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Ethical values in the evaluation of corporate social performance
Journal article   Peer reviewed

Ethical values in the evaluation of corporate social performance

Monte Wynder and Kirsty Dunbar
Managing Auditing Journal, Vol.31(2), pp.180-196
2016
DOI: https://doi.org/10.1108/MAJ-09-2014-1092
url
https://doi.org/10.1108/MAJ-09-2014-1092View
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Abstract

ethics corporate social responsibility balanced scorecard performance evaluation moral intensity
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.

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