Employee shareholder associations (ESAs) have emerged as a novel, and widely underestimated actor in the European corporate arena, established to collect and pool the shares and voting power held by a company's employees. As such, they parallel existing institutions for employee representation, potentially empowering employees in their role as shareholders and possibly even providing a counterweight to traditional company owners. Unfortunately, we know little about the actual functioning, the inner workings, and, particularly, the ESAs' contributions to (...) date. To address these shortcomings this paper explores the limitations but also the potential of ESAs in large, German listed companies to contribute to employee share ownership (ESO), to organizational democracy (OD), and to corporate sustainability (CS). Our findings show that, as far as ESOs and OD are concerned, in the specific German context, ESAs usually do not offer alternatives to (or even to compete with) existing employee representation but are instead rather dependent on cooperation with them. Regarding CS, any contribution here is closely linked to the ESAs' own principles and depends on the extent to which the ESA management takes them seriously and prioritizes them over other objectives. (shrink)

Employee shareholder associations (ESAs) have emerged as a novel, and widely underestimated actor in the European corporate arena, established to collect and pool the shares and voting power held by a company's employees. As such, they parallel existing institutions for employee representation, potentially empowering employees in their role as shareholders and possibly even providing a counterweight to traditional company owners. Unfortunately, we know little about the actual functioning, the inner workings, and, particularly, the ESAs' contributions to (...) date. To address these shortcomings this paper explores the limitations but also the potential of ESAs in large, German listed companies to contribute to employee share ownership (ESO), to organizational democracy (OD), and to corporate sustainability (CS). Our findings show that, as far as ESOs and OD are concerned, in the specific German context, ESAs usually do not offer alternatives to (or even to compete with) existing employee representation but are instead rather dependent on cooperation with them. Regarding CS, any contribution here is closely linked to the ESAs' own principles and depends on the extent to which the ESA management takes them seriously and prioritizes them over other objectives. (shrink)

As corporate managers interact with nonshareholder stakeholders, potential tradeoffs emerge and questions arise as to how these interactions impact shareholder value. We argue that this shareholder—stakeholder debate is an important issue within the overall corporate governance and corporate policy domain and examine one such stakeholder group - employees - by studying labor-friendly corporate practices. We find that announcements of labor-friendly policies are associated with positive abnormal stock returns. Labor-friendly firms also outperform otherwise similar firms, both in terms of (...) long-run stock market returns and operating results. In addition, we find that the probability and benefits of labor-friendliness increase with the demand for highly skilled labor. Our analysis of excess executive compensation suggests that top management derives no pecuniary benefits from labor-friendly practices. We interpret our results as consistent with a genuine concern for employees translating into higher productivity and profitability, which in turn facilitate value creation. It appears that the benefits of labor-friendly practices significantly outweigh the costs and that what is good for employees is good for shareholders. (shrink)

The privatization of France Telecom in 1997 led to the implementation of a profit-oriented financialization strategy. An unforgiving work environment was developed, which has unsettled many employees. Between February 2008 and October 2011, 69 employees took their own life. Many left notes blaming management for having privileged the interests of shareholders over those of employees. Through interviews with employees and professional practitioners associated with FT, we reveal that employees strongly resented the company’s use of financialization policies to maximize shareholder (...) value. Pursuit of such policies led to the de-institutionalization of socially prescribed norms that were applied commonly in Continental European workplaces. Feelings of anomie, disgrace, futility and isolation ensued among employees. This case highlights an important effect of a modern corporation’s adoption of financialization policies. It points to the need to improve workplace sensitivities and the ethical dispositions of companies and their managers. (shrink)

This study examines social issues shareholder resolutions filed at S&P 500 companies in 2007. These firms received 86% of all social issues resolutions filed. Findings indicate that green resolutions were the most common single type (30% of social issues resolutions), but nearly one third (32%) of resolutions contained non-traditional content. Firms were more likely to be targeted if they were large in size and demonstrated poor treatment of employees and customers. As might be expected, the primary sponsors of social (...) issues resolutions were socially responsible investment funds, religious groups, and pension funds. Surprisingly, over half (52%) of resolutions made it onto proxy ballots in 2007, while there was sufficient dialogue between the target companies and shareholder activists for filers to withdraw only 29% of the resolutions (although 41% of green resolutions were withdrawn). Resolution content and firm response differed by type of filer. (shrink)

Employing a unique dataset of Chinese non-listed firms, this paper investigates the effects of the presence of 19 governance structures on 20 employees’ interest indicators. In general, we find that firms with the governance structures pay workers higher hourly wages, require less monthly working hours, and have a smaller chance of wage arrears. Meanwhile, the shares of total wage and welfare expenditures in total sales revenue are lower in these firms, which results in higher profitability. Moreover, firms with the governance (...) structures invest significantly more into training and provide employees with better fringe benefits. Considering the low labor protection standard and the weak external regulations of China’s labor market, we explain the positive findings thusly: corporate governance structures induce managers to adjust wage payments to the “efficiency wage” level, which is the best balance point for the interests of both shareholders and employees and, therefore, for maintaining the stakeholder relationships. We also find the governance structures that give blockholders superpower are negatively associated with employees interests. These results highlight the importance of giving enough discretion to managers in order to successfully find the common ground for creating mutual values for shareholders and employees. (shrink)

