managerial morality and philanthropic decision-making: a test of an agency model

Managerial Morality and Philanthropic Decision-Making: A Testof an Agency Model

Cheng-Li Huang • Ju-Lan Tsai

Received: 13 November 2013 / Accepted: 22 August 2014

� Springer Science+Business Media Dordrecht 2014

Abstract While previous authors have broadly examined

the motivations and outcomes of the philanthropic activi-

ties of organizations, the present study extends Miska

et al.’s (J Bus Ethics 1–12, 2013) rationalistic approach to

examine the degree to which managerial philanthropic

decision-making behaviour is dominated by morality. This

study also tackles the question of whether this relationship

is moderated by the strength of the geographical proximity

and amount of the donation within an agency framework.

To probe the radical agency problem and the effect of

intervention, an alternative heuristic scenario is also

developed to provide evidence that managers under the

same moral level show significant differences in donation

intention under a variety of agency conditions. The results

indicate a significant difference between the existence and

non-existence of agency problems in charitable decision-

making by managers high in idealism and relativism;

however, at the same time, philanthropic behaviour is

intertwined with various dilemma-related contexts. These

findings bridge the gap in the literature on ethics and cor-

porate social responsibility, and challenge current thinking

on corporate governance mechanisms in this area by

offering researchers and practitioners an integrated model

that responds to a strong sceptical bias or a high premium

placed on morality.

Keywords Moral philosophy � Corporate charitable

decision � Contextual factors � Agency problem

Abbreviations

CSR Corporate social responsibility

EPQ Ethics position questionnaire

HRM Human resource management

Introduction

Corporate philanthropy has become a recognized approach in

the practice of corporate social responsibility (CSR), with

firms exploiting their expertise and specialist resources at

their own discretion in the service of sustainable develop-

ment and societal problems without sacrificing their core

operating activities (Campbell et al. 2002; Haley 1991; Saiia

et al. 2003). Previous research has mainly examined the

motivations and consequences behind firms’ philanthropic

engagement, including organizational impression manage-

ment (Brammer and Millington 2003; Chiu and Sharfman

2011; Godfrey 2005) and performance management

(Brammer and Millington 2008; Lev et al. 2010; Wang and

Qian 2011). However, this study attempts to expand the

antecedents of the unethical choice model proposed by Kish-

Gephart et al. (2010) and the ‘‘economic/ethical’’ overlap-

ping category of three-domain CSR model (Schwartz and

Carroll 2003) to investigate the agency conditions under

which corporate managers are willing to act philanthropi-

cally by considering donation-contextual settings and man-

agers’ intuitive choices and judgment (Miska et al. 2013).

The premise of our arguments is the agency-based

context proposed by Ross (1973) and Jensen and Meckling

C.-L. Huang

Department of Accounting, Tamkang University, No. 151,

Yingzhuan Rd., Tamsui Dist., New Taipei 25137, Taiwan, ROC

e-mail: [email protected]

J.-L. Tsai (&)

Accounting Section, Graduate Institute of Management

Sciences, Tamkang University, No. 151, Yingzhuan Rd., Tamsui

Dist., New Taipei 25137, Taiwan, ROC

e-mail: [email protected]

123

J Bus Ethics

DOI 10.1007/s10551-014-2338-x

(1976). Discretionary philanthropy provides managers with

a self-serving opportunity (Ghosh and Harjoto 2011) and

exacerbates the problems of moral hazard and adverse

selection, in which firms face severe agency problems.

Based on shareholder and stakeholder debates,1 we ratio-

nalize the effects of the probable trade-offs between max-

imizing profits and meeting societal responsibilities on

philanthropic behaviour. In addition to organizational set-

tings, the issue-contingent model provided by Jones

(1991)2 also suggests that a person’s moral philosophy

plays a dominant role in ethical decision-making (Kung

and Huang 2013). Here, the theory of reasoned action also

predicts that managers consider both their attitudes towards

the action and the subjective norms associated with the

problem or circumstances they face (Jensen and Meckling

1976; Kung and Huang 2013; Spence and Thomson 2009;

Woodbine and Taylor 2006). Thus, the morality of the

manager is a key element in an integrated model of ethical

reasoning, which largely determines their charitable deci-

sion-making.

Agency theory and moral philosophy are not mutually

exclusive when discussing corporate philanthropy. Despite

the tremendous growth in interest in corporate philanthropy

and CSR over the past decade, previous research has

merely discussed the importance of moral philosophy or

the agency problem for corporate decision-making, and

relatively few authors have addressed the effects of moral

philosophy on ethical decision-making (Falkenberg 2004;

Jamali and Mirshak 2007). It is therefore plausible to

conjecture that, for the same level of morality, managers

have distinctive patterns of behaviour intentions under

numerous agency conditions. Integrating corporate phi-

lanthropy with contextual characteristics of philanthropic

decision-making, this study also reflexively hypothesizes

that both geographical proximity (close/remote) and

donation amount (small/large) moderate decision-making

behaviour. Our findings are evidence of the potential issues

that illustrate the inherent difficulties associated with

managerial responsibility (Miska et al. 2013), and could be

used to answer questions on how and why managers strive

to engage in philanthropy.

This paper contributes to the body of knowledge on this

topic in several ways. First, this research responds to calls

made by Martin and Cullen (2006) and Margolis and

Walsh (2003) for more comprehensive and normative

research on ethical issues. Second, given that no single

framework can provide sufficient explanation of ethical

behaviour (Crossan et al. 2013; Hosmer 2008), this paper

enriches the explanations of one particular framework by

combining concepts of agency theory with ethical obliga-

tions to discuss organizational phenomena. Lastly, few

studies have explored the relationship between a manager’s

moral philosophy and decisions on corporate philanthropy,

especially in Asia. In light of the foregoing, our study

bridges this gap in the literature and provides a new per-

spective on how managerial decision-making behaviour

can be improved to offer critical insights for the benefit of

researchers and practitioners.

The remainder of this paper is organized as follows. ‘‘Lit-

erature Review and Research Hypotheses’’ section formulates

the hypotheses based on a review of the relevant literature.

‘‘Research Design’’ section describes the data and empirical

methodology and subsequently discusses the findings. The

final section offers conclusions, discusses the implications of

the work, and proposes future research directions.

Literature Review and Research Hypotheses

Scientific knowledge on the role played by moral philosophy

as an antecedent of corporate charitable decision-making

remains scarce. This section first reviews the relevant liter-

ature on the moral philosophy and agency problems that

influence a manager’s charitable decision-making behav-

iour. It then formulates four hypotheses to provide the the-

oretical basis on which to examine moral philosophy in

relation to charitable decision-making in organizations.

Moral Philosophy and Corporate Philanthropy Practice

The burgeoning research stream on CSR activities, par-

ticularly on charitable decision-making, has found that

such choices are influenced by a manager’s moral philos-

ophy (Buchholtz et al. 1999; Campbell et al. 2002; Smith

and Ward 2007; Spence and Thomson 2009). Moral phi-

losophy is defined as a set of beliefs, attitudes and values

that provide a framework for individuals to consider ethical

dilemmas (Barnett et al. 1994; Ferrell et al. 2012; Forsyth

and Nye 1990). Good ethical judgment guides a manager

both to seek justice and exploit business opportunities

(Schouten and Remme 2006; Van Staveren 2007). Hem-

ingway and Maclagan (2004) declared that altruistic CSR

is an expression of the normative values of individual

managers and an outcome of the managerial decision-

making process. In contrast, Haley (1991), Porter and

Kramer (2002) and Saiia et al. (2003) suggested that

1 Advocators of stakeholder primacy suggest that managers’ decision

outcomes must comply with moral norms and meet societal needs

(Aßlander 2011; Donaldson and Preston 1995; Gan 2006), while

advocators of shareholder primacy asserted the manner that managers

spend a firm’s resource on societal improvements is unethical unless

such an allocation also benefits its shareholders (Campbell and Slack

2007; Friedman 1970; Ricks and Williams 2005).2 Jones (1991) suggested that ethical decision-making involves the

recognition of moral issues, ethical judgment, behaviour intentions

and ethical behaviour.

C.-L. Huang, J.-L. Tsai

123

corporate philanthropy serves only to advance the strategic

interests of managers. Ricks and Williams (2005) also

refuted the notion that altruistic philanthropy exists. All

this suggests that philanthropic decision-making processes

involve individual morality and are related to issues of

ethics, thus is the moral grounding of corporate philan-

thropy a challenge for managerial planning and imple-

mentation (Cranenburgh and Arenas 2013).

