Sep 1st, 2025
2025 Phase 1: Results of the Exploratory Qualitative Pre-Study
The first qualitative pre-study had an explorative purpose, and we used an extensive 120-question survey, in combination with direct interviews. Our goal was to analyze general themes, dimensions, and initial relationships among ethical themes and key financial indices. The data collection process continued until we had reached theoretical saturation, with no new or relevant data emerging regarding the themes collected during the interview process and the six core principles defined earlier (Fusch & Ness, 2015). This approach ensured comprehensive exploration before moving on to the next phase of the study (Guest et al., 2006).
Initial Theme Discovery (Interviews 1-9)
Our analysis of outcomes revealed that the core theoretical constructs emerged within the initial set of nine interviews. The first five key informant interviews were instrumental in establishing the five primary themes addressing RQ2: (i) Philosophy of Leadership; (ii) Procurement & Supply Chain; (iii) Digitalization of Ethics; (iv) Integration with Corporate Social Responsibility (CSR); (v) Organizational Culture and Engagement.
For example, the foundational divergence in Leadership Philosophy was immediately apparent from the strongly contrasting statements of Participant S1/S2. Similarly, Procurement Ethics was defined by Participant P1, the Digitalization potential by Participant D1, CSR Integration by Participant M1, and Organizational Culture by the HR leaders (H1/G1/O1).
Confirmation and Deepening (Interviews 10-18):
Subsequent interviews served to confirm, deepen, and test the robustness and boundaries of the established themes. We remained open in case new ones arose, which did not happen. For instance, Participant D2 did not introduce a new theme but provided a practical application for “Digitalization” and “CSR Integration” through his consultancy model, thereby confirming their relevance. The remaining interviews consistently reinforced these five themes and six principles across different industries and leadership roles, indicating that a point of thematic saturation had been reached.
The Role of Dissenting Voices Crucially, the inclusion of dissenting perspectives, such as Participant S2, did not create a new, separate theme but instead defined the negative pole of the “Philosophy of Leadership” spectrum: This challenge strengthened the validity of the thematic structure by sharpening its boundaries. We concluded data collection after 18 interviews, confident that both the themes developed and the core principles to be verified were sufficiently saturated and that further interviews would not substantially alter our framework.
Link the qualitative findings to the Six Core Principles of Alterocentric Business Ethics
Originally derived from Freeman’s (1984) stakeholder theory, we can validate and detail our six core principles of alterocentric Business Ethics, demonstrating practical relevance by shaping the key dimensions (principles) and developing the measurement instrument as outlined in RQ3.
Principle 1: Alterocentric Business Strategy: Leadership Philosophy and Strategic Integration. From our interview theme of Philosophy of Leadership and Ethical Persuasion, we see a substantial divergence on how leaders frame ethics as part of their business strategy. The stark contrast is shown in some responses: “I believe a company’s only, and ultimate objective is to strive to earn the highest level of profit” (Participant S1), while another acknowledged the tension between profit maximization and stakeholder orientation. Leaders with an alterocentric organization have better approaches to ethical decision-making and stakeholder engagement, and they do not trade in ethics for profit. Especially of interest was participant S2, who challenged some of the ethical standards of our instrument.
This underscores the importance of setting a clear strategy from the highest level of the org, as we have requested in principle 1. Without proper standards, an inconsistent application might be a consequence. Moreover, the leadership team requires a genuine (philosophical) commitment, and this commitment clearly extends beyond policy statements. It is not only the presence of ethical policies but also their integration into strategic planning and a structured leadership development process.
Principle 2: Holistic Stakeholder Engagement: Supply Chain and Procurement Ethics. In our second principle, we focus on systematically identifying and engaging with all relevant stakeholders on an ongoing basis. This resonates well with the theme of “Procurement and Supply Chain Ethics as Money Matters-Financial Strategy”. Interviewers confirmed that a focus beyond traditional shareholder and customer relationships towards the supply chain makes sense.
A notable example is the well-managed and long-term supplier relationships in the automotive industry, which clearly correlate with lower costs and greater innovation. The participant pointed out, “in the absence of clear top-down mandates from the CEO, those leading procurement revert to price-based, transactional practices that will subvert ethical principles and financial performance” (Participant P1). Over the last years, the procurement function has emerged as a lever for holistic stakeholder engagement. Large organizations typically develop and maintain a comprehensive code of conduct for their suppliers. One participant suggested further enhancing it with ethical standards from the relevant purchasing process section in our questionnaire.
Principle 3: Predictable Decision-Making and Accountability: Technology-Enabled Ethical Frameworks. The digitalization of Ethical Frameworks directly links to our request for predictable decision-making and accountability. There is an emerging recognition of the role technology can play in scaling an ethical decision-making process to ensure consistency. One participant described how businesses face “unprecedented challenge on technological change, societal expectation shift, and regulatory pressure” while typically remaining “behind the curve as we rely on outdated structures, legacy thinking, low organizational resilience” (Participant D1).
This highlights the need for predictable and tech-enabled decision-making frameworks. Proposed initiatives include (i) a solution based on artificial intelligence to predict outcomes with higher accuracy, (ii) a tool to communicate ethical standards across the organization, and (iii) an integration of our measurement framework with the UN Global Compact Statement of Progress to avoid double reporting. Those ideas will enhance our approach to a living system as opposed to being a static reporting tool. A software company founder envisions “mass adoption at a lower granularity across several business units and legal entities”. She told us that “Companies are often found unprepared (for the requirements of a values-based society; in her view, driven by demands from Millennials). Outdated structures, legacy thinking, and low organizational resilience hamper many. Building a simple web solution or mobile app will dramatically lower the entry barriers to bring ethical thinking into the core of our customers’ mindset”. We used this insight to fine-tune our instrument towards technological sophistication, rather than just the existence of decision-making frameworks.
Principle 4: Anchoring in Leadership: Organizational Culture and Employee Engagement. Organizational leaders must ensure the right governance structures that support stakeholder participation throughout the entire decision-making process. The theme “Organizational Culture and Employee Engagement” validated this nicely by the fact that a practical implementation of alterocentric Business Ethics depends on leadership behavior that allows cascading of ethical considerations across all levels of hierarchy. A senior HR leader: “Ethical leadership is about more than compliance but creating a culture where ethical considerations are integrated into daily decision-making” (Participant H1). This aligns with our emphasis on embedding stakeholder orientation as opposed to treating ethics as a separate compliance function. The same participant mentioned “When employees see leaders as ethical, they are more committed, more engaged and more likely to go above and beyond the call of duty”.
Consequently, companies can create positive “feedback loops” that enhance organizational effectiveness and ethical performance. Further participants reinforced the role model idea. A senior leader noted “our people mirror your behavior” (Participant G1), while another participant observed that “People are carefully looking at signals from every layer above them – especially in hierarchical environments. A proper (ethical) guideline and implementation are almost more important than training and yearly certifications. It will also dramatically improve the employee engagement score as we have seen in our organization” (Participant O1). This feedback confirms the powerful, yet subtle influence leaders have on a company’s culture: employees apparently actively monitor leadership signals and mirror them, and authentic, ethical behavior leads to successful implementation. Based on this finding, we prioritized questions that extend beyond formal leadership training and governance structures, measuring authenticity and employee perceptions.
Principle 5: Responsible Business Behavior: CSR Integration and Long-term Value Creation. Our request for responsible business behavior is linked to long-term value creation, primarily through integration with existing CSR initiatives. Our alterocentric Business Ethics methodology aligns well with current CSR frameworks and enhances them in depth and breadth. A manufacturing company’s CEO points out “the base of all environmental actions is always ethical decision-making” (Participant M1), which underscores the key role ethical principles play in driving responsible behavior. Our standards are highly compatible across human rights, environmental due diligence, anti-corruption strategies, stakeholder dialogue, and governance transparency. Therefore, our principle provides an underlying framework that enhances CSR efforts.
A regional CEO of a consulting company sees a clear business opportunity in deriving an ethics score from our data, which can then be used as a basis to help clients move to higher stages of maturity (Participant D2). This business orientation proves a potential for tangible value creation rather than imposing costs on organizations. Our findings suggest that companies consider responsible business behavior as a competitive advantage, especially if implementation can be tech-charged. These findings helped shape our instrument development towards integrating CSR (avoiding side-by-side ownership) and performance management systems.
Principle 6: Credible Transparency: Leadership Philosophy and Strategic Integration. Our sixth principle supports stakeholder engagement by providing honest, comprehensive, and accessible information relevant to all stakeholders. It is worth mentioning that throughout all but one interview, transparent communication was quoted. The understanding of what “adequate transparency” means might vary, however. The procurement director’s feedback on supplier codes of conduct covered one dimension, as companies “typically require suppliers to confirm that they adhere to these standards” (Participant P1). In our technology-centered discussions there are clear expectations for transparency, i.e., through a “cross-company communication tools and comparisons to global standards such as the UN Global Compact” (Participant D1).
Technology enables real-time collaboration and standardization, aligning with our principle of having relevant data accessible as needed. CSR integration also emphasizes transparency requirements that companies already face as part of their reporting, which can now be further enhanced. Hence, we build upon principle six, establishing practices that are more comprehensively enhanced and applied to wider stakeholders. However, challenges are imminent: The (philosophical) disagreements among participants about fundamental ethical principles suggest that transparency alone is not sufficient without a shared understanding of what constitutes ethical behavior.
