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Showing papers in "Journal of Business Ethics in 2019"


Journal ArticleDOI
TL;DR: In this paper, the authors conceptualize algorithms as value-laden, rather than neutral, in that algorithms create moral consequences, reinforce or undercut ethical principles, and enable or diminish stakeholder rights and dignity.
Abstract: Algorithms silently structure our lives. Algorithms can determine whether someone is hired, promoted, offered a loan, or provided housing as well as determine which political ads and news articles consumers see. Yet, the responsibility for algorithms in these important decisions is not clear. This article identifies whether developers have a responsibility for their algorithms later in use, what those firms are responsible for, and the normative grounding for that responsibility. I conceptualize algorithms as value-laden, rather than neutral, in that algorithms create moral consequences, reinforce or undercut ethical principles, and enable or diminish stakeholder rights and dignity. In addition, algorithms are an important actor in ethical decisions and influence the delegation of roles and responsibilities within these decisions. As such, firms should be responsible not only for the value-laden-ness of an algorithm but also for designing who-does-what within the algorithmic decision. As such, firms developing algorithms are accountable for designing how large a role individual will be permitted to take in the subsequent algorithmic decision. Counter to current arguments, I find that if an algorithm is designed to preclude individuals from taking responsibility within a decision, then the designer of the algorithm should be held accountable for the ethical implications of the algorithm in use.

256 citations


Journal ArticleDOI
TL;DR: In this paper, the positive effects of corporate social responsibility (CSR) communication factors on consumers' CSR knowledge, trust, and perceptions of corporate reputation were analyzed using a national survey of US consumers.
Abstract: Using a national survey of US consumers, this study demonstrates the positive effects of corporate social responsibility (CSR) communication factors on consumers’ CSR knowledge, trust, and perceptions of corporate reputation. The study also examines the role of a stakeholder-specific factor of consumer–company identification in the process of CSR communication. The findings suggest that the positive effects of CSR informativeness are enduring and independent of consumers’ identification levels with a company, whereas the positive consequences of the personal relevance, transparency, and factual tone of CSR communication intensify as the identification levels increase. Although CSR communication in which a self-promotional tone is adopted has a negative relationship with consumer trust and corporate reputation, such negative effects are not evident among consumers with very high identification levels with a company. Such CSR communication in fact improves consumers’ CSR knowledge and, in turn, has a positive effect on corporate reputation.

248 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between wide-ranging board diversity and the quality of corporate social responsibility (CSR) disclosure variables in Malaysia using 200 listed firms in Bursa Malaysia during 2009-2013 and applying both OLS and 2SLS instrumental variables (IV) approaches.
Abstract: This study empirically examines the relationship between wide-ranging board diversity and the quality of corporate social responsibility (CSR) disclosure variables in Malaysia. We extend prior literature covering broader dimensions of board diversity (e.g., gender, education level, education background, age, tenure, nationality and ethnicity) and their impact on CSR after controlling for board and audit committee characteristics. Using 200 listed firms in Bursa Malaysia during 2009–2013 and applying both OLS and 2SLS instrumental variables (IV) approaches, we document significant positive effect of board education level and board tenure diversity on the quality of CSR disclosure. Further analysis using robust regression also shows positive association between gender diversity and CSR disclosure. Our findings also demonstrate that the quality of CSR disclosure is significantly negatively associated with board age and nationality diversity. These results remain consistent with using alternative measures for board diversity, and characteristics for board of director and audit committees as well as split samples between large and small firms. Additional tests exhibit complementary relationship of education level and nationality with gender, while substitutive relationship of age and tenure with gender in influencing CSR. These findings provide useful insights into the policy makers in setting regulations in respect of board diversity in Malaysia and other emerging economies in the Asian region. Our evidence is also useful for listed companies in setting the criteria to identify directors who can support their strategic decisions.

227 citations


Journal ArticleDOI
TL;DR: Li et al. as discussed by the authors found that employees' corporate social responsibility perceptions indirectly affect their engagement in voluntary pro-environmental behavior through organizational identification, and these effects are stronger for employees high in empathy.
Abstract: Scholarly interest in employees’ voluntary pro-environmental behavior has begun to emerge. While this research is beginning to shed light on the predictors of workplace pro-environmental behavior, our understanding of the psychological mechanisms linking the various antecedents to employees’ environmentally responsible behavior and the circumstances under which any such effects are enhanced and/or attenuated is incomplete. The current study seeks to fill this gap by examining: (a) the effects of perceived corporate social responsibility on employees’ voluntary pro-environment behavior; (b) an underlying mechanism that links CSR perceptions to these behaviors; and (c) a boundary condition to these relationships. Data from 183 supervisor-subordinate dyads employed in large- and medium-sized casinos and hotels in Guangdong China and Macau revealed that employees’ corporate social responsibility perceptions indirectly affect their engagement in voluntary pro-environmental behavior through organizational identification, and these effects are stronger for employees high in empathy.

202 citations


Journal ArticleDOI
TL;DR: Wang et al. as discussed by the authors investigated how managers' perceptions of institutional pressures relate to their focus on proactive environmental strategy, which in turn affects firms' realized innovation capability, which consequently fosters innovation capability development.
Abstract: Despite the rising interest in environmental strategies, few studies have examined how managerial cognition of such strategies influences actual innovation capability development. Taking a managerial cognition perspective, this study investigates how managers’ perceptions of institutional pressures relate to their focus on proactive environmental strategy, which in turn affects firms’ realized innovation capability. The findings from a primary survey and three secondary datasets of publicly listed companies in China reveal that managers’ perceived business and social pressures are positively associated with their focus on proactive environmental strategy, which consequently fosters innovation capability development. Moreover, state ownership and government administrative control weaken the impact of managerial focus on proactive environmental strategy on innovation capability. These findings have important implications for how managerial cognition supports environmental strategy and organizational capability building under the influence of institutional pressures and government intervention.

157 citations


Journal ArticleDOI
TL;DR: In this article, the authors investigate the extent and the determinants of the stock market's reaction following ordinary news related to environmental, social and governance issues, and find that firms facing negative events experience a drop in their market value of 0.1%, whereas companies gain nothing on average from positive announcements.
Abstract: Stories about corporate social responsibility have become very frequent over the past decade, and managers can no longer ignore their impact on firm value. In this paper, we investigate the extent and the determinants of the stock market’s reaction following ordinary news related to environmental, social and governance issues—the so-called ESG factors. To that purpose, we use an original database provided by Covalence EthicalQuote. Our empirical analysis is based on about 33,000 ESG news (positive or negative), targeting one hundred listed companies over the period 2002–2010. On average, firms facing negative events experience a drop in their market value of 0.1%, whereas companies gain nothing on average from positive announcements. We find also that market participants are responsive to the media, but they do not react to firms’ press releases or to NGOs’ disclosures. Moreover, our results indicate that sector’s reputation mitigates the loss (the goodwill hypothesis) and that cultural proximity and lexical contents of ESG disclosures play a significant role in the magnitude of the impact.

150 citations


Journal ArticleDOI
TL;DR: In this article, the authors use two waves of the Flash Eurobarometer survey on entrepreneurship (2009 and 2012), which contains information on start-up motivations, startup barriers, and risk perceptions of approximately 3000 (prospective) business owners across 33 countries.
Abstract: Entrepreneurs who start a business to serve both self-interests and collective interests by addressing unmet social and environmental needs are usually referred to as sustainable entrepreneurs. Compared with regular entrepreneurs, we argue that sustainable entrepreneurs face specific challenges when establishing their businesses owing to the discrepancy between the creation and appropriation of private value and social value. We hypothesize that when starting a business, sustainable entrepreneurs (1) feel more hampered by perceived barriers, such as the institutional environment and (2) have a different risk attitude and perception than regular entrepreneurs. We use two waves of the Flash Eurobarometer survey on entrepreneurship (2009 and 2012), which contains information on start-up motivations, start-up barriers, and risk perceptions of approximately 3000 (prospective) business owners across 33 countries. We find that sustainable entrepreneurs indeed perceive more institutional barriers in terms of a lack of financial, administrative, and informational support at business start-up than regular entrepreneurs. Further, no significant differences between sustainable and regular entrepreneurs are found in terms of their risk attitudes or perceived financial risks. However, sustainable entrepreneurs are more likely to fear personal failure than regular entrepreneurs, which is explained by their varied and complex stakeholder relations. These insights may serve as an important signal for both governments and private capital providers in enhancing the institutional climate.

