Isaac Smith

Extending the dialogue on corporate social performance as descriptive stakeholder management, we examine differences in CSP activity between family and nonfamily firms. We argue that CSP activity can be explained by the firm’s identity orientation toward stakeholders. Specifically, individualistic, relational, or collectivistic identity orientations can describe a firm’s level of CSP activity toward certain stakeholders. Family firms, we suggest, adopt a more relational orientation toward their stakeholders than nonfamily firms, and thus engage in higher levels of CSP. Further, we invoke collectivistic identity orientation to argue that the higher the level of family or founder involvement within a family firm, the greater the level of CSP toward specific stakeholders. Using social performance rating data from 1991 to 2005, we find that family and nonfamily firms demonstrate notable differences in terms of social initiatives and social concerns. We also find that the level of family and founder involvement is related to the type and frequency of a family firm’s social initiatives and social concerns.

Taking an abductive, mixed-methods approach, we explore the content of people’s moral deliberations. In Study 1, we gather qualitative data from small groups of graduate business students discussing moral dilemmas. We analyze their conversations with a focus on how participants perceive others’ thoughts, opinions, and evaluations about the dilemmas and incorporate them into their reasoning. Ascribing such capacities to think and feel to others—i.e., mind perception—is central to morality. We use the conversations in Study 1 to identify whose minds participants perceive. Study 1 also identifies how particular elements of deliberation—including the exploration of consequences, acknowledging ambivalence, seeking alternative options, the development of deep feelings, and the search for a moral compass—are linked to these perceptions of others’ minds. In Study 2 (an exploratory, online experiment with 378 participants), we find that priming individuals with specific forms of mind perception can influence the elements of moral reasoning they employ, and we find evidence that the presence of elements of reasoning are linked to participants’ final choices in a business-related ethical dilemma.

Drawing on early work on ethical leadership, we argue that when leaders engage in leader moral hypocrisy (i.e., ethical promotion without ethical demonstration), followers can experience psychological reactance—a negative response to a perceived restriction of freedom—which can have negative downstream consequences. In a survey of employee–manager dyads (study 1), we demonstrate that leader moral hypocrisy is positively associated with follower psychological reactance, which increases follower deviance. In two subsequent laboratory experiments, we find similar patterns of results (study 2) and explore potential alternative mechanisms (study 3). We demonstrate in a final experiment with working adults that the relationship between leader moral hypocrisy and psychological reactance is partly explained by increased perceptions of a leader’s use of power (study 4). We discuss the implications of our findings and advocate for further understanding of the risks associated with psychological reactance in response to leaders and other workplace situations.