Article Critique?

Virtue Ethics and the Practice–Institution 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-

derstanding of the theory of virtue ethics and its applica-

tions in the business arena. In contrast to other prominent

approaches to ethics, virtue ethics provides a useful per-

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-

ness conduct. Building on Geoff Moore’s (Bus Ethics Q

12(1):19–32, 2002; Bus Ethics Q 15(2):237–255, 2005;

Bus Ethics Q 18(4):483–511, 2008) treatment of Alasdair

MacIntyre’s practice–institution schema, the paper dis-

cusses how individuals, as moral agents, can serve to

promote virtuous business conduct and help foster a moral

and ethical climate in the organization and in society at

large. Using interview data from a broader study of the

New Zealand wine industry as explanatory examples, the

paper argues that while many companies’ sustainable

practices are still largely market based, such excellent

business practices are often driven by individuals’ moral

and ethical pursuits.

Keywords Business ethics � Virtue ethics � Practice– institution schema � Corporate social responsibility � Social entrepreneurship � Sustainability � Sustainable enterprise � Transformational leadership � New Zealand wine industry

Introduction

The understanding and expectation of business responsi-

bility, and its place in society is evolving. This challenges

the field of business ethics in making sense of salient issues

such as what is considered as ethical business conduct,

what drives such conduct, and how business should un-

derstand as well as act upon its place in society. The

conventional ‘‘business case’’ argument, where sustainable

business practice is aligned with long-term self-interest,

rationalizes the market incentive for responsible environ-

mental and social performance. However, business ethicists

have recognized the inadequacy of singularly relying on

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-

porate Social Responsibility, Kurucz et al. (2008) organize

the existing reviews and models of the ‘‘business case’’ for

corporate social responsibility (CSR) into four modes of

value creation, in an effort to broaden the theoretical scope

of the ‘‘business case’’ argument.

This paper, therefore, argues that business engagement

with sustainable practices should be recognized beyond

market-based propositions and that the initiatives as well as

the drivers behind such practice must be appreciated via

moral and ethical considerations. In particular, the theory of

Y. Wang (&) � G. Cheney � J. Roper University of Waikato, Hamilton, New Zealand

e-mail: [email protected]

J. Roper

e-mail: [email protected]

G. Cheney

University of Colorado, Colorado Springs, United States

G. Cheney

University of Utah, Salt Lake City, United States

e-mail: [email protected]

123

J Bus Ethics (2016) 138:67–77

DOI 10.1007/s10551-015-2579-3

virtue ethics offers a useful approach that focuses on the

importance of individuals’ moral character in driving virtu-

ous business conduct as well as fostering an ethical corporate

and social climate. As demonstrated in many successful

examples of business engagementwith sustainable practices,

while their engagement is indeed market oriented, such a

‘‘business case’’ is often rooted in and sustained through an

ethical core that is embedded in individuals’ moral and

ethical pursuits. Through the theoretical lens of virtue ethics,

specifically, this paper uses Moore’s (2002, 2005, 2008)

study of MacIntyre’s (1985) practice–institution schema in

conceptualizing the intricate process whereby individuals’

pursuit ofmoral excellence becomes the driving force behind

business sustainable practice.

The paper begins with a discussion on virtue theory and

MacIntyre’s (1985) practice–institution schema. Drawing

mainly fromMoore (2002, 2005, 2008), the paper illuminates

how the practice–institution schema helps conceptualize the

processwhereby individuals’moral character can become the

key driver behind an organization’s collective ethical and

moral pursuits. Next, the paper discusses how the theory of

virtue ethics and the practice–institution schema can be used

to understand key ethics issues such as transformational

leadership and social entrepreneurship in the contemporary

business context. Following the theoretical discussion, the

paper uses interview data from a larger study of the New

Zealand wine industry to showcase that in many cases indi-

viduals’ values and beliefs are fundamental to promoting

sustainable initiatives and practices in the business arena.

Virtue Ethics and the Practice–Institution Schema

The theory of virtue ethics has received increasing atten-

tion from business and other applied ethicists in under-

standing as well as guiding ethical business conduct. In

Evolution in the Society for Business Ethics, Koehn (2010)

notes that the recent movement in business ethics has

shown more interest in virtue ethics (specific individual

virtues or quasi-virtues such as integrity, trust, and justice),

and that ethicists have been ‘‘more willing to let the phe-

nomena suggest possibly relevant standards or virtues in-

stead of applying pre-existing frameworks to problems’’ (p.

748). According to Hursthouse (1999), virtue ethics, fol-

lowing the thoughts of Plato and Aristotle, is an ethical

approach that emphasizes virtues and moral character.

Distinct from other moral theories, as noted by Arjoon

(2000), virtue theory ‘‘grounds morality in facts about

human nature, concentrates on habits and long-term goals,

extends beyond actions to comprise wants, goals, likes and

dislikes, and, in general what sort of person one is and aims

to be’’ (p. 173). Contemporary treatments of virtue ethics

aim not only to extend the approach to collectivities but

also to promote a range of practices that give substance to

such labels as openness and integrity.

In presenting an ‘‘Aristotelian approach’’ to business,

Solomon (2004) argues that the key to the application of

virtue theory to business ethics, is the consideration of ‘‘the

place of business in society.’’ He proposes that we under-

stand the place of business in society from a virtue ethics

perspective in which business is viewed as ‘‘a human in-

stitution in service to humans and not as a marvelous

machine or in terms of the mysterious ‘magic’ of the

market’’ (p. 1024). Using the Aristotelian concept of polis

(the larger community an individual belongs to), Solomon

argues that an individual’s virtue and character are em-

bedded in, and in service to, the larger community. Busi-

ness excellence is characterized by not only its superiority

in practice but also its role in serving larger social pur-

poses. Paramount to such conceptualization is the recog-

nition of the human features and aspects of business. For

Solomon, then, there is a clear yet often overlooked linkage

between the ethics of business and the ethics of human

virtue. Business and organizations are consequently de-

mystified as human enterprises.

