Chapter 1: Organizational Ethics and Stakeholder Well-Being in the Business Environment: A Primer for Moving Forward

Broadly speaking, organizational ethics involves the institutionalized ethical principles, guidelines, and norms that influence how a company and its employees function in an ethical manner (Akaah & Lund, 1994; Chonko & Hunt, 1985; Hunt, Wood, & Chonko, 1989; McDonald, 1999; Sims, 1991; Treviño, Butterfield, & McCabe, 1998; Victor & Cullen, 1988; Vidaver-Cohen, 1998; Werhane & Freeman, 1999).V From an operating perspective, these processes include the internalized ethical business practices that are used to manage the behaviors of organizational members as they perform in their work, which demonstrates that this ethical context is workplace-focused. However, organizational ethics is also comprised of a company’s social responsibility, which often occurs outside of its operating boundary; these activities are performed to benefit external stakeholders such as customers, suppliers, investors, strategic partners, and the people living in local communities (Brammer, Millington, & Rayton, 2007; Carroll, 1979; Ferrell, Fraedrich, & Ferrell, 2008; Kim, Lee, Lee, & Kim, 2010; Maignan, Ferrell, & Hult, 1999; McAllister, Ferrell, & Ferrell, 2005; McWilliams & Siegel, 2001; Stites & Michael, 2011; Treviño & Nelson, 2011; Tuzzolino & Armandi, 1981; Wood, 1991).