The Ethical Behaviour of Firms: do Ethics Work?

1. Dissertation title Proposal Does ethical behaviour pay? An investigation of whether the Western consumer society cares about ethical behaviour of firms, and in such potentially could have an influence on corporate social responsibility behaviour of organizations, and hence give an indication of whether ethical behaviour pays in terms of consumer popularity. 2. Introduction and overall aim, objectives and rational for the research Companies such as Enron, Nike, Nestle and Exxon, just to mention a few, have been in the spotlight due to their “un-ethical” behaviour. And arguably cases as such have catapulted corporate social responsibility on the agenda of business research. Cases as above mentioned arguably make it clear that corporate social responsibility and business ethics are very important to modern business, and thus make it an excellent research topic for a business dissertation. It is timely and relevant! Ethics in academic terms has many definitions, and thus can potentially make it difficult to draw the lines between what is ethical and what is not. But how is ethics defined in layman’s terms? If people were asked to give their own definitions of ethics, would it still be as hard to draw the line around ethical behaviour? And considering that many companies who arguably behaved “unethical” are still very successful in business, do people actually care about ethical behaviour of firms? Would they choose one product over another due to the knowledge that the company behind it is “more” ethical? If they don’t, how does ethical behaviour then pay off? And if they do, how much influence could they potentially assert? The dissertations aim is to give some insights on whether corporate social responsibility and ethical behaviour really matters to consumers. And in such has it a potential power to influence corporate behaviour, as then ethical behaviour would really pay off? The length of the dissertation will vary between 10’000 to 12’000 words and the first draft shall be completed within 3 months. After 1 moth the feedback of the supervisor should be given, and the final dissertation shall be handed in 2 months after that, with all the amendments being made accordingly. 3. Critical review of the existing literature Corporate Social Responsibility seems a new fad in the business environment, and corporate social reports are published by many firms nowadays. There seems to be no consensus in writers of when this concept of corporate social responsibility originated, but what writers do however agree on is that the emergence of the subject has to do with the growth, and thus power, of large companies, and the unfortunate ill-treatment of societal issues that have come with it (Boatright, 1993 and McEwan, 2001). There are various definitions of corporate social responsibility. Boatright (1993:386) describes social responsibility as being “the selection of corporate goals and the evaluation of outcomes not solely by the criteria of profitability and organizational well-being but by ethical standards or judgements of social desirability. The exercise of social responsibility in this view must be consistent with the corporate objective of earning a satisfactory level of profit, but it implies a willingness to forego a certain measure of profit in order to achieve noneconomic ends”. In this definition, corporations’ first aim should be to make a satisfactory level of profit, naturally, but then however the corporation should not focus on making further excessive profits but however should try and do something of value for society. What will be relevant to this research is to compare this definition, with the ideas and definitions of the general population. To then compare and analyze the differences, or no differences, in definition, and thus expectation. Arguably, one of the most famous economists Milton Friedman wrote that corporations only have one responsibility, and that is to make money (cited in Frank, 2004). In this view, any extra efforts made by companies in attaining broader social goals, is just a waste of money. Also Trevino and Nelson (1999) outline, that the corporation is responsible to numerous stakeholders, and therefore has a responsibility to make a profit, simply to maintain their employees and please the shareholders. A typical argument why organizations only have the responsibility to make money is because this classical view believes that “In a well-ordered society, corporations attend to business while government and other institutions fulfil their proper roles” (Boatright, 1993:94). Arguably this statement could be challenged by simply looking at the 100 largest companies’ revenues, because their GDP nowadays exceeds the GDP of 50% of the earth’s countries (McIntosh et al, 1998). This therefore means that the top 100 companies are a lot more powerful than many countries, and thus it could be argued that with such power, certain responsibilities should also arise. This is relevant in outlining, firstly the changes in the