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Contracts to Communities: A Processual Model of Organizational Virtue

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Author Info
Heugens, P.P.M.A.R.
Kaptein, M.
Oosterhout, J. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
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.

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Paper provided by 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. in its series Research Paper with number ERS-2007-023-ORG Revision_Date: 2009-08-17.

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Date of creation: 04 Apr 2007
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Handle: RePEc:dgr:eureri:300010805

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Related research
Keywords: Business ethics; Positive theorizing; Normative theorizing; Virtue ethics; Stakeholder theory; Corporate performance; Organizational goodness;

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References listed on IDEAS
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  3. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Blackwell Publishing, vol. 43(1), pages 1-18, 01. [Downloadable!] (restricted)
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  4. Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-23, May. [Downloadable!] (restricted)
  5. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-53, July. [Downloadable!] (restricted)
  6. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-83, June. [Downloadable!] (restricted)
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  7. Bowles, Samuel & Gintis, Herbert, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 83-102, Winter. [Downloadable!] (restricted)
  8. Sugden, Robert, 1989. "Spontaneous Order," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 85-97, Fall. [Downloadable!] (restricted)
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