Joshua D. Margolis

Social Issues and Management: Our Lost Cause Found

The Academy of Management (AOM) was founded to help meet society’s social and economic objectives and in so doing, serve the public interest. However, scholarship in our field has pursued society’s economic objectives much more than it has its social ones. Surveying the supply and demand for all of the empirical research published by the AOM between 1958 and 2000 and all of the research published between 1972 and 2001 that attempts to link a firm’s social and economic performance, we provide evidence for this claim. We then propose reasons for why this research imbalance exists and conclude by foreshadowing a research agenda that honors our field’s historic social values.

Does it Pay to Be Good...And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance

In an era of rising concern about financial performance and social ills, companies’ economic achievements and negative externalities prompt a common question: Does it pay to be good? For thirty-five years, researchers have been investigating the empirical link between corporate social performance (CSP) and corporate financial performance (CFP). In the most comprehensive review of this research to date, we conduct a meta-analysis of 251 studies presented in 214 manuscripts. The overall effect is positive but small (mean r = .13, median r = .09, weighted r = .11), and results for the 106 studies from the past decade are even smaller. We also conduct sensitivity analyses to determine whether or not the relationship is stronger under certain conditions. Except for the effect of revealed misdeeds on financial performance, none of the many contingencies examined in the literature markedly affects the results. Therefore, we conclude by considering whether, aside from striving to do no harm, companies have grounds for doing good - and whether researchers have grounds for continuing to look for an empirical link between CSP and CFP.

Bringing Ethics into Focus: How Regulatory Focus and Risk Preferences Influence (Un)ethical Behavior

In four laboratory studies, we find that regulatory focus induced by situational cues (such as the framing of a task or incentive schemes) influences people’s likelihood to cross ethical boundaries. A promotion focus leads individuals to be more likely to act unethically than a prevention focus (Studies 1, 2, and 3). These higher levels of dishonesty are explained by the influence of a person’s induced regulatory focus on his or her behavior toward risk. A promotion focus leads to risk-seeking behaviors, while a prevention focus leads to risk avoidance (Study 3). Through higher levels of dishonesty, promotion focus also results in higher levels of virtuous behavior (Studies 2 and 3), thus providing evidence for compensatory ethics. Our results also demonstrate that an organization’s framing of ethics influences individuals’ ethical behavior and does so differently depending on an individual’s induced regulatory focus (Study 4).

Toward an Ethics of Organizations

The organization is importantly different from both the nation-state and the individual and hence needs its own ethical models and theories, distinct from political and moral theory. To develop a case for organizational ethics, this paper advances arguments in three directions. First, it highlights the growing role of organizations and their distinctive attributes. Second, it illuminates the incongruities between organizations and moral and political philosophy. Third, it takes these incongruities, as well as organizations’ distinctive attributes, as a starting point for suggesting an agenda for an ethics of organizations.

Responsibility in Organizational Context

Why does it matter that every negative thought you have had about car salespeople, they have likely had about you? The answer to this question opens up the distinctive challenges, and opportunities, facing business ethics. Those challenges and opportunities emerge from the significant bearing organizational reality has upon individuals’ conduct. As we consider how to assign responsibility for misconduct; how to provide guidance to organizational actors about what they ought to do; and how to develop responsive ethical theory, we need to take psychological and social forces into account. Organizations shape human behavior in ways that pose unavoidable questions about responsibility, practical guidance, and the enterprise of business ethics itself. Adopting the agents’ perspective suggests that business ethics can take a leading role in addressing these vexing questions that confront ethical inquiry and social science more broadly.

Professionalism, fiduciary duty, and health-related business leadership.

How should leaders of health-related businesses weigh the demand for efficiency and profit alongside the care of patients and the professional development of physicians? How might physicians approach these leadership roles to withstand the pressures that can divert behavior away from the espoused purposes and ethical standards of medicine? Perhaps health-related organizations, such as Geisinger, Kaiser Permanente, and Athenahealth, should be led just like any business. The economic model of how companies are optimally run suggests that when leaders focus on profit and shareholders, they best advance social welfare. Letting business leaders pursue something other than economic objectives raises concerns that it would only license them to serve their own personal interests while justifying it disingenuously as contributing to the greater good. According to this logic, the leaders of a major health care system should focus on what is best for their organization—its financial bottom line and its survival. Competition then ensures that every organization is