Navigating ethical minefields: micro‐foundations of corporate political work in ethical and sustainable business performance

David Yulong Liu, Justin Zuopeng Zhang, Jimmy Sun, Muhammad Mustafa Kamal () and Bhumika Gupta ()
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David Yulong Liu: RMIT University - Royal Melbourne Institute of Technology University
Justin Zuopeng Zhang: UNF - University of North Florida [Jacksonville]
Jimmy Sun: Otago Polytechnic [New Zealand]
Muhammad Mustafa Kamal: University of Exeter Business School - University of Exeter, JU - The University of Jordan
Bhumika Gupta: LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], IMT-BS - MMS - Département Management, Marketing et Stratégie - TEM - Télécom Ecole de Management - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]

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Abstract: In an era of rising geopolitical tensions and environmental instability, corporate political activities have become increasingly intertwined with ethical challenges and sustainability requirements. This study investigates the influence of environmental dynamics and corporate ethical responsibility on interorganizational conflict and sustainable performance within international B2B service organizations. Drawing on stakeholder theory, institutional theory, and resource dependence theory, we formulate and evaluate a model in which ethical duty serves as both a direct mitigator of conflict and a moderator of the relationship between environmental uncertainty and interfirm tensions. Using a mixed‐methods research strategy, we integrate quantitative data from 377 firms with qualitative case‐study insights, demonstrating that environmental dynamics substantially diminish organizations' ethical commitments and exacerbate interorganizational conflict, thereby undermining sustainable performance. Firms with heightened ethical responsibility are better able to mitigate the adverse effects of environmental instability on conflict. The findings are corroborated by qualitative insights from a case study of a large infrastructure firm, demonstrating how ethical governance and stakeholder alignment help organizations manage regulatory ambiguity and relational challenges. This research disaggregates corporate politics by examining conflict and ethical responsibility, thereby enhancing micro‐foundational insights into political labor and its consequences for sustainability in intricate institutional contexts.

Keywords: Sustainable performance; Stakeholder theory; Political work; Interorganizational conflict; Geopolitical uncertainty; Corporate ethical responsibility (search for similar items in EconPapers)
Date: 2026
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Published in Business Strategy and the Environment, inPress, ⟨10.1002/bse.71083⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05647972

DOI: 10.1002/bse.71083

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