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Strategic ambiguity and leaders’ responsibility beyond maximizing profits

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  • Fernando, Mario
  • Sim, A.B.

Abstract

Corporate scandals across the globe have triggered a broad discussion on the role of business in society, its legitimacy, obligations and responsibilities. As a result, businesses and their leaders are increasingly held accountable for what they do by the society at large. In Australia, the building products manufacturer, James Hardie Industries has been accused for causing over half of the number of documented cases of mesothemilia, a lung cancer caused by asbestos. The company leaders’ behavior has been widely condemned by key stakeholders, and by the local and federal governments. The issue has been a high profile case featured in the media and in public discussions on corporate social responsibility. By analyzing the James Hardie asbestos compensation case in Australia, we examine the role of strategic ambiguity on leaders’ extended responsibility beyond profit maximization. Using Våland and Heide’s (2005) regulators of organizational crisis, Ulmer and Sellnow’s (1997, 2000) ethic of significant choice, and Bright, Cameron and Caza’s (2006) organizational virtuousness, we propose a Strategic Virtuousness Model as a framework for analyzing leader and organizational responsibility in strategic ambiguity associated corporate action.

Suggested Citation

  • Fernando, Mario & Sim, A.B., 2011. "Strategic ambiguity and leaders’ responsibility beyond maximizing profits," European Management Journal, Elsevier, vol. 29(6), pages 504-513.
    • Handle: RePEc:eee:eurman:v:29:y:2011:i:6:p:504-513
    DOI: 10.1016/j.emj.2011.08.001
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    References listed on IDEAS

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    1. Fernando, Mario, 2010. "Corporate social responsibility in the wake of the Asian tsunami: Effect of time on the genuineness of CSR initiatives," European Management Journal, Elsevier, vol. 28(1), pages 68-79, February.
    2. Thomas Maak, 2007. "Responsible Leadership, Stakeholder Engagement, and the Emergence of Social Capital," Journal of Business Ethics, Springer, vol. 74(4), pages 329-343, September.
    3. Våland, Terje & Heide, Morten, 2005. "Corporate Social Responsiveness:: Exploring the Dynamics of "Bad Episodes"," European Management Journal, Elsevier, vol. 23(5), pages 495-506, October.
    4. Renae Streifel & Bethany Beebe & Shari Veil & Timothy Sellnow, 2006. "Significant Choice and Crisis Decision Making: MeritCare’s Public Communication in the Fen–Phen Case," Journal of Business Ethics, Springer, vol. 69(4), pages 389-397, December.
    5. Martin, Viktoria & He, Bo & Setterwall, Fredrik, 2010. "Direct contact PCM-water cold storage," Applied Energy, Elsevier, vol. 87(8), pages 2652-2659, August.
    6. ., 2010. "Korea's Inward and Outward Foreign Direct Investment," Chapters, in: The Korean Economy in Transition, chapter 6, Edward Elgar Publishing.
    7. Thomas Maak & Nicola M. Pless, 2006. "Responsible Leadership in a Stakeholder Society – A Relational Perspective," Journal of Business Ethics, Springer, vol. 66(1), pages 99-115, June.
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    Cited by:

    1. Amlan Haque & Mario Fernando & Peter Caputi, 2019. "The Relationship Between Responsible Leadership and Organisational Commitment and the Mediating Effect of Employee Turnover Intentions: An Empirical Study with Australian Employees," Journal of Business Ethics, Springer, vol. 156(3), pages 759-774, May.
    2. Eric Guthey & Mette Morsing, 2014. "CSR and the Mediated Emergence of Strategic Ambiguity," Journal of Business Ethics, Springer, vol. 120(4), pages 555-569, April.
    3. Mario Fernando & Ruwan Bandara, 2020. "Towards virtuous and ethical organisational performance in the context of corruption: A case study in the public sector," Public Administration & Development, Blackwell Publishing, vol. 40(3), pages 196-204, August.
    4. González Rodríguez, María Del Rosario & Díaz Fernádez, María Del Carmen & Spers, Valéria Rueda Elias & Leite, Marcelo da Silva, 2016. "Relação entre variáveis de base, valores e responsabilidade social corporativa," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 56(1), January.

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