According to Forsyth’s (1980, 1992) model of ethical

ideologies, idealism reflects the conviction that ethical judg-

ments are morally absolute in terms of moral principles.

Contrary to idealism, relativism reflects the conviction that all

moral standards are conditioned on society and culture, and

that moral judgment and conduct depend on the nature of the

situations and circumstances that arise. Davis, Andersen and

Curtis (2001) found that idealism (relativism) is more (less)

likely to express empathetic concerns and consider the per-

spectives of others. Park (2005) additionally showed that

idealism (relativism) is positively (negatively) related to the

importance of ethics and social responsibility. Similarly,

idealism (relativism) had also been found to be positively

(negatively) correlated with perceived ethics and social

responsibility (Etheredge 1999) and with ethical judgment

(Singhapakdi et al. 1996). Kant (2008) suggested that uni-

versal principles are the only motive that can endow a person

with moral values and idealism to concentrate on moral

absolutes and treat others with dignity and respect (see also

Forsyth 1992). These studies showed that different levels of

individual morality lead to different behaviours.

Integrating Godfrey’s (2005) three major themes into

the CSR literature, we conjecture that high idealism (low

relativism) advocates deontology, in which a person

shoulders the moral responsibility to satisfy social needs

voluntarily without considering economic returns (Logsdon

and Wood 2002; Trevino and Nelson 2010). By contrast,

low idealism (high relativism) can be thought as Godfrey’s

(2005) strategic philanthropy or shareholder capitalism, in

which it is considered that businesses should play no role in

social issues (Friedman 1970; McWilliams and Siegel

2000), and that a firm’s resources should be allocated to

activities only if the firm’s actions and its underlying

character are both positively perceived (Garriga and Mele

2004; Porter and Kramer 2006). In formal terms, we pos-

tulate the first hypothesis as follows:

H1 High-idealist (low-relativist) managers display a

greater tendency to donate than low-idealist (high-relativist)

managers.

Agency Problems in Corporate Philanthropy Practice

Realistically, it is necessary to consider individual moral

behaviour within the agency context in order to understand

the agency’s institutional efficiency because the individual

behaviours are influenced by the circumstances they face.

The economics and finance literature widely employs

agency theory to explain the repercussions of the diver-

gence of goals between principals and agents. It has con-

sistently supported the finding that agency problems

invariably lead to adverse selection (Fama and Jensen

1983; Jensen and Meckling 1976; Wang and Coffey 1992).

However, few authors have combined agency theory with

moral philosophy in studies of organizational behaviour.

Woodbine and Taylor (2006) posited that motivational

typologies can predict the whistle-blowing inclination of

banking officers in an agency-based context, for example.

Huang and Chang (2010) also claimed that agency prob-

lems significantly influence the moral judgments of man-

agers regarding a project at risk of failure. Similarly, Ghosh

and Harjoto (2011) suggested that insiders maximize their

stockholdings before a stock price decline to minimize

their personal taxes, which adversely affects the interests of

shareholders. These analyses show that an agency frame-

work is essential for considering the behaviour of indi-

viduals in an organization.

Seeing corporate philanthropy from the agency per-

spective allows the conclusion that managers may donate

corporate funds to local, well-publicized causes to achieve

greater personal prestige or approval from social elites

(Galaskiewicz and Burt 1991; Gallego-Alvarez et al.

2011). Rational choice theory further suggests that oppor-

tunistic managers place their personal interests ahead of

those of other stakeholders. For example, Cherry (2006)

assumed that managers always engage in unethical

behaviour that deviates from the firm’s overarching goal to

pursue personal interests. Attas (2004) and Jones and

Haigh (2007) also asserted that moral risk and asymmetric

information may trigger irresponsible managerial behav-

iour. In the same vein, Navarro (1988) was the first scholar

to apply the profit maximization and utility maximization

models to analyze the motivating factors behind corporate

donation decisions, and described the apportion of excess

discretionary income by managers as an action to satisfy

self-interest. Unequivocally, agency problems may provide

warnings about potential opportunism, while information

asymmetry gives rise to the possibility that managers might

neglect their duties as agents of shareholders by spending

shareholder dollars in their own selfish interests (Eisen-

hardt 1989; Kanodia et al. 1989).

Social contract theory further affirms that the problem of

moral hazard arises because ethics are founded upon selfish

rationality. However, it is widely acknowledged that dis-

cretionary philanthropy is easily swayed by individual

incentives, which results in a range of different decision

intentions given the variety of possible multi-agency set-

tings (Harrison and Harrell 1993). Agency problems occur

Managerial Morality and Philanthropic Decision-Making

123

because a manager is motivated to act in his/her own best

interests rather than those of the firm whenever the man-

ager has an opportunity to take hidden action. Hence, in

order to address the morality–corporate philanthropy rela-

tionship, this study differentiates the agency scenarios by

manipulating the potential opportunism and information

asymmetry conditions (Booth and Schulz 2004; Harrell and

Harrison 1994; Huang and Chang 2010; Rutledge and

Karim 1999; Woodbine and Taylor 2006). Combining

Forsyth’s (1980, 1992) definition of ethical ideologies with

these considerations provides the formulation of our second

hypothesis:

H2 The agency problem influences the relationship

between moral philosophy and the donation decision.

Specifically, the relationship varies between existent and

non-existent agency problem conditions.

Donation Characteristics and Charitable Intention

In conjunction with other donation-contextual factors,

specifically in terms of the geographical proximity and

donation amount, the decision to donate charitably is made

by a donation project manager based on cognitive moral

criteria rather than a set of specific ones (Spence and

Thomson 2009). According to Frederiksen (2010), the

proximity argument suggests that firms are more likely to

assist those in need who are located nearby compared with

those further away. The ‘slippery slope’ argument also

states that helping people in distant locations can make

firms seem morally unacceptable. In other words, the firm

ought to refrain from helping distant entities, since there

would appear to be a moral inconsistency in helping some

people but not all. Moreover, boundless donations are

morally unacceptable because they may cause the company

to fall apart.

Similarly, this study supposes that donation amount

serves as a determinant of charitable intention. Given their

limited resources, firms struggling for profit often quantify

the full costs and benefits of investing in CSR activities

(Porter and Kramer 2002). Moreover, we conjecture that

firms intend to make small donations in preference to larger

ones because small donations allow more managerial dis-

cretion. Based on the above discussions, we formulate the

following two hypotheses:

H3 Geographical proximity influences the relationship

between moral philosophy and the decision to donate.

Specifically, for the same level of morality (high or low

idealism/relativism), managers show a stronger tendency to

donate to those in closer locations.

H4 The donation amount influences the relationship

between moral philosophy and the decision to donate.

Specifically, for the same level of morality (high or low

idealism/relativism), managers show a stronger tendency to

donate smaller amounts.

In summary, on the basis of previous literature that

provides the theoretical basis of our hypotheses, we pro-

pose a conceptual framework depicted in Fig. 1 and as set

out in the following section.

Research Design

To investigate the connection between this improved

model of how agency problems, geographical proximity

and donation amount influence the donation decisions

made by managers constrained by limited resources, an

experimental questionnaire-based survey in Chinese was

conducted. Participants were first given instructions to

answer questions regarding a predesigned scenario (refer to

Part I of the Appendix); some manipulation items were

added to assess the subjects’ perceptions of the scenario.

The questions were used to assess managers’ donation

dynamics. Participants were then required to undertake a

self-assessment via an ethics position questionnaire (EPQ)

diagram developed by Forsyth (1980) before being asked a

set of questions related to their demographic characteris-

tics. The EPQ was used to assess their morality level from

two dimensions of ethical philosophy: idealism with con-

cerns for benign outcomes, and relativism with scepticism

with regards to inviolate moral principles. This framing and

ordering of the questionnaire was intended to control

respondents’ sensitive reactions to moral issues and reduce

any tendency not to answer the case questions.

Subjects and Procedures

The data for this study were collected from executive

master of business administration subjects who were either

taking courses in CSR or who had practical experience in

Moral philosophy (idealism/relativism)

Contextual factors 2)

3)

1. Agency problems (non-existent/existent) (H

(1) Geographical proximity (close/remote) (H(2) Donation amount (small/large) (H4)

Donation intention

Control variables

2. Donation characteristics

1. Social desirability bias 2. Demographic variables

H2~4

H1

Fig. 1 Proposed conceptual framework


123

the management of donation decisions in Taiwan, given

that potential subjects needed to possess knowledge on

donation conditions in order to make decisions in the

experimental case. The questionnaire was written in Chi-

nese and was pretested by academics and practitioners in

order to assess its validity (Heeler and Ray 1972). Two

pilot tests were used in this study. Firstly, eight experts and

scholars were invited to respond to the initial instrument

draft, and we then discussed their relevant comments with

them. They provided us with valuable suggestions about

some ambiguous or unrelated survey items. Modifications

were made after the pilot test had finished. Eight versions

of the revised instrument were randomly distributed to 63

EMBA students. Overall, the preliminary results indicated

a satisfactory level of reliability and discriminant validity.

