DOING GOOD IN BUSINESS. Examining the importance of morality in business contexts

Abstract

Multiple scandals in organizations exposed cheaters and fraudsters. A lot of effort in practice and in science is devoted to the question how problem behavior in organizations arises and how it can be prevented. However, what about positive organizational behavior? Are efforts of organizations to do the right thing accurately perceived and valued? Or are these taken as self-evident or even mistrusted? This is important to examine because external responses to organizational moral behavior might either reinforce positive efforts – when these are noticed and valued or discourage organizations from continuing these efforts – when they are mistrusted or dismissed. I address these questions in the current dissertation. The research in this thesis examines communications about CSR activities. CSR activities are activities demonstrating ethical or moral concerns of businesses; thus CSR activities speak to the moral image of the organization. This thesis explains why involvement in CSR activities as indicating positive moral behavior of some companies or some professional groups might not be taken at face value. A theoretical analysis elucidates a vicious circle of moral behavior where negative reactions of the media, politicians and general public to positive moral behaviors of the organization lead to a reduction in moral behavior and subsequent negative reactions of the general public. Thus, criticizing companies and professional groups for their supposed lack of morality might not be the most effective way to engage with those parties to foster change. In fact, it might actually backfire. The research reported in the current dissertation shows that it is not so easy for companies suffering from a negative moral image to improve this by demonstrating positive moral behavior. Even when they report about their actual CSR efforts, this tends to be distrusted by relevant stakeholders such as prospective customers and employees. In four empirical chapters, I examine reactions of different types of stakeholders (e.g., the general public, employees and investors) to positive moral behavior in business contexts from a social psychological perspective. Building on Social Identity Theory and social evaluation research, I test predictions derived from an overall model explaining how, why and when communications about positive corporate moral behavior (CSR), impact on reactions of various stakeholders. These studies reveal that perceptions of morality play a crucial role in our evaluations of not only individuals but also of companies.