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Written in American English

Moral Motivation Across Ethical Theories:

What Can We Learn for Designing

Corporate Ethics Programs?

Simone de Colle

Patricia H. Werhane

ABSTRACT. In this article we discuss what are the

implications for improving the design of corporate ethics

programs, if we focus on the moral motivation accounts

offered by main ethical theories. Virtue ethics, deonto-

logical ethics and utilitarianism offer different criteria of

judgment to face moral dilemmas: Aristotle’s virtues of

character, Kant’s categorical imperative, and Mill’s greatest

happiness principle are, respectively, their criteria to

answer the question ‘‘What is the right thing to do?’’ We

look at ethical theories from a different perspective: the

question we ask is ‘‘Why should I do the right thing?’’ In

other words, we deal with the problem of moral moti-

vation, and we examine the different rationale the main

ethical theories provide. We then point out the relation

between moral motivation and the concept

of rationality

in the different approaches – is acting morally seen as an

expression of rational behavior? Our analysis of

moral

motivation provides a useful framework to improve the

understanding of the relationships between formal

and

informal elements of corporate ethics programs,

emphasizing the importance of the latter, often over-

looked in compliance-focused programs. We conclude

by suggesting that the concept of moral imagination can

provide a unifying approach to enhance the effectiveness

of corporate ethics programs, by providing an intangible

asset that supports the implementation of their formal

components into management decision making.

KEY WORDS: moral motivation, moral imagination,

corporate ethics programs, Kant, Aristotle, Mill

Introduction

Virtue ethics, deontological ethics, and

utilitarianism

are often presented and discussed as different ethical

theories by reason of the different criteria of judgment

they are based upon. Aristotle’s ethics of virtue, Kant’s

categorical imperative and Mill’s greatest happiness principle

are their different moral criteria to find an answer to

the question ‘‘What is the right thing to do?’’ when facing

a moral dilemma. Various authors – such as Donaldson

and Werhane (1979), Velasquez (1982), De George

(1986), Boatright (1993), Beauchamp and Bowie

(1997), and many others – have provided examples of

how different ethical theories can be applied to

analyze and discuss ethical issues in business (the year

refers to the date of the first edition).

Since the aim of this article is to discuss the

implications of the main ethical theories for

improving the design of today’s corporate ethics

programs, we look at ethical theories from a

different perspective. Our focus is less on the situ-

ation and more on the actor who is taking a moral

decision: the question we asks is not ‘‘What is the

right thing to do?’’ but rather ‘‘Why should I do the

right thing?’’ In other words, we deal with the

problem of moral motivation.

The structure of the article is the following: in the

first three sections, we examine the different per-

spectives on moral motivation elaborated within

Aristotelian ethics, of virtue, Kantian deontological

ethics and Mill’s utilitarianism. After summarizing the

main argumentations they offer to judge what

determines the moral worth of an action – that is, their

normative content – we discuss what kind of rationale

they provide to support the motivational aspects of

their theory – that is, their descriptive explanation of

causation of moral behavior. A particular aspect that

we will point out is the relation between moral

motivation and the concept of rationality in the dif-

ferent ethical perspectives: is acting morally seen as an

expression of rational behavior? If so, how is rational

behavior defined in each perspective?

Journal of Business Ethics (2008) 81:751–764 � Springer 2007
DOI 10.1007/s10551-007-9545-7

On the basis of this analysis, in the following

section, we discuss the implications for promoting

ethical behavior within organizations in light of the

different moral motivation perspectives. How would

Aristotle, Kant, and Mill design a corporate ethics

program, if they were the Ethics Officers of a

modern corporation? What elements would they

emphasize, to ensure an effective implementation of

the formal elements of a corporate ethics program,

considering their conceptualization of the moral

motivation problem? After presenting this hypo-

thetical conversation among these three great moral

philosophers, we conclude by suggesting that the

concept of moral imagination (Werhane, 1999) offers a

unifying perspective from which any ethical

theory

can converge. We argue that – within each of the

three different moral motivation accounts discussed

– moral imagination can be recognized as a valuable

intangible asset that can support an effective imple-

mentation of the formal components of

corporate

ethics programs into daily management decision

making. We believe that Aristotle, Kant, and Mill

would all agree, if they were Ethics Officers in to-

day’s corporations.

Aristotelian virtue ethics: morality as

fulfillment of natural capacities

In Nichomachean Ethics (EN) Aristotle begins his

ethical inquiry by stating that happiness (eudaimonia)

is what any rational human being seeks to achieve:

happiness is ‘‘the highest of all the goods achievable in

action’’ (EN: I, 1095a). In order to avoid misleading

conceptions, Aristotle clarifies that the real meaning

of happiness consists in ‘‘a certain sort of activity of the

soul in accord with virtue’’ (EN: I, 1099b). Happiness is,

therefore, an activity that entails the true fulfillment

of the human nature: living in happiness means to

live the good life for a rational human being.

How can human beings reach happiness?

According to Aristotle, the answer relies on the

development of virtue. A virtue is defined as the

actualization of a potential: human beings are not

born good or bad by nature, but have the capacity to

become good if they develop their virtues, or bad if

indulge in vices.

By developing and practicing virtues, we develop

our capacities and natural dispositions to do the right

thing in any situation. And, we can actually do

more: in fact, we develop our willingness to do the

right thing as well. This is a crucial passage for the

purposes of our discussion on moral motivation, and

deserves to be emphasized. According to Aristotle,

developing her virtues not only help the rational

agent to identify the right conduct to pursue: they

also provide a motivation for doing the right thing,

because by doing so she will live the good life: ‘‘The

belief that the happy person lives well and does well also

agrees with our account, since we have virtually said that

the end is a sort of living well and doing well’’ (EN: I,

1098b).

Among the virtues of thought, practical wisdom

(phronesis, also translated as ‘prudence’) plays a very

important role in the real, hard choices of day life

that support the development of virtues: it is the

ability of a person to ‘‘to deliberate finely about things

that are good and beneficial for himself…about what sort of

things promote living well in general’’ (EN: VI, 1140a).

Still, people of good character sometimes make the

morally wrong decisions, even if they know that

what they are doing is wrong. Why can this happen?

Aristotle describes a number of these puzzling

examples of ‘irrational behavior’ and argues that they

are explained by ‘‘incontinence,’’ which can be

described as the prevalence of (wrong) emotions on

(correct) reason: ‘‘The continent person seems to be the

same as one who abides by his rational calculation; and the

incontinent person seems to be the same as one who

abandons it. The incontinent person knows that his actions

are base, but does them because of his feelings, whereas the

continent person knows that his appetites are base, but

because of reason does not follow them’’ (EN, VII,

1145b).

Emotions can, therefore, fade the moral motiva-

tion of well-intended person, but it is important also

to note that for Aristotle this does not imply that we

have to deny our emotions to be able to act ethically:

rather, what we need to do is to cultivate the right

emotions, as these will in fact reinforce our moral

motivation. As Hartman (2000) points out, coher-

ently with his assumption that the virtuous person

has a disposition not only to do the right thing, but

to enjoy doing the right thing, Aristotle does not

consider emotions being in general a threat for

correct decision making but, on the contrary, thinks

that emotions in the virtuous person are aligned with

reason.

1

752 Simone de Colle and Patricia H. Werhane

As we will discuss later, this account of moral

motivation raises one fundamental issue, concerning

the problematic relation between the ‘‘free will’’ and

the ‘‘natural disposition’’ elements of

Aristotelian

theory. But, before addressing this issue, let’s

examine how the other ethical theories address the

issue of moral motivation.

Kantian ethics: morality springing from

reason

One key element of Kantian ethics is the idea that

the moral worth of any action relies entirely on the

motivation of the agent: human behavior cannot be

said good or bad in light of the consequences it

generates, but only with regards to what moved the

agent to act in that particular way. Kant states this

very clearly in the opening line of the Groundwork of

the Metaphysics of Morals: ‘‘It is impossible to think of

anything at all in the world, or indeed even beyond it, that

could considered good without limitation except a good

will’’ (AK 4: 393).

But what are the motives that guide human

action? Kant introduces the key concept of duty to

clarify the rationale underpinning his moral theory,

by analyzing three different types of motivation:

• Actions from duty: These are actions that are
really undertaken for the sake of duty itself,

that is, done because the agent think they

are the right thing to do. No consideration

of purpose of the action matters, but only

whether the action respect a universal moral

law;

• Actions by immediate inclination: Everyone has
some inclinations, such as to preserve one’s

life, or to preserve honor. These are also

duties that have worth in their own sake.

But acting according to the maxim that these

inclinations might suggests – such as taking

care of one’s own health – lacks for Kant

true moral worth. For example, a charitable

person who donates some goods to poor

people might do it following her inclination

to help the others – that is, because she

enjoys helping the others.
2

This for Kant is

not a moral motivation, even if the action is

in conformity with duty. The person acting

from duty would in fact donate to the other

because she recognizes that helping the others

is her moral obligation;
3

• Actions impelled by some other inclination: This
third type of motivation include actions that

can be done in conformity with duty, yet

are not done from duty, but rather as a mean

to some further end. In order to illustrate

this type of motivation, Kant provides the

following example. A shopkeeper who does

not overcharge the inexperienced customer

and treats all customers in the same way

certainly is doing the right thing – that is,

acts in conformity with duty – but we

cannot say for sure that he is acting in this

way because he is moved by the basic princi-

ples of honesty: ‘‘it is his advantage (preserving

his reputation with clients) that requires it’’.

Moreover, we cannot say that he is moved

by a immediate inclination toward his

customers, since he gives no preference to

one with respect to another. Therefore,

concludes Kant, ‘‘his action was done neither

from duty nor from immediate inclination but

merely for purposes of self-interest’’ (AK 4: 397).

This explains why for Kant what makes an action

‘the right thing to do’ has to be found in the agent’s

intention: ‘‘For, in the case of what is to be morally good it

is not enough that it conform with the moral law but it must

also be done for the sake of the law; without this, that

conformity is only very contingent and precarious, since a

ground that is not moral will indeed now and then produce

actions contrary to the law’’. (AK, 4:390).
4

And ulti-

mately, what gives to the agent’s morally good

volition the force to cause her action in accordance

with it – in other words, what morally moves the

agent to act in conformity with the moral law orig-

inates from the agent’s reason itself. It is the reason,

by enabling human beings to develop their moral

thoughts, that at the same time provides an incentive

for us to behave in conformity with them: we make,

using Kant’s words, our moral thoughts become our

own maxim to act in the way they suggest.
5

Kant does not disregard the role of emotions in

providing a support to act in conformity with the

moral law, recognizing the fact that it is both

impossible to know when an action is done purely

Moral Motivation Across Ethical Theories 753

from duty and that is in any case ‘‘unlikely to occur given

the complexity of humans’ moral psychology’’ (Muthu,

2003: 151). Therefore, even if the influence of

emotions, feelings, and passions ultimately represents

for Kant non-moral motivations to act, as they can at

least support human behavior and guide it toward

actions that respect the others as ends in themselves.

