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Journal of Management Development
Beneficence as a source of competitive advantage

Cam Caldwell Larry Floyd Joseph Taylor Bryan Woodard
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Cam Caldwell Larry Floyd Joseph Taylor Bryan Woodard , (2014),"Beneficence as a source of competitive
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Beneficence
Beneficence as a source of as a source of
competitive advantage competitive
advantage
Cam Caldwell
School of Business, St Thomas University, Miami Gardens, Florida, USA
1057
Larry Floyd
Department of Management, Liberty University, Lynchburg, Virginia, USA Received 15 January 2013
Joseph Taylor Revised 8 April 2013
26 July 2013
Department of Organizational Leadership, St Thomas University, Accepted 11 September 2013
Miami Gardens, Florida, USA, and
Bryan Woodard
Georgia Southwestern State University, Americus, Georgia, USA
Abstract
Purpose – The purpose of this paper is to define “beneficence” as a management concept that is the
action associated with “benevolence” the intention. This paper explains how beneficence is a critical
element for leaders in building trust. The authors identify how beneficence honors the ethical duties
owed to followers and creates competitive advantage for organizations.
Design/methodology/approach – The approach of this paper is to present an extensive conceptual
review of beneficence as it relates to leaders and managers and to suggest eight propositions
identifying how beneficence can create competitive advantage.
Findings – The findings of this paper include eight propositions about beneficence as a source of
competitive advantage.
Practical implications – The practical implications of this paper are for practitioners and scholars.
This paper provides an opportunity for leaders to recognize the importance of translating good
intentions into specific action in acting virtuously toward others. For scholars, this paper provides
testable propositions for learning more about beneficence as a source of increased commitment,
greater trust, and competitive advantage.
Originality/value – Although benevolence has been acknowledged to be a foundation of
trustworthiness, benevolence is an attitude or intention. This paper explains the importance
of beneficence as the action derived from benevolence as an attitude or intention to do that which
benefits others.
Keywords Leadership, Trust, Competitive advantage, Commitment
Paper type Conceptual paper
In a world increasingly dependent upon the extra-mile efforts of followers to sustain

a competitive advantage (Caldwell and Hansen, 2010; Karfestani et al., 2013), a growing
list of highly regarded scholars has suggested that leaders must demonstrate a
“transformative” and highly ethical leadership approach that serves the best interests
of both their organizations and their employees (Cameron et al., 2003; Cameron and
Spreitzer, 2012). Advocating a new standard designed to achieve unparalleled
excellence, these scholars have explained that great leadership transcends traditional
leadership perspectives while honoring stewardship obligations and ethical duties that
transform organizations and enable individuals to find their voice (Covey, 2004).
The theme of this paper is that organizational leaders who treat employees with Journal of Management Development
Vol. 33 No. 10, 2014
“beneficence” and who act with a commitment to employees’ welfare, growth, and pp. 1057-1079
r Emerald Group Publishing Limited
wholeness are able to create high trust and generate competitive advantage while 0262-1711
honoring duties owed to employees. We begin our paper by defining beneficence and DOI 10.1108/JMD-01-2013-0007
JMD providing a summary of the academic literature that explains how beneficence is
33,10 a foundation element of trustworthiness, trust, and ethical leadership and a key
contributor to competitive advantage. We present a theoretical model which links
beneficent leader behavior, the corresponding high-value trust behaviors of followers,
and competitive advantage. Incorporating insights from the scholarly literature, we
identify five propositions that scholars and practitioners can use to test the practical
1058 value of beneficence in the modern organization and provide two outstanding leaders
as exemplars of beneficence in leadership. We identify six contributions of our paper to
the academic and practitioner literature and conclude by offering specific suggestions
for helping scholars and leaders to assess the practical application of beneficence to
create organizations that are more humane and more profitable.
Beneficence defined
Within the healthcare profession, beneficence has been traditionally identified as an
important ethical value in articulating the obligations owed by healthcare providers

