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Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes

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  • E. Schumacher
  • David Wasieleski

Abstract

This article answers several calls—coming as well from corporate governance practitioners as from corporate governance researchers—concerning the possibility of complying simultaneously with requirements of innovation and ethics. Revealing the long-term orientation as the variable which permits us to link the principal goal of organization, being “survival,” with innovation and ethic, the article devises a framework for incorporating ethics into a company’s processes and strategies for innovation. With the principal goal of organizations being “survival” in the long-term, it is assumed that innovation is necessary in order to realize a going concern. Firms that do not innovate and adapt to rapidly changing business environments are less likely to be sustainable. Thus, it is in a business’ best interests to adopt an innovation process for long-term success. We posit that there are two simultaneous sources of innovation and change that are unavoidable and embedded in the corporate landscape. First, we argue for genetically embedded, Darwinian explanations for adaptations that enable an entity’s survival. This view is combined with more conventional, social science explanations for change. Our new, comprehensive model of the governance of innovation processes hinges on the one hand on an organization’s long-term orientation, which we argue, is not possible without a consideration of an ethical dimension. On the other hand, the model employs, for the first time, the concept of duality, in order to make the positive coexistence of innovation and ethic analytically visible. Guided by this concept the roots of the ethic within innovation are traced from both natural science forces for change, and cultural pressures operating on members of an organization. We present our Integrated Causal Model of Innovation and propose theoretical relationships that will generate numerous avenues for future research in the field, and help managers to reorient their governance strategies. Copyright Springer Science+Business Media B.V. 2013

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  • E. Schumacher & David Wasieleski, 2013. "Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes," Journal of Business Ethics, Springer, vol. 113(1), pages 15-37, March.
    • Handle: RePEc:kap:jbuset:v:113:y:2013:i:1:p:15-37
    DOI: 10.1007/s10551-012-1277-7
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    Cited by:

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    2. Cristina Mele & Tiziana Russo-Spena & Marco Tregua & Fabio Greco, 2019. "Communication practices in the diffusion of social-business innovation: Insights from B-Corporations," MERCATI & COMPETITIVIT?, FrancoAngeli Editore, vol. 2019(4), pages 11-27.
    3. Rob Lubberink & Vincent Blok & Johan Van Ophem & Onno Omta, 2017. "Lessons for Responsible Innovation in the Business Context: A Systematic Literature Review of Responsible, Social and Sustainable Innovation Practices," Sustainability, MDPI, vol. 9(5), pages 1-31, May.
    4. Muel Kaptein, 2019. "The Moral Entrepreneur: A New Component of Ethical Leadership," Journal of Business Ethics, Springer, vol. 156(4), pages 1135-1150, June.
    5. Wade M. Chumney & David Wasieleski & E Günter Schumacher, 2017. "The conflict between U.S. patent protection and technological innovation," Post-Print hal-01768893, HAL.
    6. Abdullah Abdulaziz-Alhumaidan & Mohammad Jamal Khan, 2024. "The Effect of Ethical Strategy and Innovation on Economic Performance: a Study on Tunisian B2B Enterprises," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2589-2606, March.
    7. Shandana Shoaib & Yehuda Baruch, 2019. "Deviant Behavior in a Moderated-Mediation Framework of Incentives, Organizational Justice Perception, and Reward Expectancy," Journal of Business Ethics, Springer, vol. 157(3), pages 617-633, July.
    8. Stefan Schaltegger & Roger Burritt, 2018. "Business Cases and Corporate Engagement with Sustainability: Differentiating Ethical Motivations," Journal of Business Ethics, Springer, vol. 147(2), pages 241-259, January.
    9. Elina Riivari & Anna-Maija Lämsä, 2019. "Organizational Ethical Virtues of Innovativeness," Journal of Business Ethics, Springer, vol. 155(1), pages 223-240, March.
    10. Michaela Hausdorf, 2024. "What You Get Is What You See—The Mutual Relationships between Images of Human Nature and Business Model Innovation," Sustainability, MDPI, vol. 16(3), pages 1-15, February.
    11. Dmitry A. Ruban, 2022. "Analytical Review of Conjugation of the Ethical Bases of Artificial Intelligence Implementation and Ecologization in Corporate Governance," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(2), pages 390-418.
    12. Edwin Rühli & Sybille Sachs & Ruth Schmitt & Thomas Schneider, 2017. "Innovation in Multistakeholder Settings: The Case of a Wicked Issue in Health Care," Journal of Business Ethics, Springer, vol. 143(2), pages 289-305, June.
    13. Sokoli, Olta & Kapaj, Ilir & Doluschitz, Reiner, 2020. "Determining Factors that Affect Farming in the Albanian Milk Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 11(03), September.

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