1. Social Responsibility: the Belief That a Company Has a Moral and Ethical Duty to Act

Management 3

·  DEFINITION:

1.  Social responsibility: the belief that a company has a moral and ethical duty to act in ways that are beneficial for the community as well as profitable for its shareholders (Robertson, 746).

2.  Ethics: objective statements about what is right, good, or wrong, or bad that do not depend on nationality, religion, or time for their universal acceptance (Robertson, 746).

3.  Strategy: the goals and methods to reach those goals devised by a corporation is their strategy, or “game plan,” (Robertson, 751).

·  SUMMARY:

Christopher J. Robertson, a professor at Northwestern University is the author of An Analysis of 10 years of Business Ethics Research in Strategic Management Journal: 1996–2005. Professor Robertson conducted a review of literature on the subject of business ethics to see what factors and concerns appear to have become the most important or confusing principles in this field of study. His findings indicate that lack of ethics leads to great loss for business and society, but that many have not yet fully adopted methods or strategies on how to assure businesses formulate good ethics plans and put them into action. His review of only articles published is a very good way of determining the areas in which ethical discussions still need to take place.

·  DISCUSSION:

Business ethics has been a topic of discussion for decades. As Robertson indicates, however, this did not prevent the spectacular failures of Enron or WorldCom to ruin the lives of many innocent persons due to the unethical and downright greedy actions of corporate leaders in those companies. While laws such as The Sarbanes-Oxley Act may bring some protections to innocent employees, consumers, and others, they cannot alone correct the problems. Business ethics is a necessary and important part of each business’ operations. In fact, without business ethics, it is becoming increasingly clear, businesses cannot advance in the marketplace. Yet, key problems in determining how to advance and use business ethics remain a weakness.

The design, implementation, and use of business ethics to make business decisions have not yet been fully integrated. There is a clear lack in the proper strategy to follow and even disagreements over what proper ethical principles are. This is not surprising. For far too many persons ethics are defined based on their own values, beliefs, experience, and “world views.” For business ethics to have an impact, particularly in our increasingly global world, it is necessary for ethics to be more broadly applicable to all persons in the world. Ethics, what is right or wrong, must be easily understood by all and the determination to do what is right, no just what is “right at this time” must be followed.

The key question, of course, is just how such universally ethical principles can be arrived at. Almost all persons would agree that ethics should be universally accepted, but the reality is that ethics are not universally applicable. Many persons, due to their own personal circumstances, have very different understandings of what is ethical or no. For example, if a cure for childhood cancer was found, but in order to obtain it the entire devastation of a tribal culture had to occur, what would be the ethical thing to do. Finding the correct ethical decision, therefore, is not easy. Even when one can be completely objective on a topic, for example if one valued all life, liked children but had none of their own, and respected indigenous cultures and their right to exist, how could they possible make a life or death decision between the two groups? There is no way.

It is this confusion that lies at the heart of business ethics. Confusion regarding what policies to enact, how to follow them, who to make responsible, and many other questions are open for discussion. Simply having an ethical policy is not enough. All members of a business must know their role in such policy and be able to accomplish that role as easily as they can accomplish their job.

References:

Robertson, C.J. (2008). An Analysis of 10 years of Business Ethics Research in Strategic Management Journal: 1996–2005. Journal of Business Ethics, 80: 745–753.

·  Attachment:

An Analysis of 10 years of Business Ethics

Research in Strategic Management Journal:

1996–2005 Christopher J. Robertson

ABSTRACT. From a corporate governance perspective,

one of the most important jobs of a firm_s top management

team is to create and maintain a positive moral

environment. Business ethics has long been considered a

cornerstone in the field of strategic management and a

number of scholars have called for more research in this

area over the years. In this paper 658 articles that appeared

in Strategic Management Journal over the 10-year period

between 1996 and 2005 are reviewed for business ethics

focus and content. The results reveal that while business

ethics research in Strategic Management Journal is on the

rise, the overall focus on this research stream has been

limited. The most prominent ethics theme during the

review period was environmentalism, accounting for 30%

of all ethics articles. Author affiliations, future research

directions, and implications are also discussed.

