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Ethics Trumps Culture? A Cross-National Study of Business Leader Responsibility for Downsizing and CSR Perceptions

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Abstract

Downsizing remains a topic of great interest to both academics and practitioners. Yet, the impact of layoff decisions on perceptions of corporate social responsibility (CSR) has hardly been studied. We examine the impact of responsibility of business leaders making these layoff decisions, and characteristics of the downsizing implementation on convergence and divergence in (1) CSR perceptions, (2) victims’ perceptions of fairness, and (3) survivor commitment, in four countries. Using an experimental design, sixteen scenarios were distributed to (1) 163 managers in Estonia, (2) 152 MBA students in India and 125 MBA students in France, and (3) 186 (non-traditional) undergraduate students in the USA. Results suggest that when top managers are attributed with the responsibility for downsizing, the resulting perceptions of CSR are negative. A similar pattern of results is obtained for victims’ perceptions of fairness and survivor commitment. In addition, although there are differences in effect-size based on differences in power distance, these results hold good (are similar) across the four countries, from four different society clusters. We discuss implications, limitations, and future research directions.

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Acknowledgments

Part of the data for this study was collected with the support of the ESSEC Behavioral Research Lab, at ESSEC Business School, France.

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Authors and Affiliations

  1. KEDGE Business School Bordeaux, 680 Cours de la Libération, 33405, Talence, France

    C. Lakshman

  2. Department of Management, ESSEC Business School, Paris, France

    Aarti Ramaswami

  3. Estonia Business School, Tallinn, Estonia

    Ruth Alas

  4. College of Business, University of South Florida Sarasota-Manatee, 8350 N. Tamiami Trail, SMC-C263, Sarasota, FL, 34243-2025, USA

    Jean F. Kabongo

  5. Williamson College of Business Administration, Youngstown State University, Youngstown, OH, USA

    J. Rajendran Pandian

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Lakshman, C., Ramaswami, A., Alas, R. et al. Ethics Trumps Culture? A Cross-National Study of Business Leader Responsibility for Downsizing and CSR Perceptions. J Bus Ethics 125, 101–119 (2014). https://doi.org/10.1007/s10551-013-1907-8

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