Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes

Abstract

This paper answers several calls for research to devise a framework for incorporating ethics into a company's processes and strategies for innovation. With the principal goal of organizations being "survival" in the long-term, it is assumed that innovation is necessary in order to realize a going concern. Firms that do not innovate and adapt to rapidly changing business environments are less likely to be sustainable. Thus, it is in a business' best interests to adopt an innovation process for long-term success. We posit that there are two simultaneous sources of innovation and change that are unavoidable and embedded in the corporate landscape. First, we argue for genetically embedded, Darwinian explanations for adaptations that enable an entity's survival. This view is combined with more conventional, social science explanations for change. Our new, comprehensive model of the governance of innovation processes hinges on an organization's long-term orientation, which we argue, is not possible without a consideration of an ethical dimension. The roots of the ethic within innovation are traced from both natural science forces for change, and cultural pressures operating on members of an organization. We present our Integrated Causal Model of Innovation and propose theoretical relationships that will generate numerous avenues for future research in the field.

Organizational Ethical Virtues of Innovativeness

“…Sarros et al 2008;Wolfe 1994), namely the ethical culture of an organization. This perspective is also supported by prior research where an organization's culture has been viewed as an essential determinant of innovation (Ahmed 1998, p. 31;Damanpour 1991;Scott and Bruce 1994) and innovativeness (e.g., Brown 1992;Erdogan et al 2006;Martins and Terblanche 2003;Schumacher and Wasieleski 2013).…”

Lessons for Responsible Innovation in the Business Context: A Systematic Literature Review of Responsible, Social and Sustainable Innovation Practices

“…Firms therefore need to learn how to integrate ethics values in innovation (e.g., by deliberating not only with stakeholders but also the wider public) without putting the survival of the firm at risk. If they manage to do so, a next step would be to institutionalise this within the organisation and to make it a new organisational capability [116,117]. Therefore, the following question for further research is proposed:…”

Positive Psychological States and Employee Creativity: The role of Ethical Leadership

“…Consequently, there is fear of punishment and in extreme cases termination from their job both of which go against creative action (Clegg, Unsworth, Epitropaki & Parker, 2002). Entrepreneur leader at SMEs is also regarded in the literature as an ethical leaders who create new ethical norms (Kaptein, 2017;Schumacher & Wasieleski, 2013) such as the promotion of innovation enhancing values at work (McAdam & McClelland, 2002) where employees perceived high leadership support for their creative behaviors. Instead of promoting nepotism or autocratic control, leaders working in the SMEs emphasize values that support innovation such as empowering employees with effective interpersonal communication in order to help employees to create new ideas (Bailey, Bellandi, Caloffi & De Propris, 2010;McAdam, McConvery & Armstrong, 2004;Mosey, Clare & Woodcock, 2002;Zhou, Yim & Tse, 2005).…”