The revised version was therefore recognized as the official

one.

In the main survey, a total of 421 subjects from six

universities in Taiwan participated in the experiment.

Subjects were randomly assigned to one of the eight ver-

sions [2 9 2 9 2 factorial designs with the agency prob-

lem (non-existent/existent), geographical proximity (close/

remote) and donation amount (small/large)]. The instructor

provided guidance and requested subjects to complete all

questions. Most subjects were middle managers in their

companies. A total of 409 responses were received con-

taining usable data (an effective response rate of 97 %). As

shown in Table 1, over half the participants (54 %) were

female and one-third (34 %) were between 26 and 35 years

of age, 36 % was aged 36–45 years and 24 % was 46 years

of age or older. The 19 % of respondents had 6–10 years of

work experience, 23 % subjects had 11–15 years, 17 %

had 16–20 years and 26 % subjects had more than 20 years

of work experience. Finally, 15 % of subjects worked for

hi-tech industries and 52 % worked for traditional indus-

tries, with the remainder employed in other industries.

Variables and Measurement

Dependent Variables

The ideal approach would have been to observe actual

decision-making behaviour in terms of moral values and

ethical practices, but this is difficult to operationalize and

measure (Elango et al. 2010). We therefore used donation

intention as a proxy for behaviour as commonly used by

behavioural ethics researchers. Research showed that

intentions are the strongest predictor of real ethical actions

and that individuals typically behave consistently with

either their judgments or their intentions (Hunt and Vitell

1986; Jones 1991; Rest 1986; Valentine and Rittenburg

2004). Hence, subjects indicated the degree to which they

were likely to donate on a 10-point scale. The higher the

numerical score, the greater the tendency to donate.

Independent Variables

Moral Philosophy We used the EPQ scale proposed by

Forsyth (1980) with seven points (1 = completely dis-

agree, 7 = completely agree) to measure the subject’s

tendency to relativism and idealism when facing moral or

immoral behaviour. The existing literature suggests that the

EPQ scale is popular in Chinese studies of this kind (Huang

and Chang 2010; Kung and Huang 2013; Ramasamy and

Yeung 2013; Sidani et al. 2014). This scale was tested

using back translation by a professional translator and was

reviewed by another expert in order to correct any incon-

sistencies. The EPQ listed 20 short statements, 10 mea-

suring idealism and 10 measuring relativism. In the

analysis, we then subdivided the data set into ‘idealism’

(high/low) and ‘relativism’ (high/low) groups based on the

means of the answers to each dimension. Higher (lower)

scores in the idealism/relativism dimensions indicated

higher (lower) levels of idealism/relativism.

Agency Problems In line with the approaches of Harrell

and Harrison (1994), Rutledge and Karim (1999), Booth

and Schulz (2004), Woodbine and Taylor (2006) and Hu-

ang and Chang (2010), we depicted two agency problems.

The ‘existent agency problem’ was characterized by the

Table 1 Description of

subjects

Hi-tech industries include

electronic industry and

biotechnology and medical care

industry; traditional industries

include iron and steel industry,

textile and fibre, food industry,

plastic industry, rubber industry,

cement industry and glass and

ceramic; other industries

include building materials and

construction industry, electric

machinery, shipping and

transportation industry, trading

and consumers’ goods industry,

automobile industry and tourism

N %

Gender

Male 188 46.0

Female 221 54.0

Age

Under 25 years

old

25 6.1

26–35 years old 137 33.5

36–45 years old 147 35.9

46–55 years old 78 19.1

55? years old 22 5.4

Work experience

Under 5 years 59 14.4

6–10 years 78 19.1

11–15 years 94 23.0

16–20 years 71 17.4

20? years 107 26.2

Industry

Hi-tech

industries

63 15.4

Traditional

industries

212 51.8

Other industries 134 32.8


123

example of a junior project manager with a growing

industry reputation for carrying out donation projects. This

manager has recently received an informal job offer from

another company involving a promotion and substantial

salary increase, and it is envisaged that his or her decision

to continue with the philanthropic programme will be

helpful for the offer. In addition, information on the gen-

erosity of the offer, the geographical proximity, the dona-

tion amount and the donation purpose is known only to the

donation project manager. Thus, there is some incentive

and/or opportunity to act against the best interests of the

firm. By contrast, the ‘non-existent agency problem’ was

characterized by the example of a senior project manager

with a solid industry reputation for carrying out donation

projects over a number of years. The decision to discon-

tinue the philanthropic programme would thus not damage

his or her established reputation. In addition, donation

information is publicly available, to satisfy stakeholders’

interests.

Geographical Proximity Regarding geographical prox-

imity, we determined the ‘close’ recipient group to be a

minority population near the firm and the ‘remote’ group to

be a minority population in South Africa.

Donation Amount Further, based on the findings of

Brammer et al. (2006) that the current level of profit takes

priority over previous contributions or past profits, small

and a large charitable donations were respectively repre-

sented by 1 % and 10 % of current profits.

Control Variables

Social Desirability Bias Social desirability bias com-

monly exists in charitable donations that involve individual

moral cognitive judgments (Bellizzi and Bristol 2005;

Chung and Monroe 2003; Cohen et al. 2001), thereby

leading to different decision behaviours (Quazi 2003;

Swanson 1995). Hence, this investigation included social

desirability bias in the research experiment. Social desir-

ability bias describes the tendency of individuals to over-

estimate (underestimate) the likelihood that they would

perform an desirable (undesirable) action (Chung and

Monroe 2003). To eliminate social desirability bias on

moral behaviour from the present analysis, subjects were

asked whether, all other things being equal, they would

expect negative moral judgment from their colleagues

(Huang and Chang 2010).

Demographic Variables Andreoni et al. (2003) and Piper

and Schnepf (2008) asserted that women are more likely to

donate than men; however, donations by women are lower

than those by men. Thus, we consider gender to influence

charitable intention (Bellizzi and Bristol 2005; Williams

2003). Moreover, firms in environmentally sensitive

industries intend to pursue strategic philanthropy actively

to improve or recover lost reputation (Amato and Amato

2007; Brammer and Millington 2003), owing to the greater

signal value of such expenditure in competitive environ-

ments. We therefore also controlled for gender and industry

type.

Table 2 Extracted factor results of moral philosophy

Construct Items Loading Cronbach’s

a

Idealism If an action could harm an

innocent other, then it should

not be done

0.769 0.802

People should make certain

that their actions never

intentionally harm another

even to a small degree

0.739

It is never necessary to

sacrifice the welfare of

others

0.721

One should never

psychologically or

physically harm another

person

0.717

The existence of potential

harm to others is always

wrong, irrespective of the

benefits to be gained

0.703

Risks to another should never

be tolerated, irrespective of

how small the risks might be

0.654

Relativism Questions of what is ethical

for everyone can never be

resolved since what is moral

or immoral is up to the

individual

0.754 0.777

Moral standards should be

seen as being individualistic;

what one person considers to

be moral may be judged to

be immoral by another

person

0.736

Moral standards are simply

personal rules that indicate

how a person should behave,

and are not be applied in

making judgments of others

0.730

Ethical considerations in

interpersonal relations are so

complex that individuals

should be allowed to

formulate their own

individual codes

0.714

There are no ethical principles

that are so important that

they should be a part of any

code of ethics

0.711


123

Reliability and Validity Analysis

As proposed by Steenhaut and Kenhove (2006), we eval-

uated convergent validity using confirmatory factor ana-

lysis to extract the relativism and idealism factors from the

EPQ. As presented in Table 2, the standardized loadings

for our items ranged from 0.654 to 0.769, implying ade-

quate convergent validity (Anderson et al. 2006; Hair and

Anderson 2010; Nunnally 2010). Cronbach’s a was

respectively 0.802 and 0.777, suggesting that the reliability

was acceptable (Nunnally 2010).

