Examining CEOs’ Moral Reasoning in the Automotive Industry

Abstract

This paper examines the moral reasoning trends of CEOs (chief executive officers) in the automotive industry, gauging their relations to ethical behaviors and scandals as well as analyzing the influence of scandals and other factors on their moral reasoning. For such a purpose, we carried out a moral reasoning categorization for the top 15 automotive companies in vehicle production in 2017 by applying Weber’s method to letters written by CEOs for the period 2013–2018. A positive global trend was observed, with some CEOs reaching high levels, although the evolution was uneven without clear patterns and, in the light of facts, not sufficient, at least in the short term. We also found evidence linking the moral reasoning stages with the ethical performance of companies and introduced the concept “tone ‘into’ the top”, reflecting how CEO moral reasoning can be shaped by the company and external factors. This paper stresses the importance of considering the moral tone at the top in relation to company ethical behaviors and the interest of education in business ethics. The outcome is useful for CEOs and other managers seeking to improve corporate social responsibility (CSR) and company ethical performance and to anticipate conflicts as well as to leverage for future research.

CSR and CEO’s Moral Reasoning in the Automotive Industry in the Era of COVID-19

“…Geely’s CEO, yet at the conventional level, reaches stage #4, while Toyota’s CEO attains stage #6, the highest one on the moral reasoning ladder, explicitly reacting to the COVID-19. Moreover, Garcia-Ortega et al (2019) found that in front of a company scandal, CEOs neither adopted a principled level through their discourse in response, and they just tended to address more attention to stakeholders (stage #3). This is also the case of Daimler’s CEO under this exogenous crisis.…”

“…Far from a mere introductory presentation, letters are indeed a powerful strategic communication tool for CEOs to exercise their leadership. In all, the letters of CEOs represent a valuable source to assess their moral reasoning and CSR approach (Garcia-Ortega et al, 2019; Weber, 2010).…”

“…This adaptation resulted in an abbreviated scoring guide to assess and categorize into Kohlberg’s stages the moral reasoning of managers through their written discourse, the so-called Weber’s method, adopted in their research by Weber (2010), Kipper (2017), or Garcia-Ortega et al (2019). Table 2 presents this guidance for the manager’s moral reasoning stage assessment, enriched with further clues by Garcia-Ortega et al (2019) and a further clarification by the authors based on Kohlberg’s theory to complete the indicators in stage #6.…”

“…For our research, we selected the same sample of Garcia-Ortega et al (2019), with the top 15 automotive companies in terms of vehicle production during 2017 (Table 3), being the latest updated classification published by the International Organization of Motor Vehicle Manufacturers, comprehending firms from Europe, America, and Asia, all of these companies being global players. During our research time frame, some of these companies have just merged or are in the process of, but they still kept separated structures and governance and continue to be among the top largest vehicle producers worldwide.…”

“…In order to award a final letter score, the letter assessment was carried out by weighing the assembly of contents categorization of our first approach, shaped with an integrated assessment of the whole letter with the aim to sense overall CEO communicative intentions (Sznajder & Giménez-Moreno, 2016) and moral tone. Through a close reading technique (Amernic & Craig, 2006), we considered the overall rhetoric, the reiteration or emphasis on certain ideas or messages, the actual meaning beyond mottos or slogans, or to which extent certain reasonings could undermine others (Garcia-Ortega et al, 2019). Again, this overall assessment of each letter was carried out in two steps, individual plus collective assessment, sharing and discussing separate findings and complementing each other's views to finally reach a consensual final stage/s categorization, with some illustrative examples shown in Table 4.…”