to their patients (Sutrop, 2011). The duties owed by those who work in the medical
field that guide the practice of medicine have been traced back to Babylonia and the
Code of the Hammurabi as early as 1792 BC and to Vaidya’s Oath with Hindu origins
about 1500 BC (Ogunbanjo and Knapp van Bogaert, 2009, p. 30). The Hippocratic
Oath and other medical codes of conduct recognized the obligation to both benefit
others, or beneficence, and to cause others no harm, or non-maleficence (Rancich
et al., 2005). This ethical duty to work for the welfare and benefit of others transcends
the medical profession and applies as well to the management of organizations
(Cameron, 2003a b).
Beneficence is increasingly being recognized as a relational construct as scholars
focus on the importance of creating high commitment and high performance cultures
that honor implicit ethical duties owed to employees (Pfeffer, 1998; Pfeffer, 2007).
The growing Positive Organizational Scholarship literature has especially focussed on
the importance of virtuous leadership behavior as a source of increased organizational
performance (Cameron and Spreitzer, 2012). In the management field, treating people
with beneficence encompasses actions taken in pursuit of others’ “welfare, growth,
and wholeness” (Caldwell et al., 2011b) and is an affirmative behavior which treats
others with an eye toward our “oneness” with them (Fromm, 1956). As Murphy (2001)
noted beneficence also encompasses a moral duty to act that transcends legal
responsibility, when taking that action benefits another party. This obligation to take
affirmative action when action is needed is also important in understanding the
leader’s ethical duties.
Beauchamp (2008, section 1) described beneficence as encompassing altruism,
charity, mercy, humanity, and even love. Noting the correlation between the positive
actions of beneficence and benevolence, Beauchamp (2008, section 1) distinguished the
latter term as “the morally valuable character trait – or virtue – of being disposed to act
for the benefit of others.” Thus, beneficence, the affirmative behavior or conduct in
the service of others, is correlated with benevolence, the intention to take action or the
disposition to act. Both actions and intentions are a reflection of the underlying
cognitive beliefs and affective attitudes that are well recognized as part of the Theory
of Reasoned Action (cf. Fishbein and Ajzen, 1975). Distinguishing between
benevolence as a virtuous inclination and beneficence as a behavior or action
differentiates between one’s desire to do the right thing and his/her actual performance
in putting that intention into action. The moral assumption behind both beneficence
and benevolence is that treating others kindly and with a commitment to their welfare, Beneficence
growth, and wholeness demonstrates the importance of adding value to the lives of as a source of
others (Caldwell and Dixon, 2010) – a moral achievement that is achieved only when
benevolence is converted into beneficent action. competitive
Figure 1, provided below, identifies the interrelationships between cognitive beliefs, advantage
affective attitudes, conative intentions, and actual behaviors, based upon the Theory of
Reasoned Action. The Theory of Reasoned Action, developed by Ajzen and Fishbein 1059
(1980, pp. 11-12), identified the interrelationships between information-based cognitive
beliefs, affective attitudes that interrelate with cognition to determine one’s expectations
about the likelihood of outcomes occurring (cf. Fishbein and Ajzen, 1975, 2009;
Vroom, 1995), and intentions or one’s subjective probability of actually carrying out
behaviors. As Creed and Miles (1996) have noted, each person uses a subjective
conceptual calculus in determining their ultimate behaviors – involving a sensemaking
process that is typically subconscious and not fully understood at a cognitive level
(Weick, 1995).
Covey et al. (1999, pp. 173-175) offer great insights about this theory, explaining
that the process of making wise decisions is a marriage or synergy between the head
(or cognition) and the heart (or attitudes and emotions). These scholars also explain
that we are often prone to rationalize and justify our behaviors after the fact so that our
behaviors also influence our cognitive and affective perspectives. Karl Weick (1962),
the University of Michigan’s distinguished scholar and expert about sensemaking,
incorporated into his dissertation the process of self-justification and rationalization
that often occurs when we act in a manner that is inconsistent with our intentions,
beliefs, and attitudes (cf. Weick et al., 2005; Weick, 1993).
Consistent with the Theory of Reasoned Action, benevolence is the virtuous
cognitive or attitudinal intention to act in a manner that benefits another party,
whereas beneficence is the action by which those beliefs, attitudes, and intentions are
translated into actual behaviors in the pursuit of that which benefits others. Thus, the
cognitive recognition of the importance of treating people well in order to earn their
trust is a rational decision that recognizes that one’s responsibility as a leader includes
doing more than simply pursuing self-interest (cf. Ciulla, 2004).
Beliefs
Intentions Behaviors
Figure 1.
Attitudes Conceptual framework
of beliefs, attitudes,
intensions, and behaviors
JMD Leaders recognize that it is rationally in their interest and in the interest of their
33,10 organization for them to treat others with dignity, respect, and authentic concern for
others’ best interests – and it is also their moral responsibility (DePree, 2004). When
coupled with the attitude or conscious recognition that people are valued, important,
and individually significant (cf. Buber and Smith, 2011), a leader’s behaviors are
perceived as congruent and authentic (Boyatzis and McKee, 2005), and the leader may
1060 be perceived as trustworthy (Dirks and Ferrin, 2002). Benevolent intent comes from
a desire to treat people with consideration, compassion and empathy, but beneficent
behavior involves putting one’s beliefs, attitudes, and intentions into action.
The distinction between benevolence and beneficence has a highly practical value in
examining elements of trustworthiness associated with leadership and competitive
advantage (Caldwell and Hansen, 2010). Leadership is a relationship that is most
successful when it creates highly ethical (Covey, 1992; Starratt, 2004) and esteem
building personal connections (Boyatzis and McKee, 2005) which encourage others to
become their best (Kouzes and Posner, 2003; Ciulla, 2002). It is this ability to inspire
others to trust leaders and to pursue unparalleled excellence (Caldwell et al., 2012) that
creates the high trust and high performance cultures (Huselid, 1995) that enable
organizations to sustain high commitment and sustainable competitive advantage
(Covey, 2004; Boyatzis and McKee, 2005; Caldwell and Hansen, 2010).
The theoretical foundation between beneficence as a behavior is viewed
through each individuals “mediating lens”; perceived as a key element of a leader’s
trustworthiness by followers; resulting in the followers’ decision to trust; essential in
motivating follower behavior that reflects high commitment and creativity which add
value to the organization; and is ultimately essential in creating competitive advantage.
Figure 2 (cf. Caldwell and Hansen, 2010) shows the relationship between leader
beneficence and each of these five factors and forms the basis for the explanation that
follows.
Other Party’s
Mediating Lens
Leader’s Leader’s Determination Other Party’s

of the Degree Degree of Creativity,
Benevolent Actual and Wealth
Intent Behaviors that the Decision Commitment Competitive
Leader is to Trust and Trusting Creating
Outcomes
Advantage
Beneficent and Behaviors
Trustworthy
Figure 2.
How benevolence and
beneficence create trust
and competitive
advantage
A growing body of empirical evidence affirms that, when competent leaders treat Beneficence
employees with great regard, those employees are more committed (Senge, 2006) as a source of
and their organizations are more profitable (Cameron, 2003a; Paine, 2002; Pfeffer,
1998). At the same time, the empirical evidence confirms that the more common competitive
workplace culture is characterized by “pervasive job dissatisfaction, distrust, advantage
and disengagement” (Pfeffer, 2007, p. 115). Pfeffer (2007, p. 115) explained that the
result of ineffective leadership and organizational mismanagement is that 1061
organizations are “leaving money on the table” at a time when global competition
and a diminishing economy is making excellence in performance increasingly
critical. According to many scholars, the key to changing the effectiveness of the
modern organization is to create a virtue-based and highly ethical culture (Spreitzer
and Cameron, 2012; Gittel, 2012; Goddard and Salloum, 2012; Stansbury and
Sonenshein, 2012; Cameron and Winn, 2012).
Beneficence, trust, and trustworthiness