Manipulation Check

To ensure that the experimental design provided a clear

interpretation for our model, we included four manipula-

tion items related to how clearly the subjects understood

the case description in the questionnaire. We asked

respondents to evaluate separately the degree to which their

decisions would be the moral choice when carrying out the

donation project, as well as their perceptions of agency

problems, geographical proximity and donation amount.

The scale ranged from 1 (very moral/non-existent/remote/

small) to 10 (very immoral/existent/close/large). Based on

the t test analyses of agency problems, geographical

proximity and donation amount, the results showed 1 %

significant differences for each dichotomy of these vari-

ables. We therefore concluded that subjects had a high

comprehension of the case description and could specifi-

cally recognize the need to use their own judgment in the

design case.

Analysis and Findings

Descriptive Statistics and Preliminary Analyses

The descriptive statistics are reported in Table 3. Based on

the mean values of the relativism and idealism factors, we

divided participants into high and low subgroups for the

subsequent analyses. From the 1 % significant results of

paired t-test examination of the differences of moral

judgments between a manager and her/his colleagues, we

found that the mean responses of subjects are higher than

those of their colleagues regardless of agency problems,

geographical proximity or donation amount. In line with

the findings of Chung and Monroe (2003), managers also

tended to overestimate (underestimate) their intentions

towards an desirable (undesirable) action, confirming that a

manager’s charitable intention is significantly influenced

by the social desirability bias of high- and low-idealist/

relativist subjects. This study thus recognizes the need to

include social desirability bias as a control variable.

We carried out a preliminarily examination of the dif-

ference between the subgroups of moral philosophy and

donation-contextual factors on charitable intention. As

shown by the comparison results presented in Table 4, the

charitable intentions of low-relativist subjects are signifi-

cantly higher than those of their high-relativist counterparts

(7.897 and 7.523, p = 0.065). Charitable intention in non-

existent agency problems is higher than those in existent

agency problems (7.881 and 7.490, p = 0.051), and the

intention to make small donations is higher than it is to

make larger ones (8.000 and 7.369, p \ 0.001).

We next explored the moderation effects of moral phi-

losophy and donation-contextual factors on charitable

intention. In Table 5, we show that the charitable intentions

of both high-idealist managers and high-relativist managers

demonstrate a significant difference between existent and

non-existent agency problems (7.448 and 8.184,

p = 0.004; 7.127 and 7.872, p = 0.006), but these results

were not observed either for low-idealist managers or for

low-relativist managers. In addition, the charitable inten-

tions of high-idealist managers are higher than those of

low-idealist managers for non-existent agency problems

(8.184 and 7.483, p = 0.014), whereas the charitable

intentions of low-relativist managers are higher than those

of high-relativist ones in existent agency problems (7.898

and 7.127, p = 0.005).

Regarding the effects of geographical proximity

between moral philosophy and donation intentions, low-

relativist managers have stronger charitable intentions to

help needy people who live nearby than high-relativist

managers do (8.021 and 7.487, p = 0.041). With the

exception of low-idealist managers, all managers preferred

to make small rather than large donations (8.287 and 7.347,

p \ 0.001; 8.283 and 7.463, p = 0.007; 7.766 and 7.307,

p = 0.086). Furthermore, anchoring the small donations,

we also discovered that the charitable intentions of high-

idealist managers are higher than those of low-idealist

managers (8.287 and 7.625, p = 0.010), and the charitable

intentions of low-relativist managers are higher than those

of high-relativist ones (8.283 and 7.766, p = 0.044).

Assessment of the Integrated Model

To test our hypotheses, we performed a covariance ana-

lysis. As indicated in Table 6, relativism (F = 3.899,

p = 0.049), agency problem (F = 3.814, p = 0.052) and

donation amount (F = 11.896, p \ 0.001) had a significant

impact on charitable intention. Moreover, the results shown

in Table 4 highlight the fact that the charitable intentions

of low-relativist subjects (7.897) are significantly higher

than those of their high-relativist counterparts (7.523), thus

partially supporting H1.


123

H2 hypothesizes that agency problems and moral phi-

losophy have a joint effect on the donation decision. The

results shown in Table 6 reveal that agency problems do

interact with idealism (F = 4.630, p = 0.032) and rela-

tivism (F = 3.690, p = 0.055) in terms of charitable

intention. From the robustness check (Table 5; Fig. 2), this

finding confirmed that the states of high and low idealism

demonstrate different decision intentions in the non-exis-

tent agency problem, while states of low and high rela-

tivism result in different decision intentions in the existent

agency problem, supporting H2. More specifically, high-

idealist managers are more likely to donate than their low-

idealist counterparts in non-existent agency problems, and

that low-relativist managers are more likely to donate than

high-relativist ones in existent agency problems.

An overview of the moderating effects of the agency

problem (Fig. 3) also suggests that there is a difference in

decision-making behaviour stemming from high-idealist

managers between existent and non-existent agency prob-

lems, which is analogous to that from high-relativist

managers. High-idealist managers also have higher dona-

tion intention in the non-existent agency problem. As per

our expectation, high-relativist managers in the ‘non-exis-

tent agency problem’ have higher donation intentions than

those in the ‘existent agency problem’. Moreover, Fig. 3

also suggests that low-idealist and low-relativist managers

have almost identical donation behaviour for existent and

non-existent agency problems, but the charitable intentions

of low-relativist managers are higher than those of low-

idealist managers.

The results presented in Table 6 show that the interac-

tion between idealism/relativism and geographical prox-

imity is not significant in terms of charitable intention,

suggesting that H3 is not supported. Finally, only the

interaction between idealism and donation amount has a

significant relationship with charitable intention

(F = 4.481, p = 0.035). The moderation effect plotted in

Fig. 4 and the test results shown in Table 5 both reveal that

the charitable intentions of high-idealist managers are

higher than those of low-idealist managers for small

Table 3 Descriptive statistics

Items Idealism Relativism

Low High Low High

Subject Colleague Subject Colleague Subject Colleague Subject Colleague

Agency problem

Existent 7.554 (2.050) 6.639 (2.212) 7.448 (2.006) 6.376 (2.086) 7.898 (1.785) 6.806 (1.780) 7.127 (2.151) 6.191 (2.379)

0.915*** 1.072*** 1.092*** 0.936***

N = 83 N = 125 N = 98 N = 110

Non-existent 7.483 6.349 8.184 7.228 7.895 6.882 7.872 6.831

(2.051) (2.141) (1.926) (2.293) (2.200) (2.416) (1.888) (2.178)

1.134*** 0.956*** 1.013*** 1.041***

N = 87 N = 114 N = 76 N = 125

Geographical proximity

Close 7.632 (1.899) 6.690 (2.070) 7.800 (1.939) 6.768 (2.163) 8.021 (1.744) 7.000 (1.882) 7.487 (2.032) 6.513 (2.288)

0.942*** 1.032*** 1.021*** 0.974***

N = 87 N = 125 N = 97 N = 115

Remote 7.398 (2.192) 6.281 (2.273) 7.798 (2.070) 6.798 (2.297) 7.740 (2.227) 6.636 (2.294) 7.558 (2.065) 6.546 (2.306)

1.117*** 1.000*** 1.104*** 1.012***

N = 83 N = 114 N = 77 N = 120

Donation amount

Small 7.625 (1.955) 6.546 (2.138) 8.287 (1.664) 7.244 (2.113) 8.283 (1.731) 7.087 (1.970) 7.766 (1.868) 6.820 (2.285)

1.079*** 1.043*** 1.196*** 0.946***

N = 88 N = 115 N = 92 N = 111

Large 7.402 (2.142) 6.432 (2.225) 7.347 (2.175) 6.355 (2.246) 7.463 (2.138) 6.561 (2.167) 7.307 (2.176) 6.268 (2.276)

0.97*** 0.992*** 0.902*** 1.039***

N = 82 N = 124 N = 82 N = 124

Each cell from up to down represents average score of charitable intention, standard deviation, the difference between subjects and his/her

colleagues’ average scores and sample size

*, ** and *** Significance at 10, 5 and 1 %, respectively


123

donations, but no significant effect was found for large

donations. Further, high-idealist managers have a signifi-

cantly greater intention to make small donations compared

with large donations. These findings support H4.

To control for the confounding effect (Cochran and Cox

1992), we further tested for the interaction of moral phi-

losophy and any two donation-contextual factors. How-

ever, the covariance analysis indicated insignificant results.

To test the robustness of the results, we carried out a t test

for each of eight subgroups. From Table 7, the results

again clearly bolstered our arguments that high-idealist

(low-relativist) managers have a greater intention to make

smaller donations than low-idealist (high-relativist) man-

agers in the non-existence (existence) of agency problems.