Servant leadership and other ethical and moral approaches to leadership have been criticized for focusing on followers to the potential detriment of other stakeholders, specifically shareholders. With individual data collected from 485 respondents nested in 55 similar stores in a single company, within a large metropolitan area in France, we tested a multilevel model whereby servant leadership relates positively to business-unit performance measured by profit growth—a key indicator for shareholders—through the mediation of employee flourishing and revenue growth. With financial (...) performance data collected approximately 15 months after servant leadership was measured, results supported the hypothesized relationships. At the individual level, this study also showed the association of servant leadership and employee flourishing to be negatively moderated by individual perceptions of power distance orientation: the weaker the power distance orientation, the stronger the influence of servant leadership on employee flourishing. Improving on prior studies that relied on data aggregated at the group level and proximal indicators of performance, this multilevel study sheds light on how servant leadership, a prominent form of ethically conscious leadership, may resolve the fundamental tension leaders face vis-à-vis the potentially diverging interests of their stakeholders. (shrink)

Driven by competitive pressure, organizations are empowering employees to use their judgment, creativity, and ideas in pursuit of enhanced organizational performance and both employee and shareholder satisfaction. This empowerment offers both benefits and potential harm. This article explores the benefits and harm associated with role, reward, process and governance empowerment and makes recommendations for minimizing the harm while maximizing the benefits.

BackgroundOrganizations worldwide increasingly adopt inclusive talent management, and this approach appears to rhyme particularly well with the Nordic welfare model. Questions about its value remain understudied, however. The inclusive approach is rooted in positive psychology and focuses on recognizing each employee's individual talents and assessing whether they fit the long-term needs of the organization, since a fit is assumed to be associated with employees' wellbeing. In the present study, we test this assumption focusing specifically on a key talent management (...) practice, talent identification, and the social dimension of employee wellbeing.MethodData were collected through an employee survey conducted within the Finnish units of four international manufacturing organizations and analyzed using logistic regression.ResultsWe found that the recognition of individual talents for long-term deployment by the organization is positively associated with social wellbeing in terms of supervisor support and social climate in the work unit, as perceived by the employees.ConclusionOur results tentatively suggest that inclusive talent management creates value through the identification of employees' individual talents as this practice can be associated with their enhanced wellbeing. (shrink)

Prior literature on ethical concerns in mergers and acquisitions (M&As) has often concluded that many stakeholders, such as workers and communities, have unjustly suffered as a result of takeovers and associated defences and that their rights as stakeholders have been violated. However, very few papers provide any guidance on how to evaluate a merger or acquisition from an ethical standpoint. This study looks at how ethical frameworks could be used to assess the ethical impact of a merger or acquisition and (...) gives practical guidance. It is proposed that decision makers should consider the impact on four stakeholder groups: shareholders, employees, customers and directors. We call the proposed method for doing this Partial Utilitarian analysis. We suggest two possible ways of applying the Partial Utilitarian analysis. One approach could rely on the evidence from a sample of recent deals. For this, empirical analysis is conducted on a sample of large M&As in the United Kingdom in the period 1993–2003. Alternatively, a better approach, requiring considerable management time, requires forecasting of the economic impact on the four groups of stakeholders. The paper shows how to do this. (shrink)

ABSTRACT:A key factor in the decision to convert a publicly owned company to private status is the expectation that value will be created, providing the firm with rent. These rents have implications regarding the property rights of the firm’s capital-contributing constituencies. We identify and analyze the types of rent associated with the newly private firm. Compared to public firms, going private allows owners the potential to partition part of the residual risk to bond holders and employees, rendering them to be (...) co-residual risk bearers with owners. We propose that new promotion-based contracts with bond holders and employees, reflecting their particular investments, be negotiated as the firm migrates from public to private status. These contracts should acknowledge the firm’s intent to maximize shareholder value and its need to take the risks necessary to do so, but support that the firm’s survival not be undermined due to its possibly opportunistic owners. (shrink)

