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J Bus Ethics (2016) 138:6777

DOI 10.1007/s10551-015-2579-3

Virtue Ethics and the PracticeInstitution Schema: An Ethical

Case of Excellent Business Practices
Ying Wang George Cheney Juliet Roper

Received: 24 November 2014 / Accepted: 10 February 2015 / Published online: 4 March 2015
 Springer Science+Business Media Dordrecht 2015

Abstract This paper aims to contribute to a greater un- Keywords Business ethics  Virtue ethics  Practice
derstanding of the theory of virtue ethics and its applica- institution schema  Corporate social responsibility  Social
tions in the business arena. In contrast to other prominent entrepreneurship  Sustainability  Sustainable enterprise 
approaches to ethics, virtue ethics provides a useful per- Transformational leadership  New Zealand wine industry
spective in making sense of various business ethics issues
with an emphasis on the moral character of the individuals
and its transformational influences in driving ethical busi- Introduction
ness conduct. Building on Geoff Moores (Bus Ethics Q
12(1):1932, 2002; Bus Ethics Q 15(2):237255, 2005; The understanding and expectation of business responsi-
Bus Ethics Q 18(4):483511, 2008) treatment of Alasdair bility, and its place in society is evolving. This challenges
MacIntyres practiceinstitution schema, the paper dis- the field of business ethics in making sense of salient issues
cusses how individuals, as moral agents, can serve to such as what is considered as ethical business conduct,
promote virtuous business conduct and help foster a moral what drives such conduct, and how business should un-
and ethical climate in the organization and in society at derstand as well as act upon its place in society. The
large. Using interview data from a broader study of the conventional business case argument, where sustainable
New Zealand wine industry as explanatory examples, the business practice is aligned with long-term self-interest,
paper argues that while many companies sustainable rationalizes the market incentive for responsible environ-
practices are still largely market based, such excellent mental and social performance. However, business ethicists
business practices are often driven by individuals moral have recognized the inadequacy of singularly relying on
and ethical pursuits. the business case in explaining business engagement
with sustainable social practice. Duska (2010), for instance,
promotes a new understanding of the purpose of business
that moves beyond the usual stakeholder mind-set and
centers on value creations (see also, for example, Pies et al.
2010). In their chapter in The Oxford Handbook of Cor-
Y. Wang (&)  G. Cheney  J. Roper porate Social Responsibility, Kurucz et al. (2008) organize
University of Waikato, Hamilton, New Zealand
the existing reviews and models of the business case for
corporate social responsibility (CSR) into four modes of
J. Roper
value creation, in an effort to broaden the theoretical scope
of the business case argument.
G. Cheney This paper, therefore, argues that business engagement
University of Colorado, Colorado Springs, United States with sustainable practices should be recognized beyond
market-based propositions and that the initiatives as well as
G. Cheney
University of Utah, Salt Lake City, United States the drivers behind such practice must be appreciated via
e-mail: moral and ethical considerations. In particular, the theory of