Echoing Solomon, Geoff Moore’s approach to business

ethics also features a key emphasis on the influence of human

behavior in the business world. Drawing extensively from

Alasdair MacIntyre’s philosophical approach to ethics,

Moore’s understanding of business ethics places a focus on

how an individual’s virtuous conduct can bring out the hu-

man aspects of business (see: Moore 2002, 2005, 2008).

According to Moore, MacIntyre’s practice–institution

schema is a valid framework in understanding virtue ethics

and its application to business. MacIntyre defines practice as

Any coherent and complex form of socially estab-

lished cooperative human activity through which

goods internal to that form of activity are realized in

the course of trying to achieve those standards of

excellence which are appropriate to, and partially

definitive of, that form of activity, with the result that

human powers to achieve excellence, and human

conceptions of the ends and goods involved, are

systematically extended. (MacIntyre 1985, p. 187, as

cited in Moore 2002)

Central to MacIntyre’s conceptualization of practice is the

concern for ‘‘internal goods.’’ In MacIntyre’s notion of

practice, simply put, internal goods are about a person

feeling good about what he or she does and that such

feeling of ‘‘good’’ must be based on, and derived from, the

virtue and moral character of the individual. Business as

practice, then, is the consideration of business as a form of

such practice, where individuals in business should strive

to realize the ‘‘internal goods’’ about doing business and

achieve excellence through virtuous conducts.

68 Y. Wang et al.

123

In MacIntyre’s practice–institution schema, institutions,

on the other hand, are concerned with ‘‘external goods’’

such as money, power, and success. For Moore (2002), the

institutions can be viewed as a collective mechanism that

emphasizes the functionality of business as a profit-ori-

ented social economic entity. The fundamental character-

istic of institutions of business, therefore, is the pursuit of

financial gains, often at the expense of social performance.

However, just as institutions have the ability to set con-

straints, they also have the potential to nourish virtuous

acts and promote ethical business conduct. This happens

when one or more of the mechanisms safeguarding the

institutions—the pursuit of ‘‘external goods’’—can find

incentives and rationales to justify and encourage the

pursuit of ‘‘internal goods’’ at both individual and organi-

zational levels. These incentives and rationales, justifiable

as good practice, then become the driving force behind

business engagement with issues beyond the financial

bottom line and the movement toward sustainable social

and environmental practice. In CSR and sustainable de-

velopment literature, the argument for using mechanisms

of the institutions as a promoter for sustainable practice is

generically referred to as the ‘‘business case,’’ as it essen-

tially turns on the financial incentive of such practice.

While institutions can sustain good business practices,

they can also have corrupting power when the ‘‘external

goods’’ (incentives or rewards) no longer justify these

practices. Typically, this is when organizations no longer

perceive financial gain in association with their sustainable

practices. Yet, for Moore (2002), ‘‘it is precisely in the

interplay between the practice of business and the corpo-

ration in which it is embedded, in the interplay between

‘internal’ and ‘external goods’ that exciting possibilities

exist for business and for business ethics’’ (p. 30). In other

words, although institutions can set constraints on good

business practices, individuals’ pursuit of ‘‘internal goods’’

can motivate virtuous business conduct. In fact, the im-

portance of virtue theory lies in its emphasis on indi-

viduals’ moral character and the process whereby the

imperative of virtue brings out the human aspects of

business through individuals’ realization of their ‘‘internal

goods’’ and achievement of excellence. This, for Moore

(2005), is a process of humanizing business.

A moralized, virtuous corporation, in Moore’s conceptual-

ization, is one that ‘‘understands’’ that the pursuit of excellence

is ultimately a moral pursuit and hence seeks to encourage it.

Such an attempt at humanizing business is not to say that we

should discuss business ethics as if business naturally has vir-

tues. Instead, humanizing business is an approach of under-

standing business and business ethics by focusing on the

individuals in business and their moral capacity as well as

constraint. In Humanizing Business: A Modern Virtue Ethics

Approach,Moore (2005) posits that the humanizing of business

is a process that happens from within the business, when indi-

viduals who work in it recapture a sense of virtue and begin to

exercise such virtues. In a similar vein, Hemingway (2005) has

argued that in understanding issues surrounding CSR, indi-

viduals’ personal morality is an important factor to consider

because individuals’ own socially oriented personal values can

become a catalyst that inspire and foster responsible corporate

behavior. In this sense, she adds, any employee, at any level in

the organization, can act as a moral agent.

Individuals’ moral character, therefore, becomes the key

motivation that drives business pursuit of excellence. That is,

while the pursuit of ‘‘external goods’’ is determined by

business institutional characteristics and its reliance on mar-

ket mechanisms, the pursuit of internal goods is derived from

the moral and ethical character of the individuals in business.

This is illustrative of the inadequacy of purely relying on the

‘‘business case’’ to explain corporate involvement with social

and environmental issues. In the business case argument, the

institutions of business are highlighted, and the business

pursuit of ‘‘external goods’’ is prompted and presupposed by

the mechanisms of the market. Following this assumption,

then, when the market cannot sufficiently incentivize sus-

tainable business practices, perhaps due toweak signals or the

lack of immediate reward, business would logically decline

such practices. Or, rather, business would bemore inclined to

promote the so-called sustainable practices in the short term

for immediate benefits, and thus it is unlikely that these

practices can be sustained in the long term.

In actuality, however, there are many examples of

businesses incorporating sustainability as a company phi-

losophy and whose sustainability practices are persistent.