business environment, and secondly in highlighting the enormous power organizations really have nowadays. Particularly interesting will be to identify if people actually know about this, and if it will change (or influence) their opinion about corporate social responsibility. But the real interest in this investigation will be how much do consumers actually care about corporate social responsibility. Is the ethic of selfishness; Egoism (Hinman, 2003) really true? Do people really life secluded from each other? Not giving nor taking to-from no one. The book by Frank (2004) “what Price the Moral High Ground?” does contradict this view, and puts forward empirical research which seems to imply that people do not solely behave in a selfish way. This will be of particular interest since it will determine a. if people are interested whether or not organizations behave ethically and b. if they care about what is happening around them, and are willing to act for the common good. Baudrillard (1970, cited in Heath, 2002) argues that we are living in a consumer society, were materialism is at its pique. Also other writers are noting on the phenomenon of our materialistic Western society. Hoffman (1996) argues that nowadays in America, success of life is all defined in materialistic terms. Arguably not only in America this is the case, but generally all Western societies seem to have made a move towards a more materialistic value system. The ethics of consumerism has gradually replaced traditional values and promoted instant gratification and hedonism (Crane and Matten, 2004). Hendry (2004) in his book “Between Enterprise and Ethics, Business Management in a Bimoral Society” notes that the morality of self-interest has gained much more social legitimacy in recent years, compared to the traditional morality. Consumption has grown significantly and the per capita private consumption in Western Europe has grown by over 50% since the 1980’s (Crane and Matten, 2004). Whether this growth in consumption is desirable, and most of all sustainable would be an entire dissertation topic for itself. Not only is the move of consumerism a questionable one when it comes to ethics, but arguably also is this trend of large multinational corporations with their enormous power influence that have come with it. “It is not about how to conduct business, but whether to continue to sustain an enterprise that is based on increased consumption” (Westra and Werhane, 1998). Of particular interest and relevance to the dissertation will be how much this trend of consumerism and materialism is affecting people individually, and how much in turn this will affect people’s attitude towards corporate social responsibility, and thus willingness to forego certain consumption patterns for a more ethical business environment. 4. Research Methodology Proposal: a.) Research Strategy and design There are two different research theories, namely the deductive; theory testing, and inductive; theory building (Saunders et al., 2003). The dissertation will walk on both paths in regards to the research theory, as the outcome will not be able to build a theory, but however it will also not be a theory testing research, as there is not much theory existing on this field of research. Therefore, it will be a combination of both, but the inductive theory should be predominant. As for the research philosophy, there are two different corners of thoughts, the Realist (Objectivist) corner and the Relativist (Subjectivist) corner. The Realist approach is positivistic and with the viewpoint of a natural scientist, it believes in external reality and quantitative data research. The Relativist approach believes in the social construction of reality and therefore focuses more on qualitative data and interpretivism (Saunders et al 2003). This research will be based on a relativist philosophy. Firstly because the author can more identify with this philosophy, and arguably has thus chosen a subject requiring this research philosophy. And secondly because it will make more sense to collect and focus on qualitative data, as the research is trying to determine the attitudes of people to then interpret the possible effect this might have on business behaviour in regards to ethics. To determine the research strategy we firstly need to identify what is meant by the term research strategy. “By a research strategy, we simply mean a general orientation to the conduct of business research” (Bryman and Bell, 2003:25). They make a distinction whether research is conducted through quantitative or qualitative data. The strategy for this dissertation will mainly be based on qualitative research due to the fact that it is based on a relativistic philosophy, as already mentioned above. However, there will also be some quantitative data used, to identify how many people would react and believe a certain way. The validity and reliability (Bryman and Bell, 2003) of the secondary data that will be presented in the dissertation should arguably depict a valid and reliable picture of the subject