Mill’s utilitarianism: morality based on ‘the

social feelings of mankind’

Utilitarianism’s answer to the question ‘‘What is the

right thing to do?’’ is apparently simple and

straightforward, and can be summarized as follows:

‘‘in every situation, one should act in such a way that

will result in the greatest overall happiness.’’ This

expresses the founding principle of utilitarianism

called by Mill (1871) the ‘‘Greatest Happiness Prin-

ciple’’ (GHP): ‘‘Actions are right in proportion as they

tend to promote happiness, wrong as they tend to produce

the reverse of happiness’’ (Utilitarianism, 2.2.2). The

consequentialistic approach of utilitarian ethics was

almost naturally adopted by the self-interest, utility-

maximization axioms of the neoclassical homo

economicus, which dominated economic theory for

almost a century and still represents the mainstream

model of human behavior currently applied by

economists, despite a growing literature demon-

strating its theoretical fallacies – see for example, the

key contribution by Simon (1955) and Sen (1977) –

and providing empirical evidence of its inconsistence

with real human behavior (e.g., Kahneman and

Twersky, 1979). However, to reduce Mill’s utilitar-

ianism to the selfish utility-maximization paradigm

would be a simplistic understanding of his moral

theory, failing to recognize a number of key aspects,

as Werhane (1991) and Gustafson (2001) have

pointed out.
6

But, what is Mill’s answer to the question ‘‘Why

should I do the right thing?’’ Mill explicitly address

the issue of moral motivation in the third chapter of

Utilitarianism, entitled ‘‘Of the ultimate sanction of the

principle of utility,’’ which he opens by asking the

fundamental question that concerns ‘‘any supposed

moral standard: What is its sanction? What are the

motives to obey to it? Or more specifically, what is the

source of its obligation? Whence does it derive its binding

force?’’ (Utilitarianism, 3.1.1). The use of the word

sanction in the title of the chapter is already indicating

the direction toward which Mill is looking for an

answer. According to Mill, there are two types of

moral sanctions, on which any moral theory – not

just utilitarianism – is grounded upon: external and

internal sanctions. External sanctions refers to two

different external powers able to influence one’s

moral behavior: the judgment of other people and

God: ‘‘they are, the hope of favour and the fear of

displeasure from our fellow creatures or from the Ruler of

the Universe, along with whatever we may have sympathy

or affection for them, or of love and awe for Him, inclining

us to do his will independently of selfish consequences.’’

(Utilitarianism, 3.3.4). As Gustafson (2001) points

out, despite the fact that usually we think at

sanctions

only in negative terms, it is clear that in Mill the

concept of sanction must be understood in both

positive and negative sense: they include both the

fear of punishment or reprimand from

external

powers (our peers, the Government, God) and the

hope of favor with other people, and sympathy and

affection for others. On the other hand, internal

sanctions refer to the sense of duty, which is present

in human consciousness. Mill defines the internal

sanction of duty as ‘‘a feeling in our own mind; a pain,

more or less intense, attendant on violation of duty, which

in properly cultivated moral natures rises, in the more

serious cases, into shrinking from it as impossibility’’

(Utilitarianism, 3.4.2). If external sanctions refers to

external consequences (positive or negative) due to

the influence of other people (or God), internal

sanctions deal with the power of the individual

themselves: the idea of duty is in fact based on the

essence of conscience, the ‘‘compiled collections of inner

feelings, desires, and sentiments which themselves constitute

a motivating power within us, apart from any outside

responsibility’’ (Gustafson, 2001). Internal moral

sanctions seem therefore to be, according to Mill,

the most important ground for morality: ‘‘the ultimate

sanction, therefore, of all morality (external motives apart)

being a subjective feeling in our own minds…’’ (Utilitari-

anism, 3.5.1). Toward the end of chapter three, Mill

states his final answer: the foundation of morality –

or, in other words, the most important support for

moral motivation – is based on a feeling of sympathy

toward others in society: ‘‘This firm foundation is that

of the social feelings of mankind; the desire to be in unity

with our fellow creatures, which is already a powerful

principle in human nature, and happily one of those which

754 Simone de Colle and Patricia H. Werhane

tend to become stronger, even without express inculcation,

from the influences of advancing civilization.’’ (Utilitari-

anism, 3.10.1). But, upon what basis are such social

feelings grounded? Mill says that the

moral feelings

are not innate, but can be acquired through educa-

tion and habituation to the sense of community, the

value of cooperation and concern for the others. In

this process of moral education and socialization,

literature, poetry, and other forms of art play a

crucial role in developing moral sensitivity, as

discussed by Gustafson (2001).

Moral motivation explanations and rational

behavior

We have seen that for Aristotle, Kant, and Mill

acting according to the moral criterion of their

general ethical theories – namely according to virtue,

the categorical imperative and the greatest happiness

principle – represents at the same time acting in

accordance with the agent’s rationality. But what

concept of rationality these thinkers had in mind? It

appears that their ideas of human rationality differ in

substantial ways.

A distinction between two types of rationality

suggested by the philosopher and economist John

Harsanyi – namely between goal-directed and criterion-

satisfying rationality – seems to be useful for discussing

the concept of rationality in Aristotle, Kant and Mill.

As Harsanyi (1999) points out, our under

standing of

rational behavior is often referring to behavior

involving a choice of the best means available for

achieving a given end – that is, we are thinking at a

goal-directed behavior. The means-ends conception of

rationality became the main assumption of economic

theory, where it has been used to predict human

behavior – such as the choices of the producer or the

consumer – assuming that their rational choices will

simply coincide with what they should do in order

to attain their given preferences, or ends.
7

However,

this is not the only conception of rationality, and

even in every day life we use another model of

rational behavior. Harsanyi makes the example of

someone whose aim is to climb the highest moun-

tain in California: for this person, climbing Mount

Whitney would be the rational thing to do. But

climbing Mount Whitney cannot be said to be the

best means to achieve her aim, as climbing that

particular mountain is her aim. In other words,

saying that for this person climbing Mount Whitney

is the rational thing to do, we are not referring to a

goal-oriented idea of rationality, but to another type

of rational behavior. Harsanyi argues that this second

type of rationality can be defined as criterion-

satisfying

rationality.

In Aristotelian virtue ethics, we find a similar idea.

According to Aristotle, the problem of moral

motivation is in some way a false problem: there is

an intrinsic coherence between the end, living the

good life (by developing the virtue of character) and

the mean, developing a virtuous character (by acting

virtuously). The motivation for doing the right thing

arises from the fact that the virtuous person will

rationally (and through habit) become aware of this,

and naturally enjoy doing the right thing. As Hart-

man notes, ‘‘…the question whether there is any selfish

reason to be moral is not a straightforward question: for a

person of good character, being moral is selfish in the sense

that it is what one enjoys’’ (Hartman, 1998: 549).

Aristotle believes that rational (and virtuous) agents

will, therefore, act morally and in accordance with

their self-interest. It is precisely the capacity to be

aware and autonomously deliberate what are the

right things to do that qualifies ethical behavior for

Aristotle: an action is not good or bad in se, because

to assess whether someone’s behavior is ethical it

depends on the intentions that moved that person to

act in that way.

One fundamental issue with this view lies in the

duality between intrinsic and extrinsic motivation for

virtue ethics. On one side, the good life is the external

end that any rational agent is autonomously trying to

achieve. At the other side, however, the good life is

the fulfillment of the intrinsic function of human

beings. In other words, the good life is at the same time

the expression of an autonomous, subjective choice of

free rational agents, and the necessary, objective end of

human nature. The Kantian principle ‘ought implies

can’ clearly points out how Aristotle’s view generates a

paradox: if the good life is an intrinsic end, how can

one claim that it is the object of autonomous delib-

eration of the free will as well?

According to Kant, morality is first of all a matter

of the free (and good) will: the moral law is the only

constraint to the will that a free, rational agent accept

to impose to herself, therefore, the idea of fulfilling

a pre-ordinated plan constrained by nature is unac-

Moral Motivation Across Ethical Theories 755

ceptable. Kant’s concept of rationality is criterion-

satisfying as in Aristotle, but the role of reason is much

more central in his moral theory. Reason not only

enables the agent to identify the moral law, but also

provides her with the incentives to act in accordance

with it: moral motivation is springing from pure

reason.

On the relation between morality and self-inter-

est, Kant rejects Aristotle’s view of ‘harmony’:

morality ultimately concerns how one treats the

other human beings, and therefore cannot always

coincide with self-interest.
8

In Mill, the concept of rationality is closer to the

first type described by Harsanyi, expressing the goal-

directed rational behavior. Without falling into the

simplistic – and hugely problematic – Bentham’s

‘hedonic calculus’ meant to measure the amount of

happiness generated by any action, Mill thinks that

people use their reason to identify the best way to

achieve their ultimate end, according to

the Greatest

Happiness Principle. However, we can also read

Mill’s utilitarianism as expressing a criterion-satisfy-

ing rationality, if we look at the explanation of moral

motivation discussed above, which points out the

key role of moral feelings in choosing which ends the

person is going to try to achieve, and not just which

means are best to achieve a given end. In fact, Mill

does not give to reason the highest place of impor-

tance in his moral theory, nor in his account for

moral motivation. More important is the role of

moral sentiments, which determine the use that any

person will do of her reason: acting unethically is not

a failure of reason, but a lack of appropriate moral

feelings. A person who fails to develop her moral

feelings will for Mill use her reason to adopt the

utilitarian principle in an egoistic, self-interested

way, looking for consequences that maximizes her

own welfare, without any concerns for the welfare

of others. Once moral sentiments are acquired, on

the contrary, Mill’s utilitarianism becomes a much

more socially oriented moral theory, in which the

self-oriented interests tend to converge and find

their own satisfaction in the appreciation of the

welfare of society at large:
9

‘‘The deeply rooted

conception which every individual even now has of himself

as a social being, tends to make him feel it one of his

natural wants that there should be harmony between his

feelings and aims and those of his fellow creatures.’’

(Utilitarianism, 3.11.11).

The table below provides an overview of the key

elements on moral motivation within the ethical

theories by Aristotle, Kant and Mill, their concept of

rationality and the role of emotions for moral

motivation (Table I).

Implications of different moral

motivation

accounts for ethics programs design

Corporate ethics programs include a range of

different activities, processes and management tools,

such as promulgating codes of ethics or ethics poli-

cies, nominating an ethics and/or compliance officer,

establishing a confidential hot/help line, promoting

communication activities on the organization’s ethics

policies and standards, providing ethics training

courses to managers and employees, setting up an

internal ethical audit and monitoring system, and

many other approaches.

