Contracts to Communities: A Processual Model of Organizational Virtue

Pursey Heugens, Muel Kaptein and Hans van Oosterhout

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: In the face of systemic challenges to corporate legitimacy, scholars and managers alike have been rethinking traditional answers to the question: What does it take to be a good company? We approach this question in two novel ways. We offer a normative answer, grounded in virtue ethics, by introducing a threefold typology of organizational forms. The moral goodness of each form depends on the congruence between its purpose and virtues. But we also offer a positive answer in the form of a processual model which traces corporate goodness to its empirical antecedents and consequences. The model defies a view of organizations as innately good or evil, but rather portrays virtue as the sediment of a value infusion process. We predict that if managers succeed in establishing in their organizations the kind of virtues necessary to support collective moral agency, they can expect to reap gains like enhanced effectiveness and legitimacy. However, when they neglect their moral responsibilities, the result will likely be organizational demise.

Keywords: Business ethics; Corporate performance; Normative theorizing; Organizational goodness; Positive theorizing; Stakeholder theory; Virtue ethics (search for similar items in EconPapers)
JEL-codes: F23 M M14 (search for similar items in EconPapers)
Date: 2007-04-04
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Persistent link: https://EconPapers.repec.org/RePEc:ems:eureri:9728

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