Environmental Ethics and Information Asymmetry among Organizational Stakeholders

This paper addresses the conflicting environmental interests of a firm and the community, an important stakeholder. The short-term profit maximization objective of a firm may stand in contrast with what the community wants - a "safe and clean environment". This paper argues that the inform...

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Bibliographic Details
Published inJournal of business ethics Vol. 27; no. 3; pp. 215 - 228
Main Author Kulkarni, Subodh P.
Format Journal Article
LanguageEnglish
Published Dordrecht Kluwer Academic Publishers 01.10.2000
D. Reidel Pub. Co
Springer Nature B.V
Subjects
Asymmetry
Business ethics
Business structures
Communities
Conflicts of interest
Economics
Environmental conservation
Environmental education
Environmental ethics
Environmental impact
Environmental justice
Environmental protection
Environmentalism
Game theory
Human influences
Information asymmetry
Information dissemination
Morality
Objectives
Opportunistic behavior
Profit maximization
Profitability
Profits
Public opinion
Reputations
Stakeholders
Studies
Trust
Waste disposal
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Summary:This paper addresses the conflicting environmental interests of a firm and the community, an important stakeholder. The short-term profit maximization objective of a firm may stand in contrast with what the community wants - a "safe and clean environment". This paper argues that the information regarding the environmental impact of a firm's products, processes, and waste may be asymmetrically distributed between the firm and the community. The resultant information asymmetry may influence the probability of a firm acting opportunistically, and ultimately, a firm's ethical behavior. The paper identifies information asymmetry between a firm and community, as well as that within the community. The perceived information asymmetry across various community segments may perhaps be a determinant of environmental discrimination. The paper further contends that information asymmetry may diminish in the long run. Finally it examines the implications of information asymmetry for firms and government policy.
ISSN:0167-4544
1573-0697
DOI:10.1023/A:1006340624326