Corporations have often been taken to be the paradigm of an organization whose agency is autonomous from that of the successive waves of people who occupy the pattern of roles that define its structure, which licenses saying that the corporation has attitudes, interests, goals, and beliefs which are not those of the role occupants. In this essay, I sketch a deflationary account of agency-discourse about corporations. I identify institutional roles with a special type of status function, a status role, in (...) which the collectively accepted function is expressed in part through its occupier’s intentional expression of her agency in that role. I identify institutions as systems of status roles and show how this is compatible with seeing the agency of institutions generally, even over time periods in which there is complete change in role occupiers, as a matter of the contributions only of individual agents. I explain how the reduction of the institution to its members is compatible with its potentially having had a completely different membership. I show in the case of the corporation in particular that, once we see its origins and function, the surface features of legal discourse about corporate agency are misleading and are compatible with a deflationary account of corporate agency. I show in connection with this that the corporation is to be identified with its shareholders, and that where a corporation separates ownership and control, its managers and employees are proxy agents of the shareholders doing business under the corporate form. Finally, I canvass the legitimate ways of construing ordinary talk about corporate intention, belief, and so on, in light of this, none of which support the attribution of genuine agency or intentionality to any group per se associated with the corporation. (shrink)

This article investigates stakeholder expectations associated with corporate environmental disclosure. Several articles have studied the effect that stakeholder pressure has on environmental disclosing strategies. In this article, we extend previous research to an examination of the influence of external, internal, and intermediary stakeholder groups or constituencies in turn to clarify the demands of multiple stakeholders as to firms' disclosure of sufficient and adequate environmental information. The sample comprised Taiwanese firms listed on the Taiwan Stock Exchange. Our results show that the (...) level of environmental disclosure is significantly affected by stakeholder groups' demands. External stake-holder groups, such as the government, debtors, and consumers, exert a strong influence over management intentions regarding the extent of environmental disclosure. Internal stakeholder groups, such as shareholders and employees, impose additional pressures on firms to disclose environmental information. As for intermediate stakeholder groups, environmental protection organizations, and accounting firms, these can greatly influence managerial choices regarding their environmental disclosure strategies. (shrink)

Few doubt that automation and artificial intelligence will change business and society in the future. Questions arise, however, regarding the motivations associated with such expensive corporation expenditures and the related ethics of the disruption and unemployment that may result from corporation development and installation of sophisticated technology. This study analyzes financial statement data of 100 large public corporations to understand those motivations and their consequences for corporation profitability and employees. The study results indicate that a more automated future may be (...) profitable for corporations and their shareholders, but one of the costs of that future is significant disruption to employees. While some new positions may be created as a result of this technology, many employees will suffer disruption and will need extensive training to maintain employment in an evolving workplace. Many other employees will lose their jobs because the tasks that they once performed will be automated. The related ethics to business and society are profound. (shrink)

In order to provide an effective whistle-blowing system, it is expected that companies would provide employees with a high level of disclosure regarding the whistle-blowing process. This study investigates variation in the extent of whistle-blowing disclosures. As a measure of whistle-blowing implementation, this study further examines the provision of a hotline channel. The results suggest that the extent of whistle-blowing disclosures is positively associated with the permissibility of anonymous reporting and organisational support for whistle-blowing, the number of external directors on (...) the audit committee, and the existence of concentrated shareholdings. The mere existence of whistle-blowing disclosures could simply be symbolic. The findings also indicate a greater likelihood of the provision of hotlines when companies are larger in size, have a higher level of current inventory, are cross-listed in the US, and permit anonymous reporting. (shrink)

Secrecy and ethics are often seen as opposing forces within organizations. Secret work is viewed as unethical, as it excludes others from knowing and is associated with self-interested behavior. We contend that this view does not account for the dynamic inherent to secrecy and to the fact that ethics is embedded in social relations. This paper suggests an alternative view. We consider secrecy as a social process which allows employees to maintain their ethics when faced with managerial policies that affect (...) the quality of their work. Building on an in-depth case study of a team of journalists who worked in secret after their managers decided to prioritize the interests of shareholders and advertising firms, we show how these journalists managed to maintain collective ethics through secrecy and to do their work according to their own moral principles. This paper offers two primary contributions. First, we show a mutually beneficial relationship between ethics and secrecy in organizations, wherein secrecy helps maintaining ethics in everyday work. Second, the paper shows how secrecy can lead to ethical resistance, via a transformation of the power relationship with managers. (shrink)

Prior research suggests that ownership structure is associated to corporate social responsibility (CSR) in developed countries. This article examines whether and how ownership structure affects CSR in emerging markets using Chinese firms' social responsibility ranking. Our empirical evidences show that for non-state-owned firms, corporate ownership dispersion is positively associated to CSR. However, for state-owned firms, whose controlling shareholder is the state, this relation is reversed. We attribute the reversed relationship to political interferences and further test this hypothesis by demonstrating (...) that regional economic development is negatively related to CSR for state-owned firms due to decreased political interference in more developed areas. This study is the first to directly examine the relationship between the dispersion of corporate ownership and CSR in emerging markets, and our results depict that it is important to consider ownership type in assessing CSR in emerging market where state ownership is still prevalent such as China. The results also reveal that firm size, profitability, employee power, leverage, and growth opportunity affect CSR in China. (shrink)