Although trust has long been considered to be the glue that binds organizations
together (O’Hara-Devereaux and Johnson, 1994), for much of the past three decades
there has been a great diversity of opinion in the academic literature (cf. Parra et al.,
2011) about whether trust is a cognitive belief, an attitude, a propensity, an intention,
or an actual behavior (Caldwell and Hansen, 2010; Hosmer, 1995; Golembiewski
and McConkie, 1975). Hosmer (1995) noted that the trust conundrum was ill defined
nearly 20 years ago, and the academic literature continues to confuse trust
and trustworthiness despite hundreds of articles that have been written about
these constructs (Gullett et al., 2009). It is generally agreed, however, that first, one
person trusts another individual or party because that second party is considered
to be worthy of that trust (Dirks and Ferrin, 2002; Mayer et al., 1995); and second, the
impact of that trust benefits relationships and increases organizational effectiveness
(Mishra, 1996).
The relationship between leader trustworthiness and high levels of employee
commitment has been well established (Mayer et al., 1995; Schoorman et al., 2007).
Masterson et al. (2000) noted that the leadership relationship substantially influenced
employee commitment and work-related behaviors. Korsgaard et al. (2002) also
identified the importance of leaders’ trustworthiness in positively influencing
employee commitment. Much of the Positive Organizational Scholarship literature
emphasizes the importance of leadership virtuousness and trustworthiness on high
levels of commitment, increased profitability, and improved customer service
(Cameron, 2003a; Cameron et al., 2003; Cameron and Spreitzer, 2012).
Mayer et al. (1995, pp. 717-719) suggested that trustworthiness was created as
a result of three primary factors: ability or a domain specific set of technical or
managerial skills reflecting competence; integrity or adherence to a set of principles
that are valued as confidence inspiring; and benevolence or the degree to which the
party to be trusted intends to do that which benefited the trustor, separate and apart
from any self-interested profit motive.
Benevolence associated with trustworthiness has been equated in the
management literature with loyalty, receptivity, and caring (Butler, 1991), concern
for others (Mishra, 1996), and interpersonal consideration (Korsgaard et al., 1995).
Benevolence is also related to personal credibility (Laeequddin et al., 2012). Cruz et al.
(2010) described benevolence as the antithesis of opportunism, placing it on one
end of a continuum with opportunism creating distrust and benevolence creating
JMD trust. In a scale developed to measure benevolence, Mayer and Davis (1999) identified
33,10 four items:
(1) the degree to which others look out for what is important;
(2) concern demonstrated about one’s welfare;
(3) interest demonstrated in one’s needs and desires; and
1062 (4) the likelihood that the party to be trusted will go out of the way to assist an
individual.
Beneficence is a higher level of commitment to the welfare of others than benevolence
inasmuch as it translates one’s intentions into actual behavior and thereby
demonstrates the integrity to put an acknowledged moral duty into action.
Both beneficence and benevolence are perceived on a continuum viewed through the
mediating lens of each individual (cf. Caldwell and Clapham, 2003). That mediating
lens reflects the degree to which one party believes that the other party is honoring the
ethical duties associated with the written or unwritten social contract expected
between the parties (Caldwell and Dixon, 2010; Rousseau, 1995). Hosmer (1995) defined
trust in terms of an ethically complex set of subjectively defined variables at the
intersection of organization theory and philosophical ethics. Describing ten distinct
business-related ethical perspectives, Hosmer (1995, p. 381) explained that the decision
to trust was perceived as “a moral duty with a strong ethical component owed by the
trusted person to the trusting individuals.” Each of these ten different ethical
perspectives suggested a subtly varying set of expectations about the nature of the
actions or behaviors required by the person to be trusted as part of the perceived
relationship between the parties (Hosmer, 1995). Those actions or behaviors define how
the person perceiving those actions assesses whether the other person is acting in the
interests of the party being asked to trust and clarifies why trust is a risk-taking
relationship (Mayer et al., 1995). The person trusting ultimately determines whether
the other party is acting in his/her benefit, or acting with beneficence (cf. Gullett et al.,
2009). Trustworthiness is a subjective perception that the other party’s behaviors are
truly in one’s interest (Caldwell and Clapham, 2003). The process by which one
individual decides to trust another is individually determined, based upon the
experiences of each individual, and is based upon how a follower interprets the other
party’s behaviors (Caldwell and Hayes, 2007).
According to Caldwell and Hayes (2007), a leader’s benevolence or intention is
ultimately translated into his/her actual behaviors. These behaviors are then viewed
through the mediating lens of the other party (Caldwell and Clapham, 2003; Primeaux
et al., 2003). As Hosmer (1995) noted, the perspective of the trusting individual
determines whether the leader’s behaviors are perceived as trustworthy. Although
trustworthiness includes perceptions of a leader’s competence, character, and openness
(cf. Jahansoozi, 2006) in addition to his/her beneficence (Spreitzer and Mishra, 1999),
only if those behaviors are also perceived as beneficent by the person being asked to
trust will that person conclude that the leader is trustworthy (Caldwell et al. 2008).
In fact, research about leadership and trustworthiness found that the relationship
between the parties and how leaders treat others has been empirically found to be most
highly correlated with perceptions of both leader trustworthiness and ethical
stewardship (Caldwell et al., 2010). Based upon the trusting party’s assessment of the
leader’s beneficence and trustworthiness (cf. Mayer et al., 1995; Schoorman et al., 2007),
the decision will be made to actually trust. The degree of that trust, measured on a
continuum (Senge, 2006, pp. 202-207; Ozag, 2006), will result in behaviors that reflect Beneficence
the trusting party’s commitment. as a source of
Organizational citizenship behavior, a willingness to go the extra mile, creativity,
and other wealth creating outcomes are the outcomes of high commitment (Cameron, competitive
2003a; Pfeffer, 1998), and ultimately determine whether a firm will be able to create advantage
and sustain a competitive advantage (Caldwell and Hansen, 2010). Welch (2011) noted
that high employee engagement was a vital element in achieving organizational 1063
effectiveness, and Kataria et al. (2013) have linked that engagement with sustaining
organizational effectiveness. Bhatnagar (2012) linked high commitment, task
proficiency, reduced turnover and absenteeism, increased productivity, and improved
overall organization performance. Describing the relationship between commitment
and competitive advantage, Caldwell and Hansen (2010) suggested that the greater the
commitment, the higher the potential for creativity, excellence in performance, and
extra-role behavior. A growing body of evidence supports the correlation between
employee commitment, extra-role behavior, and increased profitability (Pfeffer, 1998;