In practice, all the above-mentioned elements are,

according to the US Federal Sentencing Guidelines

(2005), the formal elements that organizations should

consider when designing an ethics and compliance

program. As indicated by Tenbrunsel et al. (2003),

formal elements of corporate ethics programs can be

defined are ‘‘those that are documented and stan-

dardized, visible to anyone inside or outside the

organization.’’ In addition, the Guidelines also

emphasize the importance of informal elements

(namely: organizational culture, values and other

intangibles aspects): the Guidelines states clearly that,

in order for the ethics compliance program to be

effective, corporations should ‘‘promote an organiza-

tional culture that encourages ethical conduct.’’
10

Both

formal and informal components are therefore

essential elements for an effective implementation of

corporate ethics programs. However, the Guidelines

say very little about how organizations can address

and strengthen the informal part of their ethics

programs.

In this section, we try to throw light on this rather

dark side of ethics programs. We here discuss what

are the implications of the different perspectives

underpinning moral motivation within each major

ethical theory for enhancing the effectiveness of

corporate ethics programs. In other words, we ask

what is, in light of each moral motivation perspec-

tive, the best way to support ethical behavior within

756 Simone de Colle and Patricia H. Werhane

organizations? If Aristotle, Kant or Mill were the

Ethics Officer of a modern corporation in charge of

the design of the organization’s ethics program, what

would they do to differently to strengthen employ-

ees’ moral motivation within organizations?

Aristotle as ethics officer: building the

manager with

‘good character’

For Aristotle ethical behavior is about virtue, not

compliance with rules or principles: therefore, from

the perspective of virtue ethics, an

ethics program

merely focused on a compliance-approach would

not able to generate the necessary

moral motivation

to support its implementation. Instead, to be

effective a corporate ethics program designed

according to Aristotelian ethics should focus pri-

marily on creating an organizational environment

that supports the development of good character

for managers and employees. This could mean, for

example, engaging in ethics discussions, workshops

and other training activities within the organiza-

tion, rather than focusing on the creation of prin-

ciples and rules of conduct to comply with. As we

have pointed out above, the importance of ethics

training is widely recognized and emphasized

within compliance-oriented ethics programs as

well: ‘‘conducting effective training programs and other-

wise disseminating information appropriate to [such]

individuals respective roles and responsibilities’’ is one of

the key elements indicated by the US Federal

Sentencing Guidelines. However, what is impor-

tant to note is that ethics training courses designed

in the Aristotelian perspective would have some

distinctive characteristics: they would not aim at

teaching different ethical analytical frameworks or

communicating general principles for ethical deci-

sion-making (‘top-down’ approach generated and

controlled by the management), but would rather

aim at providing a dialectical conversation

encouraging individual participants to develop

their own character (‘bottom-up’ approach,

promoting employees participation and individual

TABLE I

Moral motivation across ethical theories

Ethical

theory

Normative

moral

criterion:

What is the right

thing to do?

Moral

motivation

narrative:

Why should I

do the right thing?

Moral
motivation

locus

Concept

of rationality

Role of emotions

for moral motivation

Aristotelian

virtue ethics

Act

according

to virtue

Be virtuous: it

will make you

happy as well

Intrinsic

(natural

pre-disposition)

and extrinsic

(happiness)

Criterion-

satisfying

(moral action =

action by virtue)

Reinforcing:

right emotions

(to be developed)

can reinforce

moral motivation

Kantian ethics Act

according

to the categorical

imperative

Follow your

reason: act

according to

the moral law

within yourself

Intrinsic

(reason)

Criterion-
satisfying
(moral action =

action from duty)

Residual:

emotions can

induce actions in

conformity with

the moral law,

but they are only

non-moral motivation

Mill’s

utilitarianism
Act
according to
the Greatest

Happiness
Principle (GHP)

Act according

to the GHP

(for society):

it will also bring

happiness (to you)

Intrinsic

(conscience)

and extrinsic

(external

sanctions)

Goal-directed

(utility maximization)

and criterion-satisfying

(rule-utilitarianism)

Fundamental:

the (acquired)

moral feelings

are the ultimate

binding force

for moral behavior

Moral Motivation Across Ethical Theories 757

responsibility), for example discussing case-studies,

helping them to focus on the virtues and practical

wisdom they need to acquire in order to become a

good manager and a good employee. They would

also probably challenge some common assumptions

of the mainstream business paradigm, such as the

creed that financial performance is the only mea-

sure of corporate success, and suggest the idea that

the values the virtuous person lives by should be

the same at home as well as in the office: in an

Aristotelian perspective, having to abide to inco-

herent principles ‘‘would be no way to flourish, for the

same reason that a deceptive life is no way to flourish’’

(Hartman, 2000: 69). In Table II we summarize the

key elements of an Aristotelian approach to ethics

programs, offering as well a ‘corporate motto’ that

could be used as a communication tool.

Kant as ethics officer: developing the company’s values and

principles

Probably the most useful implication of the Kan-

tian ethics for management theory is the idea that

stakeholders are to be considered like ends in

themselves, and not as means to achieve some

other (corporate) end. But, on a more practical

level, it is difficult – and probably not very useful

– the attempt to translate a strict Kantian approach

in corporate ethics programs. In fact, one can

agree with ethicist – such as Norman Bowie –

who have argued that the application of the

categorical imperative should not be taken as an

absolutistic approach, but, on the contrary, as an

overarching principle that ‘‘provides flexibility in

ethics’’ (Bowie 1999: 25). According to Bowie, the

Kantian perspective suggest to consider the

corporation as a ‘moral community’ based on

organizational structure and rules that support

human freedom, encourage workers participation

and treat in a fair way all stakeholders.

The Kantian idea of the moral law can be inter-

preted within the context of a business organization

as the search for corporate values and principles,

stated in the corporate Mission or code of ethics,

which identify a set of principles-based ethics.

Nevertheless, one must also recognize that the

‘ought’ language of universal moral laws or corpo-

rate codes of ethics is not a familiar way of thinking

in managerial decision-making. In front of the

complexity of the many different ‘communities’ that

need to be taken into consideration in today’s

business decision making, a somehow more prag-

matic approach seems to be more useful.
11

In conclusion, a corporate ethics program

designed according to Kantian ethics would focus on

the identification of corporate values and principles

norms best reflecting the moral law that should

guide all the members of that particular organization.

The moral motivation to support the program’s

implementation is for Kant to be found in the

managers themselves – namely in their

capacity of

moral reasoning, enabling them to discover the

reasons to make business decisions ‘for duty.’

Mill as ethics officer: balancing internal and external

sanctions

What are the implications of Mill’s explanation of

moral motivation for enhancing ethical decision-

making within organizations? Looking at Mill’s

analysis of the different types of moral sanctions, its

main implication seems to be the need for a balance

between internal and external sanctions. Translated

into the business world, his account of moral

motivation suggests that manager will be motivated

to act morally – that is, they will orient their deci-

sions toward the Greatest Happiness Principle – if

they demonstrate two kinds of capacities:

(a) The capacity to acquire appropriate moral

feelings to appreciate the value of coopera-

tion and society’s welfare (thereby taking

decisions that are satisfying not only their

own interests, or the interests of the share-

holders, but also by trying to achieve the

greatest happiness for all the company

stakeholders, in general); and

(b) The capacity of being aware (and thereby

proactively act in managerial terms) of the

possible external benefits of

ethical behavior

(such as corporate awards; reputational

effects; customer and employee loyalty, etc.)

and negative sanctions (such as fines by regula-

tive public authorities; cost of litigation; loss

of customers; high employee turn over, etc.)

of unethical behavior.

758 Simone de Colle and Patricia H. Werhane

In terms of designing corporate ethics programs,

these two considerations seems to imply that Mill, as

an Ethics Officer, would recommend a balanced

approach between two core elements:

(a) Moral education programs – such as ethics

training courses – specifically

designed to

help managers and employees in acquiring

the appropriate moral feelings (the most

powerful factors of moral motivation accord-

ing to Mill); and

(b) Sustainability management/Corporate Social

Responsibility (CSR) processes – such as

sustainability reporting initiatives or CSR

management standards
12

– that help the

management to integrate in their decision-

making processes a careful considerations of

the social, ethical, and environmental

impacts of corporate activity on all the orga-

nization’s stakeholder.

A unifying approach: enabling moral

imagination to support ethics

programs implementation

After having pointed out some specific elements that

differentiate the application of the main ethical

theories to the design of corporate ethics programs,

we want to emphasize a concept that, we believe,

can provide a unifying approach to support a more

effective implementation of ethics programs within

organizations – namely the concept of moral imagi-

nation.

Moral imagination has been defined as ‘‘a neces-

sary ingredient in responsible moral judgment’’ that can

enable in particular circumstances to ‘‘discover and

evaluate possibilities not merely determined by that cir-

cumstance, or limited by its operative mental models, or

merely framed by a set of rules or rule-governed concerns.

In managerial decision-making, moral imagination entails

perceiving norms, social roles, and relationships entwined

in any situation.’’ (Werhane, 1999: 93). The

importance of moral imagination resides in the

following idea: within organizations – especially

profit-driven corporations – managers who strive to

success and excellence risk in many cases to find

themselves bounded in a cognitive trap, where only

a narrow, partial perspective on reality emerges as

possible. In such cases, managers’ interpretation of

reality can become distorted and their ability to

exercise moral judgment impeded. In the worse

scenarios, as organizational psychologists demon-

strate, the competitive culture may degenerate into

a neurotic tendency of ‘‘search of glory’’ (Horney,

1950), managers tend to confuse reality with a self-

created world of fiction characterized by collective

folie á deux processes, such as psychotic forms of

illusion of grandeur or depressive delusion of per-

secution (Kets De Vries, 1980), and managerial

decision making may be heavily biased by phe-

nomena of over-confidence – unreasonable optimism

on future outcomes, inconsistency in risk-taking

decisions and excessive confidence on personal

skills (Kahneman and Lovallo, 1993; Camerer and

Lovallo, 1999).

In order to ameliorate these risks, and actively

promote a healthy environment where ethical

decision-making does not require the exercise of

exceptional qualities, and does not constitute a

last-resource process to be activated to face

exceptional circumstances, but rather represents a

normal feature – something like a ‘‘Intel-inside’’

component of strategic managerial processes – the

capacity of moral imagination is a key asset. Its

validity as a mechanism supporting the imple-

mentation of ethics programs, we believe, can be

demonstrated across the different moral motivation

accounts of the main ethical theories. In order to

illustrate this, we identify three different stages in

the process of enabling moral imagination, and

show how they emphasize three separate aspects

that are traceable back to Aristotle, Kant and Mill

respectively.

Disengagement from the context

The first stage of activating moral imagination is to

try to disengage from the particular issue and its

context to discover what mental models are at play.

