IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v120y2014i3p405-421.html
   My bibliography  Save this article

Moral Degradation, Business Ethics, and Corporate Social Responsibility in a Transitional Economy

Author

Listed:
  • Qinqin Zheng
  • Yadong Luo
  • Stephanie Wang

Abstract

This article theoretically proposes and empirically verifies an understudied issue in the business ethics (BE) and corporate social responsibility (CSR) literature—how moral degradation (MD) in a society influences the relationship between BE or CSR and firm performance (i.e., corporate legitimacy and competitive advantage). Building on strategic choice theory, we propose that both BE and CSR become more important in enhancing business success when the perceived MD is heightened. Our analysis of 300 firms operating in China statistically confirms our hypotheses: first, under high MD, firms’ engagement in CSR results in higher corporate legitimacy and competitive advantage, and second, their adherence to ethical business codes leads to higher corporate legitimacy. We conclude the article by outlining the implications for both theory and practice. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Qinqin Zheng & Yadong Luo & Stephanie Wang, 2014. "Moral Degradation, Business Ethics, and Corporate Social Responsibility in a Transitional Economy," Journal of Business Ethics, Springer, vol. 120(3), pages 405-421, March.
    • Handle: RePEc:kap:jbuset:v:120:y:2014:i:3:p:405-421
    DOI: 10.1007/s10551-013-1668-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10551-013-1668-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-013-1668-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Julie Pirsch & Shruti Gupta & Stacy Grau, 2007. "A Framework for Understanding Corporate Social Responsibility Programs as a Continuum: An Exploratory Study," Journal of Business Ethics, Springer, vol. 70(2), pages 125-140, January.
    2. H. Igor Ansoff, 1987. "The emerging paradigm of strategic behavior," Strategic Management Journal, Wiley Blackwell, vol. 8(6), pages 501-515, November.
    3. R. Whittington, 1988. "Environmental Structure And Theories Of Strategic Choice," Journal of Management Studies, Wiley Blackwell, vol. 25(6), pages 521-536, November.
    4. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, March.
    5. Alan Muller & Ans Kolk, 2010. "Extrinsic and Intrinsic Drivers of Corporate Social Performance: Evidence from Foreign and Domestic Firms in Mexico," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 1-26, January.
    6. Abagail McWilliams & David D. Van Fleet & Kenneth D. Cory, 2002. "Raising Rivals’ Costs Through Political Strategy: An Extension of Resource‐based Theory," Journal of Management Studies, Wiley Blackwell, vol. 39(5), pages 707-724, July.
    7. Petra Christmann & Glen Taylor, 2006. "Firm self-regulation through international certifiable standards: determinants of symbolic versus substantive implementation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 863-878, November.
    8. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    10. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    11. Heledd Jenkins, 2006. "Small Business Champions for Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 67(3), pages 241-256, September.
    12. Andreas Georg Scherer & Guido Palazzo, 2011. "The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy," Journal of Management Studies, Wiley Blackwell, vol. 48(4), pages 899-931, June.
    13. Pursey P. M. A. R. Heugens & Muel Kaptein & J. (Hans) van Oosterhout, 2008. "Contracts to Communities: A Processual Model of Organizational Virtue," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 100-121, January.
    14. Dima Jamali & Ramez Mirshak, 2007. "Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context," Journal of Business Ethics, Springer, vol. 72(3), pages 243-262, May.
    15. Marjo Siltaoja, 2006. "Value Priorities as Combining Core Factors Between CSR and Reputation – A Qualitative Study," Journal of Business Ethics, Springer, vol. 68(1), pages 91-111, September.
    16. Henry B. Arthur, 1984. "Making business ethics useful," Strategic Management Journal, Wiley Blackwell, vol. 5(4), pages 319-333, October.
    17. Guido Palazzo & Andreas Scherer, 2006. "Corporate Legitimacy as Deliberation: A Communicative Framework," Journal of Business Ethics, Springer, vol. 66(1), pages 71-88, June.