149 citations


Journal ArticleDOI
TL;DR: This paper examined the impact of board gender diversity on financial misconduct and found that firms with gender-diverse boards commit fewer financial reporting mistakes and engage in less fraud, after accounting for the potentially endogenous nature of board demographic characteristics via instrumental variable approach.
Abstract: This study examines the impact of board gender diversity on financial misconduct. The findings suggest firms with gender-diverse boards commit fewer financial reporting mistakes and engage in less fraud. The findings hold after accounting for the potentially endogenous nature of board demographic characteristics via instrumental variable approach. Furthermore, the findings are consistent in pre- and post-regulation (Sarbanes–Oxley) periods and hold for firms with good and bad governance. The findings do not seem driven by differences in effort or quality, in terms of independence and expertise, of female and male directors. The benefit derived from increasing the number of female directors on corporate boards seems to diminish at higher levels of gender diversity, indicating that impact of gender diversity on decreasing the likelihood of financial misconduct may be a result of a change to board group dynamics.

142 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the impact of chief executive officer ability on firms' corporate social responsibility (CSR) performance and found that firms' CSR performance increases with CEO ability and that firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities.
Abstract: This study examines the impact of chief executive officer (CEO) ability on firms’ corporate social responsibility (CSR) performance. We find that firms’ CSR performance increases with CEO ability. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. We further find that the positive relation between CEO ability and CSR is weakened for CEO who is also the chair of the board and for CEO who is close to retirement; and is weakened when the CSR emphasis exerted by a firm’s external environment is high. Our results are robust after controlling for firm fixed effects and to the use of multiple measures of CSR performance and CEO ability. Overall, our evidence is consistent with our conjecture that more able CEOs have less career concerns so that these CEOs are more willing to undertake long-term investments in socially beneficial activities, leading to better CSR performance.

137 citations


Journal ArticleDOI
TL;DR: In this article, the authors developed a disclosure score based on the tone, readability, length, and the numerical and horizon content of CSR report narratives, and examined the relationship between the CSR disclosure scores and analyst forecasts.
Abstract: Standalone corporate social responsibility (CSR) reports vary considerably in the content of information released due to their voluntary nature. In this study, we develop a disclosure score based on the tone, readability, length, and the numerical and horizon content of CSR report narratives, and examine the relationship between the CSR disclosure scores and analyst forecasts. We find that CSR reporters with high disclosure scores are associated with more accurate forecasts, whereas low score CSR reporters are not associated with more accurate forecasts than firms who do not issue CSR reports. The findings are robust to controlling for firm characteristics including CSR activity ratings and financial narratives. The findings are driven by experienced CSR reporters rather than first-time CSR reporters. Together, our findings suggest that the content of CSR reports helps to improve analyst forecast accuracy, and this relationship is more pronounced for CSR reports with more substantial content.

135 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examine the relationship between employee psychological entitlement and employee willingness to engage in unethical pro-organizational behavior (UPB) and find that a high level of psychological entitlement will increase the prevalence of this particular type of unethical behavior.
Abstract: In this research, we examine the relationship between employee psychological entitlement (PE) and employee willingness to engage in unethical pro-organizational behavior (UPB). We hypothesize that a high level of PE–the belief that one should receive desirable treatment irrespective of whether it is deserved–will increase the prevalence of this particular type of unethical behavior. We argue that, driven by self-interest and the desire to look good in the eyes of others, highly entitled employees may be more willing to engage in UPB when their personal goals are aligned with those of their organizations. Support for this proposition was found in Study 1, which demonstrates that organizational identification accentuates the link between PE and the willingness to engage in UPB. Study 2 builds on these findings by examining a number of mediating variables that shed light on why PE leads to a greater willingness among employees to engage in UPB. Furthermore, we explored the differential effects of PE on UPB compared to counterproductive work behavior (CWB). We found support for our moderated mediation model, which shows that status striving and moral disengagement fully mediate the link between PE and UPB. PE was also linked to CWB, and was fully mediated by perceptions of organizational justice and moral disengagement.

