Leadership plays a central role in fostering ethical conduct and protecting organizations from misconduct. However, despite growing attention to the governance implications of executive characteristics, the role of executive digital and financial expertise in curbing corporate fraud remains insufficiently understood, particularly in emerging economies characterized by institutional voids and information asymmetry. Drawing on Upper Echelons Theory and Fraud Triangle Theory, we examine whether executive digital and financial expertise help firms prevent corporate fraud and investigate the roles of internal governance quality (IGQ) and digitalization in this process. Using panel data from 3,679 Chinese listed firms from 2010 to 2022, we find that both executive digital expertise and executive financial expertise are associated with lower levels of corporate fraud. Further analyses show that IGQ partially mediates these relationships, while firm digitalization strengthens the fraud-mitigating effects of both forms of expertise. These findings remain robust across alternative model specifications and multiple endogeneity tests. This study contributes to the business ethics, leadership, and corporate governance literature by demonstrating that executive expertise functions as an important ethical governance resource and by revealing how IGQ and digitalization enable firms to translate executive capabilities into more effective fraud prevention in emerging economies.
While international buyers increasingly utilize global supply chains to obtain valuable resources and achieve efficiency, they confront challenges of managing unethical opportunistic behaviors of geographically dispersed suppliers. Based on equity theory, this study examines how perceived unfairness, a core issue in business ethics literature, triggers opportunistic behaviors of local suppliers in an emerging economy. Drawing insights from the resource dependence theory and institutional distance research, this study reveals how reactions of suppliers to perceived unfairness are further complicated by institutional distance and supplier dependence on international buyers. Using a two-wave survey study of 141 dyads of buyers from developed economies and their suppliers in China, our results show that local suppliers with perceived unfairness are more likely to engage in opportunism as a way to restore equity, which subsequently hurts exchange performance. However, local suppliers’ dependence on international buyers attenuates this effect, whereas formal institutional distance magnifies it. Our research has ethical implications for supply chain relationship governance by underlining the unethical consequences of perceived unfairness in international buyer–supplier relationships, and when local suppliers will compromise despite the perceived unfairness.
Building on upper echelons theory, this study examines the impact of managers’ Islamic religiosity on two primary types of relational ties (i.e., political and business ties) within varying institutional environments. Utilizing survey data from dealerships and secondary information in West African countries, our findings reveal that managers’ Islamic religiosity inhibits the formation of political ties but fosters business ties. Moreover, the negative effect of Islamic religiosity on political ties is stronger in regions with greater communal solidarity and lower government corruption, while its positive effect on business ties intensifies in areas with high communal solidarity. Our study contributes to Islamic and business ethics research by showing when religious beliefs align with or diverge from relational ties in West Africa, and by highlighting the informal institutions that reinforce or weaken the ethical influence of Islamic religiosity on tie formation. Our findings also offer practical implications for Muslim managers and policymakers by emphasizing the roles of religious values, communal environments, and anti-corruption efforts in shaping ethical relational strategies.
This study examines whether audit partners whose given names contain morally connotative characters exhibit higher audit quality. Using Chinese A-share listed firms between 2007 and 2023, the results show that auditors with morally connotative names are significantly associated with lower discretionary accruals, indicating improved audit quality. Further analyses reveal that this effect is more pronounced in regions with stronger Confucian cultural influence, among younger auditors, and in settings with weaker formal regulatory enforcement, but disappears among auditors who experienced cultural disruption or work in Big 4 audit firms where Chinese names are rarely used. Additional tests show that such auditors are more likely to attract clients, suggesting that moral names signal professional integrity in the audit market. The findings are robust to alternative measures and remain valid after employing a difference-in-differences design, propensity score matching and endogenous treatment effects model to address endogeneity.