matter. However, this data will not provide a holistic picture of the subject matter, and therefore the primary research will have to be conducted. But when it comes to secondary research, validity and reliability might prove a little trickier. There are certain features of this research that can not be ignored. Firstly, it will be impossible to interview everyone who could have an opinion and influence on the subject matter, therefore only a sample can be taken. How representative this sample will be no one can tell. Also, if a different researcher would undertake the very same study, the results will most likely be different, firstly because people might tell another person different things, but also because interpretations may vary. On top of that, what people say is the truth and what they actually believe to be the truth and what really is the truth, may all be different things. Also may there be some variations in what respondents’ say they do and what they actually do (Lave et al. 1977 & Clement, 1982, cited in Machin, 2002). This arguably may hold especially true when asking questions about a subject, where an implied right answer is given by society. Also must be noticed that attitudes, believes, habits, opinions and interests seem to vary in stability by respondents; one day they answer one thing, the next day they answer something else (Foddy, 1993). And it has to be acknowledged that all of this will make it very difficult to depict a reliable picture on people’s attitudes. The research design seems to prove to be difficult to categorize, and hopefully it will become clearer during the research process. It will however certainly have some aspects of a comparative design (Bryman and Bell, 2003). Because it aims to identify if people actually do care about business ethics, and thus they will be asked questions about different cases, and their attitudes about them will be compared. b.) Data sources The secondary research will mainly rely on books, articles, online references and databases such as This research should outline and show the differing views and theories on the subject matter. The secondary research will define the initial stage of the dissertation, and then help to guide the primary research which hopefully will reveal some new issues. These new insights then again will be investigated and tried to make sense of by going back to some further secondary research, again from the above mentioned sources. c.) Data collection methods Malhotra and Birks (2000) outline two distinct types of market researches; the problem identification research and the problem solving research. This dissertation will more be an investigatory research, and thus seems more in the lines of an identification research. Therefore what seems to be crucial is to gain insights from people. Which people to interview does not seem to matter, as most adults, and even adolescents seem to matter for this topic of research. Therefore a wide range, from all age groups, races, employment backgrounds and sex shall be taken. There are two ways this information gathering process will take place; one is by structured face-to-face interviews, and the other is through self-completion questionnaires. Campbell (cited in Bulmer, 2004) argues that open interviews would be a good tool to assist in the study of public attitudes on unfamiliar social and political issues. Therefore it is argued that this therefore is a good tool to be used for this research. The structured face-to-face interviews will be used to identify important issues, which will then be focused on, in the questionnaire. Questionnaires on the other hand are usually intended to gain quantitative data (Birn, 2000), however it will be tried to collect also some qualitative data as well. Therefore, the construction of this questionnaire will be very important. Questionnaire design There are numerous issues that would need to be taken into consideration when designing a questionnaire. Following is an outline of the main issues that will be taken into consideration when designing the questionnaire: -Wording; small changes in wording can lead to very different responses, and respondents often misinterpret questions (Foddy, 1993). -Design; the layout and design are most important in order to avoid confusion (Sanchez cited in Bulmer, 2004). -Sequence; answers given to previous questions will affect the answers to next questions, hence outlining the importance of the order of questions (Foddy, 1993). -Sensitivity; careful when formulating sensible questions (Foddy, 1993). -Memory; the human memory has its limitations, thus caution when asking questions requiring a good memory (Foddy, 1993). Naturally all questionnaires will be pre-tested to ensure that only one possible interpretation of the questions is possible (Noelle-Neumann, cited in Bulmer, 2004) d.) Data analysis techniques The data will be analyzed using a template analysis. This means that firstly categories will be drawn out, determined by the trend that can be identified from the collected data. Then the data will be unitized according to the important categories that have been identified. And then the units will be placed into their respective categories (Saunders et al, 2003). 