KEY WORDS: social responsibility, ethics, strategy

Introduction

Business ethics is a controversial topic that hits home

at all levels of an organization. The recent moral

lapses that triggered the downfalls of firms such

as Enron and WorldCom led to a new wave of

government legislation, such as Sarbanes-Oxley Act,

which is geared toward holding Chief Financial

Officers and other top management team members

directly accountable for the actions of their colleagues.

New laws and a revamped focus on ethics in

the boardroom have created new and interesting

opportunities for research into issues such as corporate

governance and organizational culture. While

the symbiotic relationship between strategy and

ethics has traditionally been a fact of life, it appears

that the two domains are now beginning to truly

coalesce.

It has been just over 10 years since LaRue Tone

Hosmer_s (1994) seminal article ‘‘Strategic Planning

As If Ethics Mattered’’ appeared in Strategic Management

Journal (SMJ hereafter). Hosmer methodically

made the case for the inclusion of more ethics

research in the field of strategy and he asserted that

(1994, p. 17), ‘‘Ethics and the moral obligations of

management were an accepted component in the

strategic planning process during the early development

of Corporate Strategy as a field of study.’’

There is little doubt that earlier strategy scholars

envisioned ethics as a core and vital area in the field.

In his classic, groundbreaking, book Administrative

Behavior, Simon (1947, p. 47) asserted that

‘‘administrative decisions in an organizational context

always had an ethical as well as factual content.’’

In today_s business environment the pressure on

CEOs and Board of Director members to establish

and maintain a cogent and unambiguous moral

environment is formidable. CEOs are now fully

expected to incorporate a moral dimension into their

definition of the firm_s strategic vision.

In 1994 Hosmer posed the question, ‘‘where do

we stand now?’’ In the 3 years prior to his article

only three research papers focused on business ethics

appeared in SMJ. Based on this dearth of ethics

research in SMJ, Hosmer issued a directive that we

must do more to incorporate ethics research into the

realm of strategic management. The purpose of this

article is to assess the progress of business ethics

research in SMJ over the past decade. An analysis of

the ethics articles over this period should accomplish

Journal of Business Ethics (2008) 80:745–753 _ Springer 2007

DOI 10.1007/s10551-007-9466-5

three objectives: first, facilitate an understanding of

how well ethics research has been incorporated into

the field of strategy, second, develop an understanding

of the primary topics within the strategyethics

dyad, and third help identify deficient, and

promising, areas for future research. From a broader

perspective, the ideas generated from this meta

analysis add to the overall domain of business ethics

by focusing on the significant themes that top

management team and corporate governance

researchers have studied. This top down approach to

business ethics is designed to facilitate research

question development from a theoretical perspective

that touches multiple functional areas.

This paper is organized as follows. In the next

section I will review literature that defines core areas

of strategy-ethics research. Next I will review the

methods and results of my analysis of ethics research

in SMJ over the 10-year period. The paper concludes

with a comprehensive assessment of the state

of strategy-ethics research and the identification of

promising areas for future research.

Strategy and ethics

The realm of strategic management has traditionally

been concerned with ethical principles and the

cultivation of a certain level of integrity within and

beyond the boundaries of the organization. What are

ethical principles? According to Hosmer (1994,

p. 20), ‘‘ethical principles are not subjective measures

that vary with cultural, social, and economic conditions;

they are objective statements that transcend

countries, religions, and times. They are the basic

rules or first principles that have been proposed to

ensure a _good_ society.’’ Although Hosmer_s definition

appears to dismiss many potential discrepancies

in values that lead to differences in ethical

principles it does raise the issue of normative ethics,

an issue that has resonated with the strategy field. In

the nascent years of strategy conceptualization it was

suggested that _the impact on the public good of

strategic alternatives_ be considered (Learned et al.,

1965). Freeman and Gilbert (1988) recommended

that corporate strategy should be built on a foundation

of ethical reasoning. Schendel and Hofer

(1979) purported that strategy should relate to an

organization_s social and political environment in a

similar fashion to the strategy industry interface.

