Codes of Ethics and the Pursuit of Organizational Legitimacy: Theoretical and Empirical Contributions

Over the past decade, discussion has flourished among practitioners and academics regarding workers' rights in developing countries. The lack of enforcement of national labour laws and the limited protection of workers' rights in developing countries have led workers' rights representatives to attempt to establish transnational industrial relations systems to complement existing national systems. In practice, these attempts have mainly been operationalised in unilateral codes of conduct; recently, however, negotiated international framework agreements (IFAs) have been proposed as an alternative. Despite their growing importance, few studies have empirically studied IFAs. This paper starts to fill this gap by studying why corporations adopt IFAs, based on a qualitative study of the process leading to the signing of a recent IFA. The study's findings complement existing research into why corporations adopt IFAs, codes of conduct, and CSR policies by demonstrating that corporate motives can be linked to a desire to retain a trusting relationship with the labour union movement. In addition, the findings indicate that the discrete campaign model of stakeholder pressure dominant in previous research should be complemented by a continuous bargaining model of stakeholder pressure. The paper concludes by discussing differences between these conceptual models of stakeholder pressure and avenues for future research.

Section: Plausible Motives For Adopting International Framework Agreementioning

confidence: 98%

Section: The Lack Of Expected Motives For Ifa Adoptionmentioning

confidence: 99%

TNC Motives for Signing International Framework Agreements: A Continuous Bargaining Model of Stakeholder Pressure

Egels‐Zandén

2008

“…Perhaps this disjunct may explain why ethical codes are often not actually followed in practice and seem to serve strategic legitimation motives rather than a real desire for organisational change (Long and Driscoll, 2008). This does, however, not mean that managers should altogether give up having any systematic stand on business ethics.…”

Section: Discussionmentioning

confidence: 99%

Making Sense of the Diversity of Ethical Decision Making in Business: An Illustration of the Indian Context

Patel

Schaefer

2009

“…Others have applied Suchman's distinction between pragmatic and moral legitimacy in related contexts such as implementing codes of ethics (Long and Driscoll 2008), social enterprise (Dart 2004), NGOs as partners of industry (Baur and Palazzo 2011), or of regulatory regimes (Black 2008). Some prior studies have also examined whether particular ISR schemes have pragmatic and moral legitimacy, as in the case of Schepers' (2010) and Cashore's (2002) evaluations of the Forest Stewardship Council.…”

Section: The Legitimacy Of Industry Self-regulationmentioning

confidence: 99%

“…Finally, the paper contributes to a burgeoning literature on the pragmatic and moral legitimacy of other phenomena such as codes of ethics (Long and Driscoll 2008), social enterprise (Dart 2004), NGOs as partners of industry (Baur and Palazzo 2011), regulatory regimes (Black 2008) or controversial projects (Melé and Armengou 2015). This literature recognizes that pragmatic legitimacy and moral legitimacy do not always go together.…”

Section: Theoretical Implicationsmentioning

confidence: 99%

Marking Their Own Homework: The Pragmatic and Moral Legitimacy of Industry Self-Regulation

Bowen

2017

When is industry self-regulation (ISR) a legitimate form of governance? In principle, ISR can serve the interests of participating companies, regulators and other stakeholders. However, in practice, empirical evidence shows that ISR schemes often under-perform, leading to criticism that such schemes are tantamount to firms marking their own homework. In response, this paper explains how current management theory on ISR has failed to separate the pragmatic legitimacy of ISR based on selfinterested calculations, from moral legitimacy based on normative approval. The paper traces three families of management theory on ISR and uses these to map the pragmatic and moral legitimacy of ISR schemes. It identifies tensions between the pragmatic and moral legitimacy of ISR schemes, which the current ISR literature does not address, and draws implications for the future theory and practice of ISR.