Abstract:The organization is importantly different from both the nation-state and the individual and hence needs its own ethical models and theories, distinct from political and moral theory. To develop a case for organizational ethics, this paper advances arguments in three directions. First, it highlights the growing role of organizations and their distinctive attributes. Second, it illuminates the incongruities between organizations and moral and political philosophy. Third, it takes these incongruities, as well as organizations’ distinctive attributes, as a starting point for (...) suggesting an agenda for an ethics of organizations. (shrink)

In this article, I aim to clarify some key issues in the ongoing debate about the relationship between Rawlsian political philosophy and business ethics. First, I discuss precisely what we ought to be asking when we consider whether corporations are part of the “basic structure of society.” I suggest that the relevant questions have been mischaracterized in much of the existing debate, and that some key distinctions have been overlooked. I then argue that although Rawlsian theory’s potential implications for business (...) ethics are more extensive than some have suggested, the nature of the concern that we ought to have about the effects of corporate behavior on individuals’ economic and social conditions should lead us to reject the view that corporations are bound by principles of justice only if, and insofar as, they are part of the basic structure. (shrink)

During the past ten years Integrative Social Contracts Theory (ISCT) has become part of the repertoire of specialized decision-oriented theories in the business ethics literature. The intention here is to (1)␣provide a brief overview of the structure and strengths of ISCT; (2) identify recurring themes in the extensive commentary on the theory including brief mention of how ISCT has been applied outside the business ethics literature; (3) describe where research appears to be headed; and (4) specify challenges faced by those (...) who seek to reform ISCT. Key themes in the critiquing literature relate to (a) the identification process for hypernorms; (b) justification of the recognition of hypernorms; (c) proposals for considering meso or meta norms; (d)␣clarification of the relationship between stakeholder concepts and ISCT; (e) problems with potentially unoccupied moral free space; (f) sources of ethical obligation within the ISCT framework; and (g) the potential role for concepts of stakeholder dialogue and engagement. (shrink)

Recent scholarship in philosophy, law, and information systems suggests that respecting privacy entails understanding the implicit privacy norms about what, why, and to whom information is shared within specific relationships. These social contracts are important to understand if firms are to adequately manage the privacy expectations of stakeholders. This paper explores a social contract approach to developing, acknowledging, and protecting privacy norms within specific contexts. While privacy as a social contract—a mutually beneficial agreement within a community about sharing and using (...) information—has been introduced theoretically and empirically, the full impact on firms of an alternative framework to respecting the privacy expectations of stakeholders has not been examined. The goal of this paper is to examine how privacy norms develop through social contract’s narrative, to redescribe privacy violations given the social contract approach, and to critically examine the role of business as a contractor in developing privacy norms. A social contract narrative dealing specifically with issues of privacy is an important next step in exploring a social contract approach to privacy. Here, the narrative is used to explain to analyze the dynamic process of privacy norm generation within particular communities. Based on this narrative, individuals within a given community discriminately share information with a particular set of obligations in mind as to who has access to the information and how it will be used. Rather than giving away privacy, individuals discriminately share information within a particular community and with norms governing the use of their information. Similar to contractual business ethics’ impact on global commerce in explaining how and why norms vary across global contexts, the social contract approach to privacy explains how and why norms vary across communities of actors. Focusing on agreements around privacy expectations shifts the responsibility of firms from adequate notification to the responsibility of firms as contractors to maintain a mutually beneficial and sustainable solution. (shrink)

Abstract:Social contract is rapidly becoming one of the significant alternatives for analyzing ethical issues in business. Contractarian approaches emphasizing consent as a means of justifying principles can provide needed context for rendering normative judgements concerning economic behaviors. Current research issues include developing tests of consent for both hypothetical and extant social contracts, and empirically testing the assumptions of the major contractarian approaches. Open questions include exploring the relationship between contractarian business ethics and other approaches, such as stakeholder management and virtue (...) based ethics; and analysis of the intersection of contractarian approaches with the findings and assumptions of the field of moral psychology. Finally, the managerial utility of social contract based approaches needs to be explored with emphasis on identifying “translator” concepts. (shrink)

This essay seeks to give a contractarian foundation to the concept of Corporate Social Responsibility, meant as an extended model of corporate governance of the firm. It focuses on justification according to the contractarian point of view. It begins by providing a definition of CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Then, by establishing the basic context of incompleteness of contracts and abuse of authority, it analyses how the (...) extended view of corporate governance arises directly from criticism of the contemporary neo-institutional economic theory of the firm. Thereafter, an application of the theory of bargaining games is used to deduce the structure of a multi-stakeholder firm, on the basis of the idea of a constitutional contract, which satisfies basic requirements of impartial justification and accordance with intuitions of social justice. This is a sequential model of constitutional bargaining, whereby a constitution is first chosen, and then a post-constitutional coalition game is played. On the basis of the unique solution given to each step in the bargaining model, the quest for a prescriptive theory of governance and strategic management is accomplished, so that I am able to define an objective-function for the firm consistent with the idea of CSR. Finally, a contractarian potential explanation for the emergence of the multi-fiduciary firm is provided. (shrink)