Ethical failures of managerial decision making are

often the result not of weak moral development or a

lack of understanding of what is right or wrong, but

rather of a poor awareness of the moral implications

and social consequences of ‘business decisions.’
13

Moral imagination begins to act at this level. Starting

with the particular event, behavior or decision that

Moral Motivation Across Ethical Theories 759

are at stake, it enables free reflection and imaginative

thinking on the ethical standards to be applied in

complex business decisions: ‘‘Moral imagination begins

with a particular case, scenario, or event in which we be-

come engaged as thick social selves’’ (Werhane, 1999:

103).
14

This means asking questions, such as: ‘‘What

motivates the decision-makers in this context?,’’

‘‘What conflicts are at stake?,’’ and ‘‘Is anyone in-

volved in the decision-making process over-confi-

dent or deluded into a distorted perspective?’’ From

the Aristotelian perspective, as we have already

pointed out, since moral motivation relies on the

development and practicing of virtues, corporate

ethics programs should be designed to facilitate a

dialectic conversation among corporate members, as

a way to provide a process for training their capacity

of moral judgment and thereby contributing to a

virtuous ‘character’ building – which ultimately

support ethical decision-making within organiza-

tions. We argue that the role of moral imagination in

this process would be essential: to develop and apply

moral principles, managers need first to reach an

appropriate understanding of the complex circum-

stances of reality that they are facing (perception); in

this activity, it is their imagination (phantasia) that

guides their understanding: ‘‘Aristotle sometimes say

that nous (understanding) is at work in correct perception’’

(Hartman, 2000: 60). By exercising their under-

standing and disengagement in the process of

developing a capacity of moral imagination,

managers will be less inclined to underestimate

salient aspects – e.g., the ethical implications – in-

volved in complex decisions.

Delving into possibilities

Moral imagination would at the same time be a core

factor supporting the implementation of a ‘neo-

Kantian’ corporate ethics program, because the

capacity of moral imagination is a necessary

complement of practical moral reasoning. This is

because the second stage of developing a robust

moral imagination involves delving into possibilities.

What are some new alternatives in approaching a

particular issue? What societal, corporate and per-

sonal values are at stake? Do any of these challenges

the status quo? In this stage, it is the combination of

moral imagination with moral reasoning that enables

creative moral managerial decision making. A cor-

porate ethics program embracing the idea of moral

imagination (i.e., aiming at training decision makers

in exercising their capacity for imaginative thinking)

would therefore be consistent with a neo-Kantian

approach, in the sense that it would still aim at

developing moral standards representing the balance

between the initial, context-based moral intuitions

and the imaginative reflection that de-contextualize

the thinking from the thick self.
15

Moral imagination

here can be seen as activating a thought process

similar to the Rawls’s notion of reflective equilibrium:

by continuously going back and forth between the

(specific) case at hand and the (general) company

mission and values; between the local culture, social

norms and traditions and more abstract personal

values and moral principles, managers will be able to

think through the issues they are facing and reinforce

their motivation to ethical decision making. This

does not mean that managers engaging in this pro-

cess will have to deny their local identities and

parochial interests. On the contrary, they will start

from there, but will put these contextual elements

under moral scrutiny, until, as Rawls (1971) points

out, their ‘considered judgments’, duly pruned and

adjusted, will be in equilibrium with their more

general principles. Instead of the Kantian universal

moral law, however, the kind of moral standards that

we are considering here are rather moral minimums in

the sense that Walzer (1994) and Donaldson (1989)

have pointed out. Moral minimums do represent

widespread agreement across different cultural, social

and historical contexts about what actions are mor-

ally justifiable or (more easily) morally questionable,

but with no claim to be absolute. Their validity

needs to be continuously reaffirmed over time, open

to revision and refinement if new situations or

innovative thinking might enable so – a practical

application example of this dynamic process can be

seen, for example, in the evolution of environmental

standards.

Focus on consequences

Finally, promoting the use of moral imagination

within organizations to support the implementa-

760 Simone de Colle and Patricia H. Werhane

tion of ethics programs would be also justified

from the social utilitarian of John Stuart Mill.

This is because the third stage of developing

moral imagination takes into account practical

issues and consequences. Here one questions the

viability of alternatives at stake. Can these be

operationalized? And what might be the conse-

quences, negative and positive, for all the stake-

holders involved? This approach to moral

imagination is, in fact, consistent with some

fundamental concepts affirmed by Mill, such as

the idea that the Greatest Happiness Principle is

not simply a ‘value-free’ utility-maximization

exercise, but requires to recognize and appreciate

social norms and rules of behavior, and the idea

that to develop ‘moral sensitivity’ is one crucial

task to enable every person to behave ethically.

Too often in modern corporations managers find

themselves trapped in narrow decision-making

frameworks, biased by short-term pressures that

burden their roles and responsibilities, and fail to

integrate in their thinking an adequate apprecia-

tion of social norms and ethical principles. In a

utilitarian perspective, moral imagination allows

managers to connect with the external word, to

‘feel a concern for the welfare of others’, in

Mill’s words – or to take into consideration the

impacts of corporate action on all the organiza-

tion’s stakeholders, to use a modern

management

language.

TABLE II

Moral motivation and corporate ethics programs

Ethical theory Characteristics of corporate ethics programs Role of moral

imagination to

support the

ethics program

Main aim Method Key ethical lead-

ership skills

Corporate

motto

Aristotelian
virtue ethics

Develop the

manager with
‘good character’

Ethics training

based on case

studies and

leadership examples

Practical wisdom

Personal integrity,

Good character

Use the same

rules at home as

well in the office

Moral imagina-

tion enables dis-

engagement from

the context and

discernment

Kantian ethics Develop the

manager’s

capacity of

moral reasoning

to act ‘from

duty’ (accord

ing to the

corporate

Mission)

Discuss case-

studies to

develop/chal

lenge moral

minimums

via a process of

continuous adap-

tation (reflective

equilibrium)

Moral reasoning

Compliance (with

corporate ethics)

Walk the

talk (demon

strating to live

up with the

corporate

Mission and

values)

Moral imagina

tion enables

investigating

new alternatives

and promotes

awareness of

what values are

at stake

Mill’s
utilitarianism
Develop the
manager’s

appropriate

moral feelings
and

Develop man

agerial under

standing of
external
sanctions
Ethics training
designed to

develop moral

feelings;

Ethics/CSR

management

programs & tools

to identify and

measure external

benefits and neg-

ative sanctions for

ethical behavior

Moral feelings

Cost/benefit

analysis (for

all stakeholders)

Act to maximize

overall stake

holder

satisfaction

Moral imagina
tion enables

evaluating the

viability and

consequences of

novel possibil

ities for all

corporate stake

holders involved

Moral Motivation Across Ethical Theories 761

In summary, the use of moral imagination can be

considered as a crucial element to enhance the

effectiveness of corporate ethics programs regardless,

whether your Ethics Officer is more incline toward a

virtue ethics, a social utilitarian or a Kantian

perspective: in designing corporate ethics programs

one should not forget this.

Conclusion

By analyzing the different moral motivation rationales

underpinning Aristotelian virtue ethics, Kantian

ethics and Mill’s utilitarianism, we have argued that

this discussion carries two relevant implications:

(a) The explanation of what is the ‘ultimate

binding force’, to use Mill’s words, that

motivates us to do the right thing according to

each ethical theory – that is, their answer to

the problem of moral motivation – brings us

inevitably to consider what concept of

human rationality they are based upon;

(b) The combination of the moral motivation

explanation, the concept of rationality

embedded in any ethical theory, and the

role of moral imagination, have, in turn,

significant implications concerning their

practical application to the design of corpo-

rate ethics programs.

The table below presents a summary of the key as-

pects discussed with regard to the implications for

corporate ethics programs. It is not intended to

provide conclusive arguments, but rather offer a basis

for discussion and suggest further research and

application. In front of the growing – and already

overwhelming – body of corporate social responsi-

bility management standards, stakeholder engage-

ment methods, sustainability reporting

methodologies and other ethics standards that are

currently available or being developed,
16

we believe

that our analysis on moral motivation can provide an

useful framework to improve our understanding of

the factors able to lead to a more effective imple-

mentation of corporate ethics programs, pointing

out the relationship between formal and informal

elements embedded in such programs – an aspect so

far not adequately addressed.

Notes

1
See Ed Hartman (2000: 64).

2
See the comments by Christine M. Korsgaard in

her Introduction of the Groundwork of the Metaphysics of

Morals, Cambridge University Press, 1997.
3

Norman Bowie argues that it is possible to defend

a more flexible interpretation of Kant on this issue, by

recognizing that there might be multiple motives to act –

that is, it is possible that an action is done from duty

and for practical prudence at the same time. See Bowie

(1999: 120–125).
4

The citation method used here refers to the

volume and page number of the Academy (AK) edition.
5

The idea that moral motivation can spring from

reason is rejected by many other philosophical

approaches. W.M. Sibley, for example, refers to the

moral philosophy of Hume (1739), who famously stated

that ‘‘Reason is, and ought only to be, the slave of the pas-

sions’’ to argue that Kant was wrong in trying to derive

moral behavior from reason: ‘‘…what reason then tells me

is not simply: ‘‘Be reasonable!’’ but rather: ‘‘Be reasonable –

if you have to!’’ It issues only hypothetical imperatives. Hume

is thus correct in seeing that morality does not spring from rea-

son alone.’’ See Sibley (1953: 558).
6

As our purpose here is to discuss the issue of moral

motivation within utilitarian theory, we cannot further

elaborate on this. However, as discussed in Gustafson

(2001), at least the following three points must be no-

ted:

(i)
Utilitarianism is not just about myopian, short-term

maximization: The GHP does not states that the moral

action is the one which generates the greatest actual and

immediate happiness, but the one which tends (as a

general rule) to promote happiness in society in the

long-term;
(ii)

Utilitarianism is not selfish, but social: by differenti-

ating between act and rule utilitarianism, Mill in fact

recognizes the importance of acting in conformity with

rules that ultimately provide for the greatest happiness,

meaning that the theory allows to act in such a way

that is not directly linked with the agent’s immediate

self-interest, if it supports socially desirable rules of con-

duct (in other words, it recognizes the intrinsic impor-

tance attached to following certain rules of behavior,

beyond their instrumental use);
(iii)

Utilitarianism distinguishes higher from lower plea-

sures: ‘‘It is quite compatible with the principle of utility to

recognize the fact that some kinds of pleasure are more desir-

able and more valuable than others.’’ (Utilitarianism,

2.4.26). Higher pleasures – such as justice, noble

762 Simone de Colle and Patricia H. Werhane

feelings and moral sentiments – are ‘intrinsically supe-

rior’ as they are what qualifies human beings; they arise

from the intellect and stimulate our imagination to

think beyond the world of sense.
7

See Harsanyi (1999: 272).
8

As we have discussed in the previous section, for

Kant actions done for self-interest can be in conformity

with duty, but if self-interest is the agent’s primary

motivation, her actions have no genuine moral worth.
9

In fact, Gustafson (2001) uses the term Social Utilitar-

ianism with reference to Mill.
10

US Federal Sentencing Commission Guidelines

Manual, Chapter 8 – Sentencing of Organizations. Part

B – Remedying Harm from Criminal Conduct, and

Effective Compliance and Ethics Program; §8B2.1.

