Kristi Yuthas

Corporate social performance, stakeholder orientation, and organizational moral development

This article begins with an explanation of how moral development for organizations has parallels to Kohlbergs categorization of the levels of individual moral development. Then the levels of organizational moral development are integrated into the literature on corporate social performance by relating them to different stakeholder orientations. Finally, the authors propose a model of organizational moral development that emphasizes the role of top management in creating organizational processes that shape the organizational and institutional components of corporate social performance. This article represents one approach to linking the distinct streams of business ethics and business-and-society research into a more complete understanding of how managers and firms address complex ethical and social issues.

Material matters: assessing the effectiveness of materials management IS

Materials management information systems (IS) are designed to enhance decision-making performance by lowering costs, increasing turnover, and improving service. Because of the large investment that these systems represent, companies have developed several ways to evaluate their effectiveness. The most direct approach is to assess the effects of the system on materials management performance outcomes such as inventory costs, turnover, and fill rates. The more common approach is to assess effectiveness via substitute measures, such as user perceptions and usage statistics. A laboratory experiment was conducted to examine the relationships between materials management performance, user satisfaction, and system usage. The three measures were recorded as subjects performed a purchasing task using an materials management IS. Correlations among the three measures suggest that although satisfaction and usage are closely associated with performance, the relationships among the measures are not sufficiently strong to warrant their use as interchangeable measures of effectiveness.

Beyond agency and structure: Triple-loop learning

With the demise of Andersen, LLP and new legislation that puts an end to self-governance in public accounting, the effectiveness of current models of accounting ethics have been seriously called into question. We argue that the profession suffers from fundamental limitations in its ethical framework that makes it impossible to effectively address ongoing ethical problems. The dominant representation of professional behavior is an agency model of ethics, in which the ultimate responsibility for identifying and dealing with ethical dilemmas resides with the individual. We argue that structural forces such as control over resources, meaning systems, and community norms and values also have a strong influence on the actions of accountants and that these must also be considered. The recent legitimation crisis has forced the accounting profession and its constituencies to begin to recognize and address the structural aspects of ethics as they enable and constrain action. We propose a framework based on structuration theory and learning theory that allows for systematic, multi-level investigation of the structural forces that cause ethical dilemmas to arise and to be recognized and that influence the manner in which they are analyzed and resolved. This framework should be capable of continual critique and reconfiguration as environmental conditions change.

Enterprise resource planning systems: A physical manifestation of administrative evil☆

Abstract We propose that enterprise resource planning systems (ERPs) inherently embody the tenets of administrative evil. First, we situate the discussion within a critical theory framework. Then, we provide a brief introduction to ERPs. Next, we present the ERP implementation process as a harbinger for organizational change and standardization. Because of the systems power and inclusiveness, the organization is molded in the image of the ERP. Management justifies ERP implementations, and the related hardships, by appeals to instrumental rationality, technological determinism, and capital market demands. ERPs are a physical manifestation, and facilitator, of instrumental rationality within hierarchical control structures. As such, ERPs embody significant potential for administrative evil because of their influence in constituting organizational climate, structures, and roles. Conscience is viewed as inferior to instrumental logic. Morality is recast as following the instrumentally rationalized and legitimized rules. A sense of individual responsibility diminishes as the distance between the object and the action increases. This detachment is greatly enhanced with the implementation of an ERP, and we discuss how this may take place. Ultimately, technical responsibility replaces moral responsibility and the totalizing influence of the ERP facilitates and expedites the process.

Ethical audit decisions: A structuration perspective

The public accounting profession has long relied on its reputation for integrity and veracity as justification for its professional status and monopoly privilege predicated on claims of acting in the public interest. If such status and privilege are to be justified and sustained, serious consideration of what constitutes ethical behavior, how such behavior is motivated as well as an explicit recognition of the rights and interests of affected parties constitutes an ethical imperative for the profession. Traditionally, work on ethics and auditing is quite narrow, failing to recognize the social context of individual actions, failing to identify the relevant constituencies of the profession, and failing to articulate processes through which the constituencies interests can be identified. Generally, the accounting literature has taken a cognitive perspective on ethical decision making which views the resolution of ethical dilemmas as primarily a function of the moral makeup of the actor responding within the context of the Code of Professional Conduct. The purpose of this paper is to broaden the theoretical base of ethical research, specifically within the area of professional accounting and more generally in the area of business. We propose the application of structuration theory in conjunction with stakeholder theory and a responsibility ethic. The application of stakeholder theory is a means for identifying affected constituencies. A responsibility ethic recognizes the situatedness of an individual within an ongoing professional community. Structuration theory provides a theoretical framework for articulating and investigating both the structures within which action is carried out as well as the interaction between the social structures and the actors. Taken together, the theories allow for an enhanced ability to define ethical behavior within a business context and to understand the contextual antecedents and consequences of ethical acts.