Whistleblowing protection is typically examined as a governance mechanism for detecting organisational misconduct, financial fraud, and regulatory violations. Its broader ethical function in enabling employee voice and preventing operational harm remains less fully theorised. Drawing on institutional theory, this study conceptualises whistleblowing protection as an ethical infrastructure through which regulative, normative, and cultural-cognitive institutions shape employees’ willingness to raise concerns about organisational risk. We argue that effective whistleblowing protection converts ethical awareness into organisational action by reducing the personal costs of speaking up, strengthening the credibility of internal escalation, and enabling firms to identify and correct unsafe practices before harm materialises. Using a global panel of 18,303 firm-year observations from 60 countries between 2003 and 2023, we examine the association between whistleblowing protection and workplace safety outcomes. The analysis combines firm fixed-effects models with Lewbel instrumental-variable estimation, entropy balancing, coefficient stability tests, and a difference-in-differences design exploiting the regulatory shock of the U.S. Dodd-Frank Act. The results show that stronger whistleblowing protection is associated with significantly lower workplace injury rates, equivalent to an approximately 23
Fostering gender equality is a fundamental pillar of ethical business conduct and corporate social responsibility. Yet, the structural architecture of production in global supply chains, and the institutional contexts in which factories are embedded, can create moral distance between “lead” firms and female workers, constrain the exercise of moral agency across network nodes, and impede distributive justice regarding women’s access to employment. In this work, we investigate gender diversity at over 800 production units of Nike’s supply base by leveraging factory-level data published by Nike, and uncover organizational and institutional drivers of female participation in the workforce. We apply a multilevel lens and theoretically motivate the relevance of six factors spanning three levels (i.e., factory, supplier and country) in increasing female employment. We construct a longitudinal dataset of complex structure by merging Nike’s published data with data from secondary sources. Our analysis reveals that factories producing relatively less complex products and belonging to suppliers with a strong network presence but limited geographical dispersion, employ a higher proportion of females. The same holds for factories in countries characterized by a more individualistic and long-term-oriented culture. Theoretically, this study contributes to business ethics by demonstrating how supply chains influence ethical outcomes, illustrating how factory, supplier, and country-level conditions jointly shape female labor participation. Practically, the findings identify actionable interventions to enhance ethical governance and gender diversity across the supply base.
Businesses increasingly engage in global development work. However, recent studies highlight the lingering risk of companies adopting Eurocentric approaches in their projects, even when collaborating with local stakeholders. While this risk has been identified, it remains unclear how such Eurocentric approaches manifest and prevail in often well-intended projects. Through an in-depth case study of a European company’s partnership aimed at improving water access for an “underserved” community in South Asia, we illustrate how Eurocentric patterns manifested and persisted through a complex interplay of discourse and material practices across different project stages. The corporate actors became deeply entrenched in this approach, with diverse shields in the partnership design preventing exposure to alternative perspectives and hindering critical reflection. By grounding our findings in postcolonial and decolonial perspectives as connected sociologies, we introduce the concept of colonial fingerprints. We use it as an analytical tool to uncover Eurocentric approaches and how they may materialize through a tight interplay of discourse, practice, organizational shields, and adverse development effects. Making such interplay visible marks a first step toward rethinking development approaches, while also acknowledging that the structural entrenchment of Eurocentric patterns can make them difficult to disrupt. We discuss the ethical implications of our work, emphasizing the need to view corporate development efforts in a historical context and to rethink partnership engagement in the context of global development.
This paper examines the conditions under which the use of wasta, a form of intermediation and informal networking widely practiced in Arab societies, is perceived as ethical by leaders in Lebanon’s pharmaceutical, food and beverage, and construction sectors. While wasta is often criticized for undermining meritocracy, we draw on postcolonial theory to analyze it as a culturally embedded practice shaped by Lebanon’s colonial history, sectarian governance, and weak formal institutions. We employ an interpretive qualitative methodology based on 18 semi-structured interviews with Lebanese sector leaders. Our findings identify three aggregate dimensions: the contextuality of ethical leadership, the contextual ethicality of wasta, and wasta as a tool for inclusive opportunity. Leaders consistently differentiate ethical wasta, legitimized when it promotes fairness, inclusion, and social solidarity, from unethical wasta, which serves narrow self-interest or bypasses competence. We contribute to the business ethics literature by showing, through a postcolonial lens, that ethical leadership in the postcolonial Global South is enacted as the situated reconciliation of two value systems whose coexistence is itself a colonial inheritance: relational obligations of reciprocity and loyalty and externally derived norms of meritocracy and impartiality. Practically, the study shows that leaders in postcolonial settings can act ethically by coupling relational obligation with competence thresholds, offering a culturally grounded logic of ethical leadership that does not measure non-Western practice against a universalized Western standard.
The competitive imperative for artificial intelligence (AI) intensifies a core tension: reconciling firms’ moral responsibility toward employees with the growing demands driving technological innovation. This study examines the impact of employee CSR (eCSR) on firm-level AI innovation. Drawing on social exchange theory and psychological contract framework, we posit that morally attentive employment practices enhance employees’ sense of trust and shared purpose, thereby reducing resistance to technological change. Leveraging a novel, text-based measure of eCSR and a dataset of AI patents from Chinese listed firms, we provide robust evidence that eCSR significantly enhances AI innovation. Mechanism analyses further reveal that eCSR attracts AI talent, strengthens internal control quality, and improves productivity. Moreover, this effect is amplified in firms with highly educated workforces and in regions prioritizing digitalization and public safety. Collectively, our findings challenge the presumed trade-off between technological progress and employee welfare, highlighting ethical employee treatment as a lever for AI innovation and underscoring the role of human-centric governance in sustainable digital transformation.