68 Y. Wang et al.

virtue ethics offers a useful approach that focuses on the also to promote a range of practices that give substance to
importance of individuals moral character in driving virtu- such labels as openness and integrity.
ous business conduct as well as fostering an ethical corporate In presenting an Aristotelian approach to business,
and social climate. As demonstrated in many successful Solomon (2004) argues that the key to the application of
examples of business engagement with sustainable practices, virtue theory to business ethics, is the consideration of the
while their engagement is indeed market oriented, such a place of business in society. He proposes that we under-
business case is often rooted in and sustained through an stand the place of business in society from a virtue ethics
ethical core that is embedded in individuals moral and perspective in which business is viewed as a human in-
ethical pursuits. Through the theoretical lens of virtue ethics, stitution in service to humans and not as a marvelous
specifically, this paper uses Moores (2002, 2005, 2008) machine or in terms of the mysterious magic of the
study of MacIntyres (1985) practiceinstitution schema in market (p. 1024). Using the Aristotelian concept of polis
conceptualizing the intricate process whereby individuals (the larger community an individual belongs to), Solomon
pursuit of moral excellence becomes the driving force behind argues that an individuals virtue and character are em-
business sustainable practice. bedded in, and in service to, the larger community. Busi-
The paper begins with a discussion on virtue theory and ness excellence is characterized by not only its superiority
MacIntyres (1985) practiceinstitution schema. Drawing in practice but also its role in serving larger social pur-
mainly from Moore (2002, 2005, 2008), the paper illuminates poses. Paramount to such conceptualization is the recog-
how the practiceinstitution schema helps conceptualize the nition of the human features and aspects of business. For
process whereby individuals moral character can become the Solomon, then, there is a clear yet often overlooked linkage
key driver behind an organizations collective ethical and between the ethics of business and the ethics of human
moral pursuits. Next, the paper discusses how the theory of virtue. Business and organizations are consequently de-
virtue ethics and the practiceinstitution schema can be used mystified as human enterprises.
to understand key ethics issues such as transformational Echoing Solomon, Geoff Moores approach to business
leadership and social entrepreneurship in the contemporary ethics also features a key emphasis on the influence of human
business context. Following the theoretical discussion, the behavior in the business world. Drawing extensively from
paper uses interview data from a larger study of the New Alasdair MacIntyres philosophical approach to ethics,
Zealand wine industry to showcase that in many cases indi- Moores understanding of business ethics places a focus on
viduals values and beliefs are fundamental to promoting how an individuals virtuous conduct can bring out the hu-
sustainable initiatives and practices in the business arena. man aspects of business (see: Moore 2002, 2005, 2008).
According to Moore, MacIntyres practiceinstitution
schema is a valid framework in understanding virtue ethics
Virtue Ethics and the PracticeInstitution Schema and its application to business. MacIntyre defines practice as
Any coherent and complex form of socially estab-
The theory of virtue ethics has received increasing atten-
lished cooperative human activity through which
tion from business and other applied ethicists in under-
goods internal to that form of activity are realized in
standing as well as guiding ethical business conduct. In
the course of trying to achieve those standards of
Evolution in the Society for Business Ethics, Koehn (2010)
excellence which are appropriate to, and partially
notes that the recent movement in business ethics has
definitive of, that form of activity, with the result that
shown more interest in virtue ethics (specific individual
human powers to achieve excellence, and human
virtues or quasi-virtues such as integrity, trust, and justice),
conceptions of the ends and goods involved, are
and that ethicists have been more willing to let the phe-
systematically extended. (MacIntyre 1985, p. 187, as
nomena suggest possibly relevant standards or virtues in-
cited in Moore 2002)
stead of applying pre-existing frameworks to problems (p.
748). According to Hursthouse (1999), virtue ethics, fol- Central to MacIntyres conceptualization of practice is the
lowing the thoughts of Plato and Aristotle, is an ethical concern for internal goods. In MacIntyres notion of
approach that emphasizes virtues and moral character. practice, simply put, internal goods are about a person
Distinct from other moral theories, as noted by Arjoon feeling good about what he or she does and that such
(2000), virtue theory grounds morality in facts about feeling of good must be based on, and derived from, the
human nature, concentrates on habits and long-term goals, virtue and moral character of the individual. Business as
extends beyond actions to comprise wants, goals, likes and practice, then, is the consideration of business as a form of
dislikes, and, in general what sort of person one is and aims such practice, where individuals in business should strive
to be (p. 173). Contemporary treatments of virtue ethics to realize the internal goods about doing business and
aim not only to extend the approach to collectivities but achieve excellence through virtuous conducts.

Virtue Ethics and the PracticeInstitution Schema 69

In MacIntyres practiceinstitution schema, institutions, is a process that happens from within the business, when indi-
on the other hand, are concerned with external goods viduals who work in it recapture a sense of virtue and begin to
such as money, power, and success. For Moore (2002), the exercise such virtues. In a similar vein, Hemingway (2005) has
institutions can be viewed as a collective mechanism that argued that in understanding issues surrounding CSR, indi-
emphasizes the functionality of business as a profit-ori- viduals personal morality is an important factor to consider
ented social economic entity. The fundamental character- because individuals own socially oriented personal values can
istic of institutions of business, therefore, is the pursuit of become a catalyst that inspire and foster responsible corporate
financial gains, often at the expense of social performance. behavior. In this sense, she adds, any employee, at any level in
However, just as institutions have the ability to set con- the organization, can act as a moral agent.
straints, they also have the potential to nourish virtuous Individuals moral character, therefore, becomes the key
acts and promote ethical business conduct. This happens motivation that drives business pursuit of excellence. That is,
when one or more of the mechanisms safeguarding the while the pursuit of external goods is determined by
institutionsthe pursuit of external goodscan find business institutional characteristics and its reliance on mar-
incentives and rationales to justify and encourage the ket mechanisms, the pursuit of internal goods is derived from
pursuit of internal goods at both individual and organi- the moral and ethical character of the individuals in business.
zational levels. These incentives and rationales, justifiable This is illustrative of the inadequacy of purely relying on the
as good practice, then become the driving force behind business case to explain corporate involvement with social
business engagement with issues beyond the financial and environmental issues. In the business case argument, the
bottom line and the movement toward sustainable social institutions of business are highlighted, and the business
and environmental practice. In CSR and sustainable de- pursuit of external goods is prompted and presupposed by
velopment literature, the argument for using mechanisms the mechanisms of the market. Following this assumption,
of the institutions as a promoter for sustainable practice is then, when the market cannot sufficiently incentivize sus-
generically referred to as the business case, as it essen- tainable business practices, perhaps due to weak signals or the
tially turns on the financial incentive of such practice. lack of immediate reward, business would logically decline
While institutions can sustain good business practices, such practices. Or, rather, business would be more inclined to
they can also have corrupting power when the external promote the so-called sustainable practices in the short term
goods (incentives or rewards) no longer justify these for immediate benefits, and thus it is unlikely that these
practices. Typically, this is when organizations no longer practices can be sustained in the long term.
perceive financial gain in association with their sustainable In actuality, however, there are many examples of
practices. Yet, for Moore (2002), it is precisely in the businesses incorporating sustainability as a company phi-
interplay between the practice of business and the corpo- losophy and whose sustainability practices are persistent.
ration in which it is embedded, in the interplay between Moreover, the frameworks for these policies and activities
internal and external goods that exciting possibilities vary in terms of expressed concern for contribution to the
exist for business and for business ethics (p. 30). In other traditional bottom line of profit or advantage to share-
words, although institutions can set constraints on good holders or other controlling stakeholders. In fact, for many,
business practices, individuals pursuit of internal goods maintaining sustainability practices are the founding prin-
can motivate virtuous business conduct. In fact, the im- ciple of the business, driven by individuals values and
portance of virtue theory lies in its emphasis on indi- beliefs. The next section will look at some specific appli-
viduals moral character and the process whereby the cations of virtue theory, particularly in the area of trans-
imperative of virtue brings out the human aspects of formational leadership and social enterprise, to elucidate
business through individuals realization of their internal how individuals provide moral guidance in promoting a
goods and achievement of excellence. This, for Moore sustainable path for their organizations.
(2005), is a process of humanizing business.
A moralized, virtuous corporation, in Moores conceptual-
ization, is one that understands that the pursuit of excellence Transformational Leadership, Social
is ultimately a moral pursuit and hence seeks to encourage it. Entrepreneurship, and Virtue Ethics
Such an attempt at humanizing business is not to say that we
should discuss business ethics as if business naturally has vir- The theory of virtue ethics has demonstrated its applica-
tues. Instead, humanizing business is an approach of under- bility in the field of business ethics, especially on the topic
standing business and business ethics by focusing on the of leadership, given its emphasis on individuals moral
individuals in business and their moral capacity as well as character. Whetstone (2001), in How Virtue Fits within
constraint. In Humanizing Business: A Modern Virtue Ethics Business Ethics, argues that virtue ethics provide business
Approach, Moore (2005) posits that the humanizing of business managers and leaders with practical applications in