Moreover, the frameworks for these policies and activities

vary in terms of expressed concern for contribution to the

traditional bottom line of profit or advantage to share-

holders or other controlling stakeholders. In fact, for many,

maintaining sustainability practices are the founding prin-

ciple of the business, driven by individuals’ values and

beliefs. The next section will look at some specific appli-

cations of virtue theory, particularly in the area of trans-

formational leadership and social enterprise, to elucidate

how individuals provide moral guidance in promoting a

sustainable path for their organizations.

Transformational Leadership, Social

Entrepreneurship, and Virtue Ethics

The theory of virtue ethics has demonstrated its applica-

bility in the field of business ethics, especially on the topic

of leadership, given its emphasis on individuals’ moral

character. Whetstone (2001), in How Virtue Fits within

Business Ethics, argues that virtue ethics provide business

managers and leaders with practical applications in

Virtue Ethics and the Practice–Institution Schema 69

123

promoting moral development and moral reasoning. This is

because, he notes, virtue ethics is both personal, in fo-

cusing on the motivations of the actor and the sources of

action, and contextual by highlighting the importance of

understanding the environment as it affects both the moral

agent and the act itself. In addition to providing practical

guidance for business leaders, virtue ethics has also be-

come an important category in understanding the ethics of

leadership itself. Price (2004), for instance, notes that

distinct from a utilitarian point of view that focuses on

overall utility maximization and the stress of Kantian ethics

on universal principles, virtue ethicists would argue that

ethical leadership depends more on developing habits or

dispositions to act virtuously.

The theory of virtue ethics has been used by many business

ethicists to advance the study of leadership ethics. In the con-

text of corporate sustainability, for instance, there has been

growing interest in the role of transformational leadership in

promoting sustainable business practice from the perspective

of virtue ethics. According to JamesMacGregorBurns (1978),

transformational leadership reflects the high moral and ethical

standard of the leader where he or she seeks to ‘‘raise the level

of human conduct and ethical aspiration of both the leader and

led, and thus it has a transforming effect on both’’ (p. 20). The

emphasis of virtue ethics on individuals as moral agents,

therefore, presents a useful perspective in understanding the

moral characters of transformational leaders and their practice

(Bass and Steidlmeier 1999). In considering virtue theory and

its applicability to leadership, for example, Arjoon (2000) ar-

gues that what distinguishes a good leader is that ‘‘he or she is

relatively more developed in the virtues and that person has a

clear vision of the common good and themeans to promote it’’

(p. 172). Thus, from the standpoint of virtue ethics, according

to Koehn (1995), the important ethical matter is that indi-

vidualsmust be able tomake contributions of value to a society

or communal enterprise and that the virtuous agent simply is

the personhabituated to desire to dowhat is good andnoble.By

extension, then, MacIntyre’s practice–institution schema

suggests that both the motivation and reward for such contri-

butions is not monetary but rather an ‘‘internal goods’’—a

sense of wellbeing.

While transformational leadership is normally applied to a

context of organizational change, the same qualities of virtue

ethics have also been applied to the study of social en-

trepreneurship, sustainable enterprise, and a range of similar

concepts. In understanding various aspects of social en-

trepreneurship, Sullivan Mort et al. (2003) argue that the key

features of social entrepreneurship include not only its con-

cern and commitment in the social domain, the entrepreneur’s

leadership aptitude, and exceptional capacity, but also the

virtue and moral characters of both the entrepreneur and the

enterprise. As Roper and Cheney (2005) point out, private

social enterprises are often led by value-driven, charismatic

leaders who style themselves and their organizations as both

innovative and socially responsible. Using examples such as

Anita Roddick, the founder of the Body Shop, Grant (2004)

and Roper andCheney (2005) alsopoint out the importanceof

the character of successful social entrepreneurs. They argue

that at their inception these successful social enterprises share

in common the entrepreneurs’ vision of socially responsive

business and their ability to instill such values in the

organization.

Pratt and Pratt (2010) conducted a study of nine sus-

tainable enterprises from around the world, all selected

because they were established by a leader who explicitly

put sustainability principles at the core of the business from

the time of its inception. Examples included The UK’s

Eden Project, New Zealand’s Comvita, and Sri Lanka’s

Dilmah Tea. Kearins and Collins (2012), among others, use

the term ‘‘ecopreneur’’ in referring to those who establish a

business ‘‘in order to have a positive environmental and

social impact, as well as to make a profit’’ (p. 72). They

include ecopreneurship as one specific category of ‘‘values-

based business’’. There is clear synergy among the various

terms applied. By whatever term, what is truly fundamental

to successful social/sustainable enterprises, those that end

up transforming their business and society, is the virtue and

moral character of their leaders. In other words, a suc-

cessful sustainable enterprise must be anchored in, and

sustained through, a moral purpose—a deep and genuine

concern for the environment and the society. Being a

successful social entrepreneur then, returning to Bass and

Steidlmeier (1999), is a way of embracing virtue and

morality; and a way one engenders virtue in self, others,

and society through the example and virtuous conduct of

social enterprise.

Importantly, the value of transformational leaders and

social entrepreneurs lies not only in their success in cre-

ating a sustainable business, but also in the moral influence

they exert on others, their organizations, and the society at

large. In fact, the cultures of organizations in which such

transformational leaders and social entrepreneurs operate

may be profoundly shaped and ultimately sustained by

certain values, practices, and habits. Virtue ethics, in

placing an emphasis on moral character, provides a useful

way to understand how individuals’ ethical and moral be-

liefs can transform conventional self-serving business

practice into virtuous business conduct.

Indeed, in the discussion of transformational leadership

and social entrepreneurship, as with organizational value-

based action in general, the question of whether leader

charisma is essential for inspired organizational perfor-

mance is a persistent one. Weber (1978), for instance, was

concerned about exemplary character on individual as well

as organizational levels. The problem of charisma is how to

move it beyond the individual performance as a key means

70 Y. Wang et al.

123

of expressing authority and indeed directing the actions of

an organization. This remains a key question for collective

applications of virtue ethics and for assessing as well as

promoting virtuous behaviors in organizations. On a prac-

tical level, all sorts of organizations that are committed to

social values wrestle with the problem of how to, in We-

ber’s terms, ‘‘routinize’’ charisma given that so much of the

socially inspired leadership in all sectors is tied to indi-

vidual leaders and their initiatives.