Employees are a special category of stakeholders. They expect the firm to behave in a particular way, which forms the basis of a psychological contract (Rousseau, 1995). If the firm engages in irresponsible behavior, known as Corporate Social Irresponsibility (CSI), this may be seen as a violation of such expectations. Through the theoretical lenses of psychological contract and expectancy disconfirmation theory, we argue that there is a negative association between employees’ evaluations of management and CSI incidents that violate employees’ expectations of a firm’s integrity than in the case of other types of CSI incidents. We further investigate how a firm’s CSR performance and the media coverage of the CSI incident moderate the relationship between integrity violations and employees’ evaluations. Analyzing employee responses to 1596 CSI incidents involving 104 US public firms from 2016 to 2021, we find a negative association between integrity violations and employees’ evaluations of management. Moreover, media coverage serves a critical role in intensifying this relationship, whereas our post hoc analyses suggest that employee-related CSR may attenuate these negative responses. Our study contributes to the literature on CSI, psychological contract, and the media, exploring the responses of employees to integrity violations.
What is happening when we encounter moral ambiguity—an experience where habitual norms, rules, or values do not seem to guide action—and engage with that ambiguity in ways that allow us to realize our moral responsibility more expansively in some way? While there is a growing interest in this phenomenon exhibited in studies of moral imagination, moral insight, and moral leadership in organizations, the existing scholarship has focused on phenomena external to the experience itself. This paper provides an account of moral expansion that draws on the works of Søren Kierkegaard and Simone de Beauvoir. Their existential philosophy suggests that an expansion of morals is predicated on the inner orientation with which individuals encounter ambiguity, rather than on any specific externally visible behavior or solution. They emphasize how that inner orientation involves an embrace of ambiguity in relation to the self, to the world, and to others. The paper develops this existentialist account in detail, illustrates it in reference to a narrative example, and discusses how it reframes the study of moral expansion in organizations, with implications for future research and practice.
As virtual influencers become increasingly prevalent in marketing communications, their influence on consumers’ pro-environmental perceptions remains understudied. This challenge is exacerbated by the diverse range of virtual influencer designs that firms can utilize in their green campaigns. Drawing on prototype category theory, we conceptualize virtual influencers into two categories—nature prototypes and consumption prototypes—and propose that these prototypes motivate pro-environmental behaviors through distinct pathways. Building on regulatory focus theory, we further argue that the extent to which virtual influencers enhance consumers’ pro-environmental behavioral intentions depends on the fit between the virtual influencer prototype and the framing of the green message. We suggest that this fit strengthens consumers’ sense of feeling right, which in turn promotes pro-environmental intentions. A series of cross-cultural experiments conducted in China and the United States reveals that prototype-framing fit enhances pro-environmental intentions in both public and private domains, although the patterns differ across cultural contexts. Among Chinese participants, both the nature-gain and consumption-loss combinations produce the expected fit effects by fostering a sense of feeling right. Among U.S. participants, however, the effect of prototype-framing fit becomes asymmetric: the nature-gain combination consistently drives pro-environmental intentions, whereas the consumption-loss combination exerts an influence only indirectly, through the sense of feeling right. Our findings offer practical insights for deploying virtual influencers in green marketing campaigns across cultural contexts.
Business–humanitarian partnerships are increasingly mobilised to respond to acute crises, yet in these extreme contexts even well-intentioned collaborations can harm crisis-affected populations and distort humanitarian action. In such settings, generic, outcome-focussed notions of impact fall short as tools for assessing cross-sector collaboration. This conceptual paper develops a normative framework—the Humanitarian Impact Value Chain (HIVC)—to assess the moral permissibility of business—humanitarian partnerships in acute crises. Building on the Impact Value Chain, we embed the humanitarian principles of humanity, impartiality, neutrality, and independence as explicit ethical constraints at each stage, from issue framing and mission design to inputs, throughputs, outputs, outcomes, and impact. The HIVC distinguishes principle-consistent positive impact paths from principle-violating negative impact paths and shows how specific partnership configurations generate predictable patterns of benefit, harm, and institutional effects for crisis-affected populations and humanitarian actors. The paper contributes to business ethics by developing a role-based account of corporate responsibility in humanitarian CSPs. It contributes to CSP scholarship by recasting recurrent implementation failures as patterned value-chain configurations, and introduces institutional harm to humanitarian space as a morally significant consequence of principle-violating partnerships.
