This paper offers the first large-scale empirical study of organizational virtue as perceived by both internal and external stakeholders (employees and customers, respectively) and of the links between these virtues and organizational outcomes such as identification, satisfaction, and distinctiveness. It takes a strategic approach to virtue ethics, one that differs from a more traditional Aristotelian concept of virtue and from Alasdair MacIntyre’s manner of distinguishing between internal and external goods. The literature review compares three different perspectives on the empirical study of organizational virtues, taken by virtue theorists, POS scholars, and strategy scholars. The main study describes an empirical research undertaking that involved the analysis of 2548 usable questionnaires administered to employees and customers of seven organizations in the U.K. A structural equation model was used to test the linkages of the six dimensions of organizational virtue (empathy, warmth, integrity, conscientiousness, courage, and zeal) to satisfaction, identification, and distinctiveness. All the links were significant, with the strongest between virtue and identification. For employees, identification (with a firm) was driven most significantly by integrity, whereas customers’ identification was principally influenced by empathy. The empirical finding also sounds an alarm bell to the global firms who focus on creating a differentiated image based on CSR in the hope that it will lead to satisfaction. The results lead to a discussion of how companies might build favorable stakeholder perceptions of key dimensions of virtue that most shape their identification and differentiation in the marketplace.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Abrams, D., & Randsley de Moura, G. (2001) Organizational identification: Psychological anchorage and turnover. In: M. A. Hogg & D. J. Terry (Eds.), Social identity processes in organizational contexts. Philadelphia: Psychology Press.
Bagozzi, R. P., Gopinath, M., & Nyer, P. U. (1999). The role of emotions in marketing. Journal of Academy of Marketing Science, 27(2), 184–206.
Barrick, M. R., & Mount, M. K. (1991). The big five personality dimensions and job performance: A meta-analysis. Personnel Psychology, 44, 1–26.
Bauer, R. A., & Fenn, D. H. J. (1973). What is a corporate social audit?. January-February: Harvard Business Review.
Beabout, G. (2012). Management as a domain-relative practice that requires and develops practical wisdom. Business Ethics Quarterly, 22(2), 405–432.
Bhattacharya, C., Korschun, D., & Sen, S. (2009). Strengthening stakeholder-company relationships through mutually beneficial corporate social responsibility initiatives. Journal of Business Ethics, 85, 257–272.
Bhattacharya, C., Rao, H., & Glynn, M. A. (1995). Understanding the bond of identification: An investigation of its correlates among art museum members. Journal of Marketing, 59(4), 46–57.
Bhattacharya, C., Sen, S., & Korschun, D. (2008). Using corporate social responsibility to win the war for talent. MIT Sloan Management Review, 49(2), 37–44.
Boehe, D. M., & Barin-Cruz, L. (2010). Corporate social responsibility, product differentiation strategy and export performance. Journal of Business Ethics, Feb. 325–346.
Bright, D., Winn, B., & Kanov, J. (2014). Reconsidering virtue: differences of perspective in virtue ethics and the positive social sciences. Journal of Business Ethics, 119(4), 445–460.
Brown, T. J., & Dacin, P. A. (1997). The company and the product: Corporate associations and consumer product responses. Journal of Marketing, 61(1), 244–249.
Buckley, M. R., Beu, D. S., Frink, D. D., Howard, J. L., Berkson, H., Mobbs, T. A., et al. (2001). Ethical issues in human resources systems. Human Resource Management Review, 11, 11–29.
Butler, J. K., & Cantrell, R. S. (1984). A behavioral decision theory approach to modeling dyadic trust in superiors and subordinates. Psychological Reports, 55, 19–28.
Cameron, K., Bright, D., & Caza, A. (2004). Exploring the relationships between organizational virtuousness and performance. American Behavioral Scientist, 47(6), 766–790.
Cameron, K., & Winn, B. (2011). Virtuousness in organizations. In K. Cameron & G. Spreitzer (Eds.), The Oxford handbook of positive organizational scholarship. Oxford University Press.
Carroll, A. B. (1999). Corporate social responsibility: Evolution of definitional construct. Business & Society, 38(3), 268–295.
Chatterjee, S., Moody, G. D., Lowry, P. B., Chakraborty, S., & Hardin, A (2015). The strategic relevance of information technology- enabled organizational virtues in improving organizational innovation. Journal of Management Information Systems (accepted August 2015).
Chun, R. (2005). Ethical character and virtues: An Empirical assessment and strategic implications. Journal of Business Ethics, 57, 269–284.
Chun, R. (2016). What holds ethical consumers to a cosmetics brand: The Body Shop case. Business & Society, 55(4), 528–549.
Clarkson, M. B. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92–117.
Cornell, A. B., & Shapiro, A. (1987). Corporate stakeholders and corporate finance. Financial Management, 16, 5–14.