The importance of virtue theory, therefore, lies in its

emphasis on individuals’ values and moral convictions in

understanding business practice. Specifically, it depicts

how individuals’ moral character can become the key dri-

ver behind an organization’s collective pursuit of ethical

business conduct. Such a virtue ethics approach to business

ethics is founded in our understanding of business as a

human-based social entity, or, as Solomon (2004) has put

it, a human institution in service to humans. According to

Arjoon (2000), the pursuit of ‘‘internal goods’’ corresponds

with a state of ‘‘being,’’ whereas ‘‘external goods’’ corre-

spond to a state of ‘‘having.’’ It is only under the state of

‘‘being,’’ the author posits that we can fulfill our true po-

tentialities which cannot be accomplished or satisfied by a

state of ‘‘having.’’ In this sense, virtue theory turns the

central issue of business ethics—‘‘how business should

act’’ to the question ‘‘how people should act,’’ where in-

dividuals’ moral capacity becomes the key to cultivating an

ethical climate in all aspects of social life. As demonstrated

in the many examples of transformational leaders and

successful sustainable enterprises, when individuals act as

moral agents, not only do their values and ethical pursuits

weigh at the core of business sustainability decision mak-

ing, but also their virtuous conduct can help foster, and in

turn be sustained through, a virtuous environment.

What we are concerned with in this paper is how trans-

formational leaders and sustainable entrepreneurs are influ-

ential.We investigate this question using the case of theNew

Zealand wine industry, an industry that includes many such

leaders whose personal stories and views strongly reflect

virtue ethics. Further, the businesses in which these indi-

viduals work stand as working examples for the application

of MacIntyre’s practice–institution schema.

An Ethical Case of Excellent Business Practices: The

New Zealand Wine Industry

Our discussion in this paper is based on a larger study which

was carried out in 2010 of sustainable practices in the New

Zealand wine industry. The New Zealand wine industry

enjoys an international reputation for its proactivity and in-

novation in facing growing concerns regarding sustainable

business practice. The focus of themain study, therefore, was

to explore the key motivations that drive the initiatives and

the practices toward sustainability in the New Zealand wine

industry. Fifteen participants from 14 wine companies were

interviewed for this study, among whom three participants

were the owners of the company, while the rest were in

managerial positions. Although it is not the purpose of this

paper to present the full findings of the larger study, it is

important to note the range of dominant motivations that

were identified by the participants. Primarily, the study

found that the participants’ discussion of sustainability mo-

tivation was closely associated with the ‘‘business case’’

argument, where the market incentive was identified as the

main driver behind companies’ engagement with sustainable

practices. In addition, the participants also identified a

regulation-based motivation, driven by both industry and

government regulations. However, our participants reflected

that both the strong industry initiative and the weak gov-

ernment regulation are clearly based on financial incentives,

where the market remains dominant. Finally, the majority of

participants of this study also made a strong ethical case; the

participants’ individual moral and ethical pursuits were seen

as the key driver behind their companies’ sustainability

practices.

In this paper, and in line with the discussion of virtue

theory, we focus on the ethical case identified through the

interviews. Through presenting these discussions, we wish

to exemplify the importance of individuals’ moral char-

acter and ethical commitment in driving ethical business

conduct. We use these discussions to show that many

participants have personal beliefs in, and long-term com-

mitments to, sustainability practices. In many cases, even

when the market signals were weak these individuals

maintained their commitment, and the sustainability prac-

tices were carried through. This shows that the ‘‘business

case’’ alone cannot fully explain business engagement with

sustainability practices. Even though ethics were not the

dominant motivation for adopting sustainable business

practices, there is clear evidence of the transformative in-

fluence virtue ethics has had in many instances. In the

remainder of the paper, we illustrate the application of

virtue theory and the practice–institution schema through

drawing on some examples from the interviews with

members of the New Zealand wine industry.

During our interviews with the New Zealand wine in-

dustry members, almost all participants, by varying de-

grees, reflected on how their own personal values and

beliefs or those of some others influenced their company’s

position and practice toward sustainability. This is at the

core of the theory of virtue ethics which, as discussed

above, grounds morality in human nature through empha-

sizing the moral character of individuals and their trans-

formational influences on others. Some participants, in fact,

identified an individual’s influence as the initial and the

Virtue Ethics and the Practice–Institution Schema 71

123

most important driver for the company’s sustainability

practice. One participant [participant 3], for instance, stated

I think the first motivation, the initial motivation was

probably driven by one of our vineyard managers, XX

[name of the person], who’s based in XX [name of the

region] and he is extremely sustainable and environmen-

tally committed.He has been a big driver for the company.

He’s alsoona lotof littleprojects and thingson the sideand

beenquite involved in thosekindsofprograms… soyeaha

lot of what we’re doing now has been driven by him.

For this participant, the vineyard manager’s personal

characteristic—‘‘extremely sustainable and environmental-

ly committed’’—is seen as the initial motivation that drives

the company’s sustainability practices. Like this particular

vineyard manager, across this study many individuals were

identified as highly committed to and having a philosophy

about sustainability. For instance, in discussing the com-

pany’s main motivation behind sustainability practices, one

of the participants [participant 5] responded

Well it comes right from the top, the owner, XX

[name of the person] has strong opinions on being

sustainable and about conserving our resources… he’s heavily involved in a not-for-profit organization

as well, so not just environmental sustainability, also

social and wellbeing programs.