Unethical consumer behavior, such as deceptive product returns, digital piracy, shoplifting, and falsifying online reviews, is a growing concern with significant economic and ethical implications. However, its psychological antecedents remain underexplored. This research investigates the role of stress as a key driver of unethical consumer behavior, offering a novel perspective on why consumers engage in such conduct. Grounded in conservation of resources theory, we propose that stress heightens perceived threats to personal resources, triggering rumination—repetitive, negative thoughts about potential resource losses—which, in turn, fosters unethical behaviors. Across a field study and five experiments (one reported in the Online Appendix), we provide empirical evidence supporting this mechanism. Moreover, our findings reveal that the effect of stress on unethical consumer behavior is particularly pronounced among individuals with high levels of narcissism. These insights contribute to the broader understanding of consumer ethics and have important implications for marketers, human resource managers, and policymakers seeking to curb unethical consumer practices.
Organizations increasingly publicize commitments to diversity and inclusion (D I), yet inequities persist because inclusion remains excluded from the infrastructures that govern evaluation, mobility, and everyday work. This paper reframes inclusion as an infrastructural problem, one that becomes durable only when encoded into the technologies, routines, and classificatory systems that structure participation, forming what the paper terms moral infrastructure. Integrating institutional work theory with the ethics of care, the paper introduces infrastructural inclusion and develops a six-zone process model that explains how organizations move from the zone of non-aspiration and symbolic signaling toward programmatic action, procedural alignment, systemic redesign, and ultimately, infrastructural care. Central to this shift is Strategic Human Resource Management (SHRM), as an institutional actor bearing distinctive ethical responsibility because its jurisdiction over job architectures, appraisal systems, and workflow design gives it the structural authority to translate moral commitments into system-level change. The model illuminates why organizations stall in symbolic or programmatic modes and offers a vocabulary for understanding how moral infrastructure is built, maintained, and sometimes reversed. This is a conceptual theory-building paper that advances a process model explaining how inclusion becomes materially embedded in organizational infrastructures.
This study investigates the micro-foundational process of board ethical decision-making in the Chinese banking sector. Departing from static governance models, we develop a behavioral framework in which directors’ distinct ethical frames are cultivated by their professional and values-based backgrounds; these frames are then filtered through the board’s culturally embedded social dynamics, such as deference to authority and harmony-seeking in the Chinese context, to shape collective ethical decisions. Drawing on a sample of all listed banks in China from 2010 to 2024, our results reveal a clear hierarchy of director influence. Directors with communist party of China (CPC) membership exert a robust and immediate negative effect on green lending. This effect reflects their prudential ethical frame, which prioritizes systemic stability and is amplified by the board’s deference to high-status members. Directors with financial regulatory experience and female directors are associated with greater green lending in the longer term. For female directors, the short-term influence is muted or briefly negative before the stakeholder-oriented frame takes root through institutionalization. The reason is that the strategic frame and the stakeholder-oriented frame they introduce belong to minority voices that require time to permeate the board’s cognitive norms. Moreover, this deliberative process operates primarily under soft regulation, where boards retain discretion and moral agency. By illuminating how diverse ethical frames compete and institutionalize within the boardroom, this study extends foundational governance theories. It also answers the call for contextually embedded frameworks of ethical governance in non-Western settings.
There has been an ongoing debate about the effectiveness of motivational and playful design, commonly referred to as gamification in improving business performance and its alignment with ethical standards. While gamification strategies and approaches are widely recognized for enhancing consumer engagement, questions remain about how consumers perceive their ethicality, and it is particularly unclear whether and how certain design aspects influence consumers’ ethical judgments. This study addresses this gap by examining how two key design aspects, social dynamics (singleplayer vs. multiplayer (collaboration vs. competition)) and agency (yes/skill-based vs. no/luck-based), shape ethical judgment of gamified marketing campaigns by conducting an online experiment. A total of 871 participants were randomly assigned to one of six conditions featuring a “Spin to Win” game, which provided monetary rewards (final N = 735). Given that individuals’ ethical ideologies influence how they interpret moral issues, idealism and relativism were investigated as key moderators. The findings reveal that ethical judgment was significantly influenced by social dynamics. Consumers rated the singleplayer design more favorably than the multiplayer conditions. Additionally, within multiplayer design, consumers perceive collaboration-based design as more ethical than competition-based design. Surprisingly, no significant differences emerged across agency levels. However, a significant interaction effect between agency and social dynamics was identified, involving levels of idealism and relativism. Grounded in empirical findings, this study addresses the gap in understanding the ethics of gamification within the marketing context and contributes to the literature by offering concrete practical recommendations for marketing managers aiming to enhance the ethicality of their gamified campaigns.