Journal ArticleDOI
TL;DR: It is suggested that critical data literacy, ethical awareness, the use of participatory design methods, and private regulatory regimes within civil society can help overcome challenges from the efficiency-driven logic of algorithm-based HR decision-making.
Abstract: Organizations increasingly rely on algorithm-based HR decision-making to monitor their employees. This trend is reinforced by the technology industry claiming that its decision-making tools are efficient and objective, downplaying their potential biases. In our manuscript, we identify an important challenge arising from the efficiency-driven logic of algorithm-based HR decision-making, namely that it may shift the delicate balance between employees’ personal integrity and compliance more in the direction of compliance. We suggest that critical data literacy, ethical awareness, the use of participatory design methods, and private regulatory regimes within civil society can help overcome these challenges. Our paper contributes to literature on workplace monitoring, critical data studies, personal integrity, and literature at the intersection between HR management and corporate responsibility.

Journal ArticleDOI
TL;DR: In this article, the mediating role of corporate reputation on the relationship between perceived corporate social responsibility and customer loyalty was examined, taking into account the role played by bank type in the mediation effect.
Abstract: The marketplace has seen significant growth in the demand for ‘ethical’ behavior, and banks are seeking to leverage customers’ perception in order to build a sustainable competitive advantage. In consequence, the concepts of corporate social responsibility and corporate reputation are of vital concern for academics and managers in terms of their potential impact on customers. This study seeks to contribute to the literature by examining the mediating role of corporate reputation on the relationship between perceived corporate social responsibility (conceptualized as a formative second-order formative construct) and customer loyalty. The study also takes into consideration the role played by bank type in the mediation effect. To achieve this aim, a study was performed comprising 572 personal surveys in the Basque Country. The results showed that corporate reputation partially mediated the relation between corporate social responsibility and customer loyalty. On the other hand, bank type is shown not to moderate the mediation effect. The results have important implications for practitioners wishing to manage their relations with customers.

Journal ArticleDOI
TL;DR: In this paper, the authors use an extended theory of planned behavior to examine the relative influence of consumers' personal norms and the theory's basic sociopsychological variables attitudes, subjective norms, and perceived behavioral control on collaborative consumption.
Abstract: Collaborative consumption is proposed as a potential step beyond unsustainable linear consumption patterns toward more sustainable consumption practices. Despite mounting interest in the topic, little is known about the determinants of this consumer behavior. We use an extended theory of planned behavior to examine the relative influence of consumers’ personal norms and the theory’s basic sociopsychological variables attitudes, subjective norms, and perceived behavioral control on collaborative consumption. Moreover, we use this framework to examine consumers’ underlying value and belief structure regarding collaborative consumption. We measure these aspects for 224 consumers in a survey and then assess their self-reported collaborative consumption behavior in a second survey. Our structural model fits the data well. Collaborative consumption is more strongly—through intentions—influenced by personal norms and attitudes than by subjective norms. Personal norms to consume collaboratively are determined by consumers’ altruistic, biospheric, and egoistic value orientations. Cost savings, efficient use of resources, and community with others are found to be consumers’ attitudinal beliefs underlying collaborative consumption. We conclude that collaborative consumption can be pin-pointed neither as a mere form of economic exchange nor as a primarily normative form of sharing resources. Instead, collaborative consumption is determined by economic/egoistic (e.g., cost savings) and normative (e.g., altruistic and biospheric value orientations) motives. Implications for collaborative consumption research, the theory of planned behavior, and practitioners are discussed.

Journal ArticleDOI
TL;DR: The Indian Companies Act 2013 (Section 135) is a remarkable example in that it replaced an older version from 1956, taking a bold step toward the integration of voluntary and mandatory aspects in the application of CSR as mentioned in this paper.
Abstract: Although the literature on corporate social responsibility (CSR) has discussed the scope and meaning of CSR extensively, confusion still exists regarding how to define the concept. One controversial issue deals with the changing legal status of CSR (i.e., the voluntary vs. mandatory nature of the concept). Based on a review of CSR definitions and meta-studies on CSR definitions, we find that the majority of definitions leans toward voluntary CSR. However, some recent regulatory amendments toward mandatory CSR have called into question the established idea of CSR as merely a managerial tool of self-regulation. In this paper, we juxtapose the evolution of CSR in India against the scholarly literature discussing voluntary-versus-mandatory CSR to understand the recent shift toward a new conceptualization of CSR as a form of co-regulation that includes elements of both voluntary and mandatory regulation. The Indian Companies Act 2013 (Section 135) is a remarkable example in that it replaced an older version from 1956, taking a bold step toward the integration of voluntary and mandatory aspects in the application of CSR. We present practical implications of the Indian case for businesses and discuss implications for CSR theory development; we particularly consider the evolution of the business and society relationship from a voluntary soft law approach to CSR to an increasingly hard law approach and transitory hybrid forms in-between like soft–hard law and hard–soft law.

