Responsible Research for Better Business: Creating Useful and Credible Knowledge for Business and Society (Palgrave Studies in Sustainable Business In Association with Future Earth) 3030378098, 9783030378097

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PALGRAVE STUDIES IN SUSTAINABLE BUSINESS IN ASSOCIATION WITH FUTURE EARTH

Responsible Research for Better Business Creating Useful and Credible Knowledge for Business and Society Edited by László Zsolnai · Mike J. Thompson

Palgrave Studies in Sustainable Business In Association with Future Earth

Series Editors Paul Shrivastava Pennsylvania State University University Park, PA, USA László Zsolnai Corvinus University of Budapest Budapest, Hungary

Sustainability in Business is increasingly becoming the forefront issue for researchers, practitioners and companies the world over. Engaging with this immense challenge, Future Earth is a major international research platform from a range of disciplines, with a common goal to support and achieve global sustainability. This series will define a clear space for the work of Future Earth Finance and Economics Knowledge-Action Network. Publishing key research with a holistic and trans-disciplinary approach, it intends to help reinvent business and economic models for the Anthropocene, geared towards engendering sustainability and creating ecologically conscious organizations. More information about this series at http://www.palgrave.com/gp/series/15667

László Zsolnai · Mike J. Thompson Editors

Responsible Research for Better Business Creating Useful and Credible Knowledge for Business and Society

Editors László Zsolnai Business Ethics Center Corvinus University of Budapest Budapest, Hungary

Mike J. Thompson The Anthesis Group London, UK

ISSN 2662-1320 ISSN 2662-1339  (electronic) Palgrave Studies in Sustainable Business In Association with Future Earth ISBN 978-3-030-37809-7 ISBN 978-3-030-37810-3  (eBook) https://doi.org/10.1007/978-3-030-37810-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover credit: Maram_shutterstock.com This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

What is the role of business and management research in producing credible knowledge to address the dramatic human and environmental challenges of our times? Human social and economic activities have dramatically and negatively impacted our natural environment, earth systems, and climate systems. The existential risk presented by the new reality of the Anthropocene era requires a radical rethinking of the purpose of business and its dominant working models. We believe that the main challenge for business and management research is to figure out how to bring our economies and business organizations in better balance with nature and society and how to create new models of socio-ecological well-being. This book collects a number of responses to the challenges set by the Responsible Research in Business and Management (RRBM), initiated by Notre Dame University Professor Anne Tsui. RRBM is an international network of leading scholars and universities to promote responsible research for better business and better world by creating useful and credible knowledge. The growing expressions of concern by business and societal stakeholders on the relevancy and responsibility of business v

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and management research is essentially a call to reexamine the responsibility of business school research and the role and calling of professorship. Learning and scholarship is a vital societal resource to tackle the immense challenges of business and planetary responsibility. What are the new paths that are open to scholarship to ensure that knowledge creation is applied to inform and equip managers as well as to further management as both an art and a science? The call of this book is a response to this question by contributors who honor the requirement for high quality business and management research but want to point to new pathways for responsible research and education. The urgent demand from many stakeholders is for responsible research to encourage transformational changes to business and management in response to the challenges of potential climate collapse and ecological breakdown. Our hope is that the chapters in our book can contribute to this difficult and vitally important task. We should like to thank Professor Anne Tsui for the encouragement and support that we received from her during the completion of our project. Budapest, Hungary London, UK

László Zsolnai Mike J. Thompson

Contents

Introduction The Call for Responsible Research in Business and Management 3 László Zsolnai and Mike J. Thompson Methodologies for Responsible Business Research Critical Realism: A Philosophy of Science for Responsible Business and Management Research 17 Tim Rogers and Benito Teehankee Identifying and Solving the Right Problem by Using Multidimensional Systems Thinking 35 László Zsolnai

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Contents

Relational Objectivity as Responsibility in Management Research 47 Karen Golden-Biddle and Jean M. Bartunek Reflections on Standards for Responsible—and High-Quality—Research: A Call for Peace 69 Tilman Bauer Responsible Research and Diversity in Methods: Contributions of Mixed Methods Research for Better Business and a Better World 101 José F. Molina-Azorin, Maria D. López-Gamero, Jorge Pereira-Moliner, Eva M. Pertusa-Ortega and Juan José Tarí From Being Observed to Becoming an Active Participant: How Visual Research Methods Contribute to Producing Useful and Credible Knowledge 125 Miikka J. Lehtonen Getting Closer to Real World Business Sustainable Value Management: Pluralistic, Multi-Criteria, and Long-Term Decision-Making 149 Adel Guitouni Responsible Research for Responsible Investment—JUST Capital Case Study 183 Ernest C. H. Ng Obstacles to Sustainable Change in Business Practice 211 James Wallis Index 235

Notes on Contributors

Jean M. Bartunek is the Robert A. and Evelyn J. Ferris Chair and Professor of Management and Organization at the Carroll School of Management, Boston College, USA. Her primary interests center around academic–practitioner relationships and organizational change. She is interested in multiple dimensions of links between theory, research, and practice, including collaborative research, how knowledge is shared across boundaries, and relationships that transcend research. In addition, she studies multiple dimensions of the processes of organizational change, especially relationships between change agents and recipients, and interactions within as across these groups. Tilman Bauer a peace researcher originally from Finland and Germany. He researches the nexus between business and peace as a doctoral candidate at Aalto University School of Business in Helsinki, Finland. He explores a new paradigm for business thinking where ethical business can foster holistic peace in society. He previously worked as assistant to the CEO at Autarkia GmbH, which organizes the Green World Tour event series bringing sustainability into the mainstream.

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Karen Golden-Biddle is Questrom Professor in Management and Professor of Organizational Behavior at the Questrom School of Business at Boston University, USA. She conducts research and teaches in the areas of organizational change and qualitative methodology. She has published two books and authored more than sixty articles and book chapters in management journals such as the Academy of Management Journal and Organization Science. Recognition for Karen’s scholarship includes the 2013 Douglas McGregor Award (Journal of Applied Behavioral Science) for her paper on organizational change, and the Academy of Management’s Robert McDonald Award for the Advancement of Organizational Research Methodology for her study of constructing opportunities for contribution in writing qualitative research. Her co-authored book, Composing Qualitative Research, has been used in doctoral programs in top business schools across the world, including Stanford, University of Michigan, Northwestern, Cambridge, INSEAD, and Columbia. Adel Guitouni is Associate Professor Peter B. Gustavson School of Business, University of Victoria, Canada. He has made several contributions to multiple criteria decision aid (MCDA), supply chain management, information systems, resource management, and cloud computing. His research interests include the automation of planning and scheduling, net-enabled dynamic resource management and supply chain management, classification and machine learning, multiple criteria decision analysis, multi-objective optimization, collaborative decision-making, and decision support systems. Before joining University of Victoria Dr. Guitouni has held positions with the Canadian government and taught at Laval University, University of Sherbrook and Concordia. Miikka J. Lehtonen  is Visiting Assistant Professor at Aalto University School of Business & School of Arts, Design and Architecture, Finland. His research interests focus on visual research methods, video game industry, blended learning pedagogies, and Japan. He has taught courses on multidisciplinary teamwork, video game industry, service design, business modeling, and visual communication. Prior to his current position, Miikka was an Assistant Professor at the University of Tokyo’s multidisciplinary unit i.school, and he has teaching and working experience in Finland, Denmark, USA, Russia, China, and Japan.

Notes on Contributors     xi

Maria D. López-Gamero  is Associate Professor in the Department of Management at the University of Alicante, Spain. Her current research interests are environmental management, sustainable tourism and competitive strategy, together with their relationships with quality management and organizational design. She has published papers in those topics in journals such as Long Range Planning, International Journal of Management Reviews, Journal of Environmental Management, Journal of Business Ethics and Tourism Management. José F. Molina-Azorin is Associate Professor in the Department of Management at the University of Alicante, Spain. His current research interests are strategic management, environmental management, microfoundations of strategy, organizational design, quality management, competitiveness of the tourism industry, sustainable tourism, mixed methods research, and multilevel research. He has published papers in those topics in journals such as Long Range Planning, Organizational Research Methods, Strategic Organization, International Journal of Management Reviews, Journal of Business Ethics and Tourism Management. He is Co-Editor of the Journal of Mixed Methods Research (Sage). He also helped co-edit as guest editor a special issue on mixed methods in organizational sciences at Organizational Research Methods. Ernest C. H. Ng  is an Honorary Assistant Professor at the Centre of Buddhist Studies at the University of Hong Kong, China where he teaches an undergraduate course on Buddhism and Economics. His research interests include Buddhist Economics, the intersection of spirituality and materiality, sustainable decision-making and mindfulness. He is currently the Chief Executive Officer at Tung Lin Kok Yuen, a Buddhist NGO with over 80 years of history dedicating to Buddhist teachings, education, and community services in Hong Kong. Prior to that he was the Chief Investment Officer at Sumeru Capital, an asset management company focusing on the Greater China markets. With over 15 years of experience in the financial market, Dr. Ng has developed keen interests in achieving sustainable developments in the market economy. He also serves as President of the CBS Alumni Association. Dr. Ng graduated Phi Beta Kappa from the University of Chicago with Bachelor of Arts in Economics and Master of Arts in International

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Relations. He received a Master of Buddhist Studies and Doctor of Philosophy from the CBS, HKU. He was a Sir Edward Youde Scholar and is a Fellow at the European SPES Institute. Jorge Pereira-Moliner is Associate Professor in the Department of Management at the University of Alicante, Spain. His current research interests are strategic management, quality management and environmental management, especially in the tourism industry. He has published papers in those topics in journals such as Annals of Tourism Research, Tourism Management and International Journal of Contemporary Hospitality Management. Eva M. Pertusa-Ortega is Associate Professor in the Department of Management at the University of Alicante, Spain. Her current research interests are organizational design, competitive strategy, ambidexterity, quality management and environmental management. She has published papers in those topics in journals such as Journal of Business Research, British Journal of Management and Management Decision. Tim Rogers is an academic developer with the University of South Australia’s Teaching Innovation Unit. He has an interest in organizational learning and systems theories, in particular action science, and in the philosophy of the social sciences, in particular critical realism. Juan José Tarí  is Professor in the Department of Management at the University of Alicante, Spain. His current research interests are quality management and its relationships with environmental management, strategy, and organizational design. He has published papers in those topics in journals such as International Journal of Management Reviews, Journal of Business Ethics and European Journal of Operational Research. Benito Teehankee is the Jose L. Cuisia Sr. Professor of Business Ethics in the Ramon V. del Rosario College of Business at De La Salle University (DLSU) in Manila, Philippines. He is Head of the Business for Human Development Network of the DLSU Center for Business Research and Development. His teaching and research focus on humanistic management, critical realism, action research, workplace spirituality, corporate social responsibility, and corporate governance.

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Mike J. Thompson  is Adjunct Professor at the Gustavson School of Business, University of Victoria and was formerly professor of management practice at the China Europe International Business School (CEIBS) in Shanghai. His teaching and research focus is on sustainability innovation, entrepreneurship, wise leadership and corporate governance and is co-editor of The Macau Ricci Institute Journal and is a reviewer for a number of management journals. He co-authored Responsible Entrepreneurship (with S. Rothlin and T. Myers, 2015) and co-edited Wise Management in Organisational Complexity (with David Bevan, Palgrave, 2013). Dr. Thompson served as a board director alongside entrepreneurs throughout his career including The Entertainer toyshops. He was CEO of GoodBrand, the impact-led innovation consultancy now part of the Anthesis Group, the sustainability activators. He is currently Leader of People Services for Anthesis. James Wallis  is Strategy Director with the sustainability consultancy, Anthesis. Having completed his undergraduate degree in Philosophy at Gonville & Caius College, Cambridge, he joined a boutique marketing strategy consultancy, The Value Engineers. As part of the graduate program he developed understanding and practice in branding and consumer qualitative research. From here, James joined Clear M&C Saatchi, where he became a Director, advising companies including MasterCard, Mitchell’s & Butlers, RB, Wagamama, and Mondelez. James left Clear M&C Saatchi in 2015 to focus on innovation and strategy that applies a more inclusive and sustainable understanding of business. In this capacity, through GoodBrand, James worked for senior clients at Unilever, Nestlé and Danone. GoodBrand joined Anthesis Group in February 2019. László Zsolnai is Professor and director of the Business Ethics Center at the Corvinus University of Budapest. He is chairman of the Business Ethics Faculty Group of the CEMS—The Global Alliance in Management Education. He is president of the European SPES Institute in Leuven, Belgium and Fellow of the Royal Society of the Arts in London, UK. He has been a guest professor/visiting scholar at University of Cambridge, University of Oxford, University of

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California at Berkeley, Georgetown University, University of Richmond, Concordia University Montreal, University of St. Gallen, Bocconi University Milan, and the Netherlands Institute for Advanced Study. László Zsolnai’s most recent books include The Collaborative Enterprise: Creating Values for a Sustainable World (2010. Oxford, UK: Peter Lang Academic Publishers); The Palgrave Handbook of Spirituality and Business (2011. Houndmills, UK, New York, NY: Palgrave Macmillan); Beyond Self: Ethical and Spiritual Dimensions of Economics (2014. Peter Lang Academic Publishers, Oxford); The Spiritual Dimension of Business Ethics and Sustainability Management (2015, Springer), and Ethics, Meaning and Market Society (2018. Routledge, New York). His website: http://laszlo-zsolnai.net.

List of Figures

Reflections on Standards for Responsible—and High-Quality—Research: A Call for Peace Fig. 1

The seven principles of responsible research (The seven principles of responsible research are further described on the RRBM website: https://rrbm.network/positionpaper/principles-of-responsible-science) (Source RRBM)

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From Being Observed to Becoming an Active Participant: How Visual Research Methods Contribute to Producing Useful and Credible Knowledge Fig. 1 Fig. 2 Fig. 3 Fig. 4 Fig. 5 Fig. 6 Fig. 7

Respondent A first drawing (December 2013) Respondent A second drawing (January 2019) Respondent B first drawing (January 2013) Respondent B second drawing (March 2018) Respondent C first drawing (December 2013) Respondent C second drawing (August 2018) Respondent D first drawing (February 2013)

134 134 135 135 136 136 137

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Fig. 8 Respondent D second drawing (August 2018) Fig. 9 Respondent E first drawing (January 2014) Fig. 10 Respondent E second drawing (January 2019)

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Sustainable Value Management: Pluralistic, Multi-Criteria, and Long-Term Decision-Making Fig. 1 Fig. 2 Fig. 3 Fig. 4

Model of the firm (Source Author’s creation) Representation of (global) co-production value chain (Source Author’s creation) Example of Pareto-optimality (Source Author’s creation) Characterization of decision outcomes (triple bottom line perspective) (Source Author’s creation)

158 159 166 168

List of Tables

Reflections on Standards for Responsible—and High-Quality—Research: A Call for Peace Table 1 Standards for high-quality research compared with principles of responsible research Table 2 Exemplary dimensions of service to society as aspects of peace

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Responsible Research and Diversity in Methods: Contributions of Mixed Methods Research for Better Business and a Better World Table 1 Summary of the QUAL→QUAN→QUAL mixed methods design for the study of environmental sustainability in tourism 109

From Being Observed to Becoming an Active Participant: How Visual Research Methods Contribute to Producing Useful and Credible Knowledge Table 1 List of respondents with selected background information 132 xvii

Introduction

The Call for Responsible Research in Business and Management László Zsolnai and Mike J. Thompson

Theories greatly influence business and management practices. In his seminal work the late London Business School professor Sumantra Ghoshal (2005) warned that bad management theories are destroying good management practices. Similarly, good management theories may help to bring forth new and better business practices. One of the most influential moral philosophers of our time, Hans Jonas (1984) suggested that responsibility should be understood as caring for the beings whose functioning is under one’s action and consideration. From Jonas’ theory of responsibility it follows that business and management researchers should not be passive observers of the subjects they L. Zsolnai Business Ethics Center, Corvinus University of Budapest, Budapest, Hungary e-mail: [email protected] M. J. Thompson (B) Anthesis, London and the Gustavson School of Business, University of Victoria, Victoria, BC, Canada e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_1

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study. Rather, responsible scholars should develop sensitivity and responsiveness toward the fate and well-being of organizations and other social systems they happen to focus on. In 2017, Notre Dame University professor Anne Tsui initiated the creation of an international network of leading scholars and universities has been formed to promote Responsible Research in Business and Management (RRBM). The core vision of RRBM is that business can be a means for a better world if it is informed by responsible research. (…) Research is the foundation of business education and practice, yet business research has failed to live up to its promise in promoting better policies and best practices. If nothing is done, business research will lose its legitimacy at best; at worst, it will waste money, talent, and opportunity. (RRBM 2019)

The voices of internal and external business school stakeholders (for example, Ghoshal 2005; Segalla 2008; Simons 2013; Cannon 2015; de Bettignies 2018; Elangovan, and Hoffman 2019) have become increasingly strident in their challenges to the business research agenda. Such voices convey a sense that perceived academic elitism, competition, and imperialism has led to a multitude of ever-increasing “cul-de-sacs” of knowledge creation which fail to translate appropriately and relevantly to knowledge dissemination. Despite grand objectives that point toward contemporary management needs, opportunities, and challenges, the internal business academic scholarship system tends to promote selfservice (Starbuck 2007, 24), rather than leading responsibly as a steward of knowledge creation, applied learning and impactful research. Brannick and Coghlan’s well-documented survey of the literature on the perceived relevance gap between academics and practitioners painted a disquieting picture in 2006. They noted that the business world appeared to be “generally ignoring the research and consequent knowledge produced by business schools or academia, since it feels it is irrelevant to its purposes” (Brannick and Coghlan 2006, 2). Publications in the field since then have continued to question the nature and relevance of business and management research and many scholars have

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shown support for the view expressed by the RRBM that although “research is the foundation of business education and practice, yet business research has failed to live up to its promise in promoting better policies and best practices” (RRBM 2019). Business research questions, methods, predictions, and prescriptions are perceived by practitioners, such as James Wallis in this volume, to reflect a habitus that does not reflect the kind of research insights that contemporary management needs. In Wallis’s words, there is “a mismatch between the conventional concepts of business and the demands of sustainable change.” He calls for a future paradigm of research and practice as “the natural and obvious path, as opposed the anomalous and exceptional one” (Chapter 10). The diagnosis for the flaws in the prevailing business and management research paradigm conditions frequently reference the over-arching demands of the academic journal ranking system in shaping research agendas and in maintaining particular forms of organizational and social scientific methodologies and theories. This has led to a narrowing frame of reference for discursive enquiry within business disciplines rather than toward an integration of business disciplines which align with the trend of companies to pursue agile strategies that integrate business functions (Visée 2015). Business and management scholarship tends to follow the conventions of other academies in aligning academic career development through journal publication filters. But, like the engineering and technology academies, business schools are expected to create fundamental knowledge that can be applied to practice “in applied domains to address pressing and current issues” (RRBM 2019). Managers require theory, design, concepts, modeling and research insights that help them to develop new markets and improve operational decision-making and processes. They also require more accessible and applied knowledge through business practitioner media. The business management paradigm creates a tension for business scholars between their vocation to use management science to serve business and society and the business journal ranking system measures that appear as an unbending career master. Research quality and focus is measured by the number of A-level journal publications, h-index, citation

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scores, and the like at the risk of “using a language that broader audiences do not understand, publishing in journals that they don’t read, and asking questions for which they have little concern” (Elangovan and Hoffman 2019). Responsible business research expressed in the seven RRBM Principles outlined below and the “real” research needs of management face obfuscation by the idiosyncratic particularities and limitations of A-level journals which, as Adler and Harzburg point out, …neither claim to comprehensively include “the best of the best” nor do they inadvertently succeed in such a task. The journals included in the FT 40 and the UTD lists, for example, are merely a sample of highquality journals; they do not even attempt to represent (let alone equitably and comprehensively include) all 13 (AACSB-defined) disciplines associated with business. (Adler and Harzburg 2009, 76)1

Adler and Harzburg summarize a commonly expressed complaint by faculty that articles published in new journals remain invisible to most citation indices and to almost all ranking systems. The responsible research agenda requires new methods of scholarly assessment and success that include criteria that measure impact, systemic solutions and practitionerrelevance. One way would be for business school faculty appointment committees in assessing candidates to give equal weight to the impact of their scholarship through the weighting of citations and articles in the practitioner press. Business and management research can do much more to contribute solutions to the global challenges expressed by the UN Sustainable Development Goals. To this end, the RRBM formulated a Position Paper from April to September 2017 supported by 85 cosigners from over 75 institutions in 21 countries, representing senior scholars, deans, university, and business leaders. The Paper sets a vision for the role of business 1 FT40

(now FT50) are the 50 business journals used by the Financial Times in compiling the FT Research rank included in the Global MBA, EMBA and Online MBA rankings. The UTD lists refer to the UT Dallas’ Naveen Jindal School of Management’s database which tracks publications in 24 leading business journals. AACSB provides quality assurance, business education intelligence, and professional development services to over 1600 member organizations and more than 800 accredited business schools worldwide.

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schools in contributing to societal well-being and the UN Sustainable Development Goals. It also sets out the Principles of Responsible Science that will “guide business and management research to build a sound body of knowledge that serves society” (RRBM 2019). In summary form, the seven RRBM Principles for transforming business and management research are: 1. Service to Society: Development of knowledge that benefits business and the broader society, locally and globally, for the ultimate purpose of creating a better world. 2. Stakeholder Involvement: Research that engages different stakeholders in the research process, without compromising the independence of inquiry. 3. Impact on Stakeholders: Research that has an impact on diverse stakeholders, especially research that contributes to better business and a better world. 4. Valuing Both Basic and Applied Contributions: Contributions in both the theoretical domain to create fundamental knowledge and in applied domains to address pressing and current issues. 5. Valuing Plurality and Multidisciplinary Collaboration: Diversity in research themes, methods, forms of scholarship, types of inquiry, and interdisciplinary collaboration to reflect the plurality and complexity of business and societal problems. 6. Sound Methodology: Research that implements sound scientific methods and processes in both quantitative and qualitative or both theoretical and empirical domains. 7. Broad Dissemination: Diverse forms of knowledge dissemination that collectively advance basic knowledge and practice. Based on the vision of the Responsible Research in Business and Management network this edited volume presents original, empirical, and conceptual papers which address the challenges of doing responsible research in the business and management professions. Responsible research is not a specific research method, but is rather an integrative approach to research that emphasizes research outcomes and impacts that target ethical, sustainable, and societal challenges.

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Responsible research focuses on practice before discourse (Flyvbjerg 2001) selecting and integrating different kinds of research methodologies. Rooney (2013), for example, has argued for wise research methodology that challenges standard approaches to management and organizational studies research “to do things better” by “being clear about the roles and relevance of one’s dispositions and their recursive relationship with habitus, including cultural artifacts like knowledge and values.” Ethnographic and praxeological narratives, discourse analysis, decision-making frameworks, and visual methods that highlight data collection moments (Lehtonen in Chapter 7) can offer alternative or complementary research routes to achieve impact and action. In their chapter, Molina-Azorin et al. show through two research projects how mixed methods action-research approaches that use field experiments and multiple rounds of qualitative interviews produce research outcomes that align with the principles of responsible research. Quantitative studies require wise interpretation for relevancy and applicability; thus Rooney’s cry for “phronesiology not epistemology” (Rooney 2013, 37), and Golden-Biddle and Bartunek’s conception of relational objectivity grounded in responsibility to all parties involved in the research, which they describe in Chapter 4.

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In their chapter Critical Realism: A Philosophy of Science for Responsible Business and Management Research Tim Rogers (University of South Australia, Adelaide, Australia) and Benito L. Teehankee (De La Salle University, Manila, Philippines) emphasize that a key motivator for the current detached approach to research in business and management is the prevailing positivist philosophy of science. The paper argues that critical realism as a philosophy of science provides an alternative ontology, epistemology, and axiology that can better ground responsible research in business and management. Critical Realism was founded as a new philosophy of science by the British philosopher Roy Bhaskar (1975, 2016). It has had some traction among British management researchers. Recently, it has been

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gaining increasing coverage among American scholars in philosophy of management research and in evidence-based management. In contrast with positivism Critical Realism favors moving from the status quo toward achieving personal and organizational transformation: How can we be change agents for social and ecological welfare as we do research? In his chapter, Holistic Problem Solving in Responsible Business Research, László Zsolnai (Corvinus University of Budapest, Hungary) emphasizes that it is a serious failure of business and management researchers when they solve the wrong problem precisely. This means that their problem formulation is inadequate, which may lead to disastrous consequences for the well-being of the stakeholders. Zsolnai argues that to avoid substantive failures in problem formulation business and management researchers should reconsider their basic assumptions of the system under study and include as many stakeholders’ views as possible. Appropriate solutions should address all the important dimensions of the problem in question (the scientific/technical, the interpersonal/social, the systemic/ecological, and the existential/spiritual) and create some optimal balance among them. Business and management researchers should also investigate their proposed solutions from a deontological point of view (i.e. which ethical norms are violated or satisfied by them?) as well as from a consequentialist point of view (i.e. what are the payoffs for different stakeholders?). Zsolnai suggests that the job of responsible business and management research is a holistic problem-solving and producing knowledge that is substantively adequate and ethically acceptable in broad socio-economic context. In their chapter, Objectivity as Responsibility in Management Research, Karen Golden-Biddle (Boston University, USA) and Jean M. Bartunek (Boston College, USA) are drawing to the scholarship of the American philosopher, Lisa Heldke (2001), and assert that a transformed understanding of the role of objectivity in inquiry is required for researchers to conduct responsible research in business and management. They discuss the traditionally conceived concept of objectivity in management and social research, and develop an explicitly relational conception of objectivity as responsibility. They expand this conception by illuminating its relevance for inquiry processes within the context

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of management research. They draw on Heldke’s notions of responsibility to and responsibility for, two central implications of conceiving objectivity as responsibility. They also give some models and practices of approaches emphasizing the importance of mutual relationships in business and management research that show the possibility of responsible management research projects. In his chapter, Reflections on Standards for Responsible and HighQuality Business Research: A Call for Peace, Tilman Bauer (Aalto University, Helsinki, Finland) presents a “mental map” of the interrelated nature of epistemic/scientific and non-epistemic/social values in responsible research which fulfills standards of high-quality scientific inquiry and contributes positively to society. After giving an overview of the responsible research concept, Bauer juxtaposes its principles with standards of high-quality research. Finally, he argues that responsible business and management research may contribute to promoting peace in a multidimensional context, including security, climate safety, the quest for truth, transpersonal experiences, and other issues related to the inner- and interpersonal functioning in society. In their chapter, Responsible Research and Diversity of Methods: Contributions of Mixed Methods Research for Better Business and a Better World, José F. Molina-Azorin, Maria D. López-Gamero, Jorge Pereira-Moliner, Eva M. Pertusa-Ortega and Juan José Tarí (University of Alicante, Spain) advance the position that mixed methods research (the combination of quantitative and qualitative research in the same study or research project) can help to promote responsible research for better business and a better world. They emphasize that mixed methods can produce rigorous and quality research, and, at the same time, relevant, useful and actionable research. The paper analyzes the main paradigm characteristics of mixed methods regarding ontology, epistemology, and axiology of this approach, emphasizing the potential of mixed methods research as a tool for social change. They present examples of works and research projects that use mixed methods and that promote better business and a better world by addressing grand challenges such as poverty and sustainability.

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In his chapter, From being observed to becoming an active participant: how visual research methods contribute to producing useful and credible knowledge, Miikka J. Lehtonen (Aalto University, Helsinki, Finland) focuses on informant reflexivity in business and management research. Drawing on a longitudinal research project utilizing visual research methods paper shows how visual research methods can support informant reflexivity. Data for the project was collected in Helsinki, Finland by inviting video game industry professionals to visualize their industry ecosystem. Responsibility in this context refers to the interpersonal dimension: how do management scholars engage in fieldwork with respondents that ensure knowledge flows between them and the respondents. Lehtonen argues that visual methods help the informants to make sense of and articulate their knowledge by breaking away from linguistic jargon, and the process of thinking through drawing already in itself is insightful for the informants. In his chapter, The Imperative of Sustainable Value Creation, Adel Guitouni (Gustavson School of Business, University of Victoria, Canada) aims to facilitate the development and diffusion of quality decisionmaking frameworks for sustainable value creation. Guitouni takes the view that sustainability and social responsibility of businesses should be founded on two critical concepts: inclusivity and reconciliation. The inclusivity is about being considered for all perspectives and beings, while reconciliation is about finding a “comfortable decision-making zone” where competing objectives can be achieved without compromises. Guitouni suggests that these properties guide the development of the quality decision-making framework for the sustainable value creation. He takes a firm and value chain view to examine the primary purpose of the corporation and its masters. Then he presents the implication of the value-based view of the corporation for management decision-making. Guitouni uses the case of Canada’s proposed Trans Mountain pipeline expansion to demonstrate how the framework he suggests may be used to characterize the decisions and actions of several actors. In his chapter, Responsible Research for Responsible Investment —The JUST Capital Case Study, Ernest C. H. NG (The University of Hong Kong, China) emphasizes that both for-profit and non-profit organizations have been increasingly aware of their performance and

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risk, not only in financial terms, but also in social and environmental terms and aim to integrate “doing good” for social interest and “doing well” for financial success. He argues that while responsible investment could contribute to a more sustainable society, it must be built on responsible research. This paper analyzes the case of JUST Capital, an independent, not-for-profit registered research organization founded to develop research, rankings, and data-driven tools. JUST Capital has been uniquely designed and driven to serve society. Not only that it was established with a diverse and strong group of board members, advisors, and partners, its polling methodology is also structured to involve different stakeholders and determined to make an impact through effecting changes in their decision-making framework. Its success is attributed to sound research methodology and an open mindset which value plurality and multidisciplinary collaboration. Its transparency and proactive communication strategy with stakeholders also ensure broad dissemination which also further strengthens its impact. In his chapter, Obstacles to Sustainable Change in Business Practice, James Wallis (Anthesis, London, UK) seeks to highlight the misalignment between academic scholarship and the true needs of businesses, society, and the planet. The paper draws on the author’s decades-long experience consulting to managers in large businesses to describe some important obstacles to sustainable change in business. In Wallis’s view these obstacles are rooted in a conceptual model of business that is poorly adapted to sustainable change. He shows the dominance this maladapted conceptual model in Business and Society, Strategy and Innovation scholarship. He suggests that an exciting and important mission of responsible scholars of business and management is to create a new paradigm which is capable of accommodating the many data and tremendous insights of the old scholarship, while reconceptualizing the territory and developing tools for sustainable change that business, society and the planet badly need. Wallis believes that a new theory should root the firm in a societal, planetary, and ethical context which includes, but is not limited to, the economic context. This broadened context implies a systemic purpose of the firm in terms liable to gain widespread understanding and assent, showing both the domains of value creation opportunity for enterprise

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and placing certain constraints on its behavior. Such a theory would coherently encourage the development of mindsets and organizational forms that promote sustainability, such as clarity of organizational purpose, systems intelligence, integrated concepts of performance, and a collaborative-constructive external view. Enterprise conceived under such a model might not only accelerate the sustainable change society and the planet urgently need, but also unlock a more productive and humane economy for all. ∗ ∗ ∗ We, the editors of this volume strongly believe that a deep transformational change in the current business and management practices is underway. Responsible business and management researchers have a vision of being the change rather than being detached observers of this change. Some business schools have already set faculty evaluation objectives that focus on “research that makes a difference,” aiming to develop responsible leaders in all business disciplines. The hopeful message from our authors is that business school faculty can become active agents in following their vocation to catalyze the required transformation for better business and better society.

References Adler, N., and A.-W. Harzing, 2009. When Knowledge Wins: Transcending the Sense and Nonsense of Academic Rankings. Academy of Management Learning & Education 8 (1): 72–95. Bhaskar, R. 1975. A Realist Theory of Science. Brighton, Sussex: Harvester Press. Bhaskar, R. 2016. Enlightened Common Sense. London and New York: Routledge. Brannick, T., and D. Coghlan. 2006. To Know and to Do: Academics’ and Practitioners’ Approaches to Management Research. Irish Journal of Management 26 (2): 1. Cannon, T. 2015. Business Schools Become Irrelevant. Financial Times, July 20. https://www.ft.com/content/c42306b2-263e-11e5-bd83-71cb60e8f08c.

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de Bettignies, H.-C. 2018. Developing Responsible Leaders in China: Beyond Compliance Toward Becoming a ‘Force for Good?’ Macau Ricci Institute Journal 2: 97–115. Elangovan, A.R., and A.J. Hoffman. 2019. The Pursuit of Success in Academia: Plato’s Ghost Asks ‘What Then?’ Journal of Management Enquiry, March 15. https://doi.org/10.1177/1056492619836729. Flyvbjerg, B. 2001. Making Social Science Matter: Why Social Inquiry Fails and How It Can Succeed Again, trans. S. Sampson. Cambridge: Cambridge University Press. Ghoshal, S. 2005. Bad Management Theories Are Destroying Good Management Practices. Academy of Management Learning & Education 4 (1): 75–91. Heldke, L.M. 2001. How to Be Really Responsible. In Engendering Rationalities, ed. N. Tuana and S. Morgen, 81–97. Albany: SUNY Press. Jonas, H. 1984. The Imperative of Responsibility: In Search of an Ethics for the Technological Age. Chicago and London: University of Chicago Press. RRBM. 2019. Responsible Research in Business and Management. http:// rrbm.network. Rooney, D. 2013. Empirical Wisdom Research. In Wise Management in Organisational Complexity, ed. M.J. Thompson and D. Bevan, 34–52. Basingstoke: Palgrave Macmillan. Segalla, M. 2008. Publishing in the Right Place or Publishing the Right Thing: Journal Targeting and Citations Strategies for Promotion and Tenure Committees. Unpublished Working Paper (expanded version of Segalla 2008). HEC School of Management, Paris, January 20. Simons, R. 2013. The Business of Business Schools: Restoring a Focus on Competing to Win. Capitalism and Society 8 (1): Art. 2. Starbuck, W.H. 2007. Living in Mythical Spaces. Organizational Studies 28 (1): 21–25. Visée, P. 2015. The Globally Effective Enterprise. McKinsey Quarterly, April 2015. https://www.mckinsey.com/business-functions/organization/ourinsights/the-globally-effective-enterprise.

Methodologies for Responsible Business Research

Critical Realism: A Philosophy of Science for Responsible Business and Management Research Tim Rogers and Benito Teehankee

Critical realism (CR) is a philosophical position that emanates principally from the work of British philosopher Roy Bhaskar. His complex, multi-layered approach is constituted of a number of ‘stadion’ that work as instalments, with subsequent levels developing, extending, and providing additional meta-theoretical justification for the earlier stages (Bhaskar 2016). Taken in totality, CR is an ontological reorientation of much of the western philosophical canon that incorporates a philosophy of science, social (human) science, ethics, and metaphysics. It has been called a philosophical Copernican revolution in the strict sense that it aims to de-anthropomorphise historical philosophical positions and reconceptualise them on ontological lines (Bhaskar 2009, 4). T. Rogers (B) University of South Australia, Adelaide, SA, Australia e-mail: [email protected] B. Teehankee De La Salle University, Manila, Philippines © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_2

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CR has been relatively underrepresented in mainstream management research (Tsoukas 1989) but has considerably more following among British management researchers (Fleetwood and Ackroyd 2004; Ackroyd and Fleetwood 2003; Hesketh and Fleetwood 2006). Recently, it has been gaining coverage among US scholars through the work of Tsang in the philosophy of management research (Tsang 2016) and entrepreneurship (Ramoglou and Tsang 2016), Van de Ven (2007) in engaged scholarship and Rousseau (Rousseau et al. 2008) in evidence-based management. In this chapter, we will focus on the critical realist approach to the human sciences generally and to the theory of explanatory critiques in particular. Our purpose here is to show that the human sciences are not just value-impregnated but value impregnating (Bhaskar 2009), that theory and practice are necessarily united, and that axiological imperatives that spring from this theory/practice nexus are essentially scientific hypotheses. We are, then, ‘openly taking a stand with science’ (Bhaskar 2009, 18), but science construed on CR terms. We begin by describing some of the fundamental concepts in CR that originate in an immanent critique of the philosophy of the physical sciences. We then see how these concepts are translated in the social realm as a critical naturalism. This sets the ontological background for our description of the critical realist explanatory critique, and we argue for its unique contribution as an underlabourer for a theoretical-practical nexus that has an essential (yet scientific) emancipatory impulse that inherently fosters responsible research. Our position can be summed up as follows. The failure of the human sciences generally, and business and management research in particular, to pursue responsible research is not because social scientists are myopically following scientific logic, as is often assumed, but rather because they are not. Certainly, there is a myopia, but that centres on the empiricist metatheory of science that has led to a positivist dogma in the human sciences that restricts social scientific practice to what exists, or has existed, and not at all to what could exist, or what should (Bhaskar 2009). In contrast, we show that science is about cause and possible worlds, not the passive observation and correlation of variables; that the human sciences necessarily have an emancipatory aim; and that ethics

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and values are implicit in social scientific practice (so are not solely exogenous considerations). Indeed, the human sciences are in the business of producing values. To a practicing social scientist this might sound like another tendentious attack on positivism, which is, after all, ‘a swear-word by which nobody is swearing’ (Raymond Williams in Stockman 1983, 3). That is not the intention. Rather, the argument put forward here is in the spirit of an immanent critique. That is, it aims to elucidate internal, intrinsic errors, and inconsistencies in the position being criticised. To wit, we assume that many, if not most, practicing social scientists would tacitly hold critical realist views: that the world is real (i.e. exists independently of our beliefs), that theories often describe underlying and unobservable causal mechanisms, that science is a social process, that reasons can be causes, and that causal generalities can, and often do, explain human action and social structure. They may be surprised, therefore, at the implications of the critical realist arguments presented below that imply the practices and norms they have inherited are heavily conditioned by epistemological and ontological assumptions that run contrary to these views, and in fact militate against their pursuit. Although the principal contrast explored in this chapter is between CR and positivism, there are also important distinctions between CR and hermeneutic and other interpretivist and irrealist positions. In short, from the perspective of CR hermeneutics is correct to emphasise that social life is pre-interpreted, so the objects of our interest in the human sciences are infused with meanings that must be understood if they are to be accounted for. However, for CR the hermeneutic moment initiates the investigations of the human sciences, it does not exhaust their ambit. To paraphrase Bhaskar (2009), interpretation without explanation is impotent. We will return to this point in our concluding remarks.

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Critical Realism

CR is realist in the sense of advocating the existence of an external world independent of our knowledge of it. It is critical in two senses. Firstly, the surface appearances of the world may be, and often are, misleading,

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hence the need for science (Bhaskar 1975). Secondly, science itself is a social and historical process, a product of human labour, that makes fallible attempts to represent or capture the mechanisms and structures that underlie appearances, and so is always subject to revision (Bhaskar 1975). CR emerged originally as a critique within the philosophy of science of the dominant empiricist account, in particular interpretations of Hume’s foundational notion that the constant conjunction of observable phenomena provided, ceteris paribus, the necessary and sufficient conditions for establishing causal laws. Bhaskar’s enquiry into the plausibility of this account begins with the question ‘what must the world be like for science to be possible?’ (Bhaskar 1975, 23). Bhaskar pursues a transcendental argument, that is, he takes his empiricist opponents’ accepted state of affairs—the success of science, particularly with reference to physics and chemistry—and explores the preconditions for the establishment of natural laws and their subsequent technological exploitation. Focussing on the nodal role of experiments in the natural sciences, Bhaskar argues, contra the empiricist position, that the conjunctions uncovered in experiments that are subsequently expressed as natural laws are produced rather than discovered. What experiments actually make possible is ontic closure i.e. the isolation of causal factors via the exclusion of interference conditions, orchestrated through control of the experimental environment. It is this closed system that makes the regularity available where it otherwise would not exist. Experiments, then, are social interventions in the natural world that create the conditions for the observed relationship between variables (Bhaskar 1975). Now, the empiricist also presumes that any laws thereby discovered operate outside of the closed conditions of the experimental set-up in the open system where they are used to explain phenomena and develop the practical technologies that make radio waves, electrical currents, bridges, and so on, possible. However, the invariant regularity obtained under closed experimental conditions may never be realised, let alone experienced, outside of the laboratory. There must, then, be a difference between invariant conjunction and reality as given in empirical laws. The former relates only to the outcome of the social activity of scientists as they intervene to produce the closure which makes conjunction

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possible. The latter are much more cogently explained as the expressions of the causal powers of things that continue to operate outside of the controlled experimental environment, but in existing may yet be unactualized (acid has the power to corrode, even if it is not doing so in a test tube), or even when actualized may not be observed. Laws, then, are ‘neither actual nor empirical. Constant conjunctions are produced not found’ (Bhaskar 1998a, xii–xiii). Science is work, not the passive observation of successive events as the empiricist would have it. This puts the empiricist position in a terminal bind: it must either be admitted that laws are not given in a conjunctive (correlational) relationship, or that laws do not hold in open systems (Bhaskar 1975, 65). This is the bedrock upon which CR marks its ‘ontological turn’. The epistemological success of science must be grounded in an ontological reality: the objects of the natural world exist independently of our conception of them and act as they do in respect of their causal powers. This implies a deep ontology of which surface events are but one aspect. There are events as perceived, the empirical level that empiricists have fastened upon; there is then the realm of the actual, events which exist but are unobserved; and further, the realm of the real, the generative mechanisms and structures which give rise to the actual and empirical. Reality, then, has ontological depth, or is stratified, as opposed to the flat event sequence proposed by the Humean causal account. The conception of the scientific programme thus shifts from prediction on the horizontal plane of successive events to vertical explanations that involve historical conditions and generative mechanisms (Bhaskar 1998b). This, importantly from the perspective of responsible research, legitimises the study of non-events and non-experiences. In the human sciences, for example, it legitimates causal inquiries into the failure of a given society to protect the interests of some groups (but not others), the relative absence of a thriving vein of responsible research in the academy, or the ‘absence of black prime ministers in the West’ (Archer 1998, 196), and so on. This is a fundamental recasting of the concept of the scientific enterprise that uncouples conjunction and causation, and hence prediction and explanation. From the critical realist vantage the empiricists have erred by conflating prediction and explanation. Conjunction is not sufficient or even necessary for establishing cause. Causal mechanisms may

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exist and be unobserved because their identity is masked by the operation of other laws in the open system (as a leaf can be acted on by the laws of thermodynamics and gravity simultaneously (Chalmers 1982)) or exist yet be unexercised (if the requisite stimulus conditions are unavailable). CR instead posits laws as transfactual, that is, they identify causal mechanisms that hold in both closed and open systems, although their manifestation in the open system is subject to interference, stimulus and enabling conditions. This is particularly important point when discussing the human sciences, as we do below, where the possibility of ontic closure, in any absolute sense, is unavailable.

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The Transformational Model of Social Activity

Bhaskar (1979) subsequently extended critical realist arguments from the natural sciences (e.g. physics, chemistry, etc.) to the human sciences. His aim was to develop a critical naturalism that demonstrated people, as individual agents, and society, could be the legitimate objects of scientific, i.e. causal, analysis, on critical realist terms. As a first step in the ontological argument Bhaskar proposed a ‘transformational model of social activity’ (TMSA) (Bhaskar 1998b, 31–39) to account for the relations of individuals and society in the ongoing production of the social world. Sharing some common ground with other models proposed independently by Berger and Giddens (yet different from them also, see Archer [1998]; Bhaskar [1998b]), the TMSA attempts to do justice to the constraints imposed and powers afforded by both social structures and the intentional activity of agents. In the TMSA society is the condition for, and structures the possibilities for, individuals. Individuals in turn reproduce or occasionally transform society through their actions. Individuals do not then create society, because it always pre-exists them. But society in turn cannot exist without individuals. The requisite skills of the individual are provided through socialisation into the practices, norms, and rules that govern individual activity within the social world.

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While this account views society as the skilled outcome of agent activity, this does not mean that agents are consciously engaged in producing this outcome—people do not, as Bhaskar notes, marry to reproduce the nuclear family (Bhaskar 1998b, 35). Indeed, the tacit and automatic processes that sustain social structures suggest that agents may not be in a position to cast light on the meaning, purpose, and outcomes of their practices even if they can be relied upon to correctly identify them. Therefore, an important consequence of the TMSA is the possibility of non-identity between the theoretical meanings of the social scientist and the lay accounts of social agents. Since agents do not create either themselves or their society, which pre-exists them and conditions the possibilities for their activity, their conception of the causes and outcomes of their actions, as well as their own capabilities and liabilities, is circumscribed. Their actions may, then, involve unacknowledged conditions, unconscious motivations, tacit skills, and have unintended consequences (Bhaskar 1982; Collier 1994, 160). Hence agents’ accounts are both corrigible and limited. Language users may not know the role of socialisation in language acquisition (unacknowledged condition), may not be aware of reasons for concealing their thoughts (unconscious motivation), may not be able to describe the grammatical rules they evidently know in practice (tacit skills) and may be incorrect in their belief about the effect of their utterance (unintended consequences). Similarly, to somewhat presage the case example presented later, a manager may not know of the previous arrangements between her team and its external client organisations (unacknowledged conditions), may not be aware of both her resistance to unfamiliar ideas and the source of the resistance (unconscious motivation), may fob off unfamiliar ideas without being aware of the strategies she uses to both do the fobbing off and to automatically cover this up (tacit skills), and be surprised by the subsequent negative reactions of her subordinates (unintended consequences) (Rogers 2004). In sum, the TMSA breaks the identity between the conceptions held by social agents and social reality, so in principle the social scientist may be able to offer a better explanation of action than the agents carrying out the action. As the critical realist account does in the natural sciences, the critical naturalist position rejects the positivist conflation of prediction and explanation in the human sciences. Since the identification of generative

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mechanisms is the real object of science (rather than the establishment of conjunctions) then the hypothesised causal dimensions of intermittent phenomena, such as reasons, rules and norms are legitimised as objects of scientific investigation. These phenomena are intermittent precisely because in open systems there can be several competing tendencies. The team leader may wish to remove a subordinate and has the power to recommend this, but this power may remain unexercised because of the constraining power of a norm of placing team harmony first. She may on balance decide that she must terminate the subordinate but be discouraged by explicit rules about the sufficient grounds for dismissal. Or she may exercise this power only to have it reversed by management which exercises its own power of veto. Of course, in any actual situation there is likely to be a more complex interaction of competing tendencies. But, just as the landing point of a falling leaf is unpredictable because it is buffeted by forces described in various laws (thermodynamics and gravity), our inability to predict the outcomes of these competing social tendencies has no consequences for the belief that these tendencies are indeed at work. Positivists ignore these entirely plausible causal explanations because of their commitment to Humean ontology rather than any legitimate scientific objection. Any explanation in terms of human agency cannot satisfy the positivist because it will not identify variables that are constant across contexts, let alone stipulate ontologically sufficient stimulus conditions. In other words, human beings are not usually driven to perform an action in the same way that an acid corrodes. The manager may choose to ignore any issue no matter what stimulus conditions are present, the acid placed on metal cannot because of its intrinsic properties (Greenwood 1989, 156–157). Since the critical realist is concerned with the identification of generative mechanisms and their powers or tendencies s/he can accommodate both the meaningful nature of human action and causal theories that aim to explain that action. Note, though, that the former has consequences for the latter. Causal theories must be able to resolve problems of meaning if they are to ground changes in practice. Realism licenses empirical theories in the social sciences, but not the empiricist goal of measuring

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atomised variables. Rather, competing hypotheses will need to be discriminated in terms of their relative ability to account for the meaning of an action or event, including its causes and consequences: … the conceptual aspect of the subject matter of the social sciences circumscribes the possibility of measurement…. For meanings cannot be measured, only understood. Hypotheses about them must be expressed in language, and confirmed in dialogue. Language here stands to the conceptual aspect of social science as geometry stands to physics. And precision in meaning now assumes the place of accuracy in measurement as the a posteriori arbiter of theory. It should be stressed that… theories may continue to be justified and validly used to explain, even though significant measurement of the phenomena of which they treat has become impossible. (Bhaskar 1998b, 46)

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The Theory of Explanatory Critiques

In the natural sciences the critical realist is concerned with misleading appearances. The real mechanisms which explain natural scientific phenomena are presumed to be, oftentimes, hidden. There would be no point to any science if it were otherwise—‘all science would be superfluous if the outward appearances and essences of things directly coincided’ (Marx in Bhaskar 1998b, 8). Critical realism proposes an ontologically deep, stratified world where experiences are distinct from actualities that are in turn explained by the real underlying mechanisms, which may not be available to experience. This is contrary to the empiricist project which posits a realm of successive events available to the senses, and the hermeneutic/interpretivist position that presumes a meaningful world wholly open to interpretation by the participating agents or the analyst. In the natural sciences the disjuncture of outward appearances and real essences pertains to the intrinsic natures of natural objects. In the human sciences this discrepancy refers to the misrepresentation of social objects. The subject matter of the human sciences is construed as both social objects (including beliefs) and beliefs about those social objects (Bhaskar 1982). Since beliefs can be mistaken (agent accounts may be

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inaccurate because of the aforementioned effects of unacknowledged conditions, unconscious motivations, tacit skills, and unintended consequences), they can be criticised for misrepresenting their object—they are false beliefs. Critical naturalism is therefore interested in the sources of appearances and the causes of people’s (mis)comprehension of their social world. And it is because of this disjuncture that science is required, for it is in the agents’ capacity to align appearances and essences that they can comprehend the powers and mechanisms that govern their actions. Two possible roles for the human sciences are then evident. Firstly, to identify false beliefs, which is the role of criticism. Secondly, to uncover the causes of false beliefs, which is the function of an explanatory critique (Bhaskar 1982). In outlining an explanatory critique Bhaskar (1982) is particularly interested in those cases where the false belief is a necessary condition for the perpetuation of its source as well as a releasing condition for its object. The source of a false belief may in turn be explained by a reference to the powers of a structure operating as a generative mechanism, with the outcome of the process being the persistence of that structure. Bhaskar represents this ‘rationalization and ideological mystification’ (Bhaskar 1982, 300–301) in the following way: S → (s → p; sp → O) → S1 (based on Bhaskar 1982, 301)

where S is a social structure or mechanism; s is the real, underlying reason or motivating stimulus; for O, which is the object of the analysis; and p is the false representation of s. p is both necessary for the perpetuation of its source, s, and a releasing condition for O. (The arrows indicate causal rather than logical relationships.) So, in the classic case we have the Marxist analysis of the wage form, where agents hold the false belief that they are engaging in a fair trade for their labour, and this creates the conditions whereby they willingly continue to work under conditions of exploitation (and here I am not evaluating the content of this particular theory, merely illustrating the form). If we were to explain profit using the model above we would have:

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S–capitalist system of social relations → (s–purchase of potential, labour as power → p–belief in equality of exchange, labour as exercised; sp → O–profit of capitalist) → S1 –perpetuation of capitalist mode of production

According to this account the real reason for, or source of, the capitalist’s profit is in the surplus value appropriated through the purchase of the worker’s labour power. The worker, however, believes that a fair contract of exchange, labour for wage, has been struck. It is this false belief that both disguises its source and makes the continued inequality (and therefore capitalist profit) possible. Revolutionary consciousness begins with the comprehension of the false beliefs and real reasons for actions (work), outcomes (profit), and structures (social relations). Note that the relevant objects for analysis and the causal hypotheses are designated by a theory (in this case Marx’s theory of capital) which shows ‘p’ as a belief is false (criticism) and the source of this false belief (explanatory critique). This form of explanatory critique could equally apply in management research. For example, Rogers (2004, 2005) applies the theory of action (also known as ‘action science’) in a case study of an organisational intervention. The theory of action proposes that, in the face of problems that contain uniqueness, uncertainty, and instability, and where interpersonal vulnerability in the form of potential embarrassment or threat is present, people will automatically invoke a low learning interpersonal theory-in-use called ‘Model I’ (Argyris and Schön 1974; Argyris 2002). Model I behaviour is characterised by a range of beliefs and conversational strategies that protect the self through unilateral management of interpersonal encounters. A key feature of a Model I theory-in-use is the dissonance and unawareness it generates: unilateral and self-protective strategies lead to poor feedback about one’s own behaviour and self-fulfilling beliefs about the social situation. The outcome is low learning about both the issue at stake and about one’s own contribution to the low level of learning. In this particular example a manager, Alison, was concerned about damaging organisational politics and attributed this primarily to a subordinate, Ms. X. Yet viewing Alison’s account through the prism of the theory of action revealed many beliefs and behaviours that Alison

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unconsciously employed that contributed both to the organisational politics she disliked and her unawareness of her own contribution. In one encounter Alison saw Ms. X as irrational and controlling, yet Alison’s own actions were controlling and likely to provoke a defensive, controlling response. The resulting enmity and stalemate spilled out to the organisation through conversations, themselves informed by a Model I theory-in-use, creating schisms and cliques. This encounter and its organisational ramifications could also be represented using the explanatory critique form: S–Model I theory-in-use → (s–tacit unilateral design and management of encounter → p–belief that Ms X is irrational and controlling by nature; sp → O–damaging organisational politics: collusion, splitting) → S1 – Model I theory-in-use

where the theory of action identifies the real reason for the personal frustrations and damaging games of deception played out in the group (damaging organisational politics) is the unilateral management of the encounter, which is misrepresented and rationalised by Alison through the interpretation of Ms. X as irrational and controlling. This rationalisation legitimates, for Alison, the use of unilateral management. The use of unilateral strategies of control when faced with these conditions is in turn explained by the structuratum of Model I theory-in-use. Ultimately, the tensions and beliefs generated by the results of the encounter created the conditions for the perpetuation of a defensive (Model I) theory-in-use. In the foregoing example both cause and meaning are essential. The relations between objects and their beliefs: … are both causal and cognitive. In the ontological or intransitive dimension we are concerned with relations of generation; in the epistemological or transitive dimension, of critique. However, it is the causal relation of generation that grounds the epistemological program of critique. (Bhaskar 1982, 294–295)

An important consequence of these arguments is their implication for Hume’s Law: the positivist orthodoxy that stipulates the separation of facts and values, often expressed as the impossibility of an ‘is’ entailing

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an ‘ought’. Rather, the emancipatory critique suggests considerations of the facts, in the light of a theory or theories, will demonstrate both the falsity of a belief and identify the structure(s) and mechanism(s) responsible for these false beliefs, leading directly to a negative evaluation (value judgement) of the structure(s) and mechanism(s) responsible and a positive evaluation of actions designed to remove them. Explanation is thus a precondition for emancipation, conceptualised as the transformation of ‘sources of determination from unwanted to wanted ones’ (Bhaskar 1982, 295). This has obvious normative consequences for responsible research, namely, that the human sciences can potentially ‘be in a position to cast some light on what we ought to do and say, feel and think’ (Bhaskar 1982, 294).

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Conclusion: A Critical Realist Praxis for Responsible Research

The goal of the human sciences, then, is not just to identify false beliefs (criticism) but to uncover the cause(s) of those beliefs (explanatory critique). In this way, the human sciences can be critical social sciences that inform agents about compulsions and illusions beyond the grasp of their lay comprehension. People’s beliefs and accounts can be both constitutive (i.e. ‘p’ as a releasing condition and as self-fulfilling prophecy) and mistaken, and so the human sciences, in revealing this, are not neutral. To achieve this, Bhaskar proposes a depth-investigation as a transcendentally necessary process. A depth-investigation: … may be defined generally as any cooperative inquiry, which includes the agent, into the structure of some presumed set of mechanisms, constituting for that agent an unwanted source of determination (which, whether cognitive or not, will always possess some cognitive manifestation), with a view to initiating, preserving, or restoring that agent’s ability to act and think rationally.” (Bhaskar 1982, 304)

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The process of a depth-investigation is dependent on the application of a theory and the willingness of the agent, below given as ‘Y’, to consent to a co-investigation with the social scientist, ‘X’ (1) Y is not capable of O; scientific realism suggests there is a mechanism M preventing this. (2) General theory T investigates the structure of blocking/compelling mechanisms, under the control of empirical data and researches. (3) The application of T to Y depends upon the agent Y, as well as co- investigator X, for it is Y’s interpretations, actions, and determinations that are at issue. (Bhaskar 1982, 304)

The theory and practices required to accomplish this cannot be given in philosophy, however, but must be worked for through the depthinvestigative process itself: … although the concept of a depth-investigation has been introduced as an idiographic, practically oriented application of some or other determinate explanatory critique, the theory at the heart of the critique itself depends crucially for its own development and empirical confirmation on such investigations (whether living or reconstructed, e.g. historical materials).” (Bhaskar 1982, 304)

That is, the theory held by the practitioner must be developed, and jointly tested in situ, as a series of hypotheses that inform its evolution or rejection. Thus, theory and practice are integrated via this joint investigation, in a ‘coherence of theory and practice in practice’ (Bhaskar 2016, 137). It must be emphasised that this necessarily entails that the coinvestigator is an agent, not a ‘subject’. Further, to engage people, as agents, in a cooperative exploration of issues, these issues must be of relevance to the agents themselves, not an abstract interest of the researcher, for it is the co-investigators’ experiences that are at the heart of the matter and the motivating force is their disposition to engage. This is also to say that the hermeneutic moment matters, but is not decisive; it is necessary, but not sufficient, if our objective is emancipatory change. People may not correctly identify the causes responsible for an event or condition, but their reasoning is crucial to understanding it.

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It should also be emphasised that this presentation of an emancipatory critique as addressing cognitive ills is a special, although foundational, case. It is foundational in that, in proceeding from purely factual premises, it offers a formal refutation of Hume’s Law. However, it is special in the sense that it does not cover the full remit of the human sciences: … the human sciences are not only concerned to explain ‘cognitive ills’: their explananda are not exhausted by beliefs. Their manifest takes in such ‘practical ills’ as ill-health, misery, repression, including the socioeconomic ills of oppression, brutality, war, exploitation, waste, etc. … (Bhaskar 2009, 191)

Insofar as these practical ills affect the possibility of engaging in explanatory-emancipatory discourse they too constitute constraints, and can be subjected to an explanatory critique that invoke a positive value judgement (an ‘ought ’) regarding actions committed to their removal. This is the kernel of an ethical naturalism (Bhaskar 2016). There are two final, and related, points to make with respect to a critical realist praxis for responsible research, as opposed to a critical realist praxis of responsible research. The first is to clarify that political, collective responses to identified ills and absences are often mandatory, despite the examples and argument so far focussing on the idiographic and casebased. To the extent that social structures are implicit in the perpetuation of any unwanted sources of determination, only an organised and collective movement is likely to transform them (Bhaskar 2009, 176). Secondly, as signalled in our introductory remarks, while the critical realist call to action in support of responsible research may sound similar to those emanating from hermeneutic and irrealist positions, the ontological commitments are not, and so the implications for praxis diverge markedly. We would expect that, given their commitment to the primacy of meaning-making, that many hermeneutic proponents of responsible research would, like us, oppose the positivist framing of much current research, implore researchers to engage with participants as co-researchers, and extend the boundaries of what is considered to be the topics of concern to include false consciousness, oppression, and

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exploitation. Yet, as the realist John Greenwood has noted, in the context of social psychology: These hermeneutical critiques have made little impact upon the practice of social psychological science. Nor is this surprising, since philosophical arguments stressing the meaningful nature of human action have been historically tied to the claims that explanations of human action are explications of meaning, that human actions are theoretical constructions, and that the classification of human action presupposes some purposive explanation in terms of human agency. Practicing social psychologists committed to a causal explanatory science of action justly perceive the first claim as tantamount to a denial of a causal science of action, the second claim as tantamount to the denial of an objective science of action, and the third claim as tantamount to a denial of an empirical science of action. (Greenwood 1989, 115)

In contrast, the CR position advocated here would proceed as follows. If the theory of explanatory critiques holds, and a depth-investigation is indeed transcendentally necessary, then the first steps of transformational praxis inevitably involve an immanent critique. This critique of the current positivist orthodoxy should progress as a co-inquiry with the existing social science community. If, as argued here, there are internal contradictions in their position that militate against their own epistemological commitments—primarily the development of causal explanations that illuminate generalities of social life—then our work is to help restore their ability to think, and act, rationally. This does not preclude parallel political efforts to address any structural impediments to responsible research. To the contrary, such commitments signal our belief in the possible world where such research is valued. Given the commitment of CR to the ontological stratification of both the natural and social worlds, any current conditions are actual, and do not exhaust the possibilities of the real. This dispositional realism (Bhaskar 2016) suggests that social life could have been very different, and so could yet be very different, and that through rational action change is possible. A path of transition, from where we are to where we would prefer to be, is part of that rationality, for, as things stand, the impediments are many. To take one example, the current interlocking

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evaluation systems that echo across international university rankings, to journal rankings, to career progress and the visibility of research, serves to preserve the status quo in favour of arms-length, atomistic, variableresponse, apolitical research. Any academic persuaded by the main transcendental argument presented here would quite understandably wonder what the next step is, practically speaking. For making a case for the rationality and desirability of something does not in itself make it possible. Just as ‘diagnosis is not therapy’ (Bhaskar 1982, 299), critique does not dictate the form of emancipatory action. Only committed, reflexive engagement that transforms the current structures, by those who are persuaded of the scientific and emancipatory value of doing so, can accomplish that.

References Ackroyd, S., and S. Fleetwood. 2003. Realist Perspectives on Management and Organisations. London: Routledge. Archer, M. 1998. Introduction: Realism in the Social Sciences. In Critical Realism: Essential Readings, 189–205. London: Routledge. Argyris, C. 2002. Double-Loop Learning, Teaching, and Research. Academy of Management Learning and Education 1 (2): 206–218. Argyris, C., and S. Schön. 1974. Theory in Practice: Increasing Professional Effectiveness. San Francisco: Jossey-Bass. Bhaskar, R. 1975. A Realist Theory of Science. Brighton, Sussex: Harvester Press. ———. 1979. The Possibility of Naturalism: A Philosophical Critique of the Contemporary Human Sciences. Sussex: Harvester Press. ———. 1982. Emergence, Explanation and Emancipation. In Explaining Human Behaviour, ed. P. Secord, 275–310. Beverly Hills: Sage. ———. 1998a. General Introduction. In Critical Realism: Essential Readings, ed. M. Archer, R. Bhaskar, A. Collier, T. Lawson, and A. Norrie, ix–xxiv. London: Routledge. ———. 1998b. The Possibility of Naturalism: A Philosophical Critique of the Contemporary Human Sciences. London: Routledge. ———. 2009. Scientific Realism and Human Emancipation, 2nd ed. London and New York: Routledge. ———. 2016. Enlightened Common Sense. London and New York: Routledge.

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Chalmers, A. 1982. What Is This Thing Called Science? St Lucia, QLD: University of Queensland Press. Collier, A. 1994. Critical Realism: An Introduction to Roy Bhaskar’s Philosophy. London: Verso. Fleetwood, S., and S. Ackroyd. 2004. Critical Realist Applications in Organisation and Management Studies. London: Routledge. Greenwood, J.D. 1989. Explanation and Experiment in Social Psychological Science: Realism and the Social Constitution of Action. New York: Springer-Verlag. Hesketh, A., and S. Fleetwood. 2006. Beyond Measuring the Human Resource Management-Organizational Performance Link: Applying Critical Realist Meta-Theory. Organization 13 (5): 677–699. Ramoglou, S., and E.W.K. Tsang. 2016. A Realist Perspective of Entrepreneurship: Opportunities as Propensities. Academy of Management Review 41 (3): 410–434. Rogers, T. 2004. Managing in the Interprofessional Environment: A Theory of Action Perspective. Journal of Interprofessional Care 18 (3): 239–249. ———. 2005. Creating Practical Knowledge for Managing Interprofessional Health Care Teams: The Promise of Critical Realism and the Theory of Action. PhD dissertation, University of South Australia. Rousseau, D.M., J. Manning, and D. Denyer. 2008. Evidence in Management and Organizational Science: Assembling the Field’s Full Weight of Scientific Knowledge Through Syntheses. The Academy of Management Annals 2 (1): 475–515. Stockman, N. 1983. Antipositivist Theories of the Sciences: Critical Rationalism, Critical Theory and Scientific Realism. Dordrecht: D. Reidel. Tsang, E.W.K. 2016. The Philosophy of Management Research. London: Routledge. Tsoukas, H. 1989. The Validity of Idiographic Research Explanations. Academy of Management Review 14 (4): 551–561. Van de Ven, A. 2007. Engaged Scholarship: A Guide for Organizational and Social Research. New York: Oxford University Press.

Identifying and Solving the Right Problem by Using Multidimensional Systems Thinking László Zsolnai

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Introduction

The world is undergoing unprecedented changes and transformations in economics, business, management, technology, and politics. The responsibility of business and management research is pinpointed and elevated by the current crisis with no end in sight. The RRBM (2019) movement is a worldwide effort to make this correction. Incorrect diagnosis of the crisis and insufficient proposals for “solving” the basic problems address the responsibility of business and management researchers who create theories and models that underline and The paper is based on and expands further the author’s paper on “Responsible Social Science in the Age of Economic Crisis” (Human Systems Management 2014, Vol. 33, Nos. 1–2, pp. 1–5, https://doi.org/10.3233/hsm-140805). Permission for using the paper is granted by the Publisher. The present version of the paper has largely benefited from constructive comments by Anne Tsui , Founder of RRBM.

L. Zsolnai (B) Corvinus University of Budapest, Budapest, Hungary e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_3

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legitimize the current flawed economic and business functioning. Business and management scholarship has value-laden implications. Anne Tsui argues that Historically, management research owes its existence to the rise in large business organizations and the issues this transformation raised for managers, employees, and society at large. But arguably, over time, many researchers have sought to emulate their colleagues in the traditional disciplines by advocating dispassionate value neutrality toward their work. Disabusing us of the notion of a value-free scientifically neutral ivory tower, (…) there is a tension between the value-free ideal and the social responsibility of universities. The distance between solving real-world problems and providing esoteric contributions to a very narrow audience of scholars leads to irresponsible outcomes. The result is a waste of resources that distances scholars from facing scientific failure. (Honig et al. 2018, 415)

Highly influential but erroneous intellectual weapons of business and management scholarship include agency theory, corporate governance models, monetary incentive schemes for top management, and the shareholder value maximization model. In ethics the most advanced concept of responsibility was developed by German-American philosopher Hans Jonas (1984, 1996). He defines responsibility as a duty in caring for the beings affected by one’s actions and policies. The beings to be considered may include human persons, social communities, nonhuman creatures, ecosystems, and future generations (Zsolnai 2006). Jonas underlines that moral responsibility concerns the fate of other beings. “I feel responsible, not in the first place for my conduct and its consequences but for the matter that has a claim on my acting.” For example, “the well-being, the interest, the fate of others has, by circumstance or by agreement, come to my care, which means that my control over it involves at the same time my obligation for it” (Jonas 1984). Business and management researchers cannot ignore the direct effects and longer term consequences of their problem-analysis and problem solutions on human communities, the natural environment, and future generations.

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Problem Formulation

A problem is a gap between an “ought” and an “is,” the difference between an ideal—something which is desired—and the actual situation as it is perceived. Important problems typically appear as “messes,” which present themselves with no clear indication of how to solve them. It is neither easy to know what the ideal is nor easy to state what the actual situation is (Ims and Zsolnai 2009). Mitroff and Silvers (2009) refer to John Tukey, the famous statistician, who once said: “I suspect that most failures occur because we attempt to solve the wrong problems in the first place, and not because we fail to get the right solutions to the right problems.” Substantive failures occur if researchers develop the solution to the wrong problem and then fools themselves into believing that they have solved the right problem to begin with. Harvard decision theorist Howard Raiffa labeled the error of solving the wrong problem precisely as the “Error of the Third Kind”. He called the error of solving the wrong problem precisely the Error of the Third Kind because the Error of the First Kind and the Error of the Second Kind were already well known in mathematical statistics (Keeney and Raiffa 1976). Mitroff and Silvers (2009) notice that while the Error of the First Kind and the Error of the Second Kind are taught in every course in statistics, the Error of the Third Kind is almost never discussed. At the basic level, Error of the First Kind and the Error of the Second Kind involve technical knowledge. In contrast, the Error of the Third Kind demands wisdom, the ability to exercise critical thinking (to be aware of and to challenge one’s basic assumptions). Ironically, assessing the consequences of the Error of the First Kind and the Error of the Second Kind involves nontechnical thinking; i.e., values and wisdom (Douglas 2003). A revealing example of wrong problem formulation is when business and management scholars frame the main problem of managing a company as the agency problem. It suggests that there is an unavoidable conflict between the owners and the managers of the company. Managers tend to use the resources of the company for their own material interest, which results in loss of efficiency and profit (Jensen and Meckling 1976).

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Wharton School business ethicist Thomas Donaldson (2012) demonstrates that this problem formulation is essentially wrong. He developed an impossibility theorem for corporate governance that clarifies how agency theory neglects normative concepts that compromises its application. For example, agency theory neglects to consider what general obligations, moral or otherwise, principals might have either to their agents or to other groups inside or outside the firm. (…) One may ask whether a manager is obliged to lie to employees (thus violating the implicit obligation to tell the truth) in order to effect a marginal benefit for shareholders, whether a manager is obliged to violate an employee’s right to privacy to marginally enhance the property rights maximizing impact for shareowners, or whether a manager is obliged to engage in environmental abuse when operating in countries with insufficient environmental protections. (Donaldson 2012)

For avoiding substantive errors in problem formulation different advices have been developed in research methodology. Russell Ackoff (2004) suggested reconsidering the basic assumptions of the system under question. Ian Mitroff (1998) urges to include as many stakeholders’ views as possible in the process of problem formulation. Business and management scholars need to employ holistic thinking to define the right problem in their study. Assumptions about the stakeholders and their broader social context should be scrutinized. Business and management research should define the right stakeholders, and this generally means expanding the set of conventionally accepted stakeholders. To define the right problem precisely is indispensable for avoiding the Error of the Third Kind. The systems methodology developed by Russell Ackoff (2004) at the Wharton School states that a system performance is determined by the adequateness of the basic assumptions on which it functions and on the way the system is capable of pursuing its objectives. Problems indicate that the basic assumptions are inadequate and/or the system is incapable of performing adequately. Corporate governance models typically favor institutional arrangements in which executives are accountable to the Board of Directors and

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not directly to the shareholders or other representatives of society. This kind of arrangement makes it easy for corporate executives to avoid full responsibility for their decisions and policies affecting the future of the company and the well-being of diverse stakeholders including the company’s stockholders. In this way, corporate executives are discouraged to serve as guardians of society’s vital interest. The result is corporate “shorttermism” and malfunctions even from a narrow economic point of view. For decades management and business scholars have missed the opportunity to shape the thinking of executives and their decision process. Blind following of a theory with flawed assumptions has reduced most of academic research to offering irrelevant knowledge at best or solutions harmful to society at worst. Cornell University legal scholar, the late Lynn Stout (2012) forcefully criticized the so-called “shareholder myth”. She shows that putting shareholders first harms investors, corporations, and the public. The assumption that corporations should maximize shareholder value fails to capture the real structure of public companies with directors, executives, shareholders, debtholders, and other stakeholders. The first fundamental error of the shareholder paradigm is the belief that shareholders own the corporation. However, the corporations are independent legal entities that own themselves. Shareholders own shares of stock, not the corporation itself. The second erroneous belief is that shareholders are the residual claimants in the corporation. In reality the corporation is its own residual claimant, and the board of directors decides what to do with the corporation’s residual. The third mistaken belief is that shareholders are principals who hire directors and executives as their agents. But corporate law renders that the corporation is controlled by the board of directors, not by shareholders. Shareholders have certain rights—the right to vote, the right to sue, and the right to sell their shares—that can be used to influence the board but these rights have little practical value in seeking to make directors serve the interest of the shareholders. Widespread empirical evidence shows that using the shareholder value maximization model hurts not only stakeholders and society at large but also shareholders themselves, both individually and immediately, as well as collectively and over time (Stout 2012).

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More recently, Harvard Business School professors Joseph L. Bower and Lynn S. Paine (2017) made similar points. They argue that shareholders’ wealth is not the same as the health of the company, and the latter should be the primary concern of those who manage corporations. This change from shareholder-centered to company-centered view could make companies less vulnerable to damaging forms of activist investing and make it easier for managers to focus on the long term.

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Developing Substantively Adequate and Ethically Acceptable Solutions

Solutions developed for business and management problems are never ethically neutral. They confirm or violate the ethical claims of the stakeholders and generate different payoffs for them. The use of multidimensional systems thinking may help researchers (and also practitioners) to generate solutions for business and management problems which are substantively adequate and ethically acceptable in broad socioeconomic context. The standard solution to the agency problem is to provide managers of the company with high monetary incentives including excessive pay and bonuses. This solution may become counterproductive as it usually generates adverse effects on managerial performance and creates negative effects for the employees and the society at large. High monetary incentives may have an adverse effect on managerial performance in a broad sense. Ims et al. (2014) argue that onedimensional economic incentives may crowd out existential, social, and ecological values that influence the manager’s commitment to ensure responsible business conduct, and have negative spillover effects that reduce the manager’s performance (Bouckaert 2006; Frey 1997; Ims and Zsolnai 2009; Mitroff 1998). Psychologists including Deci and Ryan (2000) have illuminated the relationship between intrinsic and extrinsic motivation, that is motivation inherent in the task itself and motivation that relies on external rewards or sanctions. In economics literature, the crowding-out effect, that is instances where external rewards in fact reduce the motivation of

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the actor, has been explored both conceptually and through a number of experimental studies (Frey 1997). Ims et al. (2014) show how high-level compensation crowd out not only intrinsic motivation of managers, but also existential, social, and ecological value considerations that influence the managers’ commitment to responsible business conduct. Excessive compensation schemes may be detrimental to the inclinations of managers and their organizations to act responsibly. The crowding-out effect is often referred to as “the hidden cost of reward” (Deci 1976). It can be called the hidden existential, social, and ecological costs of one-dimensionality of business and management conduct. This is an instructive example of a highly complex problem with a single-dimension solution. It shows that the wrong problem framework may lead to solutions that are not only wrong but may be harmful. Mitroff (1998) suggests that there are four basic, irreducible dimensions of any important problem: the scientific-technical, the interpersonal-social, the systemic-ecological, and the existential-spiritual. Researchers and practitioners should use all these dimensions as an integrated framework for problem identification to avoid solving the wrong problem. The technical-scientific dimension is the dominant perspective in today’s business and management thinking and favors technical solutions to the problems, even when other solutions are more appropriate. This techno-centric bias is partly explained by the status and prestige that engineers and economists enjoy in our culture. This dimension also dominates today’s business and management research by focusing on the scientific rigor without correspondence attention to the relevance of the topic for use in the real world. The interpersonal-social dimension concerns the way the problem is perceived from a social, a group, and a family point of view. Social relationship and social issues get a lot less attention than production efficiency and performance outcomes in mainstream research agenda (Walsh et al. 2003). The systemic-ecological dimension takes into consideration the longterm consequences of how the problem is solved. It assumes that all things are interconnected. This dimension involves the perspective of

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future generations and nature and goes beyond geographic borders and narrow time limits. The finance and business management literature almost completely lacks the discussion of the vital connections between economic functioning and the Earth systems processes and hence disregards most of the negative effects of business and management practices on nature and future generations (Shrivastava et al. 2019). The existential-spiritual dimension emphasizes the lives and fates of individual human beings and the impacts on their lifeworlds. Feelings and meaning are important aspects in this dimension. The important existential questions are as follows: Who am I? Who do I want to be? How do my actions influence my life project? Which gives meaning and purpose to my life? Ultimately, all important decisions and acts influence the self of the decision makers and decision receivers. It is important to emphasize the existential/spiritual dimension because it is usually ignored or even denied in mainstream social science literature (Zsolnai and Flanagan 2019). It is almost non-existing in business and management research too. Yet we cannot ignore that organizations are social systems with people who have deeply held feelings and spirits (Ims and Zsolnai 2009). Finding appropriate solutions for business and management problems require addressing all dimensions of the problem (the scientific-technical, the interpersonal-social, the systemic-ecological, and the existentialspiritual) and integrating them into solutions that create a new balance among them. Ethics is implicated by any problem solution, so it is worthy to evaluate more explicitly the generated problem solutions in the lens of ethics. Ethics offers two main paradigms that are the most relevant for assessing the ethical validity of solutions developed for business and management problems. One such paradigm is called “consequentialism” while the other is called “deontology.” Consequentialism bases the evaluation of a problem solution solely on its real-world consequences. In this paradigm the ethical value depends on the goodness of consequences for the stakeholders. Contrary to this, deontology favors the evaluation of a

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problem solution on the basis of its correspondence to the relevant ethical norms. In this paradigm the ethical value depends on ethical rightness, that correspondence to the norms. Deontology disregards the actual consequences of a problem solution. Verschuren and Zsolnai (1998) argue that one has to use both the consequentialist and the deontologist paradigms in assessing the ethical value of solutions developed for business and management problems. Multidimensional systems thinking also applies here. Solving the right problem should consider both ethical principles. A holistic approach would be explicit about these two considerations, and avoid compromising one principle with the exclusive focus on the other principle. The external value of a problem solution is largely determined by its service to the stakeholders. A solution can be considered good if it meets the needs and wants of the stakeholders. The limitations of this approach can be surpassed if one introduces deontological considerations into the evaluation. Certainly, a solution should satisfy the basic ethical norms that are commonly accepted by the community of stakeholders and the general public. How well a solution comes up to the relevant ethical norms constitutes the intrinsic value of the solution. Excessive pay for business executives has been criticized by many stakeholder groups as well as the general public. Many people including politicians and employees believe that the extremely high salaries and bonuses of business executives violate the principles of fairness and social justice (Frey and Osterloh 2005). Also, monetary incentives induce corporate behavior that results in detrimental effects which may lead to further destruction of the company and its business ecosystem (Ims et al. 2014).

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Conclusion

A distinctive characteristic of responsible business and management research is that it aims to solve the right problems in substantively adequate and ethically acceptable ways in broad socio-economic context. This involves defining the problems in the right form and developing solutions that meet the relevant ethical norms of the stakeholders and generate true benefits for them.

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To avoid substantive failures in problem formulation business and management scholars should reconsider the basic underlying assumptions of the system they study and should investigate the chosen problem from a wide range of perspectives taking the views of different stakeholders into consideration. In avoiding failures in developing solutions, business and management scholars may use multidimensional systems methodologies. Appropriate solutions address all the important dimensions of the problems in question (the scientific-technical, the interpersonal-social, the systemicecological, and the existential-spiritual), and create some optimal balance among them. Business and management researchers are advised to evaluate their solutions from a deontological point of view (Which ethical norms are violated or satisfied by them?) and also from a consequentialist point of view (What are the payoffs for different stakeholders?).

References Ackoff, R. 2004. Ackoff Center Guiding Principles. Philadelphia: The Wharton School, University of Pennsylvania. Bouckaert, L. 2006. The Ethics Management Paradox. In Interdisciplinary Yearbook of Business Ethics, ed. L. Zsolnai, 191–194. Bern: Peter Lang. Bower, J.L., and L.S. Paine. 2017. The Error at the Heart of Corporate Leadership. Harvard Business Review, May–June, 50–60. Deci, E.L. 1976. The Hidden Cost of Rewards. Organizational Dynamics 4 (3): 61–72. Deci, E.L., and R.M. Ryan. 2000. The ‘What’ and ‘Why’ of Goal Pursuits: Human Needs and the Self-Determination of Behavior. Psychological Inquiry 11 (4): 227–268. Donaldson, T. 2012. The Epistemic Fault Line in Corporate Governance. Academy of Management Review 37 (2): 256–271. Douglas, H. 2003. The Moral Responsibilities of Scientists. American Philosophical Quarterly 40 (1): 59–68. Frey, B. 1997. Not Just for the Money: An Economic Theory of Personal Motivation. Cheltenham: Edward Elgar.

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Frey, B., and M. Osterloh. 2005. Yes, Managers Should Be Paid Like Bureaucrats. Journal of Management Inquiry 14 (1): 96–111. Honig, B., J. Lampel, J.A.C. Baum, M.A. Glynn, R. Jing, M. Lounsbury, E. Schübler, D.G. Sirmon, A.S. Tsui, J.P. Walsh, and A. Van Witteloostuijn. 2018. Reflections on Scientific Misconduct in Management: Unfortunate Incidents or a Normative Crisis? Academy of Management Perspectives 32 (4): 412–442. Ims, K.J., L.J. Pedersen, and L. Zsolnai. 2014. How Economic Incentives Destroy Social, Ecological and Existential Values: The Case of Executive Compensation. Journal of Business Ethics 123 (2): 353–360. Ims, K.J., and L. Zsolnai. 2009. Holistic Problem Solving. In The Future International Manager: A Vision of the Roles and Duties of Management, ed. L. Zsolnai and A. Tencati, 116–129. London: Palgrave Macmillan. Jensen, M.C., and W.H. Meckling. 1976. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics 3 (4): 305–360. Jonas, H. 1984. The Imperative of Responsibility: In Search of an Ethics for the Technological Age. Chicago and London: University of Chicago Press. Jonas, H. 1996. Mortality and Morality: A Search for the Good After Auschwitz. Evanston, IL: Northwestern University Press. Keeney, R.L., and H. Raiffa. 1976. Decisions with Multiple Objectives: Preferences and Value Tradeoffs. New York: Wiley. Mitroff, I. 1998. Smart Thinking for Crazy Times: The Art of Solving the Right Problems. San Francisco: Berrett-Koehler Publishers. Mitroff, I., and A. Silvers. 2009. Dirty Rotten Strategies—How We Trick Ourselves and Others into Solving the Wrong Problems Precisely. Palo Alto, CA: Stanford University Press. RRBM. 2019. Responsible Research in Business and Management. http:// rrbm.network/. Accessed 14 Apr 2019. Shrivastava, P., L. Zsolnai, D. Wasieleski, M. Stafford-Smith, T. Walker, O. Weber, C. Krosinsky, and D. Oram. 2019. Finance and Management for the Anthropocene. Organization & Environment 32 (1): 26–40. Stout, L. 2012. The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. San Francisco: Berrett-Koehler Publishers. Verschuren, P., and L. Zsolnai. 1998. Norms, Goals and Stakeholders in Program Evaluation. Human Systems Management 17: 155–160. Walsh, J.P., K. Weber, and J.D. Margolis. 2003. Social Issues and Management: Our Lost Cause Found. Journal of Management 29 (6): 859–881.

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Zsolnai, L. 2006. Extended Stakeholder Theory. Society and Business Review 1 (1): 37–44. Zsolnai, L., and B. Flanagan (eds.). 2019. The Routledge International Handbook of Spirituality in Society and the Professions. London and New York: Routledge.

Relational Objectivity as Responsibility in Management Research Karen Golden-Biddle and Jean M. Bartunek

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Introduction

Our work in this chapter is situated in scholarly traditions at the forefront of social science research that conceive social life and in particular inquiry as fundamentally a relational activity. These traditions include pragmatism (Dewey and Bentley 1949), public policy (Fischer 2003; Stone 2012), sociology (Emirbayer 1997; Somers 1994) and emergent work in organizational studies (Anteby et al. 2016). Although distinct streams of work, they are similar in their use of “dynamic unfolding relations” as a central unit of analysis (Dewey and Bentley 1949; Emirbayer 1997, 28; Somers 1994). That is, individuals are not treated as discrete K. Golden-Biddle (B) Questrom School of Business, Boston University, Boston, MA, USA e-mail: [email protected] J. M. Bartunek Carroll School of Management, Boston College, Chestnut Hill, MA, USA © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_4

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entities but as “essentially and vitally constituted through relationships” (Heldke 2001, 88–89) that escape fixed social categories and roles. A key implication for this chapter of adopting a relational analytic unit is that scientific inquiry becomes more receptive to meaningful stakeholder involvement (Dewey 1938; Fischer 2003; Stone 2012). Developing a relational view of inquiry positions management research to contribute to the second of seven principles of responsible science set forth in the position paper for responsible research in business and management (RRBM Network 2017). This principle, “Stakeholder Involvement” reads: Business and management research values the involvement of different stakeholders who can play a critical role at various stages of the scientific process, without compromising the independence of inquiry.

Although there are many stakeholders involved in the larger “research ecosystem,” (RRBM Network 2017), we focus in this chapter on those involved in and/or affected by research. We build on the scholarship of Lisa Heldke (e.g., Heldke 1988, 1997, 2001; Heldke and Kellert 1995; Boisvert and Heldke 2016), a contemporary US philosopher, to develop an explicitly relational concept of objectivity as responsibility. We assert that a transformed understanding of the role of objectivity in inquiry is required for researchers to conduct responsible research in business and management. Although Heldke’s work is not well known in management circles, her reformulated conception of objectivity as organized around responsibility (Heldke 1987, 2001; Heldke and Kellert 1995) offers a novel and important perspective with direct relevance for understanding the conduct of responsible management research. After a brief discussion of objectivity as traditionally conceived in management and social science research, we develop a relational conception of objectivity as responsibility and illustrate its manifestation in management inquiry. To do so, we draw on Heldke’s (2001; Heldke and Kellert 1995) notions of responsibility to and responsibility for, two central implications of conceiving objectivity as responsibility. We

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expand on her conception by focusing on its relevance for management inquiry broadly and connect and elaborate it with extant work in management studies.

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Toward a Relational Conception of Objectivity as Responsibility

2.1

Traditional Conception of Objectivity

The traditional conception of objectivity in scholarly research is grounded in researcher separation and independence. It emphasizes research as undertaken by “an ‘objective’ – detached and indifferent – observer that leads to clear, certain, unambiguous knowledge” (Boisvert and Heldke 2016, 108). The goal is the “production of disinterested and objective knowledge whose import is self-evident” (Golden-Biddle et al. 2003, S2:20). This conception of objectivity, often associated with logical positivism (cf. Van de Ven 2007), is represented most notably by the hypotheticodeductive approach in management research. Established methodological protocols such as inter-rater reliability assist researcher efforts to sustain the role of objective observer and recorder of the lives and worlds of those researched (Locke and Golden-Biddle 2002, 102). By definition, this conception of objectivity excludes significant stakeholder involvement, except as sources of data and as recipients of research findings.

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Relational Conception of Objectivity as Responsibility

In contrast, building on Heldke’s work, we develop a conception of relational objectivity as grounded in responsibility to all parties involved in the research context (Heldke 1987; Heldke and Kellert 1995). Heldke (2001, 87–88) argues that, “objectivity presupposes an understanding of participants in inquiry as relational beings – not secondarily or superficially but essentially. This is true for all participants in inquiry and not

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just human inquirers (researchers) – those often given the honorific title of ‘subjects.’” A relational conception has epistemological and ontological grounding in pragmatism. It does not hold to relativism’s view of reality as socially constructed (Van de Ven 2007). However, neither does it hold to empirical realism’s view of reality as existing independent of our cognition (Van de Ven 2007) with participants “conceived as individuals or as groups acting as if they had one mind” (Stone 2012, 30). Knowers (researchers) and the empirical reality into which they inquire “inhabit the same world” (Heldke 2001). Inquiry is itself relational (Emirbayer 1997; Stone 2012). Heldke (1987) follows Dewey (1938, 104–105) in defining inquiry as “the controlled or directed transformation of an indeterminate situation into one that is so determinate in its constituent distinctions and relations as to convert the elements of the original situation into a unified whole.” This definition makes evident that inquiry is a full experience that is “always collective and social” (Lorino 2018, 109). This is certainly a broader view of inquiry than is usually discussed in scholarly writing in management or other social sciences. However, it aptly describes a broad purpose for research and theorizing and suggests how these processes may take bits and pieces of information, e.g., relations and elements of the “indeterminate situation,” and create a unified whole of them. Following from this, Heldke’s—and similarly our—basic premise is that all inquiry, including scientific inquiry, is relational. Inquiry is “an activity of communities, and … understanding (objective understanding, truth, the right answer) that emerges as a consequence of that process” (Heldke personal communication, May 13, 2018). In this respect, responsible inquiry must concern itself with a broadened horizon of process, “any and all processes of generating, evaluating and communicating knowledge…” and a context that meaningfully involves “… all those who participate in inquiry - those who are inquiring, those inquired into, and those to whom the results of the inquiry are conveyed” (Heldke and Kellert 1995, 362). Thus, objectivity becomes a property of the processes and context of social inquiry. Further, following Dewey, Heldke (1988, 19) eschews any “strict dichotomy” between theory as “knowledge gaining” activity and practice

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as “getting-things-done” activity. “These are not two separate domains of human life, but two interrelated, interdependent domains. The difference is one of degree, not kind.” This is a radical perspective for social science and even more so for management inquiry, which has struggled for decades with dichotomies between “knowledge gaining” and “gettingthings-done” (cf. Bartunek and Rynes 2014). Yet it is a perspective that is very appropriate for exploration of responsible management scholarship because it challenges our taken-for-granted assumptions about central issues to inquiry (Heldke 2019), especially the separation between scholars and practitioners, the appropriate understanding and conduct of scholarly inquiry and even what it means to “apply” knowledge. Heldke has fleshed out what objectivity as responsibility means with regard to inquiry in a number of scholarly works. Here we will incorporate a specific segment of her contribution, responsibility as objectivity in scholarly inquiry and its implications for management scholarship. Specifically, we will focus on the need Heldke (2001, 81) discusses for all participants in inquiry “to acknowledge, fulfill, and expand the bonds of responsibility…” The enactment of these three commitments is critical to creating responsible management inquiry through meaningful stakeholder involvement. Indeed, Heldke and Kellert (1995, 361) argued that “inquiry is marked by objectivity to the extent that” these commitments to the bonds of responsibility are fulfilled.

2.3

The Bonds of Responsibility

To acknowledge the bonds of responsibility means to “recognize the demands made by others in the inquiry context, whether or not one chooses to respond to them” (Heldke 2001, 86). At a basic level, this means that participants acknowledge the existence of each other and that the perspectives each brings may have relevance to the inquiry context. To fulfill the bonds of responsibility means to “meet the demands made upon one, or otherwise accounting for a decision not to meet them” (Heldke 2001, 86). When participants fulfill responsibility, they listen to each other’s views and recognize tensions that may emerge in the course of inquiry. They may or may not choose to respond to the tensions, but at least they recognize these.

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To expand the bonds of responsibility “involves transforming existing inquiry projects as a result of identifying and incorporating new areas of concern” (Heldke 2001, 86). This means expanding—looking around to discover new arenas that the inquiry may imply or to identify potential relevant participants who might have been overlooked. To understand what such bonds of responsibility might mean, Heldke (2001, 86) invites readers to “consider a familiar inquiry context: a teacher, working with her students to try to understand the origins of a conflict in the classroom.” Heldke suggests that acknowledging responsibility includes the recognition that the teacher and different students all have perspectives that are relevant to the task of understanding the conflict. Fulfilling responsibilities means that students and the teacher consider each other’s views and frustrations and recognize how they have contributed to these. Finally, in expanding responsibility, classroom members look for new connections with each other, how the conflict in the classroom spills over into other settings and so forth. They also consider how much these are their responsibilities, or others’. This example vividly illustrates that there are many people who are responsibly involved in inquiry, not just the initiator (e.g., the teacher or researcher). As Heldke (2001, 88) says, All participants in inquiry are relational agents, and acknowledging those relations has profound effects on the way in which inquiry-and objectivity-are conceived. Indeed, understanding objectivity as responsibility requires-or at the very least supports-a radical reconceiving of the roles of “subject,” “object,” and “public,” rendering them more fluid. In order to maximize objectivity, the lines of responsibility must “run” in all directions, among all participants; it is not only the folks who design and carry out the research project who have responsibilities to the objects of their study, and to the public that will receive that study. Those objects have responsibilities too-to the researchers, to themselves and each other, and to the public. The existence of these multiple lines of responsibility necessarily undermines traditional conceptions of subject/object roles.

This is of course quite different from scholarly inquiry in management, where the usual assumption is that the researcher is inquiring and the research participant is simply an object of inquiry. But in a relational

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conception of objectivity as responsibility, researcher and researcher participants inhabit the same reality of inquiry. Heldke’s description makes evident the responsibilities for process and context of inquiry that researchers and research participants share. Thus, acknowledgment, fulfillment and expansion of responsibilities are not solely to be understood within the realm of or from the perspective of the researcher.

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3.1

Acknowledging Responsibility

The characteristic of acknowledgment suggests that researchers and practitioners acknowledge the existence and value of each other and that the perspectives each brings may have relevance to the inquiry context. This seems simple on the surface. Of course, practitioners’ perspectives on the subject of inquiry have relevance; otherwise, the researcher would not be inquiring about their thoughts and actions. But this reflects only a minimal level of acknowledgment. Sometimes researchers acknowledge the presence of the participants, but only to the extent of the data they bring that respond to the researcher’s own questions. Researchers do not acknowledge practitioners as inquirers with their own interests pertinent to the research. Informed consent agreements help a little in requiring researchers to acknowledge some basic dignities of practitioners in their studies. However, this is not as full an acknowledgment as desirable and it is not as full an inquiry as possible. Similarly, research participants may not take seriously or acknowledge the inquiry of researchers in any depth. One way that academics have sometimes acknowledged practitioners, at least minimally, is through implications for practice sections in academic journals (Bartunek and Rynes 2014). Recently, the editors of the Academy of Management Journal (Simsek et al. 2018, 2022) announced a decision no longer to require this in articles because “these implications are often general and/or trivial and offer relatively little practical guidance to managers.” Instead, they suggest other types of academic engagement

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with practitioners that include dialogue between them in such a way that “Researchers can be exposed to new ways of seeing the phenomena, exposing potentially new research directions.” They add further (2018, 2023) that, “In deepening the relationship, researchers have come to understand and empathize with the efforts practitioners make in shaping their institutions, communities, organizations, and themselves.” Acknowledging these other types of academic engagement with practitioners is certainly a start to acknowledging a deeper relationship with practitioners on the part of academics. However, while these are helpful recommendations for deepening the relationships, unless institutional mechanisms or norms are developed to support the new recommendations, the institution as stakeholder has opted out of its formal role in fostering responsible inquiry. Notably, in its position paper and in a separate part of its website, the RRBM network identifies a number of important actions for achieving all seven principles, including actions institutional stakeholders, such as journal editors, can take to support responsible research in management. Taking this another step further, Bartunek (2007) suggested the value of academics and practitioners constructing what she called a relational scholarship of integration. This might include a number of dimensions, but one of the most important is fostering positive, mutual relationships that go beyond research encounters. Dutton and Dukerich (2006, 23), in a thoughtful reflection on the relational foundations of an awardwinning study they conducted, commented that such a study: “Depends on the quality of the connection built with research participants who have the information, knowledge, and wisdom that are so essential to understanding and answering research questions.” Similarly, they noted the importance of researchers bringing several characteristics with them to the research, including being vulnerable (Behar 1997), being genuinely interested in what practitioners have to say, seeking feedback and being trustworthy. These practices can help to create high-quality connections (Dutton 2003) among different participants in inquiry, lead to a sense of mutuality (Jordan 1991; Miller and Stiver 1997) and strengthen the context and process of inquiry.

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Additional work suggests that academic attitudes toward practitioners likely to foster such relationships include understanding practitioners’ lived experience and modes of knowing, practices consistent with ethnography (Silverman 2013) and more generally qualitative field research (Patton 2014); as well as empathizing with and appreciating the complexities of practitioners’ experience and knowledge (Bartunek 2007; Bartunek and Trullen 2007; Evered and Louis 1981). Practitioners might similarly engage academics, to gain insight into their lived experience, assumptions in doing research and modes of knowing.

3.2

Fulfilling Responsibility

Fulfilling responsibility involves listening to each other’s views and recognizing tensions that may emerge in the course of inquiry. It includes “meeting the demands made upon one, or otherwise accounting for a decision not to meet them” (Heldke 2001, 86). In the latter response, participants may see other participants’ demands as “unjustified, irrelevant or otherwise not worthy of their attention” (Heldke 2001, 86). In other words, simply acknowledging the presence of the other is not enough. There must be active engagement that involves responding to each other, or explicitly deciding not to engage. Engaging tensions is rarely discussed at all in the context of research. However, tensions certainly occur and are one of the reasons that protocols for informed consent exist and that some studies are aborted while still in progress; practitioners decide they do not want to participate any more. Jean had that experience in a study she conducted in the mid-1980s of a change project that took place at a school. By the end of the school year, the change project had not been a success. For Jean as an academic whether the change project was a success or a failure was not particularly meaningful for her study. However, success was clearly important for those in the school, as she later reflected (Bartunek 2006, 1887): I wanted to continue the study the next school year, and I requested permission from the principal to do this. However, she said no. At the

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beginning of the study, I had clearly said (and gotten agreement) that I would be writing about the events, and the principal had been enthusiastic about that. However, it emerged that the reason she had been enthusiastic was that she had assumed that the new position would be a success, and she wanted the success documented. Why would I want to write about a failure?

This experience led Jean (as she reported in 2003, 34) to work more effectively with tensions when she was beginning a research project in a teacher development group. The (group) members were ambivalent about having the group researched. When I presented the proposal on Saturday afternoon, they had several questions and concerns, especially about whether my presence would disrupt their work. Later, when I was not present, Nancy suggested that the group members discuss whether they trusted me or not, and proposed that their trust in me should be the basis on which they would decide if they wanted to do the research. The group decided they did trust me, and so decided to participate in the research.

This time, the project went well.

3.3

Expanding Responsibility

Finally (Heldke 2001, 86) states that “expanding responsibility goes even further; it involves transforming existing inquiry projects as a result of identifying and incorporating new areas of concern.” This can mean, in part, learning from the present inquiry in ways that expand topics addressed, e.g., how events present in the current inquiry “spill over” beyond the present situation. For example, the time Jean was dismissed from the study in the school ended up leading to a new approach to inquiry, insider/outsider team research (Bartunek and Louis 1996). There are other means of expanding responsibility as well. One mechanism of potential expansion of projects in the early stages of inquiry is the funding protocols of grant agencies that advocate for and sometimes require engagement of stakeholders. Agencies, including the US Agency

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for Healthcare Research and Quality or the Canadian Foundation for Healthcare Improvement (formerly Canadian Health Services Research Foundation), have adopted such protocols for use in evaluating research proposals for funding. Mechanisms such as those just described transform inquiry by institutionally validating the integration of stakeholders who are not researchers and the design of inquiry contexts that foster expansion of responsibility. Further, they may alter the relational dynamics of power, as participants realize that more than one set of stakeholders have legitimate aims. In this respect, “inquiry becomes more objective the more we fully trace out the lines of responsibility that connect us to others and that bring those others into the inquiry context” (Heldke 2001, 92).

4

Relevance of Objectivity as Responsibility for Management Research

In the material above we have discussed specific bonds of responsibility as introduced by Heldke, including some specific examples of how these have been illustrated in management inquiry. Here we expand this discussion, developing the related ideas of responsibility to and responsibility for (Heldke 1995; 2001), by connecting and elaborating them more broadly with inquiry in management. Building on the topics we addressed above, our guiding question explores: How can management inquiry be made more responsible?

4.1

Responsibility to the Features and Qualities of Relating

Heldke and Kellert (1995) emphasize the importance of responsibility to the features and qualities of unfolding interactions among inquiry participants and participant groups, moving away from a prior emphasis on behavior and participant characteristics with fixed roles. With this shift to the primacy of relationships, inquiry can become deeply cooperative.

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This discussion highlights two key areas of responsibility to relating in the inquiry context. The first is the area of roles and tasks: the roles participants construct and enact as well as how participants design and shape tasks related to inquiry. When relationships are the important issue, roles and tasks become more fluid, undermining the traditional belief that interaction creates bias harmful to inquiry. For example, the role of expert (Dewey 1938), such as researcher, as having unquestioned authoritative knowledge becomes more fluid as participants become accustomed to questioning research assumptions, engaging in difficult but necessary conversations. Similarly, in participatory policy analysis, the role of policy analyst as expert no longer holds a “privileged position from which to define the issues” (Fischer 2003, 16) over those who will implement policy. Thus, rather than conceiving inquiry as constituted in fixed “researcher” and “subject” entities who interact in socially bounded categories, roles become more malleable as participants engage in meaningful dialogue and simultaneously occupy different roles, e.g., researcher as well as insider, inquirer as well as member of the public, practitioner as participant in inquiry as well as conductor of inquiry. The second area is methodology. The notion of hybrid and flexible roles is built into some traditional methodology. Ethnography, in particular, has the long-standing role of “participant-observer,” researchers conducting inquiry who are both and at once observers of participants interacting in the field and themselves participants in the field and observer of participants interacting in the field (Silverman 2013). For example, Karen was startled when participants in a study she and colleagues were conducting asked about the particular methodology of “grounded theory” being used. The participants wanted this information before continuing. Well trained as nurses in the grounded theory method and experienced in its use in their own research, these practitioners were also researcher participants who expected those who study them to hold a certain level of knowledge and competence in this method and to follow certain protocols. They also saw it as their responsibility to speak up to ensure their expectations for quality research were met. Hybrid and flexible approaches are present in other methodologies such as action research, insider–outsider research projects and engaged

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scholarship. We describe and develop these as means through which mutually enacted relationships may take place in management research.

4.2

Action Research

This method of research essentially involves projects in which members of a setting, working jointly with researchers/consultants, strive together to foster improved practice and, ideally, scholarship. It is based on the insight that “human systems could only be understood and changed if one involved the members of the system in the inquiry process itself ” (Coghlan 2017, 343). Reason (2006, 197), for example, has claimed that “Good action research emerges over time in an evolutionary and developmental process, as individuals learn skills of inquiry, as communities of inquiry develop, as understanding of the issues deepens, and as practice grows and shifts changes over time.” For example, Lüscher and Lewis (2008, 225) described an action research project in which a consultant/researcher (Lüscher) worked with managers at LEGO to make sense of and cope with a very complicated structural change there. They conducted “sparring” intervention sessions in which managers explored their concerns about the structural change and sought to understand them in new ways. Then consultants and focus groups of managers evaluated emerging patterns of managerial sensemaking occurring in the sparring sessions. Based on these evaluations, the consultant worked with the managers in a second set of sparring sessions to help them understand what was happening in new ways and from other managers’ perspectives. These new sparring sessions led the managers to understand more fully how to recognize and appreciate the underlying paradoxical dimensions surfaced by the restructuring. The sessions also helped the managers to manage more effectively in situations characterized by paradox and led the researchers to understand more fully how paradoxical dimensions of organizations may be understood and worked with.

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Insider/Outsider Research

A second way through which more fluid relationships between and among participant groups may take place is “insider/outsider team research” as developed by Bartunek and Louis (1996). This approach involves researchers collaborating with members of a setting to study it together (e.g., Bartunek et al. 1992, 1996). As Bartunek and Louis (1996, 22) note, insiders to a setting and outside researchers first develop working relationships. They then work together to develop research questions to orient the study, design ways of collecting pertinent data, collect research data, analyze the data and then convey the findings to others, both other scholars and setting members. Finally, insiders take appropriate action in their setting. Thus, it means that members of a setting have a say over the story told about their setting and can contribute practical insights. For example, Bartunek et al. (2007), studied why an innovation begun by the Society for Organizational Learning (SoL) had become routinized and ceased to be as effective over time in accomplishing its purposes. At the time of the study, Bartunek and Trullen were external universitybased researchers, Immediato was the president and managing director of SoL and Schneider was a staff member there. Together they designed the study, contributed complementary data to it and analyzed and interpreted the data together. They coauthored the publication about the study and Immediato and Schneider made changes at SoL based on the outcomes of the study.

4.4

Engaged Scholarship

The final way profiled through which more fluid roles and relating may take place in inquiry is “engaged scholarship” broadly (Van de Ven 2007) which involves “a participative form of research for obtaining the advice and perspectives of key stakeholders (researchers, users, clients, sponsors and practitioners) to understand a complex problem or phenomenon” (Van de Ven 2018, 112). It does not include just one method, but a

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variety of them, based on desires of researchers and participants. Van de Ven (2018, 107) notes that this is a challenging approach: One cannot study or engage meaningfully across different communities of practice without understanding the language, norms, and procedures used in the specialized domain of work being carried out at the boundary…. If academics and practitioners are to meaningfully engage in research partnerships, then all parties involved need to develop interactive expertise.

As this statement suggests, the varieties of participants in inquiry likely need to develop skills in the variety of types of responsibility to the features and qualities of relating needed for responsible inquiry. One resource for skill development is the concept of humble inquiry, developed in a book by the same name (Schein 2013) which provides ways to move away from telling as a mode of relating to asking questions that tap what is not already known.

4.5

Responsibility for Our Actions/Judgments

Heldke’s (2001, 87) definition of objectivity “makes objectivity an unabashedly moral concept.” The idea of having responsibility for our actions or judgments in inquiry illuminates the fundamentally normative nature of conceiving objectivity as responsibility in terms of both moral rightness and epistemic utility. Regarding moral rightness, the concept of relational objectivity as responsibility elucidates values concerning how we are to act in inquiry. Regarding epistemic utility, relational objectivity as responsibility accords primacy to contexts of inquiry that cultivate the good production of knowledge. This conception of objectivity crystallizes how our actions and judgments have real consequences. The relational activity of making, evaluating and communicating knowledge in and through inquiry is consequential for all stakeholders, including participants in making knowledge and the general public in its use of the knowledge. Being accountable—being responsible for our actions means all participants need to acknowledge and address potential and actual consequences arising in and from the inquiry process and context. Note that this is different from punishment

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or blame. Rather, it involves a clear-eyed and close look at the real consequences of actions and judgments we make in inquiry. In the concrete, taking responsibility for our actions and judgments in management research involves addressing important and sometimes discomforting questions about the inquiry process and context. In this section, we identify and develop two of these important questions. In doing so, we assume a broad definition of participants that includes the public. The questions are: How do we decide appropriate forms of interaction among participants? How do we decide appropriate ways, inquiry participants and venues for communicating the results? Each question represents a crucial component of objectivity and is elaborated below by integrating commentary and descriptions of inquiry in published management research.

4.6

How Do We Decide Appropriate Forms of Interaction Among Participants?

This question concerns how we as researchers carry out appropriate forms of interaction with others. It assumes that such decisions are intentional and explicitly discussed because how we decide has consequences for the participants and inquiry. This is in contrast to letting forms of interaction evolve along with prevailing beliefs about appropriate interaction. Consider how multiple participants may be involved in the design of the inquiry, i.e., in developing research questions (cf. Bartunek and Louis 1996). Traditionally, this has been the purview of the researcher as inquirer, who might then convey the questions to participants. However, if researchers as participants actively seek to access the perspectives of other participants on this task, then it may involve consideration of the end users of the knowledge from the start and result in research questions tailored to a much larger set of stakeholders than readers of scholarly journals. If adopted, a likely consequence is that knowledge is more readily used and useful. For example, Karen and her Canadian collaborators included multiple participants in developing a funding proposal for a five-year research project on change in healthcare whose funder required active engagement of senior decision-maker partners, at the level of Health Region

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CEOs or Provincial Health Minister (Golden-Biddle et al. 2003). Each study in the larger research project needed a sign on by a decisionmaker, who agreed to become involved in its design and conduct. In one instance, Karen and her colleagues met with potential decision-maker partners to share the studies to be included in the larger project. After listening carefully, the potential partners suggested to the researchers that a different topic be included: introducing the new role of the Nurse Practitioner (Casebeer et al. 2003). Although initially hesitant to expand into this area, the decision-makers helped the researchers realize the importance of this topic for generating knowledge useful in practice (Reay et al. 2003) and understanding how embedded insiders effectively introduced and sustained a new role (Golden-Biddle and Reay 2009; Reay and Golden-Biddle 2007; Reay et al. 2006).

4.7

How Do We Decide Appropriate Ways, Inquiry Participants and Venues for Communicating the Results?

This question concerns (Heldke and Kellert 1995, 364) inquirers’ “choices about how and when to communicate their results and the way their results are used.” How we communicate our findings and how the results are used are crucial to the morality of objectivity. For example, Caprar et al. (2016) found that how scholarly findings are communicated in undergraduate classes can sometimes cause students to feel a need to protect themselves from information they feel discredits them. In presenting the implications of their study, Caprar et al. suggested ways that scholars can present that are less threatening and engage students’ action learning. Scholars’ relationships with other inquirers, in other words, are important before, during and beyond the inquiry process. They do not end when data are collected. As is obvious, Heldke’s work opens up a wide range of possible questions to explore about the processes and context of inquiry in management research. It is impossible to address them all, but this paper has made a start in suggesting new potential approaches.

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Implications and Conclusion

In this chapter, we have built on Heldke’s definition of objectivity as responsibility and used it to inform scholarly inquiry in conducting responsible research in management and business. Heldke’s work suggests a radical rethinking of what responsible inquiry involves and, thus, what relationships among researchers, research participants and the public might be. Her emphasis (2001, 88–89) that “all participants are essentially and vitally constituted through relationships challenges us to take these relationships very seriously,” certainly in ways that are rarely considered, even by those who think of the management research they are conducting as responsible. As noted initially, our chapter relates to the RRBM Principle Of Stakeholder Involvement (Principle 2) that expresses the value of engaging different stakeholders who play critical roles in responsible business research. In asserting that a transformed understanding of the role of objectivity is essential for the conduct of responsible research, we have addressed responsibility to the primacy and breadth of stakeholder relationships in the unfolding inquiry process. This is an important contribution. Newkirk (1996) argued that it is not at all unusual for those who have been participants in qualitative interview studies to feel betrayed by the final written product. But Heldke’s work offers the possibility of rethinking the relationship between researchers and research participants as well as the entire inquiry process in ways that upend typical norms of scholarship and make the inquiry more responsible. Implementing Heldke’s principles in practice and getting such practice accepted is of course, very challenging. The fact that there are some models of approaches that emphasize the importance of mutual relationships in research gives us hope that it is possible to move management research more toward Heldke’s ideal and we recognize that more such approaches be recognized and developed. Carrying forward this approach in increasingly broad ways holds the real possibility of transforming the processes and context of management inquiry. Acknowledgements The authors thank Lisa Heldke for her helpful comments.

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Heldke, L., and S.H. Kellert. 1995. Objectivity as Responsibility. Metaphilosophy 26 (4): 360–378. Jordan, J.V. 1991. The Meaning of Mutuality. In Women’s Growth in Connection, ed. J.V. Jordon, A.G. Kaplan, J.B. Miller, I.P. Stiver, and J.L. Surrey, 81–96. New York: Guilford Press. Locke, K., and K. Golden-Biddle. 2002. An Introduction to Qualitative Research: Its Potential for Industrial and Organizational Psychology. In Handbook of Research Methods in Industrial and Organizational Psychology, ed. S. Rogelberg. Malden: Blackwell. Lorino, P. 2018. Pragmatism and Organization Studies. Oxford: Oxford University Press. Lüscher, L.S., and M.W. Lewis. 2008. Organizational Change and Managerial Sensemaking: Working Through Paradox. Academy of Management Journal 51 (2): 221–240. Miller, J.B., and I. Stiver. 1997. The Healing Connection. Boston: Beacon Press. Newkirk, T. 1996. Seduction and Betrayal in Qualitative Research. In Ethics and Representation in Qualitative Research Studies, ed. P. Morensen and G. Kirsch, 3–16. Urbana: NCTE. Patton, M.Q. 2014. Qualitative Research and Evaluation Methods, 4th ed. Thousand Oaks: Sage. Reason, P. 2006. Choice and Quality in Action Research Practice. Journal of Management Inquiry 15: 187–203. Reay, T., and K. Golden-Biddle. 2007. Strategies of Persuasion: The Efforts of Nurse Practitioners in Institutionalizing a New Role. In Change in Health Care, ed. E. Ferlie and L. Dopson. London: Palgrave Macmillan. Reay, T., K. Golden-Biddle, and K. GermAnn. 2003. Challenges and Leadership Strategies for Managers of Nurse Practitioners. Journal of Nursing Management 11: 1–8. ———. 2006. Legitimizing a New Role: Small Wins and Microprocesses of Change. Academy of Management Journal 49 (5): 977–998. Responsible Research in Business and Management. 2017. A Vision of Responsible Research in Business and Management: Striving for Useful and Credible Knowledge. https://rrbm.network/position-paper/. Accessed 20 Apr 2019. Schein, E.H. 2013. Humble Inquiry: The Gentle Art of Asking Instead of Telling. San Francisco: Berrett-Koehler Publishers. Silverman, D. 2013. Doing Qualitative Research: A Practical Handbook, 4th ed. London: Sage.

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Simsek, Z., P. Bansal, J.D. Shaw, P. Heugens, and W.K. Smith. 2018. From the Editors—Seeing Practice Impact in New Ways. Academy of Management Journal 61: 2021–2025. Somers, M.R. 1994. The Narrative Constitution of Identity: A Relational and Network Approach. Theory and Society 23 (5): 605–649. Stone, D. 2012. Policy Paradox: The Art of Political Decision Making, 3rd ed. New York: W. W. Norton. Van de Ven, A. 2007. Engaged Scholarship: A Guide for Organizational and Social Research. New York: Oxford University Press. ———. 2018. Developing Capabilities of Engaged Scholarship. In AcademicPractitioner Partnerships: Developments, Complexities, Opportunities, ed. J.M. Bartunek and J. McKenzie, 107–1025. London: Routledge.

Reflections on Standards for Responsible— and High-Quality—Research: A Call for Peace Tilman Bauer

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Introduction

The essay builds on the “ideal of socially responsible science” (Kourany 2010, 68) and attempts to draw a mental map of the interrelated nature of epistemic/scientific and nonepistemic/social values (Tsui 2016). Responsible research is a “joint satisfaction account of the role of epistemic and social considerations, that is, it is committed to the principle of the joint necessity of evidence and social values” (Brown 2013, 68). In other words, responsible research aims, by definition, to fulfill standards of high-quality academic research and, at the same time, contribute positively to society. As Anne Tsui (2016, 10) explains: “Research in business schools, by necessity, is subject to assessment by both epistemic values (does the research qualify as sound science) and social values (does T. Bauer (B) Aalto University School of Business, Espoo, Finland e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_5

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the research produce useful knowledge).” This is at the heart of engaged scholarship (Van de Ven 2007). But what exactly does it mean to conduct “responsible research” in the context of business and management scholarship? What is the meaning of, and philosophical basis for, expecting research to be of service to society? How can a study concretize its positive impact in relation to an ultimate benefit to society? What makes research “good,” “credible,” and “responsible?” To outline possible answers to these questions, I start with an overview of the responsible research concept. Next, I juxtapose responsible research principles with general standards of high-quality research to show their interrelation. Finally, I ask what the requirement of “service to society” means. Perhaps somewhat surprisingly, the concept of peace may be useful here. With the help of literature from the academic discipline of Peace Studies, a guideline through the responsible science axiom is presented. The aim is to offer peace as a philosophical basis for further improving the concept of responsible research as an alternative to the ideal of value-free science. Hereby, I attempt to outline an answer to Kristina Rolin’s (2012) and Matthew J. Brown’s (2013) concerns that responsible research, in its current form (Kourany 2010), does not sufficiently define the role and source of social values in scientific inquiry. Peace may provide an answer, as “science for peace” could represent the next step in the evolution of responsible research.1

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Responsible Research: A Brief Overview2

The earliest mention of “responsible research” dates back to the nineteenth-century German microbiologist and Physiology/Medicine Nobel Prize winner Robert Koch, who acknowledged the help of his colleagues with these words: “Without this many sided co-operation it would not have been possible to have pushed this difficult and responsible 1 I’d

like to thank the participants of the Responsible Business Research Seminar at Tampere University, Finland, for their helpful questions following my presentation on March 13, 2019. 2The contribution of Farid Karimi to an earlier version of this overview is gratefully acknowledged.

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research so far forward […]” (Koch 1890, 301, emphasis added). What does Koch’s “responsible” characterization mean? In researching remedies for tuberculosis, Koch seems to refer to the societal importance of his research—which cannot be overstated. As the National Research Council (2009, 21) states: “It is not an exaggeration to attribute increased human lifespan and better human health to the research of legions of microbiologists and other biomedical researchers [such as Robert Koch] on the biology of bacteria and viruses and the toxins they produce.” Societal impact, improving human health, and scientific breakthroughs, however, go beyond dictionary definitions of “responsibility,” which tend to emphasize accountability, obligation, attributability, rationality, causality, or trustworthiness. The National Research Council defines the researchers’ responsibility, in the context of microbiology, merely as “concern for safety and security and implementation of protective measures [in the laboratory] that minimize risk” (ibid., 21–22). We can see that responsible research has indulged in praising societal significance (since Koch) and, on the other hand, a more down-to-earth aspect to it: minimizing risk. In addition to reducing risk, having positive impacts, considering implications, engaging stakeholders, and emphasizing transparency are principles associated with responsibility in research and innovation (RRI) advocated by the European Union (see, for example, Sutcliffe 2011). Responsible research can be conceptualized in terms of responsible means, ends (intentions), and effects of research. Fundamental to human responsibility are the assumptions of capacity and free will. Diana Mertz Hsieh (1995), referring to the Aristotelian notion of moral responsibility, states: “Because at least some human action is self-caused, rather than solely a product of instinct or external forces, humans can be held responsible for those self-caused actions.” What are those deliberate actions? Aristotle (1999) explores this in his Nicomachean Ethics: any deliberate action is the result of a desire. If we generalize human action to the farthest, one can say the ultimate desire of any human action is to increase happiness, or eudaimonia. What we have learned so far is that responsible research is based on the decision to aim at doing good and avoiding harm—and to aim for excellence—because this helps more people to have a good life in

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the Aristotelian sense.3 Indeed, how research could serve society has been a matter of discussion for much of the twentieth century. For instance, since contributions from the scientific community were associated with advancements in the technology of warfare, “there was a strong demand [in the 1960s and 1970s] that science be more effectively organized and mobilized to produce solutions. Hence attention shifted towards mission-orientated, ‘relevant’ research” (Johnston and Buckley 1990, 379; Johnston 1988; Smith 1990). The question then follows: what research is “relevant” for society? The Vienna Circle, a group of eminent scientists and philosophers (including Albert Einstein) in the early twentieth century, advocated a socially engaged science aimed at social reform (Kourany 2003, 2010). According to Alvin M. Weinberg (1968), research is relevant for society if it is aligned with society’s values. However, it is critical to note that Weinberg discusses the value of research for society in the context of developing criteria for governmental funders’ resource allocation decisions. The implication of this is in contrast with the maxim of free will mentioned above. Another aspect is the ideal of judgment free of personal prejudice. Max Weber (1949) postulates that theories and facts should not be accepted based on one’s personal biases. Weber argues that this part of scientific research should be free of personal interests and values. Whether all steps of the research process can be value-free is a long-standing debate. Proponents of responsible research (Kourany 2003, 2010, 2013; Tsui 2016; Kincaid et al. 2007)4 contest the view that science should be value-free. Omar Swartz (1997) argues in his inspiring book Conducting Socially Responsible Research (in the context of communication studies and leftist critiques of capitalism but applicable more generally to humanities and social sciences) that scholars have the ability and obligation to work toward the betterment of the human condition in society. Swartz mentions deconstructing and changing those discourses that foster inequity and exploitation. This means that “such scholarship

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owe this thought to the lectures of the Business Ethics course (“Yritysvastuu ja -etiikka”) taught by Santiago Martinez at Aalto University in Espoo, Finland, in January 2019. However, later in this essay, I will distance myself from the Aristotelian notion of the one objective good. 4 For defenses of the value-free ideal, see Kaplan (1964), Lacey (1999), and Betz (2013).

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de-emphasizes ‘theory construction’ as the normative goal for our professional practices and places a greater emphasis on disseminating a sociopolitical critique in outlets designed to reach an audience wider in scope than that of our current journals” (ibid., 2). Such responsible practice starts with minimizing or keeping the use of jargon sensible and avoiding “epistemological totalitarianism,”—“the belief that scholarship is only ‘valid’ if it produces value-free statements describing a mind-independent empirical world” (ibid.). Further, Swartz argues that scholarship can be “systemic” in the sense that it “ground[s] its appeal or claims of validity in a project of transcendence or universal commensuration” (ibid., 3) and that it “should serve as a revolutionary ‘tool’ and seek as its ‘end’ a cultural condition reducing marginality and human suffering” (ibid., 4). Interestingly, Swartz also claims that “the end of philosophy” (ibid., 33) would allow us to transcend pure rationality and create positive social impacts through research. Swartz’s underlying reasoning is that, for research to be responsible, scholars need to depart from the idea of one truth and recognize “power” as a means to change cultural discourse. For Swartz (who reviewed epistemological trends and cited postmodernists, such as Michel Foucault, Richard Rorty, and Calvin Schrag), this is a detachment of the “one objective truth” in favor of social progress. However, proclaiming “the end of philosophy” does not reject or critique philosophy per se but advocates transcending the limits of analytic philosophy. This is in line with postmodern philosophy and, ultimately, transrationality (Dietrich 2012, see the third section of this essay). Swartz (1997, 41–42) concludes5 : In recognizing the cultural contingencies surrounding the relationship between “knowledge” and “power,” disciplinary scholars can begin to recognize the importance research has for serving the ends of human necessity. For Rorty (1989), such academic or professional commitment to society is associated with “moral progress” among the intelligentsia of this country.

5 Prof.

Omar Swartz states in a personal correspondence on March 28, 2019: “What you wrote […] is a good summary of my position. Today, I would not talk so stiffly in terms of philosophy […] but that was certainly true in the context of the book [published in 1997].”

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Tsui (2016) concludes that, in social sciences, conducting value-free research is neither practically possible nor desirable. While Swartz develops the concept of responsible research in the context of communication studies, and while Janet Kourany (2003, 2010, 2013) amends philosophy of science with the feminist quest for equality, the present book (Responsible Research for Better Business) concerns the field of business and management scholarship. Here, research should be relevant, useful, and credible; it should contribute, for example, to the UN Sustainable Development Goals or policy goals of the EU. Joyce Tait (2017) argues that this may lead to political bias. The international community for Responsible Research in Business and Management (RRBM) with 85 cosigners, 55 partnering organizations, and 940 endorsers (as of March 2019), formed in 2014, argues in its Position Paper (Community for Responsible Research in Business and Management 2017, 1) that research should be “useful [for] address[ing] problems important to business and society” (emphasis added). Underlying this is a critique that addresses the “research-practice gap” (Tsui 2016, 13)—that scholars have overemphasized theory construction at the expense of societal relevance. This discussion distinguishes between research that is merely relevant for business and research that is relevant to wider society. The trajectory entails three stages: first, the decade-long accusation that theory was not relevant to practice (Hambrick 1994); second, the recognition that the research-practice gap should be closed or at least narrowed (Cummings 2007); and finally, the idea that research should be relevant to both business practitioners and society. Thomas G. Cummings (ibid., 359) arrives at this conclusion: “As scientists, […] it is our duty and responsibility to make sure that our knowledge makes the world a better place.” With Anne Tsui as its main driving force, the RRBM network seeks to re(dis)cover the purpose of business research as being a force for good. Figure 1 presents RRBM’s seven principles of responsible research.

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Improve the Usefulness of Knowledge Principle 1 — Service to Society

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Improve the Credibility of Knowledge Principle 4 — Valuing Both Basic and Applied Contributions

Principle 2 — Stakeholder Involvement Principle 3 — Impact on Stakeholders

Principle 5 — Valuing Plurality and Multidisciplinary Collaboration

Principle 7 — Broad Dissemination

Principle 6 — Sound Methodology

Fig. 1 The seven principles of responsible research (The seven principles of responsible research are further described on the RRBM website: https://rrbm. network/position-paper/principles-of-responsible-science) (Source RRBM)

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Standards of High-Quality Research Vis-à-Vis Principles of Responsible Research

What are the general standards of any research that make it of “high quality?” This section identifies a set of standards that satisfy both the requirements of rigorous academic research practice and those of responsible research. To start with, any research aims at creating new knowledge based on an initial understanding of reality (phenomena), the study of extant literature (prior theory), and the utilization of empirical or nonempirical evidence (data/arguments) and reason. In other words, this requires the following steps: 1. Knowing the field, 2. Understanding what is known, and 3. Using empirical and/or theoretical argumentation. Just presenting the results (evidence) is insufficient. One must also explain “why the observed relationships might hold” (Langley and Abdallah 2011, 210) in order to “deepen understanding” (ibid.) and to offer various possible explanations (cf. “verstehen” in Dilthey [1924] 1990).

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The above conceptualization of research allows us to recognize that quantitative, qualitative, and nonempirical6 research is (in theory) fundamentally based on the same principles and that common characteristics can be found. The primary characteristic that applies to all forms of research is that of rigor (cf. Gioia et al. 2013). A critique of (nonquantitative) research lacking rigor can apply to both qualitative and nonempirical research, which distances itself from the traditional quantitative/scientific paradigm in which rigor is presumably ensured through the “objective” nature of it. In qualitative research, there is at least some qualitative data to be analyzed. Nonempirical research, however, rests entirely on the researcher’s ability to present logical arguments. In a way, philosophical researchers are, therefore, even more exposed to critiques questioning rigor as they cannot “hide” behind their data. This does not mean that philosophical research would not itself follow the model of natural sciences to be as “objective” as possible. Rigorous data analysis allows presenting evidence for, or against, some view. However, this implies that, if the analysis was “rigorous,” the results are “objective,” or “scientific.” Yet, this assumption is questionable, as the researcher’s subjective decisions, interpretations, and research choices can drastically alter findings. Therefore, rigor alone does not guarantee a high quality of research. And yet, rigorous analysis is sometimes used to proclaim objectivity (cf. Morse et al. 2002). Nonetheless, rigor is a requirement for any research (cf. Kaplan 1964; rigor as a trade-off to a study’s usefulness, see Lehmann et al. 2011). This also applies to theoretical research, because only a rigorous conceptualization and analysis of thoughts, assumptions, and implications will suffice for the successful defense (or successful rejection) of a hypothesis. The next question is, then, what are the characteristics of high-quality research? If rigor alone is insufficient, then what makes research “high quality?” The following steps, as frequently stated by business research methods literature (for example, Collis and Hussey 2003; Saunders et al. 2009), are required: 6 While

there are differences, I consider in this essay “nonempirical,” “theoretical,” “conceptual,” and “philosophical” research as belonging to the same category of research. These thoughts are based on an unpublished paper for the “Qualitative Research: Principles and Practices” course taught by Prof. Johanna Moisander at Aalto University School of Business in Spring 2018.

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1. The definition of research questions pertaining to the object of research in theory/practice; 2. The demonstrated detailed attempt to present the status quo and the state of the art regarding existing knowledge related to the research question(s); 3. The rigorous (scrupulously accurate or strict, thorough), systematic, and fearless recognition, analysis, and discussion of all pro and contra arguments, assumptions, and consequences pertaining to the issue at hand; and 4. The coherent and complete assessment of the extent to which conclusions can be made regarding the research question(s) and respective answers based on logical insights from pro and contra arguments in order to arrive at a valuable contribution. To understand what a valuable contribution to knowledge is, we first need to understand the importance of clear “constructs,” i.e. the role and effect of well-defined conceptual abstractions. Roy Suddaby (2010, 346) argues that “constructs are the foundation of theory” and need to be clarified through the presentation of precise definitions of concepts, their scope conditions, their semantic relationships to other concepts, and proof for the coherence of the logical argumentation. Such rigorous “construct clarity” (ibid.) refers to making statements that “hold.” However, there are varying depths of construct clarity. I suggest that complete construct clarity means the following: • The coherence of thoughts and findings is analyzed beyond mere coherence within the study’s own field, and coherence across all available knowledge is sought. • Implications are not just identified and discussed as consequences of one’s findings; rather, implications are analyzed for second, third, and nth-degree implications (implications of implications). This consistent analysis should aim to identify and reveal the deepest structural premises, axioms, constructions, alternative explanations, ambiguities, causalities, paradoxes, etc. (cf. Baggini and Fosl 2010).

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Though perhaps idealistic—as ultimate construct clarity is not realistically possible due to limited time and space—these conceptions offer an inspiring guideline for conducting high-quality research. Yet, Suddaby’s (2010) emphasis on construct clarity is a requirement but not a guarantee for high-quality research. To remedy this, Kevin G. Corley and Dennis A. Gioia (2011) argue that a groundbreaking contribution to knowledge takes place if it has a large “scope” of utility—i.e. high scientific or practical usefulness—and if it can be characterized as having “revelatory” as opposed to “incremental” originality. Revelatory originality refers to something extraordinary, surprising, and transformational. Clearly, high-quality research that aspires to make groundbreaking contributions needs to transcend the limits of extant knowledge as a source of research problems. In the words of Tsui (2016, 12): Unfortunately, currently most researchers in organizational science parse the texts of research literature to look for “theoretical gaps” to fill (Alvesson and Sandberg, 2011; Davis, 2015; Suddaby, 2014) instead of exploring new research areas in the real world. Using the existing literature as the source of ideas for new research perpetuates the research focus of existing literature, accounting for the continuing domination of a focus on economic outcomes and contributing to incremental rather than ground-breaking research.

Revelatory research addresses fundamental questions related to the grand challenges of our time (cf. Anderson and Linder 2019). Solving these challenges calls for an approach that identifies systemic consequences and draws coherent conclusions to an unprecedented extent, for which the following model may be useful. While debatable, I contend that the following basic scheme is at the core of such research inquiry aiming to make groundbreaking contributions to knowledge: 1. Critically asking the most fundamental and relevant questions possible (pertaining to the issues at hand and the core belief systems of our time). 2. Expanding (rather than narrowing) concepts and the scope of analysis to venture into the unfamiliar terrain (with greater potential for groundbreaking insights).

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3. Applying and combining different concepts in innovative ways to allow for serendipitous (groundbreaking) insights. 4. Answering research questions through rigorous and fearless research, challenging prevailing assumptions and pursuing results to their logical conclusions to contribute to society’s progress. From the above discussion, standards for high-quality research are summarized in Table 1. Here, the question arises: to what extent do these quality standards (left column) align with the principles of responsible Table 1 Standards for high-quality research compared with principles of responsible research Standards for high-quality academic researcha

Principles of responsible research and knowledge creation

Definition of a relevant research problem Is a research question or research problem pertaining to theory and practice defined and presented in a relevant way from the perspective of the study’s audience and context?

Usefulness and relevance Research is deemed useful if it is connected to a phenomenon and if it aims to provide a new perspective on it. A researcher should know the existing field in order to ask the relevant questions

Scientific due diligence Does the study demonstrate a serious attempt to present the status quo and state of the art regarding existing knowledge related to the research question(s), cite all relevant sources, and refrain from any plagiarism?

Credibility Scientific due diligence, aiming at presenting a researcher’s understanding of what is known, is a required starting point for creating credible knowledge

Rigor Is that, which the study aims to do, done, and shown to be done, consistently until the end through rigorous, systematic, and fearless recognition, analysis, and discussion of all pro and contra arguments, assumptions, and consequences pertaining to the issue at hand?

Sound methodology Rigor is the keystone of a sound methodology and, thus, is at the heart of ensuring the credibility of knowledge creation

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Table 1 (continued) Standards for high-quality academic researcha

Principles of responsible research and knowledge creation

Coherence Is the presented argumentation logically correct and based on complete construct clarity, as well as on a rigorous assessment of the extent to which conclusions or generalizations can be made regarding the research question(s) and respective answers based on logical insights from pro and contra arguments?

Impact on stakeholders Coherence and complete construct clarity are basic requirements for identifying and understanding a study’s impacts on all stakeholders

Validity and soundness Is the argumentation rooted in demonstrated—credible, proven, observed, or commonly assumed-to-be-true—evidence, and in its meaningful analysis and interpretation?

Sound methodology The analysis and interpretation of evidence and subsequent argumentation forms the crux of designing and following a sound methodology, which improves the credibility of knowledge

Contribution Are the implications discussed thoroughly? Are the conclusions changing the way “we”—the intended audience—think or speak about something? This includes suggesting new conceptualizations, developing or extending theories, asking new questions, building or breaking consensus, etc.

Service to society The importance of a study’s contribution to theory and practice has been emphasized in academia. The idea that the contribution should be of service to society is at the heart of responsible research

Readability and style Is the text well written? Does the author show reflection and openness to criticism and debate?

Broad dissemination A study that is not read will not have any impact. Good readability and style will allow for broad dissemination across disciplinary boundaries and into spheres of the public

Source Author’s creation a These standards are a simplified consolidation of standards found in extant research methods literature

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research (right column) (identified in Fig. 1)? Table 1 maps the relationship between top-quality research and responsible research to show that these are fundamentally connected. In Table 1, I de-emphasize the importance of justifying choices. More important are the consequences and the precise definition of choices, rather than how or why choices are made. We do not really care how Einstein got his ideas that led to new discoveries. In fact, it is generally believed that he had an unusually penetrating intuition (Isaacson 2017). Finally, the intended audience is a crucial, yet easily overlooked, aspect of research. A high-quality study is one that decisively raises the audience’s consciousness (now or in the future). Consequently, the quality of two separate studies can be compared conclusively only if they are similar in some respects or address the same audience. Importantly, however, the above standards, or epistemic values, for high-quality research are not only most conducive to conducting responsible research, but are also at the core of both empirical and nonempirical research.

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The Ultimate “Service to Society”: Fostering Peace Through Research

Having analyzed the notion of, and developed the standards for, responsible and high-quality research, I now examine the “service to society” requirement, which is the first principle of responsible research (Fig. 1). What does “service to society” mean? Fundamentally, what is the purpose of knowledge creation? Should academic insights in responsible business and management research offer value beyond the immediate discipline, as business is expected to create value for society (Porter and Kramer 2011)? In this section, I argue that “science for peace” could be an apt notion. The amalgamation of the responsible research concept with literature from the discipline of Peace Studies allows us to frame the substance of a positive impact in relation to the ultimate benefit for society. I propose that any positive impact—or service—to society can have, in substance, the meaning of contributing to one or more aspects of peace. To see why this could be true, we need to appreciate that peace is much more than the absence of war. Since the establishment of the academic

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field of Peace Studies in the 1960s, the “father” of the discipline, Johan Galtung (1967, 1969), coined the distinction between “negative peace” and “positive peace.” Negative peace refers to the absence of physical violence, and positive peace to the absence of structural or cultural violence and to the presence of justice. Going beyond Galtung’s negative/positive peace framework, we see that the peace concept can be expanded further to include any positive value that is deemed useful for society (Bauer 2019a). While it may appear that such a drastic expansion of the concept is overstretching its boundaries, it is conceivable that the absence of the notions that contribute to the smooth functioning of society—such as education, equality, justice, trust, and satisfaction of human needs— would reduce peace, which may lead to dissatisfaction and the escalation of conflicts. Therefore, contributing to the benefit of society can be said to be contributing to peace (cf. Popper 2018). To illustrate this, some examples of service to society—and how they are related to peace—are presented in Table 2. Table 2 presents an illustrative list of positive dimensions of contributions to society and their relationships with peace. Ethical business can play an important role in all of them (Bauer 2019b). Further, more holistic conceptions of peace include, for instance, inner peace (Fox 2014), systemic harmony (Jeong 2000), and unity-based visions for humanity (Danesh 2011). From this, it is inducible that any positive impact that contributes to the functioning of society—whether to the essential minimum or high-level thriving—will likely be linked to peace. The philosophical basis of this claim rests on the idea that peace could be the ultimate value for society. With this expanded understanding of peace, it is plausible that the positive impact of responsible business research and practice can, in substance, foster peace (cf. Bauer 2019b). Moreover, if we expect responsible research to be of service to society, then fostering an aspect of peace seems to be a logically congruent outcome. This essentially boils down to the following argument: • If positive impact refers to any betterment of the human condition or awareness in a sphere of desired human interaction, perception, feeling, or understanding; and

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Table 2 Exemplary dimensions of service to society as aspects of peace Positive Connection to contribution peace (excerpts) Exemplifying references to societya Security

Freedom

Trust

Equality

Peace and comprehensive human and national security or safety are closely associated. Peacebuilding contributes to the promotion of security at the personal, institutional, and structural-cultural levels Peace implies freedom on different planes: political and religious freedoms, economic and social opportunities, transparency, as well as freedom from fear and violence. Peace, freedom, and development are linked Social capital contributes to peacebuilding through trust and dialog. In other words, trust is essential and a type of “currency” in communities Equality is at the heart of Galtung’s positive peace. Inequality significantly contributes to undermining the creation of a shared society and multiplies tension within society by cementing or exacerbating differences. Also, feminism should receive a more prominent role in critical peace and conflict studies. The role of women in peacebuilding is increasingly emphasized

• Fontanel and Chatterji (2008) • Wæver (2008) • Dietrich (2012)

• Barnett (2008)

• Cox (2009) • Väyrynen (2000) • Oelsner (2007) • Galtung (1967) • Adolf (2009) • McLeod and O’Reilly (2019)

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Table 2 (continued) Positive contribution to societya Health

Justice

Human rights

Prosperity

Connection to peace (excerpts)

Optimizing health is considered a means to contribute to peacebuilding; in other words, peace ultimately becomes a result of health promotion activities. This stems from the idea that health is a requirement for, and enabler of, life Justice and peace go hand in hand. Peace is often defined as the presence of justice. Justice does not just assume looking back at the past, but also provides resources for a better, nonviolent future, thus being an important part of peacebuilding The satisfaction of human rights is intrinsically related to, and a requirement for, peace. Treating other human beings with dignity and equality is the foundation of peaceful relations Prosperity and economic development represent important opportunities for building peace. The need and aspiration for access to, and control over, resources can be a cause of conflict. Poverty and severe inequality increase the risk of wars

Exemplifying references • Adolf (2009) • Arya (2017) • Garber (2002)

• Galtung (1969) • Sriram (2007)

• Jeong (2000) • Bell (2005)

• International Alert (2015)

(continued)

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Table 2 (continued) Positive contribution to societya Well-being

Education

Connection to peace (excerpts)

Human well-being describes the complex phenomenon of individuals and communities achieving psychological and physical, inner and outer, well-being in an insecure world. Many international political actors have incorporated well-being and human security as part of their mandate and policy agenda, including their peacebuilding attempts. Well-being is a vital element of peace Education contributes to developing the skills for peaceful interhuman relations, good governance, and peacebuilding. Education is capable of building capacity and social relationships for democratic, inclusive, and just conflict transformation by influencing individual and collective understandings, competencies, values, norms, opportunities, etc. Teaching social and emotional learning skills in schools can foster peace. Education is a necessary requirement for peace

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Exemplifying references • Webel and Galtung (2007) • Fox (2014) • Yarnell and Neff (2013)

• Kant ([1795] 2013) • Montessori (1949) • Hymel and Darwich (2018) • Danesh (2011)

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Table 2 (continued) Positive contribution to societya Spirituality

Happiness

Sustainability

Livelihood creation

Connection to peace (excerpts)

Spirituality and peace are closely related: the wider the definition of peace, the more intertwined it is with the concept of spirituality. There is the idea of introspective spiritual peace of a person: inner peace leads to outer peace. The focus of these practices is a process of individual transformation, which brings positive consequences for society in terms of peacebuilding Conflict and peace are correlates of happiness. People who feel they have a self-actualized life will be better at transforming conflicts and fostering peace. Moreover, peace has an etymological meaning of happiness Efficient environmental management is of great importance to providing stable and sustainable peace. Environmental degradation can be a cause of war. Social sustainability and peace are directly linked Livelihood creation and peace are interconnected, as poverty can be a cause of conflict. Earning a livelihood brings with it a basic satisfaction with life, including economic necessities

Exemplifying references • Bauer (2019a) • Curle (1995) • Dietrich (2012)

• Online Etymology Dictionary (n.d.) • Marcantonio (2017)

• Shiva (2005) • Brauch et al. (2016)

• Lederach (2008)

(continued)

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Table 2 (continued) Positive contribution to societya Satisfaction of human needs

Technological development

Mentality

Connection to peace (excerpts)

Through reducing direct and structural violence, peacebuilding processes contribute to the equitable satisfaction of human needs for security, identity, well-being, and self-determination Technological development corresponds to the creation of new opportunities for multilateral cooperation for peace, global governance, state-society relations, and sustainable development. A case in point are the notions of “peacetech” and “peace innovation.” As a result of technological progress, new ways of participation in, engagement with, and accountability of societal developments are emerging. All these developments change how people participate in peace processes Contributing to a peaceful mentality reduces not only physical but also structural and cultural violence. Peace is also shaped by a person’s view of reality, human nature, purpose of life, and interpersonal relationships. Peace psychology deals with posttraumatic stress disorders, addressing a wider variety of mental health issues, such as grief and depression, along with key psychosocial issues such as family separation, interpersonal and intergroup distrust, etc.

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Exemplifying references • Galtung (1980)

• Miklian and Hoelscher (2018) • Puig Larrauri and Kahl (2013)

• Fox (2014) • Danesh (2011)

(continued)

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Table 2 (continued) Positive contribution to societya Access to information

Connection to peace (excerpts)

Information is at the heart of development, democracy, decision-making, and peace. Conflicts are often caused or promoted by the unavailability of, or wrong, information. Moreover, access to information and knowledge promotes a better understanding between people of different origins, opinions, and beliefs, thus having the potential of preventing or eliminating conflicts

Exemplifying references • Popper (2018) • Puig Larrauri and Kahl (2013)

Source Author’s creation a This list of positive contributions to society is not comprehensive and merely exemplary for possible positive impacts. The purpose, here, is not to argue that each dimension is positive in all cases

• if such betterment corresponds to contributing to an aspect or dimension of peace, such as health, happiness, spirituality, prosperity, wellbeing, justice, etc.; in other words, if peace is to society as, for example, health to medicine, or money to Wall Street bankers; then • any research that wants to have a positive impact on society (i.e. be “responsible”) can, for the sake of complete construct clarity (as defined in the previous section), declare fostering (an aspect of ) peace as one of its aims. Another approach to the connection between responsible research and peace brings us to the topic of spirituality (as mentioned in Table 2), a subject which is not often brought into academic discussions. Spirituality here refers to a nonmaterialistic lifestyle aiming for awareness, interrelatedness, a higher purpose, morality, doing good, transformational experiences, holistic nonviolence, and, ultimately, higher consciousness (Zsolnai and Flanagan 2019). Luk Bouckaert and László Zsolnai (2019, 249)

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write: “A postmaterialistic management paradigm is emerging and characterized by frugality, deep ecology, trust, reciprocity, responsibility for future generations and authenticity.” This puts business on a trajectory of doing good, as current business practice tends to see its raison d’être too narrowly and often is inherently violent. An emerging new business paradigm distances itself from profit maximization as the sole purpose of business in favor of a mindset where business can contribute to peace in society (Bauer 2019b; cf. Lankoski and Smith 2017). This shows how a holistic approach to peace offers a philosophical guideline through the jungle of imperatives for the “ultimate purpose of creating a better world,” as the first principle of responsible research states. The underlying assumption here is that academic research should go beyond merely not being unethical, which is, through the above reasoning, distinguished from being more ethical.7 Therefore, I argue that peace can be a helpful guideline for operationalizing “spirituality,” “ethics,” and “responsibility” for business and management research (cf. Bouckaert and Zsolnai 2011; Zsolnai 2004). According to Michael Gibbons et al. (1994), there are three “modes” of research that underpin the purpose of scientific inquiry. Mode 1 refers to basic research, and Mode 2 is the traditional counterpart referring to applied research. Mode 3, however, is more apt, as it aims to “assure survival and promote the common good, at various levels of social aggregation” (Huff and Huff 2001, 53). This can be interpreted as promoting one of the dimensions of the expanded concept of peace. Mark N. K. Saunders et al. (2009, 7) explain: Mode 3 “emphasizes the importance of broader issues of human relevance of research. Consequently, […] the findings of business and management research [in Mode 3] might also contain practical implications, and these findings may have societal consequences far broader and complex than perhaps envisaged by Mode 2.” Thus, we need to address the larger realm and purpose of research as a whole—and its role in contributing to a better world.

7 In

Bauer (2019b), I define climbing a “ladder of morality” as moving from lower to higher contributions to peace.

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Finally, I turn to Rolin (2012) and Brown (2013) who note that responsible research—defined by Kourany (2010) as “Philosophy of Science after Feminism” in the book of the same name—does not define the role and source of “sound” social values. Rolin (2012, 321) explains: “The ideal of socially responsible science [Kourany 2010] suggests that sexist or racist assumptions and concepts are ‘bad’ simply because they reflect ‘wrong’ social values and alternative research programs are better insofar as they are guided not only by ‘sound’ epistemic values but also by ‘sound’ social values.” Rolin (ibid.) argues that, in its current form, “the ideal of socially responsible science does not provide us with a satisfactory account of values in science because it remains vague in its answer to two crucial questions: (i) what roles are ‘sound’ social values required to play in scientific inquiry, and (ii) how do scientists identify ‘sound’ social values?” I contend that the peace concept inherently solves this conceptual problem for two reasons: peace may be the most ubiquitous universal value, and, unlike other normative ideals, peace does not preclude the existence of harmony in contentious situations. This is a central tenet of Peace Studies, but it implies a larger, holistic definition of the concepts of peace, which includes inner peace. Therefore, peace as an aim can guide every step of the research process. According to Wolfgang Dietrich (2012), peace, as well as its postmodern plural form peaces, is an umbrella term that includes security, climate issues, the quest(s) for truth(s), transpersonal experiences, and many other issues related to the inner- and inter-personal functioning in society—culminating in “transrational” (ibid.) interpretations of peace. To paraphrase Dietrich, transrational peace advocates a dynamic and functional balance based on harmony, justice, security, and truth. Transrationality implies that spirituality is a part of the human experience, without denying rationality. Transrational interpretations of peace require a perceiving subject. According to Dietrich (ibid.), there is no one, absolute truth and no objective “good” in the Aristotelian sense (cf. von Wright [1963] 1996). Peace is an inner experience. As Rolin (2012, 327) points out, “there will be a diversity of social values, that is, conceptions of the good life, because the value of liberty urges us to respect different individual choices.” The holistic notion of peace, as well as peace philosophy, takes this into account (cf. Dietrich 2012).

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From this, it follows that peace is the result of a dynamic balance of energies (Lederach 2005). Peace is useful as a social value for responsible science because it is not just the absence of conflict. Rather, it effectively screens out all forms of violence (cf. Swartz 1997), including structural or cultural division, discrimination, or deprivation. Moreover, peace and feminism share a significant basis of concern (Jeong 2000), such as nonviolence, equality, and social justice. In the end, if we understand the transrational and pluralistic nature of the scientific peace concept, then we can appreciate research as a device for contributing to the harmonious yet dynamic transformation of social relations and society as a whole.8 What can we conclude regarding the role of social values in responsible research? The view outlined in this essay suggests that responsible business and management research can be connected—explicitly or implicitly—to a theory, model, or idea on how the study, or its direct or indirect implications, foster some aspect of peace. As cultures evolve over time, so do norms and habits. I call for a new responsible research paradigm in which researchers consider the wider implications of their work for peace in society, as peace is both sufficiently large and sufficiently inspiring to be of use in any research context. To be clear, what I’m suggesting is not a specific methodology, nor is it unscientific. Rather, it is a mindset to seek opportunities for more peaceful outcomes. Knowledge creation for the sake of knowledge creation may still receive recognition or respect if one is able to explain one’s work in simple terms, but it can be complemented by the test of the future: does your research foster peace?9

8 Here,

I’m influenced by wisdom research. See, for example, Rooney et al. (2014). this statement may appear to be too strong, it serves as an aspirational guideline. The discussion is based on an unpublished paper for the “Professionals at Academic Work” course taught by Prof. Keijo Räsänen at the Aalto University School of Business in Spring 2018.

9 While

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Conclusion: A New Paradigm for Business and Management Scholarship

The responsible research program consists of two realms: the quality and the societal usefulness or relevance of research. Here, the standards for high-quality research are amended with the normative expectation that research has a positive impact on society. The combination of “epistemic” and “social” values (Tsui 2016) brings forth the notion that business and management scholarship can make a positive contribution to society. This essay argues that this premise can have the meaning of fostering peace. This philosophical statement is based on the idea that peace can be seen as the ultimate value for society. Moreover, transrational peace philosophy (Dietrich 2012) allows for a context-dependent and relational awareness of changing dynamics and values. Such an expanded concept of peace thereby answers Rolin’s (2012) and Brown’s (2013) concerns regarding the role and source of responsible research values, as peace can be understood as a universal yet pluralistic human value. Research that aspires to have a positive impact on society can—for the sake of complete construct clarity— define fostering (an aspect of ) peace as one of its (implicit) goals. Connecting a business/management study’s implications to an aspect of peace answers the call for responsible research standards that internalize both epistemic and broad social values. In this essay, I have attempted to consolidate such standards. In the Popperian tradition, this does not have any diminishing effect on scientific quality. Rather, science for peace is a useful device if it helps humanity progress toward a higher goal. These insights rest on the correctness of the assumption that society’s expectations toward business being sustainable and ethical will remain and grow in importance in the future— and this should be reflected in research. With this call for peace, further research is needed to study the application of these principles in the praxis of business and management scholarship.

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Responsible Research and Diversity in Methods: Contributions of Mixed Methods Research for Better Business and a Better World José F. Molina-Azorin, Maria D. López-Gamero, Jorge Pereira-Moliner, Eva M. Pertusa-Ortega and Juan José Tarí

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Introduction

Several authors highlight that there is a crisis of confidence and credibility crisis in management studies (Bedeian et al. 2010; Tsui 2013; Bergh et al. 2017a, b; Butler et al. 2017; Byington and Felps 2017; Honig et al. 2017; Aguinis et al. 2018; Aguinis and Solarino 2019; Harley 2019). Some important reasons and problems identified are a lack of methodological transparency in management research, a lack of value and practical impact from most published research, a narrowing of focus in the field, and awareness of ethical problems that pose a serious threat to the integrity of the publication process due to questionable research practices. A downgrading of teaching and increased pressure in publishing are also related issues. J. F. Molina-Azorin (B) · M. D. López-Gamero · J. Pereira-Moliner · E. M. Pertusa-Ortega · J. J. Tarí Department of Management, Campus de San Vicente, University of Alicante, Alicante, Spain e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_6

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As indicated in the position paper of the Community for Responsible Research in Business and Management (CRRBM) (2017) titled “A Vision of Responsible Research in Business and Management: Striving for Useful and Credible Knowledge” (www.rrbm.network), responsible science tries to cope with previous problems of crisis of confidence in management studies through the production of credible and useful knowledge that addresses problems that are important to business and society. Credible knowledge is created with scientific rigor and, as indicated in the position paper of CRRBM, it refers to knowledge based on carefully executed research either quantitatively or qualitatively, or both. For example, in quantitative research, quality criteria for credible knowledge that must be considered are standards of reliability and validity. Integrity of scholars and ethical research practices are key elements for creating this credible knowledge. Useful knowledge is considered from a broad perspective, taking into account two key points. Firstly, an important issue is to solve an important gap in management studies: the science-practice gap (also known as the research-practice gap or academic rigor-practical relevance gap) (Bansal et al. 2012; Tsui 2013; Kieser et al. 2015). Some academic studies are distant from issues and solutions, and from research questions and responses, that may be of interest to companies and managers in their daily practice. Therefore, useful knowledge must be relevant and actionable for better management practices, and then this type of knowledge must have a practical impact (and not only an academic impact through a high number of citations). Secondly, another key point of useful knowledge is its societal impact. In this regard, responsible research aims to address problems important not only to business but also to society. This vision is based on the belief that business can be a means for a better world if it is informed by responsible research. Therefore, responsible research is also socially responsible science, and an important aspect is that beyond producing credible knowledge (knowledge based on carefully executed research either quantitatively, qualitatively, or both), management research should be socially engaged in order to solve social problems and promote a better world through better business (CRRBM 2017). The goal of science is to seek truth and the ultimate purpose of

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seeking truth is to provide valid explanations about empirical phenomena to make improvements in the natural and social worlds (Tsui 2013). The world is confronted with many “grand challenges” and efforts must be made to encourage research on societal problems with the aspiration that management scholars join global efforts at understanding and solving these grand challenges (George et al. 2016). Mixed methods research (the combination of quantitative and qualitative research in the same study or research project) can help promote responsible research for better business and a better world, helping to solve grand challenges. As will be emphasized in this chapter, mixed methods can produce credible, rigorous, and quality research, and, at the same time, relevant, actionable, and useful knowledge for business and for society. The main aim of this chapter is to examine the important role that mixed methods research may play as an appropriate methodology to develop responsible business and management research. In this chapter, firstly we briefly indicate the foundations of mixed methods research. Next, we examine two examples of research projects that use mixed methods and that promote better business and a better world addressing two important grand challenges: poverty and environmental sustainability. Then, we analyze how the seven key principles of responsible research may be addressed through the use of mixed methods.

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Education and health sciences are the areas with more tradition in using and examining mixed methods, with important books published by authors from these areas (Greene 2007; Andrew and Halcomb 2009; Teddlie and Tashakkori 2009; Tashakkori and Teddlie 2010; Hesse-Biber and Johnson 2015; Plano Clark and Ivankova 2016; Creswell and Plano Clark 2018). In management, a special issue on mixed methods has been published in Organizational Research Methods (Molina-Azorin et al. 2017).

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We would like to indicate some key aspects of mixed methods research, mainly its definition, main purposes, and basic designs. Johnson et al. (2007) define mixed methods as the type of research in which a researcher or team of researchers combines elements of qualitative and quantitative research approaches (e.g., use of qualitative and quantitative viewpoints, data collection, analysis, inference techniques) for the broad purposes of breadth and depth of understanding and corroboration. The main foundation of mixed methods research is that the use of quantitative and qualitative research approaches in combination may provide a better understanding of research problems and complex phenomena than does either approach alone (Creswell and Plano Clark 2018). This better understanding can be obtained through the purpose of triangulation of quantitative and qualitative findings, trying to enhance their validity through corroboration or examining a possible divergence. There are other purposes of mixed methods studies (Greene et al. 1989): development (the results from a stage/method are used in the next stage/method), complementarity (the researcher clarifies the findings from the quantitative part with an analysis of a qualitative part, or vice versa), expansion (researchers seek to extend the breadth and range of a study by using different methodologies for different components), and initiation (when a researcher seeks new perspectives or the recasting of questions or findings from one methodology with questions or findings from the other methodology). Another important aspect of mixed methods research is how researchers can design a mixed methods study or research project. There are two main characteristics or dimensions that determine several types of mixed methods designs: priority and implementation of data collection (Morse 1991; Morgan 1998). Regarding priority, scholars have three options: (1) they could give equal priority to both methods (equivalentstatus designs); (2) they could emphasize the quantitative part; or (3) they could emphasize the qualitative part. The last two options are known as dominant or nested designs, and the researchers design and carry out these studies within a dominant method with a small component of the other method. With regard to implementation of data collection, there are two main types of mixed methods studies: concurrent and sequential designs.

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In a concurrent design, the researchers collect quantitative and qualitative data at the same time, usually seeking to compare for congruent results. In a sequential design, the quantitative data and the qualitative data are collected in phases. Qualitative information may precede quantitative information when the purpose is first to explore the research question and problem and then follow-up with quantitative data so that findings might be inferred to a population. When quantitative data collection and analysis precede the qualitative phase, the purpose may be to test relationship among variables with a large sample and next to explore in more depth with some cases during the qualitative part. Combining these two characteristics, several mixed methods designs can be represented using the notation used by Morse (1991). The dominant part is indicated with capital letters (QUAN, QUAL) and the complementary method is represented by lowercase letters (quan, qual). The notation “+” indicates a simultaneous design and the arrow “→” stands for a sequential design. There are nine types of mixed methods designs, classified in four main groups (Johnson and Onwuegbuzie 2004): (1) equivalent status/simultaneous design (QUAL+QUAN); (2) equivalent status/sequential designs (QUAL→QUAN; QUAN→QUAL); (3) dominant/simultaneous designs (QUAL+quan; QUAN+qual); and (4) dominant/sequential designs (qual→QUAN; QUAL→quan; quan→QUAL; QUAN→qual). Of course, a specific study or research project may include more than two phases.

3

Examples of Contributions of Mixed Methods Research to Better Business and a Better World

In this section we present two projects that aim to solve grand challenges. These projects use mixed methods approaches. Specifically, we examine a project related to poverty alleviation and another project about environmental sustainability. This last project on environmental sustainability has been conducted by the authors of this chapter.

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Poverty Alleviation and the Role of Management Research Using Mixed Methods

The Social Innovation Research Lab (SIRlab, www.sirlab.org) is a global collaboration between researchers from developed and less-developed countries. Its main purpose is to understand the role of business in poverty alleviation. In this initiative, scholars work with developmental organizations seeking to improve the impact of poverty alleviation measures. Research projects have been carried out in several countries (for example, Guatemala, Tanzania, Ethiopia, Nepal, Sri Lanka, and Ghana). These research projects include NGO practitioners, developed country scholars, and developing country scholars. We would like to highlight a methodological characteristic of these projects. This SIRlab initiative usually conducts projects through mixed methods combined with action research, using field experiments and qualitative interviews. In particular, and following the notation indicated earlier, these projects use a QUAL→QUAN→QUAL mixed methods design, with development, triangulation, and complementarity as the main mixed methods purposes. A first qualitative phase is carried out, with observation and interviews with multiple stakeholders in the specific context. Each project begins with this qualitative stage with first interviews with some development organization with the main purpose of gaining an understanding of the problem. The problem is examined from a theoretical perspective trying to understand the factors that influence this problem. Observation and additional interviews are conducted with several stakeholders, mainly staff of the development organization and community members. Next, a second quantitative phase is conducted through field experiments. After analyzing the qualitative data collected in the first phase, the researchers develop solutions and interventions to the problem in this second quantitative stage. The researchers collect baseline measures, that is, numeric values that capture the extent of the problem prior to the intervention, and the relevant individuals are randomly assigned to either a “treatment” or “control” group. The researchers also develop a

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protocol describing the process of this quantitative phase through the field experiment. Finally, a third qualitative phase is conducted through interviews and focus groups. After collecting and conducting a statistical analysis of quantitative data, the researchers conduct a last qualitative phase through follow-up interviews. The aim is to understand and clarify the quantitative findings, for example, what occurred within the treatment group and to determine what could be done to improve upon the intervention in the future. As an example of a specific project, next we describe the project carried out by SIRlab together with the development organization “Room to Read” (RtR). The mission of this organization is to improve the quality of child education in impoverished countries. A specific action is to construct school buildings. RtR uses a “challenge-grant” model in order to develop a sense of ownership and to mitigate construction costs. This model requires communities to pledge a certain value of materials and labor up-front toward the building of the new facility. However, subsequent to the beginning of construction, some communities failed to deliver on their commitment. To solve this issue, SIRLab carried a first qualitative phase conducting interviews with community members in Sri Lanka and managers of RtR. Next, a pilot was designed about all construction projects in this country. These projects were randomly divided in a “competition” condition and a “cooperation” condition. These two groups are based on different views of social interdependence which suggest that group motivation could be improved either by instilling a stronger sense of rivalry (competition) or by establishing a sense of psychological interdependence (cooperation). A protocol was developed for implementing the field experiment in this quantitative phase. Final statistical results were combined with a last qualitative phase through interviews and focus groups. Findings suggested that communities within the competition condition were more motivated to fulfill their challenge grant commitment. However, the level of motivation was the same in cases where cooperating communities were relative strangers. In this regard, the opportunity to learn new information through collaboration was particularly powerful. RtR modified the

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challenge grant model to be more effective. More information about this project can be found in www.sirlab.org and in Kistruck et al. (2016). After conducting the three research phases, the final stage is the dissemination of findings. For every project, the SIRLab team prepares a presentation and final report for the partner development organization and community members, detailing the major findings. At the same time, the research team prepares academic manuscripts for presentation in conferences and submission to organizational journals. Moreover, general insights are made accessible in the webpage to other organizations and professionals that are doing similar work.

3.2

Promoting Environmental Sustainability in Tourism Through Mixed Methods

This research was conducted by the authors of this chapter. In this project, we used mixed methods research to address an important grand challenge: environmental degradation. Specifically, we examined this problem by studying the role of environmental management in the Spanish hotel industry. In our opinion, an important way to solve environmental problems (such as pollution, consumption of natural resources, climate change, etc.) is to promote environmental actions by companies. Environmental problems, such as climate change, are important issues that concern Spain. One of the industries that can be affected by these environmental problems is the tourism industry. We also consider that the tourism industry can play a key role to solve environmental problems. We wanted to make tourism organizations aware of the importance of protecting the natural environment (conserving water and energy, and reducing pollution), trying to promote their efforts for improving their environmental actions. We considered that it would be interesting and useful to examine not only why and how tourism companies can reduce their negative environmental impacts but also how an adequate environmental management system is related to other important management systems in this industry (quality management). From our experience in helping organizations to implement environmental and quality management systems, and from some interviews with managers, we knew that

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there are clear and important relationships and synergies between these management systems. Moreover, we considered that a key point is to study how the implementation of both environmental and quality management systems could benefit not only the natural environment but also the companies in terms of their increased competitive advantages and financial performance. We analyzed the relationship between environmental management, quality management, and competitive strategy, studying the impact of environmental and quality management systems on competitiveness of the hotel industry. We conducted a mixed methods study with three sequential phases. Specifically, following the notation for mixed methods designs, we used a QUAL→QUAN→QUAL design (as in the case of the SIRlab project). Table 1 shows the main aspects of these three phases. Table 1 Summary of the QUAL→QUAN→QUAL mixed methods design for the study of environmental sustainability in tourism Phases

Purposes

Data collection

Data analysis

1st/Qualitative

To develop a theory (propositions). To develop the questionnaire for the second phase To test relationships among environmental management and other variables in the population of Spanish hotels To clarify the quantitative findings from the point of view of practitioners. New ideas for future projects

Interviews with stakeholders in the hotel industry

Content analysis

Questionnaire

Statistical analysis (PLS)

Interviews with stakeholders in the hotel industry

Content analysis

2nd/Quantitative

3rd/Qualitative

Source Authors’ creation

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We considered a useful approach to be the development of an initial qualitative stage due to the inconclusive results found in the literature analyzing the relationships between environmental management and competitive advantage, and also due to the need to contextualize the study within the hotel industry. The purpose of this exploratory qualitative stage was to develop theory and establish propositions in this context. This qualitative phase also helped the development of the questionnaire used in the quantitative phase. Several interviews with different stakeholders in this industry were carried out (hotel managers, representatives of hotel associations, representative of a technological institute, representative of a quality institute in the tourism industry, and manager of a consulting firm specializing in environmental management in hotels). Through content analysis, several propositions were formulated about the impact of environmental and quality management on competitive advantages (cost and differentiation), the mediating role of some variables, and the relationship between environmental and quality management. The mixed methods purpose of this first qualitative part was development. As noted above, this mixed methods purpose of development is considered when the researcher uses the results from one method to help develop the utilization of the other method. In our project, the results from the first qualitative phase (mainly knowledge of context, theoretical propositions, and development of the questionnaire) helped develop and inform the next quantitative phase. In the second quantitative stage, the population included hotels located in Spain. Through statistical analysis, the findings showed the impact of environmental management on cost and differentiation competitive advantages through environmental performance as a mediating variable. Our results also indicated that quality management influences environmental management. The main findings of these first two phases can be found in Molina-Azorin et al. (2015). The added value and rationale of the last qualitative phase was to corroborate, analyze, elaborate, and clarify the quantitative results from the point of view of practitioners. We conducted new interviews with hotel managers and other stakeholders in the hotel industry with the main mixed methods purpose of complementarity (i.e., elaboration or clarification of the quantitative results). These interviews were very

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interesting because practitioners pointed out relevant insights about the relationships found in the quantitative phase and about the competitive importance of environmental management in the hotel industry. These practitioners corroborated the quantitative findings and emphasized that environmental management, quality management, and competitive strategy must go hand in hand in the hotel industry. Furthermore, they also helped to understand how quality management can influence environmental management. An important idea that some managers pointed out in this last qualitative phase is that hotels could implement an environmental management system using varying levels of adoption and commitment. They explained that some companies use the certification of environmental management symbolically, without maximizing its potential for continuous improvement and for reducing environmental impacts. However, other firms internalize all the requirements of environmental management through a full integration and adoption of these requirements in daily practices and the competitive strategy of the company. Moreover, the respondents also provided relevant insights about the key role of managers and employees for a full implementation of environmental management. These ideas about the role of people (managers and employees) led us to think about the importance of human resources management for the development of environmental management and, subsequently, the improvement of the natural environment. The need for new studies about the level of adoption of environmental management and the linkages among managers, employees, and the implementation of environmental practices suggested that new and interesting research questions can be addressed via a new research. Therefore, the final qualitative phase provided new ideas that are being used to design a new future research about the level of adoption of environmental management systems and the key role of managers and employees. As in the case of SIRlab projects, the dissemination of results was a key part of our research. We prepared a report with the main findings that was sent to hotel managers, hotel associations, public administrations, and other stakeholders. Moreover, we prepared papers for presentation in conferences, academic manuscripts for submission to academic journals, and works for submission to professional journals and magazines

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in the hotel and tourism industry. We have also participated not only in academic conferences but also in conferences organized by practitioners in the tourism industry.

4

Mixed Methods and Principles of Responsible Research

Seven principles that support responsible research are indicated in the position paper of the CRRBM (2017). We examine how the methodological characteristics of the previous projects can help address and encourage these main principles of responsible research. Principles 1, 2, 3, and 7 aim primarily to improve the usefulness of knowledge and Principles 4, 5, and 6 aim to improve its credibility. Principle 1. Service to society: Business research aims to develop knowledge that benefits business and the broader society, locally and globally, for the ultimate purpose of creating a better world. The mixed methods approach used in the two described projects described above supports this principle. The combination of qualitative and quantitative phases may contribute to the development of knowledge that benefits business (for example, in terms of competitive advantages) and the broader society (poverty alleviation and environmental sustainability). In this regard, in the project on environmental sustainability, the qualitative and quantitative phases corroborated that the implementation of environmental management systems by tourism companies benefits not only the competitiveness of the companies but also the protection of the natural environment through reducing the consumption of natural resources (mainly water and energy) and generating less pollution (mainly waste) by hotel companies. Through the mixed methods design used by SIRlab in its projects, it is clear that knowledge is developed that benefits the society through the design and implementation of actions that can help address and solve one of the main grand challenges: poverty.

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The ultimate purpose of described research projects is to create a better world through better business, highlighting specific actions that can be implemented to solve social and environmental problems. Principle 2. Stakeholder involvement: business and management research values the involvement of different stakeholders who can play a critical role at various stages of the scientific process, without compromising the independence or autonomy of inquiry. One of the main strengths of using a mixed methods approach is related to stakeholder involvement. The quantitative and qualitative phases combined in mixed methods designs facilitate the involvement and participation of different stakeholders. For example, in the case of the SIRlab project described above, several stakeholders participated: the research team, the development organization’s field staff, community members, and other relevant stakeholders. A key point is that different stakeholders can play a critical role at various stages of the research process: from the formulation of the key problems to solve and research questions to answer, to the interpretation of the main findings and identification of specific actions to solve the problems. This aspect is also clear in the SIRlab project. The specific problem was identified, framed, and determined mainly by the development organization and community members in the first qualitative phase. Possible solutions were also indicated by these stakeholders. After the field experiment conducted in the quantitative phase, several stakeholders participated again in the last qualitative phase through followup interviews and focus groups with community participants in order to garner a deeper understanding of the problem studied, solutions and the quantitative findings. The involvement of practitioners and community members in the various stages of the scientific process helps bridge the science-practice gap and the usefulness and relevance of management research. The environmental sustainability project also involved several stakeholders through the QUAL→QUAN→QUAL mixed methods design. The quantitative phase was conducted with hotel managers, but other different stakeholders also participated in the qualitative phases. In the first qualitative phase, hotel managers together with other community members in the tourism industry (mainly representatives of several hotel

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and tourism associations) helped identify and frame the main research questions and hypotheses that were testes in the second quantitative phase. And the last qualitative phase also involved managers and other stakeholders to analyze and clarify the quantitative findings. Regarding the participation of stakeholders in a last qualitative phase for garnering a deeper understanding of the quantitative findings, Aguinis et al. (2010) pointed out that to demonstrate a study’s practical and useful significance, there is a need to describe quantitative results in a way that makes sense for practitioners. They suggested that this can be achieved by including practitioners in each research project as part of a qualitative research study to corroborate, analyze, elaborate, and clarify the quantitative results from their point of view. Therefore, these authors implicitly defend mixed methods research whereby a quantitative research study is conducted with a subsequent qualitative phase wherein managers and other practitioners become participants. Qualitative research gives voice to the participants and places importance on their understanding and interpretation of previous quantitative results. A key point, as it is indicated in the position paper by CRRBM (2017), is co-creation of knowledge with stakeholders. Their involvement and participation in various stages of the research process may promote this co-creation. Managers are important stakeholders and, as noted above, the research-practice gap is characterized as the failure of management research to impact practice. This gap emphasizes the tension between rigor and relevance (Bansal et al. 2012; Kieser et al. 2015). Researchers and managers can co-create knowledge through collaboration, coming together to study a problem of common interest (Sharma and Bansal in press). Managers and researchers bring their insights such that the knowledge produced is relevant and rigorous. Community-based participatory research (Israel et al. 2013) combined with mixed methods research (Dejonckheere et al. 2019) engage several stakeholders and communities (not only managers) in the design and implementation of research that benefits society. Partnering with community members, community- and industry-based organizations, and practitioners allows the research design to be grounded in diverse perspectives and expertise and to be more responsive to the needs of the community or a specific

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industry. Community-based participatory research fosters capacity building, co-learning, and action toward social change. Members of the community and managers are at the table from the inception of the project (indeed, they help define what the problem is in collaboration with the research team). Principle 3. Impact on stakeholders: business and management schools, funders, and accrediting agencies acknowledge and reward research that has an impact on diverse stakeholders, especially research that contributes to better business and a better world. This principle is related to Principles 1 and 2 from the point of view of useful knowledge. The point here is that responsible research not only must involve different stakeholders, but also it must impact on them, contributing to better business and a better world. The two research projects examined in this chapter, as noted above, impact on several and different stakeholders, in their local communities (SIRlab project) and in the country and industry context (project on environmental sustainability). Communities, companies, managers, representative of associations, policy makers, public administrations, development organizations, representatives of tourism destinations, and other stakeholders can take into account findings and implement specific actions indicated in the research projects. This impact and influence is due to the participation and involvement of these different stakeholders in various stages of the scientific process. In both projects, dissemination of findings to nonacademic circles (as we indicated in the description of these projects) was a key aspect to facilitate this impact on stakeholders and society. In order to bridge the science-practice gap, participatory action research through mixed methods (Ivankova 2015) may help to conduct responsible research. The SIRlab project is a good example, as described above. Action research is based on a collaborative problem-solving relationship between researchers and practitioners, which aims at both solving a problem and generating new knowledge (Coghlan 2011). Evidence-based research can also help promote this Principle 3. Evidence-based decisions are guided by a combination of elements, including practitioner expertise and judgment, evidence from the local context, a critical evaluation of

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the best available research evidence, and the perspectives of people who might be affected by the decision (Briner et al. 2009). Another interesting approach is engaged scholarship. Van de Ven and Johnson (2006) define engaged scholarship as a collaborative form of inquiry in which academics and practitioners leverage their different perspectives and competencies to co-produce knowledge about complex problems that exists under conditions of uncertainty. Mixed methods designs, as examined in the projects on poverty and environmental sustainability, can facilitate the implementation of action research, evidence-based research, and engaged scholarship. For example, regarding engaged scholarship, Van de Ven and Johnson (2006) emphasize that multiple methods are needed to understand complex problems or phenomena. Researchers have a much greater likelihood of making important knowledge advances to theory and practice and solving important problems if the research is designed so that it uses multiple and different methods, comparing plausible explanations of the phenomenon being investigated from different stakeholders. Principle 4. Valuing both basic and applied contributions: business school deans, journal editors, funders, accrediting agencies, and other stakeholders respect and recognize contributions in both theoretical and applied research. We agree with Saunders et al. (2016) that management research can be placed on a continuum according to their purpose and context. At one extreme is research that is conducted purely to understand the processes of management and their outcomes. This research is termed basic or fundamental research, and it is undertaken as the result of an academic agenda with relatively little attention to its practical applications. Through considering the practical relevance and social usefulness, the research would start to move toward the other end of the continuum. Here applied research is of direct use to managers, addresses questions and issues that they see as important and is presented in ways that they understand. Both basic and applied contributions are important in management. We would like to emphasize an important aspect regarding the relationship between research questions and methods, considering the important role of mixed methods research. There is a traditional view

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that considers that research questions determine the specific methods used in a study. Then, a researcher will select the best tools available in their methods toolbox to answer the stated questions. However, from a broader point of view, we consider that there is a reciprocal relationship between research questions and methods. Research questions influence the methods we use, but methods may also influence the research questions we ask. Therefore, research questions shape and are shaped by methods. If methods may influence the research questions, then an important consequence is that by extending our methodological skills, we can improve the question-asking process. Extending and sharpening our methodological skills, we can increase the rigor of our conceptual thinking, see new ways to answer research questions, and even identify questions that would not have occurred to us otherwise (Edwards 2008). And here, undoubtedly, mixed methods can play a key role. Because mixed methods combine and integrate quantitative and qualitative methods, the researcher is motivated to develop a broader set of research skills. Training in mixed methods can overcome the tendency to rely on known methods and can play an important role in widening and extending our repertoire of methods if the training emphasizes the importance of combining, comparing, and mixing different methodologies (Mertens et al. 2016). Moreover, as indicated in Principles 2 and 3, the qualitative part of a mixed methods design promotes contact and conversations with several stakeholders in different stages in the research process, and this can allow the identification of questions and issues that are interesting and relevant for business and society. The use of mixed methods designs in the projects examined in this chapter allows the development of new theory through collaboration with several stakeholders. Moreover, in these research projects, applied research was conducted that helped to solve important social problems for a better world. The key point of using mixed methods is that the combination and integration of qualitative and quantitative methods may provide a better understanding of research problems and complex phenomena (such as poverty alleviation and environmental sustainability) than does either approach alone. Principle 5. Valuing plurality and multidisciplinary collaboration: business school deans, senior leadership, journal editors, funders, and

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accreditation agencies value diversity in research themes, methods, forms of scholarship, types of inquiry, and interdisciplinary collaboration to reflect the plurality and complexity of business and societal problems. This Principle 5 highlights the value of plurality and diversity in research methods, among other important aspects. And mixed methods, as described in this chapter, emphasize this diversity through the combination of quantitative and qualitative methods. An appropriate combination of methods (as used in the two research projects on poverty and environmental sustainability through a QUAL→QUAN→QUAL mixed methods design) can help to study and analyze the plurality and complexity of business and societal problems, developing local and global knowledge. Moreover, the credibility and rigor of the second quantitative phase is improved due to the implementation of the first qualitative phase. And the application of the last qualitative phase may also increase the usefulness of the quantitative findings. Regarding interdisciplinary research, in our opinion the combination of mixed methods and multilevel research may help promote interdisciplinary studies about important societal problems. This combination would allow the integration of business disciplines (macro- and microlevel theories) and the collaboration of scholars from these different areas. Principle 6. Sound methodology: business research implements sound scientific methods and processes in both quantitative and qualitative or both theoretical and empirical domains. Together with Principles 4 and 5, this Principle 6 also emphasizes the importance of credibility, quality, and rigor in responsible research. There are several quality criteria for sound mixed methods studies. A key aspect is the issue of integration, indicating the linkages between the different stages. In the two described projects, the authors clearly stated the links in the sequential mixed methods design used, specifically the links between the first qualitative phase and the second quantitative stage, and the relationship between this quantitative stage and the last qualitative phase. As noted above, the central premise of mixed methods is that the use of quantitative and qualitative research approaches in combination may provide a better understanding of complex phenomena and grand challenges than does either approach alone. Moreover, an appropriate

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integration of the qualitative and quantitative methods supposes that the whole will be greater than the sum of the parts. In addition, the use of a mixed methods approach must consider the quality and rigor of each part/phase, taking into account transparency and appropriate research practices for methods used in the qualitative and quantitative stages. Principle 7. Broad dissemination: business and management schools value diverse forms of knowledge dissemination that collectively advance basic knowledge and practice. As indicated in the description of the research projects on poverty alleviation and environmental sustainability, in both cases dissemination played a key role. As noted in Principle 3, dissemination of findings (not only through academic publications but also dissemination to nonacademic stakeholder communities) is an important element of these projects as this broad dissemination of findings may facilitate the impact on stakeholders and society. This dissemination is facilitated by the use of a mixed methods approach, especially through the implementation of the qualitative phases.

5

Conclusions

Bansal et al. (2012) pointed out that researchers prefer producing knowledge over translating and disseminating it; researchers have an incentive to produce research rather than to engage with practitioners; and researchers and practitioners represent information in different ways and use different languages. A consequence is that sometimes the motivation for the research is more about seeking publications and less about solving important social problems through responsible research (Tsui 2013). Researchers hold different perspectives regarding their roles. Some frame their roles as producers and disseminators of new knowledge in academic circles. Hence, they have a responsibility to share their knowledge in academic conferences and in peer-reviewed journals and be judged by the impact factor of the journal where they publish. However, other researchers believe that their research should be conducted with a purpose of supporting changes that are necessary to avoid the

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negative consequences of environmental degradation, poverty, and other social problems. For this latter group, their work can be judged by publications and impact factors, but even more importantly, they believe that the ultimate measure should be associated with action and social change. Good research should stress the need for science designed to change society for the better. Responsible research, producing useful and credible knowledge, tries to address problems important to business and society (CRRBM 2017). In our opinion, mixed methods research is appropriate for addressing grand challenges because this methodological approach allows researchers from diverse groups to develop a common language to guide their inquiry, participants, and practitioners to be included in their contexts, and policy-makers and other stakeholders to be part of the process of problem and solution identification. Together with quantitative statistical data, qualitative research may help to examine the different views of different groups related to these issues. We consider that mixed methods designs (and specifically the QUAL→QUAN→QUAL sequential design used in the two projects examined in this chapter) are appropriate research models for responsible research. The transformative paradigm may provide a framework that explicitly addresses social change using mixed methods designs, as explained by Mertens (2007). Finally, we think that it is our responsibility as researchers to use a variety of methods available for a better understanding of grand challenges for society. These problems, their identification and their analysis require methodological diversity. Therefore, mixed methods research may play a key role as this methodological approach promotes the combination of quantitative and qualitative approaches and the use of information from different stakeholders. Mixed methods research is not a panacea but it may be an appropriate methodology that can help to develop responsible research that addresses problems important to business and society. Acknowledgements This study was supported by the Spanish Ministry of Economy and Competitiveness (Research Grants ECO2015-67310-P, ECO2012-36316, and ECO2009-12231). The authors are grateful for the support received. We are also grateful to Mike J. Thompson and László Zsolnai for their invitation and for comments and feedback on an earlier version of this chapter.

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From Being Observed to Becoming an Active Participant: How Visual Research Methods Contribute to Producing Useful and Credible Knowledge Miikka J. Lehtonen

For us management scholars, gaining access to informants in organizations is crucial in terms of knowledge production and cutting-edge teaching. Moreover, not only does data collection support our career advancement, but it also contributes to our broadened body of expertise. But what about our respondents, what do they get out of the data collection process? Extant research has investigated the connections between industry and academia (Perkmann et al. 2013) as well as how do we as scholars depart from fieldwork (Michailova et al. 2014), but to date informant reflexivity has not received much scholarly attention. That is to say, while the methods we utilize to collect research data might be credible and robust, how useful are our scholarly findings for practitioners, if we do not pay attention to and utilize research methods that shift our attention from observing to active co-creation (Symon and Cassell 2004)?

M. J. Lehtonen (B) Dubai Institute of Design and Innovation, Dubai, United Arab Emirates e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_7

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Building on this, the purpose of this study is not to criticize existing research methods employed in organization and management studies, but instead to approach data collection moments as spaces for cocreating knowledge that can benefit both research and practice. More specifically, this paper looks at visual research methods, and drawings created by informants in particular, as acts of changing modalities and therefore positively contributing to informant reflexivity. With this, I wish to highlight data collection moments as holding great potential for us scholars to create spaces for our respondents that enable them to gain new perspective or insights into their daily work routines. Drawing on a longitudinal research project utilizing visual research methods (Lehtonen et al. 2019), my aim in this study is to illustrate how visual research methods can support informant reflexivity. Data for this project was collected in Helsinki, Finland by inviting video game industry professionals to visualize their industry ecosystem: first drawings were made between 2012–2014 and the second drawings during 2018. The purpose here is to generate longitudinal insights on how the video game industry ecosystem develops over time in Helsinki, Finland, and for the respondents the data collection process helps them to analyze changes over time through the drawings they have made. Responsibility in this context refers to the interpersonal dimension: how do we, as management scholars, engage in fieldwork with our respondents in a way that ensures knowledge flows between us, our data, and the respondents. Building on this, as publishing research findings in academic outlets usually takes several years, once the findings are out they are often outdated from the practitioners’ perspective. This is especially true for the video game industry that has gone through rapid changes ever since the beginning of the 2000s (Zackariasson and Wilson 2010). This temporal discrepancy between academic publishing and video game industry dynamics is something that begs alternative ways of engaging in a mutually beneficial relationship. Moreover, as academics are often equipped with skills to see the bigger picture—something practitioners seldom have time for—it is pivotal to devise means through which academics can create value for the practitioners already before the academic outputs are published.

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In conclusion, responsibility in this paper builds on the question “how do management scholars create value for the practitioners before the manuscript is published to alleviate temporal discrepancies?”, and here I am arguing that visual research methods are one of the many means we can employ to give back to our informants. Visual methods help the informants to make sense of and articulate their knowledge by breaking away from linguistic jargon, and the process of thinking through drawing already in itself is insightful for the informants. Through a longitudinal research design, the informants are also exposed to analyzing the changes in their sense-making over the years. In addition, reflexivity and being able to see differently (Barry and Meisiek 2010) that are both inherent in visual methods enables management scholars to contribute to their informants’ work already before the journal articles are published. The rest of this chapter is structured as follows: next, I will offer a brief account of previous visual research in organization and management studies, after which I move on to describe the methodology devised for this study. Based on this, findings and discussion are covered, and concluding remarks signal the end of this chapter.

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Extant Literature on Visual Methodologies in Organization and Management Studies

While visual research methods have been utilized in such fields as art and design (Arnheim 1997a, b; Butler-Kisber and Poldma 2010), anthropology (Becker 1995; Latour 2005; Pink 2007, 2011), and sociology (Feeney et al. 2015), in management studies they are still relatively novel with Meyer’s (1991) account being one of the earliest calls for researchers to be visually more inclusive. Since the early 1990s, our field has witnessed an increase in visually informed studies (for a review, see Meyer et al. 2013), and perhaps one of the most pressing challenges has been that these studies have been rather sporadic, thus partially contributing to rather thin foundations for visual research in management studies.

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Having said that, although management studies as a discipline is somewhat behind in relation to neighboring disciplines in terms of how we approach and analyze visual research, currently the situation is improving as more and more visually inclusive research is being published and cited. However, my aim here is not to focus on what our field is lacking, but instead to draw attention to what has been written already about visual research in management studies in order to contribute to what Boxenbaum et al. (2018) refer to as the “visual turn.” As prior research has claimed (Boxenbaum et al. 2018; Lehtonen 2014; Meyer et al. 2013), contemporary organizations have become increasingly reliant on visual means of communication, and at the same time technological advances have enabled individuals to communicate visually easier than before. As is the case with verbal data, visual data can also be approached from diverse approaches with two having attracted most scholarly attention: preexisting data (e.g. corporate logos and annual reports [Davison 2007, 2008], and new product development [Ewenstein and Whyte 2007, 2009]) or data generated in the research process (Bryans and Mavin 2006; Comi et al. 2014). While both of these approaches come with its own ontological and methodological considerations, they seem to differ in their stance on informant participation, and as such visual data generated in the research process calls for more attention in the context of responsible research in business and management (RRBM) as it enables what Symon and Cassell (2004) refer to as Collaborative Inquiry; or shifting the attention from informants as passive to active agents in the research process. This stance was echoed in Bryans and Mavin’s (2006, 126) study on how researchers visualize and thus interpret research and researchers: “[B]y describing the process of the technique, and the resulting images, we have demonstrated that using images can open up individuals to otherwise closed or tacit issues about the research process and about their own personal anxieties and feelings.” What is at play here is a transformation between modalities, or what Barry and Meisiek (2010) conceptualize as workarts to highlight the importance of analogous artefacts in helping individuals turn the familiar into something unfamiliar. Within the context of this study, for instance, inviting informants to

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visualize their ecosystem enables them to transcend their verbal domain by utilizing novel means to explore something familiar. Such transcendence between modalities is in line with RRBM’s second and third principle: stakeholder involvement and impact, respectively (Community for Responsible Research in Business and Management 2017). In terms of stakeholder involvement, generating visual data during the research process serves two purposes. First, it enables the informants to become active agents in the process by approaching the familiar through unfamiliar means, and second, embracing visual research data broadens our scope on what is understood as a legitimate source for knowledge production. Backtracking to RRBM’s call for producing useful and credible knowledge (Community for Responsible Research in Business and Management 2017), acknowledging the visual as both a source and means for knowledge production has positive implications in terms of how we define usefulness and credibility within the context of knowledge production. Building on this line of thought, disregarding the role visual plays in knowledge production is a dangerous perspective as it would emphasize the researcher’s role in determining what kind of knowledge counts as useful and credible (Tuhiwai Smith 2012). When it comes to stakeholder impact, Community for Responsible Research in Business and Management (2017, 4) states that “…the publication itself is not the outcome or the end goal, but a step in the journey to scholarly and/or societal impact.” As the visual has the potential to help individuals approach something taken for granted from a novel perspective (Parker 2009), adopting a longitudinal perspective to the visual further increases the potential impact. By analyzing a drawing the respondent has previously drawn enables her to be present in two temporalities. While such transcendence is also possible with interviews (e.g. providing the informant with a transcript of their previous interview), acts of looking at images are by nature more evocative than reading what was said before (Berger 1972). As this section has illustrated, there is a growing interest toward the visual in organization and management studies (Davison et al. 2012, 2015) that some also refer to as the “visual turn” (Boxenbaum et al. 2018). Appreciating the visual as a source of data is indeed something that benefits our theorizing and deepens our analytical endeavors.

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Generating visual data in the research process is especially powerful in producing useful and credible knowledge (Community for Responsible Research in Business and Management 2017) by broadening our understanding on what counts as legitimate acts of knowledge production. What is more, as extant research has shown (Crilly et al. 2006; Davison et al. 2015; Slutskaya et al. 2012; Steyaert et al. 2012), visual research can be helpful when it comes to articulating tacit or otherwise complex phenomena.

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Methodology: A Longitudinal Visual Inquiry into Game Industry Ecosystems in Helsinki, Finland

Research for this longitudinal study was collected in two phases. First phase was part of a larger research project investigating music and game industries in Finland, Japan, and the US during which I collected local ecosystem visualizations from respondents living and working in Helsinki, Finland and Tokyo, Japan. This data collection phase took place between 2013 and 2014, and the second phase that took place between 2018 and 2019 was independent from the initial research project, although the research design has remained identical. In order to generate deeper insights, this longitudinal study focuses only on respondents located in Helsinki for two reasons: first, although the Finnish game industry emerged during the late 1980s and early 1990s (Saarikoski and Suominen 2009), the industry experienced tremendous growth since 2008 when digital distribution of video games radically changed the revenue distribution in favor of game development companies, and second, to the best of my knowledge, there are no longitudinal studies on the Finnish game industry exploring industry-level changes from practitioners’ point of view. During the first data collection period many respondents highlighted the notion that the video game industry is changing relatively rapidly mainly due to technological advances, and this creates challenges for practitioners to keep up with changes not only related to technology and

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business models but also—and perhaps more importantly in the context of this study—on the industry level. For practitioners, this creates yet another layer of challenges: prior to digital distribution, most game development companies relied on publishers for support (financial, marketing, and customer relationships, for instance), and while digital distribution increased game development companies’ revenue share (often from 30–70 split to 70–30) it also implied more responsibilities in terms of customer service, market research, and establishing connections with major distributors (e.g. Nintendo, Apple, and Google). To add a further layer of complexity, game development companies and their top management are now also expected to stay up-to-date with how their industry is developing. This implies that game development companies are currently required to develop or acquire new skills and competencies supporting game development processes, their core business. Industry-level changes, however, are also impacting actors directly or indirectly connected to the video game industry: for example, law firms, recruitment companies, marketing agencies, educational institutions, and public organizations. This is especially true in the Finnish context: while some of the currently active companies were already established in the early 1990s, the industry really gained momentum after 2008 (Neogames 2017), and so Finland’s game industry does not possess similar institutional legacy and foundations to the US, Japan, Canada, or the UK. From a practitioners’ perspective, then, academics taking a bird’s eye perspective to explore industry dynamics has the potential to generate insights and tools that contribute to managerial practices in game development companies and organizations linked to the video game industry. As mentioned above, data for this study was collected through drawings by asking the informants to visualize their local ecosystem. During the first data collection phase, the informants were invited to draw their ecosystem after an interview that focused on their company’s activities, game development processes, and industry dynamics. More specifically, the question that was posed to the informants regarding the visualization was: Could you draw the game industry ecosystem in Tokyo/Helsinki from your perspective?

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Each respondent was given a pen and sheets of blank white papers, and additional clarification was provided only if the respondent requested. Briefing for the visualization was intentionally left relatively open-ended to provide the respondents with a space to visualize what they deemed as worth visualizing. Moreover, prior to the drawing task I emphasized there are no right or wrong drawings as the focus was on exploring how the respondents make sense of the ecosystem in which their company was embedded. During the second data collection phase the same respondents were contacted again and instead of starting with an interview, I briefly reminded the informants about the first study after which I presented them with the same brief for the visualization. Again, I provided them with a pen and sheets of paper, and only provided additional clarification if the respondent requested that. When the respondent felt the drawing was complete, I showed them the drawing they had created for the first data collection phase, after which we discussed differences and similarities in the drawings as well as reasons behind them. Table 1 briefly describes the informants for this study as well as when data collection with them was conducted. Of the respondents listed above; A, C, and E have remained in the same position, whereas respondent B shifted from being a freelancer to investor, and respondent D sold the company they established prior to the first data collection period to another game development company Table 1 List of respondents with selected background information Respondent

Organization

Position

First round

Respondent A Respondent B Respondent C

Higher education Venture capital firm Game development company Game development company Law firm

Lecturer

December 2013 January 2013

Respondent D Respondent E

Investor

Second round January 2019 March 2018

CFO

December 2013

August 2018

Founder, CEO

February 2013

August 2018

Attorney

January 2014

January 2019

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and before the second data collection phase they had co-founded another game development studio. Thus, each respondent had been working in the game industry or with game companies before and during both data collection phases. Prior to both data collection periods, each respondent was briefed with the purpose of this study and how their data would be utilized and treated, as well as the procedure to withdraw from the study. The respondents were also informed their data would be treated anonymously, and to this end some of the drawings referring to the respondent’s organization were blurred. Finally, data analysis in this study focused on both visual (drawings) and verbal (interview) material to understand what we are seeing in the ecosystem visualizations and how the informants talk about the visualizations and their relation to one another. As the focus here is on responsible research, data has been analyzed from the perspective of RRBM’s seven principles: namely, how can visual research methods support the production of credible and useful knowledge.

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Analyzing Drawings: From Research Subjects to Co-creators of Knowledge

What can we say about the drawings and how the informants approach them by analyzing them from the perspective of RRBM’s principles? Of the seven principles introduced in the position paper (Community for Responsible Research in Business and Management 2017), findings from this study resonate especially with principles two, three, five, and seven. Before further elaborating on how these principles connect to this study, the visual dataset is first introduced (Figs. 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10). While differences in the drawings above are evident when looking at them as sequential pairs, that is not our focus here, but instead how these acts of drawing manifest and make tangible some of the principles discussed above. How might visual research methods and informants talking about their drawings help us to reclaim business schools as sites for producing knowledge that benefits both scholars and practitioners? Thus,

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Fig. 1 Respondent A first drawing (December 2013)

Fig. 2 Respondent A second drawing (January 2019)

in the following paragraphs the dataset collected for this study will be analyzed from the perspective of usefulness and credibility. First, the second principle deals with stakeholder involvement, and as extant research (Bryans and Mavin 2006; Symon and Cassell 2004) has pointed out, visual methods focusing on generating data in situ have the potential to shift our attention away from observing to interacting.

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Fig. 3 Respondent B first drawing (January 2013)

Fig. 4 Respondent B second drawing (March 2018)

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Fig. 5 Respondent C first drawing (December 2013)

Fig. 6 Respondent C second drawing (August 2018)

That is to say, while researchers conduct their data collection in the field (Michailova et al. 2014), informant involvement through visual methods has the potential to evoke new thoughts and spur creativity even after

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Fig. 7 Respondent D first drawing (February 2013)

Fig. 8 Respondent D second drawing (August 2018)

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Fig. 9 Respondent E first drawing (January 2014)

the researcher has left the field. For example, in this study on ecosystem visualizations, some of the informants wanted digital copies of their drawings, which suggests these visual artefacts hold value even outside the data collection context. Thus, visual research which focuses on data produced during the data collection period has two long-lasting implications: first, such moments of stepping back from the familiar (Barry and Meisiek 2010) can help our informants generate new thoughts and perspectives, and second, visual artefacts—in comparison to interview transcripts—can be meaningful not only for the informants but also to their colleagues and peers. Second, as discussed earlier in this chapter and in connection to the second principle, visual research can positively impact the informants (third principle) and people around them by changing their role from research subjects to active co-creators of knowledge. In design literature, co-design and co-creation have attracted significant interest both as research approach and phenomena (Sanders and Stappers 2008, 2014), but in management studies we are still flirting with the notion of informants as active producers of knowledge. Granted, interviews can be

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Fig. 10 Respondent E second drawing (January 2019)

regarded more as conversations rather than interrogations with predefined questions (Moisander and Valtonen 2006), but how many conversations can we recall or how many tangible artefacts do we have of discussions to remind us of what was covered? My purpose here is not to downplay interviews as a rich source of data and insights; my point here is to illustrate that visual research methods can be highly impactful, not only for research purposes, but also to benefit practitioners, thus increasing the usefulness of knowledge produced during academic research. Third, as the ecosystem visualizations introduced in this chapter illustrate, how individuals within a temporally confined space perceive and experience ecosystems involves more complexity than what could be

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expressed solely through verbal means (Buchanan 1992; Community for Responsible Research in Business and Management 2017; Rittel and Webber 1973). More specifically, linguistic sense-making is often of linear nature with going back to what was said being somewhat difficult as words disappear once they are phrased, whereas acts of visualization— while also being temporally linear—enable the informant to revisit what has been previously conjured on the paper. Symbols can be complemented with additional elements, relationships and their nature strengthened between actors, and movement within the ecosystem visualized are all examples of how visual research methods promote multidisciplinarity, thus positively contributing to credibility in terms of knowledge production (RRBM’s fifth principle). Building on this, as the data collection process yields tangible artefacts (i.e. drawings), these—with several ethical considerations—can be shared with our peers to improve transparency and collective efforts toward more meaningful theorizing. Such transparency also highlights and makes visible the researcher’s role in the process: “this is what I am seeing in the drawings, how would you analyze them?”. Lastly, according to the RRBM position paper (Community for Responsible Research in Business and Management 2017), the seventh principle that focuses on dissemination contributes to the usefulness aspect of knowledge production, and here visual research can be useful in terms of circulating visual artefacts and the methods utilized to generate them. While the seventh principle seems to be more focused on institutional factors (e.g. open access publishing models), disseminating insights from research to nonacademic stakeholders is also highlighted, and this is where the outputs from visual research can illustrate the potential they have in generating actionable insights. Having said that, and in line with ethical guidelines on conducting research, informants’ consent for disseminating the artefacts should be acquired and data anonymized (e.g. blurring or removing the informant’s or their organization’s name). Moreover, whereas interviews are anonymized in terms of their style by generating transcriptions with word processing software, drawings can especially reveal the informant’s identity through style, which is why extra attention should be devoted to issues of anonymity.

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Concluding Remarks: From Moments of Reflection to Reflective Practitioners

To conclude, this chapter has explored visual research methods— drawings created by the informants, more specifically—and how they link to what the RRBM position paper describes as the useful and credible production of knowledge (Community for Responsible Research in Business and Management 2017). As mentioned in the beginning, data collection and the production of scholarly knowledge are activities that most certainly benefit us scholars, but what about our informants? How could we enable them to see more and differently (Barry and Meisiek 2010) by utilizing novel research methods? While my aim here has not been to advocate the visual’s primacy over the verbal, as the findings above illustrate, change in modality has the potential to articulate tacit or difficult to verbalize issues (Bryans and Mavin 2006; Comi et al. 2014). More specifically, going back to the notions of usefulness and credibility in knowledge production, generating visual data in situ not only helps our informants step back and approach the mundane from a novel perspective but it also has the potential to invite others to look at the artefacts and imbue them with new meanings. Thus, visual research can help us see our informants not as research subjects but as active co-creators of knowledge, and as such academic knowledge production can become relevant for practitioners. While the findings from this exploratory study do highlight the positive aspects of visual research, it also has to be admitted that as organization and management scholars we have only begun to explore the visual aspect of research and theorizing. Indeed, in terms of future research avenues in the intersection between responsible research and visual methods, how visual research methods influence informants in the long run warrants more research. As mentioned above, inviting informants to compare two of their drawings with several years between them yields insightful and novel findings, but from the informant’s point of view it is somewhat difficult to immediately analyze how these acts of drawing influence them. Similarly challenging would be to ask someone to articulate the long-term impact of their learning immediately after a course has ended, which is why additional studies could involve follow-up interviews with informants focusing on

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their drawings and how the passing of time enables them to see something else in the drawings (Schön 1983). In addition, this study has focused on how informants reflect on differences and similarities in their ecosystem visualizations; that is, the drawings have been analyzed as final artefacts, whereas the drawing process is equally of importance. What is being drawn and in what order are both crucial perspectives to sense-making. It would therefore be beneficial to video the drawing process and then to analyze the video together with the respondent. Such granular studies on visual data could yield significant insights on the informants’ cognitive and sense-making processes. To the best of my knowledge, such studies are relatively scarce in management studies, but such inquiries would not only benefit scholarly pursuits but also practitioners by helping them become more aware of their thought processes.

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Getting Closer to Real World Business

Sustainable Value Management: Pluralistic, Multi-Criteria, and Long-Term Decision-Making Adel Guitouni

1

Introduction

Now more than ever, research in business and management requires a pragmatic and responsible understanding of the reality of doing business as organizational actions simultaneously affect the economy, society, and environment. Indeed, many of the issues before us—such as climate change, inequalities, automation (e.g., Industry 4.0), job obsolescence due to machine learning, and habitat destruction—are wicked managerial problems (Churchman 1967). The interwoven relationships between economic, social, and environmental dimensions make most business problems multidimensional in nature (Clinebell and Clinebell 2008; Dutta 2018; Hoover et al. 2010; Verzat et al. 2009). Consequently, business schools and management education are under increased scrutiny. A. Guitouni (B) Gustavson School of Business, University of Victoria, Victoria, BC, Canada e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_8

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For many years, business schools enjoyed rising popularity, attracted talent, gained respectability, and grew in prestige. However, recently many authors doubt the relevance of the contribution of business education and scholarship to the society (Antonescu 2018; Bennis and O’Toole 2005; Harte 1995; Mintzberg 2004; Parker 2018). Parker (2018) called for bulldozing all business schools in a recent provocative article in The Guardian under the title: “There are 13,000 business schools on Earth. That’s 13,000 too many”. According to Bennis and O’Toole (2005), business schools have lost their way; business education is criticized for failing to prepare business leaders for the “real world”, ignoring pressing social and environmental challenges and teaching irrelevant theories (Mintzberg 2004). Technical advances such as artificial intelligence, distributed ledgers, and automation (e.g., Industry 4.0) are dramatically changing the reality of management (Antonescu 2018). Furthermore, the unprecedented societal pressure on business to integrate sustainability, social responsibility, and ethics into business practice and behaviour has led to the adoption of the “triple bottom line” (Henriques and Richardson 2004), sustainable development goals (SDGs), and environmental, social and governance (ESG) criteria, to name only a few (Harte 1995). From an environmental perspective, business responsibility is about the obligation of corporations to reconcile current generations’ consumption of non-rentable resources and emissions with future generations’ rights to a healthy and thriving natural order. The Rio Declaration provided twenty-seven principles as a framework for sustainable development (Declaration 1992; WCED 1987). From a social perspective, business responsibility is about the obligation of corporations to balance shareholder value (shareholder’s wealth maximization) with the benefits of the whole society (common good or stakeholder’s wellbeing). Corporate Social Responsibility (CSR), the Global Reporting Initiative (GRI), International Integrated Reporting (IIR), Corporate Social Investment (CSI), Corporate Citizenship (CC), the Sustainability Accounting Standards Board (SASB), and Sustainable Growth (SG) are examples of reporting frameworks introduced to encourage corporations to integrate non-financial business performance standards into corporate governance

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(Blackburn 2012). However, the internalization of sustainability in corporate decision-making processes should guide individuals and organizations to include all stakeholders, consider all relevant decision criteria, and assess all potential consequences over the long term. Decision criteria to create sustainable business may include responsible management of renewable and non-renewable natural capital (the environment), human capital (people), social capital (social relationships and structures), manufactured capital (fixed assets), and financial capital (profit and loss) (Blackburn 2012; Unerman et al. 2010). In this chapter, I contribute that RRBM should explicitly develop an understanding of responsible decision-making in organizations. I, therefore, focus on the conceptualizing of the responsible decision-making in business management founded on three theoretical and pragmatic research fields: value chain management, multiple criteria decision analysis, and stakeholder’s theory. I make three important propositions: (i) pluralistic stakeholders share in value creation, accumulation, and distribution; (ii) sustainability implies that value is multidimensional; and (iii) sustainable value accumulates and decays over time and territories. These propositions are in line with the main principles suggested by RRBM, but more particularly with the following three principles: service to society, stakeholder involvement, and impact on stakeholders. I believe that these propositions should support the development of a responsible research agenda in business and management. I begin, in the following section, by synthesizing the main prevailing school of thoughts on sustainability and social responsibility in the business literature. This discussion is appropriate to our understanding of the different rationalizations of responsible business management form different epistemological and pragmatic perspectives. In the third section, I argue for founding responsible business management into sustainable creation, transformation and distribution of business value. I use a firm and value chain view to develop a responsible value management framework consistent with stakeholders theory, Multiple Criteria Decision Analysis (MCDA) and recent literature of such behavioural economics. Moreover, this view reconciles the different school of thoughts on sustainability. In section four, I discuss responsible management decision-making. I develop a set of propositions and implications for RRBM.