This article draws on the moral philosophy of Immanuel Kant to explore whether a corporate ‘duty of beneficence’ to non-shareholders is consistent with the orthodox ‘shareholder theory’ of the firm. It examines the ethical framework of Milton Friedman’s argument and asks whether it necessarily rules out the well-being of non-shareholders as a corporate objective. The article examines Kant’s distinction between ‘duties of right’ and ‘duties of virtue’ (the latter including the duty of beneficence) and investigates their consistency with the shareholder (...) theory. The article concludes that it is possible within the ethical framework of shareholder theory for managers to pursue directly the happiness of non-shareholders. Furthermore, shareholders have a duty to hold management to account for the moral consequences of the firm’s activities on non-shareholding stakeholders. (shrink)

Many traditional conceptions of ethics use categories and arguments that have been developed under conditions of pre-modern societies and are not useful in the age of globalisation anymore. I argue that we need an economic ethics which employs economics as a key theoretical resource and which focuses on institutions for implementing moral norms. This conception is then elaborated further in the area of business ethics. It is illustrated in the case for banning child labour.

Contract-based approaches have been a focus of attention in business ethics. As one of the grand traditions in political philosophy, contractarianism is founded on the notion that we will never resolve deep moral disagreement. Classical philosophers like Hobbes and Locke, or recent ones like Rawls and Gaus, seek to solve ethical conflicts on the level of social rules and procedures. Recent authors in business ethics have sought to utilize contract-based approaches for their field and to apply it to concrete business (...) dilemmas. However, the application of contractarianism to management contexts can cause difficulties. Our article discusses this conceptual problem of contractarian business ethics and presents the idea of order ethics as an alternative. Order ethics, as we argue, can make a difference by conceptually bridging the gap between contractarianism and business ethics. (shrink)

ABSTRACT:This article reviews a conversation between business ethicists and feminist scholars begun in the early 1990s and traces the development of that conversation in relation to feminist theory. A bibliographic analysis of the business ethics and corporate social responsibility literatures over a twenty-five-year period elucidates the degree to which gender has been a salient concern, the methodologies adopted, and the ways in which gender has been analyzed. Identifying significant limitations to the incorporation of feminist theory in these literatures, we discuss (...) how feminist scholarship relating to behavior, organizations, and economics could be integrated. We suggest that a better integration of feminist theory would strengthen BE/CSR research, and point to new research directions and agendas arising from our approach. (shrink)

This paper applies Wempe’s (2005, Business Ethics Quarterly 15(1), 113–135) boundary conditions that define the external and internal logics for contractarian business ethics theory, as a system of argumentation for evaluating current or prospective institutional arrangements for arriving at the “good life,” based on the principles and practices of social justice. It does so by showing that a more dynamic, process-oriented, and pluralist ‘dialogic twist’ to Donaldson and Dunfee’s (2003, ‘Social Contracts: sic et non’, in P. Heugens, H. van Oosterhout (...) and J. Vromen (eds.), The Social Institutions of Capitalism: Evolution and Design of Social Contracts (Cheltenham, UK, Edward Elgar Publishing, Ltd.) pp. 109–126; 1999, Ties that Bind: A Social Contracts Approach to Business Ethics (Boston, MA, Harvard Business School Press); 1995, Economics and Philosophy 11(1), 85–112; 1994, Academy of Management Review 19(2), 252–284.) integrated social contracting theory (ISCT) of economic ethics will further develop this promising and influential approach to moral reasoning, ethical decision-making, and stakeholder governance. This evolutionary, interactive learning-based model of ethical norm generation via dialogic stakeholder engagement is particularly appropriate within economic communities that are experiencing value conflict and pressures for institutional change. (shrink)

ABSTRACT:The extension of human rights obligations to corporations raises questions about whose rights and which rights corporations are responsible for. This paper gives a partial answer by asking what legal rights corporations would need to have to fulfil various sorts of human rights obligations. We should compare the chances of human rights fulfilment (and violations) that are likely to result from assigning human rights obligations to corporations with the chances of human rights fulfilment (and violations) that are likely to result (...) from giving corporations the legal rights needed to undertake those human rights obligations. Corporations should respect basic human rights of all people. Non-complicity in human rights violations requires that corporations have the right to political freedom of speech. To actively protect people from human rights violations, corporations need the right to hire armed security personnel; such obligations should be limited to protecting corporate property and narrowly defined stakeholders. Obligations to spend corporate resources on human rights fulfilment are confined to contributing to specific projects. Corporations have no obligation to ensure a society in which human rights are fulfilled. This principle helps us understand why corporate obligations are substantially different from those of governments. (shrink)

