arena” for debate and deliberation on the protection of the interests of future generations, next to the arenas of the government and the market. Companies should participate in this third arena, led by a participatory ethics.

Business ethics serves the important social function of integrating business and society, by promoting the legitimacy of business operations, through critical reflection. Although the social function of business ethics is implicit in leading business ethics foundation theories, it has never been presented in a systematic way. This article sets out to fill this theoretical lacuna, and to explore the theoretical potentials of a functional approach to business ethics. Key concepts from Parsonian functionalistic sociology are applied to establish the social integrative function of business ethics. This produces a theoretical framework for business ethics that provides strong theoretical arguments against often-heard criticisms of business ethics. Many of these criticisms are ideological in nature, in that they systematically play down the importance of integrative functions in the business-society relationship, on the grounds of unrealistic assumptions about the performance of economic and bureaucratic institutions. However, business ethics itself can also become ideological, if it forgets that the conditions for the application of ethics to business are not always ideal as well.

A communitarian ethical approach is at least as important for the pastoral dealing with peace issues in the church as a procedural ethical approach. Empirical support for this thesis is gathered through a survey among 175 members of Dutch church peace movements and 127 church members who are not active in a peace movement. First, a conceptualisation of communitarian peace attitudes is elaborated. Then, the effects of communitarian peace attitudes on peace action are tested. Significant effects are measured for both groups. The article concludes that there is an important communitarian dimension in the empirical theological ethics of peace. This communitarian dimension involves in particular the identity and mission of the church with regard to peace issues. Pastoral dealing with peace issues in the church, but also with other moral issues, should not neglect the communitarian side of the moral consciousness of believers.

Financial services play a key role in creating prosperity and welfare in our society. They facilitate a good life, but can also seriously frustrate it (see part 3 of this thought paper). This huge impact comes together with the responsibility to carefully consider the interests of all stakeholders of a financial institute, such as clients, shareholders, employers and the society in which the bank operates. The turmoil in the financial industry over the last years raised serious doubts whether this responsibility is still to the core of morality in the financial sector. As a consequence, national and international governments impose new regulations and guidelines to make banks comply with preset standards. But in order to strengthen accountability and regain public trust a compliance approach can never suffice (part 4). Compliance is aimed at preventing misconduct – doing the moral minimum - while it is expected from financial institutions that they reorient themselves towards their social function and to the related values worthy to live for. This requires an approach that stimulates ethical and value-driven decision making across the entire organization. This thought paper explores the lessons for management in developing and implementing such an ethics management approach (part 5). However, before we elaborate on this, we need to explore a more fundamental question about the morality in the financial sector. Since, as long as we don’t understand the reasons why the financial sector drifted away from its social function, there will always be the risk that attempts towards ethics management will be mere symbolic at worse and suboptimal at best. For this we will first turn to an overview of the ethical failures in the financial industry (part 1) and see how the views of philosopher Thomas Hobbes shed light on the current developments in the financial sector (part 2).

This paper examines the question of to what extent the legitimate interests of stakeholders towards a firm also imply the need, or even the right, to exercise control over that firm’s decisions. In order to do so, it discusses the so-called “stakeholder capitalism”, which is based on the fundamental assumption that a company is not anyone’s specific business and that its achievements are rather the result of the joint effort and mutual trust of many parties. The paper explores whether and how the notion of stakeholder capitalism involves the extension of decision rights in a company to other stakeholders than the shareholders only. In this context, a distinction is made between economic and social stakeholders, and it is argued that control rights are most plausible for the economic stakeholders of a firm, less so for social stakeholders. Next, this conclusion is put into perspective by pointing to the increased prominence and prevalence of the open-systems and values-chain approaches to stakeholder management, which tend to decentralize the role of the firm in relation to its stakeholders. The resource-based view of the firm helps understand why the question of which stakeholder controls the firm is increasingly superseded by the question of which stakeholder owns which resource that is critical to the achievement of the common goals of the networked partners in the values chain.