Employee engagement and spirituality have both been the focus of increasing interest by researchers and practitioners, and both are still early stage theories with ill-defined constructs and definitions. Emergent empirical work related to engagement and spirituality has supported the promise of improving both organizational performance and employee conditions. Responding to the call by theorists to examine engagement antecedents and specifically, the relationship between spirituality and employee engagement, a cross-sectional study was performed to examine self-reported individual spirituality as (...) measured by the DSES and employee engagement measured using the UWES-9 including the dimensions of vigor, dedication, and absorption. 124 usable surveys were collected from a snowballing convenience sample and after confirming demographic representativeness and identifying the individual’s organizational role as a potential influential variable, analyses of the relationships between individual spirituality, overall engagement, and three individual engagement dimensions were performed using multiple regression controlling for organizational role. Empirical support was found for relationships between individual spirituality and engagement, vigor, and dedication but not for the engagement dimension of absorption. The findings should encourage further future exploration of the relationship between spirituality and engagement and inquiry into why results differ across engagement’s dimensions; specifically, why the relationship was not supported for absorption. The empirical support for spirituality as a predictor of engagement informs practical decisions for addressing workplace spirituality and concerns with the potential to assist in countering the declining engagement trend. (shrink)

The paper provides an introduction to some of the professional ethical dilemmas facing an accountant in the United Kingdom. The first part deals with those dilemmas which accountants would normally accept are covered by the term ethics. These include the problems associated with adequately fulfilling a duty to shareholders and conflicts of interest (including whistleblowing) by the accountant acting as independent auditor or as an employee. The second part deals with wider aspects of ethical dilemmas stemming from reconciling the (...) implicit understanding that the accountant is being objective with the fact that accounting rules make it very difficult to sustain that objectivity. (shrink)

Although many studies have found a positive relationship between corporate social performance and employer attractiveness, few have examined how different forms of responsibility might mediate that attraction, particularly when those social practices afford different degrees of employee participation. The current study undertook this line of inquiry by examining prospective employees’ attraction to three common approaches to corporate social performance (CSP) that offer increasing levels of participation: donation, volunteerism, and operational integration. Unexpectedly, findings from an empirical investigation challenged the study's (...) main hypothesis; that is, prospective employees were least attracted to firms that integrated their social and financial goals. Consequently, important implications and questions remain for both employers and business educators. (shrink)

Shareholder activism has been largely neglected in the few available studies on corporate governance in sub Saharan Africa. Following the recent challenges posed by the Cadbury Nigeria Plc, this paper examines shareholder activism in an evolving corporate governance institutional context and identifies strategic opportunities associated with shareholders’ empowerment through changes in code of corporate governance and recent developments in information and communications technologies in Nigeria; especially in relation to corporate social responsibility in Nigeria. It is expected that the (...) paper would contribute to the scarce literature on corporate governance and accountability in Africa. (shrink)

Ethical dilemmas arise when one must decide between conflicting ethical imperatives. One potential ethical dilemma is a manager’s decision of whether to engage in corporate social responsibility activities. This decision could pit the ethical imperative of honoring unwritten obligations to society against the ethical imperative of honoring contractual obligations to the firm. However, CSR activities might only be a minor ethical dilemma or none at all if they simultaneously benefit the firm and society. To examine this I test the association (...) between future-period employee productivity and current-period use of one type of CSR activity: employee volunteer programs. I use a unique sample of 1428 firm-years, hand-collected from sustainability reports of 373 firms. I find evidence that the current-period use of an employee volunteer program has a positive association with future-period employee productivity. I find this result in future periods up to 6 years after a firm uses an employee volunteer program. I also find a positive association between incentives that focus CEOs’ attention on long-term firm outcomes and more extensive employee volunteer programs. (shrink)

The focus of this paper is employee ownership, specifically the role of employee ownership in value creation. Based on a sample of 163 French companies, we have measured the impact of employee share ownership on value creation for both shareholders and stakeholders. Only companies with a sustained employee ownership policy over a 5-year period (from 2001 to 2005), as defined by the French Federation of Employee and Former Employee Shareholders (FAS), have been considered. The (...) results indicate that employee share ownership plans have no effect on shareholders’ or stakeholders’ value creation. (shrink)

This study surveyed investors to determine the extent to which they preferred ethical behavior to profits and their interest in having information about corporate ethical behavior reported in the corporate annual report. First, investors were asked to determine what penalties should be assessed against employees who engage in profitable, but unethical, behavior. Second, investors were asked about their interest in using the annual report to disclose the ethical performance of the corporation and company officials. Finally, investors were asked if they (...) felt that ethics reports should be audited.The survey results indicate that many shareholders (42%) do not expect a high level of ethical behavior from corporate employees or officers. There is a significant amount of interest in disclosure of ethical issues (72%) and unwillingness to trust management to provide unbiased reports of ethical behavior. If such reports are included with the financial statements, 32 percent of the investors surveyed would prefer to have them audited to provide independent verification. (shrink)

