Making sense of changing ethical expectations: The role of moral imagination

• Author: Craig V. VanSandt,Timothy J. Hargrave,Mukesh Sud,Patricia M. Werhane
• DOI: http://doi.org/10.1111/basr.12206
• Date: 01 June 2020
• Published date: 01 June 2020

Bus Soc Rev. 2020;125:183–201.

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183

wileyonlinelibrary.com/journal/basr

Received: 29 January 2020

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Accepted: 4 February 2020

DOI: 10.1111/basr.12206

ORIGINAL ARTICLE

Making sense of changing ethical expectations:

The role of moral imagination

Timothy J.Hargrave1

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MukeshSud2

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Craig V.VanSandt3

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Patricia M.Werhane4

© 2020 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,

MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

1Management Department, Central

Washington University, Lynnwood, WA,

USA

2Strategy Area, Indian Institute of

Management, Ahmedabad, India

3Management Department, University of

Northern Iowa, Cedar Falls, IA, USA

4Darden School, University of Virginia,

Charlottesville, VA, USA

Correspondence

Timothy J. Hargrave, Central Washington

University, Snoqualmie Hall, 20000 68th

Ave W., Lynnwood, WA 98036, USA.

Email: hargravet@cwu.edu

Abstract

We propose that firms that engage in morally imaginative

sensemaking will manage society's changing ethical expec-

tations more effectively than those engaging in habituated

sensemaking. Specifically, we argue that managers engag-

ing in habituated sensemaking will tend to view changes

in expectations as threats and respond to them defensively.

In contrast, morally imaginative managers will tend to see

these same changes as opportunities and address them by

proactively or interactively engaging stakeholders in learn-

ing processes. We contribute to the literature on moral im-

agination by highlighting the value of moral imagination

relative to conventional sensemaking, and by positioning

moral imagination as an ongoing mode of sensemaking.

While we recognize that managers' capacity to continuously

address changing ethical expectations using moral imagina-

tion is constrained by cognitive limitations, we posit that

morally imaginative sensemaking may economize on cog-

nitive resources over time by enabling managers to avoid

managing ethical issues unproductively based on habit.

We also contribute to the issues management literature

by calling attention to two underlying factors, managerial

sensemaking mode and firm enterprise strategy, that drive

companies' approaches to issues management.

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HARGRAVE Et Al.

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INTRODUCTION

In recent years, the public has increasingly come to expect that companies will meet their ethical

obligations to the many stakeholders they impact. As expectations change, many companies have

difficulty in keeping up. Companies that have famously been punished financially and in the court

of public opinion because of their failure to respond to changing ethical expectations include Ford,

Nike, Walmart, Union Carbide, Nestlé, McDonald's, Volkswagen, many of the large pharmaceutical,

oil, and financial services companies, and the entire tobacco industry. As of this writing, Facebook,

Google, Amazon, and Uber are among the companies regularly receiving negative press because of

their perceived failure to meet society's expectations for ethical behavior.

Why do firms have difficulty in living up to changing ethical expectations, and what can they do

to improve their ability to do so? In this article we address these questions by integrating the sensem-

aking perspective with moral imagination theory. We show that companies that integrate moral imag-

ination into their sensemaking processes will be better able to manage emerging ethical expectations.

Sensemaking is the process by which managers and organizations perceive, interpret, and respond to

their surrounding environments. They do so employing mental models, which are symbolic represen-

tations of the external environment and its relationship to the firm. When the operant mental models in

a company do not adequately represent society's ethical expectations, or they dictate an inappropriate

response to them, negative consequences for the company can follow.

To build our argument we first describe a typical, “habituated” sensemaking process. We propose

that organizational actors following this process initially will not perceive changing societal ethical

expectations as they arise, and instead will perceive them only after failing to meet them and they have

come to be characterized as “issues.” We further expect that managers will react defensively to issues

involving stakeholders that are focal to the firm's enterprise strategy, and will ignore or not perceive

ethical issues that involve stakeholders that are peripheral to the enterprise strategy. If these peripheral

stakeholders gain the power needed to impact the firm, however, then the manager will perceive the

issue and manage it reactively.

We then introduce moral imagination theory and propose that firms engaging in morally imagi-

native sensemaking will view changing expectations as an opportunity for learning, and engage with

stakeholders to devise imaginative, practical approaches to addressing them. When these changing

expectations involve focal stakeholders, companies with morally imaginative sensemaking processes

will tend to manage them proactively, working with stakeholders to address them and pre-empting

them from coming to be socially constructed as issues. When the changing expectations involve pe-

ripheral stakeholders, managers are unlikely to perceive the changes when they first emerge but will

manage them interactively once they become aware of them.

This article contributes to the literatures on ethical decision making and moral imagination by

describing one approach that organizations can employ to help ensure that they effectively respond to

changes in ethical expectations. To date, the literature has portrayed moral imagination as a tool that is

useful intermittently for addressing isolated ethical issues. Making a link between moral imagination

and organizational sensemaking, we normatively re-frame moral imagination as an element of organi-

zations' ongoing sensemaking activities that managers can use to continuously address changes in eth-

ical expectations. We do not accept the premise that because of bounded rationality actors may employ

KEYWORDS

ethical expectations, ethical issues, issues management, moral

imagination, sensemaking