Corporate deceptions can range from the mundane to the illegal, from the little white lie to the mendacious misrepresentation of facts. Some deceptions are more easily tolerated than others. This is a study of seven factors that influence the extent to which corporate deceptions become socially acceptable.

As scholars have built on Gilligan's ethic of care over the past 40 years, there has been a shift away from the gender essentialism of early attributions to consider more broadly how an ethic of care can be enacted pragmatically in many contexts. I derive key lessons from the early Gilligan vs. Kohlberg debate, that can help us move toward building intersectional approaches to moral theorizing. Such approaches aim to facilitate a greater recognition of barriers to equity in our own work.

This paper examines the controversies surrounding the defense sector in ESG investing, with a particular focus on the impact of the Ukraine war. Drawing on historical, philosophical, and contemporary perspectives, we explore the complex ethical landscape that shapes the intersection of defense and ESG investing. Our research employs a mixed-methods approach, including controversy mapping, press review and practitioner insights to provide a comprehensive analysis of the evolving discourse and practices in the field. The sociology of controversies (Lemieux, 2007) and economics of conventions (Orléan, 2005) inspired our methodological orientations: monitoring controversies, detecting signs of stabilization, identifying shared reasoning. Following their path, we focus on actors: identifying them, their objectives, and the strategies they deploy in negotiating the place of defense in ESG portfolios. Our findings reveal a nuanced picture of an industry grappling with the tension between established ethical positions and changing geopolitical realities. While the Ukraine war has not led to wholesale changes in weapons exclusions, it has prompted a significant reassessment of policies, definitions, and stakeholder engagement practices. This research contributes to the ongoing debate about the role of defense in ESG investing and highlights the dynamic nature of ESG investing in response to global events.

The 21^st century has brought a substantial change in the rules of the game for business. The bottom line of companies does not only account for financial results anymore. At present time, there is a rising awareness that the operation costs of a company include the consumption and even the degradation of social and environmental common goods which are not their property, but the humankind’s. Conscious capitalism is an approach that reframes the relationship between businesses and society seeking for flourishment for all (Sisodia & Cooperrider, 2022). It stands on four tenets: a higher purpose, conscious leaders, integration of stakeholders and a conscious culture (Sisodia, 2011).

To go from consciousness -being aware of business’ impacts in society-, to conscience -discerning and choosing right from wrong-, it is necessary a high level of trust among the business and its employees, customers, suppliers, community and all its stakeholders (Wickam, 2022). Therefore, trust is the cornerstone of a conscious culture (Nabilla & Budiono, 2020) and the focus of our work. We understand trust as the set of expectations, beliefs and assumptions that someone or an organization can rely on others, because there is mutual confidence that all parties involved will make good faith efforts to act accordingly to the commitments made (Kramer & Lewicki, 2010; Pološki Vokić et al., 2021). There are many studies on the antecedents of trust at the organizational level (Augustine, 2012; Kramer & Lewicki, 2010; Schein & Schein, 2018; Williams, 2005); however, to our knowledge, it has not been studied yet within the conscious capitalism perspective. Consequently, specifically using a conscious culture lens, we proposed that transparency, integrity and compassion are antecedents of trust.

For some scholars, transparency is a predictor of trust (Schnackenberg et al., 2024; Williams, 2005). But for some others, trust enables transparency, since it implies a mutual confidence that the other party will not take advantage of one’s vulnerabilities, so they are able to disclosure valuable information for decision making (Pološki Vokić et al., 2021). Otherwise, which seems to be the norm, secrecy between managers and shareholders, or companies and providers, clients and employees, distorts information exchange and the quality and extent of outcomes when making decisions(Augustine, 2012).

Integrity has also been studied as a dimension of trust (Pološki Vokić et al., 2021). For Rismayati et al. (2023) integrity is an element of the character that underlies public trust. Integrity is a constant commitment to pursue moral and ethical standards(Adekanmbi & Ukpere, 2023). Moreover, only in a culture of integrity where members tell and act the truth and deal fairly, stakeholders go beyond what is lawful and socially acceptable to what it is ethically right (Mackey & Sisodia, 2013).

The ethics of care and compassion has burst into the business world recently (Krause et al., 2023) as a response to alleviate suffering, which has been neglected as a silent but strong determinant of human behavior, as its economic impact has become more and more evident through time. Suffering is a significant and pervasive aspect of organizational life since it is a mental and emotional anguish that human beings experience (Kanov et al., 2017) and that affects our behavior, whether it comes from the workplace or from the individual’s environment. And it seems unavoidable in human experience.