Journal ArticleDOI
TL;DR: This article explored the role of firms' climate change targets in shaping their emissions trends in the context of a large multi-country sample of companies and found that targets characterized by a commitment to more ambitious emissions reductions, a longer target time frame, and absolute reductions in emissions are associated with significant reductions in firms' emissions.
Abstract: Addressing climate change is among the most challenging ethical issues facing contemporary business and society. Unsustainable business activities are causing significant distributional and procedural injustices in areas such as public health and vulnerability to extreme weather events, primarily because of a distinction between primary emitters and those already experiencing the impacts of climate change. Business, as a significant contributor to climate change and beneficiary of externalizing environmental costs, has an obligation to address its environmental impacts. In this paper, we explore the role of firms’ climate change targets in shaping their emissions trends in the context of a large multi-country sample of companies. We contrast two intentions for setting emissions reductions targets: symbolic attempts to manage external stakeholder perceptions via “greenwashing” and substantive commitments to reducing environmental impacts. We argue that the attributes of firms’ climate change targets (their extent, form, and time horizon) are diagnostic of firms’ underlying intentions. Consistent with our hypotheses, while we find no overall effect of setting climate change targets on emissions, we show that targets characterized by a commitment to more ambitious emissions reductions, a longer target time frame, and absolute reductions in emissions are associated with significant reductions in firms’ emissions. Our evidence suggests the need for vigilance among policy-makers and environmental campaigners regarding the underlying intentions that accompany environmental management practices and shows that these can to some extent be diagnosed analytically.

Journal ArticleDOI
TL;DR: In this paper, the authors empirically examined the effects of customer perceived ethicality of corporate brands that operate in the services sector, based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis.
Abstract: In order to be competitive in an era of ethical consumerism, brands are facing an ever-increasing pressure to integrate ethical values into their identities and to display their ethical commitment at a corporate level. Nevertheless, studies that relate business ethics to corporate brands are either theoretical or have predominantly been developed empirically in goods contexts. This is surprising, because corporate brands are more relevant in services settings, given the nature of services (i.e., intangible, heterogeneous, inseparable and perishable), and the fact that services settings comprise a greater number of customer–brand interactions and touch points than goods contexts. Accordingly, the purpose of this article is to empirically examine the effects of customer perceived ethicality of corporate brands that operate in the services sector. Based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis. The generalizability theory is applied to test for measurement equivalence between these categories. The results of the hypothesized model show that, in addition to a direct impact, customer perceived ethicality has a positive and indirect impact on brand equity, through the mediators of recognition benefits and brand image. Moreover, brand heritage negatively influences the impact of customer perceived ethicality on brand image. The main implication is that managers need to be aware of the need to reinforce brand image and recognition benefits, as this can facilitate the translation of customer perceived ethicality into brand equity.

Journal ArticleDOI
TL;DR: The authors investigated the effectiveness of negative versus positive message framing in promoting green products, whereby companies highlight the detrimental versus beneficial environmental consequences of choosing less versus more green options, respectively, and found that negatively framed messages are more effective than positively framed ones in prompting consumers to engage in proenvironmental behaviors.
Abstract: Despite society’s increasing sensitivity toward green production, companies often struggle to find effective communication strategies that induce consumers to buy green products or engage in other environmentally friendly behaviors. To add clarity to this situation, we investigated the effectiveness of negative versus positive message framing in promoting green products, whereby companies highlight the detrimental versus beneficial environmental consequences of choosing less versus more green options, respectively. Across four experiments, we show that negatively framed messages are more effective than positively framed ones in prompting consumers to engage in pro-environmental behaviors. More importantly, we find that anticipated shame is the emotion responsible for this effect. Furthermore, both environmental concern and the type of product promoted serve as moderators; thus, the mediating role of anticipated shame is attenuated when environmental concern is low and the product is a luxury one. Finally, we discuss the theoretical and managerial implications of our work, along with its limitations and some directions for future research.