Another participant [participant 11] who, himself, is highly

involved in the local sustainability programs, stated

For me it [sustainability] is a philosophy; it’s about be-

coming better at what we do and whowe are. Every year

in the vineyard to me is a research year, every year is a

trial so that we try things, we do things in the vineyard

and we learn from that year, and then we can add it to

next year so we become better at what we are doing.

These individuals’ commitment and philosophy is often

perceived as an important motivation for them not only to

drive their own company’s sustainability practices but also

to become involved in other environmental and social

projects that are outside the company scope. They,

therefore, ascribe to the characteristics of what Burns

(1978) refers to as ‘‘transformational leaders,’’ who not

only have high moral and ethical standard themselves but

also seek to raise the level of human conduct and ethical

aspiration of others. Regardless of their roles in the

organization, the owner of the company or the vineyard

manager, these individuals’ vision and moral inspiration

makes them the transformational leaders who encourage

commitment and foster change. Or, in Weber’s (1978)

terms, the charisma of such transformational leaders,

become ‘‘routinized’’ as the organization’s collective

practice.

AsKoehn also (1995) points out, from a virtue ethics point

of view, the important ethical issue is that individuals are

able to make contributions of value to a society or communal

enterprise and that the virtuous agent simply is the person

habituated to desire to do what is good and noble. The

character and beliefs of individuals, therefore, are crucial to

their desire as well as ability to elevate the moral ground of

others and transform behaviors. Across the interviews, a

number of factors were identified by the participants as the

key aspects that have influenced their personal attitudes and

beliefs toward issues surrounding sustainability. These in-

cluded personal experience and educational background, as

well as research and knowledge advancement. One par-

ticipant [participant 6], in discussing his personal motivation

toward sustainability practices, stated

My motivations are driven from personal experience.

I had worked for someone in XX [name of the re-

gion], XX [name of the person], who was among

earliest organic producers in New Zealand… So my

inspiration came from him. I also had an extended

period in Europe, based in London, actually, where I

think they were more advanced than we were and

possibly still are; they just seemed more in tune with

the environmental sensitivity and they had a lot of

pushes too in the supermarkets.

For this participant, his personal work and life experience

was the driver for him to become more environmentally

sensitive. For some other participants, it came from an

educational background:

I studied the program at Lincoln University, you

know, the model of the Swiss Sustainable Growing. I

was very impressed with it so I thought it would be

good for the environment around the vineyard. It was

going to be a good approach to see how we can be-

come more sustainable. There were some really in-

teresting things in the program that cover crops and

alternative sprays and, yeah, so we thought we would

give it a go and we did it. It has been ongoing and

very good. [Participant 8].

Another participant [participant 4], in discussing some of

the recent experiments in the vineyard, reflected on how

others’ research and knowledge advancement has promoted

his personal understanding and approach toward sustain-

ability practices:

This guy, XX [name of the person], he’s done a huge

amount of research into the use of beneficial plant-

ings around the vineyards, you know, planting flow-

ers and that kind of thing. He’s involved in a big

project in XX [name of the region]. He did some

good solid research; he got in there and counted the

72 Y. Wang et al.

123

bugs, and he said, well, if you plant this plant here,

you’re going to get so many beneficial insects, and

you’re going to be able to stop using that sprayer and

that particular chemical. That was amazing, I thought,

and it’s huge. I mean if you do it right, it’s beneficial

in so many ways…

The participant went on to talk about a few types of flowers

that they have planted in the vineyard:

…when you leave if you look over the other side of the

road, you’ll see we’ve got alyssum which is a little

white flower, and there’s another vineyard just out that

way and we’ve got a mix of wildflowers; we’ve got

some nice little red poppies coming up now and all

sorts of things. I’m not sure if we’ve got the colors quite

right this time but it’s such a good approach, a good

thing to try, you know, so yeah, this guy XX [name of

the person], he’s right into it, done the research and he’s

really enthusiastic. It got us all fired up; it just makes

you realize there are very good alternatives…

The advancement in research and knowledge, for this

participant, presents exciting opportunities in terms of

companion planting and sustainable growing. More impor-

tantly, the commitment and enthusiasm of others have

influenced his approach as well as attitude toward sustain-

ability practices. In a similar vein, some other interviewees

have also reflected on how the experience and passion of

others have been inspirational for them to become more

sensitive about, and involved with, sustainability initiatives

and practices. Participant 6, for instance, stated

I know this guy, his family has a vineyard, he wasn’t

working in the vineyard at the time but he would go

home for the weekends and go shooting and hunt-

ing/gathering sort of stuff on the home vineyards.

And I think it was during the 70 s or maybe it was

80 s he noticed that the soil was going a kind of grey

color, and that he wasn’t able to shoot as many

pheasants and birds, and noticed the wildlife was

slowly disappearing. It was at the same time that the

chemical companies were having a big push to viti-

culturalists and coming up with what we call calendar

spraying. So regardless of the climatic conditions,

regardless of the life cycle of what you are trying to

get rid of, they were just spraying. So it was his I

guess inspirational and emotional talk that pushed me

in that sort of direction as well.

For this participant, the story and emotion of others are

turned into his own inspiration and motivation. After

telling this story, the participant said

So yeah, it’s quite a personal motivation, I guess it’s

children. I have three kids and I think when you see

some of the damage that has been done through the

use of chemicals and you hear stories like that, you

know that something is not right and you have to do

what you can.

In this passage, the participant is making a moral and

ethical statement, expressing a concern for the damage that

has been done to the environment and a desire to do the

right thing. These moral and ethical statements are deeply

embedded in and reflective of the participant’s emotions

and feelings. For this participant, the motivation for

sustainability practices has passed beyond strategic calcu-

lations and become something ‘‘personal.’’

One of the key findings of the main study is that indi-

viduals’ moral and ethical concerns often emerge to sup-

plement, and challenge the centrality of a market mentality.

