How Companies (Prepare to) Disrupt Themselves: Towards a Theory of Intercultural Business Ethics

Abstract

As evidenced in GE’s reverse innovation process in India, this paper addresses the unresolved issue as to how opportunities are recognized in an intercultural context. We argue that opportunity recognition is only possible when companies move from a prescriptive to descriptive corporate philosophy. We develop a theoretical framework we call intercultural business ethics to illustrate this change in corporate philosophy. We begin with the framework’s philosophical underpinnings whereby we identify two key constructs: operational mean and rebalancing. Operational mean is the set of accepted practices that are derive from recognizing and accommodating to a society’s cultural differences. Rebalancing is when the operational mean is either reasserted or changed as new circumstances arise. We then demonstrate the organizational implications of the framework, whereby the operational mean serves as the institutional logic, and rebalancing serves as the institutional micro-foundation. By theorizing on how partners without shared values can purposively and progressively work together to structure their collaborations, and in so doing recognize new intercultural opportunities, we contribute not only to the intercultural collaboration but also to the institutional theory literature.

Keywords: Business and Society, Business Ethics, Corporate Social Responsibility, Institutional Theory, Intercultural Collaboration