This article investigates the use of favors by managers of BRIC firms to accomplish business goals, the ethicality of which should be determined by the moral reasoning in these countries rather than from a developed country perspective. We define a favor as an exchange of outcomes between individuals, typically utilizing one's connections, that is based on a commonly understood cultural tradition, with reciprocity by the receiver typically not being immediate, and its value being less than what would constitute bribery within (...) that cultural context. This exchange normally takes place between and among members of networks, and may involve a network outsider contacted by a network insider on behalf of another insider. We see the giver and receiver of the favor, as well as network insiders and outsiders, as stakeholders. Additionally, society could also be considered to be a stakeholder since the practice of using favors generally inhibits the development of legitimate, strong formal institutions, since the use of favors in emerging economies is rooted in cultural traditions that we view as informal institutions. Furthermore, we assert that the practice of using favors can lead to bribery which harms society as a stakeholder both morally and economically. We posit that BRIC-country managers' behaviors stem from informal, culturally based practices—jeito in Brazil, blat/sviazi in Russia, jaan-pehchaan in India, and guanxi in China. We utilize institutional theory to explain why favors are relied upon, and ISCT to support the argument that the use of favors in environments like the BRICs is generally considered ethical. (shrink)

In this article, the authors attempt to build a bridge between economic theory and medical ethics to offer a new perspective to tackle ethical challenges in the physician–patient encounter. They apply elements of new institutional economics to the ethically relevant dimensions of the physician–patient relationship in a descriptive heuristic sense. The principal–agent theory can be used to analytically grasp existing action problems in the physician–patient relationship and as a basis for shaping recommendations at the institutional level. Furthermore, the patients’ increased (...) self-determination and modern opportunities for the medical laity to inform themselves lead to a less asymmetrical distribution of information between physician and patient and therefore require new interaction models. Based on the analysis presented here, the authors recommend that, apart from the physician’s necessary individual ethics, greater consideration should be given to approaches of institutional ethics and hence to incentive systems within medical ethics. (shrink)

Some leading economists maintain that corporate managers have no social responsibilities other than to maximize profits and obey the law. To support that thesis, they rely, in part, on the agency theory of the firm. The theory provides that managers are agents of shareholders and must do what shareholders want, which is generally to make as much money as possible. For purposes of this article, I accept that managers are agents of shareholders, but I reject the conclusion that the relationship (...) dilutes their moral obligations. Managers, as agents, cannot justify immoral decisions on the grounds that their shareholders direct their actions. Similarly, shareholders, as principals, lack moral bases to authorize managers to take actions the shareholders could not justify taking themselves. I apply this thesis to the ethical challenges managers of government contracting businesses face when they consider whether to make independent political expenditures. I argue that where it is in the interests of government contractors to publicly disclose, limit, or forego making independent political expenditures, they can legally do so, and that in the absence of financial advantage or legal obligation, agency theory highlights the ethical obligations of shareholders and their managers agents. It does not grant them an ethical free pass. (shrink)

Some leading economists maintain that corporate managers have no social responsibilities other than to maximize profits and obey the law. To support that thesis, they rely, in part, on the agency theory of the firm. The theory provides that managers are agents of shareholders and must do what shareholders want, which is generally to make as much money as possible. For purposes of this article, I accept that managers are agents of shareholders, but I reject the conclusion that the relationship (...) dilutes their moral obligations. Managers, as agents, cannot justify immoral decisions on the grounds that their shareholders direct their actions. Similarly, shareholders, as principals, lack moral bases to authorize managers to take actions the shareholders could not justify taking themselves. I apply this thesis to the ethical challenges managers of government contracting businesses face when they consider whether to make independent political expenditures. I argue that where it is in the interests of government contractors to publicly disclose, limit, or forego making independent political expenditures, they can legally do so, and that in the absence of financial advantage or legal obligation, agency theory highlights the ethical obligations of shareholders and their managers agents. It does not grant them an ethical free pass. (shrink)

The use of agency theory remains highly controversial among business ethicists. While some regard it as an essential tool for analyzing and understanding the recent spate of corporate ethics scandals, others argue that these scandals might not even have occurred had it not been for the widespread teaching of agency theory in business schools. This paper presents a qualified defense of agency theory against these charges, first by identifying the theoretical commitments that are essential to the theory (in order to (...) distinguish between agency theory itself and certain incorrect interpretations that have been widely promulgated), and second, by specifying more clearly the different ways that agency theory can be used to analyze relations within the firm. The recommendation that follows from this analysis is that agency theory be used as a critical-diagnostic tool, to identify the points at which both firms and markets will be vulnerable to breakdown in the absence of moral constraint. (shrink)

In recent years executive coaching has become an important management development practice in many organizations. Executive coaching is a partnership between a management level client and a coach hired by an organization to assist the executive in becoming a more effective and successful manager. While executive coaching has become a frequent and important practice in organizations, there has been relatively little serious consideration of the complex ethical issues that arise for persons and organizations. This study proposes that executive coaching involves (...) an agency relation with specific moral duties that go beyond the usual standards of professional ethics. Agency theory, and in particular a focused understanding of the agency relationship, can provide a needed ethical grounding and basis for moral thinking about executive coaching. (shrink)

Standard accounts on the nature of the firm are highly dependent on explanations by Coase, coupled with inputs from agency theory and shareholder theory. This paper carries out their critique in light of personalist and common good postulates. It shows how personalist and common good principles create a framework that not only accommodates business ethics better but also affords a more compelling understanding of business as a whole.

The wantok system in the Solomon Islands and the Melanesian countries more broadly, strongly links to the practices of group identity and belonging, reciprocity, and caring for one’s relatives. It is a term used to express patterns of relationships that link people in families, tribes, islands, provinces, nationality and even more superficially at greater Melanesian sub-regional aggregates. Various aspects of the wantok system are called different names by distinct language groups in Papua New Guinea, Solomon Islands and Vanuatu. Nevertheless, the (...) word wantok originates from the English words ‘one talk’, which literally means in Melanesian pidgin, speakers of the same language. (shrink)