Cameron, 2003a; Paine, 2002).
Leaders likely to achieve the highest levels of commitment and followership are also
likely to create relationships that demonstrate their ability to connect with others
on a personal level (Boyatzis and McKee, 2005). Commitment that “binds an individual
to a course of action that is relevant to a particular target” (Meyer and Herscovitch,
2001, p. 301) is best attained when organizations and their leaders demonstrate their
trustworthiness and appeal to people at affective and normative levels and is most
relevant when the committed individual persistently seeks that desired outcome
(Meyer et al., 2004).
Cropanzano et al. (2007, p. 34) noted that in organizational relationships one’s “sense
of the moral propriety of how they are treated” is the glue or the determining factor
“that allows people to work together effectively.” Erben and Guneser (2007) found that
leadership which demonstrated individualized care, understanding, and forgiveness
elicited strong affective commitment. How people perceive the way they are treated can
result in “greater trust and commitment, improved job performance, more helpful
citizenship behaviors, improved customer satisfaction, and diminished conflict
(Cropanzano et al., 2007, p. 34)” which are critical factors as companies pursue strategic
competitive advantage (Cameron, 2003a, b). Reed and DeFillippi (1990) noted that
a competitive advantage based upon leader-follower relationships was often tacit,
difficult to imitate, and hard to measure but did acknowledge the importance of key
relationships as critical to building trust that can be imperative to creating such an
advantage. A growing body of literature acknowledges the importance of creating
organizational and interpersonal relationships that treat employees as valued owners
and partners (Block, 1993; Pfeffer, 1998). High trust cultures form the basis of high
performance work systems (HPWS) (Becker et al., 2009; Ulrich et al., 2001; Paine, 2002;
Cameron, 2003a), and engender employee loyalty and commitment (Hart and
Thompson, 2007; Collins, 2001). Sadri and Lees (2001) confirm that competitive
advantage can substantially be increased by strengthening organizational culture and
cite several examples of firms that have incorporated high performance human
resource management elements that build greater commitment and strengthen
relationships.
Although beneficence and benevolence are viewed at the interpersonal level in the
decision to determine whether leaders are perceived as trustworthy (Gullett et al.,
2009), beneficence also can impact organizational level trustworthiness (cf. Caldwell
JMD and Clapham, 2003). Caldwell and Clapham (2003, pp. 353-355) found that the
33,10 correlation between individual level and organizational level trustworthiness was high
and identified six factors that reflected organizational trustworthiness – including
interactional courtesy – which they suggested was most closely related to benevolence
at the individual level. The alignment of policies, rules, practices, and systems is key to
creating a high trust and high performance work culture that impacts the degree
1064 to which employees are committed (Pfeffer, 1998). In a work world “frequently
characterized by verbal bullying and psychological harassment” (Pfeffer, 2007, p. 118),
organizations treat employees as “Its” or objects, rather than like “Yous” or real people
(Buber and Smith, 2011). Despite the evidence that suggests that high trust
organizations lead to higher performance and better quality (Pfeffer, 1998; Reynolds,
1997; Paine, 2002; Cameron, 2003a, b), leaders and organizations overlook the
importance of creating strong connections with employees that are typically built upon
mutual care, positive energy, and positive regard (Stephens et al., 2012).
Enlightened corporation leaders have recognized that they must not only
demonstrate that they are ethical and honest (Paine, 2002), but that they view their
employees as more than simply another organizational commodity to manage (Ulrich
and Beatty, 2001). In a knowledge-, wisdom-, and information-based economy,
employees are increasingly recognized as the key to business success (Covey, 2004).
This recognition of the important role of employees as the key to improving
organizational outcomes is fundamental to creating a learning culture (Beer, 1997;
Senge, 2006), and achieving competitive advantage (Ulrich and Brockbank, 2005;
Barney and Wright, 1998). More importantly, wise leaders recognize that they have
a moral duty to treat others humanely, kindly, and with the dignity and respect that
each individual deserves (Covey, 2004). Increasingly, leadership scholars have noted
that leaders have a moral obligation to change society by integrating the pursuit of
instrumental or financial objectives with normative and highly moral outcomes that
demonstrate the leader’s obligation to not only increase profits but create a world that
is more authentic, more caring, and more competent (Covey, 2004; Paine, 2002; Quinn,
2005).
Building a competitive advance through generating high commitment, citizenship
behavior, and employee creativity has been shown to be a natural byproduct of
virtuous management and POS (Cameron, 2003a). Organizational leaders who pursue
“power with” employees rather than “power over” employees demonstrate the commitment
and caring that typifies the actions and behaviors of beneficence (cf. Graham, 2003).
A collaborative approach in pursuit of synergy creates organizational wealth and
spurs creativity and is unlikely to be accomplished by leaders who approach
governance from a zero-sum perspective (Covey, 2011). Avolio and Mhatre (2012,
pp. 780-781) have noted that leaders whose behaviors are perceived as self-aware,
transparent, morally based, and balanced are seen as authentic and likely to generate
follower trust and commitment.
Beneficence and virtuousness

Beneficence as an interpersonal and organizational level construct has a clear
relationship with virtuous leadership. Beneficence, as described herein, is highly
correlated with Fredrickson’s (2003, p. 163) description of the leader’s ability to
generate “positive emotions (that) can reverberate though other organizational
members and across interpersonal transactions.” Cameron (2003a) explained that
virtuous leader behavior was clearly distinguished on a continuum in which immoral
behavior represented doing that which caused harm and was possibly illegal, amoral Beneficence
behavior was that which created no negative impacts and was within the bounds as a source of
of legality, and virtuous behavior was that which added value and benefited
others. Beneficence is that behavior which creates wealth, adds value, and benefits competitive
others – consistent with our Cameron’s description of virtuousness. advantage
Verbos et al. (2007, p. 19) described the standards of conduct of virtuous and ethical
leadership as “(1) modeled and promoted by authentic leaders; (2) infused through a 1065
positive organizational context in which formal and informal organizational structures,
processes and systems are aligned with ethical practices; and (3) sustained and
reinforced in an ethical organizational culture in which heightened ethical awareness and
salient ethical identities among members contribute to a strong positive climate
regarding ethics.” Each of these three standards impacts ethically related elements of
beneficence and are clearly articulated in the management literature.
Beneficence is also consistent with aligned human resource management systems,
processes, and structures which have been described as essential in helping

organizations to add value to their organization, particularly as part of HPWS
(Huselid, 1995; Pfeffer, 1998; Becker and Huselid, 1999). Boudreau and Ramstad (2005)
emphasized the importance of creating aligned organizational systems that espouse
ennobling standards, reinforce desired employee behaviors, and model organizational
values. Treating employees as valued owners and partners, creating high trust
relationships, and aligning organizational systems and policies communicates that
employees are more than commodities or “its” but valued with beneficence as “Yous”
(Caldwell et al., 2011b).
Creating an organizational culture that reinforces the governance obligations of
ethical stewardship honors duties to individual employees (Caldwell and Hayes, 2007).
Such a culture also establishes an organizational identity that is central, enduring, and
distinctive (Albert and Whetten, 1985) in sending the message that people matter and
that the organization is committed to their welfare, growth, and wholeness in addition
to optimizing wealth creation (Caldwell and Hansen, 2010). Cameron (2003a, b) noted
that organizational cultures that were normatively virtuous can earn employee
commitment and high trust which also produces improved quality, better customer
service, and increased profitability. Schein (2010) emphasized that organizational
leaders create aligned cultures and increase trust when leaders conform their
behaviors and actions with the espoused values of the organization.
Consistent with Peck’s (2003, pp. 81-83) description of love as the conscious
extending of oneself to benefit another’s personal growth, beneficence encompasses
that same demonstrated effort to serve another party and to honor a broad array of
ethical duties owed to them (DePree, 2004). Beneficence, like love, is best expressed
when it is self-less and not self-serving (Mayer et al., 1995; Fromm, 1956). When we give
to others with a commitment to their welfare, rather than seeking our own benefit or
hidden agenda, that commitment is perceived as genuine and authentic (Fromm, 1956,
p. 23). Beneficence, like love, is the surrender of one’s freedom to another and “the
greatest gift you can ever give” to another (Koestenbaum, 2002, p. 195). Rather than
being a controller and a judge, Deming (2000, p. 117) described a great leader as one
who “will spend hours with every one of his people” as “a colleague, counseling and
leading his people on a day-to-day basis, learning from them and with them.” This
commitment to others involves “caring for people, not manipulating them” (Autry,
1991, p. 17) and “communicating to people their worth and potential so clearly that they
come to see it in themselves” (Italics in the original) (Covey, 2004, p. 98).
JMD Beneficent leadership is ethically and morally virtuous and encompasses the three
33,10 key attributes of “human impact, moral goodness, and social betterment” (Italics in the
original) (Cameron, 2003b, p. 49). As Baucus and Beck-Dudley (2005) have noted,
virtuousness perpetuates flourishing interpersonal relationships to bring out the best
in others, creates meaningful work to enable people to maintain a healthy personal
identity, and sustains values that contribute to an enduring ethical community.
1066 Although beneficence may include the valuing of individuals and the honoring of
relationships, it incorporates the transformational leadership’s balancing of the value
of people and their betterment with a passionate commitment to the optimization of
long-term wealth creation for organizations and for society at large (cf. Barnard, 1938;
Burns, 1978). Consistent with the concept of ethical stewardship, beneficence “integrates
long-term wealth creation, a commitment to the transformational interests of
stakeholders, and creating organizational systems that reinforce both instrumental and
normative organizational goals”.
Beneficence as competitive advantage

In this section of our paper we identify five specific propositions which scholars and
practitioners can use to test the practical value of beneficence in the modern organization.
Related to the underlying obligations of leaders to care for the welfare of others,
Pava (2003) suggested that leadership duties rise to the level of covenantal obligations
that included modeling organizational values, learning new truths that benefit all
organization members, and treating others with a commitment to their success. Autry
(1991) also described the importance of leaders demonstrating genuine care for others’
welfare, describing the leader’s obligations as a sacred trust that were equivalent to the
qualities of love. These leadership behaviors exemplify beneficent action identified in
Figure 2 and are altogether consistent with great leadership. The duties of beneficence
are fundamental elements of moral intelligence, described by Lennick and Kiel (2007)
as doing no harm, creating present value, and creating future value. The key leadership
obligation to “do no harm” is also a fundamental principle of non-maleficence (Rancich
et al., 2005).
Caldwell et al. (2010, p. 505) found that leaders who demonstrated care for others
and who conveyed authentic concern in relationships were viewed as more trustworthy
and as honoring the responsibilities of ethical stewardship. Honoring these ethical
obligations by treating others with great regard and by avoiding doing that which
negatively impacts wealth creation or the best interests of others is a fundamental
responsibility of ethical stewardship (Caldwell and Karri, 2005). These duties clearly
encompass the concepts of both beneficence and non-maleficence and increase
perceived trustworthiness. Consistent with this perspective about leadership, we
suggest our first two propositions:
P1. Leaders who are perceived as high in beneficence are also more likely to be
perceived as high in non-maleficence and high in trustworthiness.
P2. Leaders who demonstrate high beneficence are also more likely to be perceived
as highly ethical by their employees.
By demonstrating their commitment to others, constantly looking for ways to add