From market-driven to ‘‘person’’-driven, many par-

ticipants’ moral and ethical considerations become crys-

tallized in the shift from viewing sustainability practices as

part of business decisions to emphasizing personal values

and beliefs behind sustainability motivations. Like the

aforementioned participant, some other interviewees also

reflected on how sustainability practices have become ‘‘a

personal thing.’’ Another participant [participant 1], for

example, stated

Basically it [sustainability practice] is the right thing

to do. I mean with the environment if you were just

going to be careless and damage the soil and not care,

it says something about you as a person, doesn’t it?

And also your people, people who work for you,

you’ve got to pay them right, you’re not going to rip

them off… I think it’s just a personal thing. You can’t

add a tangible benefit to that, I guess you just feel

better because of it, you know.

For this participant, ‘‘doing the right thing’’ and ‘‘feeling

good about it’’ are identified as importantmotivations behind

sustainability practices. As the theory of virtue ethics posits,

individuals commit to ethical and virtuous conduct because it

is the moral thing to do and it is in their character to do so

(Hursthouse 1999). In viewing ‘‘sustainability’’ as some-

thing that carries personal and sentimental values, as shown

in the above examples, the moral character of these

individuals becomes the foundation for their own, as well

as their company’s ethical conduct. In their discussion of

personal motivations, some participants revealed how their

own and some other individuals’ personal values and

emotions had become the key for them to transform self-

interest and business-centric consideration into ethical

practices that benefit themselves as well as others beyond a

cold economic rationale. Participant 9, for instance, consid-

ered the owner of his company as the initial driver that had

led the company to a sustainable path. For this participant,

Virtue Ethics and the Practice–Institution Schema 73

123

the owner’s personal ‘‘affinity with the land’’ is the most

important personal value that has been transformed into

actual business practices:

It was important for XX [name of the owner]. He

wanted to have a point of difference, and he’s not just

going to be another winemaker that’s selling wines.

He wanted to have something different. XX [name of

the owner] has always had an affinity with the land,

and wherever he’s gone he’s always built the wet-

lands, he loves birds… he wanted us to be a sus-

tainable company. When we did the construction of

the winery and the design of the winery, our focus

was to build a winery that was very energy efficient,

and it just flowed on from there. So it was just right

from the word go, and it just has grown from there.

This reflects what Duska (2010) refers to as ‘‘false

dichotomy’’ (p. 730), where the distinction between self-

interested and altruistic practices is blurred. In other words,

for this owner there is no clear divide between self-interest

and ethical practice, because his personal values and

beliefs (‘‘self-interest’’) are aligned with what is considered

as ethical business conduct. Participant 6, in talking about a

correspondence between the owner of the company and

himself (branch manager), stated

A couple of weeks agowe got some feedback about our

organic wines, and one in particular was very positive

for us, saying ‘‘well done, congratulations, you are

doing the right thing’’. XX [name of the owner] flicked

me a quick email on Saturday morning as I was

watching my boy playing cricket, saying ‘‘what do you

think the tipping point will be?’’ and he was referring

there to the tipping point of the market. So his view is

that we are now just right at that tipping point, and it is

going to tip soon and then it is all on, and everyone will

have to have to prove that what they are doing is sus-

tainable. So he is a pretty astute businessman, but I think

the key for him and for me as well is before that tipping

point hits is to try and convert people as well.

As reflected by this participant, both he and the owner of

the company feel rewarded about being recognized as

‘‘doing the right thing.’’ Meanwhile, they are also both

excited about being ‘‘right at that tipping point.’’ For this

participant, there is a clear synergy between being able to

do the right thing and serving business interests, between

being an ‘‘astute businessman’’ and a transformational

leader who seeks to raise others’ awareness and change

behavior—‘‘to try and convert people.’’ Following this

passage, the participant continued to talk about the owner’s

personal influence on the company’s sustainability initia-

tives and practices:

XX [name of the owner] has always had a feeling that

we should be sensitive to the environment and sensitive

to the people who are working with the environment,

our employees. He set up an organic vineyard in XX

[name of the region] back in the late 90 s, called XX

[name of the vineyard], which was way ahead of its

time really, quite a big organic vineyard. So he puts his

money where his mouth is, and it has been a really hard

exercise as we have learned aswe have gone along, and

it hasn’t been too economic to date, but we’ve learned a

lot. So that has been a big driver for the company as a

whole to have the person at the top really be, you know,

following up his words with actions, and he is even

more so now.

Here, the owner’s sensitivities to the environment and the

people, as well as his personal actions, are seen as ‘‘a big

driver’’ for the company’s sustainability path. Like this

owner, several other individuals mentioned in this study

have demonstrated characteristics of not only a transfor-

mational leader, but also a successful social entrepreneur.

As Roberts and Woods (2005) point out, social en-

trepreneurship is a mind-set or paradigm of incorporating

social values and missions into business practices and, as

such, it has a place in any business. Social entrepreneurs,

then, are those who share in common the visions of socially

responsible business and the ability to instill such values in

the organization (Roper and Cheney 2005). The aforemen-

tioned owner is one such example; the previously men-

tioned owner who has ‘‘an affinity with the land’’ is

another. However, company owners are not the only people

who may have a transformational effect. The following

passage, for example, revealed how the personal values and

beliefs of a chief winemaker had been influential in the

company’s sustainability development:

Well we’ve been on this site since the early 90 s,

XX [name of the person], he’s our chief winemaker

for the entire time. When he had the opportunity to

build the site he really wanted to build it with

sustainability in mind. Sustainability wasn’t some-

thing that we’ve picked up on the side and run

with. When XX [name of the person] built this

place from scratch he kept sustainability in the back

of his mind and he has done everything with that

intention, so yeah, it’s from scratch and it’s always

been embedded in the company’s excellence. [Par-

ticipant 12].