Shareholder activism has become a dynamic institutional force, and its associated, rapidly increasing body of scholarly literature affects numerous disciplineswithin the organizational science academy. Despite growing shareholder empowerment, the impact of shareholder activism on corporate outcomes remains equivocal. The heterogeneity of factors in shareholder activism, such as environmental, firm, proponent, and issue characteristics; the variety of activism methods and processes; and varying outcomes provides a plethora of theoretical and methodological challenges for activism researchers. Furthermore, the separation (...) of prior research on financial and social activism has left unanswered questions critical for both the scholarly discourse on shareholder activism and the normative debate on shareholder empowerment. Our multidisciplinary review integrates both the financial and social activism streams and explores shareholder activism controversies, seeking to provide an impetus for more cohesive conceptual and empirical work in the field. (shrink)

We examine the impact on firm bribery of two corporate governance devices heavily studied in corporate governance research—i.e., separation of ownership and control, and equity share of the largest shareholder. In addition, we investigate the impact of the principal—owner's gender on firm bribery. From agency theory, we predict that firms with the owner also acting as a manager (owner-manager) are more likely to engage in bribery compared to their counterparts with separation of ownership and control. We argue that an (...) increase of the equity share of the largest shareholder can either increase or decrease firm bribery likelihood depending on the net cost-benefit effect of such bribery actions. In addition, we predict that bribery is more likely to occur when the principal— owner is male rather than female. Using a rich dataset of the World Bank Enterprise Surveys of 2002-2005, we find that the equity share of the largest shareholder is negatively and male principal—owner is positively associated with the likelihood of firm bribery. Furthermore, we reveal that owner—manager is more likely to bribe when the principal— owner is male rather than female. We also observe that the effect of owner—manager is smaller as the equity share of the largest shareholder increases. (shrink)

The paper introduces a virtue-theoretic critique of recent “prosocial” revisions of shareholder primacy. The paper aims at widening the scope of virtue-based business ethics beyond its nearly exclusive focus on the character and virtue of managers, employees, and organizations. In contrast to MacIntyre-inspired research, the paper takes a “good intentions” approach that looks squarely at shareholders, regarding them as real people (not algorithms or institutions) occupying distinctive roles as principals of firms who are, ideally, virtuous moral agents. It is (...) argued that virtue ethics can play a part in questioning normative features of shareholder primacy and the objective function of the firm. Probing deeper than prudential and instrumental concerns, the paper poses normative questions about interpreting shareholder motivations: what _ought_ shareholders to prefer/want/desire?; _ought_ shareholders to desire profit maximization versus profit satisficing?; _ought_ shareholders to prefer other, prosocial goals, alongside of wealth?; should self-interested motivation in profit-seeking be considered virtuous? To lend focus, the paper taps Hart and Zingales’ recently revised “pro-social” version of shareholder primacy, as well as Munger and Russell’s analysis of “virtuous profit-seekers,” as normative frames of reference. Doing so enables a critical engagement with their respective accounts from the standpoint of virtue theory. Taking a “virtuous shareholders” perspective provides an aretaic standpoint, one that is appropriate, given that shareholders care about matters of justice and the common good. Shareholders are not simply concerned about making money. Hence it is the moral intentions and motivations of ideally virtuous shareholders which ought to modulate the profit-seeking activities of shareholders in accordance with maximizing their welfare. (shrink)

The purpose of this paper is to analyze from a strategic ethical perspective four selected shareholder resolutions reported by the Social Issues Service of the Investor Responsibility Research Center regarding international labor and workplace standards. Particular attention will be paid to specific employee relations issues at the operating and tactical level of individual multinational firms. The paper concludes with policy recommendations for proxy statements.

The managers of colleges and universities have to make decisions on a wide range of issues with regard to goals and how they may be pursued. “Managers” refers to such positions as the president, provost, vice president dean, and director of a university. This paper lays out the theoretical basis for the right answer for these decisions. It does so by setting out the fundamental function of an academic institution, linking this function to a duty, and explaining how to satisfy (...) this duty in hard cases. This article’s thesis is that university managers have a duty to shareholders alone. Shareholders are those who own the university. This duty is satisfied when managers satisfy the fundamental project shareholders assign to a university. My overall argument supports two theses: the shareholder theory is true and university managers’ duty is to satisfy the fundamental function shareholders assign to a university. The argument for the first thesis rested on the notion that a university needs a fundamental function if managers are to have a defensible criterion by which to make decisions and that the shareholder theory best accounts for that function. Along the way, the stakeholder theory were found to be inadequate. The second thesis applies the first thesis. The article then considered some objections. With regard to the shareholder theory, one objection is that the shareholder theory suggests that a manager owes duties to a university’s owner, and not its students, and this is distasteful. A second is that on the shareholder theory, a university can have as a fundamental function something like maximizing the endowment associated with the university, maximizing profits, or promoting a Christian lifestyle, rather than focusing on creating or distributing knowledge. A third is that a university manager has role-based duties. None of these objections is fatal to shareholder theory. (shrink)