Additionally, both high-idealist and high-relativist man-

agers in the non-existence of agency problems have a

significantly greater intention than those who act in the

existence of agency problems. Last but not least, for the

same level of high idealism (low relativism), managers

have a stronger intention to donate smaller amounts in

various agency conditions.

Discussion

Given the paucity of research on the effects of a manager’s

moral philosophy on ethical decision-making in controversial

business practices (Cranenburgh and Arenas 2013; Falken-

berg 2004; Jamali and Mirshak 2007; Tian 2008), this study

exclusively focuses on the philanthropic donation in that it

permits the expression of other forms of ethical predisposition.

The exploratory results confirmed the predominant roles of

agency problem and donation amount that extraordinarily

moderate the relationship between moral philosophy and

charitable intention. The findings also affirmed that different

moral philosophy reveal different behaviour intentions related

to philanthropy in various agency conditions.

Arguments Related to the Findings

Our results suggest that different moral levels of high

idealism (high relativism) are related to different decision

intentions in the non-existence (existence) of agency

problem. These results were consistent with our conjecture

mentioned previously that high idealism (low relativism) is

thought to be more other-centred, altruistic and unselfish

than low idealism (high relativism) (Forsyth 1992; Park

2005), so these people intend to donate. Expanding from

stewardship theory, high-idealist managers act as respon-

sible stewards who are transparent and accountable, max-

imizing social benefits, and they exercise the due care of a

good administrator in how they manage philanthropic

donations. Hence, a governance structure of public dona-

tion information specifically stimulates high-idealist man-

agers’ voluntary donations. Alternatively, high-relativist

managers apprehend that they cannot effectively advertise

their philanthropic undertakings without having public

access to donation information. Broadening out our per-

spective from signalling theory, they thus have a higher

intention to donate in the non-existence of an agency

problem in respect of their contributions by publishing

information about their donations, but the dubious ethics of

the case are still open to debate.

The egocentricity of high-relativist managers causes

charitable intentions to be lower than for high-idealist

managers. Furthermore, high-relativist managers intend to

donate in the existence of an agency problem because they

instinctively defend their own self-interest. However, their

merits of private informal job offer and withdrawal infor-

mation make charitable donation as a form over substance.

Thus, it is predicted that the donation behaviour of high-

relativist managers in the existence of agency problems

will decrease, and high-relativist managers in the non-

existence of agency problems are more likely to donate

than they are in the existence of agency problems.

Moreover, low-idealist and low-relativist managers have

almost identical donation behaviour whether agency

problems exist or not, but the charitable intentions of low-

relativist managers are higher than those of low-idealist

Table 4 Statistics test of subgroups effects on charitable intention

Sample

size

Mean SD t value p value

Moral philosophy

Idealism

Low 170 7.518 2.045 -1.391 0.165

High 239 7.799 1.998

Relativism

Low 174 7.897 1.971 1.853* 0.065

High 235 7.523 2.045

Agency problem

Non-existent 201 7.881 2.006 1.960* 0.051

Existent 208 7.490 2.019

Geographical proximity

Close 197 7.629 2.126 -0.508 0.612

Remote 212 7.731 1.920

Donation amount

Small

amount

203 8.000 1.821 3.198*** \0.001

Large

amount

206 7.369 2.157

Dependent variable is charitable intention



123

managers. Compared to low-idealist managers, we deduced

that low-relativist managers are devoted to cultivating a

corporate or personal image and social benefits through

philanthropic activities, and hence they are more likely to

donate than low-idealist managers. In addition, we specu-

late that low relativism, compared with high relativism,

emphasizes moral absolutes and treats people with dignity

and respect; in other words, it is impervious to agency

problems.

However, a possible explanation for the insignificant role

of geographical proximity is that managers recognize that

donation behaviour is simply an accepted CSR initiative

irrespective of whether the motives of the decision-maker are

altruistic or strategic; in other words, doing good benefits firms

and/or managers. Managers are aware that recipients can

receive help from continuous donations, and thus targeted

donations are not necessarily essential. Further, the finding of

managers’ greater preference for small donations demon-

strates that managers are unwilling to spend large amounts to

assist recipients. From a strategic perspective, managers may

donate small amounts frequently rather than making large

one-off donations to attract media attention, to promote visi-

bility, and to improve the CSR image of the firm.

Implications for Academics and Practitioners

The exploration of this issue contributes to bridging an

important gap in the literature on philosophical and ethical

decision-making from a multi-theoretic perspective, and

Table 5 Statistics test of moderations of moral philosophy and contextual factors on charitable intention

Item Idealism Relativism

N Mean SD t value p value N Mean SD t value p value

Moral philosophy $ agency problem

Low ? Non-existent 87 7.483 2.051 -0.227 0.821 76 7.895 2.200 -0.011 0.992

Low ? Existent 83 7.554 2.050 98 7.898 1.785

High ? Non-existent 114 8.184 1.926 2.888*** 0.004 125 7.872 1.888 2.803*** 0.006

High ? Existent 125 7.448 2.006 110 7.127 2.151

Low / Non-existent 87 7.483 2.051 -2.487** 0.014 76 7.895 2.200 0.078 0.938

High / Non-existent 114 8.184 1.926 125 7.872 1.888

Low / Existent 83 7.554 2.050 0.371 0.711 98 7.898 1.785 2.822*** 0.005

High / Existent 125 7.448 2.006 110 7.127 2.151

Moral philosophy $ geographical proximity

Low ? Close 87 7.632 1.899 -.744 0.458 97 8.021 1.744 -0.932 0.353

Low ? Remote 83 7.398 2.192 77 7.740 2.227

High ? Close 125 7.800 1.939 -0.007 0.995 115 7.487 2.032 0.267 0.79

High ? Remote 114 7.798 2.070 120 7.558 2.065

Low / Close 87 7.632 1.899 -0.625 0.533 97 8.021 1.744 2.058** 0.041

High / Close 125 7.800 1.939 115 7.487 2.032

Low / Remote 83 7.398 2.192 -1.297 0.196 77 7.740 2.227 0.585 0.559

High / Remote 114 7.798 2.070 120 7.558 2.065

Moral philosophy $ donation amount

Low ? Small 88 7.625 1.955 0.708 0.480 92 8.283 1.731 2.756*** 0.007

Low ? Large 82 7.402 2.142 82 7.463 2.138

High ? Small 115 8.287 1.664 3.769*** \0.001 111 7.766 1.868 1.726* 0.086

High ? Large 124 7.347 2.175 124 7.307 2.176

Low / Small 88 7.625 1.955 -2.603** 0.010 92 8.283 1.731 2.028** 0.044

High / Small 115 8.287 1.664 111 7.766 1.868

Low / Large 82 7.402 2.142 0.181 0.857 82 7.463 2.138 0.510 0.610

High / Large 124 7.347 2.175 124 7.307 2.176

Dependent variable is charitable intention

SD standard deviation



123

Fig. 2 Joint effects of idealism/

relativism and agency problem

on charitable intention

Fig. 3 Comparisons of agency problem moderating effects on moral

philosophy and charitable intentionFig. 4 Moderation of idealism and donation amount on charitable

intention

Table 6 Analysis of covariance

(N = 409)

Dependent variable is donation

intention

*, ** and *** Significance at

10, 5 and 1 %, respectively

Source Sum of squares df Mean square F value p value

Corrected model 253.404 16 15.838 4.439*** \0.001

Intercept 23539.670 1 23539.670 6597.023*** \0.001

Idealism 5.835 1 5.835 1.635 0.202

Relativism 13.914 1 13.914 3.899** 0.049

Agency problem 13.610 1 13.610 3.814* 0.052

Donation relationship 0.639 1 0.639 0.179 0.672

Donation amount 42.446 1 42.446 11.896*** \0.001

Idealism 9 agency problem 16.519 1 16.519 4.630** 0.032

Idealism 9 geographical proximity 1.742 1 1.742 0.488 0.485

Idealism 9 donation amount 15.988 1 15.988 4.481** 0.035

Relativism 9 agency problem 13.167 1 13.167 3.690* 0.055

Relativism 9 geographical proximity 3.590 1 3.590 1.006 0.316

Relativism 9 donation amount 3.111 1 3.111 0.872 0.351

Social desirability bias 98.724 1 98.724 27.668*** \0.001

Gender 3.104 1 3.104 0.870 0.352

Age 9.185 1 9.185 2.574 0.109

Experience 0.637 1 0.637 0.179 0.673

Industry types 11.192 1 11.192 3.137* 0.077

Error 1355.926 380 3.568

Adjusted R2 0.122


123

responds to calls by Martin and Cullen (2006) for a more

comprehensive perspective of ethical issues in research and

by Margolis and Walsh (2003) for more normative research

rather than instrumental consideration. This investigation

still offers an alternative explanation for expectations

regarding individual moral judgments and behaviours. The

finding that different moral levels of moral philosophy have

different behaviour intentions irrespective of whether the

agency problem exists or not, suggest that practitioners need

to consider the special role of human resource management

(HRM) in the generation of an ethical climate in organiza-

tions in general, and to strengthen their corporate

governance mechanisms to maintain corporate growth

(Klettner et al. 2013).