In this passage, the chief winemaker’s emphasis on building

a sustainable winemaking site has had an important bearing

on the company’s value proposition. His personal commit-

ment is not only perceived as the initial motivation behind

74 Y. Wang et al.

123

the company’s sustainability positioning, but also an influ-

ential factor on the company’s ethical climate and culture in

what should be considered as excellent business practice.

This chief winemaker, therefore, as well as the aforemen-

tioned company owners, functions as the early leader whose

values set the organization’s ethical climate, the character-

istics of which eventually become internalized by all

members within the organization (Dickson et al. 2001).

Participant 5, in particular, reflected on how the leadership of

the company is crucial in fostering a sustainability culture in

the organization:

Growing sustainably is a feel-good thing, but it’s not

just that; it’s also just a culture in the company. The

owner of the company, XX [name of the owner], it

starts right at him. It’s a really good company to work

for and the culture and the management support for

sustainability is huge. We have a sustainability

meeting maybe once every six months; senior man-

agers, managing director come and sit down and

make time for it and that’s huge, but it starts from the

top, because if it doesn’t come from him [the owner],

there’s no buying. So it starts from the top and it’s the

culture; it’s something we don’t have to consider, and

it’s just something we do. It’s part of our everyday

business; it’s just second nature for us.

Here, the participant views sustainability practices as part

of the company’s culture—‘‘it’s just something we do. It’s

part of our everyday business’’ and it is just ‘‘second

nature.’’ The owner of the company—‘‘from the top’’—is

seen as the most important driver in development of such a

culture, from senior management to branch employees like

herself. For this participant, the owner’s commitment and

determination is the key to the company’s sustainability

culture simply because ‘‘if it doesn’t come from him,

there’s no buying.’’

Throughout the interviews, moral and ethical consid-

erations prevailed when individuals were identified as the

key motivation behind a company’s sustainability prac-

tices. These individuals’ values and beliefs, often influ-

enced by their experience, are the key to their personal as

well as the company’s commitment to a sustainability path.

Underlying such a commitment is the individual’s desire,

as well as ability, to transform self-interest into ethical and

virtuous business conduct. These motivating individuals

are crucial in fostering a sustainability culture within the

organizations and in elevating the ethical and moral ground

of others. As reflected by many participants in this study,

successful and inspirational individuals are committed to

social missions not only because such an act is ethical and

virtuous—‘‘it’s the right thing to do’’—but also because it

is the individual’s moral imperative to do so—‘‘it’s a

personal thing’’.

Discussion

Our larger study of the New Zealand wine industry iden-

tified strong market motivation that aligns with the ‘‘busi-

ness case’’ argument for sustainable practices. According

to the practice–institution schema (Moore 2002), business

preference for self-regulation and reliance on market

mechanisms are expressions of its pursuit of ‘‘external

goods,’’ such as money, power, and fame, and such pursuit

of ‘‘external goods’’ is determined by its institutional

characteristics as a profit-oriented social economic entity.

Constrained by such institutional characteristics, then, so-

cial and environmental concerns in business would only be

considered when they can be justified as the pursuit of

external goods because of perceivable economic values.

Following such a rationale, then, where market rewards are

lacking, the ‘‘business case’’ argument would become weak

motivation for long-term and sustained CSR practices be-

cause they are not justifiable as the pursuit of ‘‘external

goods’’.

However, as the examples show in this paper, most

participants in this study demonstrated long-term commit-

ment to sustainability practices despite the weak market

signals in many cases. These individuals make a strong

ethical case in understanding sustainable business practices

as they show that individuals’ pursuit of internal goods in

many cases can transform into a company’s collective

pursuit of virtuous business conduct. Our examples show

that many individuals have been identified as the funda-

mental motivation for a company’s engagement with sus-

tainability initiatives and practices. These individuals’

personal commitments to, and philosophy about, sustain-

ability are often seen as the driving force behind not only

virtuous business conduct but also the development of a

moral and ethical climate in the organization.

Individuals’ moral and ethical-based considerations

move the discussion of business sustainability motivation

from the business case of self-interested enlightenment to

an ethical case of the individuals’ desire to ‘‘do good.’’ In

the practice–institution framework, the individuals’ desire

to ‘‘do good’’ is conceptualized in the notion of practice,

where one’s pursuit of internal goods is based on, and

derived from, the virtue and moral character of the indi-

vidual. Essential to an ethical case of sustainability prac-

tices, therefore, is the individuals’ moral character and their

pursuit of internal goods. In other words, whereas the

pursuit of external goods is determined by business’ in-

stitutional market characteristics, the pursuit of internal

goods depends on the individuals in business finding ra-

tionales in ethical narratives and intrinsic values. As shown

in the discussion of many participants as well as their re-

flections on others, for many individuals within the busi-

ness arena, leading business practices to a sustainability

Virtue Ethics and the Practice–Institution Schema 75

123

path is not only seen as ‘‘the right thing to do,’’ but also

simply a way of embracing and engendering virtue and

morality through example and virtuous conduct.

Conclusion

It has been a moving experience to talk to the participants

in our larger study of the New Zealand wine industry, who

have helped demonstrate a clear ethical case for sustainable

business practices. We argue that the ‘‘business case’’ alone

cannot fully explain companies’ engagement with sus-

tainability practices in the long term. Our examples show

that a company’s sustainable practices are often anchored

by an ethical core, which is rooted in the moral and ethical

pursuits of the individuals within the organization. Espe-

cially when the market is not perceived as sending strong

signals for external goods, individuals’ moral and ethical

beliefs become pivotal in driving sustainable initiatives and

practices of the company.

We draw particular attention to the theory of ‘virtue

ethics’ and show that virtue theory provides a useful ex-

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

promoting ethical business conduct. In placing an emphasis

on human values and morality, virtue theory turns the

central question of business ethics—how business should

behave—to the question of how people should behave. An

important implication is that business may be viewed as a

human enterprise with embedded ethical and moral value.