Effective Compliance and Ethics Program.
11

See on this aspect the interesting discussion on the

‘Problem of community’ in Dunham et al. (2006).
12

Such as AA1000 for Stakeholder engagement pro-

cesses; SA8000 for monitoring working conditions

along the supply-chain; OHSHA18000 for health and

safety issue, and many others (see, for example, Leipzi-

ger, 2003).
13

A problem that Freeman (2007) has defined as the

Separation Fallacy: ‘‘It is useful to believe that sentences

like, ‘‘x is a business decision’’ have no ethical content or any

implicit ethical point of view. And, it is useful to believe that

sentences like ‘‘x is an ethical decision, the best thing to do all

things considered’’ have no content or implicit view about

value creation and trade (business)’’. This way of thinking,

suggests Freeman, fails to recognize that almost every

business decision has some ethical content.
14

Rorty (2006) has assumed a more radical position

concerning moral imagination, affirming that ‘‘Her

(Werhane, 1999) book argues that moral imagination is a

necessary but not a sufficient condition for moral decision-mak-

ing. I suspect that it may, in fact, be sufficient as well’’.

Rorty thinks that moral reasoning skills are not useful at

all in the process of moral deliberation: ‘‘I think of moral

imagination not as a supplement to moral theory and moral

reasoning skills, but as pretty much all you need. […] When

it comes to ‘moral reasoning skills’, I am less certain than

Werhane that there are such things’’. Rorty concludes that

moral motivation is fundamentally time and context-

depending: ‘‘There is no connection between skill at justify-

ing one’s beliefs – rhetorical effectiveness – and having the

right beliefs. Being able to have the right beliefs and to do the

right thing is largely a matter of luck – of being born in a cer-

tain place and a certain time.’’ While the first part of the

argumentation seems valid – there is not a causal rela-

tionship between the agent’s ability to exercise imagina-

tive moral thinking and her actual moral behavior –

Rorty’s conclusion appears dangerous: it risks to throw

the baby out with the bath water. As noted in Werhane

(2006: 405), Rorty’s idea that moral imagination is

‘‘pretty much all you need’’ threatens to reduce moral

judgments to intuition and story-telling. Refusing the

direct causal link between moral imagination and moral

behavior does not imply that moral reasoning skills have

no role to play at all. On the contrary, we believe that

moral reasoning skills can enable the agent to ‘see’ what

is the right thing to do, that is, they help the agent in

identifying possible alternatives for moral actions – which

we do not see how one could reasonably argue as not

being a key phase in the process of choosing to do the

right thing.
15

In ‘‘Thick and Thin’’ Walzer (1994) explains the dis-

tinction between a thin set of universal principles,

which we can think of as a ‘‘core morality’’ shared

across different cultures, which become thick through a

process (or, more precisely, the many different pro-

cesses) of elaboration which reflect cultural, political,

social and historical differences.

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Simone de Colle

The Darden School of Business,

University of Virginia,

P.O. Box 6550, Charlottesville, VA, 22906-6500,

U.S.A.

E-mail: sd7ua@virginia.edu

Patricia H. Werhane

Ruffin Professor of Business

Ethics,

Darden School of Business, University of Virginia,

Charlottesville, U.S.A.

and

Director of the Institute for Business and Professional

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Depaul University,

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764 Simone de Colle and Patricia H. Werhane

Corporate Reputation Review,
Vol. 10, No. 4, pp. 261–277
© 2007 Palgrave Macmillan Ltd,

1363-3589 $30.00

Corporate Reputation Review Volume 10 Number 4

261www.palgrave-journals.com/crr

ABSTRACT
The need to investigate the link between rep-
utation and responsibility is well established.
This paper answers calls to conduct this com-
parison from a stakeholder perspective. In so
doing a literature review identified models of
reputation that engage with stakeholders from
their inception to measurement, while no such
models of corporate responsibility were found.
A qualitative study to conceptualize responsi-
bility from the perspective of stakeholders wa

s

then conducted. Following this, a formal com-
parison between this conceptualization and
that of reputation models is undertaken. The
results suggest that there is considerable simi-
larity between the concepts of responsibilit

y

and reputation. Implications may include the
use of reputation models as potential measures
for many of the aspects conceptualized as
responsibility. Questions about the causal
relationship between the two concepts are also
discussed.

Corporate Reputation Review (2007) 10, 261 – 277.
doi: 10.1057/palgrave.crr.1550057

KEYWORDS: corporate reputation ; corporate
responsibility ; stakeholders

INTRODUCTION
In recent years, practitioners and academics
have become increasingly interested in rep-
utation and how it relates to other concepts
such as responsibility (eg Brammer and
Pavelin, 2006 ; Fombrun, 2005 ; Andriof and
Waddock, 2002 ). In part, this is because ele-
ments of responsibility have been viewed as
key drivers of reputation. Antecedents of
a good reputation have been suggested
to include embracing CSR standards
( Fombrun, 2005 ), philanthropic giving
( Brammer and Millington, 2005 ) and the
development of trusting relationships with
stakeholders ( MacMillan et al ., 2004 ;
Waddock, 2002 ; Jones, 1995 ).

On the other hand, some theorists suggest
that rather than being an antecedent of rep-
utation, issues relating to the responsibilities
of a business are key attributes in terms of
which an organization ’ s reputation is judged.
Schnietz and Epstein (2005) , for example,
identify social responsibility as a key dimen-
sion of reputation; Tucker and Melewar
(2005) see social responsibility as a critical
element of reputation relevant to crisis man-
agement and Lindgreen and Swaen (2005)

Corporate Responsibility and Corporate
Reputation: Two Separate Concepts
or Two Sides of the Same Coin?

Carola Hillenbrand
The John Madejski Centre for Reputation, School of Reputation and
Relationships, Henley Management College , Greenlands,
Henley-on-Thames, Oxon , UK

Kevin Money
The John Madejski Centre for Reputation, School of Reputation and
Relationships, Henley Management College , Greenlands,
Henley-on-Thames, Oxon , UK

Corporate Responsibility and Corporate Reputation

Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00262

argue that issues relating to responsibility are
embedded within the functional relation-
ships that underpin business activities. They
suggest, therefore, that there will be a sig-
nifi cant overlap between the reputation for
these activities and the reputation for issues
relating to responsibility.

It is thus not clear from the current lit-
erature how responsibility and reputation
interact. Does responsibility lead to a good
reputation? Or is reputation judged in terms
of issues relating to responsibility and other
characteristics? The key difference between
these two approaches is the following: The
fi rst approach sees responsibility as preceding
reputation, or in other words as bringing
about a good or bad reputation. The second
approach sees responsibility as an inherent
part of reputation, in other words as a key
element in terms of which reputation is des-
cribed. At this stage both, one or neither of
these propositions might be true. This paper,
therefore, sets out to compare these two con-
cepts. To achieve this, the paper follows fi ve
related steps:

1. First, literature relating to reputation is
reviewed.

2. Second, literature relating to responsibility
and its related constructs such as CSR is
reviewed.

3. Third, stakeholder literature is reviewed
with the aim of developing an approach
to bring together literature on reputation
and responsibility.

4. Fourth, the fi ndings of a qualitative
research study are presented.

5. Finally, the conceptualizations of respon-
sibility and reputation are compared and
contrasted with a view to reaching a
better understanding how these concepts
interact.

CORPORATE REPUTATION
Corporate Reputation is a multi-stakeholder
concept that is refl ected in the perceptions
that stakeholders have of an organization

( Smidts et al ., 2001 ). There is much evidence
that reputations with different stakeholder
groups interact. In particular, reputation with
employees is seen to have an impact on
reputation with customers and communities
( Carmeli, 2005 ). When managing their
Corporate Reputation, organizations should
therefore take account of not only their
relationships with stakeholders but also
monitor how stakeholders infl uence each
other ( Dutton et al ., 1994 ).

A review of existing models of Corporate
Reputation reveals a relatively small number
of widely used models, the most prominent
of which seem to be variations of Fortune ’ s
Most Admired Companies List (MAC) and
the Reputation Quotient (RQ) ( Fombrun
and Van Riel, 2004 ; Fombrun, 1996 ). Also
popular but to a lesser extent are models
such as the Corporate Personality Scale
( Davies et al ., 2003 ) and the Stakeholder
Performance Indicator and Relationship
Improvement Tool (SPIRIT) ( MacMillan
et al ., 2004 ). These models differ considerably
in terms of their underlying approach, the
stakeholder they survey and what they meas-
ure ( Mahon, 2002 ).

For example, the MAC List surveys CEOs
and fi nancial analysts about their view of
listed companies in terms of issues such as
innovation, fi nancial soundness, use of cor-
porate assets and social responsibility. The
list was developed by the Fortune ’ s edito-
rial panel in discussion with business leaders
and fi nancial analysts and sought to identify
characteristics that executives and fi nancial
experts admire in companies. Subsequent
analysis of the data revealed that all compo-
nents factored on one underlying dimension,
which can best be described as a fi nancial
dimension ( Fryxell and Wang, 1994 ).

The RQ, on the other hand, can be app-
lied to obtain data on a company ’ s reputation
from the point of view of the general pub-
lic, customers, employees, suppliers and
investors. Although, in practice, surveys with
the general public and customers have been

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 263

the main focus of research. The model meas-
ures perceptions of an organization in terms
of social expectations of dimensions such as
products and services, vision and leadership,
work place environment and social respon-
sibility. The scale was developed through a
literature review of existing reputation
models followed by focus groups conducted
in ten different countries. The focus groups
asked members of the general public to ans-
wer questions such as ‘ What is Corporate
Reputation? And what aspects make it up? ’
The statistical analysis found evidence for
two distinct factors: those relating to emo-
tional appeal and those relating collectively
to all the other dimensions.

The Corporate Personality Scale surveys
customers and employees in terms of their
perceptions of organization ’ s personality,
focusing on dimensions such as agreeableness,
machismo, competence and enterprise. The
scale was developed by extending the Aaker
branding scale from the level of brands to
that of organizations. This was done by ana-
lyzing corporate websites for descriptions of
corporate character, conducting focus groups
in which customers and employees were
asked to describe the characteristics of orga-
nizations ‘ as if they had come to life ’ and
searching for terms used to describe person-
ality. Items were generated and tested on
thousands of customers and employees. A
factor analysis was used to confi rm and
refi ne the components in the scale.

