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Moral Entrepreneurship

Chapter · June 2020

DOI: 10.1007/978-3-030-22767-8_1224

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Moral entrepreneurship

Muel Kaptein

Synonyms

Leadership in ethics; proactive ethical leadership; innovative ethical leadership; moral leadership;
leader in ethics; ethics pioneer; moral reformer; moral frontrunner

Definition

The moral entrepreneur is a person or organization who creates a new ethical norm that others
follow. Moral entrepreneurship is the process by which such ethical norm is created.

Moral entrepreneurs are leaders in ethics. They develop new and better ethical norms. Apart from
challenging an ethical norm, rethinking ethics, and reflecting on ethical goals, moral entrepreneurs
also create new ethical norms. Moral entrepreneurs are innovators and pioneers in ethics. They
disrupt existing moral codes and give rise to a new one. They alter the views about what is “right”
or “wrong”. Instead of simply following current or accepted morality, moral entrepreneurs lead
morality through the creation of a new morality.

The moral entrepreneur should not be confused with the social entrepreneur. Whereas social
entrepreneurs can be agents of change and emphasize innovation, they do not necessarily introduce
new ethical norms. However, social entrepreneurs can also develop new products and services that
make existing ethical standards more feasible. Likewise, a moral entrepreneur, as an innovator in
ethics, should not be confused with the ethical innovator who innovates in a normatively
appropriate way. Neither is moral entrepreneurship the morality of entrepreneurship, which is the
values and norms associated with being an entrepreneur.

The concept of moral entrepreneurship does not suggest that a person or organization is a leader
in ethics regarding every relevant norm. Moral entrepreneurship is norm-specific. The moral
entrepreneur can display moral entrepreneurship regarding one issue while being reactive or
passive regarding another.

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Origin

The concept of moral entrepreneurship has its origin in the sociological literature. Becker coined
the term in 1963 to explain how moral reforms happen. Becker’s central thesis was that social
groups create deviance by making rules and applying these rules to people who deviate and then
labeling the deviants as outsiders. For Becker, moral entrepreneurs are people who make this moral
reform happen. He differentiates between two kinds of moral entrepreneurs: those who create new
norms and those who enforce these new norms. The crusading reformer, as rule-creator, is the
moral entrepreneur par excellence. The moral entrepreneur experiences some evil that profoundly
disturbs him and that he wants to correct by translating a preferred norm into legal prohibitions;
however, he also risks becoming an outsider himself when he is not successful in his attempt to
create support for the new rule or norm, as Becker argued.

Examples

Outside the business and professional literature, the concept of moral entrepreneurship has been
applied to the challenges faced by nongovernmental organizations concerned with human rights,
to the conditions under which global norms become part of the agenda of global governance, to
the transformation and institutionalization of international commercial arbitration as the leading
contractual method for the resolution of transnational commercial disputes, and to cooking shows
on television that tackle some social problems like health and social exclusion. Other examples of
moral entrepreneurship analyzed in the literature are the development of moral norms against
smoking, drunk driving, underage drinking, and copyright infringement. A scale has also been
developed to assess the personality of moral entrepreneurs.

In the business and professional literature, the concept of moral entrepreneurship has been
employed in analyzing the careers of exemplars of the moral entrepreneur, to the actions of
multinational enterprises fighting corruption in largely corrupt regimes, and in explaining why
employees who observe wrongdoing speak up to correct the wrongdoing or wrongdoers. Other
examples provided in the literature are:

— A CEO who, based on the belief that once goods are delivered the money for it belongs to the
supplier, decided to pay invoices immediately even though the norm in the sector then was to
only pay suppliers after 90 days;

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— A manager who, out of respect for animals, led his airline company to be the first to introduce
a ban on the transport of dead animals as hunting trophies;

— A lingerie shop manager who, out of respect for women, made his shop the first in his country
to stop portraying scantily dressed women on advertising billboards; and

— An organization that, out of respect for the stakeholders, established the new norm requiring
employees to prevent not only conflicts of interest but also the appearance of it.

Importance of moral entrepreneurship

Demonstrating moral entrepreneurship is important. Some reasons for this are:

— Moral entrepreneurship has a positive influence on society: the creation of a new ethical norm
that will be followed can contribute to a better society.

— Moral entrepreneurship improves trust: moral entrepreneurship indicates that the moral

entrepreneur values ethics by going further than what is expected, has a good will and the drive

to improve society.

— Moral entrepreneurship creates efficiency: by being proactive the moral entrepreneur

demonstrates self-regulation that may prevent interventions and measures, like rules and

regulations, set by others.

— Moral entrepreneurship is good for self-actualization: making a moral difference can advance

individual (or organizational) self-fulfillment and self-development.