As such, the fundamental issue of business ethics becomes

the question of how individuals, as moral agents, can

promote virtuous business conduct and help foster a moral

and ethical climate in the organization as well as in society

at large. As the individuals within business make their

pursuits of internal goods, they realize the vision of busi-

ness as ‘‘a human institution in service to humans’’

(Solomon 2004).

In this paper,we have considered intentions ormotivations

as expressed by interviewees. In certain ways, we have ac-

cepted those as stated or presented by the individual repre-

sentatives of organizations. We have not delved into the

complexities of howwe knowmotivations, how theymanifest

in discourse and specific types of behaviors, or how they get

challenged and negotiated. Yet, the attributions of motiva-

tions are inescapable in human affairs, are profoundly rele-

vant to demonstrations and contestations of virtuousness;

thus, the question of how we know motivations, or what in-

deed constitutes the best evidence for inferringmotivations, is

an ongoing and not entirely resolvable matter in any context.

The revival of virtue ethics applies to individuals, in-

cluding their roles in organizations, as we have discussed in

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

kinds of behaviors. This is an important question, espe-

cially for the theoretical move from the individual to the

collective level, where attributions of motivation and of

virtue necessarily take on a different type of character. In

this regard, of course, owners, top managers, etc., have a

disproportionate influence on what becomes, de facto, the

moral character of an organization.

Acknowledgements This paper was part of a research project

funded by the New Zealand Marsden Fund, administered by the Royal

Society of New Zealand.

Ethical standards The authors declare that the conduct of this re-

search conforms to the policies and principles of human research

which is in accordance with the research ethical standards of the

University of Waikato.

Conflict of interest The authors declare no conflict of interest with

respect to this research. The authors have full control of all primary

data, which are available for review if requested.

References

Arjoon, S. (2000). Virtue theory as a dynamic theory of business.

Journal of Business Ethics, 28(2), 159–178.

Bass, B. M., & Steidlmeier, P. (1999). Ethics, character, and authentic

transformational leadership behavior. The Leadership Quarterly,

10(2), 181–217.

Burns, J. M. (1978). Leadership. New York: Harper and Row.

Dickson, M. W., Smith, D. B., Grojean, M. W., & Ehrhart, M. (2001).

An organizational climate regarding ethics: The outcome of

leader values and the practices that reflect them. The Leadership

Quarterly, 12(2), 197–217.

Duska, R. (2010). BEQ’S twentieth anniversary: The evolution of

business ethics. Business Ethics Quarterly, 20(4), 729–730.

Grant, S. (2004). Narrating the body shop: A story about corporate

identity. Doctoral dissertation: University of Waikato.

Hemingway, C. A. (2005). Personal values as a catalyst for corporate

social entrepreneurship. Journal of Business Ethics, 60(3),

233–249.

Hursthouse, R. (1999). On virtue ethics. Oxford: Oxford University

Press.

Kearins, K., & Collins, E. (2012). Making sense of ecopreneurs’

decisions to sell up. Business Strategy and the Environment,

21(2), 71–85.

Koehn, D. (1995). A role for virtue ethics in the analysis of business.

Business Ethics Quarterly, 5(3), 533–540.

Koehn, D. (2010). Evolution in the society for business ethics.

Business Ethics Quarterly, 20(4), 747–748.

Kurucz, E., Colbert, B., & Wheeler, D. (2008). The business case for

corporate social responsibility. InA.Crane,A.McWilliams,D.Matten,

J. Moon, & D. S. Siegel (Eds.), The Oxford handbook of corporate

social responsibility (pp. 83–112). Oxford: Oxford University Press.

MacIntyre, A. (1985). After virtue. London: Duckworth.

76 Y. Wang et al.

123

Moore, G. (2002). On the implications of the practice–institution

distinction: MacIntyre and the application of modern virtue

ethics to business. Business Ethics Quarterly, 12(1), 19–32.

Moore, G. (2005). Humanizing business: A modern virtue ethics

approach. Business Ethics Quarterly, 15(2), 237–255.

Moore,G. (2008). Re-imagining themorality ofmanagement:Amodern

virtue ethics approach. Business Ethics Quarterly, 18(4), 483–511.

Pies, I., Beckmann, M., & Hielscher, S. (2010). Value creation,

management competencies, and global corporate citizenship: An

ordonomic approach to business ethics in the age of globaliza-

tion. Journal of Business Ethics, 94(2), 265–278.

Pratt, M., & Pratt, H. (2010). Sustainable peak performance: Business

lessons from sustainable enterprise pioneers. North Shore: Pearson.

Price, T. L. (2004). Ethics: Overview. In G. R. Goethals, G.

J. Sorensen, & J. M. Burns (Eds.), Encyclopedia of leadership

(Vol. 1, pp. 462–470). Thousand Oaks, CA: Sage.

Roberts, D., & Woods, C. (2005). Changing the world on a

shoestring: The concept of social entrepreneurship. University

of Auckland Business Review, 7(1), 45–51.

Roper, J., & Cheney, G. (2005). Leadership, learning and human

resource management: The meanings of social entrepreneurship

today. Corporate Governance, 5(3), 95–104.

Solomon, R. C. (2004). Aristotle, ethics and business organizations.

Organization Studies, 25(6), 1021–1043.

Sullivan Mort, G., Weerawardena, J., & Carnegie, K. (2003). Social

entrepreneurship: Towards conceptualisation. International

Journal of Nonprofit and Voluntary Sector Marketing, 8(1),

76–88.

Weber, M. (1978). Economy and society: An outline of interpretive

sociology. Berkeley, CA: University of California Press.

Whetstone, J. T. (2001). How virtue fits within business ethics.

Journal of Business Ethics, 33(2), 101–114.

Virtue Ethics and the Practice–Institution Schema 77

123

Journal of Business Ethics is a copyright of Springer, 2016. All Rights Reserved.