For example, effective in-house ethical training pro-

grammes evoke managers’ awareness of the ethical codes

needed to encourage idealism to maintain the correct

behaviour and high standards that help delineate correct

and incorrect behaviour. Enforcing ethical codes also

causes relativism to be more effective with regard to

expressing genuine concern for needy people. However,

blindly cultivating corporate ethical value without ade-

quate integration of managers’ personal moral philosophy

may make them more or less willing to adhere to

Table 7 Statistics test of moderations on charitable intention (control for confounding effect)

Panel A: control for donation amount and geographical proximity

Treatment Idealism Relativism

Donation

amount

Geographical

proximity

Agency problem Low High Difference(L–H) Low High Difference(L–H)

Small Remote Existent 7.385 8.000 -0.615 8.040 7.261 0.779*

Non-existent 7.632 8.643 -1.011** 8.000 8.367 -0.367

Difference(Exist–Non) -0.247 -0.643* – 0.040 -1.106** –

Close Existent 7.750 7.806 -0.056 8.321 7.250 1.071**

Non-existent 7.783 8.759 -0.976** 8.727 8.033 0.694*

Difference(Exist–Non) -0.033 -0.953** – -0.406 -0.783* –

Large Remote Existent 7.160 7.448 -0.288 7.867 7.121 0.745

Non-existent 7.538 7.286 0.253 7.050 7.471 -0.421

Difference(Exist–Non) -0.378 0.163 – 0.817 -0.349 –

Close Existent 7.583 6.844 0.740* 7.400 6.885 0.515

Non-existent 7.400 7.893 -0.493 7.706 7.677 0.028

Difference(Exist–Non) 0.183 -1.049** – -0.306 -0.793* –

Panel B: control for agency problem and geographical proximity

Treatment Idealism Relativism

Agency problem Geographical proximity Donation amount Low High Difference(L–H) Low High Difference(L–H)

Existent Remote Small 7.385 8.000 -0.615 8.040 7.261 0.779*

Large 7.538 7.286 0.253 7.867 7.121 0.745

Difference(S–L) -0.154 0.714* – 0.173 0.140 –

Close Small 7.750 7.806 -0.056 8.321 7.250 1.071**

Large 7.583 6.844 0.740* 7.400 6.885 0.515

Difference(S–L) 0.167 0.962** – 0.921** 0.365 –

Non-existent Remote Small 7.632 8.643 -1.011** 8.000 8.367 -0.367

Large 7.160 7.448 -0.288 7.050 7.471 -0.421

Difference(S–L) 0.472 1.195** – 0.950 0.896** –

Close Small 7.783 8.759 -0.976** 8.727 8.033 0.694*

Large 7.400 7.893 -0.493 7.706 7.677 0.028

Difference(S–L) 0.383 0.866** – 1.021** 0.356 –

Dependent variable is donation intention



123

organizational CSR policies. Managers should be aware of

corporate ethical values through a code of ethics, but

managers’ ethical ideologies should be recognized when

formulating ethical codes in order to avoid the misinter-

pretation and misapplication of organizational values and

intentions.

The pursuit of ethical HRM is essentially futile if cor-

porations show little respect for any ethical or even legal

considerations over and above the generation of profit.

Therefore, a sound governance structure specifically stim-

ulates managers to donate appropriately. Firms should shift

emphasis from single profit-seeking to the development of

the diffusion of social responsibility, and implement finan-

cial compensation collocated with nonfinancial rewards.

Meanwhile, the philanthropic information is required to be

fully accessible to all stakeholders to prevent opportunistic

behaviour. Firms should also assign a senior manager to

authorize large donation decisions in order to ensure that

stakeholders’ interests are addressed.

Limitations and Further Research

Despite our contributions, as with any empirical study, a

number of potential limitations exist. As with most of the

literature on behavioural ethics, our study measures dona-

tion intention substituted for donation behaviour. However,

the strong constraints or disruptions by the environment or

measurement discrepancies may result in bias between

intention and behaviour (Kish-Gephart et al. 2010). The

consideration of both intention and behaviour in same

investigation is important in future studies because it

influences the theories and the methodology. Our research

initially only found a non-significant interaction between

moral philanthropy and geographical proximity in terms of

the charitable donation decision; however, other factors

such as donation frequency, disaster donations and the

perceived role of ethics and social responsibility warrant

further investigation. Moreover, because subjects respon-

ded directly to questions provided in the given design case,

the results of this study may not be generalizable to other

design cases. Further research that considers different

information sets or statements may provide different find-

ings. Additionally, a cross-cultural comparison may be

expected because cultural heterogeneity might produce a

different moral framework even though the cultural back-

ground of Taiwan is characterized by the traditional ethics

of Confucianism (Al-Khatib et al. 2004). Finally, the dis-

cretionary nature of donating brings forward the problem

of the financial-based compensation packages offered to

managers, which is another popular corporate governance

mechanism (Cordeiro and Sarkis 2008). Further research is

recommended to examine compensation contracts and

agency problems simultaneously.

Acknowledgments The authors gratefully acknowledge the finan-

cial support by National Science Council (NSC 100-2410-H-032-

035). In addition, we also appreciate the two blind reviewers’ con-

structive suggestions for improving the quality of this study.

Appendix: The Content of the Measurement

Instrument

There are three parts in the instrument, including design

case, the scale of ethics position and demographic profile,

but we omit the part of demographic profile here.

Part I: Design Case

Agency Scenario

You are a donation project manager and acting as a junior

project manager with a growing industry reputation for

managing donation projects. You have recently received an

informal job offer from another company involving a

promotion and substantial salary increase, and it will be

helpful for the offer if you make a decision to continue the

philanthropic programme. In addition, all information on

the generosity of the offer, geographical proximity, dona-

tion amount and donation purpose are known only to the

donation project manager and will never be published.3

[You are a donation project manager and acting as a senior

project manager with a solid industry reputation for man-

aging donation projects over a number of years. The

decision to discontinue the philanthropic programme will

not damage your well-established reputation. In addition,

donation information is available to the public to ensure

that stakeholders’ interests are met.4]

Philanthropic Donation Programme

Your company is expected to achieve sales revenues of

two billion and profits of 200 million this year. You are a

donation project manager, and your duty is to formulate a

donation proposal. The company plans to make a donation

at the end of this year. The philanthropic plan is as

follows:

Your company decides to allocate 1% of its current

profit [10% of its current profit] to 200 disadvantaged

students in South Africa [50 disadvantaged students

in Taiwan] to support educational activities and

3 The description represented an ‘‘existent agency problem’’ scenario.4 The description represented a ‘‘non-existent agency problem’’

scenario.


123

express their social responsibilities and concerns.

These charitable donations also offer some tax

advantages.

Part II: The Scale of Ethics Position

Items

1 People should make certain that their actions never intentionally harm another even to a small degree

2 Risks to another should never be tolerated, irrespective of how small the risks might be

3 The existence of potential harm to others is always wrong, irrespective of the benefits to be gained

4 One should never psychologically or physically harm another person

5 One should not perform an action which might in any way threaten the dignity and welfare of another individual

6 If an action could harm an innocent other, then it should not be done

7 Deciding whether or not to perform an act by balancing the positive consequences of the act against the negative consequences of the act is

immoral

8 The dignity and welfare of the people should be the most important concern in any society

1. To what extent do you intend to continue the philanthropic program? Definitely will NOT

Definitely will

1 2 3 4 5 6 7 8 9 10

2. If your colleague is the donation project manager in this case, to what extent do

you think your colleague intend to continue the philanthropic program?

Definitely will NOT

Definitely will

1 2 3 4 5 6 7 8 9 10

3. To what extent do you perceive with the philanthropic program is ethical?

Definitely ethical

Definitely NOT ethical

1 2 3 4 5 6 7 8 9 10

4. To what extent do you perceive with the donation amount (1% of its current profit)

is small or large?

