The Usefulness of Social Norm Theory in Empirical Business Ethics Research: A Review and Suggestions for Future Research

Abstract

In response to recent calls to extend the underlying theories used in the literature (O’Fallon and Butterfield in J Bus Ethics 59(4):375–413, 2005; Craft in J Bus Ethics 117(2):221–259, 2013), we review the usefulness of social norm theory in empirical business ethics research. We begin by identifying the seeds of social norm theory in Adam Smith’s (in: Raphael and Macfie (eds) The Theory of Moral Sentiments, the Glasgow Edition, Oxford University Press, Oxford, 1759/1790) seminal work, The Theory of Moral Sentiments. Next, we introduce recent theory in social norm activation by Bicchieri (The grammar of society: The nature and dynamics of social norms, Cambridge University Press, New York, 2006) and compare the new theory to two theoretical frameworks found in the literature: Kohlberg’s (in: Goslin (ed) Handbook of socialization theory and research, Rand McNally, Chicago, IL, 1969; in: Lickona (ed) Moral development and behavior, Holt, Rinehart & Winston, New York, 1976) theory of moral development and Cialdini and Trost’s (in: Gilbert et al. (eds) The handbook of social psychology, Oxford University Press, Boston, 1998) taxonomy of social norms. We argue that the new theory provides useful insights by emphasizing the ability of situational cues and information to generate common expectations for social/moral norms. The theory is particularly useful for empirical research in business ethics because it gives both organizational and individual factors a role in motivating norm-based behavior. To demonstrate this usefulness, we present examples where the theory has been effectively applied in experimental accounting research to generate new insights. We conclude by citing specific examples where the theory may prove useful in empirical business ethics research.

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Notes

  1. 1.

    This hesitancy is reflected in the recent attempt by Erhard et al. (2009, 2010) to incorporate integrity within the theory of the firm. While acknowledging the importance of integrity in markets and organizations, and encouraging researchers to incorporate this integrity into the theory of the firm, the authors espouse a positive model of integrity that strips the construct of any moral content. Their model of integrity is based on the erroneous premise that moral theory is purely normative in nature and therefore has little relevance to positive economic theory. Thus, their model offers no testable predictions for empirical researchers in empirical business ethics research or the other business-related disciplines of accounting, economics, and finance.

  2. 2.

    Adam Smith’s first appointment at the University of Glasgow was as Professor of Logic from 1751 to 1752.

  3. 3.

    Adam Smith criticized the moral philosophy of his day for reflecting a deficient understanding of “natural principles.” He viewed his account of moral sentiments as superior because it more fully reflected these natural principals (Smith 1759/1790, VII.I.1).

  4. 4.

    Smith defined sympathy in a neutral way, so his definition fits more closely with what we today would call “empathy.”

  5. 5.

    Although Bicchieri assumes that sensitivity to a given social norm varies across individuals and particular social norms, she considers an individual’s sensitivity to a particular norm to be a fairly stable disposition (Bicchieri 2006, p. 116).

  6. 6.

    For a thorough discussion of these challenges and potential responses, see Modgil and Modgil (1986) and Rest et al. (1999).

  7. 7.

    Kohlberg developed his theory in response to the social upheaval of the 1960s and the rejection by many of traditional American society, “which had become too repressive at home and too imperialistic abroad” (Rest et al. 1999, p. 3).

  8. 8.

    For example, Beauchamp and Childress (1994) address moral dilemmas in biomedicine by starting from the moral consensus that has arisen within the medical community (i.e., the common morality that has evolved out of previous cases) and then examining the moral justifications for the specific case based on that consensus. That is, common moral principles that have arisen over time within the medical community function as the justification basis for action choices in specific cases. For Beauchamp and Childress, therefore, moral theory building within the medical profession is a dialectical process of both top-down and bottom-up moral judgments (Rest et al. 1999). We assert that moral theory building within the business professions is very similar.

  9. 9.

    This list represents only a subset of the experimental studies in the participative budgeting literature and is intended only to demonstrate the usefulness of Bicchieri’s model to empirical research. For a more comprehensive list of experimental studies in the participative budgeting literature, see Brown et al. (2009).

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Correspondence to Douglas E. Stevens.

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This paper has benefitted from the helpful comments of Kendall Bowlin, David Bryan, David Cooper, Mark Isaac, Terry Mason, Josette Pelzer, Kenny Reynolds, James Wilhelm, and workshop participants at the FSU Experimental Economics Research Group, the FSU Accounting Research Colloquium, the USF School of Accountancy Workshop, the 2012 AAA Annual meeting, the 2012 AAA Auditing Midyear Meeting, and the 2013 AAA Annual Ethics Research Symposium. The paper has also benefitted from discussions with Christopher Berry at the Adam Smith Research Foundation, University of Glasgow. Finally, we thank the editor and two anonymous reviewers for their exceptionally helpful comments.

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Blay, A.D., Gooden, E.S., Mellon, M.J. et al. The Usefulness of Social Norm Theory in Empirical Business Ethics Research: A Review and Suggestions for Future Research. J Bus Ethics 152, 191–206 (2018). https://doi.org/10.1007/s10551-016-3286-4

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Keywords

  • Empirical business ethics research
  • Social norm theory
  • Moral theory
  • Economic theory
  • Adam Smith