To cater to this need, our instrument adjustments focused on specific relevance to stakeholders, rather than general accessibility. We include measures of transparency quality, stakeholder feedback mechanisms, and the responsiveness of organizational communication to stakeholder information needs.
Synthesis of Qualitative Insights and Theoretical Framework Validation
There is strong empirical support for our framework derived from Freeman’s Stakeholder Theory. We could validate each principle through real-world business examples provided by industry practitioners and learn about the nuances of implementation. The cross-themes that emerged from this phase helped us to understand how alterocentric Business Ethics would operate in practice. We identified the following findings:
(i) Interconnection of the principles with feedback that spans across two or more in every conversation. The technology-enabled ethical frameworks discussed by participants simultaneously address predictable decision-making (Principle 3), leadership anchoring (Principle 4), and credible transparency (Principle 6).
(ii) Successful implementation of ethical practices strongly depends on authentic leadership beyond following “a policy”. It must include role modelling. This shows the fundamental importance of Principle 1 (Alterocentric Business Strategy) while highlighting its interdependence with Principle 4 (Anchoring in Leadership).
(iii) There is a clear business case for alterocentric ethics – shown throughout multiple discussions. Ethical practices create value, improve innovation, and – forward-looking – allow for new business opportunities in consulting and technology.
Instrument refinement for the main quantitative study
The transition from a holistic 120-question instrument to a lean 24-question version is a critical step. The qualitative findings guided us to the most relevant theoretical concepts with practical implementation. Our practitioner approach ensured that we captured the dimensions of alterocentric Business Ethics, which each stakeholder most recognized. We are also highly interested in understanding which questions are most strongly associated with financial performance.
We are also highly interested in understanding which questions are most strongly associated with financial performance. We asked which components of ethical business practice were important to practitioners and how such components might be associated with financial performance. Through thematic content analysis of the interviews, we identified a series of key topics and questions that are relevant to understanding and measuring ethical performance. These themes, extracted from the qualitative findings, serve as guiding constructs for the design emphasis and for selecting the most relevant questions at a subsequent stage.
These questions are primarily informed by inductive qualitative data collected through interviews, representing practitioners’ intuitive understanding of key questions that, when viewed through the lens of responsible business, appear to relate to financial performance. This qualitative approach yielded more information on the “why” and “how” of these associations, complementing the broader quantitative study.
We have integrated the five major themes that emerged from the qualitative analysis as follows:
(i) Leadership Philosophy and Ethical Persuasion is represented by evaluating leadership commitment, strategic alignment, and implementing values across the organization.
(ii) Procurement and Supply Chain Ethics is reflected through a focus on suppliers as one of the key stakeholders.
(iii) Digitalization of Ethical Frameworks is covered by asking to measure and report on ethical standards systematically.
(iv) Integration with CSR Programs has always been covered through a link to the UN Global Compact, and we have made sure to include relevant questions in the final instrument.
(v) Organizational Culture and Employee Engagement are reflected by checking for the application of standards in the daily life of the organization.
Phase 2: Findings of the Main Quantitative Study: Statistical Testing of the Ethical-Performance Relationships
The quantitative work provides strong, comprehensive empirical evidence for the associations identified in the qualitative insights on alterocentric Business Ethics, financial performance expectations, and their relationships.
Variable Definitions and Measurement
We measure current ethical behavior and the future vision based on six alterocentric core principles we have derived from Stakeholder Theory and validated through phase 1. In both current behavior and future vision, we defined a composite measure comprising 24 parallel items on a 5-point Likert Scale (with individual definitions ranging from 1 to 5).
Sample Characteristics and Quality
After applying extensive data cleaning methods, the resulting sample consisted of 309 full responses, which constituted 98,4% of the initially received 314 sets of responses. The sample was highly geographically representative for the DACH area (244 responses) and included companies of all sizes, ranging from small and medium-sized enterprises (SMEs) to large multinational corporations.
Descriptive Statistics
The quantitative analysis directly addresses RQ1 through comprehensive statistical testing. Both for current ethical practices and future outlook, the scores show high means (current ethical practices on average 4,87 (SD = 1,64) and future outlook on average 6,15 (SD=1,12) on the 7-point scale. We can derive from this data that the current implementation of Business Ethics is moderate, and the future ambition is high. The same picture is accurate for the financial performance metrics:
| Variable | Mean | SD | Skewness | Kurtosis | Missing % |
| Revenue Growth | 5,52 | 1,48 | -0,41 | 2,89 | 2,3% |
| Net Profit Margin | 5,61 | 1,52 | -0,42 | 3,12 | 2,5% |
| EBITDA | 5,68 | 1,41 | -0,38 | 3,24 | 1,9% |
| Return on Invested Capital | 5,49 | 1,46 | -0,29 | 2,95 | 3,2% |
| Cash Flow | 5,60 | 1,43 | -0,33 | 3,08 | 2,3% |
The skewness value indicates a slightly negative skew across all variables. This suggests that most companies expect above-average financial performance. Kurtosis values range around 3.0, approximately normal distribution. This supports our statistical procedure as being appropriate.