5. Ethical Implications Research ethics is of particular importance when undertaking primary research. Therefore the questions for the structured interview and the questionnaires will be designed in a sensible way in the best attempt not to offend anyone. People will be informed what the research is designed and intended for. Naturally all information will be treated with most confidentiality and the information will not be given to any other source. Also will the research not fabricate nor falsify any data presented in the dissertation. (Spata, 2003) 6. Timetable This following timetable will be based on 5 days a week and an 8hour working day for the first 3months and then the final 2 months of the period of the dissertation. 2 weeks: Reading literature, drawing out the main themes 3 days:Write the Methodology 2 days:Drawing up the questions for the face-to-face interview 2 days:Conducting face-to-face interviews 2 days:Evaluating face-to-face interview results 2 days:Draw up a questionnaire (based on results from interviews) 4 days:Carry out Questionnaire 4 days:Evaluate Questionnaire 4 days:Write the findings 4 days:Write the first chapter 4 days:Write the second chapter 4 days:Write the third chapter 4 days:Write the fourth chapter 4 days: Write interpretations of findings 3 days:Write the conclusion 2 days:Sort out the Appendixes & personal reflection and Abstract 2 days :“Security days” The plan for the two moths after the feedback will need to be established after it can be determined how much change has to be done to the dissertation. 7a.) References Birn J. R. (1990, 2000) The Handbook of International Market Research Techniques (2nd edn.), Ebbw Vale; MRS (the market research society) Boatright J.R, (1993) Ethics and the Conduct of Business, Englewood Cliffs; Prentice Hall Bryman A. and Bell E. (2003) business research methods, Oxford: Oxford University Press Bulmer M. (2004) Questionnaires Volume I, London; Sage Publications Bulmer M. (2004) Questionnaires Volume II, London; Sage Publications Crane A. and Matten D. (2004) business ethics, A European Perspective, Oxford: Oxford University Press Foddy W. (1993) Constructing questions for interviews and questionnaires, theory and practice in social research, Cambridge; Cambridge University Press Frank R. H, (2004) What Price the Moral High Ground? Ethical Dilemmas in Competitive Environments, Princeton; Princeton University Press Heath E. (2002) Morality & the Market, Ethics & Virtue in the Conduct of Business, New York; McGraw Hill Hendry J. (2004) Between Enterprise and Ethics, Business and Management in a Bimoral Society, Oxford; Oxford University Press Hinman L.M, (2003) Ethics, A Pluralistic Approach to Moral Theory (3rd edn.), Toronto; Thomson * Wadsworth Hoffman E. (1996) The Unpublished Papers of Abraham Maslow, Thousand Oaks: Sage Publications Machin D. (2002) Ethnographic Research for Media Studies, London; Arnold Malhotra N. K. and Birks D. F. (2000) Marketing Research, An Applied Approach (European Edition) Edinburgh: Pearson Education, Financial Times Prentice Hall McEwan T, (2001) Managing Values and Beliefs in Organisations, Edinburgh; Financial Times Prentice Hall McIntosh M, Leipzinger D, Jones K. and Coleman G, (1998) Corporate Citizenship, Successful strategies for responsible companies, London: Financial Times Pitman Publishing. Saunders M., Lewis P. and Thornhill A. (1997:2003) Research methods for Business Students (3rd edn.) Essex; FT Prentice Hall Spata A. V. (2003) Research Methods, Science and Diversity, USA: John Wile & Sons, Inc. Trevino L.K. and Nelson K.A. (1999) Managing Business Ethics, Straight Talk About How To Do It Right (2nd edn), New York; John Wiley & Sons, Inc. Westra L. and Werhane P. H. (1998) The Business of Consumption, Environmental Ethics and the Global Economy, Lanham: Rowman & Littlefield Publishers, Inc. 7b.) Bibliography Baker M. J. (2002) Research Methods, Marketing Review Vol.3 Issue 2 p. 167 Balsley H. L. and Clower V. T. (1988) Research for Business Decisions: Business Research Methods (4th edn.), Columbus: Publishing Horizons, Inc. Budd J. W. (Winter 2004) Mind Map as Classroom Exercises, Journal of Economic Education Vol.35, Issue 1, p.35 Burns A. C. and Bush R. F. (1995:1998:2000) Marketing Research (3rd edn.) New Jersey; Prentice Hall Daymon C. and Holloway I. (2002) Qualitative Research Methods in Public Relations and Marketing Communications, London; Routledge Easterby-Smith M., Thorpe R. and Lowe A. (2002) Management Research, An Introduction (2nd edn.) London; Sage Easton G. (1982:1992) Learning from Case Studies, Harlow; FT Prentice Hall Gill J. and Johnson P. (1991:1997) Research methods for managers (2edn.), London; Paul Chapman Publishing Ltd. Hartley R. F. (2005) Business Ethics, Mistakes and Successes, Place Unknown: John Wiley & Sons Inc.

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