Journal ArticleDOI
TL;DR: In this paper, the authors proposed a theoretical model wherein self-serving leadership hinders team creativity through psychological safety as well as knowledge hiding, with task interdependence acting as a contextual condition.
Abstract: Self-serving leadership is a form of unethical leadership behavior that has destructive effect on its targets and the overall organization. Adopting a social cognition perspective, this study expands our knowledge of its adverse effect and the way to mitigate the effect. Integrating two sub-theories of social cognition (social information processing and social learning), we propose a theoretical model wherein self-serving leadership hinders team creativity through psychological safety as well as knowledge hiding, with task interdependence acting as a contextual condition. Results from a sample of 107 R&D teams revealed that self-serving leadership not only reduced team psychological safety, but also induced team knowledge hiding, both of which ultimately affected team creativity. The presence of high task interdependence buffered the destructive effect of self-serving leadership on team creativity via team psychological safety as well as the indirect effect via knowledge hiding.

Journal ArticleDOI
TL;DR: In this paper, an analysis of the opinions of assurance providers regarding the quality and the limitations of sustainability reports and their recommendations to improve them using the Global Reporting Initiative (GRI) as a framework is presented.
Abstract: This article presents, an analysis of the opinions of assurance providers regarding the quality and the limitations of sustainability reports and their recommendations to improve them using the Global Reporting Initiative (GRI) as a framework. The qualitative content analysis of 301 assurance statements for sustainability reports from mining and energy companies provides a comprehensive view of the main outcomes of the assurance process, including its limitations, the application of the GRI principles and suggestions for improving sustainability reports. Taking into account the perceptions of practitioners a priori well informed on the quality of sustainability reports—namely assurance providers—this paper complements the current literature on sustainability reporting and its assurance, including critical approaches that question the reliability of sustainability reports, stakeholder engagement and the accountability of reporting practices. This study contributes to the debates surrounding the quality of sustainability reports, the added value of assurance statements and the ethical issues underlying the assurance process. It also contains important practical implications for auditors, standardization organizations and stakeholders.

Journal ArticleDOI
TL;DR: In this paper, the authors posit that a key goal of firms' corporate social responsibility efforts is to influence reputation through carefully crafted communicative practices, and they posit that only some messages will be effective and achieve broad public resonance.
Abstract: We posit a key goal of firms’ corporate social responsibility (CSR) efforts is to influence reputation through carefully crafted communicative practices. This trend has accelerated with the rise of social media such as Twitter and Facebook, which are essentially public message networks that organizations are leveraging to engage with concerned audiences. Given the large number of messages sent on these sites, only some will be effective and achieve broad public resonance. Building on signaling theory, this paper asks whether and how messages conveying CSR-related topics resonate with the public and, if so, which CSR topics and signal qualities are most effective. We test our hypotheses using data on public reactions to Fortune 500 companies’ CSR-focused Twitter feeds, using the retweeting (sharing) of firms’ messages as a proxy for public resonance. We find resonance is positively associated with messages that convey CSR topics such as the environment or education, those that make the topic explicit through use of hashtags, and those that tap into existing social movement discussions.

Journal ArticleDOI
TL;DR: In this paper, a web-based online survey was administered to collect data targeting a sample of 200 Australian employees working full time, and structural equation modelling was used to analyse the data.
Abstract: Contemporary leaders are increasingly challenged to execute their leadership roles with a higher sense of responsibility. However, only a handful of studies have empirically examined the influence of responsible leadership on employee and organisational outcomes. Using Social Identity Theory and Psychological Contract Theory, this paper reports the findings of the relationship between responsible leadership and organisational commitment through the mediating role of employee turnover intentions. A web-based online survey was administered to collect data targeting a sample of 200 Australian employees working full time. Structural equation modelling was used to analyse the data. The results reveal that perceived responsible leadership significantly influences employees’ organisational commitment and their turnover intentions. Moreover, the direct relationship between responsible leadership and organisational commitment was found to be partially mediated by employees’ turnover intentions.