70 Y. Wang et al.

promoting moral development and moral reasoning. This is leaders who style themselves and their organizations as both
because, he notes, virtue ethics is both personal, in fo- innovative and socially responsible. Using examples such as
cusing on the motivations of the actor and the sources of Anita Roddick, the founder of the Body Shop, Grant (2004)
action, and contextual by highlighting the importance of and Roper and Cheney (2005) also point out the importance of
understanding the environment as it affects both the moral the character of successful social entrepreneurs. They argue
agent and the act itself. In addition to providing practical that at their inception these successful social enterprises share
guidance for business leaders, virtue ethics has also be- in common the entrepreneurs vision of socially responsive
come an important category in understanding the ethics of business and their ability to instill such values in the
leadership itself. Price (2004), for instance, notes that organization.
distinct from a utilitarian point of view that focuses on Pratt and Pratt (2010) conducted a study of nine sus-
overall utility maximization and the stress of Kantian ethics tainable enterprises from around the world, all selected
on universal principles, virtue ethicists would argue that because they were established by a leader who explicitly
ethical leadership depends more on developing habits or put sustainability principles at the core of the business from
dispositions to act virtuously. the time of its inception. Examples included The UKs
The theory of virtue ethics has been used by many business Eden Project, New Zealands Comvita, and Sri Lankas
ethicists to advance the study of leadership ethics. In the con- Dilmah Tea. Kearins and Collins (2012), among others, use
text of corporate sustainability, for instance, there has been the term ecopreneur in referring to those who establish a
growing interest in the role of transformational leadership in business in order to have a positive environmental and
promoting sustainable business practice from the perspective social impact, as well as to make a profit (p. 72). They
of virtue ethics. According to James MacGregor Burns (1978), include ecopreneurship as one specific category of values-
transformational leadership reflects the high moral and ethical based business. There is clear synergy among the various
standard of the leader where he or she seeks to raise the level terms applied. By whatever term, what is truly fundamental
of human conduct and ethical aspiration of both the leader and to successful social/sustainable enterprises, those that end
led, and thus it has a transforming effect on both (p. 20). The up transforming their business and society, is the virtue and
emphasis of virtue ethics on individuals as moral agents, moral character of their leaders. In other words, a suc-
therefore, presents a useful perspective in understanding the cessful sustainable enterprise must be anchored in, and
moral characters of transformational leaders and their practice sustained through, a moral purposea deep and genuine
(Bass and Steidlmeier 1999). In considering virtue theory and concern for the environment and the society. Being a
its applicability to leadership, for example, Arjoon (2000) ar- successful social entrepreneur then, returning to Bass and
gues that what distinguishes a good leader is that he or she is Steidlmeier (1999), is a way of embracing virtue and
relatively more developed in the virtues and that person has a morality; and a way one engenders virtue in self, others,
clear vision of the common good and the means to promote it and society through the example and virtuous conduct of
(p. 172). Thus, from the standpoint of virtue ethics, according social enterprise.
to Koehn (1995), the important ethical matter is that indi- Importantly, the value of transformational leaders and
viduals must be able to make contributions of value to a society social entrepreneurs lies not only in their success in cre-
or communal enterprise and that the virtuous agent simply is ating a sustainable business, but also in the moral influence
the person habituated to desire to do what is good and noble. By they exert on others, their organizations, and the society at
extension, then, MacIntyres practiceinstitution schema large. In fact, the cultures of organizations in which such
suggests that both the motivation and reward for such contri- transformational leaders and social entrepreneurs operate
butions is not monetary but rather an internal goodsa may be profoundly shaped and ultimately sustained by
sense of wellbeing. certain values, practices, and habits. Virtue ethics, in
While transformational leadership is normally applied to a placing an emphasis on moral character, provides a useful
context of organizational change, the same qualities of virtue way to understand how individuals ethical and moral be-
ethics have also been applied to the study of social en- liefs can transform conventional self-serving business
trepreneurship, sustainable enterprise, and a range of similar practice into virtuous business conduct.
concepts. In understanding various aspects of social en- Indeed, in the discussion of transformational leadership
trepreneurship, Sullivan Mort et al. (2003) argue that the key and social entrepreneurship, as with organizational value-
features of social entrepreneurship include not only its con- based action in general, the question of whether leader
cern and commitment in the social domain, the entrepreneurs charisma is essential for inspired organizational perfor-
leadership aptitude, and exceptional capacity, but also the mance is a persistent one. Weber (1978), for instance, was
virtue and moral characters of both the entrepreneur and the concerned about exemplary character on individual as well
enterprise. As Roper and Cheney (2005) point out, private as organizational levels. The problem of charisma is how to
social enterprises are often led by value-driven, charismatic move it beyond the individual performance as a key means