Definitely Small

Definitely Large

1 2 3 4 5 6 7 8 9 10

5. To what extent do you perceive with the geographical proximity of recipient

(200 disadvantaged students in South Africa) is remote or close?

Definitely Remote

Definitely Close

1 2 3 4 5 6 7 8 9 10

6. To what extent do you perceive with the agency problem in this case?

Definitely NOT existent

Definitely existent

1 2 3 4 5 6 7 8 9 10


123

References

Al-Khatib, J., Rawwas, M. A., & Vitell, S. (2004). Organizational

ethics in developing countries: A comparative analysis. Journal

of Business Ethics, 55(4), 307–320.

Amato, L., & Amato, C. (2007). The effects of firm size and industry

on corporate giving. Journal of Business Ethics, 72(3), 229–241.

Anderson, R. E., Tatham, R. L., & Black, B. (2006). Multivariate data

analysis. Lightning Source Incorporated.

Andreoni, J., Brown, E., & Rischall, I. (2003). Charitable giving by

married couples: Who decides and why does it matter? The

Journal of Human Resources, 38(1), 111–133.

Aßlander, M. (2011). Corporate social responsibility as subsidiary co-

responsibility: A macroeconomic perspective. Journal of Busi-

ness Ethics, 99(1), 115–128.

Attas, D. (2004). A moral stakeholder theory of the firm. Zeitschrift

fuer Wirtschafts- und Unternehmensethik, 5(3), 312–318.

Barnett, T., Bass, K., & Brown, G. (1994). Ethical ideology and

ethical judgment regarding ethical issues in business. Journal of

Business Ethics, 13(6), 469–480.

Bellizzi, J., & Bristol, T. (2005). Supervising the unethical selling

behavior of top sales performers: Assessing the impact of social

desirability bias. Journal of Business Ethics, 57(4), 377–388.

Booth, P., & Schulz, A. K. D. (2004). The impact of an ethical

environment on managers’ project evaluation judgments under

agency problem conditions. Accounting, Organizations and

Society, 29(5–6), 473–488.

Brammer, S., & Millington, A. (2003). The evolution of corporate

charitable contributions in the UK between 1989 and 1999:

Industry structure and stakeholder influences. Business Ethics: A

European Review, 12(3), 216–228.

Brammer, S., & Millington, A. (2008). Does it pay to be different? An

analysis of the relationship between corporate social and

financial performance. Strategic Management Journal, 29(12),

1325–1343.

Brammer, S., Millington, A., & Pavelin, S. (2006). Is philanthropy

strategic? An analysis of the management of charitable giving in

large UK companies. Business Ethics: A European Review,

15(3), 234–245.

Buchholtz, A. K., Amason, A. C., & Rutherford, M. A. (1999).

Beyond resources: The mediating effect of top management

discretion and values on corporate philanthropy. Business and

Society, 38(2), 167–187.

Campbell, D., Moore, G., & Metzger, M. (2002). Corporate

philanthropy in the U.K. 1985–2000 some empirical findings.

Journal of Business Ethics, 39(1–2), 29–41.

Campbell, D., & Slack, R. (2007). The strategic use of corporate

philanthropy: Building societies and demutualisation defences.

Business Ethics: A European Review, 16(4), 326–343.

Cherry, J. (2006). The impact of normative influence and locus of

control on ethical judgments and intentions: A cross-cultural

comparison. Journal of Business Ethics, 68(2), 113–132.

Chiu, S.-C., & Sharfman, M. (2011). Legitimacy, visibility, and the

antecedents of corporate social performance: An investigation of

the instrumental perspective. Journal of Management, 37(6),

1558–1585.

Chung, J., & Monroe, G. (2003). Exploring social desirability bias.

Journal of Business Ethics, 44(4), 291–302.

Cochran, W. G., & Cox, G. M. (1992). Experimental designs (2nd

ed.). New York: Wiley.

Cohen, J. R., Pant, L. W., & Sharp, D. J. (2001). An examination of

differences in ethical decision-making between Canadian busi-

ness students and accounting professionals. Journal of Business

Ethics, 30(4), 319–336.

Cordeiro, J. J., & Sarkis, J. (2008). Does explicit contracting

effectively link CEO compensation to environmental perfor-

mance? Business Strategy and the Environment, 17(5),

304–317.

Cranenburgh, K., & Arenas, D. (2013). Strategic and moral

dilemmas of corporate philanthropy in developing countries:

Heineken in Sub-Saharan Africa. Journal of Business Ethics,

122, 523–536.

Crossan, M., Mazutis, D., & Seijts, G. (2013). In search of virtue: The

role of virtues, values and character strengths in ethical decision

making. Journal of Business Ethics, 113(4), 567–581.

Davis, M., Andersen, M., & Curtis, M. (2001). Measuring ethical

ideology in business ethics: A critical analysis of the ethics

position questionnaire. Journal of Business Ethics, 32(1), 35–53.

Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the

corporation: Concepts, evidence, and implications. The Academy

of Management Review, 20(1), 65–91.

Eisenhardt, K. M. (1989). Agency theory: An assessment and review.

The Academy of Management Review, 14(1), 57–74.

Elango, B., Paul, K., Kundu, S., & Paudel, S. (2010). Organizational

ethics, individual ethics, and ethical intentions in international

decision-making. Journal of Business Ethics, 97(4), 543–561.

Items

9 It is never necessary to sacrifice the welfare of others

10 Moral behaviours are actions that closely match ideals of the most ‘‘perfect’’ action

11 There are no ethical principles that are so important that they should be a part of any code of ethics

12 What is ethical varies from one situation and society to another

13 Moral standards should be seen as being individualistic; what one person considers to be moral may be judged to be immoral by another

person

14 Different types of morality cannot be compared as to ‘‘rightness’’

15 Questions of what is ethical for everyone can never be resolved since what is moral or immoral is up to the individual

16 Moral standards are simply personal rules that indicate how a person should behave, and are not be applied in making judgments of others

17 Ethical considerations in interpersonal relations are so complex that individuals should be allowed to formulate their own individual codes

18 Rigidly codifying an ethical position that prevents certain types of actions could stand in the way of better human relations and adjustment

19 No rule concerning lying can be formulated; whether a lie is permissible or not permissible totally depends upon the situation

20 Whether a lie is judged to be moral or immoral depends upon the circumstances surrounding the action

Forsyth (1980, 1992)


123

Etheredge, J. (1999). The perceived role of ethics and social

responsibility: An alternative scale structure. Journal of Business

Ethics, 18(1), 51–64.

Falkenberg, A. (2004). When in Rome… Moral maturity and ethics

for international economic organizations. Journal of Business

Ethics, 54(1), 17–32.

Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and

control. Journal of Law and Economics, 26(2), 301–325.

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2012). Business ethics:

Ethical decision making and cases (9th ed.). Mason, OH: South

Western Cengage Learning.

Forsyth, D. R. (1980). A taxonomy of ethical ideologies. Journal of

Personality and Social Psychology, 39(1), 175–184.

Forsyth, D. (1992). Judging the morality of business practices: The

influence of personal moral philosophies. Journal of Business

Ethics, 11(5–6), 461–470.

Forsyth, D. R., & Nye, J. L. (1990). Personal moral philosophies and

moral choice. Journal of Research in Personality, 24(4),

398–414.

Frederiksen, C. (2010). The relation between policies concerning

corporate social responsibility (CSR) and philosophical moral

theories-an empirical investigation. Journal of Business Ethics,

93(3), 357–371.

Friedman, M. (1970). The social responsibility of business is to

increase its profits. The New York Times Magazine, pp. 122–126.

Galaskiewicz, J., & Burt, R. S. (1991). Interorganization contagion in

corporate philanthropy. Administrative Science Quarterly, 36(1),

88–105.

Gallego-Alvarez, I., Prado-Lorenzo, J. M., & Garcıa-Sanchez, I. M.

(2011). Corporate social responsibility and innovation: A resource-

based theory. Management Decision, 49(10), 1709–1727.

Gan, A. (2006). The impact of public scrutiny on corporate

philanthropy. Journal of Business Ethics, 69(3), 217–236.

Garriga, E., & Mele, D. (2004). Corporate social responsibility

theories: mapping the territory. Journal of Business Ethics,

53(1–2), 51–71.

Ghosh, S., & Harjoto, M. A. (2011). Insiders’ personal stock

donations from the lens of stakeholder, stewardship and agency

theories. Business Ethics: A European Review, 20(4), 342–358.