Care and compassion have shown to be a powerful booster of individual’s ability to behave in a more productive manner. Care is a social practice, to deliberatively pay attention to people’s needs, while compassion is a response that empowers and enables to heal suffering; care and compassion together are about nurturing relationships (Willey & Owen, 2023), recognizing human dignity in people and being truly concerned about their wellbeing. Thus, care and compassion are now considered as leadership skills to respond to suffering, specially in servant leadership model, where the leader notices and empathizes with the suffering, makes sense out of it and acts to alleviate it (Krause et al., 2023). This ethics relies in actions and not in personality traits, creating relationships that facilitate dialogue, collaboration and trust (Lemon & Boman, 2022). This is why creating solid bonds with people is not a requisite for compassion, while doing something about suffering, whether work or non-work related, is what it is all about(Elley-Brown & Pringle, 2021).

Considering that the connection between trust and principles such as transparency, integrity and compassion, is still only an assumption (Schnackenberg et al., 2024; Williams, 2005), logically it has still not been fully explored contingent mechanisms that potentialize the effect of having transparency, integrity and compassion - from this point onward in this work referred to as the principles of a conscious culture - on trust. On this regard, in the organizational behavior literature, it has been explored that practices to develop an organizational culture are essential, since they are the core of a learning process that functions as the mechanism through which and organizational culture evolves and solidifies (Schein, 1996). As this has been observed in different typologies of organizational cultures, we propose that those same practices are mechanisms that may enhance the growth of trust in conscious cultures, moderating the relationship between trust and the beforementioned principles.

RESEARCH QUESTION

Therefore, our research question is: Do practices aimed to strengthen an organizational culture moderate the relationship between the conscious culture principles and the organizational trust?

Insert Figure 1. Research Model here

It is the aim of our study to contribute to solve this question by testing it empirically. We used the conscious capitalism audit (Sisodia et al. 2018) to collect responses on a sample of 17 medium and large Mexican companies. 482 respondents in different roles within the organization (i.e. managers, employees, board members) were asked about their perceptions regarding the conscious culture principles, the conscious practices implemented, and the level of trust within their companies. Notably, this is a suitable sample as it is integrated by Mexican business companies that are implementing conscious business practices (Rodríguez-Aceves et al., 2024), giving us the possibility to understand how these principles build trust inside the company (Stauffer & Maxwell, 2020). Theoretically, we contribute to the academic discussion over the controversy between the precursors of the Conscious Capitalism philosophy (Strong & Mackey, 2009) and their critics who argue that the foundations of this theory are weak due to a lack of rigor in its empirical support (O’Toole & Vogel, 2011; Wang, 2013).

METHOD

Sample and data collection

To answer the research questions, we conducted an empirical study using a cross-sectional survey, based on Sisodia et al (2018) Conscious Capitalism Audit, which comprised 56 items, 15 of which corresponded to conscious culture, the construct analyzed in this study. The survey was applied to board members, directors, managers, and employees of 17 different companies that are academic partners of Tecnologico de Monterrey for their undergraduate business programs, who have explicitly declared an interest and commitment to include conscious capitalism principles as the base of their corporate strategy. Students from twelve different campus applied the survey to 482 respondents during the academic year 2023 – 2024. In this sample, 172 women participated and 308 men. The average age of participants was 38 years old and the years of labor in their present company was 7.37 years.

Variable measurement and reliability

To analyze the construct conscious culture, the items as in the survey, comprehended five variables: trust, transparency, integrity, compassion, and practices taken to develop a conscious culture (such as learning and development of capabilities, planned efforts from managers and employees to maintain and develop the organizational culture and the empowerment of employees to make decisions on their own initiative for the best interest of the community). The fifteen items of the conscious culture section were evaluated by respondents using a five-point Likert scale, ranging from 1 = “it seems that we represent the opposite to this, or that this is something we lack” to 5 = “We are exceptionally good at this, to the extent that others could learn from us”. To measure the variables, the corresponding items means were averaged. The internal consistency of the scale was confirmed by Cronbach´s alpha test (0.921).

The reliability of the items was also tested, where all the items reached a correlation > 0.7, as it can be seen in table 1.

