Thus, from the standpoint of virtue ethics, according
to Koehn (1995), the important ethical matter is that indi-
vidualsmust be able tomake contributions of value to a society
or communal enterprise and that the virtuous agent simply is
the personhabituated to desire to dowhat is good andnoble.By
extension, then, MacIntyre’s practice–institution schema
suggests that both the motivation and reward for such contri-
butions is not monetary but rather an ‘‘internal goods’’—a
sense of wellbeing.
While transformational leadership is normally applied to a
context of organizational change, the same qualities of virtue
ethics have also been applied to the study of social en-
trepreneurship, sustainable enterprise, and a range of similar
concepts. In understanding various aspects of social en-
trepreneurship, Sullivan Mort et al. (2003) argue that the key
features of social entrepreneurship include not only its con-
cern and commitment in the social domain, the entrepreneur’s
leadership aptitude, and exceptional capacity, but also the
virtue and moral characters of both the entrepreneur and the
enterprise. As Roper and Cheney (2005) point out, private
social enterprises are often led by value-driven, charismatic
leaders who style themselves and their organizations as both
innovative and socially responsible. Using examples such as
Anita Roddick, the founder of the Body Shop, Grant (2004)
and Roper andCheney (2005) alsopoint out the importanceof
the character of successful social entrepreneurs. They argue
that at their inception these successful social enterprises share
in common the entrepreneurs’ vision of socially responsive
business and their ability to instill such values in the
organization.
Pratt and Pratt (2010) conducted a study of nine sus-
tainable enterprises from around the world, all selected
because they were established by a leader who explicitly
put sustainability principles at the core of the business from
the time of its inception. Examples included The UK’s
Eden Project, New Zealand’s Comvita, and Sri Lanka’s
Dilmah Tea. Kearins and Collins (2012), among others, use
the term ‘‘ecopreneur’’ in referring to those who establish a
business ‘‘in order to have a positive environmental and
social impact, as well as to make a profit’’ (p. 72). They
include ecopreneurship as one specific category of ‘‘values-
based business’’. There is clear synergy among the various
terms applied. By whatever term, what is truly fundamental
to successful social/sustainable enterprises, those that end
up transforming their business and society, is the virtue and
moral character of their leaders. In other words, a suc-
cessful sustainable enterprise must be anchored in, and
sustained through, a moral purpose—a deep and genuine
concern for the environment and the society. Being a
successful social entrepreneur then, returning to Bass and
Steidlmeier (1999), is a way of embracing virtue and
morality; and a way one engenders virtue in self, others,
and society through the example and virtuous conduct of
social enterprise.
Importantly, the value of transformational leaders and
social entrepreneurs lies not only in their success in cre-
ating a sustainable business, but also in the moral influence
they exert on others, their organizations, and the society at
large. In fact, the cultures of organizations in which such
transformational leaders and social entrepreneurs operate
may be profoundly shaped and ultimately sustained by
certain values, practices, and habits. Virtue ethics, in
placing an emphasis on moral character, provides a useful
way to understand how individuals’ ethical and moral be-
liefs can transform conventional self-serving business
practice into virtuous business conduct.
Indeed, in the discussion of transformational leadership
and social entrepreneurship, as with organizational value-
based action in general, the question of whether leader
charisma is essential for inspired organizational perfor-
mance is a persistent one. Weber (1978), for instance, was
concerned about exemplary character on individual as well
as organizational levels. The problem of charisma is how to
move it beyond the individual performance as a key means
70 Y. Wang et al.
123
of expressing authority and indeed directing the actions of
an organization. This remains a key question for collective
applications of virtue ethics and for assessing as well as
promoting virtuous behaviors in organizations. On a prac-
tical level, all sorts of organizations that are committed to
social values wrestle with the problem of how to, in We-
ber’s terms, ‘‘routinize’’ charisma given that so much of the
socially inspired leadership in all sectors is tied to indi-
vidual leaders and their initiatives.
The importance of virtue theory, therefore, lies in its
emphasis on individuals’ values and moral convictions in
understanding business practice. Specifically, it depicts
how individuals’ moral character can become the key dri-
ver behind an organization’s collective pursuit of ethical
business conduct. Such a virtue ethics approach to business
ethics is founded in our understanding of business as a
human-based social entity, or, as Solomon (2004) has put
it, a human institution in service to humans. According to
Arjoon (2000), the pursuit of ‘‘internal goods’’ corresponds
with a state of ‘‘being,’’ whereas ‘‘external goods’’ corre-
spond to a state of ‘‘having.’’ It is only under the state of
‘‘being,’’ the author posits that we can fulfill our true po-
tentialities which cannot be accomplished or satisfied by a
state of ‘‘having.’’ In this sense, virtue theory turns the
central issue of business ethics—‘‘how business should
act’’ to the question ‘‘how people should act,’’ where in-
dividuals’ moral capacity becomes the key to cultivating an
ethical climate in all aspects of social life. As demonstrated
in the many examples of transformational leaders and
successful sustainable enterprises, when individuals act as
moral agents, not only do their values and ethical pursuits
weigh at the core of business sustainability decision mak-
ing, but also their virtuous conduct can help foster, and in
turn be sustained through, a virtuous environment.
