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Ethical Behavior as a Strategic Choice by Large Corporations: The Interactive Effect of Marketplace Competition, Industry Structure and Firm Resources

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  • Prakash Sethi, S.
  • Sama, Linda M.

Abstract

Analysis of ethical conduct of business organizations has hitherto placed primary emphasis on the conduct of that corporation’s managers because ethical conduct, like all conduct, must manifest itself through individual behavior. This paper argues that in the real world corporate actions are influenced, to a considerable extent, by external market-based conditions. Therefore, a more comprehensive explanation of ethical business conduct must incorporate both corporate, i.e., internal considerations, and competitive, industry structure-based, i.e., external considerations. A framework is presented that provides a systematic analysis of the interactive effect between different types of external market-based competitive conditions, institutional opportunities to engage in ethical behavior, and the likelihood that corporations would do so. The analytical framework leads to recommendations as to the types of actions that might be more effective in improving business ethical conduct under varying sets of market-based competitive conditions.

Suggested Citation

  • Prakash Sethi, S. & Sama, Linda M., 1998. "Ethical Behavior as a Strategic Choice by Large Corporations: The Interactive Effect of Marketplace Competition, Industry Structure and Firm Resources," Business Ethics Quarterly, Cambridge University Press, vol. 8(1), pages 85-104, January.
    • Handle: RePEc:cup:buetqu:v:8:y:1998:i:01:p:85-104_00
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    Cited by:

    1. Dimitrios Varvarigos & Eleni Stathopoulou, 2023. "On the relation between corruption and market competition," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 99-121, January.
    2. Fernando Lourenço & Natalie Sappleton & Ranis Cheng, 2015. "Gender and Business Ethics of Enterprise Students and Nascent Entrepreneurs Engaged in Entrepreneurship Education," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 24(2), pages 186-203, September.
    3. Gokalp, Omer N. & Lee, Seung-Hyun & Peng, Mike W., 2017. "Competition and corporate tax evasion: An institution-based view," Journal of World Business, Elsevier, vol. 52(2), pages 258-269.
    4. Norma Laura Godínez Reyes & Rodrigo Gómez Monge & Argelia Calderón Gutiérrez & Gerardo Gabriel Alfaro Calderón, 2022. "Efficiency Analysis of Mexican Stock Exchange Sustainable Firms," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(1), pages 1-22, Enero - M.
    5. Anne Barraquier, 2013. "A Group Identity Analysis of Organizations and Their Stakeholders: Porosity of Identity and Mobility of Attributes," Journal of Business Ethics, Springer, vol. 115(1), pages 45-62, June.
    6. Noel Siu & Kit-Chun Lam, 2009. "A Comparative Study of Ethical Perceptions of Managers and Non-Managers," Journal of Business Ethics, Springer, vol. 88(1), pages 167-183, April.
    7. Quach, Sara & Thaichon, Park & Hewege, Chandana, 2020. "Triadic relationship between customers, service providers and government in a highly regulated industry," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    8. S. Prakash Sethi & Terrence F. Martell & Mert Demir, 2016. "Building Corporate Reputation Through Corporate Social Responsibility (CSR) Reports: The Case of Extractive Industries," Corporate Reputation Review, Palgrave Macmillan, vol. 19(3), pages 219-243, October.
    9. Burbano, Vanessa C. & Ostler, James, 2021. "Differences in consumer-benefiting misconduct by nonprofit, for-profit, and public organizations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 166(C), pages 117-136.
    10. Bert Scholtens & Lammertjan Dam, 2007. "Cultural Values and International Differences in Business Ethics," Journal of Business Ethics, Springer, vol. 75(3), pages 273-284, October.
    11. Niklas Egels-Zandén, 2009. "TNC Motives for Signing International Framework Agreements: A Continuous Bargaining Model of Stakeholder Pressure," Journal of Business Ethics, Springer, vol. 84(4), pages 529-547, February.
    12. Perry, Patsy & Towers, Neil, 2009. "Determining the antecedents for a strategy of corporate social responsibility by small- and medium-sized enterprises in the UK fashion apparel industry," Journal of Retailing and Consumer Services, Elsevier, vol. 16(5), pages 377-385.

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