Insert Table 1. Item Reliability here

Procedures

Using the framework of conscious capitalism, we first explored how many factors were present in the conscious culture construct through an exploratory factor analysis, using jamovi 2.3.28 software. With such results, we ran a confirmatory factor analysis. After that, we tested the interplay of such factors, looking for a mediating and/or moderating effect between the variables.

a) Exploratory factor analysis

We carried out an exploratory factor analysis to test the conscious culture construct. We found that three factors explained 63.6% of the variance, distributed as shown in table 2:

Insert Table 2. Exploratory Factor Analysis here

Noticeably, factor 1 comprised our three variables in study: transparency, compassion and integrity and they altogether explained 31.8% of variance.

To test whether the model fits the data, we ran a confirmatory factor analysis and we found that relative chi-square is acceptable (x2/df = 3.21) and p is significant. CFI and TLI are in range of acceptability (> 0.90), and SRMR is in good fit too (< 0.08), (See table 3).

Insert Table 3. Fit measures here

RESULTS

To test our hypothesis, that conscious culture practices moderate the relationship between principles and trust, we ran a moderation analysis.

We found that conscious culture practices act as a moderator of the relationship between principles and trust, since it is significant and positive (Estimate = 0.699, p<.001). Additionally, conscious culture practices showed a direct positive effect on trust (Estimate = 0.348, p z.001). The interaction term principles × culture development practices was marginally significant (0.0752, p = 0.053), indicating that conscious culture practices may slightly influence the strengthen of the relationship between principles and trust. (see table 4).

Insert Table 4. Moderation effect analysis here

The simple slope analysis demonstrated that the positive relationship between principles and trust is consistent at different levels of conscious culture practices. Specifically, when practices for conscious culture development are high (1 St dev above the mean), the effect of principles on trust is stronger (Estimate = 0.760, p < .001), which leads us to conclude that if practices are increased, the impact of principles on trust becomes more pronounced (table 5).

Insert Table 5. Simple Slope Estimates here

CONCLUSIONS

As a theoretical implication, our study brings empirical evidence on how three principles of conscious culture model, transparency, integrity and compassion, build trust in Mexican business. The analyses showed that these principles have a strong direct effect on trust, independent from the practices carried out to develop their culture. However, such strategies moderate such effect, boosting the effect of those principles on the outcome of trust when they are present and are nurtured. So, as a practical implication, this study confirms that it worthy to design and invest in practices to intentionally build a conscious culture, further than declaring and modelling principles.

This study is naturally not free from limitations. It is important to note that the interaction term was only marginally significant ( p = 0.053), which even when it reveals a positive effect, it should be interpreted with caution, being worthy to continue with further research that could reply this study in other labor cultures in emerging and developed countries as well to understand differences and similarities. In the same sense, it could be also valuable to seek the challenges of business trust in small companies, since this study was carried out in medium and big companies.

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The dynamic interplay between cultural dimensions and individual value orientations are often difficult to detect, yet continue to gain complexity when examined through the lens of generational cohorts, particularly and most recently Generation Z (D’Arco, et al., 2023; McGraw, 2022; Narayanan, 2022). Typically defined as individuals born between 1997 and 2012 (Pew Research Center, 2019), Generation Z were raised in a highly digital, interrelated world that influenced their views on connectivity, immediacy, and privacy (McGraw, 2022; Smith & Cawthon, 2017).

Despite the abundant research on cultural dimensions and generational characteristics, there remains a significant gap in understanding how Generation Z integrates these cultural frameworks into their value systems and behavioral orientations (Weber, 2024). The existing frameworks, primarily developed through studies utilizing previous generation samples, may not adequately capture the nuances across cultures that define Generation Z’s approach to power dynamics, uncertainty in work environments, collective versus individual achievements, gender roles, future orientation in professional settings, and more.

This research aims to address existing gaps by conducting an empirical analysis of how geographic location and demographic factors affect the value orientations and preferences of Generation Z (Hofstede, 1984a, 1994; Tung & Verbeke, 2010). The study will specifically examine the ways these cultural dimensions shape Generation Z’s expectations and behaviors within diverse organizational settings globally. By exploring these influences, this study aims to deepen the theoretical understanding of how culture affects generational cohorts and provide actionable insights for organizations striving to effectively engage with this burgeoning segment of the workforce.