Dimensions

Moral entrepreneurship can be described in terms of its various dimensions. Some of the relevant
ones are:

— The actor: Who is the moral entrepreneur? Is it an individual or an organization? If an

individual, then the hierarchical level of this individual can be employee, manager, or CEO. If

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 an organization, then is it a business or a sector organization, or is it a team or division within
an organization? Is the moral entrepreneur one or more individuals or organizations?

— The object. What type of ethical norm is created? To which value, principle, or stake is the
norm related? What issue does it aim to solve, and how big is the difference with the current
ethical norm?

— The process. What is the process of creating the new ethical norm that others follow? Is it
gradually or suddenly, formally or informally, individually or collectively, iteratively or
straightforwardly, consciously or unconsciously? What type of arguments does the moral
entrepreneur use to convince followers?

— The subjects. Who are the followers? Are they inside or outside the organization, sector, or
country. How many followers are there? What are the other characteristics of the followers and
non-followers?

— The context. What is the context and situation in which the moral entrepreneurship takes place?
Is it a crisis or a stable situation? One of scarcity or abundance? Is it well-ordered or complex,
with many or few pressures and issues?

— The output. To what extent is the new ethical norm observed? Is it followed sometimes or
always? Is the new ethical norm deeply or only superficially embedded? Does the government
adopt it in its laws and regulations and is there supervision and enforcement? Are there further
innovations by others on the new ethical norm?

Relationship with other concepts

The concept of moral entrepreneurship is closely related to other concepts. Three of those concepts
discussed here are ethical leadership, corporate social responsibility, and proactive leadership.

Moral entrepreneurship is one of the three layers of ethical leadership. There is one widely used
definition of ethical leadership developed by Brown, Treviño and Harrison (2005). They define
ethical leadership as “the demonstration of normatively appropriate conduct through personal
actions and interpersonal relationships, and the promotion of such conduct to followers through
two-way communication, reinforcement, and decision-making” (p. 120). According to Brown et
al., managers become ethical leaders, firstly, by being and behaving ethically, that is, by fulfilling

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the role of “moral person”; and secondly, by promoting the ethical behavior of others through two-
way communication, reinforcement, and decision-making, that is, by fulfilling the role of “moral
manager”. This definition suggest that ethical leadership is consistent with what a particular
society or culture defines as right and wrong or as good and evil. According to this definition, the
ethical leader follows current morality. However, the ethical leader can also lead morality. So an
ethical leader can also be a moral entrepreneur who creates new ethical norms. Thus ethical
leadership is “the demonstration of normatively appropriate and new conduct.…” The moral
entrepreneurship component complements the two other components of ethical leadership:
whereas the moral person is oriented towards who the leader is and the moral manager towards
how the leader influences others, the moral entrepreneur is focused on what norms to establish.

Moral entrepreneurship relates to the highest level of corporate social responsibility. Studies on
corporate social responsibility are concerned with how companies can contribute to societal
development not only in the sense of solving social problems but also in the sense of improving
social welfare, promoting social progress, and creating new social value. According to Carroll’s
(1979) widely used typology, there are four kinds of strategies that companies can follow to
contribute to the development of society: obstructionist, defensive, accommodative, and proactive.
These strategies are in a continuum, from doing nothing to doing much. The difference between
an accommodative and proactive strategy is that companies that adopt an accommodative strategy
meet stakeholders’ demands without initiating voluntary actions for the common good, whereas
companies with a proactive strategy initiate voluntary actions for the common good, and they lead
the sector or industry. Thus, being proactive coincides with the highest level of social
responsibility. It is only at this level, according to Carroll, that leadership takes place. It is also at
this level that moral entrepreneurship takes place.

Moral entrepreneurship is an example of proactive leadership. Based on a literature review, Wu

and Wang define proactive leadership as “generating and enacting self-initiated and future-focused
leading actions that are persistently sustained to bring changes toward the environment” (2011, p.
305). In their view, proactive leadership requires leaders to do more than what is required and
expected of them. This kind of leadership is also forward-looking, responsive to opportunities or
challenges in advance rather than merely focused on the problems or demands at hand. Such
leaders actively set goals to create a better future. Proactive leaders actively master and effect

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changes in their environment. Proactive leaders are innovative. The quality of proactiveness also
distinguishes leadership from management. A crucial difference is that management concerns the
implementation of what is set and what others expect, whereas leadership concerns, first and
foremost, the setting of new standards and the formulation of new ambitions and goals. Moral
entrepreneurs are in this sense proactive leaders who set new standards to create a better future.

Antecedents

Moral entrepreneurship has many antecedents. They can be grouped into the opportunity for moral
entrepreneurship, the vision on moral entrepreneurship, and the capability for moral
entrepreneurship.