Virtue Ethics and the PracticeInstitution Schema 71

of expressing authority and indeed directing the actions of to explore the key motivations that drive the initiatives and
an organization. This remains a key question for collective the practices toward sustainability in the New Zealand wine
applications of virtue ethics and for assessing as well as industry. Fifteen participants from 14 wine companies were
promoting virtuous behaviors in organizations. On a prac- interviewed for this study, among whom three participants
tical level, all sorts of organizations that are committed to were the owners of the company, while the rest were in
social values wrestle with the problem of how to, in We- managerial positions. Although it is not the purpose of this
bers terms, routinize charisma given that so much of the paper to present the full findings of the larger study, it is
socially inspired leadership in all sectors is tied to indi- important to note the range of dominant motivations that
vidual leaders and their initiatives. were identified by the participants. Primarily, the study
The importance of virtue theory, therefore, lies in its found that the participants discussion of sustainability mo-
emphasis on individuals values and moral convictions in tivation was closely associated with the business case
understanding business practice. Specifically, it depicts argument, where the market incentive was identified as the
how individuals moral character can become the key dri- main driver behind companies engagement with sustainable
ver behind an organizations collective pursuit of ethical practices. In addition, the participants also identified a
business conduct. Such a virtue ethics approach to business regulation-based motivation, driven by both industry and
ethics is founded in our understanding of business as a government regulations. However, our participants reflected
human-based social entity, or, as Solomon (2004) has put that both the strong industry initiative and the weak gov-
it, a human institution in service to humans. According to ernment regulation are clearly based on financial incentives,
Arjoon (2000), the pursuit of internal goods corresponds where the market remains dominant. Finally, the majority of
with a state of being, whereas external goods corre- participants of this study also made a strong ethical case; the
spond to a state of having. It is only under the state of participants individual moral and ethical pursuits were seen
being, the author posits that we can fulfill our true po- as the key driver behind their companies sustainability
tentialities which cannot be accomplished or satisfied by a practices.
state of having. In this sense, virtue theory turns the In this paper, and in line with the discussion of virtue
central issue of business ethicshow business should theory, we focus on the ethical case identified through the
act to the question how people should act, where in- interviews. Through presenting these discussions, we wish
dividuals moral capacity becomes the key to cultivating an to exemplify the importance of individuals moral char-
ethical climate in all aspects of social life. As demonstrated acter and ethical commitment in driving ethical business
in the many examples of transformational leaders and conduct. We use these discussions to show that many
successful sustainable enterprises, when individuals act as participants have personal beliefs in, and long-term com-
moral agents, not only do their values and ethical pursuits mitments to, sustainability practices. In many cases, even
weigh at the core of business sustainability decision mak- when the market signals were weak these individuals
ing, but also their virtuous conduct can help foster, and in maintained their commitment, and the sustainability prac-
turn be sustained through, a virtuous environment. tices were carried through. This shows that the business
What we are concerned with in this paper is how trans- case alone cannot fully explain business engagement with
formational leaders and sustainable entrepreneurs are influ- sustainability practices. Even though ethics were not the
ential. We investigate this question using the case of the New dominant motivation for adopting sustainable business
Zealand wine industry, an industry that includes many such practices, there is clear evidence of the transformative in-
leaders whose personal stories and views strongly reflect fluence virtue ethics has had in many instances. In the
virtue ethics. Further, the businesses in which these indi- remainder of the paper, we illustrate the application of
viduals work stand as working examples for the application virtue theory and the practiceinstitution schema through
of MacIntyres practiceinstitution schema. drawing on some examples from the interviews with
members of the New Zealand wine industry.
During our interviews with the New Zealand wine in-
An Ethical Case of Excellent Business Practices: The dustry members, almost all participants, by varying de-
New Zealand Wine Industry grees, reflected on how their own personal values and
beliefs or those of some others influenced their companys
Our discussion in this paper is based on a larger study which position and practice toward sustainability. This is at the
was carried out in 2010 of sustainable practices in the New core of the theory of virtue ethics which, as discussed
Zealand wine industry. The New Zealand wine industry above, grounds morality in human nature through empha-
enjoys an international reputation for its proactivity and in- sizing the moral character of individuals and their trans-
novation in facing growing concerns regarding sustainable formational influences on others. Some participants, in fact,
business practice. The focus of the main study, therefore, was identified an individuals influence as the initial and the