Journal ArticleDOI
TL;DR: In this article, the effects of inconsistent external-internal CSR strategies on employee attitudes, intentions, and behaviors are examined. And the authors take a social and moral identification theory view and demonstrate the importance of taking into account the interests of both external and internal stakeholders of the firm when researching and managing CSR.
Abstract: Extant research provides compelling conceptual and empirical arguments that company-external (e.g., philanthropic) as well as company-internal (i.e., employee-directed) CSR efforts positively affect employees, but does so largely in studies assessing effects from the two CSR types independently of each other. In contrast, this paper investigates external–internal CSR jointly, examining the effects of (in)consistent external–internal CSR strategies on employee attitudes, intentions, and behaviors. The research takes a social and moral identification theory view and advances the core hypothesis that inconsistent CSR strategies, defined as favoring external over internal stakeholders, trigger employees’ perceptions of corporate hypocrisy which, in turn, lead to emotional exhaustion and turnover. In Study 1, a cross-industry employee survey (n = 3410) indicates that inconsistent CSR strategies with larger external than internal efforts increase employees’ turnover intentions via perceived corporate hypocrisy and emotional exhaustion. In Study 2, a multi-source secondary dataset (n = 1902) demonstrates that inconsistent CSR strategies increase firms’ actual employee turnover. Combined, the two studies demonstrate the importance of taking into account the interests of both external and internal stakeholders of the firm when researching and managing CSR.

Journal ArticleDOI
TL;DR: This paper investigated the effect of the gender of a chief executive officer (CEO) on earnings management using classification shifting and found that female CEOs are more risk-averse than their male counterparts.
Abstract: The question of whether females tend to act more ethically or risk-averse compared to males is an interesting ethical puzzle. Using a large sample of US firms over the 1992–2014 period, we investigate the effect that the gender of a chief executive officer (CEO) has on earnings management using classification shifting. We find that the pre-Sarbanes–Oxley (SOX) Act period was characterized by high levels of classification shifting by both female and male CEOs, but the magnitude of such practices is, surprisingly, significantly higher in firms with female CEOs than in those with male CEOs. By contrast, our results suggest that following the passage of the punitive SOX Act, classification shifting by female CEOs declined significantly, whilst it remained pervasive in firms with male CEOs. This suggests that the observable differences in financial reporting behavior between male and female CEOs seem to be because female CEOs are more risk-averse, but not necessarily more ethically sensitive than their male counterparts are. The central tenets of our findings remain unchanged after several additional checks, including controlling for alternative earnings management techniques, corporate governance mechanisms, CEO and chief financial officer characteristics and propensity score-matching.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between the quantity and quality of sustainability disclosure and earnings quality in the context of corporate ethical value and culture, and found that sustainability disclosure quantity is positively associated with innate earnings quality and negatively correlated with discretionary earnings quality.
Abstract: Voluntary disclosures of sustainability information have recently received considerable attention by investors, regulators, and public companies in improving reliability and integrity of corporate reporting. We examine the association between the quantity and quality of sustainability disclosures and earnings quality in the context of corporate ethical value and culture. We posit that sustainability disclosures of environmental, social, and governance (ESG) performance reports are linked to earnings quality, because of the importance of both earnings quality and ESG sustainability disclosures to investors and trustworthiness of corporate reporting. We collect our sample of 35,110 firm-year observations between 1999 and 2015. Using both difference-in-difference tests and OLS regression, we find that sustainability disclosure quantity is positively associated with innate earnings quality and negatively correlated with discretionary earnings quality in mitigating managerial earnings manipulation and unethical opportunistic reporting behavior. Further tests illustrate that sustainability disclosure quality can strengthen the positive relation between innate earnings quality and sustainability disclosure quantity and mitigate the negative relation between discretionary earnings quality and sustainability disclosure quantity. Finally, additional tests suggest that the relation between earnings quality and sustainability disclosure quantity is moderated by corporate structure and prior-year sustainability performance. Our results provide policy, practical, and research implications as ESG sustainability reporting is being integrated into corporate culture and business models.

