This experimental study examines individuals’ legitimacy judgments. We develop a model that demonstrates the role of attributed motives and corporate credibility for the evaluation of organizational legitimacy and test this model with an experimental vignette study. Our results show that when a corporate activity creates benefits for the firm—in addition to social benefits—individuals attribute more extrinsic motives. Extrinsic motives are ascribed when a corporation is perceived as being driven by external rewards as opposed to an altruistic commitment to a social (...) cause. Extrinsic motives negatively affect corporate credibility and organizational legitimacy judgments. This article contributes to a better understanding of the complex process of organizational legitimacy judgment by shedding light on the individual’s perspective and expounding the relationship between attributed motives, corporate credibility, and organizational legitimacy. (shrink)

Friedman’s view on corporate social responsibility is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom. Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to (...) reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ. Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses. (shrink)

Research has shown that specific individual values, such as green and environmental values, are important in motivating the decision to start a sustainable business. Beyond this finding, there is limited knowledge about why, how, and when such values become important and what this means for sustainable entrepreneurship engagement. We address this question abductively and conduct a multi-case study of 18 sustainable entrepreneurs and their fashion companies. Drawing on the self-activation and the impressionable years hypotheses, we identified three ways in which (...) sustainability-oriented values become activated and more important to individuals: (1) through informational stimuli, (2) through formative and life-changing experiences, and (3) through socialization. Further, we show that the entrepreneurs engaged in reflexive learning due to the value-activating experience, whereby they critically questioned their assumptions and actions. Together, one or more value activations and the involved reflexive learning contributed significantly to the decision to become a sustainable entrepreneur. With this novel explanation for why and how values become engaged in the first place, we contribute to the theory of (sustainable) entrepreneurship. Further, our research helps devise value-activating strategies for practitioners who want to help (prospective) entrepreneurs act more in line with their sustainability-oriented values and start a sustainable business. (shrink)