72 Y. Wang et al.

most important driver for the companys sustainability As Koehn also (1995) points out, from a virtue ethics point
practice. One participant [participant 3], for instance, stated of view, the important ethical issue is that individuals are
able to make contributions of value to a society or communal
I think the first motivation, the initial motivation was
enterprise and that the virtuous agent simply is the person
probably driven by one of our vineyard managers, XX
habituated to desire to do what is good and noble. The
[name of the person], whos based in XX [name of the
character and beliefs of individuals, therefore, are crucial to
region] and he is extremely sustainable and environmen-
their desire as well as ability to elevate the moral ground of
tally committed. He has been a big driver for the company.
others and transform behaviors. Across the interviews, a
Hes also on a lot of little projects and things on the side and
number of factors were identified by the participants as the
been quite involved in those kinds of programs so yeah a
key aspects that have influenced their personal attitudes and
lot of what were doing now has been driven by him.
beliefs toward issues surrounding sustainability. These in-
For this participant, the vineyard managers personal cluded personal experience and educational background, as
characteristicextremely sustainable and environmental- well as research and knowledge advancement. One par-
ly committedis seen as the initial motivation that drives ticipant [participant 6], in discussing his personal motivation
the companys sustainability practices. Like this particular toward sustainability practices, stated
vineyard manager, across this study many individuals were
My motivations are driven from personal experience.
identified as highly committed to and having a philosophy
I had worked for someone in XX [name of the re-
about sustainability. For instance, in discussing the com-
gion], XX [name of the person], who was among
panys main motivation behind sustainability practices, one
earliest organic producers in New Zealand So my
of the participants [participant 5] responded
inspiration came from him. I also had an extended
Well it comes right from the top, the owner, XX period in Europe, based in London, actually, where I
[name of the person] has strong opinions on being think they were more advanced than we were and
sustainable and about conserving our resources possibly still are; they just seemed more in tune with
hes heavily involved in a not-for-profit organization the environmental sensitivity and they had a lot of
as well, so not just environmental sustainability, also pushes too in the supermarkets.
social and wellbeing programs.
For this participant, his personal work and life experience
Another participant [participant 11] who, himself, is highly was the driver for him to become more environmentally
involved in the local sustainability programs, stated sensitive. For some other participants, it came from an
educational background:
For me it [sustainability] is a philosophy; its about be-
coming better at what we do and who we are. Every year I studied the program at Lincoln University, you
in the vineyard to me is a research year, every year is a know, the model of the Swiss Sustainable Growing. I
trial so that we try things, we do things in the vineyard was very impressed with it so I thought it would be
and we learn from that year, and then we can add it to good for the environment around the vineyard. It was
next year so we become better at what we are doing. going to be a good approach to see how we can be-
come more sustainable. There were some really in-
These individuals commitment and philosophy is often
teresting things in the program that cover crops and
perceived as an important motivation for them not only to
alternative sprays and, yeah, so we thought we would
drive their own companys sustainability practices but also
give it a go and we did it. It has been ongoing and
to become involved in other environmental and social
very good. [Participant 8].
projects that are outside the company scope. They,
therefore, ascribe to the characteristics of what Burns Another participant [participant 4], in discussing some of
(1978) refers to as transformational leaders, who not the recent experiments in the vineyard, reflected on how
only have high moral and ethical standard themselves but others research and knowledge advancement has promoted
also seek to raise the level of human conduct and ethical his personal understanding and approach toward sustain-
aspiration of others. Regardless of their roles in the ability practices:
organization, the owner of the company or the vineyard
This guy, XX [name of the person], hes done a huge
manager, these individuals vision and moral inspiration
amount of research into the use of beneficial plant-
makes them the transformational leaders who encourage
ings around the vineyards, you know, planting flow-
commitment and foster change. Or, in Webers (1978)
ers and that kind of thing. Hes involved in a big
terms, the charisma of such transformational leaders,
project in XX [name of the region]. He did some
become routinized as the organizations collective
good solid research; he got in there and counted the

