An analysis of business ethics in the cultural contexts of different religions

• DOI: http://doi.org/10.1111/beer.12277
• Published date: 01 July 2020
• Date: 01 July 2020

570  

|

  wileyonlinelibrary.com/journal/beer Business Ethics: A Eur Rev. 2020;29:570–586.© 2020 John Wiley & Sons Ltd

1 | INTRODUCTION

Over the years, r eligion has played a p aramount role in m ost soci-

eties, including in affecting the cultural context, which is strongly

influenced wor ldwide by religiou s beliefs and org anizations. At t he

same time, it may inf luence ethical prac tices developed by firms, ei-

ther through in dividuals' personal va lues or through its influe nce on

culture, leadi ng to a set of social norms.

The theoreti cal base that may link differ ent religions to the inte-

grating appro ach of businesse s may rest on stakeh older theory. As

Retolaza, Agu ado, and Alcaniz (2019) hold, this theo ry pays special

attention to the d ifferent social and economi c factors that contrib-

ute to society, stre ssing that corpo rate management sh ould not be

focused just on s hareholders' i nterests, b ut must comprise t he re-

maining stakeholders' interests, creating value for each stakeholder

in search of the com mon good (Arga ndoña, 2015; Freeman, Wicks,

& Parmar, 2004). Th erefore, the final aim is to crea te value for each

stakeholde r that contributes to the comp any, and not only to obtain

economic profit. Consequently, from the perspective of stakeholder

theory, conside ring the company as a n institution t hat is not only

economic, but a lso social as well, w ill encourage et hical pract ices

inside organiz ations, and consideration of th e impact on their envi-

ronment. In thi s context, religions, by sha ring the same perspec tive,

also boost a corp orate ethical vision whic h goes beyond purely eco-

nomic object ives and pursues the integr al development of individu-

als (Cremers, 2017).

Previous works a bout the influe nce of different re ligions on

business ethics have evidenced that religions are expected to rein-

force ethical de cision-making and the impleme ntation of a higher

number of ethic al practices . In this sense, re ligiosity may infl u-

ence “an individual's attitudes, views, decisions, and ultimately

behaviors” (Nel son, James, Miles, Morr ell, & Sledge, 2017, p. 385).

However, research cond ucted on the influence of religio n on eth-

ical corpora te practices (C raft, 2013; Loe, Fer rell, & Mansfi eld,

2000; O' Fallon & Butterfield, 20 05; Vitell, 2009) has not reach ed

conclusive results, suggesting that religiosity does not directly

imply ethica l behavior (Weaver & A gle, 2002). Vi tell (2009) con-

cludes that the re is evidence to af firm that religio us people are

more prone to devel oping stronger e thical rules a nd judgments

in the business co ntext compared t o those with weaker b eliefs.

Therefore, rel igion can be consid ered to have a somewha t posi-

tive relationship with corporate ethical decision-making (O'Fallon

Received: 13 Sept ember 2019 

|

  Revised: 10 Januar y 2020 

|

  Accepted: 24 Februa ry 2020

DOI: 10 .1111/bee r.12277

ORIGINAL ARTICLE

An analysis of business ethics in the cultural contexts of

different religions

Isabel Gallego-Alvarez1 | Luis Rodríguez-Domínguez1 | Javier Martín Vallejo2

1Facultad de Econ omía y Empresa,

Department of Business Studies, Instituto

Multidisciplinar de Empresa, Universidad de

Salamanca, Salamanca, Spain

2Facultad de Medicina, Department

of Statistic s, University of S alamanca,

Salamanca, Spain

Correspondence

Luis Rodríguez-Domínguez, Facultad de

Economía y Empre sa, Departme nt of

Business Studies, Instituto Multidisciplinar

de Empresa, U niversidad de Sala manca,

Campus Migu el de Unamuno, Sala manca

37007, Spain.

Email: lrodomin@usal.es

Abstract

The aim of our research is to a nalyze how different religio ns influence business ethic s.

We develop an index of prac tices in the field of business ethics , made up of 19 items

containing prac tices related to workers , consumers, produ cts, human right s, man-

agement of ethical confl icts, and crim e prevention. Also, we consid er a wide range

of religion affiliatio ns. To undertake this resea rch, we use a panel data s ample com-

posed of 11,956 firm-year observati ons from 18 countries. Dr awing on stakeholde r

theory, we posit some hypot heses based on the r eligions considered. T he results

obtained show that a hig her percentage of religious adher ents in the country where a

company does busines s usually involve the implementation of mo re ethical practices

in the corporate fie ld. These findings are obtained fo r Christian, Islamic, Jewish, and

Hindu religions. In cont rast, this does not stand for Bu ddhist and folk religions. Also,

countries where th ere is no predominant religion do not show a confl uence between

religion and ethica l corporate practices.

    

|

 571

GALLEGO-ALVAREZ Et A L.

& Butterf ield, 2005), at le ast in terms of impa ct on beliefs, at ti-

tudes, and eth ical judgments. I n the same line, Singhap akdi, Marta,

Rallapalli, an d Rao (2000 ) or Quazi (2003) o btain argume nts in

favor of positive relationships among religion, ethical perception,

and behaviora l intentions. Als o, Quazi (2003) ha s shown that the

stronger the religious beliefs, the more likely the manager would

be to perceive soci al and ethical com mitment beyond t he strict

regulatory requirements. However, Weaver and Agle (2002) and

Vitell (2009) hi ghlight that religion may influen ce perceptions and

attitudes tow ard an ethical pr oblem, but not ne cessarily the final

ethical condu ct (Craft, 2013), an issue o n which literature doe s not

reach conclusive results. Kurpis, Beqiri, and Helgeson (2008) find

that religiosity does not directly influence recognition of ethical

problems and be havior intentions, althou gh it may to some extent

result in higher commitment to moral self-improvement, and this

will influence th e perceived impo rtance of ethi cs These concl u-

sions may be due to the d ifferent methodolog ies employed, which

have led to differe nt results, and to unclear know ledge about the

influence of different religions on business ethics (Longenecker,

McKinney, & Moore, 20 04). Therefore, the re is much work to do in

order to deeply understand this relationship.