value, and carefully avoiding harming others, leaders honor their ethical and moral
responsibilities to stakeholders and to society (Hosmer, 2010).
Although beneficent leaders are deeply committed to helping their employees Beneficence
achieve greatness (Covey, 2004), their commitment is not at the expense of the success as a source of
of the organization. Transformative leaders give credit to others for outcomes achieved
but are also characterized by a fierce resolve to achieve unprecedented excellence competitive
(Caldwell et al., 2012). Covey (2011) noted that a commitment to “win-win or no deal” advantage
was neither about being gracious or kind to the other party nor pursuing a quick-fix
solution by compromise. Like other great leaders, beneficent leaders recognize that 1067
“Good is the enemy of great” (Collins, 2001, p. 1). Achieving greatness requires a
character-based collaboration in pursuit of outcomes that achieved the highest possible
synergy and an optimal result (Covey, 2011).
Although beneficence encompasses genuine consideration for others and a caring
for their best interests (cf. Autry, 1991), it also can enjoy the power of “and” described
as a key element of success by Collins and Porras (1994, p. 43). Beneficent leaders focus
not just on employees and their priorities but are ethical stewards (Caldwell and Hayes,
2007) who combine a commitment to the twin goals of social and financial performance
(cf. Paine, 2002, p. 246) which are essential elements to achieving competitive
advantage indicated in Figure 2. Accordingly, we present our third proposition:
P3. Organizations with leaders who combine beneficence with a high commitment
to financial performance are more profitable than organizations with leaders
who are not high in beneficence but who are high in commitment to financial
performance.
In writing about the importance of breaking out of old leadership perspectives,

Paine (2002, pp. 224-246) explained that a governance model that does not emphasize
both normative and instrumental outcomes was “unsustainable over the long term” if
those leaders want to make the world “not only more prosperous, but also more just
and more humane.”
Leaders who practice beneficence possess a clear moral imagination and moral
identity. Moral imagination involves sensitivity to the schemas (Werhane, 1999), lenses
(Caldwell and Hayes, 2007, pp. 263-264), or grammar (Weick, 1979, p. 3) by which we
see the world and which guide our ethical thinking. In her description, Werhane (1999,
p. 5) suggested that moral imagination was contextually aware of opportunities from a
moral perspective that transcended economic relationships to encompass virtuous
possibilities. Moral imagination encompasses an unusually astute awareness both of
oneself and the needs of others within a business context (cf. Goleman, 2007). Moral
identity also reflects high moral intelligence or moral imagination and encompasses
a high degree of awareness with one’s own moral values or self-identity, one’s sense of
moral responsibility or moral engagement about what ought to be done in relationship
with others, and self-consistency or the degree that one converts intentions to actual
behaviors (Walker, 2004, pp. 2-4).
Walker’s (2004) insights about moral identity reinforce Schein’s (2010) emphasis on
the correlation between what leaders espouse and what they actually do. Schein (2010)
noted that leaders create high trust when they embed into their organizational culture
their proclaimed values to achieve both alignment with those values and congruence
between programs and policies that carry out normative and instrumental objectives.
Similarly, the concepts of moral imagination and moral identity reinforce the
importance of the Theory of Reasoned Action in translating the intentions of
benevolence into the actions or behaviors of beneficence. Referring again to the
JMD relationship between leader behavior and perceived trustworthiness, identified in
33,10 Figure 2, we suggest that employees demonstrate their commitment to trust others and
their willingness to engage in extra-role behaviors when leaders’ behaviors match their
words (Senge, 2006; Caldwell and Hansen, 2010). Consistent with these insights we
present the following proposition:
1068 P4. Leaders and organizations whose beneficent actions are perceived as congruent
with their espoused values achieve greater organizational profits than comparable
businesses with leaders whose actions are not perceived as congruent.
Moral imagination and moral identity reflect beneficence’s commitment to the best
interests and growth of others, confirming the importance of the Theory of Reasoned
Action and the translation of beliefs, attitudes, and intentions into actual behaviors for
a person to be perceived as congruent and authentic (cf. Gullett et al., 2009).
In today’s modern organization, the importance of extra-role behaviors, high

commitment, a willingness to be creative, and the giving of one’s best efforts are traits
that are critical for the success in a highly competitive global marketplace (Covey,
2004). These characteristics of personal commitment reflect Lavine’s (2012) description
of positive deviance as “the extreme end of the positive spectrum” which focusses on
“the uncommon cases that represent unusually successful behaviors amid unlikely
odds.” It is no secret that businesses are struggling to survive in a world economy that
has become increasingly competitive (Friedman, 2009) and are dependent upon extra-
role behaviors and high employee commitment to create a competitive advantage.
The social contract between organizations and employees that defines
management’s commitment to employees’ welfare is often poorly articulated
(Rousseau, 1995) and frequently fails to honor the implied covenants of the
employment relationship that are essential for creating high trust (Pfeffer, 1998). In
honoring the expectations of the perceived social contract that exists between leaders
and those whom they serve, beneficence is considered by an employee as an ethical
duty owed, even if that duty has not been formally articulated nor mutually
understood (Morrison and Robinson, 1997). Robinson and Rousseau (1994) have
studied the nature of express and implied contracts between parties and have
determined that perceived violations of those contracts are very common and are
actually the norm rather than the exception.
Caldwell et al. (2011a, p. 345) noted that an effective organizational leader needed to
“recognize that the psychological contract contains unarticulated priorities not always
shared by the other party.” The obligation of the wise leader is to not only
communicate his/her understanding of the relationship between parties, but, more
importantly, to make certain that (s)he also understands how others view that
relationship. In particular, leaders must specifically discern how others perceive
whether actions are beneficent. The ability to empathize with and to amend one’s
behavior to conform with the needs of other parties is a critical skill of social
intelligence (Goleman, 2007) and a key to building trust relationships.
For employees to be willing to engage in extra-role behaviors, they must believe that
their organizations and their organization’s leaders are committed to their welfare
(Caldwell and Hansen, 2010; Caldwell et al., 2011b). Dutton and Heaphy (2003)
suggested that “high-quality connections” in organizations generated highly
committed followership. Specifically, highly committed follower responses occurred
because of a heightened sense of positive energy or support from leaders within the
organization; a high sense of personal regard arising from feeling understood, Beneficence
acknowledged, and loved; and a sense of mutuality in which both parties become as a source of
dependent upon and responsive to the other and a high degree of empathy and
understanding is present between the parties (Dutton and Heaphy, 2003, p. 267). Gittel competitive
(2003) suggested that high-quality relational connections occur because the parties advantage
share goals, share knowledge, and enjoy mutual respect.
We suggest that it is this process of creating cooperative relationships that are 1069
clearly articulated and supported by beneficent leader behaviors that “form the
necessary and sufficient conditions for competitive advantage and wealth creation”
(Caldwell and Hansen, 2010, p. 182). It is this linkage between leader behavior and
wealth creation that ultimately leads to competitive advantage, shown in Figure 2.
Consistent with this discussion of the importance of the social contract, we offer our
fifth proposition:
P5. Leaders and organizations who articulate a clear social contract and that
demonstrate high levels of beneficence toward organization members see
employees respond with higher levels of extra-role behaviors and enjoy higher
organizational profits than comparable businesses with leaders whose actions
are not perceived as beneficent and who do not articulate a clear social contract.
As Dutton and Heaphy (2003, p. 263) noted, “Theories of human behavior in