With the advent of responsible business, ensuring social responsibility in sourcing is of interest to both academics and practitioners. In this study, we examine one way of achieving this goal: ethical sourcing initiatives (ESIs). ESIs refer to a firm’s formal and informal actions to manage sourcing processes in an ethical and socially responsible manner. While ESIs have been established as an important part of corporate social responsibility, it is unclear whether, how, and when this corporate effort is economically beneficial. We (...) conduct an event study estimating the shareholder value effect of 159 publicly traded firms’ ESIs and find that the stock market reacts positively to ESIs in general. We also compare market reactions under different conditions including reactive versus proactive ESIs, and their interactions with initiative timing, firm size, and financial risk. Additionally, we find that ESIs are associated with long-term stock price and operating performance. Overall, our findings clarify the potential economic benefits of corporate ESIs and encourage buying firms to take these initiatives selectively according to business contexts. (shrink)

Employees remaining silent about ethical aspects of work or organization-related issues, termed employee ethical silence, perpetuates misconduct in today’s business setting. However, how and why it occurs is not yet well specified in the business ethics literature, which is insufficient to manage corporate misconducts. In this research, we investigate how and when exploitative leadership associates with employee ethical silence. We draw from the conservation of resources theory to theorize and test a cognitive resource pathway (i.e., work meaningfulness) and (...) a moral resource pathway (i.e., moral potency) to explain the association between exploitative leadership and employee ethical silence. Results from two studies largely support our hypotheses that work meaningfulness and moral potency mediate the effect of exploitative leadership on ethical silence contingent on performance reward expectancy. Theoretical and practical implications are thoroughly discussed in the paper. (shrink)

This paper examines the shareholder primacy norm as a widely acknowledged impediment to corporate social responsibility and explores the role of business schools in promoting the SPN but also potentially as an avenue for change by addressing misconceptions about shareholder primacy and the purpose of business. We start by explaining the SPN and then review its status under US and UK laws and show that it is not a likely legal requirement, at least under the guise of (...) class='Hi'>shareholder value maximization. This is in contrast to the common assertion that managers are legally constrained from addressing CSR issues if doing so is inconsistent with the economic interests of shareholders. Nonetheless, while the SPN might be muted as a legal norm, we show that it is certainly evident as a social norm among managers and in business schools—reflective, in part, of the sole voting rights of shareholders on corporate boards and of the dominance of shareholder theory—and justifiably so in the view of many managers and business academics. We argue that this view is misguided, not least when associated with claims of a purported legally enforceable requirement to maximize shareholder value. We propose two ways by which the influence of the SPN among managers might be attenuated: extending fiduciary duties of executives to non-shareholder stakeholders and changes in business school teaching such that it covers a plurality of conceptions of the purpose of the corporation. (shrink)

Workplace stressors were identified to have critical impacts on employee creativity. However, little is known about how and when involuntary citizenship behavior (i.e., compulsory citizenship behavior, CCB)-induced stress might exert influence on employee creativity. To fill this void, the present study firstly develops a moderated mediation model to investigate the CCB—employee creativity association as well as the underling mechanism and contextual condition of this relationship. By integrating social cognitive theory such as self-efficacy theory and conservation of resources (...) (COR) theory, we propose that CCB predicts employee creativity through the mediating role of creative self-efficacy (CSE), with the individual characteristics (i.e., personality traits) of negative affect acting as a boundary condition. Using two-wave time-lagged survey data collected from a sample of 251 front-line employees in 10 manufacturing firms in Southern China, the results show that: (a) CSE mediates the negative relationship between CCB and employee creativity; (b) negative affect moderates the relationship between CCB and CSE; (c) negative affect moderates the indirect influence of CCB on employee creativity through CSE. As the level of negative affect rises, this indirect relationship is stronger. Finally, important theoretical and managerial implications and promising avenues for future research are addressed. (shrink)

Shareholders are sometimes considered to be, in moral terms, the owners of a company, they are after all the carriers of the residual liabilities and bear a higher proportion of the financial risk. However, in company law, the shareholders’ responsibility is limited, and in financial terms shareholders are only liable up to the fully paid value of the share certificate. Moreover, when the shares are sold, the responsibility and risk are transferred completely to the new bearer of the shares. Whether (...) this gap in moral and legal perceptions can be judged to be satisfactory in business ethics terms is a moot point and will be partly explored in this case study which seeks to analyse the shareholder’s responsibility towards a firm in which they own shares. The case study company chosen as a vehicle to explore these issues is that of Turner & Newall; a company that subjected its employees, communities and customers to a major health hazard – asbestosis. This paper will use the Turner & Newall archive materials to illustrate the moral hazards that can arise for shareholders. In particular it will examine the ethical responsibilities of shareholders towards those stakeholders who were exposed to the dangers of asbestos. This case is a significant test of the veracity of the legal system of company control, and exposes the ineffectiveness of that system in accountability terms. The case study also deals with specific issues that arose in the asbestos crisis, as well as with more general issues in our present system of corporate governance and shareholder responsibilities. (shrink)