The SPIRIT model can be applied to
survey Corporate Reputation from the per-
spective of many stakeholder groups of a
business including, for example, customers,
employees, suppliers, investors and commu-
nity groups. SPIRIT measures Corporate
Reputation in terms of three areas, namely,
the experience, feelings and intentions of
stakeholders towards a business. Experiences
of stakeholders include the way a business
informs and listens to stakeholders, the
material and non-material benefi ts a business
provides to stakeholders and outside

infl uences such as experience of what the
media has to say about a business or how a
business treats other stakeholder groups.
Feelings refer to the level of trust and posi-
tive emotions that stakeholders feel towards
a business. Intentions of stakeholders meas-
ure the likelihood that stakeholders will sup-
port the business in the future, for example
through stakeholder retention, advocacy and
cooperation. The scale was developed
through a literature review of reputation,
marketing and psychology literature and fol-
lowed by focus groups and interviews. The
concepts in the model were modifi ed and
refi ned and questionnaires were developed
to measure aspects in the model. These were
distributed to 8,000 stakeholders of different
kinds across three different continents. Sta-
tistical Techniques, such as factor analysis and
structural equation modeling, confi rmed the
independence of the measures and the pro-
posed links between reputation, its causes
and consequences.

These models are now summarized in
Table 1 with reference to their main features.

As described in Table 1 , models differ from
each other according to their underlying
approach, the stakeholders they survey and
what they measure. The way a model is
developed and the underlying assumptions
of theorists have an impact on when it is
most appropriate to use different models. For
example, it is important to consider when it
is appropriate to use a personality metaphor
or a relationship metaphor and to consider
what useful data could be obtained from dif-
ferent stakeholder groups. We have already
stated we will take a stakeholder perspective
and this means focussing on models that
ely up on stakeholder expectations in their
underlying approach. Since the RQ and
SPIRIT models are developed with stake-
holder perceptions and expectations as
their fundamental starting points, these
two models will be used as a basis for the
comparison with a conceptualization of
responsibility developed from a similar

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Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00264

methodology. While others, such as Davies
et al . (2003) also incorporated customers and
employees in the refi nement of their scales,
their conceptualization does not begin with
stakeholder expectations, but rather with the
application of a personality metaphor.

CORPORATE RESPONSIBILITY
Corporate Responsibility (CR) is a concept
in business research with roots in Business and

Society literature ( Andriof and Waddock,
2002 ). In this arena it is used as a broad term
to describe the issues relating to the respon-
sibilities of business. CR is closely linked to
other concepts in the Business and Society
literature, most importantly the concept of
Corporate Social Responsibility (CSR) (eg
Lockett et al ., 2006 ; Windsor, 2006 ; Moir,
2001 ), but has been differentiated from
CSR as being broader and encompassing

Table 1 : Summary of Reputation Models

Measures of
reputation

Underlying approach Who is surveyed What is measured

MAC list
(Fortune
Magazine

)

Reputation described in terms
of characteristics that are
admired by fi nancial analysts,
CEO and journalists

CEOs and
fi nancial analysts

Eight characteristics of reputation (innovation,
fi nancial soundness, employee talent, use of
corporate assets, long-term investment value,
social responsibility, quality of management,
quality of products and services)
Statistical analysis suggest that all eight
characteristics factor on one dimension

Reputation

quotient (RQ)
( Fombrun, 1996 )

Reputation described in
terms of stakeholder
expectations of organizations

Many stakeholder
groups of a business
including the general
public, customers,
employees, suppliers,
investors, etc

Six pillars of reputation (emotional appeal,
products and services, vision and leadership,
workplace environment, fi nancial
performance, social responsibility) Statistical
analysis suggests that the six pillars group
into two dimensions of reputation:
emotional appeal as one dimension and the
remaining pillars as second dimension

Corporate

Personality
Scale ( Davies
et al. , 2003 )

Reputation described
in terms of a
personality-metaphor

Customers and
employees

Seven dimensions of corporate personality
(agreeableness, enterprise, competence, chic,
ruthlessness, machismo, informality) Distinct
dimensions are supported by statistical
analysis

SPIRIT

( MacMillan
et al. , 2004 )

Reputation described in
terms of stakeholder
expectations in business
relationships

Many stakeholder
groups of a business
including customers,
employees, suppliers,
investors, etc

Three dimensions: experiences (including
for example sub-dimensions such as
communication, material benefi ts, experience
of outside infl uences), feelings (including
sub-dimensions trust and positive emotions)
and intentions (including sub-dimensions of
supportive behaviors such as advocacy and
retention of stakeholders towards a business)
Distinct dimensions and sub-dimensions are
supported by statistical analysis

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 265

day-to-day operating practices and strategies
of business as well as impacts on society and
the environment ( Ahmad et al ., 2003 ; An-
driof and Waddock, 2002 ). The term CR
drops the word social from previous concep-
tualizations ‘ to signal an emerging sense that
responsibilities are fundamental to all actions,
decisions, behaviours and impacts of business ’
( Waddock, 2003: 15 ). CSR, on the other
hand, can thus usefully be seen as relating
to the specifi c social, philanthropic and
community focussed responsibilities of
business.

CR rather than any of its related concepts
is investigated in this paper for two reasons:
First, there is a growing use and acceptance
within both the practitioner (eg Eco
Conference, 2006 ; EABIS Conference, 2006 ;
Zadek, 2004 ) and academic (eg Andriof and
Waddock, 2002 ; Waddock, 2003 ) communi-
ties for the term CR. Second, CR being a
broad concept, allows for the investigation of
both the social and other aspects of respon-
sibility within the same study ( MacMillan
et al . 2004 ; Waddock, 2003 ). A discussion
about the link between reputation and the
different aspects of responsibility should
therefore ensue.

Despite this distinction, a fundamental
problem in Business and Society literature is
that there is no universally agreed defi nition
of CR or CSR ( Windsor, 2006 ; Garriga and
Mele, 2004 ; Waddock, 2003 ). The lack of
agreement in terms and defi nitions has not
stopped academics and practitioners from
conceptualizing and measuring CR and its
related constructs in many different ways.

Academic examples include categorizing
corporate social performance in terms of
people and products ( Johnson and Greening,
1999 ) and in terms of social issues, such as
employee relations, diversity issues, product
issues, community relations and environ-
mental issues ( Hillman and Keim, 2001 ).
Practitioner examples include the triple
bottom line of fi nancial, social and environ-
mental performance ( Elkington, 1997 ) and

the Global Reporting Initiative (GRI)
that includes reports on employees, custo-
mers, community, supply chain and business
partners among other aspects. While these
conceptualizations often survey stakeholder
opinion, few actually involve stakeholders
in a rigorous and systematic way from the
defi nition of the concept through to meas-
urement. This leaves an opportunity for
stakeholders to be involved in defi ning
responsibility and identifying issues that are
relevant to them. It is clear from our review
above that researchers in the Corporate
Reputation domain have already developed
conceptualizations and models of Corporate
Reputation by engaging stakeholders in
concept development and through the map-
ping of their perceptions (eg MacMillan
et al ., 2004 ; Fombrun, 1996 ). It is also now
clear that researchers in the area of Business
and Society have yet to carry out similar
conceptual development for CR and its
related constructs ( Windsor, 2006 ; Neville
et al ., 2005 ). Before we can understand how
responsibility and reputation interact, it
follows that we fi rst have to have conceptu-
alizations of both concepts that are derived
from a similar approach. This will allow us
to compare and contrast the concepts more
easily and rigorously.

A number of scholars have thus called for
a conceptualization of CR to be developed
from a stakeholder perspective ( Wood et al .,
2006 ; Waddock, 2002 ). Taking account of
how stakeholders make sense of CR would
also add to the legitimacy of any models and
measures developed. This is because the
opinions of key groups such as customers,
employees or suppliers would be acknowl-
edged in an explicit way ( Wood et al ., 2006 ).
For these reasons, this paper sets out to
develop a conceptualization of CR that is
built through an engagement with stake-
holders from the inception stage. Before
this is done, the next section reviews key
elements of stakeholder theory relevant to
this approach.

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Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00266

STAKEHOLDER THEORY
Stakeholder theory is developed from stra-
tegic management literature ( Freeman, 1984 ).
Its core theme is that businesses have obliga-
tions to a broader group of stakeholders than
just shareholders. Freeman (1984) defi nes
stakeholders as ‘ ( … ) any group or individu-
al who can affect or is affected by the
achievement of the organization ’ s objective ’ .
Stakeholder theory has developed to view
the fi rm as a nexus of relationships ( Jones,
1995 ). This approach suggests that mutual
trust between organizations and stakeholders
are key drivers of long-term sustainable suc-
cess ( Jones, 1995 ).

Stakeholder theory also moved forward
signifi cantly with the contribution of
Donaldson and Preston (1995) . They suggest
that work conducted with stakeholders could
be viewed as descriptive, instrumental and
normative. Put simply, descriptive approach-
es seek to investigate and describe ‘ how ’
organizations and stakeholders relate to each
other. Instrumental approaches investigate
‘ what happens if ’ organizations relate to
stakeholders in certain ways. Normative
approaches suggest how a fi rm ‘ should ’ relate
to its stakeholders. When applied to a
research setting, it seems reasonable that the
Donaldson and Preston taxonomy could in
some ways be viewed as sequential. This is
because it follows that concepts fi rst need to
be described before their instrumental or
normative value can be established.

Another key tenant of stakeholder theory
is that concepts, such as responsibility, are
multifaceted and possess multiple criteria
that can change over time ( Harrison and
Freeman, 1999 ). This is because concepts
should refl ect the different views and needs
of stakeholders ( Mitchell et al ., 1997 ). It
is thus suggested that criteria should be
esta blished and measured in a process of
consultation and engagement between orga-
nizations and stakeholders ( Wood et al ., 2006 ;
Jones, 1995 ). This is supported by Neville
et al . (2005) , who state that the extent of an

organ ization ’ s responsibilities is framed with-
in the context of an organization ’ s relation-
ship with its stakeholders.

Much of the research examining stake-
holders in the business and society literature
is concerned with instrumental issues and
normative issues. In the realm of descriptive
research, little empirical work has looked
into what stakeholders think responsibility
is. This is, however, particularly important
if we are to accept the thesis of both
Connolly et al . (1980) and Jones (1995) , who
suggest that instrumental and normative
research should be built upon the foundation
of strong descriptive research. This paper
aims to provide such a foundation.

The Need for a Conceptualization of CR
from a Stakeholder Perspective
The conceptualizations of reputation
developed by MacMillan et al . (2004) and
Fombrun (1996) reviewed in the reputation
literature involved stakeholders in their
development. They drew upon the key
tenants of stakeholder theory outlined above.
As was outlined in the previous section,
current conceptualizations of responsibility
have been produced without systematically
and rigorously engaging stakeholders in their
development. Furthermore, current measures
often focus primarily on the social activities
of a business such as charitable donations,
community involvement and employee vol-
unteerism ( Maignan and Ferrell, 2004 ).