Cox, D., La Caze, M., & Levine, M. P. (2003), Integrity and the fragile self, Ashgate.
Daan, vk, & van Schie, E. C. M. (2000). Foci and correlates of organizational identification. Journal of Occupational & Organizational Psychology, 73(2), 137–147.
Daily, R. C., & Kirk, D. J. (1992). Distributive and procedural justice as antecedents of job satisfaction and intent to turnover. Human Relations, 45, 305–317.
Davis, M. H., Conklin, L., Smith, A., & Luce, C. (1996). Effect of perspective taking on the cognitive representation of person: A merging of self and other. Journal of Personality and Social Psychology, 70, 713–726.
Donaldson, T., & Dunfee, T. (1994). Toward a unified conception of business ethics: Integrative social contracts theory. Academy of Management Review, 19(2), 252–284.
Dreifus, C. (1994). Passing the scoop: Ben & Jerry, New York Times Magazine, Vol. December 18, pp. 38–41.
Dukerich, J. M., Golden, B. R., & Shortell, S. M. (2002). Beauty is in the eye of the beholder: the impact of organizational identification, identity, and image on the cooperative behaviors of physicians. Administrative Science Quarterly, 47, 507–533.
Entine, J. (1994). Shattered image. Business Ethics, Vol. Sep/Oct, pp. 23–28.
Ferrero, I., & Sison, A. J. G. (2014). A quantitative analysis of authors, schools and themes in virtue ethics articles in business ethics and management journals (1980–2011). Business Ethics: A European Review, 23(4), 375–400.
Fournier, S., & Mick, D. G. (1999). Rediscovering satisfaction. Journal of Marketing, 63(October), 5–23.
Friedman, H. S., & DiMatteo, M. R. (Eds.). (1982). Interpersonal issues in health care. New York: Academic Press.
Gauzente, C., & Ranchhod, A. (2001). Ethical marketing for competitive advantage on the internet. Academy of Marketing Science Review, 1(10).
Gilliland, S. W. (1993). The perceived fairness of selection systems: An organizational perspective. Academy of Management Review, 18(4), 694–732.
Griffin, J. J., & Mahon, J. F. (1997). The corporate social performance and corporate financial performance debate: Twenty-five years of incomparable research. Business & Society, Mar, 5–31.
Hartman, E. M. (1998). The role of character in business ethics. Business Ethics Quarterly, 8(3), 547–559.
Hogg, M. A., & Abrams, D. (1988). Social identifications: A social psychology of intergroup relations and group processes. London: Routledge.
Kim, K. H., Kim, M. C., & Qian, C. (2015). Effects of corporate social responsibility on corporate financial performance: A competitive-action perspective. Journal of Management. Published Online First:. doi:10.1177/0149206315602530.
Kline, R. B. (Ed.). (1998). Principles and practice of structural equation modeling. New York: The Guilford Press.
Koh, H. C., & Boo, E. H. Y. (2001). The link between organizational ethics and job satisfaction: A study of managers in Singapore. Journal of Business Ethics, 29, 309–324.
Kreiner, G., Hollensbe, E., & Sheep, M. (2006). ‘Where is the “me” among the “we”? Identity work and the search for optimal balance. Academy of Management Journal, 49(5), 1031–1057.
Long, J. S. (1983). Confirmatory factor analysis: A preface to Lisrel. Sage Publications, Sage University Paper Series on Quantitative Applications in the Social Science, series no 07-033, Newbury Park.
Madrigal, R. (2000). The influence of social alliances with sports teams on intentions to purchase corporate sponsors’ products. Journal of Advertising, 29(4), 2–13.
Mael, F., & Ashforth, B. E. (1992). Alumni and their alma mater: A partial test of the reformulated model of organizational identification. Journal of Organizational Behavior, 13, 103–123.
McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of Management Journal, 31(4), 854–872.
McMahon, D. M. (2004). From the happiness of virtue to the virtue of happiness: 400 B.C.-A.D. 17, Daedalus, Vol. 133, No. 2, On Happiness (Spring, 2004), pp. 5–17.
McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlations or misspecification? Strategic Management Journal, 21, 603–609.
McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127.
Moberg, D. J. (1999). The big five and organizational virtue. Business Ethics Quarterly, 9(2), 245–272.
Moore, G. (2012). Virtue in business: Alliance boots and an empirical exploration of Macintyre’s conceptual framework. Organization Studies, 33(3), 363–387.
Murphy, P. E. (1999). Character and virtue ethics in international marketing: An agenda for managers, researchers and educators. Journal of Business Ethics, 18(1), 107–124.
Nargundka, E. (2008). Marketing research: Text and cases, 3E. India: McGraw Hill.
