Strategic Global Strategy: The Intersection of General Principles, Corporate Responsibility and Economic Value‐Added

• Author: Laura P. Hartman,Mukesh Sud,Cynthia E. Clark,Patricia H. Werhane,Craig V. Vansandt
• DOI: http://doi.org/10.1111/basr.12109
• Published date: 01 March 2017
• Date: 01 March 2017

Strategic Global Strategy: The

Intersection of General

Principles, Corporate

Responsibility and Economic

Value-Added

LAURA P. HARTMAN, PATRICIA H. WERHANE,

CYNTHIA E. CLARK, CRAIG V. VANSANDT, AND MUKESH SUD

ABSTRACT

An ongoing argument often made by business ethicists is

that a singular preoccupation on profitability, will lead, in

the long run, to disvalue for all the stakeholders and the

communities it affects, and often (but alas not always), eco-

nomic challenges for the company. On the other hand, we

argue, a preoccupation with ethics and CSR as the primary

aims of a for-profit company, it is, on its own, like a preoc-

cupation with profitability, unsustainable. Indeed, without

economic viability, a company will fail. Both of these conten-

tions point to our conclusion that one must take care in

Laura P. Hartman is Director of the Susilo Institute for Ethics in the Global Economy, and Clinical

Professor in the Department of Organizational Behavior, Questrom School of Business, Boston Uni-

versity, Boston, MA. E-mail: LHartman@depaul.edu. Patricia H. Werhane is an Adjunct Professor at

the University of Illinois and Professor Emerita at the University of Virginia and DePaul University,

Chicago, IL. E-mail: pwerhane@depaul.edu. Cynthia E. Clark is an Associate Professor of Manage-

ment and Director at the Bentley Alliance for Ethics and Social Responsibility and at the Harold S.

Geneen Institute of Corporate Governance, Bentley University, Waltham, MA. E-mail: cclark@bentley.

edu. Craig V. VanSandt is an Associate Professor at the University of Northern Iowa, David W. Wilson

Chair in Business Ethics, College of Business Administration, Cedar Falls, IA. E-mail: craig.van-

sandt@uni.edu. Mukesh Sud is an Associate Professor at the Indian Institute of Management,

Ahmedabad, Gujarat, India E-mail: mukesh.sud@gmail.com.

V

C2017 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.

Business and Society Review 122:1 71–91

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changing habits and rethinking business models. We illus-

trate through case examples, that merely being ethical and

socially responsible is insufficient for the long-term well-

being of business just as a preoccupation with profits for

their own sake also is insufficient. What is realistic, practi-

cal, pragmatic, sustainable and profitable for corporations,

and what also serves the interests of multiple stakeholders

including those in the communities they serve, is a true bal-

ance of ethics, CSR, and economic value-added. Expanding

on the recent work of Husted and Allen (2011), we call this

a strategic global strategy approach.

The theme at a recent international business conference was

“Changing habits, rethinking business models.” The conven-

ers explained, “we want to explore the interrelationships

between developing new, sustainable and ethical business models,

and the changes in habits (values, mind-sets, and life-styles)

required for such business models to succeed.” In the description

that followed, the conveners implied that what is at stake is chang-

ing corporate mind sets and business models to reflect more explic-

itly the ethical and corporate social responsibility (CSR)

dimensions of business. In this article, we will defend a more

nuanced analysis of the stake referred to above. We make two

arguments. First, using Prahalad and Bettis’s notion of “dominant

logics” (Bettis and Prahalad 1995; Prahalad and Bettis 1986), we

argue that changing corporate habits and the minds sets that

ground them entails changing a corporate dominant logic underly-

ing these habits. One viable methodology to achieve this end is to

operationalize and engage in the process of moral imagination.

Second, we take issue with the implicit thesis prevalent in the lit-

erature suggesting social and economic values are dichotomous. An

ongoing argument often made by most business ethicists is that a

singular preoccupation on profitability without taking into account

the context in which a company operates, its stakeholders, or a con-

sideration in broad terms of social and environmental value added,

will lead, in the long run, to devalue for all the stakeholders and the

communities it affects, and often (but alas not always), economic

challenges for the company. This perspective is exemplified by Web-

er’s (1904) observation, “...capitalism is identical with the pursuit of

profit, and forever renewed profit, by means of continuous, rational,

72 BUSINESS AND SOCIETY REVIEW