Employee governance, which includes employee ownership and employee participation in decision making, is regarded by manyas morally preferable to control of corporations by shareholders. However, employee governance is rare in advanced market economies due to its relative inefficiency compared with shareholder governance. Given this inefficiency, should employee governance be given up as an impractical ideal? This article contends that the debate over this question is hampered by an inadequate conception of employee governance that (...) fails to take into account the difference between employees and shareholders. It offers a different, more adequate conception of employee governance that recognizes a sense in which employees currently have some ownership rights. The argument for this conception of employee governance is built on an expanded understanding of the ownership of a firm. The article also suggests new strategies for strengthening the role of employees in corporate governance. (shrink)

We examine the impact on firm bribery of two corporate governance devices heavily studied in corporate governance research—i.e., separation of ownership and control, and equity share of the largest shareholder. In addition, we investigate the impact of the principal–owner’s gender on firm bribery. From agency theory, we predict that firms with the owner also acting as a manager (owner–manager) are more likely to engage in bribery compared to their counterparts with separation of ownership and control. We argue that an (...) increase of the equity share of the largest shareholder can either increase or decrease firm bribery likelihood depending on the net cost-benefit effect of such bribery actions. In addition, we predict that bribery is more likely to occur when the principal–owner is male rather than female. Using a rich dataset of the World Bank Enterprise Surveys of 2002–2005, we find that the equity share of the largest shareholder is negatively and male principal–owner is positively associated with the likelihood of firm bribery. Furthermore, we reveal that owner–manager is more likely to bribe when the principal–owner is male rather than female. We also observe that the effect of owner–manager is smaller as the equity share of the largest shareholder increases. (shrink)

This article surveys arguments for the claim that employees have a right to strong forms of decision-making participation. Itconsiders objections to employee participation based on shareholders' property rights and it claims that those objections are flawed. In particular, it argues the employee participation rights are grounded on the same values as are property rights. The articlesuggests that the conflict between these two competing rights claims is best resolved by limiting the scope of corporate property rightsand by recognizing a (...) strong employee right to co-determine corporate decisions. (shrink)

ABSTRACT:Although business ethicists have theorized frequently about the virtues and vices of employee loyalty, the concept of loyalty remains loosely defined. In this article, we argue that viewing loyalty as a cognitive phenomenon—an attitude that resides in the mind of the individual—helps to clarify definitional inconsistencies, provides a finer-grained analysis of the concept, and sheds additional light on the ethical implications of loyalty in organizations. Specifically, we adopt the psychological contract perspective to analyze loyalty's cognitive dimensions, and treat loyalty (...) as an individual-level construction of perceived reciprocal obligations. Based upon this perspective, we present a three-tiered framework of loyalty that provides a psychologically informed definition of the concept, specifies the variety of obligation types that loyalty can imply, and anticipates the potential for asymmetrical loyalty configurations between employers and employees. We use the framework to articulate moral issues associated with both symmetrical and asymmetrical loyalty configurations and discuss the implications of the framework for theory and practice. (shrink)

Although the individual journalist is an essential unit of ethical agency, journalists are increasingly employees of large companies or corporations whose primary aim is to maximize returns to shareholders. Consequently, many, perhaps most, of the ethical dilemmas journalists face begin with the inherent conflict between the individual's role as a journalist and his or her employer's quest for profit. My underlying argument in this article is that this situation is not unique, that other fields are confronting similar dilemmas, and consequently, (...) journalism may have much to learn from them. In the article I contend that business and journalism ethics, in particular, appear to have more in common than has generally been acknowledged and that the field of business ethics has yielded many concepts that appear to have relevance to journalism. In the article, I conclude that considering the insights offered by those who operate from the perspective of business ethics will facilitate analysis of the interface between individual journalists and the corporate forces that affect so many of them. (shrink)

The importance of providing a positive employee experience has gotten a lot of attention in recent years. However, peak experience, as a highly positive experience, has been studied and applied in the field of human resource management only to a very limited extent. We still know little about how employees’ peak experience happens and what the impact will be. Therefore, based on the affective events theory and the two-factor theory, our research conducted an in-depth exploration of EPE through three (...) studies. In Study 1, we constructed a theoretical model centered on EPE based on and interview data. In Study 2, we developed and validated a scale for measuring triggers of EPE, which is a four-dimensional scale with 16 items. In Study 3, we adopted structural equation modeling to examine the relationship between EPE and its triggers as well as its impacts using data from 424 valid questionnaires. Our research shows that elevation, insight, pride, and connection can trigger EPE; employees are more likely to have proactive behavior and word-of-mouth referrals after they have PE; and the more job-relevant the triggers are, the stronger the association between PE and PB is. Our research provides a reliable and effective measurement tool for scholars to study EPE, broadens the findings of PE and EX, and points out feasible measures for organizations to create EPE. (shrink)