Journal ArticleDOI
TL;DR: In this article, the authors explored the linkage between socially responsible HRM and employee support for perceived external corporate social responsibility (CSR) and the underlying social and psychological process and found that the relationship between SRHRM and employees support for external CSR initiatives of the employing organization is mediated by the organizational CSR climate.
Abstract: Building on the human resource management (HRM) behavioral and organizational climate literature, this study explores the linkage between socially responsible HRM (SRHRM) and employee support for perceived external corporate social responsibility (CSR) (that is, CSR directed toward external stakeholders) and the underlying social and psychological process. Multilevel analysis of data gathered over two separate periods confirmed that the relationship between SRHRM and employee support for external CSR initiatives of the employing organization is mediated by the organizational CSR climate. Moreover, the indirect effect is contingent on perceived internal CSR (that is, CSR directed toward employees). This study extends CSR research into the HRM domain and develops a better understanding of the micro-foundations of CSR (individual actions and interactions) by integrating the micro- and macro-perspectives of CSR. Based on the study findings, this paper also discusses theoretical contributions and future research directions.

Journal ArticleDOI
TL;DR: In this article, the authors develop a model theorizing employee unethical pro-organizational behavior (UPB) as one potential negative outcome of high-inducement EORs, as mediated by high-quality social exchange relationship between the employee and the employer.
Abstract: Prior research on employee–organization relationships (EORs) has exclusively focused on the positive consequences of high-inducement EORs (i.e., mutual- and over-investment EORs). Drawing from social exchange theory , we develop a model theorizing employee unethical pro-organizational behavior (UPB) as one potential negative outcome of high-inducement EORs, as mediated by high-quality social exchange relationship between the employee and the employer. Empirical findings from two field studies provided convergent support to the mediation relationship between mutual-investment EORs and employee UPB via perceived social exchange. Moreover, the results in Study 2 further revealed that the relationship was less significant among employees with higher levels of moral identity, because the positive relationship between perceived social exchange and employee UPB was weakened by high moral identity. The theoretical and managerial implications were discussed.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the impact of social capital on financial reports and found that firms in regions with high social capital have lower levels of discretionary accruals and much more readable annual reports.
Abstract: I examine social capital’s impact on financial reports. Based on the social capital literature, I predict that the quality of the financial reports is higher when a firm is headquartered in a region with high social capital. Consistent with this prediction, I find that the firms that are headquartered in this type of region in the USA have a lower probability of committing fraud by misrepresenting financial information. Further, I find that the firms in regions with high social capital have lower levels of discretionary accruals and much more readable annual reports.

Journal ArticleDOI
TL;DR: In this paper, the authors investigate the effect of country-level emancipative forces on corporate gender diversity around the world and develop an emancipatory framework of board gender diversity that explains how action resources, emancipation values and civic entitlements enable, motivate and encourage women to take leadership roles on corporate boards.
Abstract: This study investigates the effect of country-level emancipative forces on corporate gender diversity around the world. Based on Welzel’s (Freedom rising: human empowerment and the quest for emancipation. Cambridge University Press, New York, 2013) theory of emancipation, we develop an emancipatory framework of board gender diversity that explains how action resources, emancipative values and civic entitlements enable, motivate and encourage women to take leadership roles on corporate boards. Using a sample of 6390 firms operating in 30 countries around the world, our results show positive single and combined effects of the framework components on board gender diversity. Our research adds to the existing literature in a twofold manner. First, our integrated framework offers a more encompassing, complete and theoretically richer picture of the key drivers of board gender diversity. Second, by testing the framework empirically, we extend the evidence on national drivers of board gender diversity.

Journal ArticleDOI
TL;DR: In this article, the influence of gender diverse boards on various groups of stakeholders has been investigated and it was found that GDB are positively related to CSR dimensions that are related to less powerful stakeholders such as the environment, contractors, and the community.
Abstract: The inconclusiveness of previous research on the association between gender diverse boards (GDB) and corporate social performance (CSP) has led us to revisit the question in light of stakeholder management and institutional theories. Given that corporate social responsibility (CSR) is a multidimensional concept, we test the influence of GDB on various groups of stakeholders. By considering the interaction between stakeholders’ power and directors’ personal motivations toward the prioritization of stakeholders’ claims, we find that GDB are positively related to CSR dimensions that are related to less powerful stakeholders such as the environment, contractors, and the community. However, GDB do not appear to have a significant impact on CSR dimensions that are associated with stakeholders who benefit from more institutionalized power, such as employees and customers.