It is not clear however, whether these
issues are similar or different to stakeholder
conceptualizations of the social elements of
responsibility, let alone what the views of
stakeholders would be regarding a wider
notion of responsibility ( Dawkins and
Lewis, 2003 ). As a result, the indicators cur-
rently used by companies to demonstrate
CR are often said to be pragmatic or public
relations-based responses to pressure from
non-governmental organizations (NGOs)
( Esrock and Leichty, 1998 ; Sumner,
2004 ) and are seen to lack credibility with

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 267

stakeholders ( Barone et al ., 2000 ; Mohr et al .,
2001 ). There is, however, a consensus among
practitioners and academics alike that it is
important to understand and address
stakeholder expectations of CR ( Wood et al .,
2006 ; MacMillan et al ., 2004 ; Waddock,
2002 ). It is our aim to import the appro aches
and rigor around which reputation measures
were developed to the fi eld of CR. In
particular to apply similar techniques used
by Fombrun and Van Riel (2004) and
MacMillan et al. (2004) .

This paper continues by describing a re-
search project that sets out to defi ne respon-
sibility from the perspective of stakeholders
and fi lls this gap. Customers and employees
of a fi nancial institution are the participants
and sources of data in this study. As such
the study provides a fi rst step to conceptua-
lize responsibility from a stakeholder per-
spective. A formal comparison with the
reputation models, as outlined in the intro-
duction, is then given.

METHODOLOGY AND RESEARCH DESIGN
The research was conducted with a fi nancial
service company in the UK and was part of
a larger project investigating responsibility
and its impact in the fi nancial service sector.
Data gathering for the research reported in
this paper included 15 in-depth interviews
with employees of three different branches.
Furthermore, data gathering included four
focus groups with 8 – 12 customers each in
three different areas of the UK. The views
of a total of 56 customers and employees
were used as data in the qualitative analysis.
The design of the interviews was informed
by Kvale (1996) . The design of the customer
focus groups was informed by Marshall and
Rossman (1995) .

The study was based upon an inductive
research design. Following key qualitative
research techniques, the discovery of emp-
loyee and customer construction of reality
as a basis for conceptual understanding builds
on elements of grounded theory ( Glaser and

Strauss, 1967 ; Easterby-Smith et al ., 2002 ). In
a similar way to Fombrun (1996) , who asked
general questions such as ‘ What is Corporate
Reputation ’ and ‘ What does it entail ’ , the
current research study also used general
questions, such as ‘ What is Corporate
Responsibility ’ and ‘ What does it entail ’ .
While Fombrun asked stakeholders to think
of business in general and good and bad
companies, this research study is carried out
in the context of a relationship between
stakeholders and a target business. This is
done to take account of stakeholder theorists
and social psychologists who suggest that
issues are more richly understood when
they are embedded into experience.

It should be noted that the aim of the
research is to investigate mental conceptu-
alizations of CR among customers and
employees. Therefore, the design did not
employ existing conceptualizations of CR,
or aspects thereof, as practical research
guidelines. In the same way, no organiza-
tional value propositions such as mission
and vision statements of the participating
research organization were employed as
guidelines.

DATA ANALYSIS AND RESULTS
The fi eld notes and transcripts were analyzed
in an inductive way based on Miles and
Huberman (1994) who suggest a systematic
process for making sense of and displaying
data, including the following stages that are
now outlined:

1. Preparation of written-up fi eld notes.
2. Qualitative clustering to identify trends

in the data.
3. Further analysis to identify high-level

themes and links between clusters.

Field Notes
The focus groups with customers were
audio- and videotaped and subsequently
transcribed. Interviews with employees
could not be taped due to reasons of

Corporate Responsibility and Corporate Reputation

Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00268

confi dentiality. Therefore, a second research-
er who took notes during the interviews
accompanied the facilitator.

Qualitative Clustering to Identify Trends
in the Data
The written up fi eld-notes and transcripts
were then analyzed by identifying dominant
trends that were repeatedly mentioned by
customers and employees. The method of
identifying trends was based on a qualitative
clustering technique described by Miles and
Huberman (1994) . Qualitative clustering
helps to understand data by grouping and
then conceptualizing units that have similar
patterns or characteristics. Based on this
technique, eight distinct clusters of respon-
sibility were identifi ed from the data that
represent customer and employee thoughts
on what a business is responsible for. These
eight clusters are responsibility for: (1) com-
munication with them, (2) the kind of ben-
efi ts a business offers them, (3) behaving with
integrity, transparency and accountability
towards them, (4) how a business makes
them feel, (5) how a business relates to local
communities, (6) how a business relates to
the wider society, including the environ-

ment, (7) how business behaves towards
other exchange stakeholders and (8) being
a fi nancially stable and successful business
in the long term.

HIGH-LEVEL THEMES AND LINKS BET-
WEEN CLUSTERS OF RESPONSIBILITY
These eight clusters were then categorized
in three high-level themes that refl ect who
these responsibilities are addressed to in the
minds of stakeholders. So, in the minds of
stakeholders a business is responsible for how
it relates to (1) ‘ me ’ , (2) ‘ others ’ and (3) ‘ it-
self ’ . These three themes with corresponding
clusters are shown in Table 2 .

Table 3 gives some specifi c examples of
how these themes and clusters are expressed
in the customer and employee data from the
fi nancial service organization studied.

It should be noted that there is a high
degree of overlap between the themes and
the clusters that underpin customer and em-
ployee understanding of CR. Expression of
these clusters seems to be more similar when
referring to issues removed from their own
relationship, such as how business relates to
others and to itself. While this is the case,

Table 2 : Themes and Clusters of Responsibility from a Stakeholder Perspective

Three themes of responsibility Eight clusters of responsibility

A business is responsible for …

… how it relates through communication
to ME through the kind of benefi ts it offers to m

e

through the way it behaves with integrity, transparency

and accountability
and how that makes me feel

… how it relates to OTHERS

(that includes stakeholders and
society in large)

The local community
The wider society
Towards other direct exchange stakeholders (ie employees,

customers, suppliers and shareholders)

… how it relates to ITSELF Long-term business success

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© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 269

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Corporate Responsibility and Corporate Reputation

Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00270

the specifi c expression of concepts is often
different, particularly when relating to how
a business relates to them as a focal stake-
holder group.

DISCUSSION OF THE RESULTS
The most noticeable fi nding from the re-
search is how comprehensive and extensive
customers ’ and employees ’ conceptualization
of CR is. The analysis reveals a wide spread
of business behaviors and characteristics as-
sociated with the notion of CR such as the
way a business behaves towards people in its
daily activities, the way a business makes
people feel, aspects of profi tability and com-
munication. This is particularly interesting
when one considers how the term CR is
sometimes used in a very narrow sense to
represent charitable donations, community
involvement and employee voluntarism,
which are all extra-curricular activities and
not core aspects of how a business makes its
profi ts. While customers and employees see
support of good causes and the environment
as part of the picture, it does not seem to
be their main priority. The results do
suggest however, that CR is a concept that
em braces both the social aspects normally
associated with CSR and wider elements as-
sociated with more mainstream business
practice.

The results also suggest that customers
and employees see CR as being refl ected in
similar issues. This has implications for the
management of multiple stakeholder rela-
tionships in that it suggests that organizations
can manage and demonstrate their responsi-
bility using a similar set of issues. Theorists
such as ( Carmeli, 2005 ; Dutton et al ., 1994 ;
Smidts et al ., 2001 ) could build on this in
their work linking internal and external
reputations.

The most important business responsi-
bilities in customer and employee under-
standing are core aspects of business
behavior and strategy such as the way a busi-

ness runs its operations and treats customers
and staff and whether it is profi table or not.
Indeed of the eight clusters identifi ed, only
two ( How a business relates to the local com-
munity and How it relates to wider society ) did
not relate to the core activities of business.
The other six clusters refer to how a business
relates to stakeholders in terms of their
daily business activities and whether or
not a business makes money.

The message to businesses here is clear.
If they want to be seen as responsible by
customers and employees, they need to
get the relationship right with these groups
as well as meeting wider social obligations.
The fi ndings should also come as a relief
to managers who often wrestle with the
‘ confl ict ’ between being responsible and
providing good service and profi tability.
The message is again clear: businesses
that deliver value and service to customers
and are honest and fair to employees
should be perceived as being responsible.
If we believe past research, these activities
should also bring profi t (eg MacMillan et al . ,
2004 ).

LINKING CR AND CORPORATE
REPUTATION
A comparison of the conceptualization of
responsibility provided by the data analyzed
in this paper and current measures and mod-
els of reputation provides the framework for
a discussion about links between responsibil-
ity and reputation. As a starting point,
similarities between elements of CR, as rep-
resented by the fi ndings of the current study,
and elements of Corporate Reputation, as
represented by the SPIRIT-Model of Repu-
tation ( MacMillan et al ., 2004 ) and the RQ
Model ( Fombrun and Van Riel, 2004 ) are
summarized in Table 4 .

For ease of reference similarities and dif-
ferences are now discussed in terms of the
three themes of CR developed from the
empirical research in this paper.

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 271

Table 4 : Comparison between Findings of the Current Study and Reputation Models

Themes and clusters of responsibilities
(Results of the current study)

Reputation models

Three themes of
responsibility

Eight clusters of
responsibility

SPIRIT
MacMillan et al. (2004) Data from
one or more stakeholder groups on
their perceptions of a business

RQ
Fombrun and Van Riel (2004)
Data from one or more
stakeholder groups on their
perceptions of a business

A business is responsible for:

… how it relates to ME Through

communication
Experience of Business Behavior

(Communication)

Through the kind of

benefi ts it offers to me
Experience of business behavior (Material

and non-material benefi ts)
Products and services

Through the way it behaves

with integrity, transparency
and accountability

Experience of business behavior (Keeping
commitments,
fairness and a lack of
coercion)

Vision and leadership

And how that makes me

feel
Stakeholder feelings towards a business

(eg trust and positive emotions)
Emotional appeal

… how it relates to

OTHERS (that includes
stakeholders and society
in large)

The local community Experience of outside infl uences , eg the
local community or apply SPIRIT
to the local community

The wider society Experience of outside infl uences , eg the

local community or apply SPIRIT
to the wider society to obtain their
experiences of the business

Social responsibility

Towards other direct

exchange stakeholders
(eg employees, customers,
suppliers and shareholders)

Apply SPIRIT to multiple
stakeholders to gain
experiences of employees, customers,
investors and
shareholders

Workplace environment

… how it relates to

ITSELF
Long-term business success Stakeholder Intentions towards a business

including behavioral support such as
retention, extension, advocacy,
cooperation and a lack of subversion

Financial performance

Corporate Responsibility and Corporate Reputation

Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00272

Theme 1: Stakeholder Expectation about
‘ How a Business Relates to Me ’
It seems that the theme of ‘ how an organi-
zation relates to me as a stakeholder ’ is par-
ticularly similar to the part of SPIRIT that
measures ‘ stakeholder experiences of an or-
ganization ’ . Both the above-mentioned
themes in the CR and SPIRIT models,
for example, include a measure of how
an organization communicates with stake-
holders, the benefi ts stakeholders receive
from organizations, the integrity with which
stakeholders are treated and how stakehold-
ers feel towards the business.