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Review of the Prevailing Narratives on Sustainability and Social Responsibility

The review of the business literature on sustainability and social responsibility reveals rich but fragmented streams of publications (e.g., Glaviˇc and Lukman 2007; Salzmann et al. 2005; Searcy 2012), which can be summarized based on their epistemic perspectives underlying different narratives, mainly: (i) the internalization of externalities (economic thinking); (ii) the monetization of sustainability and CSR (financial thinking); (iii) morality, ethics, and values (moral and emotional thinking); (iv) regulation and corporate governance (normative and regulatory thinking); and (v) the looming catastrophic threats to the existence of human kind and the natural order (catastrophic thinking). Sustainability is the economy! For many, it suffices to internalize externalities through “appropriate price signals, incentives, and substitution effects” (Chindarkar and Thampapillai 2018) to incorporate sustainability and social responsibility in corporate decision-making and governance. In this traditional thinking, corporate economic performance (e.g., profit (Friedman 1970)) often “lexicographically” outweighs other performance indicators like sustainability and social responsibility. The economic wisdom is, therefore, about fully internalizing all externalities to explain equilibria in various markets. Sustainability (environmental and societal impacts) is consequently an externality that should be integrated through pricing, incentives or substitution decisions in microeconomic equilibria, which serve as the basis for macroeconomic analysis. The appropriate decision-making behaviour is therefore about finding an “optimal” value for the internalization of externalities in a particular market to justify the mobilization of resources and additional cost to the corporation: the equilibrium. Several studies argued that the failure of a business to integrate social and environmental risks and opportunities significantly retards its economic performance and weakens its competitive advantage (Blackburn 2012). At the macro level, countries like Norway, with its sovereign wealth fund, are praised for their decision to put aside a portion of the royalties from natural resources for future generations. The argument is to consider long-term instead of

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short-term economic advantages and all stakeholders including future generations (Foxon et al. 2012; Gowdy 2007). New economic models such as behavioural economics (Sacconi et al. 2011) promote the analysis of the economy and society in their “full complexity, recognizing that ‘marginal’ analysis cannot be just irrelevant but positively harmful when the need is for systemic shifts in economic and social trajectories” (Foxon et al. 2012). Sustainability is good for business! As corporate reputation is an intangible asset, corporations are paying attention to sustainability and social responsibility to increase their competitive advantage, thus their financial bottom line (e.g., Cantele and Zardini 2018; Idowu et al. 2013; Lubin and Esty 2010; Miles and Covin 2000). The main argument is that a firm will gain competitive advantage and market differentiation by engaging in CSR actions, which generally improve the financial performance of the firm (Kim et al. 2018). Indeed, several empirical studies claim a non-null positive relationship between CSR and corporate financial performance (e.g., Aguinis and Glavas 2012; Kim et al. 2018; Margolis and Walsh 2003; Orlitzky et al. 2003). However, other studies doubt the existence of such positive relationships (e.g., Gamerschlag et al. 2011; Htay et al. 2012; Hull and Rothenberg 2008; Margolis and Walsh 2003; Mulyadi and Anwar 2012). Increased profitability is used as the main argument to convince managers and decision makers to incorporate CSR factors into business and managerial decision-making. A CSR cost/benefit-like decision analysis is generally used to guide corporate business choices (McWilliams and Siegel 2001; McWilliams et al. 2006), with the important postulation that the expected additional revenues should, at least, offset additional cost for sustainability. The problem with this way of thinking is that sustainability and social responsibility do not create structural and behavioural decision-making changes in the organization for long-term impact. The integration of sustainability in business practice is therefore short-lived. Sustainability is moral! Many authors used utilitarianism and deontology within moral philosophy to argue that the sustainability and social responsibility of a corporation is a moral and ethical obligation (Becker 2012; Christensen et al. 2007; Goodin 1999; Nicholson and

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Kurucz 2017; Rodriguez-Rad and Ramos-Hidalgo 2018). Being sustainable and socially responsible are, consequently, moral obligations rooted in humanity’s universal system of ethical values (Burkhardt 1989; Hirschland 2006; Idowu et al. 2015). Many businesses and mainstream business schools adopted ethics as a foundation for ethical business decision-making (Idowu et al. 2015; Joyner and Payne 2002), especially following the 2007–2008 financial meltdown. Raiborn and Payne (1990, 879) suggest that “ethics is a system of value principles or practices and a definition of right and wrong. Ethics differ from the law, in that laws are designed to reflect a society’s attitudes and desires about the culture in which it wishes to exist”. According to Joyner and Payne (2002), a firm’s responsibilities are economic, legal, ethical, and discretionary. Consequently, any firm is under the obligation to not only observe the laws of the land, but more importantly, to behave by society’s ethical and moral expectations (Joyner and Payne 2002). Corporations should behave as good citizens and respond to their community’s aspirations. Community engagement invites morality and ethics because the firm is a social microcosm composed of moral and ethical community members (e.g., employees, board members, managers, and shareholders). Under a moral obligation, managers and decision makers are always expected to seek the “greater good” (Altman 2007) or the “common good” (Daly and Cobb 1994). For example, our moral relationship with the environment (or a forest, a tree, or another being) is used to induce the change of attitude towards nature. This logic is fundamental to understanding the argument that sustainability must be ethically construed and applied, and that nature and society are unified. Sustainability is the norm! The convergence of sustainability and corporate governance contributes to the development of regulatory national and supra-national institutions to govern corporate actions (Rahim 2013). The common belief of the nineteenth and twentieth centuries, that capitalist freedom “could positively establish a complete harmony between private interests and the common good” (Schlag and Mercado 2012), is more often than not considered to be erroneous. Schlag and Mercado (2012, 9) suggests that “the free coordination of individual interests by market forces, without any ordering and correcting activity by the state… does not necessarily and automatically lead

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to the common good”. Normative and regulatory narratives are generally founded in legitimacy, stakeholder theory, and corporate governance (Rahim 2013). The European Union, for example, created different initiatives for advancing sustainable corporate sustainability national public policies (European Commission. Directorate-General for Employment & Equal Opportunities. Unit 2007). Several other jurisdictions are adopting regulations for the implementation, monitoring, reporting, and disclosure of business sustainability and social responsibility actions. In many cases, corporations pay additional taxes for emissions (e.g., carbon taxes) or social levies for community services. Governments and international bodies are being lobbied to foster the sustainability agenda by creating policies and regulations to encourage responsible business behaviour and to penalize “rogue corporations” (Albareda et al. 2007; Beare et al. 2014). Following recent corporate scandals and crises, the public pressure is mounting for increased business accountability and scrutiny, thus leading to legislative reforms to enforce disclosures (Kolk 2003). The threat of additional regulations and scrutiny is used to convince corporations to voluntarily adopt CSR standards. However, others (e.g., Lozano et al. 2008) argue that advancing the sustainability agenda around the world is about developing the “right” public policies instead of threatening regulations. According to Lozano et al. (2008), “the right question is not about CSR regulation, but what policy governments should adopt towards CSR”. The decision-making therefore becomes a question of doing things right, or, as argued by Friedman, to maximize the profit for the corporation and its shareholders within the rules of the game (Friedman 1970). Sustainability is survival! The global warming increased the level of anxiety and worry about humanity’s future. As suggested by Blackburn (2012, 20), “unfortunately, it is difficult to tell when sustainability is achieved… It is much easier to tell when organizations and societies fail the sustainability challenge when they cease to exist because of shortcomings in managing economic or natural resources or because of their lack of respect for people or other living things”; e.g., the Mayan, Anasazi, and Easter Island societies that suffered such fate (Diamond 2005). The 2008 financial crisis, for example, boosted the general awareness of the global economic dependencies and the impact of financial corruption on

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global social welfare (Idowu et al. 2017; Theofilou et al. 2017). Environmental and social crises are not separable (Dominelli 2012; Visser 2011). Confronted with pollution, erosion, deforestation, species extinction, destruction of natural habitats, and the increasing rate and strength of natural disasters, many populations around the world are questioning the prevailing beliefs that nature was to be unrestrictedly exploited to serve economic growth (Sarpong 2017). Recent scandals (e.g., Volkswagen emission cheating, Kik’s labour conditions in Bangladesh, subprime mortgage) led to the erosion of trust in national and multi-national corporations to protect humankind from a doomed future (Theofilou et al. 2017). Several studies claim that these very scandals provoked broader societal changes that are going beyond the traditional conception of corporate responsibility (Crisan and Adi 2017). The common belief in the twenty-first century is shifting, and no longer is the public willing to accept that managers are working selflessly for the benefit of the corporation and society (Boddy 2011). Management scholars studied “dark” (McCleskey 2013; Takala 2010; Wilmarth 2008), “dysfunctional” (Boddy 2011; Dandira 2012) and “bad” and “corrupt” (Boddy 2011; Ebegbulem 2012; Kellerman 2004) leadership. Prominent voices claim that recent crises, scandals and “dark” leaders have the potential of bringing down the free market ideals, and consequently causing societies to cease to exist—similar to the Mayan, Anasazi and other ruined civilisations of the past. Boddy (2011) claims that the longevity of western capitalism and corporations depends on removing “psychopaths” from the decision-making processes. Decision makers and managers should therefore seek an integrated approach to restoring social welfare while protecting nature to guarantee the common survival of organizations and societies. Janssen et al. (2015) claim that CSR acts as a cushion, insulating the firm from the consequences of such doomed future.

3

Sustainable Value Creation

The review of the different school of thoughts on sustainability in business scholarship is relevant to our discussion because these schools of thought have profound implications on the conceptualization of

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decision-making and governance in corporations and organizations. The previous section shows the different perspectives neglect to discuss the purpose of business: create value. I believe that examining business value creation complements and reconciles these different schools of thought with the reality of business. The most essential question asks who should benefit from the firm. In other words, whom should the firm serve? There are several theories of the firm, such as the neoclassical, behavioural, transactional, resource-based, and asset specificity theories (Slater 1997). For some, the corporation exists to serve their shareholders, and accordingly, managers and decision makers should seek shareholders wealth maximization (Allen 2017). Others see the corporation as a social institution as it benefits from the licence to operate, legal recognition and social protection (Allen 2017). Societies provide for the corporation with business-friendly eco-systems to operate and access common capital and endowed resources (e.g., natural resources, infrastructure, safety, security, the rule of law, education, training, recreation, health, and finances). These distinct conceptions of the corporation’s allegiances have profound implications on the way one conceives responsible business management. A corporation is either an agent of welfare maximization—protecting the interests of all its stakeholders- or wealth maximization—protecting the interests of its executives and the shareholders. The difference is profoundly felt in corporate governance, accountability, responsibility, and sustainability. The research and scholarly contributions are not lagging behind. Indeed, researchers are influenced by the distinct conceptualization of the corporation, and thus either support wealth maximization for shareholders or welfare maximization for stakeholders. RRBM explicitly recognizes that scholarly contributions should benefit business and the broader society, locally, and globally, for the ultimate purpose of creating a better world. Thus, responsible scholar should unequivocally seek a stakeholder inclusivity and societal welfare. Whether managers maximize wealth or welfare, business value creation is inherently social in that it requires the cooperation of multiple actors who share in, or influence, its creation and distribution. The concept of value has various nuanced meanings as discussed in several fields such as philosophy, economy, psychology, sociology, and business (Gradin 2016;

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Ng and Smith 2012). Value as a “utility” has been a cornerstone of economic thinking as in marginal utility theory (Fry 1957; Kauder 2015), but there are other competing theories (Gradin 2016; Luo and Xu 2018; Ng and Smith 2012). Business value is “created” mainly through a series of economic activities performed by different economic agents. A firm transforms intermediary goods and services into final products and services consumed by customers, which I call the value creation (transformation) process. The value creation process requires capital, knowledge, labour, and technology (see Fig. 1). In the process of value creation, corporations usually use their know-how and technology and engage in economic upgrading through learning, improving, and modernizing its capabilities (knowledge, process, and technology). The view of the firm in isolation cannot provide a full understanding of value transformation, creation, and distribution. The organization of the value creation process, however, has been shifting in profound ways as a result of trade and investment liberalization, financial deregulation, and technological change (e.g., artificial intelligence and Industry 4.0). By definition, a value chain involves distributed entities (firms) in a distributed network of production as illustrated in Fig. 2. Many corporations are disaggregating operations to benefit from preferential tax treatment, superior or lower cost factors of production, and more

Fig. 1 Model of the firm (Source Author’s creation)

Fig. 2 Representation of (global) co-production value chain (Source Author’s creation)

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accommodating regulatory environments by outsourcing and offshoring, often in emerging economies. This process of “fine-slicing” the value chain has led to the growth of “quasi-internalization”, in which outsourcing through arm’s-length contractual agreements as well as other non-equity modes has given rise to the global value chain (GVC). A GVC is, therefore, a logical combination of largely independent firms, both large and small, often located in both developed and developing countries, that facilitate the international production of goods and services from raw material to end consumer (Gereffi 1994). Prior research has shown that GVCs can take on different forms that vary in the manner and extent of inter-firm coordination that includes a range of possibilities from arm’s-length transactional relationships to internalized hierarchies (Gereffi et al. 2005). Thus, the particular forms and practices within GVCs—that is, who will make what, where it will be made, and how much will be paid for it—very often emanate from the specific goals of the lead firms, usually large MNCs that manage access to critical technologies or large markets (Gibbon et al. 2008). In fact, the importance of GVCs within international trade appears to be growing as intermediate goods now dominate global trade flows, accounting for over 60 percent of world exports (UNCTAD 2013). The preceding observations are germane to our analysis because they highlight the importance of GVCs in driving the sustainability and social responsibility agenda, since many GVCs reach into emerging economies in which workers and the environment are vulnerable due to weak political and regulatory institutions (Nadvi 2004). The expansion of global production networks to developing countries has been associated with what is commonly recognized as “economic upgrading” through industrial, technical, and knowledge transfers. Indeed, in several instances the establishment of GVC activities in developing countries has led to significant economic benefits—mainly as they have provided new sources of income for poorer households by integrating them into GVCs (Barrientos et al. 2003; Raworth 2004). Little attention has been paid to the question of the spilling over of corporate social responsibility standards along GVCs. As industrial production and extractive activities became concentrated in developing countries, lead firms in GVCs are under growing pressure to demonstrate more integrated forms of CSR along their GVCs (Gereffi

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and Lee 2014; Pipkin and Fuentes 2017). GVCs may merely constitute a disparate network of variously associated firms that vary in approaches, ethics, standards of conduct, competence, and transparency (Clarke and Boersma 2015; Gereffi and Lee 2016; Lund-Thomsen and Nadvi 2010; Roth et al. 2008; Soundararajan and Brown 2016). Integrating developing country economic activity into GVCs has created additional environmental pressures (see, e.g., Gereffi and Lee 2014; Lund-Thomsen and Lindgreen 2014; Mayer and Gereffi 2010; Pipkin and Fuentes 2017; Puppim de Oliveira 2008). For example, unresolved human rights, environmental, and ethical dilemmas plagued the Apple Computer supply chain (Clarke and Boersma 2015) for several years as poor working conditions remain a severe problem in supplier facilities in developing countries (Soundararajan and Brown 2016). Food supply contaminations and disruptions resulting in problems like the pet food recall of 2007 highlight the inherent difficulties and risks within GVCs (Roth et al. 2008). It is becoming evident that integrating developing country economic activity into GVCs often leaves many behind (see, e.g., Locke 2013; Locke et al. 2009; Lund-Thomsen and Lindgreen 2014; Mayer and Gereffi 2010; Posthuma and Nathan 2010; Puppim de Oliveira 2008). This point was illustrated by Damodaran (2010), for example, who showed that many jobs created within GVCs are poorly paid and insecure, often with difficult working conditions. Female workers, in particular, appear to be involved in the most insecure (often employed only “as-needed”) and low-paid work (Mezzadri 2014). Apple, for example, reported in its 2018 supplier responsibility report that more than 17.3 million employees had been trained on their rights since 2007, that it achieved 100% zero waste at different production sites, and that several hundred facilities upgraded along its value chain (Apple 2019). It is interesting to explore how we got from the 2010 “Apple-Foxconn” scandal to these impressive results. Value creation activities are performed over time in locations: signifying the territoriality and temporality of value creation. The territory defines the geographic and social conditions, while time specifies the mindsets and dynamics. Economic activities spanning over international borders invite multi-national and international regulations and standards. Territoriality defines constructs such as culture, ethnicity,

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rules and regulations, social conditions, geography, environment, nature, labour conditions, responsibilities, and welfare. Temporality delineates relationships, transactions, accumulation, evolution, impact, measurement, uncertainties, and tolerance. The entangled spatiotemporal effects on value creation specify stakeholders and the business context, such as socio-technical, economic, and environmental eco-systems.

4

The Case for Pluralistic, Multiple Criteria and Long-Term Decision-Making

I conceptualize that business creates and distributes value along its value chain(s). Therefore, decision-making along the value chains requires some degree of theoretical support in its conceptualization—especially as it concerns the governance and specification of sustainable and socially responsible activities in dispersed, co-production groups of firms. The expectations upon which I base our characterization of decision-making for sustainable business value management are threefold. First, decisionmaking under highly complex conditions such as those that occur in large co-production entities involve stakeholders who shape corporate decisions and in turn are shaped by them. Therefore, RRBM should engage with stakeholders and explicitly examine the impact of all stakeholders. In our observation, the assertions of stakeholder theory, as they apply to the decision-making, have not been addressed. The stakeholder literature assumes a stakeholder-centric view (Mitchell et al. 2017) but that view, ironically, is as narrow as single-objective function views, in that it does not capture the full system within which decision-making in large complex system resides. Second, decision-making in organizations are “wicked” problems involving multiple conflicting quantitative and qualitative criteria. Value is multidimensional, and thus decisions should often be assessed using different performance dimensions (i.e., criteria, objectives, attributes) or “bottom lines” (e.g., triple bottom line: economic profit, environmental sustainability, and social benefits). Performance dimensions are generally incommensurable when there is no common basis to translate these dimensions without a residue of loss. In some circumstances, incommensurability implies incomparability (Kuhn

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1982) which requires the building of a catalog of knowledge to translate value from one value performance metric to another. The possibility of value incommensurability presents the challenge to managers that decisions must be made when comparison is virtually impossible (Krantz and Tversky 1971; Roberts 1984), i.e., when we do not have the dictionary that can enable managers to translate value measures from one system to another. Third, I address the reality that value accumulates and decays over time and territory (space), where a series of interdependent decisions are made to achieve overall goals. In general, temporally bound decisions are subject to uncertainty because of the unknown future (e.g., environmental change, which could occur in uncertain ways) and because earlier decisions have created various path dependencies. For instance, financial value is a not only determined by the corporate decisions but also by the international financial market (e.g., exchange rates) and by the past conduct of the value chain members in various regulatory jurisdictions, which has opened some decision pathways and closed others. The question of whose perspective defines which performance dimension (criteria) are ultimately pursued in business very often appears as a discussion of stakeholder pluralism (Freeman et al. 2004; Harrison and Wicks, 2015; Mitchell et al. 2016). As an interplay between stakeholder groups and the actors in the co-production groups is complex and dynamic, different stakeholders may use their pressure and controls to preclude the enactment of particular decisions (Cairns et al. 2016), or as stakeholder affects or is affected by participation in a co-production group (Freeman 1984). The stakeholder identification process enables co-production actors to collaborate across the temporal and geographic work-phases of the co-production process (Mitchell et al. 1997). Since stakeholders “supply the firm with critical resources (contributions) and in exchange each expects its interests to be satisfied (by inducements)” (Hill and Jones 1992, 133), and because “stakeholders having the needed resources… to control the interaction and resource flows in the network most likely have a strong influence on an organization’s survival” (Pajunen 2006, 1263), their decisions with respect to engaging in a co-production group specify how the business context will affect their

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engagement. Sustainable management requires, therefore, not only inclusive management and decision-making processes, but sometimes a reconciliatory approach in order to reconcile corporations with their natural and social eco-systems. Stakeholder inclusivity and reconciliation ought to be central in the business and management research agenda. Decisions must also be made where there is a conflict between decision dimensions (i.e., criteria) requiring a trade-off—for example, between costs and environmental stewardship (Guitouni and Martel 1998). In such situations, a decision ought to be made that considers multiple criteria and reconciles their conflicts, i.e., a Pareto-efficient decision that is as good as all alternatives when there exists at least one criterion for which that decision is better. Unfortunately, single-objective decision-making leads inherently to non-Pareto decisions, which means the solution is “dominated”, i.e., it is not on the Pareto frontier. In the normative tradition of decision theories, decision-making is about maximizing surplus outcomes (i.e., benefits: it is worthwhile) and minimizing shortfalls (i.e., costs: it is worth it). For a long time, the concept of rationality or bounded rationality (including social rationality) assumptions (e.g., Simon 1979) have dominated the outcome-driven perspective, and thus, a decision should be “rational” (Becker 1976; Coleman 1990; Dowding and Hindmoor 1997; Hindmoor 2011; Scharpf 1997; Verweij et al. 2015). Under rationality, a decision maker is assumed to be a “homo-economicus” agent pursuing the maximization of selfinterest. Other normative theories extended rational decision-making such as bounded rationality (March 1978; Rubinstein 1998; Simon 1979), cognitive bias (Kahneman and Tversky 1979, 1983; Tversky and Kahneman 1973, 1974, 1981, 1986), inconsistency (Allais 1953, 1995; Kahneman and Tversky 1979, 2000), satisfaction or aspiration (Byron 1998, 2004), and ordered preferences (Arrow 1951; Fishburn and LaValle 1998; Kahneman et al. 1982). MCDA then emerged in the management sciences to overcome the limitations of the normative decision theories (Guitouni and Martel 1998; Mardani et al. 2015; Reichelt and Peldschus 2005). MCDA addresses complex decision-making problems involving various conflicting and non-commensurable evaluations, both quantitative and qualitative. MCDA offers an appropriate theoretical framework for

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many practical businesses, as well as environmental, social, and technical applications (e.g., corporate sustainability assessment, health, artificial intelligence, project management, rating, voting, resource management, and safety and security). It is entirely consistent with value maximization behaviour where value is often multidimensional and subject to imperfections (uncertainties, conflicts, non-commensurability, information types, incompleteness, etc.). MCDA techniques evolved to integrate several information imperfection theories properly: stochastic modelling, belief functions, fuzzy sets, rough sets, and heterogeneous modelling. The aggregation process of these evaluations has to be performed carefully to reduce violation of information transformation and preferences aggregation principles. When used for collective decision-making, MCDA helps groups build a constructive conversation about decision opportunity in a way that allows multiple stakeholders’ perspectives to be considered. The MCDA process is an iterative and interactive social process that enables stakeholders to learn, engage, innovate, and finally decide. MCDA offers a promising theoretical perspective for responsible decision-making as it addresses explicitly the multidimensionality of value, the plurality of decision makers, and the subjectivity of the decision-making process (Alves de Albuquerque et al. 2013; Barata et al. 2014; Della Bruna et al. 2014; Lokesh et al. 2018; Stoycheva et al. 2018). I posit that responsible business and management research should consider more realistic assumptions about decision-making when multiple and conflicting decision dimensions are involved. Mitchell et al. (2016) discuss welfare economic implications of management theory by examining the decision-making viability of firms, which seek to implement a plural objective, function. The decision space when a two-dimensional decision problem is considered (e.g., profits and sustainability) may be represented graphically as illustrated in Fig. 3.1 The contour of the space represents the frontier of the feasible decision space; all decisions within the contour are potential solutions to the problem considered.2 Different quadrants may characterize different qualities of any feasible decision. For example, potential decisions such as E and I 1 For 2The

illustration purpose and not intended as theoretical representation. space shown in Fig. 3 represents the boundaries of potential feasible decisions.

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Fig. 3 Example of Pareto-optimality (Source Author’s creation)

have the same financial evaluation (e.g., same profit for E and I). Singleobjective decision-making does not provide a decision maker with alternative perspectives to discriminate between decisions such as E and I. When the sustainability dimension is added—distinct and not aligned with profit—this offers a new perspective to explore the good decisions quadrant; i.e., without the sustainability dimension, the choice between decisions E versus I would have been the result of randomness. Moreover, it is possible to reach the Pareto-efficient frontier (shown in red). In such situations, a decision ought to be made that considers multiple criteria and reconciles their conflicts, i.e., a Pareto-efficient decision that is as good as all alternatives when there exists at least one criterion for which that decision is better. Unfortunately, single-objective decisionmaking leads inherently to non-Pareto decisions. This difficulty arises partly because such decisions have multiple dimensions and constraints

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and, while other possible solutions might be better, they are not likely to be considered—or even envisioned (Mitchell et al. 2016)—which is rooted in rational choice assumptions (Arrow 1959; Olson 1965; Riker 1962). It is fundamental to recognize that trade-offs are only required when the Pareto-efficient frontier is reached; i.e., the limits of what is possible. Conversely, it is possible to improve decisions on all dimensions in most decision-making situations because the system boundaries are fuzzy and may be reconfigured by innovation, thinking outside the box, etc. Embracing sustainability in decision-making creates new perspectives for innovative thinking, design, planning, and execution that are guided by multidimensional value creation. For instance, financial (ϑ f ), social (ϑs ) and environmental (ϑe ) are evaluation dimensions to guide responsible decision-making when the triple bottom- line is considered. Let us assume that each potential decision may yield a positive (+) or negative (–) outcome along each of the dimensions. A multi-criteria decision analysis framework helps managers and decision makers to create different tools to assess the quality of their decisions (e.g., Fig. 4: “good”, “bad”, “altruistic”, or “selfish” depending on its position in the outcome space).3 I believe that the multi-criteria decision analysis creates conditions for a corporation to innovate by exploring innovative solutions that otherwise would be undiscovered.

3 Fig.

4 (A): an environmentally good decision creates value while reconciling financial (ϑ f ) and environmental (ϑe ) outcomes without surrendering one to the other. In opposition, an environmentally bad decision yields possible value by the destruction of both financial (ϑ f ) and environmental (ϑe ) outcomes. An altruistic environmental decision represents a philanthropic decision where the financial value is surrendered to create a better environment. Alternatively, a selfish environmental decision will sacrifice the environment to create private wealth. Figure 4 (B): a socially good decision creates value while reconciling financial (ϑ f ) and social (ϑs ) outcomes without surrendering one to the other. In opposition, an environmentally bad decision yields possible value by the destruction of both financial (ϑ f ) and social (ϑs ) outcomes. An altruistic social decision represents a philanthropic decision where the financial value is surrendered to create a better society. Alternatively, a selfish social decision will sacrifice the common social good to create private wealth. Figure 4 (C): These types of situations are rarely discussed. A socially and environmentally good decision creates value by reconciling social (ϑs ) and environmental (ϑe ) outcomes without surrendering one to the other. In opposition, a socially and environmentally bad decision destroys both social (ϑs ) and environmental (ϑe ) outcomes. An altruistic social decision represents a situation where a community sacrifices its wellbeing or welfare to create a better natural environment. Alternatively, a selfish social decision will sacrifice the environment in favour of social welfare or wellbeing.

Fig. 4 Characterization of decision outcomes (triple bottom line perspective) (Source Author’s creation)

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Finally, one should recognize that sustainable value both accumulates and decays over time and space (Helfat and Eisenhardt 2004; Rodriguez et al. 2014). The lagging effect of decision-making outcomes may be defined by the time required to measure the decision’s results, which may occur over a lengthy period. Glyn and Talya (2010) suggest that “reliance on outcomes as the measure of a good decision is rendered even weaker when temporal issues are also considered”. For example, when price is the main competitive advantage, it takes time to measure whether the profit of the company increased enough as a consequence of a price reduction or a sale promotion; i.e., it is problematic to isolate the real effects of such decisions regarding market share increases and new customer acquisition or retention. Dynamic decision-making is concerned with changing situations, the main characteristics of which are the transience, uncertainty, and accumulation of value over time. This body of research is fragmented into several theories, such as learning theory (Anzai 1984; Brehmer 1992), connectionism (Bechtel and Abrahamsen 1991; Fodor and Pylyshyn 1988), sequential decision-making (Edwards 1954; Flood 1952), and dynamic optimization (Bellman 1957; Edwards 1962). There has been increasing progress in developing temporal aggregation methods for decision-making (Bellman 1957; Frini et al. 2012; Haimes 2015).

5

Where Do We Go From Here?

Business education and research face many major challenges as the reality of doing business is changing dramatically under several pressures such as climate change, inequalities, automation (e.g., Industry 4.0), job obsolescence due to machine learning, and habitat destruction. Responsible business and management research should recognize explicitly the complex relationships between the economy, society, and the natural order. RRBM agenda starts with the internalization of sustainability and social responsibility in business theories and education and the recognition of different schools of thought when sustainability is considered. Economic thinking leads to pursuing a research agenda around the internalization of otherwise external effects, through appropriate price signals, incentives, and substitution. Monetization thinking is conducive

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to quick adoption of sustainability in business management and may incite some positive, but short lived, behavioural changes. Deontology thinking is consistent with moral philosophy and emotional intelligence literature. Some managers and scholars may recognize the moral obligations rooted in humanity’s universal system of ethical values, but not all. Normative thinking contributes to the development of regulatory national and supra-national frameworks that are supported, or not, by powerful public institutions. According to the normative school of thought, responsible business and management is about doing things right, rather than doing the right thing. Finally, catastrophic thinking plays on the fear factor to create change. The main issue is that people are usually short-sighted and react to urgent immediate threats, rather than to distant threats, even though they’re real. I argue that these different rationalizations about sustainability have profound implications on the conceptualization of RRBM, and I offered to extend these perspectives by introducing value chain management as a foundation for responsible business and management research. Business value creation is inherently social and multidimensional. I suggest that the value chain view of doing business the reconciliation of sustainability and social responsibility teachings with responsible capitalism. I posit that both human rights and nature rights travel along the value chains, thus offering incredible opportunities to expand responsible business management principles and best practices globally and locally. Value creation activities are carried out in different locations and over variable time spans when the true appreciation of the value may take a long time. I think that business and management theories ought to explicitly consider the entanglement of these spatiotemporal effects. I therefore suggest that responsible decision-making for sustainable business value management should be founded on inclusivity of stakeholders (sometimes reconciliation of otherwise excluded groups), multidimensional (e.g., triple bottom line) value creation, and long-term governance (in opposition to short-term). Responsible research agendas should clearly be at the service of the society, involve stakeholders and make an impact on as much stakeholders as possible. The question of whose perspective defines which goals and criteria are ultimately pursued in business and in the research agenda should be central to these research

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agendas. I argue that responsible management should be pluralistic, encouraging the inclusion of all stakeholders, and reconciliation with disenfranchised and sometimes harmed communities. Moreover, management theories should explicitly consider multiple criteria and reconcile their conflicts as single-objective decision-making leads to non-Pareto decisions. MCDA offers a theoretical framework to consider multiple decision objectives and value dimensions. Moreover, the empirical evidence shows that corporations that adopted MCDA usually developed innovative solutions that otherwise would be undiscovered by the singleobjective approach. I suggest that responsible research implies adopting a long-term framework to account for value accumulation and decay over time and across territories. The lagging effect of decision-making outcomes should be explicitly considered in management research.

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Responsible Research for Responsible Investment—JUST Capital Case Study Ernest C. H. Ng

1

Introduction

Responsible investment decisions in the finance sector demand robust research analyses with responsible data, methodology, and reporting. Even on the value-driven parameters, identifiable and measurable indicators are essential to communicate progress and prioritize resources. For scholarly research in the socially responsible finance area, it has been challenging to develop common ground and reveal real insight relating to public views on a wide spectrum of social issues and defining corporate responsibilities. This research looks into the case study of JUST Capital to illustrate its potential contribution to the field of research as defined

E. C. H. Ng (B) Centre of Buddhist Studies, The University of Hong Kong, Hong Kong, People’s Republic of China e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_9

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by the seven principles of Responsible Research in Business and Management (RRBM). First, the study presents an overview of the developments of social responsibility for corporates in general and then specifically in the financial industry. Second, it analyzes the organizational and governance structure of JUST Capital and further looks into its ranking methodology. Third, the study reviews JUST Capital’s research and operational processes with reference to each of the seven RRBM principles. It evaluates the technical and value-driven factors behind JUST Capital’s process and further reflects on how responsible research could be conducted in the academic and professional setting. It aims to demonstrate the enormous potential of applying RRBM to the finance industry and society as a whole (JUST Capital 2019a).

2

The Importance of Being Responsible

While the market economy1 has been very efficient in promoting economic growth, it has also been criticized for applying a narrow financial and materialistic focus on profit as the primary measurement, reasoning, and motivation (Zsolnai 2011). In the 2018 survey by JUST Capital (2019b), 38% (47% in 2017) of American thought that the behaviors of companies were heading in the wrong direction while 30% (27% in 2017) believe in the opposite. 63% of Americans thought that CEOs of large companies have a responsibility to take a stand on important social issues such as gender pay, discrimination, immigration, climate change, gun control but only 56% of Americans considered that these responsibilities should be applied only if the issues are related to their business.

1 Market

economy in this research refers to economic systems which rely heavily on the market operations in transactions, price-discovery, and resource allocation. As discussed by Ng (2015) and Chang (2014), it is indeed challenging to categorize an operating economic system simply with one definite school of thought. Yet market economy should share the core characteristics and assumptions of Classical and Neoclassical schools based on rationality and self-interest, and furthermore with the Neoclassical school’s reliant on the dominant role of the market exchange and consumption. Market economy may not be entirely “free” from government and other forces of intervention, but in terms of its reliance on government, it is on the “right side” of the spectrum in the opposite directions with Keynesian, Developmentalist or even the Marxist on the “left”.

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Consensus in the past might consider it reasonable and acceptable for corporates to purely focus on profit without regard for any social responsibility. As a strong advocate of the Free Market economy, Friedman (2002, 133) notably proclaimed a very narrow sense of responsibility for business: In such [a free economy], there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.

For both for-profit and nonprofit organizations, there appears to be a firewall between “doing good” for social interests and “doing well” for business interests. These organizations may have conflicting responsibilities on financial efficiency, shareholder returns, and social and environmental values. According to Zsolnai (2011, 188), the principle of profit adopted by for-profit organizations is problematic because using profit as the “sole measure of rightness” and “the main motivation of economic activities” crowds out other important intrinsic motivations. He proposes to replace this narrow notion of responsibility in profit-making by introducing the Responsible Decision Making Model (2009, 32). He argues that human choices should be assessed in three aspects: (1) effectiveness, (2) efficiency, and (3) ethics. According to Zsolnai (2009, 96), a responsible decision model should involve three “R”s, being: (1) rationality, (2) reverence, and (3) respect. In the twenty-first century, leaders are required to identify and respond to their expected roles and responsibilities in relation to society and environment. They should be aware of their performance and risk, not only in financial terms but also in double (financial and social impact) or triple (social, environmental, and financial) bottom line (Tideman 2004, 237). They need to act methodologically to ensure support from their stakeholders, not only by refraining from causing more social and environmental problems but also by contributing to the solutions as responsible corporate citizens (Ng 2015, 266–269). Emerson (2002, 6) admitted that it could be an arduous balance either for both nonprofit organizations to fulfill their social missions while achieving financial sustainability, or for-profit organizations to bridge the “investment gap” between

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investing their financial capital for economic returns and social capital for fulfilling their social responsibilities. To maximize both financial and social value in totality, asset managers or trustees serving as the stewards for the clients should expand their traditional understanding of fiduciary responsibilities by leveraging “the greatest possible combination of both financial and social value, the returns of all investments—philanthropic, market-rate and below market-rate are extended” (Emerson 2002, 14). As one of the largest asset managers in the world, BlackRock has recently declared its responsibility to encourage practices which will drive sustainable, long-term growth, and profitability (BlackRock 2019). Its Chairman and CEO, Larry Fink, argues that the purpose of a corporate should not solely “be the pursuit of profits but the animating force for achieving them…profits and purpose are inextricably linked.” He is leading the change in recognizing that “companies are, in fact, social organizing forces, and do affect the lives of millions of people and millions of families and millions of communities” (Fortune 2018). Part of these changes in the expected roles and responsibilities of corporates is driven by the economic development. As the initial growth stage of economic development has passed, associated negative impact of development to society, environment, and future generation such as income inequality, pollution, deteriorating living standards, and working conditions, have also begun to outweigh the benefits of economic success (Dalio 2019). Another driver is that the millennials are increasingly dominant, representing 35% of the workforce and would have “new expectations of the companies they work for, buy from, and invest in” (BlackRock 2019). A survey by Deloitte (2016, 4) revealed that the millennials pose a “loyalty challenge” when they prioritize the sense of purpose over growth or profit maximization. While they believe in the impact of business and 58% of them agree that businesses should “behave in an ethical manner,” 54% of the millennials are disappointed that businesses around the world have “no ambition beyond making money.” They are also less impressed by the growth in business scale, its legacy or the “buzz”. They find the business profile or “positive energy” around the business more important (Deloitte 2016, 9). Besides, the millennials often put their personal values ahead of organizational goals, according to the survey.