Virtue Ethics and the PracticeInstitution Schema 73

bugs, and he said, well, if you plant this plant here, some of the damage that has been done through the
youre going to get so many beneficial insects, and use of chemicals and you hear stories like that, you
youre going to be able to stop using that sprayer and know that something is not right and you have to do
that particular chemical. That was amazing, I thought, what you can.
and its huge. I mean if you do it right, its beneficial
In this passage, the participant is making a moral and
in so many ways
ethical statement, expressing a concern for the damage that
The participant went on to talk about a few types of flowers has been done to the environment and a desire to do the
that they have planted in the vineyard: right thing. These moral and ethical statements are deeply
embedded in and reflective of the participants emotions
when you leave if you look over the other side of the
and feelings. For this participant, the motivation for
road, youll see weve got alyssum which is a little
sustainability practices has passed beyond strategic calcu-
white flower, and theres another vineyard just out that
lations and become something personal.
way and weve got a mix of wildflowers; weve got
One of the key findings of the main study is that indi-
some nice little red poppies coming up now and all
viduals moral and ethical concerns often emerge to sup-
sorts of things. Im not sure if weve got the colors quite
plement, and challenge the centrality of a market mentality.
right this time but its such a good approach, a good
From market-driven to person-driven, many par-
thing to try, you know, so yeah, this guy XX [name of
ticipants moral and ethical considerations become crys-
the person], hes right into it, done the research and hes
tallized in the shift from viewing sustainability practices as
really enthusiastic. It got us all fired up; it just makes
part of business decisions to emphasizing personal values
you realize there are very good alternatives
and beliefs behind sustainability motivations. Like the
The advancement in research and knowledge, for this aforementioned participant, some other interviewees also
participant, presents exciting opportunities in terms of reflected on how sustainability practices have become a
companion planting and sustainable growing. More impor- personal thing. Another participant [participant 1], for
tantly, the commitment and enthusiasm of others have example, stated
influenced his approach as well as attitude toward sustain-
Basically it [sustainability practice] is the right thing
ability practices. In a similar vein, some other interviewees
to do. I mean with the environment if you were just
have also reflected on how the experience and passion of
going to be careless and damage the soil and not care,
others have been inspirational for them to become more
it says something about you as a person, doesnt it?
sensitive about, and involved with, sustainability initiatives
And also your people, people who work for you,
and practices. Participant 6, for instance, stated
youve got to pay them right, youre not going to rip
I know this guy, his family has a vineyard, he wasnt them off I think its just a personal thing. You cant
working in the vineyard at the time but he would go add a tangible benefit to that, I guess you just feel
home for the weekends and go shooting and hunt- better because of it, you know.
ing/gathering sort of stuff on the home vineyards.
For this participant, doing the right thing and feeling
And I think it was during the 70 s or maybe it was
good about it are identified as important motivations behind
80 s he noticed that the soil was going a kind of grey
sustainability practices. As the theory of virtue ethics posits,
color, and that he wasnt able to shoot as many
individuals commit to ethical and virtuous conduct because it
pheasants and birds, and noticed the wildlife was
is the moral thing to do and it is in their character to do so
slowly disappearing. It was at the same time that the
(Hursthouse 1999). In viewing sustainability as some-
chemical companies were having a big push to viti-
thing that carries personal and sentimental values, as shown
culturalists and coming up with what we call calendar
in the above examples, the moral character of these
spraying. So regardless of the climatic conditions,
individuals becomes the foundation for their own, as well
regardless of the life cycle of what you are trying to
as their companys ethical conduct. In their discussion of
get rid of, they were just spraying. So it was his I
personal motivations, some participants revealed how their
guess inspirational and emotional talk that pushed me
own and some other individuals personal values and
in that sort of direction as well.
emotions had become the key for them to transform self-
For this participant, the story and emotion of others are interest and business-centric consideration into ethical
turned into his own inspiration and motivation. After practices that benefit themselves as well as others beyond a
telling this story, the participant said cold economic rationale. Participant 9, for instance, consid-
ered the owner of his company as the initial driver that had
So yeah, its quite a personal motivation, I guess its
led the company to a sustainable path. For this participant,
children. I have three kids and I think when you see