Currently, increasing attention is being given to environmental, social, and governance (ESG) performance due to the importance of ethical issues in international business and the need for organizations to operate with integrity whilst navigating diverse cultural, legal, and social landscapes. In this context, this work investigated the relationship between foreign direct investment (FDI) inflows, corruption control, accountability, and ESG performance (index) using panel data from 22 Latin America and the Caribbean (LAC) countries for the period of 1996–2022 and employing Driscoll–Kraay standard errors, Newey–West standard errors, and the fully modified ordinary least squares estimation techniques. The pollution halo hypothesis (PH), pollution haven hypothesis (PHH), and institutional theory provided the basic theoretical frameworks of the study. The results suggest that FDI inflows positively and significantly correlate with ESG performance. Similarly, corruption control and accountability appear to promote ESG performance, highlighting that effective monitoring processes and corruption control may support sustainability in LAC. The outcomes of this work demonstrate that international trade is significantly and positively related to ESG performance, and correspondingly, foreign portfolio investments (FPIs) and economic size significantly promote ESG performance in LAC. The environmental Kuznets curve hypothesis was not validated for LAC. However, unexpectedly, the interaction effect of FDI inflows and accountability showed a negative relationship with ESG performance. The causal relationship suggests a bidirectional connection between FDI inflows and ESG performance. A unidirectional connection of both accountability and FPIs with ESG performance was also found. As such, the governments of host countries should promote sustainable inflows of FDI, whilst policymakers and corporate managers should integrate ESG norms into international trade and foreign investments to foster a more responsible business environment.
Research on auditing ethics explains ethical recognition, judgment, intention, voice, collective deliberation, audit-firm conditions, and reduced audit quality acts. However, it does not provide a concern-level explanation of how matters become recognized as ethically significant and subsequently progress through external audit practice. Drawing on Traditional Grounded Theory and interviews with 30 South African professionals with external audit experience, including seven working in international offices, this paper develops Ethical Enactment Theory. The theory begins with ethical alertness, through which a matter becomes a recognized ethical concern. The ethical significance spectrum captures variation in how auditors register and weigh that significance, while ethical calibration compares these interpretations against evidence, professional requirements, and shared professional reference points. Governance-conditioned conversion explains how consultation makes a recognized concern jointly assessable, conditional escalation routes it where additional authority, independence, expertise, or protection is required, and documentation preserves the concern, evidence, reasoning, decision, and response for review. Ethical enactment occurs where the concern is incorporated into audit work through an appropriately supported response or reasoned closure. Where progression weakens, the concern may be deferred, diluted, or displaced. These forms describe what happened to the concern. Intentional procedural departure separately qualifies a form only where the evidence establishes that the auditor knew the required professional response and knowingly avoided it or substituted an inadequate response. The theory explains how ethical responsibility is enacted or weakened through distributed professional processes in external auditing.
Following a prominent view business corporations are “private governments” that exercise discretionary authority over the workforce. Assuming that authority requires legitimation and that the predominant mode of legitimation is by democratic procedures, it is commonly argued that corporate authority is legitimate only if the workforce is granted rights of democratic participation in corporate decision-making. This paper take issue with the premise that corporations are necessarily governed by appeal to authority. A major defect in the current literature is that the conditions for the exercise of authority are scarcely defined. Following predominant conceptions of authority in legal and moral theory, this paper argues that there are two necessary and together sufficient conditions for exercises of authority: the intention that others comply with directives and that subjects generally comply or conform with directives (de facto authority). This account is used as a reference point to show that prevalent accounts of the relationship between employees and the management in corporations are unable to substantiate the conclusion that the management is exercising authority. Neither the fact that the management make decisions affecting the workforce; that the management enforce decisions against employees; that corporations are hierarchical organizations; or that corporations are legally entitled to authority, are reasons to conclude that employees are subjected to exercises of corporate authority. Though the conclusion is not that corporations cannot or do not exercise authority, the claim defended is that authority is a contingent rather than necessary feature of business corporations.