A. Opportunity for moral entrepreneurship

A1. Moral issues. Moral entrepreneurship depends on whether there are moral issues that need to
be addressed or that will arise in the short or long term. These moral issues, whether they are
problems, dilemmas, or challenges, are conditions for or enablers of societal improvement and
development. It is not only the number of moral issues that creates room for moral entrepreneurship
but also their urgency. The urgency of an issue is its magnitude in terms of potential harm and its
proximity in time and space. The more urgent an issue, the more morality or an appropriate
normative response is required. Moral entrepreneurs are critical for norm emergence because they
call attention to moral issues or even create them.

A2. Moral void. Moral entrepreneurship is required only if morality is lacking or inadequate with
respect to a particular issue; in other words, if there is a moral void. Moral void is the absence of
a shared and adequate moral orientation. The moral entrepreneur can only introduce a new ethical
norm when that norm does not exist yet. This means that moral entrepreneurship is not a moral
obligation for everyone in an organization or profession. When there is no opportunity for moral
entrepreneurship, we cannot blame people and organizations for not showing it.

B. Vision on moral entrepreneurship

B1. Moral awareness. Moral awareness—the recognition of the moral aspects of a given
situation—is essential for moral entrepreneurship. It is not enough that moral entrepreneurs
recognize the moral dimensions of a given issue; they should also recognize that an issue is

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(potentially) arising. The process of anticipating moral issues is clearly critical to the success of
moral entrepreneurs: they have an image of the future of a society, including what will happen and
what might happen. Moral entrepreneurs may show their leadership in situations where others have
not yet recognized an issue, or where the issue is still at a very early stage of development, or
where the issue has not yet manifested itself. Moral entrepreneurs have the moral awareness or
sensitivity to recognize moral issues as such.

B2. Moral development. How to come up with a new ethical norm after recognizing a moral issue
is crucial for moral entrepreneurship. Moral entrepreneurs have an image not only of what will
happen and what might happen but also of what ought to happen. Following Kohlberg’s three
levels of moral development, moral entrepreneurship is negatively related to the second level
(where people follow the moral conventions in their environment) and positively related to the
third level (where people base their arguments on principles that they believe are right and good
for society).

B3. Moral identity. Where there is an abundance of moral issues for which there is no or inadequate
morality, moral entrepreneurship does not require that a person or organization shows leadership
on all those issues. The moral issue(s) to which an individual or organization decides to commit is
likely to depend on their moral identity, understood as their self-conception around a set of moral
traits. Some specific traits of a person’s or organization’s identity may be related to the specific
issues with regard to which they will choose to demonstrate moral entrepreneurship. For example,
one whose moral identity is linked to caring for the natural environment is more likely to select
issue(s) and norms in that area than someone who identifies with being a good employer or fair
competitor.

C. Capability for moral entrepreneurship

C1. Drive towards transition. Moral entrepreneurship coincides with transitional leadership in the
sense that these persons or organizations are not focused on improving current practices to catch
up with current ethical norms. Instead, they are focused on improving current ethical norms
through the introduction of new and better ones. An antecedent of moral entrepreneurship is thus
the extent to which a person or organization is driven toward transition, i.e., toward focusing on
improving one or more ethical norms. This drive is important because improving ethics is a

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struggle accompanied by conflict and resistance. Therefore, moral entrepreneurs are committed
and dedicated. They persevere because they have a deeply rooted drive to change.

C2. Capability to gain power. Moral entrepreneurship is successful when others adopt the new
ethical norm. This points to the importance of moral entrepreneurs gathering support for their
proposed new norm. Therefore it is crucial for moral entrepreneurs to gain power. There are many
sources and tactics of power. Power can be developed through relationships, reputation, credibility,
networks, competence, information, skills, and expertise. Moral entrepreneurs can encourage the
inclusion of issues on the agenda in various ways, for instance, through their use of the media,
lobbying, and testimony. Through role modeling, that is, demonstrating the new norm through
one’s own behavior, moral entrepreneurs can also gain power. What is relevant for moral
entrepreneurs is the extent to which they are capable of building their power and applying that
power in a manner that gets others to adopt the new ethical norm.

Finally

Moral entrepreneurship is a useful concept to describe not only the development of ethics of
businesses and professions but also of people and organizations that become leaders because they
create new ethical norms and are able to get followers for these norms.

References

Becker, H. (1963). Outsiders: Studies in the sociology of deviance. New York: The Free Press of
Glencoe.

Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning
perspective for construct development and testing. Organizational Behavior and Human Decision
Processes, 97, 117–134.

Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy

of Management Review, 4, 497–505.

Kaptein, M. (2019). The moral entrepreneur: A new component of ethical leadership. Journal of
Business Ethics, 156, 1135-1150.

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 Wu, C., & Wang, Y. (2011). Understanding proactive leadership. In W. H. Mobley, M. Li, & Y.
Wang (Eds.), Advances in global leadership (pp. 299–314). Emerald: Bingley.

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