In this chapter, the authors detail the development of The Body Shop and the importance to it of the social projects it has undertaken. They then discuss the implications of The Body Shop's reorganization, brand repositioning and the L'Oreal takeover, and what the future might hold for The Body Shop. The Body Shop has gradually professionalized its approach and has also persevered with various social projects in the face of fierce criticism. With the reorganization, brand repositioning and the L'Oreal takeover, The Body Shop appears to have averted the risk of sustained erosion of its market share. After the reorganization, The Body Shop's management attention assumed more business and commercial aspects and less of a pioneering role in corporate social responsibility (CSR). The question now is whether The Body Shop will continue in the future to be viewed by customers as distinct from competitors, who have slowly also become more active in CSR. The history of The Body Shop has gone through three phases: rise, fall and recovery. The company's recovery is not a repetition of the early period, but a transformation, in which the ideals of old have been tempered by the hard business lessons of the fall. The Body Shop's new style is a synthesis of the previous two phases.

In a time when corporate governance seems to be rooted in detailed control systems, where codes of conduct are perceived to give meaning to daily activities and where a global organization parallels a unified actor, it might seem odd to approach CSR from a sensemaking perspective. Still, we believe that much can be learned from such an approach. Research has proven over and over again that a one-sided structure-based approach of stimulating responsible behaviour is missing its goal. Our understanding of CSR can gain considerably from a sensemaking perspective, because it attracts attention to some dubious assumptions behind CSR that are too often taken for granted. For example, it is often stated that CSR is based on shared values, without questioning by whom these values are shared or how a shared meaning of values originates in an organization. Approaching CSR from a sensemaking perspective models CSR as an evolutionary process where many different agents act and react upon each other (Weick 1995). In other words, sensemaking is about how people construct their own reality. Poole & McPhee (1983: 195) refer to this as a duality between people and organizations: ‘People create, maintain, and control organizations, yet organizations attain a life of their own and often overshadow, constrain and manipulate their members . . . The explanation of this complex relationship is one of the great goals of organizational studies and also one of its greatest problems’. This special issue aims to present some insights into this problematic relationship as far as it relates to the concept of CSR. Approaching CSR from a sensemaking perspective means focusing on the dynamic and social processes underlying the development of CSR in organizations. It also means focusing on people’s motivations for acting in a responsible or irresponsible way (Fisscher et al. 2003). This kind of research is generally more qualitative in character, and based on ‘why’ and ‘how’ questions rather than on ‘what’ questions. To give some examples of the application of the Respectively: Assistant Professor, Faculty of Business, Public Administration and Technology, University of Twente, Enschede, The Netherlands; and Professor of Business Ethics, Nyenrode Business University, Breukelen, The Netherlands.

The concept of responsibility implies the notion of a response to a forum that asks questions, that accuses, that wants to hear justifications. A primary forum before which the moral responsibilities of business are assessed is the morally concerned public. The public is morally anxious about business, because it has come to understand that its well-being is, to a large extent, dependent on the degree to which business takes its social responsibilities seriously. The disasters with the Herald of Free Enterprise at Zeebrugge and with the Boeing-freighter in Amsterdam, or the problems of mass-unemployment, the social exclusion of minorities and pollution are examples of this.

In this paper, the approaches of a sample of small firms to environmental issues in the UK and the Netherlands are compared. The study makes a contribution by addressing the lack of research on small firms and the environment, as well as offering insights into the influence that cultural, institutional, and political frameworks can have on small firm owner-managers’ attitudes to external issues. The environment is considered here as an ethical issue, drawing on work on the environmental responsibility of business by both Bowie (1990) and Hoffman (1991). It is argued that the approaches to the environment identified in this study by Dutch and UK small firm owner-managers do not fit in with the positions of either Bowie or Hoffman. The concept of stakeholder cooperation is proposed as a more realistic alternative.