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Contracts to Communities: A Processual Model of Organizational Virtue

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  • Pursey P. M. A. R. Heugens
  • Muel Kaptein
  • J. (Hans) van Oosterhout

Abstract

abstract In the face of systemic challenges to corporate legitimacy, scholars and managers alike have been rethinking traditional answers to the question: What does it take to be a good company? We approach this question in two novel ways. We offer a normative answer, grounded in virtue ethics, by introducing a threefold typology of organizational forms. The moral goodness of each form depends on the congruence between its purpose and virtues. But we also offer a positive answer in the form of a processual model which traces corporate goodness to its empirical antecedents and consequences. The model defies a view of organizations as innately good or evil, but rather portrays virtue as the sediment of a value infusion process. We predict that if managers succeed in establishing in their organizations the kind of virtues necessary to support collective moral agency, they can expect to reap gains like enhanced effectiveness and legitimacy. However, when they neglect their moral responsibilities, the result will likely be organizational demise.

Suggested Citation

  • Pursey P. M. A. R. Heugens & Muel Kaptein & J. (Hans) van Oosterhout, 2008. "Contracts to Communities: A Processual Model of Organizational Virtue," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 100-121, January.
    • Handle: RePEc:bla:jomstd:v:45:y:2008:i:1:p:100-121
    DOI: 10.1111/j.1467-6486.2007.00738.x
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    References listed on IDEAS

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    1. Solomon, Robert C., 2003. "A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success," OUP Catalogue, Oxford University Press, number 9780195167337.
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    Cited by:

    1. David Dawson, 2018. "Organisational Virtue, Moral Attentiveness, and the Perceived Role of Ethics and Social Responsibility in Business: The Case of UK HR Practitioners," Journal of Business Ethics, Springer, vol. 148(4), pages 765-781, April.
    2. Terry R. Adler & Thomas G. Pittz & Hank B. Strevel & Dina Denney & Susan D. Steiner & Elizabeth S. Adler, 2022. "Team Over-Empowerment in Market Research: A Virtue-Based Ethics Approach," Journal of Business Ethics, Springer, vol. 176(1), pages 159-173, February.
    3. J. Oosterhout & Pursey Heugens, 2009. "Extant Social Contracts in Global Business Regulation: Outline of a Research Agenda," Journal of Business Ethics, Springer, vol. 88(4), pages 729-740, October.
    4. Yan, Ziqiao & Li, Wanli & Tang, Xiaobo & Wang, Hua, 2022. "Overseas corporate social responsibility engagement and competitive neutrality of government subsidies: Evidence from multinational enterprises in emerging markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    5. Dongsoo Kim & Jongseon Lee & Nami Kim, 2023. "Engaging CSR in SMEs by exporting: The critical factors of CEOs and markets," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1953-1964, July.
    6. Mfon Jeremiah, 2017. "Corporate Social Responsibility Contribution to Environmental Sustainability in Developing Countries: The Accountability Perspective," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(1), pages 1-33, December.
    7. Qinqin Zheng & Yadong Luo & Stephanie Wang, 2014. "Moral Degradation, Business Ethics, and Corporate Social Responsibility in a Transitional Economy," Journal of Business Ethics, Springer, vol. 120(3), pages 405-421, March.
    8. Jerzy Kociatkiewicz & Monika Kostera, 2012. "The good manager : an archetypical quest for morally sustainable leadership," Post-Print hal-02423779, HAL.
    9. Sharon Bolton & Rebecca Kim & Kevin O’Gorman, 2011. "Corporate Social Responsibility as a Dynamic Internal Organizational Process: A Case Study," Journal of Business Ethics, Springer, vol. 101(1), pages 61-74, June.
    10. Wu, Bao & Jin, Chenfei & Monfort, Abel & Hua, Danni, 2021. "Generous charity to preserve green image? Exploring linkage between strategic donations and environmental misconduct," Journal of Business Research, Elsevier, vol. 131(C), pages 839-850.
    11. Xingqiang Du, 2015. "Is Corporate Philanthropy Used as Environmental Misconduct Dressing? Evidence from Chinese Family-Owned Firms," Journal of Business Ethics, Springer, vol. 129(2), pages 341-361, June.
    12. Toby Newstead & Sarah Dawkins & Rob Macklin & Angela Martin, 2020. "The Virtues Project: An Approach to Developing Good Leaders," Journal of Business Ethics, Springer, vol. 167(4), pages 605-622, December.
    13. Kaptein, S.P., 2008. "Ethics Programs and Ethical Cultures: A Next Step in Unraveling their Multi-Faceted Relationship," ERIM Report Series Research in Management ERS-2008-020-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    14. Hickman, L. Emily & Iyer, Subramanian Rama & Jadiyappa, Nemiraja, 2021. "The effect of voluntary and mandatory corporate social responsibility on earnings management: Evidence from India and the 2% rule," Emerging Markets Review, Elsevier, vol. 46(C).
    15. Björn Mestdagh & Luc Van Liedekerke & Olivier Sempiga, 2024. "A Drivers Framework of Organizational SDG Engagement," Sustainability, MDPI, vol. 16(1), pages 1-20, January.
    16. Carole L. Jurkiewicz & Robert A. Giacalone, 2016. "Organizational Determinants of Ethical Dysfunctionality," Journal of Business Ethics, Springer, vol. 136(1), pages 1-12, June.
    17. Michael S. McLeod & Curt B. Moore & G. Tyge Payne & Jennifer C. Sexton & Robert E. Evert, 2018. "Organizational Virtue and Stakeholder Interdependence: An Empirical Examination of Financial Intermediaries and IPO Firms," Journal of Business Ethics, Springer, vol. 149(4), pages 785-798, June.
    18. Abhishek Mukherjee & Ron Bird, 2016. "Analysis of mandatory CSR expenditure in India: a survey," International Journal of Corporate Governance, Inderscience Enterprises Ltd, vol. 7(1), pages 32-59.
    19. Sarah Williams & Anja Schaefer, 2013. "Small and Medium‐Sized Enterprises and Sustainability: Managers' Values and Engagement with Environmental and Climate Change Issues," Business Strategy and the Environment, Wiley Blackwell, vol. 22(3), pages 173-186, March.
    20. Andrew Ngawenja Mzembe & Adam Lindgreen & François Maon & Joëlle Vanhamme, 2016. "Investigating the Drivers of Corporate Social Responsibility in the Global Tea Supply Chain: A Case Study of Eastern Produce Limited in Malawi," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(3), pages 165-178, May.
    21. Muel Kaptein, 2009. "Ethics Programs and Ethical Culture: A Next Step in Unraveling Their Multi-Faceted Relationship," Journal of Business Ethics, Springer, vol. 89(2), pages 261-281, October.
    22. Marina Balboa & Germán López-Espinosa & Antonio Rubia, 2012. "Non-linear Dynamics in Discretionary Accruals: An Analysis of Bank Loan-Loss Provisions," Faculty Working Papers 07/12, School of Economics and Business Administration, University of Navarra.
    23. Richard Winter, 2011. "The Principled Legal Firm: Insights into the Professional Ideals and Ethical Values of Partners and Lawyers," Journal of Business Ethics, Springer, vol. 98(2), pages 297-306, January.
    24. George Gotsis & Zoe Kortezi, 2010. "Ethical Considerations in Organizational Politics: Expanding the Perspective," Journal of Business Ethics, Springer, vol. 93(4), pages 497-517, June.
    25. Ignacio Ferrero & Reyes Calderón, 2012. "The Ethical Dimension of Industrial Production: the Role of Transitive Motivation," Faculty Working Papers 11/12, School of Economics and Business Administration, University of Navarra.

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