Naughton, M., & Cornwall, J. (2006). The virtue of courage in entrepreneurship: Engaging the catholic social tradition and the life cycle of the business. Business Ethics Quarterly, 16, 71–95.
Orlitzky, M. (2011). Institutional logics in the study of organizations: the social construction of the relationship between corporate social and financial performance. Business Ethics Quarterly, 21(3), 409–444.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multi-item scale for measuring consumer perceptions of the service quality. Journal of Retailing, 64(1), 12–40.
Pava, M. L., & Krausz, J. (1996). The association between corporate social-responsibility and financial performance: The paradox of social cost. Journal of Business Ethics, 15, 321–357.
Payne, G. Tyge, Brigham, Keith, Broberg, J. Christian, Moss, Todd, & Short, Jeremy. (2011). Organizational virtue orientation and family firms. Business Ethics Quarterly, 21(2), 257–285.
Petrenko, O. V., Aime, F., Ridge, J., & Hill, A. (2016). Corporate social responsibility or CEO narcissism? CSR motivations and organizational performance. Strategic Management Journal, 37(2), 262–279. doi:10.1002/smj.2348.
Pilling, B. K., & Eroglu, S. (1994). An empirical examination of the impact of salesperson empathy and professionalism and salability on retail buyers’ evaluations. Journal of Personal Selling and Sales Management, Winter, 45–58.
Porter, M. (1989). Competitive advantage. New York: Prentice Hall.
Porter, M., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(December), 78–92.
Scott, W. R. (2007), Institutional teory: Contributing to a theoretical research program. In G. Smith Ken & A. Hitt Michael (Eds.), Great minds in management: The process of theory development (pp. 460–484). Oxford: Oxford University Press.
Shanahan, K., & Hyman, Ml. (2003). The development of a virtue ethics scale. Journal of Business Ethics, 42(2), 197–208.
Solomon, R. C. (1992). Ethics and excellence: Cooperation and integrity in business. New York: Oxford University Press.
Solomon, R. C. (1999). Business ethics and virtue. In R. E. Frederick (Ed.), A companion to business ethics (pp. 30–37). MA: Blackwell, Malden.
Spicer, B. H. (1978). Investors, corporate social performance, and information disclosure: An empirical study. Accounting Review, 53, 94–111.
Stark, A. (1993). What is the matter with business ethics? Harvard Business Review, May/June, 38–48.
Strong, K. C., Ringer, R. C., & Taylor, S. A. (2001). The rules of stakeholder satisfaction: Timeless, honesty, empathy. Journal of Business Ethics, 32, 219–230.
Swanson, D. L. (1995). Addressing a theoretical problem by reorienting the corporate social performance model. Academy of Management Review, 20, 43–64.
Tajfel, H. (1978). The achievement of group differentiation. In Tajgel (Ed.), Differentiation between social groups: Studies in the social psychology of intergroup relations (pp. 77–98). London: Academic Press.
Tang, Z., Hull, E. C., & Rothenberg, S. (2012). How corporate social responsibility engagement strategy moderates the CSR—Financial performance relationship. Journal of Management, 49(7), 1274–1303.
Tayler, T. R., & Blader, S. L. (2000). Cooperation in groups: Procedural justice, social identity, and behavioral engagement. Psychology Press.
The Independent. (2013). Tax evasion, bribery and price-fixing: How Samsung became the giant that ate Korea, February 25.
The Irish Times. (2015). HSBC rebranding raises possibility of revival of ‘listening’ Midland Bank, June 10, Accessed August 20 1015 http://www.irishtimes.com/business/financial-services/hsbc-rebranding-raises-possibility-of-revival-of-listening-midland-bank-1.2243336
Trout, J. (2001) Differentiate or die: Survival in our era of killer competition. Wiley
Vera, D., & Rodriguez-Lopez, A. (2004) Strategic virtues: Humility as a source of competitive advantage. Organizational Dynamics, 33(4), 393–408. Sutirtha
Waddock, S., & Graves, S. (1997). The corporate social performance—Financial performance link. Strategic Management Journal, 18, 303–319.
Whetstone, J. T. (2001). How virtue fits within business ethics. Journal of Business Ethics, 33, 101–114.
Wolf, M. (2001). Sleeping-walking with the enemy: Corporate social responsibility distorts the market by defecting business from its primary role of profit generation. Financial Times, May 16.
Wright, P., & Farris, S. (1997). Agency conflict and corporate strategy: The effect of divestment on corporate value. Strategic Management Journal, 18, 77–83.
About this article
Cite this article
Chun, R. Organizational Virtue and Performance: An Empirical Study of Customers and Employees. J Bus Ethics 146, 869–881 (2017). https://doi.org/10.1007/s10551-016-3262-z
- Organizational virtue
- Social responsibility