Godfrey, P. C. (2005). The relationship between corporate philan-

thropy and shareholder wealth: A risk management perspective.

The Academy of Management Review, 30(4), 777–798.

Hair, J. F., & Anderson, R. E. (2010). Multivariate data analysis.

New York: Prentice Hall Higher Education.

Haley, U. C. V. (1991). Corporate contributions as managerial masques:

Reframing corporate contributions as strategies to influence

society. Journal of Management Studies, 28(5), 485–510.

Harrell, A., & Harrison, P. (1994). An incentive to shirk, privately

held information, and managers’ project evaluation decisions.

Accounting, Organizations and Society, 19(7), 569–577.

Harrison, P. D., & Harrell, A. (1993). Impact of ‘‘adverse selection’’

on managers’ project evaluation decisions. The Academy of

Management Journal, 36(3), 635–643.

Heeler, R. M., & Ray, M. L. (1972). Measure validation in marketing.

Journal of Marketing Research, 9(4), 361–370.

Hemingway, C., & Maclagan, P. (2004). Managers’ personal values

as drivers of corporate social responsibility. Journal of Business

Ethics, 50(1), 33–44.

Hosmer, L. R. (2008). The ethics of management (6th ed.). Irwin:

McGraw-Hill.

Huang, C. L., & Chang, B. G. (2010). The effects of managers’ moral

philosophy on project decision under agency problem condi-

tions. Journal of Business Ethics, 94(4), 595–611.

Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics.

Journal of Macromarketing, 6(1), 5–16.

Jamali, D., & Mirshak, R. (2007). Corporate social responsibility

(CSR): Theory and practice in a developing country context.


Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm:

Managerial behavior, agency costs and ownership structure.

Journal of Financial Economics, 3(4), 305–360.

Jones, T. M. (1991). Ethical decision making by individuals in

organizations: An issue-contingent model. The Academy of

Management Review, 16(2), 366–395.

Jones, M. T., & Haigh, M. (2007). The transnational corporation and

new corporate citizenship theory. The Journal of Corporate

Citizenship, 27, 51–69.

Kanodia, C., Bushman, R., & Dickhaut, J. (1989). Escalation errors

and the sunk cost effect: An explanation based on reputation and

information asymmetries. Journal of Accounting Research,

27(1), 59–77.

Kant, I. (2008). Kant: Groundwork of the metaphysic of morals.

Radford: Wilder Publications.

Kish-Gephart, J. J., Harrison, D. A., & Trevino, L. K. (2010). Bad

apples, bad cases, and bad barrels: Meta-analytic evidence about

sources of unethical decisions at work. Journal of Applied

Psychology, 95(1), 1–31.

Klettner, A., Clarke, T., & Boersma, M. (2013). The governance of

corporate sustainability: Empirical insights into the develop-

ment, leadership and implementation of responsible business

strategy. Journal of Business Ethics, 122(1), 1–21.

Kung, F. H., & Huang, C. L. (2013). Auditors’ moral philosophies

and ethical beliefs. Management Decision, 15(3), 479–500.

Lev, B., Petrovits, C., & Radhakrishnan, S. (2010). Is doing good

good for you? How corporate charitable contributions enhance

revenue growth. Strategic Management Journal, 31(2),

182–200.

Logsdon, J. M., & Wood, D. J. (2002). Business citizenship: From

domestic to global level of analysis. Business Ethics Quarterly,

12(2), 155–187.

Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies:

Rethinking social initiatives by business. Administrative Science

Quarterly, 48(2), 268–305.

Martin, K., & Cullen, J. (2006). Continuities and extensions of ethical

climate theory: A meta-analytic review. Journal of Business

Ethics, 69(2), 175–194.

McWilliams, A., & Siegel, D. (2000). Corporate social responsibility

and financial performance: correlation or misspecification?

Strategic Management Journal, 21(5), 603–609.

Miska, C., Hilbe, C., & Mayer, S. (2013). Reconciling different views

on responsible leadership: A rationality-based approach. Journal

of Business Ethics, 1–12.

Navarro, P. (1988). Why do corporations give to charity? The Journal

of Business, 61(1), 65–93.

Nunnally, J. C. (2010). Psychometric theory (3rd ed.). New York:

McGraw-Hill.

Park, H. (2005). The role of idealism and relativism as dispositional

characteristics in the socially responsible decision-making

process. Journal of Business Ethics, 56(1), 81–98.

Piper, G., & Schnepf, S. (2008). Gender differences in charitable

giving in Great Britain. VOLUNTAS: International Journal of

Voluntary and Nonprofit Organizations, 19(2), 103–124.

Porter, M. E., & Kramer, M. R. (2002). Competitive advantage of

corporate philanthropy. Harvard Business Review, 80, 56–68.

Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link

between competitive advantage and corporate social responsi-

bility. Harvard Business Review, 84, 56–68.

Quazi, A. M. (2003). Identifying the determinants of corporate

managers’ perceived social obligations. Management Decision,

41(9), 822–831.


123

Ramasamy, B., & Yeung, M. H. (2013). Ethical ideologies among

senior managers in China. Asian Journal of Business Ethics,

2(2), 129–145.

Rest, J. R. (1986). Moral development: Advances in research and

theory. New York: Praeger.

Ricks, J. M., & Williams, J. A. (2005). Strategic corporate philan-

thropy: Addressing frontline talent needs through an educational

giving program. Journal of Business Ethics, 60(2), 147–157.

Ross, S. A. (1973). The economic theory of agency: The principal’s

problem. The American Economic Review, 63(2), 134–139.

Rutledge, R. W., & Karim, K. E. (1999). The influence of self-interest

and ethical considerations on managers’ evaluation judgments.

Accounting, Organizations and Society, 24(2), 173–184.

Saiia, D. H., Carroll, A. B., & Buchholtz, A. K. (2003). Philanthropy

as strategy: When corporate charity ‘‘begins at home’’. Business

and Society, 42(2), 169–201.

Schouten, E. M. J., & Remme, J. (2006). Making sense of corporate

social responsibility in international business: Experiences from

Shell. Business Ethics: A European Review, 15(4), 365–379.

Schwartz, M. S., & Carroll, A. B. (2003). Corporate social

responsibility: A three-domain approach. Business Ethics Quar-

terly, 13(4), 503–530.

Sidani, Y. M., Ghanem, A. J., & Rawwas, M. Y. A. (2014). When

idealists evade taxes: The influence of personal moral philoso-

phy on attitudes to tax evasion—a Lebanese study. Business

Ethics: A European Review, 23(2), 183–196.

Singhapakdi, A., Vitell, S., Rallapalli, K., & Kraft, K. (1996). The

perceived role of ethics and social responsibility: A scale

development. Journal of Business Ethics, 15(11), 1131–1140.

Smith, N. C., & Ward, H. (2007). Corporate social responsibility at a

crossroads? Business Strategy Review, 18(1), 16–21.

Spence, C., & Thomson, I. (2009). Resonance tropes in corporate

philanthropy discourse. Business Ethics: A European Review,

18(4), 372–388.

Steenhaut, S., & Kenhove, P. (2006). An empirical investigation of

the relationships among a consumer’s personal values, ethical

ideology and ethical beliefs. Journal of Business Ethics, 64(2),

137–155.

Swanson, D. L. (1995). Addressing a theoretical problem by

reorienting the corporate social performance model. The Acad-

emy of Management Review, 20(1), 43–64.

Tian, Q. (2008). Perception of business bribery in China: The impact

of moral philosophy. Journal of Business Ethics, 80(3), 437–445.

Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics:

Straight talk about how to do it right (5th ed.). New York: Wiley.

Valentine, S., & Rittenburg, T. (2004). Spanish and American

business professionals’ ethical evaluations in global situations.


Van Staveren, I. (2007). Beyond utilitarianism and deontology: Ethics

in economics. Review of Political Economy, 19(1), 21–35.

Wang, J., & Coffey, B. (1992). Board composition and corporate

philanthropy. Journal of Business Ethics, 11(10), 771–778.

Wang, H., & Qian, C. (2011). Corporate philanthropy and corporate

financial performance: The roles of stakeholder response and

political access. Academy of Management Journal, 54(6),

1159–1181.

Williams, R. (2003). Women on corporate boards of directors and

their influence on corporate philanthropy. Journal of Business

Ethics, 42(1), 1–10.

Woodbine, G. F., & Taylor, D. (2006). Moral choice in an agency

framework: The search for a set of motivational typologies.Journal of Business Ethics, 63(3), 261–277.


123

managerial morality and philanthropic decision-making: a test of an agency model

Documents