organizations need to take seriously the quality of connections between people to
understand why people flourish or flounder” in organizations. Creating strong
connections involves communicating clearly at multiple levels in establishing
relationships that resonate with organization members and that generate high
performance (Boyatzis and McKee, 2005). The social contract between leaders and
followers is a key factor that must not only articulate mutual expectations but also
establish close mutual respect and high regard at the emotional level (Gittel, 2003).
We note that high commitment, creativity, and extra-role behavior are necessary but
far from sufficient to achieve competitive advantage (Pfeffer, 1998). Competitive
advantage is also dependent upon competency at all levels of an organization,
economics of supplies and customers, market dynamics, successful innovation, and an
integrated set of key factors (Christensen and Raynor, 2003) that reflect sensitivity to
the internal integration and external adaptation of organizations (Schein, 2010). Our
point, however, is that beneficent leadership can also substantially contribute to
competitive advantage and is critically important in a knowledge, wisdom-, and
information-based economy (Paine, 2002; Covey, 2004).
Examples of beneficence in leadership

Although there are several excellent examples of leaders who have been highly
respected for beneficence, we cite two outstanding men who have created great
organizations. These organizations have been frequently acknowledged for leadership
in their industries and these two leaders have been revered by employees, customers,
and the general public.
Max DePree, former CEO of Herman Miller Furniture Company, helped create that
company as one of the most respected companies in the furniture industry. DePree’s
(2004) commitment to the welfare and growth of his employees – as well as his
company – is profoundly portrayed in his highly regarded book, Leadership is an Art.
DePree (2004, Ch. 1) is well-acknowledged for his belief that leaders and organizations
JMD owe a “covenantal duty” to their employees. That covenantal obligation included not
33,10 only keeping them well informed but helping them to achieve their personal greatness
as individuals and as employees. Herman Miller thrived under DePree’s philosophies
and in 2010 it was one of only six companies to earn Fortune’s “100 Best Companies to
Work For,” Fortune’s “Most Admired” companies, and Fast Company’s “Fast 50” most
innovative companies. The Max DePree Center for Leadership carries on his legacy in
1070 leadership development.
S. Truett Cathy, founder of Chick-fil-A, is another highly regarded leader who has
received plaudits for his humanity, his treatment of others, and his inspired ability to
serve others (Caldwell et al., 2012). Cathy’s restaurant chain is built around the
principles of service to others and treating people well. His employees are known as
among the best in the food service industry at customer service, and mirror the
company’s values by their outstanding service to the customer. Many of Cathy’s
employees receive scholarships for their education and turnover for Chick-fil-A is
among the lowest in the industry while employee morale and quality of service
is remarkably high. Cathy has received numerous awards for his service to humanity,
as well as his business, acumen and has written five books that each advocate treating
people with kindness and consideration. Chick-fil-A restaurant has grown from one
small Atlanta store in 1946 to a three-billion annual business, and is considered
a “cultural icon” and one of the most respected companies in the food services industry
(Green, 2006).
Max DePree and S. Truett Cathy demonstrate that beneficence and consideration
for others is not only a key to leadership effectiveness and better employee
relationships, but can be a philosophy upon which organizations can create high trust
cultures that are often regarded as key elements to increased profitability and
competitive advantage (Pfeffer, 1998).
Contributions of our paper

In identifying the importance of beneficence as a leadership behavior, our paper offers
five specific contributions to the practitioner and academic literature:
(1) We define beneficence as a key leadership behavior, clarifying the distinction
between benevolence as an intention and beneficence as an action-oriented
behavior that demonstrates a leader’s commitment to the welfare, growth, and
wholeness of organization members. Although beneficence and non-maleficence
have generally been viewed within the context of the duties of healthcare
providers (Beauchamp, 2008), we have noted the important contributions that
beneficence and non-maleficence make as leaders seek to strengthen the trust
relationship between leaders and followers. Beneficence, like trust (Gullet et al.,
2009), trustworthiness (Mayer et al., 1995), and commitment (Senge, 2006), is
measured on a continuum. That continuum is individually determined by each
person and is based upon the subjective perception of a leader’s behaviors as
viewed through the mediating lens of the person assessing that behavior as
shown in Figure 2 (Caldwell and Hayes, 2007).
(2) We emphasize the importance of the Theory of Reasoned Action in
understanding the nature of trust, trustworthiness, and beneficence. The
academic literature confirms that the definitions of trust and trustworthiness
are subject to wide differences of opinion about their precise nature (cf. Hosmer,
1995; Caldwell and Hansen, 2010; Gullett et al., 2009). The Theory of Reasoned
Action helps to clarify the distinctions between trust as a belief, an attitude, an Beneficence
intention, and as a behavior (Caldwell and Hayes, 2007). The Theory of as a source of
Reasoned Action also provides insight into the importance of differentiating
between beneficence as a leadership behavior and benevolence as intention to competitive
do that which best serves followers. Understanding this key difference about advantage
beneficence as enacted intention plays an important role for leaders. A leader’s
actions must be congruent with his/her proclaimed values and intentions 1071
(cf. Schein, 2010) if (s)he is to be successful in earning the trust and commitment
of followers to perform effectively in today’s highly competitive workplace
which Figure 2 identifies as so important in creating wealth and competitive
advantage (Pfeffer, 1998; Paine, 2002).
(3) We suggest five propositions that scholars and practitioners can use to test
the practical value of beneficence in the modern organization. Beneficence
behavior on the part of leaders enables them to solidify relationships and