    18. Tony Fang & Caroline Gunterberg & Emma Larsson, 2010. "Sourcing in an Increasingly Expensive China: Four Swedish Cases," Journal of Business Ethics, Springer, vol. 97(1), pages 119-138, November.
    19. Bilian Ni Sullivan & Pamela Haunschild & Karen Page, 2007. "Organizations Non Gratae? The Impact of Unethical Corporate Acts on Interorganizational Networks," Organization Science, INFORMS, vol. 18(1), pages 55-70, February.
    20. Matthias Ehrgott & Felix Reimann & Lutz Kaufmann & Craig Carter, 2011. "Social Sustainability in Selecting Emerging Economy Suppliers," Journal of Business Ethics, Springer, vol. 98(1), pages 99-119, January.
    21. Stephen J. Brammer & Stephen Pavelin, 2006. "Corporate Reputation and Social Performance: The Importance of Fit," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 435-455, May.
    22. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    23. Ran Zhang & Zabihollah Rezaee, 2009. "Do Credible Firms Perform Better in Emerging Markets? Evidence from China," Journal of Business Ethics, Springer, vol. 90(2), pages 221-237, December.
    24. Yadong Luo, 2004. "An Organizational Perspective of Corruption," Management and Organization Review, International Association of Chinese Management Research, vol. 1(1), pages 119-154, June.
    25. Luo, Yadong, 2008. "A Strategic Analysis of Product Recalls: The Role of Moral Degradation and Organizational Control," Management and Organization Review, Cambridge University Press, vol. 4(02), pages 183-196, July.
    26. Şükrü Özen & Fatma Küskü, 2009. "Corporate Environmental Citizenship Variation in Developing Countries: An Institutional Framework," Journal of Business Ethics, Springer, vol. 89(2), pages 297-313, October.
    27. Yadong Luo, 2008. "A Strategic Analysis of Product Recalls: The Role of Moral Degradation and Organizational Control," Management and Organization Review, The International Association for Chinese Management Research, vol. 4(2), pages 183-196, July.
    28. Dima Jamali & Ben Neville, 2011. "Convergence Versus Divergence of CSR in Developing Countries: An Embedded Multi-Layered Institutional Lens," Journal of Business Ethics, Springer, vol. 102(4), pages 599-621, September.
    29. Marie A. McKendall & John A. Wagner, 1997. "Motive, Opportunity, Choice, and Corporate Illegality," Organization Science, INFORMS, vol. 8(6), pages 624-647, December.
    30. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mai Chi Vu & Trang Tran, 2021. "Trust Issues and Engaged Buddhism: The Triggers for Skillful Managerial Approaches," Journal of Business Ethics, Springer, vol. 169(1), pages 77-102, February.
    2. Mai Chi Vu & Nicholas Burton, 2022. "Bring Your Non-self to Work? The Interaction Between Self-decentralization and Moral Reasoning," Journal of Business Ethics, Springer, vol. 181(2), pages 427-449, November.
    3. Yingzhao Xiao & Liuyang Xue & David Ahlstrom & Chundong Zheng & Xiling Hao, 2024. "To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 193(3), pages 655-677, September.
    4. Junzhe Ji & Pavlos Dimitratos & Qingan Huang & Taoyong Su, 2019. "Everyday-Life Business Deviance Among Chinese SME Owners," Journal of Business Ethics, Springer, vol. 155(4), pages 1179-1194, April.
    5. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2017. "The role of board gender and foreign ownership in the CSR performance of Chinese listed firms," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 75-99.
    6. Li Yuan & Robert Chia & Jonathan Gosling, 2023. "Confucian Virtue Ethics and Ethical Leadership in Modern China," Journal of Business Ethics, Springer, vol. 182(1), pages 119-133, January.
    7. Florian MARIN, 2020. "Collective Agreement - A Tool For Strengthening Public Policies In The Area Of Social Responsibility," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(1), pages 41-60, March.