The RQ also seems to overlap with the
CR model in terms of this theme of ‘ how
an organization relates to me as a stakehold-
er ’ . In particular, the pillar of ‘ products
and services ’ seem to relate very strongly to
‘ benefi ts offered to me (as a customer) ’
and the pillar of ‘ emotional appeal ’ seem to
link very strongly to ‘ how an organization
makes me feel ’ . The other two clusters of
this theme of responsibility, in terms of
the communication and integrity seem to
be less closely linked to the RQ. However,
it could be argued that elements of vision
and leadership should correlate with notions
of integrity.

Theme 2: Stakeholder Expectations
about ‘ How a Business Relates to Others ’
In terms of the second theme of responsibil-
ity, ‘ how an organization is seen to relate to
others ’ , the themes and dimensions from
reputation models fi t well, but not with the
same degree of synergy as the previous
theme of CR. This is because reputation re-
search often provides data from the perspec-
tive of one stakeholder group only in terms
of how the organization relates to them. RQ
and SPIRIT surveys are, for example, often
conducted with customers or employees of
an organization, while it is less common for
surveys to be conducted simultaneously with
both these groups, let alone multiple stake-

holders. Ideally, data regarding this dimen-
sion of responsibility should be obtained by
conducting research directly with different
stakeholder groups regarding their individu-
al relationships with the organization.

Research with one stakeholder group
does, however, offer an opportunity to gath-
er information that is relevant to this theme
of responsibility because reputation models
often require stakeholders to give their opin-
ion about how organizations relate to stake-
holder groups other than their own. An RQ
with customers of an organization, for ex-
ample, will provide an indication of how
customers perceive an organization to be
performing in terms of ‘ social responsibility ’ .
This could, for example, relate to the dimen-
sion of responsibility relating to ‘ how an
organization is seen to impact the wider so-
ciety ’ . An RQ with customers would also,
for example, provide an indication of how
customers perceive the ‘ workplace environ-
ment ’ of an organization. This may provide
some indication of the dimension of respon-
sibility that relates to ‘ how an organization
relates to its employees ’ .

When SPIRIT is applied to one stake-
holder group, it provides much more infor-
mation about the details of the focal
relationship than the RQ, but less informa-
tion about how this focal group perceive an
organization to relate to others. It does,
however, provides an indication of how
other groups may infl uence the reputation
of an organization in the minds of one focal
stakeholder group. This could include, for
example, customer perceptions of how an
organization relates to the local community
and wider society and an indication of how
these perceptions infl uence the reputation of
the organization in their minds. It does not,
however, overtly ask stakeholders how other
groups are treated by the organization.

This example highlights the differences
between the SPIRIT model and the RQ
and also highlights the importance of
carrying out further multi-stakeholder

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 273

research in both the reputation and respon-
sibility fi elds. It seems clear that organiza-
tions will obtain a more accurate picture of
their reputation and whether they are meet-
ing their responsibilities, if they survey dif-
ferent stakeholder groups directly and
simultaneously.

If simultaneously applied to various stake-
holders, the SPIRIT model seems to provide
the closest link to the responsibility model.
This is because it asks stakeholders directly
about issues that relate to their own relation-
ship and that they have direct experience of.
The RQ, on the other hand, may require a
focal stakeholder group to make judgments
about things that are beyond their experi-
ence and knowledge. A customer RQ, would,
for example, ask customers about their
perceptions of an organization ’ s ‘ workplace
environment ’ , while an employee RQ may
ask about an organization ’ s ‘ products and
services ’ and ‘ fi nancial performance ’ . Issues
that each group may not necessarily know
that much about and that more closely links
to the experience of another stakeholder
group. Doing an RQ with multiple stake-
holders, may therefore, provide more of an
overview of the reputation of an organiza-
tion in terms of macro issues, rather than an
analysis of how an organizations relates to
each stakeholder group in term of issues that
are important to them.

The discussion above highlights the most
crucial differences between the RQ and
SPIRIT and suggests that organizations have
important decisions to make when choosing
reputation and responsibility models. The
RQ may for example, provide a more ho-
listic picture of responsibility when applied
to just one group, while SPIRIT fi ts well
with a multi-stakeholder approach. It also
indicates that SPIRIT and the RQ could
be modifi ed to take account of the needs
of responsibility practitioners. Choices of
research approach will have to be balanced
in terms of organizational need, costs and
time constraints.

Theme 3: Stakeholder Expectations
about ‘ How a Business Relates to Itself ’
In terms of the fi nal dimension of responsibil-
ity, ‘ how an organization relates to itself in
terms of long-term business success ’ , both
reputation models provide strong indicators.
The SPIRIT model provides an indication of
stakeholder intentions to be supportive of an
organization in the future. Since this relates
to issues such as customers continuing to buy
products and employees being committed to
their work, it provides an indication of the
future fi nancial success and sustainability of
an organization. Therefore, it provides a strong
indication of the future sustainability of an
organization. The RQ, on the other hand,
provides an indication of the perception of
the past fi nancial performance of an organiza-
tion. While not providing an indication of
future performance, this is a key element of
past performance that will determine wheth-
er an organization is seen to be responsible
at any particular moment in time. Both meas-
ures seem complimentary.

SUMMARY OF THE COMPARISON
BETWEEN THE CR MODEL AND
REPUTATION MODELS
In summary, an analysis of Table 4 suggests
that stakeholder understanding of CR is, in
important aspects, similar to stakeholder un-
derstanding of Corporate Reputation, as
expressed by the two reputation models
analyzed. This poses serious questions for
theorists who suggest that CR is a key an-
tecedent of Corporate Reputation or even
suggest that CR and Corporate Reputation
are distinct concepts. Rather, the results sug-
gest that far from being distinct the two
concepts are largely overlapping. In other
words, when taking a stakeholder perspec-
tive, Corporate Reputation and CR are both
expressed through similar and overlapping
corporate behaviors and understood in terms
of similar and overlapping stakeholder per-
ceptions. In this way rather than viewing
reputation and responsibility as two separate

Corporate Responsibility and Corporate Reputation

Corporate Reputation Review Vol. 10, 4, 261–277 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00274

concepts, they may more usefully be thought
of as two sides of the same coin.

This has a number of implications, but
critically it may mean that reputation models
could be used to provide a starting point for
the provision of proxy-measures of responsi-
bility. In addition, the conceptualization of
responsibility provided in this paper suggests
that organizations can use measures provided
by reputation models to communicate and
report on the responsibility of their busi-
nesses in terms of issues that are relevant to
stakeholders. In this way data could be col-
lected for a number of purposes. Also, these
measures could be incorporated into strategic
decision-making that is aimed at growing
the value of the business as well as ensuring
responsible behavior. It might also provide an
opportunity for reputation and responsibility
practitioners and academics to join forces and
move both concepts forward.

Another interesting fi nding is that despite
differences in the interpretation of aspects of
the clusters, on a conceptual level, employees
and customers construct CR in a very simi-
lar way. From a theoretical point it suggests
that a generic conceptualization of CR and
Corporate Reputation could be developed
that is applicable to different stakeholder
groups. This could then be operationalized in
different ways with different organizations
and stakeholders as our research suggests dif-
ferent stakeholders express the same underly-
ing themes in different ways. From a practical
point it suggests that a business can simultane-
ously enhance its reputation and demonstrate
its responsibility by meeting stakeholder ex-
pectations. However, the expression of spe-
cifi c relationship issues still highlights
importance of understanding the specifi cs in
the expectations of different stakeholder
groups before operationalizing responsibility
or reputation in organizations.

LIMITATIONS AND FUTURE RESEARCH
The research focuses on the concepts of CR
and Corporate Reputation. The results

should not be taken to be generalizable to
other concepts such as CSR. While the
results suggest that social elements are key
components of CR, richer and more
in-depth views of CSR may be obtained
by taking a similar inductive approach and
researching this concept in more detail.
Researchers are thus encouraged to conduct
this type of research with different type of
corporate entity and concepts that embrace
different elements of those identifi ed in this
study or in the literature.

The current study has been conducted
with customers and employees of a fi nancial
service company in the UK and it is not
clear in how far the fi ndings can be gener-
alized to other industries, stakeholders or
countries. Future research could extend
exploratory research into stakeholder expec-
tations of CR including other stakeholder
groups such as suppliers, investors, commu-
nities and NGOs. It would also be interest-
ing to conduct similar research with different
businesses and in different industries and
countries to compare how far expectations
of CR can be compared and separated into
specifi c business responsibilities, specifi c
industry responsibilities, cultural responsi-
bilities and general responsibilities. Since a
key tenant of stakeholder theory is that con-
ceptualizations are multifaceted and depend-
ent upon different stakeholder needs, the
overlap between reputation models and con-
ceptualizations of CR could be further in-
vestigated in different situations.

CONCLUSION

Implications for Academics
The study has a number of implications for
the academic world. First, the fi ndings of this
study suggest that customers and employees
conceptualize CR in three ways: as business
behavior towards them, as business behavior
towards other stakeholder groups and as
business behavior that ensures a business ’

Hillenbrand and Money

© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 4, 261–277 Corporate Reputation Review 275

own success. When broken down into its
constituent parts these relate to, for example,
issues such as how an organization provides
benefi ts to stakeholders through its products
and services, how it communicates with
stakeholders as well as the emotional impact
that an organization has on stakeholders.
Second, in a comparison of these fi ndings
with prominent reputation models it was
found that there is a great overlap between
elements of reputation models and aspects
of CR. This was particularly the case in that
both investigate how a business relates to its
various stakeholders in terms of key business
activities. Measuring CR may therefore, not
be that different from measuring Corporate
Reputation, as both can be rooted in stake-
holder relationships. Third, this paper pro-
vides the opportunity to apply the advances
in the conceptual development of reputation
to the fi eld of CR.

Implications for the Practitioner
The study also has a number of implications
for practitioners. One implication is the way
Corporate Reputation and CR are managed
in organization. Since the fi ndings suggest
that the areas of reputation and responsibil-
ity are overlapping, it follows that the con-
cepts could be managed in an integrated way.
Perhaps organizations already have the meas-
ures and processes they need to manage both
concepts in separate business units. For this
reason, organizations are encouraged to ex-
plore how Corporate Reputation and CR
activities could positively impact each other.
A further implication is that involving stake-
holders in defi ning an organization ’ s respon-
sibilities can add to the legitimacy of how
the concept of responsibility can be defi ned,
implemented and measured. Finally, it is clear
that elements of CR have been closely linked
to Corporate Reputation. This should give
practitioners the ammunition they need to
justify the costs that are sometimes associ-
ated with the fi eld.

CONCLUDING REMARKS
Overall, the major conclusion is that practi-
tioners and researchers in Corporate Reputa-
tion and CR are encouraged to explore how
they could work together to raise the profi le
of both fi elds, conduct further research and
infl uence strategic decision making.

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