74 Y. Wang et al.

the owners personal affinity with the land is the most XX [name of the owner] has always had a feeling that
important personal value that has been transformed into we should be sensitive to the environment and sensitive
actual business practices: to the people who are working with the environment,
our employees. He set up an organic vineyard in XX
It was important for XX [name of the owner]. He
[name of the region] back in the late 90 s, called XX
wanted to have a point of difference, and hes not just
[name of the vineyard], which was way ahead of its
going to be another winemaker thats selling wines.
time really, quite a big organic vineyard. So he puts his
He wanted to have something different. XX [name of
money where his mouth is, and it has been a really hard
the owner] has always had an affinity with the land,
exercise as we have learned as we have gone along, and
and wherever hes gone hes always built the wet-
it hasnt been too economic to date, but weve learned a
lands, he loves birds he wanted us to be a sus-
lot. So that has been a big driver for the company as a
tainable company. When we did the construction of
whole to have the person at the top really be, you know,
the winery and the design of the winery, our focus
following up his words with actions, and he is even
was to build a winery that was very energy efficient,
more so now.
and it just flowed on from there. So it was just right
from the word go, and it just has grown from there. Here, the owners sensitivities to the environment and the
people, as well as his personal actions, are seen as a big
This reflects what Duska (2010) refers to as false
driver for the companys sustainability path. Like this
dichotomy (p. 730), where the distinction between self-
owner, several other individuals mentioned in this study
interested and altruistic practices is blurred. In other words,
have demonstrated characteristics of not only a transfor-
for this owner there is no clear divide between self-interest
mational leader, but also a successful social entrepreneur.
and ethical practice, because his personal values and
As Roberts and Woods (2005) point out, social en-
beliefs (self-interest) are aligned with what is considered
trepreneurship is a mind-set or paradigm of incorporating
as ethical business conduct. Participant 6, in talking about a
social values and missions into business practices and, as
correspondence between the owner of the company and
such, it has a place in any business. Social entrepreneurs,
himself (branch manager), stated
then, are those who share in common the visions of socially
A couple of weeks ago we got some feedback about our responsible business and the ability to instill such values in
organic wines, and one in particular was very positive the organization (Roper and Cheney 2005). The aforemen-
for us, saying well done, congratulations, you are tioned owner is one such example; the previously men-
doing the right thing. XX [name of the owner] flicked tioned owner who has an affinity with the land is
me a quick email on Saturday morning as I was another. However, company owners are not the only people
watching my boy playing cricket, saying what do you who may have a transformational effect. The following
think the tipping point will be? and he was referring passage, for example, revealed how the personal values and
there to the tipping point of the market. So his view is beliefs of a chief winemaker had been influential in the
that we are now just right at that tipping point, and it is companys sustainability development:
going to tip soon and then it is all on, and everyone will
Well weve been on this site since the early 90 s,
have to have to prove that what they are doing is sus-
XX [name of the person], hes our chief winemaker
tainable. So he is a pretty astute businessman, but I think
for the entire time. When he had the opportunity to
the key for him and for me as well is before that tipping
build the site he really wanted to build it with
point hits is to try and convert people as well.
sustainability in mind. Sustainability wasnt some-
As reflected by this participant, both he and the owner of thing that weve picked up on the side and run
the company feel rewarded about being recognized as with. When XX [name of the person] built this
doing the right thing. Meanwhile, they are also both place from scratch he kept sustainability in the back
excited about being right at that tipping point. For this of his mind and he has done everything with that
participant, there is a clear synergy between being able to intention, so yeah, its from scratch and its always
do the right thing and serving business interests, between been embedded in the companys excellence. [Par-
being an astute businessman and a transformational ticipant 12].
leader who seeks to raise others awareness and change
In this passage, the chief winemakers emphasis on building
behaviorto try and convert people. Following this
a sustainable winemaking site has had an important bearing
passage, the participant continued to talk about the owners
on the companys value proposition. His personal commit-
personal influence on the companys sustainability initia-
ment is not only perceived as the initial motivation behind
tives and practices:

Virtue Ethics and the PracticeInstitution Schema 75

the companys sustainability positioning, but also an influ- Discussion

ential factor on the companys ethical climate and culture in
what should be considered as excellent business practice. Our larger study of the New Zealand wine industry iden-
This chief winemaker, therefore, as well as the aforemen- tified strong market motivation that aligns with the busi-
tioned company owners, functions as the early leader whose ness case argument for sustainable practices. According
values set the organizations ethical climate, the character- to the practiceinstitution schema (Moore 2002), business
istics of which eventually become internalized by all preference for self-regulation and reliance on market
members within the organization (Dickson et al. 2001). mechanisms are expressions of its pursuit of external
Participant 5, in particular, reflected on how the leadership of goods, such as money, power, and fame, and such pursuit
the company is crucial in fostering a sustainability culture in of external goods is determined by its institutional
the organization: characteristics as a profit-oriented social economic entity.
Constrained by such institutional characteristics, then, so-
Growing sustainably is a feel-good thing, but its not
cial and environmental concerns in business would only be
just that; its also just a culture in the company. The
considered when they can be justified as the pursuit of
owner of the company, XX [name of the owner], it
external goods because of perceivable economic values.
starts right at him. Its a really good company to work
Following such a rationale, then, where market rewards are
for and the culture and the management support for
lacking, the business case argument would become weak
sustainability is huge. We have a sustainability
motivation for long-term and sustained CSR practices be-
meeting maybe once every six months; senior man-
cause they are not justifiable as the pursuit of external
agers, managing director come and sit down and
make time for it and thats huge, but it starts from the
However, as the examples show in this paper, most
top, because if it doesnt come from him [the owner],
participants in this study demonstrated long-term commit-
theres no buying. So it starts from the top and its the
ment to sustainability practices despite the weak market
culture; its something we dont have to consider, and
signals in many cases. These individuals make a strong
its just something we do. Its part of our everyday
ethical case in understanding sustainable business practices
business; its just second nature for us.
as they show that individuals pursuit of internal goods in
Here, the participant views sustainability practices as part many cases can transform into a companys collective
of the companys cultureits just something we do. Its pursuit of virtuous business conduct. Our examples show
part of our everyday business and it is just second that many individuals have been identified as the funda-
nature. The owner of the companyfrom the topis mental motivation for a companys engagement with sus-
seen as the most important driver in development of such a tainability initiatives and practices. These individuals
culture, from senior management to branch employees like personal commitments to, and philosophy about, sustain-
herself. For this participant, the owners commitment and ability are often seen as the driving force behind not only
determination is the key to the companys sustainability virtuous business conduct but also the development of a
culture simply because if it doesnt come from him, moral and ethical climate in the organization.
theres no buying. Individuals moral and ethical-based considerations
Throughout the interviews, moral and ethical consid- move the discussion of business sustainability motivation
erations prevailed when individuals were identified as the from the business case of self-interested enlightenment to
key motivation behind a companys sustainability prac- an ethical case of the individuals desire to do good. In
tices. These individuals values and beliefs, often influ- the practiceinstitution framework, the individuals desire
enced by their experience, are the key to their personal as to do good is conceptualized in the notion of practice,
well as the companys commitment to a sustainability path. where ones pursuit of internal goods is based on, and
Underlying such a commitment is the individuals desire, derived from, the virtue and moral character of the indi-
as well as ability, to transform self-interest into ethical and vidual. Essential to an ethical case of sustainability prac-
virtuous business conduct. These motivating individuals tices, therefore, is the individuals moral character and their
are crucial in fostering a sustainability culture within the pursuit of internal goods. In other words, whereas the
organizations and in elevating the ethical and moral ground pursuit of external goods is determined by business in-
of others. As reflected by many participants in this study, stitutional market characteristics, the pursuit of internal
successful and inspirational individuals are committed to goods depends on the individuals in business finding ra-
social missions not only because such an act is ethical and tionales in ethical narratives and intrinsic values. As shown
virtuousits the right thing to dobut also because it in the discussion of many participants as well as their re-
is the individuals moral imperative to do soits a flections on others, for many individuals within the busi-
personal thing. ness arena, leading business practices to a sustainability

76 Y. Wang et al.

path is not only seen as the right thing to do, but also The revival of virtue ethics applies to individuals, in-
simply a way of embracing and engendering virtue and cluding their roles in organizations, as we have discussed in
morality through example and virtuous conduct. this paper. Although the matter of discerning or inferring
motivation for a collectivity is fraught with epistemo-
logical, legal, and other problems, it remains important to
consider how the cultures of organizations foster certain
Conclusion kinds of behaviors. This is an important question, espe-
cially for the theoretical move from the individual to the
It has been a moving experience to talk to the participants collective level, where attributions of motivation and of
in our larger study of the New Zealand wine industry, who virtue necessarily take on a different type of character. In
have helped demonstrate a clear ethical case for sustainable this regard, of course, owners, top managers, etc., have a
business practices. We argue that the business case alone disproportionate influence on what becomes, de facto, the
cannot fully explain companies engagement with sus- moral character of an organization.
tainability practices in the long term. Our examples show
that a companys sustainable practices are often anchored Acknowledgements This paper was part of a research project
funded by the New Zealand Marsden Fund, administered by the Royal
by an ethical core, which is rooted in the moral and ethical Society of New Zealand.
pursuits of the individuals within the organization. Espe-
cially when the market is not perceived as sending strong Ethical standards The authors declare that the conduct of this re-
signals for external goods, individuals moral and ethical search conforms to the policies and principles of human research
which is in accordance with the research ethical standards of the
beliefs become pivotal in driving sustainable initiatives and University of Waikato.
practices of the company.
We draw particular attention to the theory of virtue Conflict of interest The authors declare no conflict of interest with
ethics and show that virtue theory provides a useful ex- respect to this research. The authors have full control of all primary
data, which are available for review if requested.
planatory framework in making sense of various business
ethics issues through placing a focus on the moral character
of the individuals and its transformational influences in References
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