Ethical Development of Advanced Technology: A Postmodern Stakeholder Perspective

Zygmunt Bauman is arguably the most well-known theorist in postmodern ethics. He argues that to develop and enforce universal ethical laws or codes leads to an abdication of individual moral responsibility. Actors rely on external rules and a rational consideration of costs and benefits rather than on moral impulse. In order to recognize and act upon moral impulse, the moral agent must both recognize and understand the Other. We operationalize these ideas, applying them to the development of advanced information technology (AIT) in organizations. We propose that a stakeholder theory of enabling can be used to formulate processes that will give form and voice to the Other by providing mechanisms for face-to-face interactions and dialogue. Applying the principles of affirmative postmodern ethics through an enabling stakeholder oriented system development process explicitly allows for the examination of moral concerns which might otherwise be overlooked, ignored, or silenced.

Critical dialogics, agonistic pluralism, and accounting information systems

We propose heteroglossic accounting as a context wherein accounting information systems may be conceptualized so as to provide a more complete and complex basis for including competing, and possibility incompatible, information needs associated with interested and diverse constituencies. Given that information needs to vary based on such dimensions as geography, values, views, and vision, one representation is unlikely to be adequate. Incorporating pluralistic perspectives facilitates more relevant comparisons required to derived criteria of judging among the viable alternatives, especially in cases where no one perspective can be shown to be inclusive. Agonistic pluralism employed in developing alternative accounting information systems provides insights into the underlying ideologies, assumptions, values, worldviews, and power relationships that inform alternative positions, indicating those being privileged. Accounting information systems conceptualization, development, and implementation based on the principles of critical dialogics recognizes the countervailing forces operating both pulling the dialog and debate toward hegemonic consensus as well as pushing it toward antagonistic separation.

Mission impossible: diffusion and drift in the microfinance industry

Purpose – The purpose of this paper is to thoroughly examine sources of mission diffusion and mission drift in the microfinance industry and to identify consequences of and remedies to these problems.Design/methodology/approach – Extensive field experience relating to individual microfinance institutions (MFIs) and industry trends provides the grounding for a review of the trade and academic literatures in microfinance and social enterprise management.Findings – Mission diffusion arises from pursuing diverse approaches to poverty alleviation and addressing disparate and changing stakeholder interests. Mission drift arises from commercialization and conversion activities aimed toward enhancing ratings and achieving scale. Mission clarity can be regained through clarification of the mission along with more effective corporate governance and performance management systems.Practical implications – The tension between financial and social performance is not merely ideological – economic realities make it almos...

Enamored with Scale: Scaling with Limited Impact in the Microfinance Industry

In many ways, the microcredit industry is a scaling success story. With fewer than 10 million clients a decade ago, the industry now serves approximately 150 million clients and continues to grow, even through the economic downturn. In part, this growth is made possible by the very nature of microcredit—it is a service that clients both need and are able to purchase, enabling donated funds to be recycled many times. In addition, the industry as a whole has served a critical role in catalyzing growth. Cooperative efforts among industry stakeholder groups have led to the development of information exchanges, rating systems, and research efforts that have rapidly improved efficiency and professionalization of microfinance. Nonetheless, mission drift has become a real concern, and the industry has reached a point where additional scale does not guarantee increased social impact. Some markets are saturated and hyper-competitive, while enormous demand remains unfulfilled in difficult-to-serve markets and among clients whose credit needs fall beyond the narrow range of products currently offered. Continued questions about microcredit’s poverty-reducing potential continue to plague the industry, and high rates of client defection and over-indebtedness provide cause for alarm. Without significant changes in microfinance institution (MFI) management and business models required to serve client needs, further growth may harm the very clients the industry seeks to serve.

Scaling Effective Education for the Poor in Developing Countries: A Report from the Field

Many school programs in developing countries have achieved scale but with varying quality. Conversely, some programs have achieved quality in one or two schools but have not achieved scale. This article describes an extensive field investigation of three education organizations in developing countries that have achieved both scale and quality: Bangladesh Rural Advancement Committee, Escuela Nueva in Colombia, and Pratham in India. The research led to the development of a framework of organizational characteristics and practices that are important for the successful scaling of effective education in impoverished regions. The three scaling levers—program, process, and passion—can also be effectively applied to other social enterprises addressing social issues in many industries.