Ethical values in the evaluation of corporate social performance
Abstract
Purpose
This paper aims to explore two factors that may moderate the relation between an individual’s ethical values and their evaluation of competing ethical and financial outcomes. It is argued that distance (i.e. low proximity) attenuates moral intensity, thereby inhibiting ethical decision-making (EDM). In contrast, it is argued that presenting outcomes in a separate social and environmental perspective in the balanced scorecard (BSC) increases EDM.
Design/methodology/approach
In an experiment, participants evaluated social outcomes presented in a BSC. Proximity and scorecard format were manipulated in a 2 × 2 factorial design.
Findings
The results indicate that physical and social proximity increase the extent to which performance evaluation is influenced by the ethical values of the evaluator. Contrary to expectations, BSC format did not influence the EDM of the evaluator.
Research limitations/implications
Participants were undergraduate students which may limit the generalisability of the results. Further research should be conducted with practicing managers. The study focused on a particular ethical issue, hiring and training from the local community. Further research is necessary to consider the effect of personal ethical values on other aspects of corporate social responsibility (CSR).
Practical implications
This study indicates that ethical values will be less salient when the outcomes relate to distant locations. There are important implications for multinational corporations seeking to avoid the liability of foreignness in their distant operations.
Originality/value
Previous CSR research has focused on the institutional level. The focus of the authors on the individual’s decision-making process increases our understanding of the biases that can affect EDM.
Keywords
Acknowledgements
The authors gratefully thank for the valuable comments from the participants of the 2014 RMIT Accounting for Sustainability Conference, the two anonymous reviewers and the editor.
Citation
Wynder, M. and Dunbar, K. (2016), "Ethical values in the evaluation of corporate social performance", Managerial Auditing Journal, Vol. 31 No. 2, pp. 180-196. https://doi.org/10.1108/MAJ-09-2014-1092
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited