Paul I. Louangrath
Appendix 1: ASEAN Corporate Governance Scorecard Items – Part D. The Disclosure and Transparency
C) Important Theories
2. LITERATURE REVIEW Moral Manager
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Based on this proposition, the study will first describe the concept of moral manager and corporate sustainability. Then the relation between moral manager and corporate sustainability will be addressed and the discussion be raised. The concepts of the study should contribute to the academic and practical field. The concepts prescribe managers’
moral value and moral virtue necessary for corporate sustainability with the rationale behind.
The propositions are also made to provide a basis for further empirical analysis.
2. LITERATURE REVIEW
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the desired end goal. Economic values relate to financial objectives and the use of rational and quantifiable means to their attainment. On the other hand, social values are predominantly altruistic or other-oriented in nature. Individuals with strong social values are oriented towards maintaining positive social relations and improving human well-being.
Environmental values relate to the desired end state of natural systems integrity and the means of human adaptation to, rather than domination over, the natural environment. Finally, balanced values are defined as the enduring belief that economic, social and environmental objectives are mutually desirable and interrelated. Financial concerns are not given ultimate precedence, but are balanced within a holistic framework of various stakeholder needs, interests and demands. They found that the stronger an individual’s social or environmental values, the greater their likelihood of adopting beneficial (and avoiding harmful) social and environmental firm actions respectively. They indicate that stronger social values may be particularly valuable in helping guard against corporate actions that could compromise sustainability goals. They also found that strong economic values increased the propensity to engage in corporate actions that undermine long-term sustainability and to work in controversial industries. Individuals with balanced values were as likely as those with strong economic values to pursue positive economic outcomes, but without the same downside potential for concern actions. The limitation of the work, however, is that it was conducted with a student sample population with limited life and work experience.
Despite the limitation, the study by Marcus et al. (2015) is interesting in the sense that it classifies values into economic, social, environmental, and balanced value and compares the influence exerted by values on the propensity to engage in actions. Based on its definition of social value, which is predominantly altruistic or other-oriented in nature, this is relevant to the moral value of altruism in this study. Their finding of the relation between the social value and the likelihood of adopting social and environmental actions can provide support to the concept that altruism is related to corporate sustainability (perhaps from social and ecological sustainability aspects). In addition, their finding that individuals with balanced values were as likely as those with strong economic values to pursue positive economic outcomes, but without the same downside potential for concern actions, indicates that individuals can seek to balance different types of values and hence balance their actions of concern. In other words, the finding supports the notion that individuals can manage to balance their actions with regard to several dimensions of sustainability and this fits with what a “moral manager” is supposed to do.
Another empirical study on value and sustainability (in term of strategies) that should be mentioned here employed values theory proposed by Schwartz. Kaldschmidt (2011) investigates empirically the relationship between leaders’ value and sustainability strategies.
Her dissertation on the topic: “The Values of Sustainability: The Influence of Leaders' Personal Values on Sustainability Strategies” is concerned with how leaders’ personal value influence the formulation and implementation of corporate sustainability strategies. The focal point is on the process of strategy development. According to Schwartz’s values theory (e.g., Bardi & Schwartz, 2003), values guide individuals and are grounded in what they see as desirable. Values may vary in their importance, but remain relatively stable. Values motivate behavior, serve interests, and are standards for the evaluation of decisions, actions, events, and so on. There is a dynamic relationship between values that reflects the conflicts and congruencies between them. Schwartz defines ten basic values (self-direction, stimulation, hedonism, achievement, power, security, conformity, tradition, benevolence, and universalism) which are summarized into higher order values, based on their motivational aspects. The higher order values comprise: openness to change which reflects the pursuit of
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personal intellectual and emotional inclinations without regard for the results or outcomes of the pursuit; self-enhancement which reflects a self-focus and the following of personal interests, regardless of the effects that these pursuits may have on others; conservation reflects self-restriction in favor of maintaining relationships and the status quo; and self- transcendence which concerns the achievement of personal interests through the prioritization of the promotion of others’ well-being and the welfare of the natural environment (p.101).
The findings from the quantitative phase, i.e., a survey of 28 German family owned small and medium sized enterprises (SMEs) who have already demonstrated their commitment to sustainability, indicate that a values profile combining self-transcendent and openness to change values characterizes the leaders of these firms and that this value profile leads to transformative, innovative, and credible corporate sustainability strategy types. In addition, the evidence from two contrasting case studies indicates that pro-socially and pro- environmentally oriented leaders promote their values and the associated strategies through active development of common and aligned values within the firm. This leads to a high consensus on strategic directions and implementation.
The empirical study by Kaldschmidt (2011) thus provide support to the relationship between values of altruistic nature as well as wisdom and corporate sustainability strategy types. Whereas the value of self-transcendence is more like the value of altruism, the value of openness to change seems consistent with the virtue of prudence since it is led by wisdom.
The study by Kaldschmidt (2011), however, differs from this study in several aspects, i.e., (a) its focus is on the sustainability strategy rather than on sustainability with different dimensions, (b) it identifies the value profile on the basis of Schwartz’s value theory whereas this study focuses on specific value of altruism., (c) it does not refer to the virtue theory whereas this study does bring in the notions from the virtue theory.
Another study on values and organizational sustainability that may be mentioned here is the conceptual one. Florea, Cheung and Herndon (2013) attempt to integrate scholarship on organizational sustainability, human resource practices, and values in delineating how four specific values support effective human resource practices in organizations. They claim that the four values that they propose (altruism, empathy, positive norm of reciprocity, and private self-effacement) are compatible with self-enhancement and self-transcendence values, which are contrasting values as identified by Shwartz (1992). The authors suggest that self- enhancement and self-transcendence values are important drivers for the adoption and effective implementation of high-performance human resource practices that lead to organizational sustainability across cultures. Specifically, they postulate that altruism, empathy, positive norm of reciprocity, and private self-effacement will lead to the emergence and development of high-performance human resource practices. They believe that these values support organizational sustainability in all its aspects: economic prosperity (through the positive norm of reciprocity), and environmental integrity and social sustainability (through altruism, empathy, and private self-effacement). While this conceptual work of Florea et al. (2013) provides yet another linkage between (four) values and organizational sustainability, its theoretical background for the proposed values could be improved. Florea et al. (2013) refer to Schwartz (1992)’s value dichotomy which contrasts self-enhancement and self-transcendence and attempt to classify their four values under this dichotomy with no linkage to basic values proposed by Schwartz. In addition, their propositions of relating specific values to different types of sustainability may be difficult to interpret the meanings since the values are overlapping and sustainability types are also interrelated.