    8. Qingyu Zhang & Sohail Ahmad, 2021. "Analysis of Corporate Social Responsibility Execution Effects on Purchase Intention with the Moderating Role of Customer Awareness," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    9. Xinyue Zhang & Dian Li & Xintong Guo, 2022. "Antecedents of Responsible Leadership: Proactive and Passive Responsible Leadership Behavior," Sustainability, MDPI, vol. 14(14), pages 1-22, July.
    10. Jamali, Dima & Karam, Charlotte & Yin, Juelin & Soundararajan, Vivek, 2017. "CSR logics in developing countries: Translation, adaptation and stalled development," Journal of World Business, Elsevier, vol. 52(3), pages 343-359.
    11. Ying Jiang & Xiaolong Xue & Chris K. Y. Lo & Hengqin Wu, 2019. "Corporate Ethical Responsibility in Management Research: Intellectual Bases, Focus, Salience, and Future," Sustainability, MDPI, vol. 11(8), pages 1-17, April.
    12. Wenwen Zhao & Zhe Zhang, 2020. "How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy and Relative Competitive Performance from a Micro-process Perspective," Journal of Business Ethics, Springer, vol. 166(2), pages 425-440, October.
    13. Mai Chi Vu, 2021. "Tensions and Struggles in Tackling Bribery at the Firm Level: Perspectives from Buddhist-Enacted Organizational Leaders," Journal of Business Ethics, Springer, vol. 168(3), pages 517-537, January.
    14. Jianhong Zhang & David L. Deephouse & Désirée van Gorp & Haico Ebbers, 2022. "Individuals’ Perceptions of the Legitimacy of Emerging Market Multinationals: Ethical Foundations and Construct Validation," Journal of Business Ethics, Springer, vol. 176(4), pages 801-825, April.
    15. Lin Liao & Guanting Chen & Dengjin Zheng, 2019. "Corporate social responsibility and financial fraud: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 3133-3169, December.
    16. Potdar, Balkrushna & Garry, Tony & McNeill, Lisa & Gnoth, Juergen & Pandey, Rakesh & Mansi, Mansi & Guthrie, John, 2020. "Retail employee guardianship behaviour: A phenomenological investigation," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    17. Kim, Changsu & Kim, Jungkeun & Marshall, Roger & Afzali, Hajir, 2018. "Stakeholder influence, institutional duality, and CSR involvement of MNC subsidiaries," Journal of Business Research, Elsevier, vol. 91(C), pages 40-47.
    18. Dirk Clercq & Narongsak Thongpapanl & Maxim Voronov, 2018. "Sustainability in the Face of Institutional Adversity: Market Turbulence, Network Embeddedness, and Innovative Orientation," Journal of Business Ethics, Springer, vol. 148(2), pages 437-455, March.
    19. Thamir Al Barrak & Amel Kouaib, 2024. "Sustainability Commitment Versus Earnings Management Practices: Saudi Insights," Sustainability, MDPI, vol. 16(12), pages 1-20, June.
    20. Xiaodong Li & Xiaojiang Gao‐Zeller & Tracey E. Rizzuto & Fan Yang, 2019. "Institutional pressures on corporate social responsibility strategy in construction corporations: The role of internal motivations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 721-740, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ioanna Boulouta & Christos Pitelis, 2014. "Who Needs CSR? The Impact of Corporate Social Responsibility on National Competitiveness," Journal of Business Ethics, Springer, vol. 119(3), pages 349-364, February.
    2. Wenbin Long & Sihai Li & Huiying Wu & Xianzhong Song, 2020. "Corporate social responsibility and financial performance: The roles of government intervention and market competition," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 525-541, March.
    3. Joern H. Block & Marcus Wagner, 2014. "The Effect of Family Ownership on Different Dimensions of Corporate Social Responsibility: Evidence from Large US Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 23(7), pages 475-492, November.
    4. Tolossa Fufa Gulema & Yadessa Tadesse Roba, 2021. "Internal and external determinants of corporate social responsibility practices in multinational enterprise subsidiaries in developing countries: evidence from Ethiopia," Future Business Journal, Springer, vol. 7(1), pages 1-19, December.