For practitioners it is important to know that the biggest future potential has been identified as EBITDA improvements. The table below shows current performance and future potential for all 5 finance KPIs as well as overall (“Overall Financial Health”).
| Business Impact Area | Current Performance | Future Potential | ROI Indicator |
| Revenue Growth | 79% | 97% | ***** |
| Net Profit Margin | 80% | 99% | ***** |
| EBITDA | 81% | 100% | ***** |
| Return on Invested Capital | 80% | 97% | ***** |
| Cash Flow | 80% | 97% | ***** |
| Overall Financial Health | 80% | 98% | ***** |
Integration of Qualitative and Quantitative Phases
To demonstrate the systematic connection between our qualitative findings and quantitative instrument development, the Table below presents a joint display linking interview themes, questionnaire items, and tested statistical paths. It answers RQ3 by specifically highlighting key dimensions on the question level based on the Themes and Principles outlined in our previous phases of this study.
| Qualitative Theme (Phase 1) | Corresponding Alterocentric Principle | Questi-onnaire Items (Phase 2) | Tested Path in Model | Statistical Significance |
| Leadership Philosophy & Ethical Persuasion | Principle 1: Alterocentric Business Strategy; Principle 4: Anchoring in Leadership | Q1, Q4, Q5, Q33, Q34 | Alterocentric Business Strategy → Financial Performance | p < 0,001 |
| Procurement & Supply Chain Ethics | Principle 2: Holistic Stakeholder Engagement | Q12, Q13, Q14 | Holistic Stakeholder Engagement → Financial Performance | p < 0,001 |
| Digitalization of Ethical Frameworks | Principle 3: Predictable Decision-Making | Q18, Q19, Q29, Q30 | Predictable Decision-Making → Financial Performance | p < 0,001 |
| Integration with CSR Programs | Principle 5: Responsible Business Behavior | Q25, Q26, Q27 | Responsible Business Behavior → Financial Performance | p < 0,001 |
| Stakeholder Engagement & Communication | Principle 6: Credible Transparency | Q47, Q48, Q49 | Credible Transparency → Financial Performance | p < 0,001 |
Correlation Analysis
The results provide strong empirical support for the effectiveness of alterocentric Business Ethics, as all the correlations are strong (r from 0,509 to 0,915, p < 0,0001) between Business Ethics and financial performance. The “Future Financial Performance Outlook” was the most significant predictor (r² = 0,838 = 83,8% variance explanation), indicating that companies that adopt alterocentric Business Ethics have a promising economic future. This represents a large to very large effect size (Cohen, 1992).
● Present ethical behavior → Financial expectations: r = 0,685 (p < 0,0001, 95% CI: 0,622-0,739)
● Vision future ethical → Financial expectations: r = 0,915 (p < 0,0001, 95% CI: 0,895-0,932)
● Ethical behavior now → Ethical behavior in the future: r = 0,707 (p < 0,0001)
These correlations constitute large to very large effects by conventional standards (Cohen, 1988), with appreciable implications for real-world success.
All five financial KPIs were substantially, significantly (for all values: p < 0,001) positively correlated with ethical behavior:
| Financial KPI | Current Behavior | Future Vision |
| Revenue Growth | r = 0,527 | r = 0,724 |
| Net Profit Margin | r = 0,549 | r = 0,729 |
| EBITDA | r = 0,620 | r = 0,763 |
| Return on Invested Capital | r = 0,509 | r = 0,697 |
| Cash Flow | r = 0,527 | r = 0,739 |
Of the performance measures, EBITDA showed the highest correlation with EV in the future (r = 0,763), indicating that financial performance directly benefits ethical practices.
Synthesis of Qualitative and Quantitative Evidence
The study combines qualitative insights and quantitative evidence to examine the relationship between other-centered Business Ethics and financial performance. The qualitative insights shed light on how ethicality creates financial value, and the quantitative findings offer evidence for these relationships.
| Qualitative Theme | Supporting Qualitative Evidence | Integration Insight |
| Leadership Philosophy Differences | 10% skeptical minority in clustering analysis | Philosophical orientation influences ethical implementation |
| Supply Chain Ethics Benefits | Strong correlations across all financial KPIs | Stakeholder relationship quality drives financial performance |
| Technology-Enabled Ethics | High R² (0,838) for future ethical vision | Systematic approaches enhance ethical effectiveness |
| CSR Integration Opportunities | Broad-based correlations across ethical dimensions | Ethical frameworks complement existing sustainability initiatives |
| Employee Engagement Mechanisms | Strong EBITDA correlations (r = 0,763) | Operational improvements mediate ethics-performance relationships |