demonstrate their commitment to the welfare of employees while also
honoring their stewardship responsibilities to their organizations and to other
stakeholders. Establishing relationships based upon mutual respect and
honoring employees as valued partners also increases perceptions about leader
trustworthiness, promotes employee commitment and extra-role behavior,
reduces perceptions of distrust, and honors ethical duties owed to others. Each
of these propositions helps to clarify the relationship between beneficent leader
behavior and the creation of competitive advantage indicated in Figure 2.
(4) We provide logical evidence to leaders and scholars to examine the need for
more creative leadership models that are both normative and instrumental in
their approach. Virtuous options are increasingly being acknowledged to
generate greater creativity, high quality, and increased profits. Clearly, current
leadership models seem to be inadequate for the complex global marketplace,
and a leadership model that resonates at the interpersonal level and creates
high commitment seems to be necessary to inspire creativity, extra-mile
commitment, and greater energy. Our paper provides both a model that links
leader behavior and competitive advantage and a strong rationale for
understanding the importance of beneficent leadership in building commitment
and trust.
(5) We affirm the nature of beneficence as a virtuous leadership behavior and an
ethical obligation of leadership. Beneficence promotes “the best of the human
condition” by treating others in a way that is both morally excellent and highly
pragmatic. Leader beneficence treats others as valued “Yous” rather than as
impersonal “Its.” Leadership beneficence is transformative in its scope and
comprehensive in its honoring of ethical duties. Beneficence is clearly an
important element in organizational relationships and affirms the critical
importance of virtuousness advocated in the Positive Organizational
Scholarship literature.
(6) We provide examples of beneficent leaders who have also been highly effective
and successful in creating great organizations. We emphasize that beneficence
can be a contributing factor to creating high profits, but quickly acknowledge
that effective leaders and great organizations must possess other qualities
as well.
JMD Although a constantly growing body of research is being initiated about virtuous
33,10 behaviors in organizations, the feedback from many employees is that management’s
actions are not consistent with their words, and organizational leaders frequently
struggle to make the right decisions (Maritz Research, 2011). Old models of leadership
that focus on control and that rely on “power over” employees are no longer good
enough – and perhaps they really have not been for more than three decades (Covey,
1072 2004; Reich, 2011).
Conclusion
Great leaders seek to earn the trust and followership of their employees must create
organizational systems that are aligned (Pfeffer, 1998), that empower employees to
excel (Bennis and Nanus, 2007), and that treat employees like owners and partners
rather than like commodities (Block, 1993). In this paper we have suggested that such
leaders understand the importance of acting as ethical stewards (cf. Caldwell and
Hayes, 2007) whose actions are beneficent and who are committed to the welfare,
growth, and wholeness of employees and the pursuit of wealth maximization (cf. Paine,
2002; Caldwell and Hansen, 2010; Cameron, 2003a).
Management scholars who have studied leadership have come to recognize that “we
don’t know what hasn’t worked or isn’t true,” but it is incumbent upon those who
manage to seek “more precise answers and facts on which to base one’s practice”
(Pfeffer and Sutton, 2007, pp. 154-155). Increasingly, the empirical evidence is
suggesting that a virtue-based and principle-centered approach to leading others and
governing organizations merits thoughtful assessment in a world where trust,
commitment, and creativity are of vital importance (Christensen and Raynor, 2003;
Cameron and Winn, 2012; Cameron et al., 2003).
Leaders and organizations can create competitive advantage when they create a
culture of high trust and personal connection that “unlocks and empowers the
untapped capabilities, overcomes the withheld commitment, and dissipates the
reluctant distrust so prevalent in other leadership models that lack an authentic
interest in the welfare of employees and other stakeholders” (Caldwell and Dixon, 2010,
p. 98). Beneficent leadership honors the sacred trust owed to employees by leaders, and
treats them as valued ends rather than simply as the means for achieving quarterly
profits (Autry, 1991).
As Nicholson (2011, p. 14) has confirmed “a gentler, kinder business world is
emerging, where people are treated with humanity, not as assets to be used and
disposed of.” Beneficence as a personal and organizational virtue honors the
covenantal duties (Pava, 2003; DePree, 2004) owed by leaders to employees and enables
leaders to be perceived as trustworthy ethical stewards who merit the trust and
followership of those they serve (Caldwell and Karri, 2005). The implications of
applying beneficence as a source of competitive advantage can contribute to increasing
wealth and improving relationships in every industry, and in all facets of life.
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Corresponding author
Dr Cam Caldwell can be contacted at: cam.caldwell@gmail.com
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Beneficence as a source of competitive advantage

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Georgia Southwestern State University, Americus, Georgia, USA

In a world increasingly dependent upon the extra-mile efforts of followers to sustain

important ethical value in articulating the obligations owed by healthcare providers

Leader’s Leader’s Determination Other Party’s

Beneficence, trust, and trustworthiness

employee commitment, extra-role behavior, and increased profitability (Pfeffer, 1998;

Beneficence and virtuousness

processes, and structures which have been described as essential in helping

Beneficence as competitive advantage

By demonstrating their commitment to others, constantly looking for ways to add

In writing about the importance of breaking out of old leadership perspectives,

In today’s modern organization, the importance of extra-role behaviors, high

As Dutton and Heaphy (2003, p. 263) noted, “Theories of human behavior in

Examples of beneficence in leadership

Contributions of our paper

behavior on the part of leaders enables them to solidify relationships and

Cameron, K.S. (2003b), “Organizational virtuousness and performance”, in Cameron, K.S.,

Approach, Psychology Press, New York, NY.

Management Journal, Vol. 38 No. 1, pp. 60-84.

Human Resource Management, Vol. 40 No. 4, pp. 293-307.

available at: www.amazon.com:Enquiry-into-Principles-Morals:dp:1770833617:ref¼

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