Many organizations offer their employees the opportunity to voice their opinions about work-related issues because of the positive consequences associated with offering such an opportunity. However, little attention has been given to the possibility that offering voice may have negative effects as well. We propose that negative consequences are particularly likely to occur when employees perceive the opportunity to voice opinions to be “pseudo voice”—voice opportunity given by managers who do not have the intention to actually consider employee input (...) (i.e., managerial disregard). The effects of this kind of deception were examined by means of a survey among employees (N = 137) and managers (N = 14) of a Dutch healthcare organization. We hypothesized and found that perceived pseudo voice led to reduced voice behavior and, as a result, increased intragroup conflict. These results imply that while offering voice opportunity is mostly seen as an effective management strategy, negative effects are likely to occur when a manager is perceived to try to deceive employees by pretending to be interested in their points of view. (shrink)

Managing stakeholders is an important managerial aspect of corporate social responsibility. Employee stakeholder is one of the primary stakeholders that are critical to a company. Previous studies have shown inconclusive findings regarding the performance impact of managing this stakeholder, with some identifying little impact while others finding a positive association. This study further explores this issue in the context of foreign companies' subsidiaries in China. A potential mediating mechanism (i. e., customer orientation) between employee stakeholder orientation and performance (...) (both financial performance and innovation performance) was proposed; a sample of 103 Chinese subsidiaries of foreign companies which have new product development responsibilities was used to test hypotheses. A subsidiary's employee orientation was found to show a significant positive relationship with its product innovation performance, but no significant relationship with its financial results. Moreover, employee orientation showed a significant indirect relationship with both performance outcomes through customer orientation. (shrink)

System analyses deal with interrelationships between different variables that keep the system in balance. In many analysis of complex thinking, a system is viewed as a complex unit in which the ‘whole’ is not reduced to the ‘sum’ of its parts; the system becomes an ambiguous item because it consists of several entities that interact with unforeseen results or, in other words, it is situated at a transdisciplinary level, it is impossible for an area to have a complete reading of (...) its complexity. It was also mentioned that the concept of the open system best describes complexity by stating that ‘the laws of the organization are not equilibrium, but an imbalance that is restored or compensated for by stabilized dynamics’. This idea originated from the field of thermodynamics and the second law, in which the imbalance that it maintains allows the system for an apparent balance. This fragile steady state has something of a paradox, since the structures remain the same, but their constituents are changeable. The concept of open system undoes the door to a theory of evolution that can only derive from the interactions between a system and its ecosystem. Within this systemic approach, the focus of the analysis takes into account the ambiguity, multidisciplinary and complexity associated with system adjustment, i.e. it is intended to qualify an employee job based on their experience and knowledge as a measure of their impact on the organization performance. (shrink)

Using a sample of 12,061 firm-year observations from the Chinese stock market for the period of 2001–2011 and geographic-proximity-based Confucianism variables, this study provides strong evidence that Confucianism is significantly negatively associated with minority shareholder expropriation, implying that Confucianism does mitigate agency conflicts between the controlling shareholder and minority shareholders. This finding suggests that Confucianism has important influence on business ethics, and thus can serve as an important ethical philosophy or social norm to mitigate the controlling shareholder’s (...) unethical expropriation behavior. Moreover, my findings reveal that the nature of the ultimate owner attenuates the negative association between Confucianism and minority shareholder expropriation, suggesting that Confucianism’s negative impact on minority shareholder expropriation is less pronounced for state-owned enterprises than for non-state-owned enterprises. The above results are robust to a variety of sensitivity tests and my findings are valid after controlling for the potential endogeneity between Confucianism and minority shareholder expropriation. (shrink)

The purpose of this paper is to provide an overview of the most recent public policy and ethical issues as they relate to the growing usage of nonunion employment arbitration particularly in relation to financial services firms and professional firms. In this era of increasing employment-related litigation, it is wise from an employer’s point of view to find alternative procedures that offer assurances of fairness yet provide expeditious means for resolving disputes. From an employee’s vantage point, however, it is (...) essential that the fundamental issue of procedural and substantive due process be maintained and guaranteed. Therefore, a number of strategic ethical issues arise: How should employment arbitration procedures be designed following the Due Process Protocol of the Task Force on Alternative Dispute Resolution in Employment? How should arbitration procedures follow the national rules for the resolution of employment disputes of the American Arbitration Association? Do recent court decisions shed light on these issues? What ethical principles can be gleaned from these public policy pronouncements? A final objective of this paper is to study some of the current initiatives on this topic. (shrink)