More recently a wave of research has focused on the

strategic and moral benefits of having a strong reputation

(Dollinger et al., 1997; Ferguson et al.,

2000; Roberts and Dowling, 2002). And the concept

of corporate social responsibility, with its focus

on externally oriented discretionary moral behavior,

has also found its way into strategy research (Kassinis

and Vafeas, 2002; McWilliams and Siegel, 2000;

Waddock and Graves, 1998).

There have been number of studies that identified

the potential positive outcomes of fostering a strong

moral environment within a firm. In 1988 Weigelt

and Camerer concluded that the reputation of a firm

could lead to elevated financial performance. This

finding was later dissected and its subthemes

re-examined with generally supportive results

(Dollinger et al., 1997; Shamshie, 2003). While

results related to the corporate social performance–

financial performance relationship have been

mixed (McWilliams and Siegel, 2000; Waddock and

Graves, 1998) and support has been conclusively

linked to the financial benefits of proactive environmental

strategies (King and Shaver, 2001), minimizing

white collar crime (Schnatterly, 2003), and

maintaining ethics codes (Stevens et al., 2005).

Other scholars have gone as far to argue that business

ethics can be used as a motivating force within a firm

(Solomon, 1992).

Contemporary strategy scholars have focused on

ethics related topics as diverse as pollution prevention

(Marcus and Geffen, 1998), female CEOs (Daily

et al., 1999) and insider trading (Ahuja et al., 2005).

A broad mosaic of theoretical foundations has also

been intertwined with the strategy-ethics research

stream. Robertson and Crittenden (2003) injected

the notion of moral philosophy, and ethical

ideologies such as formalism, relativism, and utilitarianism,

into the domain. Stevens et al. (2005)

incorporated the theory of planned behavior into

their analysis of ethics codes on financial executive_s

decisions. Stakeholder theory, the resource-based

view, control theory, and goal theory have all been

employed in analyses of strategic behavior and corporate

governance mechanisms (Branzie et al., 2004;

Hillman and Keim, 2001; Shamsie, 2003).

Hosmer (1994), based on his comprehensive

analysis of the historical links between strategy and

ethics, clearly articulated that the decision process of

746 Christopher J. Robertson

management should go beyond economic considerations.

Adding a moral dimension to decisionmaking

leads to trust, which facilitates higher

commitment and long-term performance (Hosmer,

1994; Stevens et al., 2005). Indeed there is a home

for business ethics research in the strategy literature

for competitive and strategic fit reasons ranging from

protecting shareholder wealth, developing governance

systems, and sustaining environmental performance.

It is therefore important at this point in

time, due to the recent lack of ethical reasoning by a

number of high-level executives, to assess the state of

ethics research in strategic management. Moreover,

it has been 10 years since Hosmer_s (1994) clamor

for more ethics research and as we press forward as a

field it will be beneficial to know what has been

done, and which streams of research have emerged

within the area.

Method and results

The impact of Strategic Management Journal on the

field of strategic management since its inception has

been more than exceptional. SMJ has rated at or near

the top in every journal ranking in recent years. In

one study SMJ was ranked as the most cited journal

as a percentage of references in a study of 17 journals,

and 1275 articles, with close to 11% of all references

over a 2-year period (Tahai and Meyer,

1999). SMJ, combined with the Academy of Management

Journal and Journal of Applied Psychology,

accounted for 30% of all citations in Tahai and

Meyer_s (1999) study. Another analysis of journal

quality found that SMJ was one of seven top journals

1 that accounted for over 60% of all citations in

28 journals over a 2-decade span (Podaskoff et al.,

2005). Moreover, SMJ remained in the top group of

journals for the entire 20-year period (Podaskoff

et al., 2005). The evidence from further research

reinforces the general conclusion that SMJ is the

premier journal in the field of strategy since its

inception in 1980 (MacMillan, 1991; Park and

Gordon, 1996; Podaskoff et al., 2005; Salancik,

1986; Tahai and Meyer, 1999; Trieschmann et al.,

2000). Therefore SMJ was selected as the outlet

for strategy-ethics research with the highest level

of impact. Certainly authors can publish their

research focused on the strategy-ethics link in other

important Management journals such as Academy of