Economic inequality is one of the most pressing issue of our times and organizational scholars have recently turned their attention to it. Given the mandate of Business and Society, we wanted to provide a platform for research on this topic that intersects with organizations and society. When we issued a call for papers for the special issue on economic inequality in late 2014, we believed that management mattered as much to inequality as did public policy. So, our intention was to add the voice of organizational scholars to the debate on economic inequality, already vibrant in disciplines such as economics, sociology, criminology, and public health.
A number of our peers have enthusiastically responded to our call for papers and offered high quality research for publication. Given the importance of the topic and the quality of contributions, we decided to publish more papers (nine, including the editorial essay) than a normal special issue does.
In our introduction essay, we contend that inequality can be better understood at a theoretically robust level by paying equal attention to the interlinked, but distinct issues of value creation, value appropriation, and value distribution by firms in a social context. Accordingly, we define and distinguish between these three issues and suggest that organization is the space in which value is created, but the inputs for value creation are provided by individuals (employees, managers, shareholders) and society (markets and institutions). We argue that high levels of economic inequality being witnessed around the world are a result of value distribution being skewed towards shareholders and executives at the expense of others.
The paper by Ivana Katic and Paul Ingram shows that income inequality increases the subjective wellbeing of the individuals with higher incomes, but reduces the wellbeing of those who believe that income generation processes are unfair and also of those who believe that hard work leads to success.
Michael Elmes examines food security in the US as an issue of economic inequality. Unequal access to nutritious foods, he argues, is attributable in part to an industrial food system that is designed to produce short-term profits for producers, processors, and distributors at the expense of the long-term benefits for consumers, food workers (including farmers), and ecosystems.
Maureen Scully, Sandra Rothenberg, Erynn Beaton and Zhi Tang present a qualitative examination of “privilege work,” a process that enables wealthy but socially conscious actors to deploy their wealth as a tool for change and contest income inequality in the society.
Krista Lewellyn uses data collected from multiple sources to construct a sample of 38 countries and deploys a configurational approach to show that high income inequality is likely to result from high-growth entrepreneurship when such entrepreneurship occurs in institutional contexts with capital-based financial systems, and those that promote reductions in wages.
Saurav Pathak and Etayankara Muralidharan use data from the Global Entrepreneurship Monitor survey to demonstrate that country-level income inequality increases the likelihood of individual-level engagement in social entrepreneurship, while income mobility constrains it.
Michael Carney and Robert Nason utilize data from the triennial survey of consumer finance to highlight that divided ideological positions obscure the presence of family firms in the wealthiest 1% households, and thus, their role in income inequality is not scrutnized. They argue that family firms create jobs and economic growth, but also perpetuate privilege, ownership, and wealth across generations.
Amir Shoham and Sang Mook Lee analyze data from 163 countries over nine years and conclude that nations with a higher level of gender marking in their dominant language have a higher wage gap between genders, which in turn has an effect on country income inequality.
The final paper by Richard Marens argues that scholars need to study the corporate practices that contribute to rampant inequality through empirically informed open theory. Offering a critical view of the business and society scholarship, he points to the need for organizational scholars to revisit their theoretical assumptions and empirical approaches to study economic inequality.
Together, this special issue presents a range of papers that shed light on organizational strategies and societal conditions that contribute to and maintain economic inequality. These papers have reinforced our belief that organizations and management have an equally important role to play as public policy in creating more equal societies that provide equal opportunities to its individuals and maximize their wellbeing.
Hari Bapuji, Bryan Husted, Jane Lu, and Raza Mir