This paper aims to e xtend the deba te outlined above an d con-

tribute to the ex isting literature in seve ral ways. First, we dev elop an

index of business ethics, referring to the different practices in many

areas of a company, that may be u sed in the international sphe re to

analyze the mos t relevant aspe cts of corpor ate ethics. Seco nd, we

study the ef fect of different inte rnationally accepted r eligions: other

studies have focu sed only on a specific re ligion (generally th at of the

country anal yzed). Third, we co mplement a rese arch line that has

been not suff iciently developed to date in p revious literature.

To reach those object ives, we use a samp le of companies com-

posed of 11,956 internation al firm-year obser vations from 2004 to

2015 originating f rom 18 countries. This sample wa s obtained from

Thomson Reuter s; it allows for analysis of this t opic from an interna-

tional perspective.

This paper is st ructured as fo llows. After th e introductio n, the

theoretica l framework is exposed in se ction two, arguing for the i n-

fluence of religio ns on business ethics and r ole of different faiths . In

the third sec tion, the samp le, variables , and method are de scribed.

In section fou r, the results obtained in t he research are analy zed and

discussed in sec tion five. Finally, in the last se ction, the conclusions

derived from our analysis are presented.

2 | STAKEHOLDER THEORY IN BUSINESS

ETHICS

Based on the arg uments put forw ard by Friedman (1962), maximizing

economic profi t is the main objective pursue d by corporations over

time. However, a differ ent way of viewing companies has grad ually

emerged in socie ty (Freeman et al., 20 04). This viewpoint i s informed

by stakeholde r theory, whereby t he company's mission is to create

value for all its s takeholders.

Richter and Dow (2017) underline how stakeholder theory rede-

fines compani es as a complex set of s takeholders , giving rise to an

integration of relationships among groups with varied rights, objec-

tives, expec tations, and responsibil ities. Therefore, as Freeman an d

Auster (2015) hold , a company's purp ose is not just to retur n prof-

its, as it must a lso take into conside ration the right s, the roles an d

the stakes of all t he participants in the org anization. Consequently,

these participants are stakeholders, defined as “any group of individ-

uals who can af fect, or is affect ed by, the achievement of the orga ni-

zation's object ives” (Freeman, 1984, p. 46). Thus, the i mportance of

the role of the Ot hers, beyond shareholde rs, is essential to the pro-

posals put for ward by stakeholder th eory (Hatami & Firoozi, 2 019).

This approach undoubtedly has ethical implications in the corpo-

rate field. Acco rding to Alford (2012), this focus ac knowledges each

stakeholde r's individual dignit y, and seeks to treat each on e as a goal

in its own right. T herefore, the ethical persp ective in this theory is

to promote stakeh olders' pers onal objecti ves within a fram ework

of responsibility. Although individuals have their own interests, at

the same time, t hey cooperate in a co mmon project s erving soci-

ety (Arga ndoña, 2015). This holist ic understanding of h uman beings,

being able to tra nscend their own individualit y and show openness

to the Other, reflec ts a social basis and a posit ive vision of humanity

(Aguado, Ret olaza, & Alcañ iz, 2017). Other aut hors (e.g., Retolaz a

et al., 2019) stress how dif ferent social and e conomic factor s contrib-

ute by stressing t hat shareholders are not the onl y ones interested

in corporate management. Other stakeholders should be considered

in pursuit of the co mmon good, which can be def ined as “the overall

conditions of life i n society that allow the dif ferent groups and their

members to achi eve their own perfection mo re fully and more eas-

ily” (Arga ndoña, 2015, p. 1095).

Consequentl y, ethical decision-m aking may be rooted i n stake-

holder theor y. As Freeman (1994, p. 415) states, the t heory's cor e

premise is to refute t he thesis of separation , distinguishing betwe en

the discourse of b usiness and the discours e of ethics. An integrati ve

view of responsib ilities toward the d ifferent grou ps affected by a

company's activities requires an ethical dimension, with a particular

emphasis on dialo g and engagement (Richter & D ow, 2017).

According to Fassin (20 09), there are three dif ferent stakeholder

groups: real st akeholders (to wh om a company has a resp onsibility

because they h ave a legitimate claim , power, and influence in i t),

stakewatcher s (who do not have a direc t stake, but inst ead repre-

sent, for examp le, watchdog associations that c are for the environ-

ment or consumer interests), and stakekeepers (mainly independent

regulators that m onitor and impose ex ternal controls, su ch as courts,

regulatory agencies, the media, etc.). In this regard, Mitchell, Agle,

and Wood (1997) mention thre e attributes of s takeholder s. First,

stakeholde rs require power to i nfluence compan ies; power will

also determine and prioritize stakeholders' demands. Second, le-

gitimacy give s rights throug h power, and determine s the extent to

which companie s have legal and mor al obligations. F inally, urgency

requires some s takeholder demands to b e met in an immediate way.

These attri butes enable stakeh olders to fulfill th e goals proposed for

companies (Hatami & Firoozi, 2019).