Strategic ambiguity and leaders’ responsibility beyond maximizing profits

SummaryCorporate scandals across the globe have triggered a broad discussion on the role of business in society, its legitimacy, obligations and responsibilities. As a result, businesses and their leaders are increasingly held accountable for what they do by the society at large. In Australia, the building products manufacturer, James Hardie Industries has been accused for causing over half of the number of documented cases of mesothemilia, a lung cancer caused by asbestos. The company leaders’ behavior has been widely condemned by key stakeholders, and by the local and federal governments. The issue has been a high profile case featured in the media and in public discussions on corporate social responsibility. By analyzing the James Hardie asbestos compensation case in Australia, we examine the role of strategic ambiguity on leaders’ extended responsibility beyond profit maximization. Using Våland and Heide’s (2005) regulators of organizational crisis, Ulmer and Sellnow, 1997 and Ulmer and Sellnow, 2000 ethic of significant choice, and Bright, Cameron and Caza’s (2006) organizational virtuousness, we propose a Strategic Virtuousness Model as a framework for analyzing leader and organizational responsibility in strategic ambiguity associated corporate action.

► James Hardie Industries has been accused for causing over half of the number of documented cases of mesothemilia, a lung cancer caused by asbestos.
► The company leaders’ behavior has been widely condemned by key stakeholders, and by the local and federal governments.
► The issue has been a high profile case featured in public discussions on corporate social responsibility.