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Furthermore, the next large-scale generational wealth transfer, which is estimated at over $30 trillion in financial and nonfinancial assets in North America and expected to peak between 2031 and 2045, would put pressure on corporates and their management to respond to a very different generational expectation set (Accenture 2015, 1). An institutional investor survey conducted by Morgan Stanley (2018) polled 118 public and corporate large-scale asset owners worldwide. It reported that investors are getting more interested in sustainable investing but approaching the strategy through a range of approaches. Eighty-four percent of the respondents had demonstrated a strong commitment to increasing their participation in responsible or Environmental, Social, and Governance (ESG) investing with 78% of them considered risk management and 77% said return potential was the critical motivation behind. In fact, the financial market is responding to this transition in a timely manner. Contribution of Socially Responsible Investing (SRI) or ESG investing increased from 18% of US assets under professional management in 2014 to 22% in 2016, which was still meaningfully less than that of Europe at 53% (GSIA 2017, 7).

3

Responsible Investment Demands Responsible Research

Decades of outstanding business and management studies have contributed to better decision-making to maximize profit but similar work on making responsible business and management decisions is scanty. Even when decision-makers commit to become socially responsible, they need to know how to be responsible. Only 42% of the respondents in the asset owners (Morgan Stanley 2018) felt that they have adequate tools to assess the performance of the responsible strategy. They reported some meaningful obstacles between interest and implementation. They cited that access to quality ESG data is their top concern. Overall, asset managers and investors find themselves unfit to evaluate options and make decisions without a reliable framework to measure achievements in these intangible values.

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First and foremost, there is not enough research to properly identify and justify a consensus view on the relevant issues or values contributing to a “responsible company.” The list of relevant issues or values for responsible decision-making could range from a precise three factors model of future generation, society, and environment proposed by Zsolnai (2009), to the Seventeen Sustainable Development Goals (SDG) of the United Nations (2015), a wide range of ESG factors2 within the six core principles introduced by the United Nations Principles of Responsible Investment (PRI) (UNPRI 2018), and the nine domains of happiness and four pillars of Gross National Happiness (GNH) (Ng 2018, 374– 375).3 Looking into ESG factors which are widely adopted by the financial industry in developing research database, benchmark indexes and investments products, DavisPolk (2017) identified eight ESG report providers for illustration. Some of these providers such as Bloomberg ESG Data, Corporate Knights Global 100, MSCI ESG, RepRisk, RobecoSAM, Sustainalytics, Thomson Reuters ESG Research Data conduct their data collections independently while some others develop their indexes in collaboration with other providers. For example, DJSI develops its index based on RobecoSAM’s ESG analysis and ISS partners with RepRisk. These providers have different rating scales and corporates covered, but they all attempt to construct a normalized scoring and ranking system based on a wide range of ESG indicators and issues. These providers also adopt different methodology and have different levels of transparency in terms of their research processes, ranking methodology, and result disclosure. Differences in their methodologies may result in very different results as demonstrated in the low correlation of ESG evaluations by FTSE and MSCI, two leading ESG research service providers (GPIF 2017). The wide dispersion of ESG scores suggests 2 ESG

such as (1) environment: climate change, greenhouse gas emissions, resource depletion, waste, and pollution, (2) social: working conditions, local communities, health and safety, employee relations, and diversity, and (3) governance: executive pay, bribery and corruption, board diversity and structure, and tax strategy. 3The four pillars are (1) sustainable and equitable socioeconomic development, (2) environmental conservation, (3) preservation and promotion of culture, and (4) good governance. The nine domains are (1) psychological well-being, (2) health, (3) time use, (4) education, (5) cultural diversity and resilience, (6) good governance, (7) community vitality, (8) ecological diversity and resilience, and (9) living standards.

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that those highly ranked companies by MSCI may be ranked among the lowest by FTSE. The reasons behind the lack of consistency among different ESG methods could range from the selection of the respondents, choice of data, mode of measurement (quantitative objective measurement, qualitative subjective decisions, tick-box, and binary yes/no or true/false), weighting of scores, normalization of data, as well as backtesting or verification of research assumptions based on empirical data. As Allen (2017) argues, these conflicting results highlight the challenges in managing different subjective and objective factors contributing to responsible businesses. It is important to understand the methodology behind different ESG measurements and understand their respective strengths and weaknesses instead of “over-reliance on simple ESG scores” (CLSA 2018). Another challenge in analyzing intangible values, such as just or socially responsible behaviors, is not only about identifying the underlying measurable indicators but also about how they should be weighted, compared, and normalized among each other to form a holistic measurement. For example, how do we compare the importance of zero poverty versus clean water, gender equality versus environmental friendliness? How do we quantify intangible improvement—reducing workday per week for employees may mean better work condition but could also mean lower job security. Is lowering workday per week really an improvement for a responsible corporate? Different prevailing ESG analyses adopt different weighting and normalization methodology. For example, MSCI (2018) ESG Rating’s weightings “take into account both the contribution of the industry, relative to all other industries, to the negative or positive impact on the environment or society; and the timeline within which [they] expect that risk or opportunity for companies in the industry to materialize…,” while FTSE4Good ESG Ratings weigh the score of each theme by its exposure level. The overall ESG Rating is calculated by weighing each pillar based on the average exposure to the applicable themes within it (FTSERussell 2016). For Thomson Reuters ESG Research, categories with multiple issues have a greater weight than those with fewer issues (DavisPolk 2017).

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These challenges are also affecting ESG research analyses measuring objective quantifiable identifiers. For example, ESG investment research of Pictet Asset Management (Diana 2020) adopts two objective measurements, namely Planetary Boundaries (PB) framework and Life Cycle Assessment (LCA)4 to quantify the ecological footprint of more than 100 subindustries and identify firms “with the strongest environmental credentials…[which] neither make excessive use of raw materials nor generate disproportionate amounts of waste.” Within these firms, it continues to select businesses engaging in products or services that reverse environmental degrading based on a proprietary “thematic purity” value calculation of which portion of a firm’s certain financial metrics is derived from environmental products and services. In other words, they adopt two commonly adopt techniques of ESG analyses: (1) positive screening—selecting companies with positive ESG attributes for inclusion, and (2) negative screening—filter out companies with negative attributes for exclusion. While some of these screenings may appear to be noncontroversial, some of the intangible values may require trade-offs and comparative analyses which demand further survey and other social science research techniques to provide further guidance. For example, the trucking industry generates significant environmental footprint with its CO2 emissions which is considered negative, but reducing investment exposure to it may also compromise the social responsibility to maintain jobs. Therefore, socially responsible decision-making would require equally responsible underlying research, which is driven by high-quality genuine real-world challenges in society. By definition, “Responsible Research” should aim at bringing real change and achieving real insight (CRRBM 2017). The knowledge hence developed should be actionable to narrow the gap among policy, research, and practice. The data, methodology and reporting should also be “responsible” in terms of being “credible.” 4The PB framework sets ecological thresholds for nine of the most damaging man-made environmental phenomena, which, if breached, would have irreversible damages to human prosperity. The LCA, meanwhile, is a framework developed by the Carnegie Mellon University’s Economic Input-Output Life Cycle Assessment (EIO-LCA) database to calculate the waste emissions and resource usage of 157 corporate subindustries which make up the global economy (Diana 2020).

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Being “credible” refers to knowledge based on carefully executed research either quantitatively or qualitatively, or both, and in quantitative work that meets the standards of both reliability and validity (CRRBM 2017). Responsible research conducted under these criteria attains legitimacy to support better policies and practices and ultimately a better world (CRRBM 2017). This research applies the experience of the JUST Capital to discuss how an organization can design and operate to conduct responsible research to achieve a meaningful impact on business, society, the environment. It also explores how JUST Capital and RRBM principles may help inspire solutions to some of the challenges in measuring corporate social responsibility in terms of ESG or other metrics.

4

What Is JUST Capital?

JUST Capital is an independent not-for-profit registered charity based in the United States cofounded in 2013 by a group of leading individuals, from a diverse field including business, finance, and civil society. Since its establishment, JUST Capital has initiated a range of programs including research, rankings, and data-driven tools which contribute to their mission to build a “more just and balanced marketplace that better reflects the true priorities of the American people” (JUST Capital 2019c). This mission statement recognizes the efficiency and maturity, as well as the structural deficiency, of business and management within the market mechanism. Notwithstanding its shortcoming, the US$19 trillion private sector (which is four times of the public sector, forty times of the philanthropic sector) should be essential to deliver change not only at the corporate level but also at an individual level. All of us have the power to contribute to a different marketplace (JUST Capital 2019b). Market mechanism could still serve human interest but its participants have to be “informed”. JUST Capital is convinced that when facilitated by the right information, decision-makers including “consumers, producers, workers, employers” could make better decisions (JUST Capital 2019d). Its research aims to enable the free markets to reward the “just” behaviors and incentivize reforms (RAC 2019).

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In the following sections, this case study looks further into JUST Capital’s ranking methodology and attempts to analyze how JUST Capital is consistent with RRBM’s seven principles and how its framework facilitates the realization of these principles in the finance sector.

5

JUST Capital Ranking Methodology

JUST Capital ranking methodology is built upon a three-step process including (1) survey research, (2) company evaluation, and (3) rankings (2019e). In the first step process of survey research, it implements large-scale, nationwide representative survey research on people’s “attitudes and values relating to business behavior” to understand what are the “key issues” important to them and represent “just” behaviors, how these issues should be defined, and the relative importance of each. Its inaugural survey in 2015 produced 188 individual characteristics of just corporate behaviors which were further condensed into thirty-six specific “Components.” Further quantitative polling in 2016 provided data to determine the relative importance of each Component. Its methodology involves focus groups, telephone interviews, online discussions, and surveys (JUST Capital 2019d). For both the 2016 and 2017 survey, the National Opinion Research Center (NORC), based at the University of Chicago, was selected to conduct the qualitative research and the quantitative weighting surveys (JUST Capital 2019e). The quantitative weighting surveys were performed using NORC’s AmeriSpeak panel. In 2017, JUST Capital further refined its research framework and conducted additional research work through an online survey company YouGov to confirm NORC’s work on the high-level “Drivers” (broad categories) and specific Components (smaller actions) of just corporate behaviors, and there are further “Metrics” for each of these Components (2019e). JUST Capital’s surveys comprise around 10,000 Americans each year (9000 Americans in 2018), covering up to 81,000 American adults with fourteen focus groups over seven cities in 2018 (JUST Capital 2019b). Each year, these focus groups across the country provide detailed, unfiltered responses on what business priorities should be for “just” companies (2019e). Based on these identifiers, further surveys are conducted to

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confirm the relative weighting of these issues based on survey research techniques such as Maximum Difference “MaxDiff ” and other forms of scaling. At every stage of the process, JUST Capital continues to engage with its expert advisors and/or the public through polls or surveys. The final JUST Capital’s Rankings are based on over four years of market research. Excluding companies which cannot be subject to common standards of measurements or those being acquired, it ranked 875 companies publicly traded companies across thirty-three industries in the United States (2019e) over seven issues, thirty-six components, seventy-six metrics, and 110,000 data points (JUST Capital 2019b). It adopts five types of Metrics including (1) performance, (2) management, (3) controversies, (4) crowd-sourced, as well as (5) fines (2019e). It developed these Metrics in consultation with its advisers and believed that they are: • Best reflections of the public’s definition of the component in question • Accurate measurement tools for company performance or managerial commitment to specific actions • Possible to interpret with few assumptions and little subjectivity • Able to be assessed with clear units of measurement or with clearly defined binary outcomes • Reflective of measurement best practices • Broadly applicable to all companies in its universe, regardless of size, industry, or business model (RAC 2019). JUST Capital identifies the relevant data associated with each Metric and scrutinizes the quality and reliability of the underlying data, sourcing data from many different sources including data from publicly available reports, third-party vendors, government, academic and not-for-profit, national media and press, crowd-sourced data (JUST Capital 2019e). It believed that these Key Issues, Components, and Metrics should be relatively stable in the future with only annual adjustments on the weights of each of these individual parameters based on the survey data (RAC 2019). JUST Capital’s ranking methodology comprises both Absolute Ranking and Industry Relative Rankings. Its model leverages the survey research and company evaluations to rank the largest, public-traded US

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companies, where further results are fed into an industry ranking for further peer analyses and comparisons. For the Absolute Rankings, JUST Capital assesses a series of individual numerical scores at the Metric and Component level, which are further calculated and normalized for all Metrics and Components with some varying adjustments for missing data, outliers, and scaling based on the nature of the underlying data. To normalize metrics to reflect the performance of a company in proportional to the size of the company, company revenue is chosen as the scaling factor. Based on the weighted sum of each company’s scores across all Components, an overall score for each company is determined (2019e). These Absolute Rankings represent the “universal nature of just business behavior,” allowing for direct comparison of the performance of any group of companies regardless of the specific business nature (RAC 2019). The JUST Capital’s Thirty-three “Industry Relative Rankings” are similarly derived from the same metrics as the Absolute Ranking, but compared companies only within their industry peers group (RAC 2019).

5.1

Principle One: Service to Society

The first principle of responsible research states that “business research aims to develop knowledge that benefits business and the broader society, locally and globally, for the ultimate purpose of creating a better world.”

JUST Capital research has a core mission to identify what should constitute “just” for business and the broader society in the United States. While different stakeholders may agree that all businesses should be just, their definitions of “just” could be very different. Therefore, prior to introducing more “just” business practices, an important contribution of the JUST Capital to society is to develop a responsible research methodology and process which allows for the identification of “key issues” defining “just”. Based on how corporates are assessed in relation to these “key issues,” we can then evaluate whether the corporates are “just” as a whole.

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Prior to JUST Capital, different research institutes may develop their own criteria or matrix in defining “just.” Once developed, these “just” defining criteria and their relative weighting tend to be quite rigid without responding to the changing societal dynamics regularly. In other words, since different stakeholders may consider “just” differently at different period of time, responsible research institutes should develop a dynamic mechanism to consistently and regularly engage with the stakeholders to define and redefine the meaning of “just” and then evaluate the performance and compliance of “just” accordingly. This approach adheres to the first responsible research principle to “systematize knowledge of best practices, past and current, and to shape the future by creating knowledge based on emerging scenarios” (CRRBM 2017). Most importantly, the research methodology and ranking process of JUST Capital has the built-in organic capacity to adjust to other “key issues” and the needs of other societies with a completely different social, cultural, and religious background. Though it only operates in the United States currently, JUST Capital’s research process has an enormous capacity to expand to serve and benefit businesses and societies worldwide. In 2018, its surveys identified key “Prioritized Issues” including (1) workers, (2) customers, (3) products, (4) environment, (5) jobs, (6) communities, and (7) leadership & shareholders, with each of these issues being built-up by other components (JUST Capital 2019b). JUST Capital then applies these priorities for tracking and assessing how companies perform in being “just” and develop the ranking models including the JUST 100 and Industry Leader lists. These surveys contribute to a better understanding of just behaviors in society and are also applied to the financial market, reaching out to investors and corporates. JUST Capital developed a benchmark stock index, the JUST U.S. Large Cap Diversified Index (JULCD) in June 2018 based on the top 50% of Russell 1000 companies ranked by JUST Capital across thirty-three industries (Cortina and Jones 2018a). The index contributes to the later success of its first ever exchange-traded fund (“ETF”), the “JUST U.S. Large Cap Equity ETF” launched by Goldman Sachs Asset Management in 2018 (JUST Capital 2019f). With over US$250mn in assets on the first day of trading, the launch was the single most successful ESG ETF launch ever, and in the top 10 equity ETF launches in history (JUST

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Capital 2019b). This ETF is an important milestone to further accelerate participation from the retail investors in SRI.

5.2

Principle Two: Stakeholder Involvement

The second principle of responsible research emphasizes on the values of “the involvement of different stakeholders who can play a critical role at various stages of the scientific process.”

To ensure that responsible research can truly serve societal needs with legitimacy and credibility, it must involve various stakeholders in the research process for data collection, verification, and recognition. Freeman (1984) proclaimed that the core essence of the Stakeholder Theory is that any organization must take “into account the effects of your actions on others, as well as their potential effects on you.” In other words, there are mutual actions and reactions in an interactive process. It is impossible to appreciate the potential interactions without a deep understanding of “stakeholder behaviors, values and backgrounds or context, including the societal context” (Freeman 1984). Being a nonprofit organization, JUST Capital is structured to earn the trust of the public and corporates as an independent entity (JUST Capital 2019a). It receives funding from private individuals, board members, and foundations but refrains from accepting donations from companies it analyzes. It strives to provide credible and unbiased information on just corporate behaviors to serve their public missions free from any commercial or political biases. It does not engage in any activities that create a conflict of interest (JUST Capital 2019d). It has also established a Board of Directors and Advisory Board with members joining from a wide range of disciplines (JUST Capital 2019g, h). Respecting this principle of stakeholder involvement allows JUST Capital to maintain its research integrity and legitimacy in ranking all corporates involved fairly. Nonetheless, these stakeholders may also provide inputs on the research data and methodology which may affect the independence or autonomy of the research process itself. Too many stakeholders could also distract or dilute the focus of responsible research by

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demanding additional time and resources to manage the mere volume and complexity of information involved. It is important for responsible research to build a wide network for co-creation and collaboration, but not being “captured” or “entangled” by vested interests (CRRBM 2017). As Freeman and Velamuri (2005) elucidate, “stakeholders are real and complex people with names, faces and values.” It is therefore a delicate process to survey and involve people as in any research process involving human subjects, which demands the highest standards of morality, integrity, and care. Meanwhile, other stakeholders which are “voiceless” such as the future generations, the environment, inaccessible subjects (due to limitations of transport, communication, literacy, etc.) are also important (Zsolnai 2007, 2011). By engaging with the American public directly, JUST Capital collects valuable data through first-hand information from people of diverse backgrounds as consumers, employers, employees, and business decisionmakers. The survey targets comprise people from all geographies, income levels, political persuasions, ethnicities, and education levels to ensure that both the breadth and depth of data are a good representation of views from society involving multiple stakeholders. Particularly on gathering data for an abstract concept of “just corporate behavior,” JUST Capital open-ended survey allows for the collection of genuine feedback from the public (JUST Capital 2019d). It is reassuring to observe that Americans are not as divided. They value and prioritize more or less the same issues “across many demographics—liberal, conservative, highincome, low-income, men, women, millennials, and boomers” (JUST Capital 2018).

5.3

Principle Three: Impact on Stakeholders

The third principle of responsible research encourages that different part of the value-chain in a research process should “acknowledge and reward research that has an impact on diverse stakeholders, especially research that contributes to better business and a better world.”

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JUST Capital engages with the public through an active dissemination of fundamental bottom-up surveys, research reports on the research findings, annual reports and technical notes through traditional and social media channels. These efforts ensure that its philosophy, process, and results are being broadly communicated to different communities including the general public, academic, business leaders, corporate managements, and most importantly key stakeholders of businesses, for example, their consumers, staff members, suppliers, and shareholders. One of the contributions of JUST Capital is to empower different groups of stakeholders by transferring the knowledge developed from the research to support decision-making in line with their respective values— investors about their investments, employees about their employers, and consumers about their producers. Comparing its 2018 survey results with those of 2017 (JUST Capital 2019i), respondents reported stronger conviction in the effectiveness of their collective actions in relation to the large corporates by offering support for positive corporate behaviors as consumers, social media supporters, investors, or employees (JUST Capital 2019i). Based on its “just” stock index, JUST Capital has originated an exchange-traded fund called the JUST ETF through which investors can allocate capital into companies which are most “just.” Unlike other similar investment products, JUST ETF was developed with an engaging and dynamic research process as described above. In additional to the JUST ETF, JUST Capital has also embarked on another two core research initiatives in 2018, namely the “Rankings on Corporate Tax Reform,” which offers valuable data on how corporations were investing their tax savings, and the “Environmental Explorer,” which allows the public to access conveniently the environmental impacts of different companies through an online interactive tool (JUST Capital 2019b). These tools offer critical information for the public, academic, policy experts to identify issues and evaluate implications of policies. JUST Capital (2019m) has also developed a JUST Scorecard which builds upon their survey results and metrics adopted in the Rankings as a resource for companies to review their own corporate practices—better understand their strengths and weaknesses relative to their peers, and most importantly understand areas for further improvement, converting insights from the survey into real impactful actions.

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In support of the Just Capital ranking methodology, constituents of its benchmark stock index JULCD demonstrate more just behaviors overall. In comparison with the excluded Russell 1000 companies, they are “twice as likely to pay nearly every worker a living wage, produce 45% lower greenhouse gas emissions per dollar of revenue, give more than twice as much to charity, pay 94% less in Equal Employment Opportunity Commission fines” (Cortina and Jones 2018a), and create US jobs at a 20% greater rate (Forbes 2018). The top 100 ranked “just” companies exhibited similar “just” behavior: they “pay their median US worker 33% more than other Russell 1000, are more than 10 times likelier to have conducted pay equity analyses, and face 74% fewer employment discrimination cases per dollar of revenue” (JUST Capital 2019a). These data are strong proofs of the JUST Capital methodologies to support “just” business practices conducive to solving complex business and social problems, contributing to a just society.

5.4

Principle Four: Valuing Both Basic and Applied Contribution

The fourth principle of responsible research values both theoretical and applied studies.

Like many other moral and social values, the notion of “just” has strong philosophical, social, cultural, legal, historical, and even political contexts. Sandel (2010, 6) argues that there could be at least three answers to the question “What is justice?”: (1) maximizing welfare, the Bentham and utilitarianism answer which considers justice from the perspective of happiness or welfare maximization; (2) respecting freedom, the Kantian ethics which argues justice from the perspective of respect and human dignity; and (3) promoting virtue, the Aristotelian tradition of giving people what they deserve, which is in turn depending on their virtues. These widely accepted values are often difficult to define, not to mention any attempt to compare, rank, or prioritize them. Nonetheless, given limited resources and time available to decision-makers, private and

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non-private alike, it is critical to develop and access reliable and credible data on the relative importance of these key values and social issues. Though JUST Capital research does not include social or politicaleconomic theories of just behaviors or a just society, it has a sound theoretical evaluation on what constitutes “just” based on its direct survey methodology. Instead of relying on the theoretical understanding of “just” and its components, quantitative research by JUST Capital manages to translate qualitative values into measurables components and identifiers. It has conducted in-depth applied research on the relationship between “just” companies and potential implications, such as customer loyalty, employee relationship, and share price performance. These integrated theory- and practice-led initiatives in business and management research can further facilitate behavioral change and create an impact as discussed in Principle Three. When being asked how they want just companies and market to behave and look like, the results among Americans indicated relatively consistent priority on key issues they consider just and care about over the years (JUST Capital 2019j). It gives further justification and consensus to the theoretical and reported definition of “just” behaviors.

5.5

Principle Five: Valuing Plurality and Multidisciplinary Collaboration

The fifth principle of responsible research values “diversity in research theme, methods, forms of scholarship, types of inquiry, and interdisciplinary collaboration” in recognition of the “plurality and complexity of business and societal problems.”

JUST Capital has the flexibility in its research design and operational structure to embrace diversity and multidisciplinary collaboration by allowing the respondents to determine their select fields of “key issues” without a predetermined answer. Even when evaluating the scoring methodology, JUST Capital has engaged with the public and subject matter experts (i.e. academic, investment practitioners, and corporates)

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on the choice of Metrics and Data Points, as well as the mechanism of translating the raw data to a ranking model (JUST Capital 2019e). Its open system of “key issues” survey allows for different disciplines, ethnographic, geographic, multifaceted topics to emerge which would require the collective wisdom and experience of stakeholders from different background to work together to improve the openness, objectiveness, and accuracy of its research (JUST Capital 2019e). Apart from engaging the public as survey participants, JUST Capital has also formed a robust Research Advisory Council of academics, economists, and subject matter experts. They include leading research centers and business schools, as well as a long list of marketing & operations partners and experts on data security. It also collaborates with Forbes, a well-respected publication of business ranking, to publish its ranking on America’s Most JUST Companies, JUST 100 and Industry Leader list annually (JUST Capital 2019d, k). The program is also wellsupported by a few charity and family foundations (JUST Capital 2019k; RAC 2019). A core question in JUST Capital research is not only if “just” business behaviors could contribute to a just society but also whether just companies can create shareholder value in business and financial terms. Multidisciplinary collaboration on shared social issues required not only common languages and shared understanding of the issues at hand but also shared goals and values. For business leaders, managers, and investors who are assessed by their financial returns and shareholder value creation, they may care about what the “Main Street” American values as long as they are also rewarded in business terms. Recent research by JUST Capital supports that just US public companies “generate significantly greater investment returns and exhibit reduced investment risk than their lowerperforming counterparts” (Cortina 2018)—companies in the top 20% of the JUST Capital ranking generated 14% higher annualized returns and exhibited 7% lower volatility and 11% lower betas compared to those in the bottom 20%. If further adjusted for other factors which include company size, profitability, investment, value, and overall market factors, these just companies generated excess return (alpha) of 3.5% versus a negative alpha of 7.1%, with 76% of the noted outperformance can be

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attributable to alpha. In another study, if “momentum” is added as the sixth factor in the analysis, the share of unexplained alpha increases to 83% (Cortina and Jones 2018a).5 The top quintile of companies listed by JUST Capital’s corporate ranking also consistently outperformed their peers on financial returns (as measured by return-on-equity ROE) by 7%. In particular, strong worker pay and benefits and worker treatment have a meaningful correlation with lower stock volatility and drawdowns. Other just behaviors such as leadership and ethics and lower environmental impact are also correlated with the higher ROE and stock market return. Comparing with other metrics of socially responsible behaviors, these just companies have demonstrated greater risk reduction (Cortina 2018). Specifically, worker treatments have been one of the most “weighted” issues for “just” companies. The data show that it is possible to achieve a win-win strategy for maximizing both profit (in terms of return and worker treatment— particularly in terms of (1) promoting work–life balance, (2) providing career development opportunities, and (3) committing to antidiscrimination in the workplace (Cortina and Jones 2018b). Further ESG research should be conducted to explain the mechanism through which these specific corporate responsibility behaviors could contribute to higher financial and investment performance.

5.6

Principle Six: Sound Methodology

The sixth principle proclaims that research should be conducted with “sound scientific methods and processes” which embrace openness, reproducibility, replication, transparency.

Sound methodology does not only mean that the research is based on robust and proven methodology. It should also mean that other 5 Higher

investment risks are represented by metrics such as higher volatility (as typically measured by the square root of the variance in investment returns), higher betas (as typically measured by the correlation with market returns), deeper average drawdowns (as typically measured by the consecutive peak to trough decline in returns).

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researchers could gain access to the method statements, technical notes, source data, operational menus so that they could generate similar results accordingly. They could also use the methodology as a reference to expand or refine their own analyses. To embrace openness and transparency, JUST Capital has closely engaged with corporates by producing reliable rankings and industry analysis. The AmeriSpeak panel it adopts for qualitative weighting surveys is a nationally representative panel of households across the US population with probability-based samples and scientifically rigorous statistical surveys. In order to ensure that the Drivers and Components proposed by qualitative analyses are adequate, further quantitative analyses were conducted. They include surveys designed by NORC for a latent class analysis (LCA). The LCA was not informative but factor analysis and cluster analysis provide further guidance to the construction of the Drivers. JUST Capital also appointed another online survey company YouGov to conduct surveys supplemental to NORC’s research. YouGov surveys offer insight to number and combination of Drivers, as well as the different combination of the Components to different Drivers (JUST Capital 2019e). Although YouGov’s samples are nonprobability samples, it consistently outperformed other survey providers in achieving reasonably representative survey results and managed to turn around surveys with high cost and time efficiency (JUST Capital 2019e). With a detailed understanding of JUST Capital’s research methodology and research, corporations can develop greater confidence in its research process and focus on promoting “just” corporate behaviors. Through the corporate data review process, companies have the opportunities to review the data collected by JUST Capital and understand how these data are compared with their peers. The corporate portal and the corporate engagement team facilitates ongoing open and transparent dialogue among the stakeholders.

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Principle Seven: Broad Dissemination

The seventh principle focuses on the dissemination of knowledge that could facilitate better business and better world.

JUST Capital’s decision to make the research findings available to public through an online platform, an open source, and an open access could facilitate knowledge transfer. For companies which achieve the JUST 100 companies and the 33 Industry Leaders statues, JUST Capital has designed a collection of resources for the broader dissemination of the research results, such as the “JUST Seal, sample press release, public engagement campaign, and social media promotion” (JUST Capital 2019l). Unlike other academic research which may have a relatively narrow audience base, JUST Capital engages in effective use of online media for the distribution of its research findings to both the academic and nonacademic communities. In 2018, its media coverage has increased by 213%, social media reach increased by 3000%, and companies promoting the JUST Seal increase by 132%. Though deploying new media could widen the audience of research to include nonacademics, responsible research like JUST Capital must stay focused and its dissemination strategy should not affect its credibility which could be reassured through rigorous peer review and feedback mechanism. One critical challenge for a data service provider or market research organization is to balance a broad dissemination with a sustainable revenue generation. In order to ensure profitable and sustainable operations, many research organizations may charge commercial or finance sectors a premium or a licensing fee for access to these highquality data. The process could be dynamic and self-enforcing in a way that if high-quality “just” company data are available and if these data demonstrate a strong correlation with underlying business performance, more people will choose to buy from, invest in, and work for these companies. These companies receiving positive feedback could amass sufficient resources to further advance their just behaviors. If being sold for profit to exclusive clients, the research data could be highly valuable to the market and JUST Capital too. However, it may also contradict with

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JUST Capital’s principle to ensure broad dissemination to educate and strengthen just behaviors in the public.

6

Conclusion

This case study has illustrated how the seven principles of RRBM have been reflected in the research designs and implementation of JUST Capital to serve society. Its organizational and governance structure are consistent with some of the RRBM principles to contribute to a valuable research platform through which different aspects of the American population could be heard, particularly on what they expect from businesses and their management. JUST Capital creates a positive communication loop where business management could receive sound data on what their employees, consumers, and the public are expecting so that they could also adjust the business approaches accordingly. As discussed in this study, there should be increasing demand from the market for responsible corporates with just behaviors contributing to a better world. This could foster trust in how positive change could be achieved through the marketplace. Comparing the JUST Capital survey results between 2017 and 2018, media has reported a more constructive tone and indicated a stronger willingness for public and businesses to work together (Fortune 2018; Business Insider 2018; Fortune CEO Daily 2018). However, it is not only challenging to define some of these intangible values such as “just” and “responsible”, it is also difficult to measure and rank these values, to create impact and inspire sustainable changes. JUST Capital is an exemplar demonstrating how responsible research could be conducted from design to data collection, from analyses to results dissemination. Its methodology as illustrated in this research could have wide applications and implications to similar responsible research studies in business and management not only in finance but also in other areas.

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Obstacles to Sustainable Change in Business Practice James Wallis

Business can be a means for a better world if it is informed by responsible research. (…) Research is the foundation of business education and practice, yet business research has failed to live up to its promise in promoting better policies and best practices. If nothing is done, business research will lose its legitimacy at best; at worst, it will waste money, talent, and opportunity. (RRBM 2017)

The core vision of the RRBM frames the risk of continued failure to live up to principles of responsible research in terms of a loss of legitimacy for scholarship, and a squandering of money, talent and opportunity. This understates the risks. Business is deeply implicated in some of the greatest challenges facing humanity and the planet. If we agree that ‘research is the foundation of business education and practice’, then failure to address these challenges through business and management J. Wallis (B) Anthesis, London, UK e-mail: [email protected] © The Author(s) 2020 L. Zsolnai and M. J. Thompson (eds.), Responsible Research for Better Business, Palgrave Studies in Sustainable Business In Association with Future Earth, https://doi.org/10.1007/978-3-030-37810-3_10

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research is to prolong—or perpetuate—the creation of avoidable human suffering and detrimental changes to planetary systems. This chapter will show that despite the magnitude and acknowledged importance of these challenges, practitioners struggle to enact the warranted changes in business practice. We shall term these ‘sustainable change’: changes in existing business systems, or the creation of new business systems or enterprises which purposefully reduce or remove negative externalities associated with the activities of the firm, and/or contribute to the solution of outstanding social and/or environmental challenges. I shall draw on my consulting experience to describe five major obstacles to sustainable change in business practice, before suggesting that these obstacles share a common root in a paradigm of business that is abstracted from its true societal, environmental and ethical context. I shall show how this abstraction is visible in two areas of the academic literature that purport to guide practitioners as a ‘foundation of business education and practice’. Finally, I shall recommend that it is an exciting and urgent task for responsible scholars of business and management to propose a new paradigm of business which can better accommodate the exigencies of sustainable change in business practice, and thus help business be a means to a better world.

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Business and a Better World

Recent history is witness to unprecedented improvement in human wellbeing across a range of important markers. According to the World Bank (2018), the global rate of extreme poverty (