    5. Boehe, Dirk Michael & Cruz, Luciano Barin & Ogasavara, Mário Henrique, 2010. "How can Firms from Emerging Economies Enhance their CSR-Supported Export Strategies?," Insper Working Papers wpe_209, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    6. Jamali, Dima & Karam, Charlotte & Yin, Juelin & Soundararajan, Vivek, 2017. "CSR logics in developing countries: Translation, adaptation and stalled development," Journal of World Business, Elsevier, vol. 52(3), pages 343-359.
    7. Shirodkar, Vikrant & Liedong, Tahiru Azaaviele & Rajwani, Tazeeb & Lawton, Thomas C., 2024. "MNE nonmarket strategy in a changing world: Complexities, varieties, and a values-based approach," International Business Review, Elsevier, vol. 33(2).
    8. Wang Shuo & Gao Yuhui, 2016. "What do we know about corporate social responsibility research? a content analysis," The Irish Journal of Management, Sciendo, vol. 35(1), pages 1-16, April.
    9. Sadok El Ghoul & Omrane Guedhami & Yongtae Kim, 2017. "Country-level institutions, firm value, and the role of corporate social responsibility initiatives," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 360-385, April.
    10. Danny Zhao‐Xiang Huang, 2022. "An integrated theory of the firm approach to environmental, social and governance performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1567-1598, April.
    11. Aneta Oniszczuk-Jastrząbek & Ernest Czermański & Giuseppe T. Cirella, 2020. "Sustainable Supply Chain of Enterprises: Value Analysis," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    12. Hajer Tebini & Bouchra M’Zali & Pascal Lang & Paz Méndez-Rodrı́guez, 2015. "Social Performance and Financial Performance: A Controversial Relationship," International Series in Operations Research & Management Science, in: Enrique Ballestero & Blanca Pérez-Gladish & Ana Garcia-Bernabeu (ed.), Socially Responsible Investment, edition 127, chapter 0, pages 53-73, Springer.
    13. repec:cte:idrepe:id-09-02 is not listed on IDEAS
    14. Jason Zhang & Hong Zhu & Hung-bin Ding, 2013. "Board Composition and Corporate Social Responsibility: An Empirical Investigation in the Post Sarbanes-Oxley Era," Journal of Business Ethics, Springer, vol. 114(3), pages 381-392, May.
    15. Kim, Moshe & Surroca Aguilar, Jorge & Tribo Gine, José Antonio, 2009. "The effect of social capital on financial capital," IC3JM - Estudios = Working Papers id-09-02, Instituto Mixto Carlos III - Juan March de Ciencias Sociales (IC3JM).
    16. Woo, Donghyup & Suresh, Nallan C., 2022. "Voluntary agreements for sustainability, resource efficiency & firm performance under the supply chain cooperation policy in South Korea," International Journal of Production Economics, Elsevier, vol. 252(C).
    17. Aneta Havlinova & Jiri Kukacka, 2023. "Corporate Social Responsibility and Stock Prices After the Financial Crisis: The Role of Strategic CSR Activities," Journal of Business Ethics, Springer, vol. 182(1), pages 223-242, January.
    18. Anna-Lena Maier, 2021. "Political corporate social responsibility in authoritarian contexts," Journal of International Business Policy, Palgrave Macmillan, vol. 4(4), pages 476-495, December.
    19. Jacob Brower & Peter A. Dacin, 2020. "An Institutional Theory Approach to the Evolution of the Corporate Social Performance – Corporate Financial Performance Relationship," Journal of Management Studies, Wiley Blackwell, vol. 57(4), pages 805-836, June.
    20. Amidu P. Mansaray & Liu Yuanyuan & Sesay Brima, 2017. "The Impact of Corporate Social Responsibility Disclosure on Financial Performance of Firms in Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 137-146.
    21. Patricia Crifo & Marc-Arthur Diaye & Sanja Pekovic, 2016. "CSR related management practices and Firm Performance," Post-Print hal-01278585, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:120:y:2014:i:3:p:405-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.