By considering what we identify as a problem inherent in the ‘nature of the firm’—the risk of abuse of authority—we propound the conception of a social contract theory of the firm which is truly Rawlsian in its inspiration. Hence, we link the social contract theory of the firm with the general theory of justice. Through this path, we enter the debate about whether firms can be part of Rawlsian theory of justice showing that corporate governance principles enter the “basic structure.” (...) Finally, we concur with Sen’s aim to broaden the realm of social justice beyond what he calls the ‘transcendental institutional perfectionism’ of Rawls’ theory. We maintain the contractarian approach to justice but introduce Sen’s capability concept as an element of the constitutional and post-constitutional contract model of institutions with special reference to corporate governance. Accordingly, rights over primary goods and capabilities are granted by the basic institutions of society, but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post-constitutional institutional domains. The constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post-constitutional level anyone may achieve her/his functionings in the corporate domain by exercising such capabilities. In the absence of such a condition, post-constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes. (shrink)

While previous literature provides evidence of the positive relationship between ethical climate and job satisfaction, the possible mechanisms of this relationship are still underexplored. This study aims to enhance scholars’ and practitioners’ understanding of the ethical climate–job satisfaction relationship by identifying and testing two of the possible mechanisms. More specifically, this study fills an existing research gap by examining social and interpersonal mechanisms, referred to in this study as workplace isolation of colleagues and salesperson’s teamwork, of the ethical climate–job satisfaction (...) relationship. This is vital for the selling profession because job satisfaction is known to drive higher levels of salespeople’s performance. The arguments for such mechanisms are built on the foundations of social/psychological contract theory and ethical climate literature. Empirical testing using a large sample of salespeople shows higher levels of ethical climate to decrease workplace isolation and increase teamwork. Findings support hypothesized model where ethical climate positively relates to job satisfaction as partially mediated by workplace isolation and teamwork. Ethical climate is negatively related to workplace isolation and positively to teamwork. Further, findings indicate negative effect of workplace isolation on teamwork and sales performance. Job satisfaction is found to be key factor in driving performance of salespeople. (shrink)

This article assesses the quality of Integrative Social Contracts Theory (ISCT) as a social contract argument. For this purpose, it embarks on a comparative analysis of the use of the social contract model as a theory of political authority and as a theory of social justice. Building on this comparison, it then develops four criteria for any future contractarian theory of business ethics (CBE). To apply the social contract model properly to the domain of business ethics, it should be: (1) (...) self-disciplined, i.e., not aspire results beyond what the contract model can realistically establish; (2) argumentative, i.e., it should seek to provide principles that are demonstrative results of the contractarian method; (3) task-directed, i.e., it should be clear what the social contract thought-experiment is intended to model; and (4) domain-specific, i.e., the contractarian choice situation should be tailored to the defining problems of business ethics. (shrink)

This essay seeks to give a contractarian foundation to the concept of Corporate Social Responsibility, meant as an extended model of corporate governance of the firm. Whereas, justificatory issues have been discussed in a related paper, in this essay I focus on the implementation of and compliance with this normative model. The theory of reputation games, with reference to the basic game of trust, is introduced in order to make sense of self-regulation as a way to implement the social contract (...) on the multi-fiduciary model of corporate governance. This affords understanding of why self-regulation, meant as mere recourse to a long-run strategy in a repeated trust game, fails. Two basic problems for the functioning of the reputation mechanism are examined: the cognitive fragility problem, and the motivational problem. As regards the cognitive fragilities of reputation, the paper develops the logic and the structure that self-regulatory norms must satisfy if they are to serve as gap-filling tools with which to remedy cognitive limitations in the reputation mechanism. The motivation problem then arises from the possibility of sophisticated abuse by the firm. Developed in this case is an entirely new application of the theory of conformism-and-reciprocity-based preferences, the result of which is that the stakeholders refuse to acquiesce to sophisticated abuse on the part of the firm. (shrink)

Contractualism is one of the most promising ‘centers of gravity’ in business ethics. In this guest editorial we provide a concise roadmap to the field, sketching contractualism’s historic and disciplinary antecedents, the basic argumentative structure of the contract model, and its boundary conditions. We also sketch two main dimensions along which contributions to the contractualist tradition can be positioned. The first dimension entails positive versus normative theorizing – does a given contribution analyze the world as it is or how it (...) ought to be? The second dimension involves four different levels of analysis that are commonly employed in contractualist business ethics: the nano, micro, meso, and macro levels. We then proceed to position the articles comprising this special issue along these two dimensions. (shrink)

A generation ago, the field of business ethics largely abandoned analyzing the broader issue of social justice to focus upon more micro concerns. Donaldson applied the social contract tradition of Locke and Rawls to the ethics of management decision-making, and with Dunfee, has advanced this project ever since. Current events suggest that if the field is to remain relevant it needs to return to examining social and economic fairness, and Rawl's approach to social contracting suggests a way to start. First, (...) however, the field needs to discard the weaker and counterproductive aspects of its Lockean legacy: Locke's hostility to government activism and his indifference with regard to outcomes for the bulk of society. Donaldson's and Dunfee's social contracting approach is not suited to, nor was it designed to, analyze or resolve broad issues of social and economic justice. Their postulated network of communities upon which they rely is problematic in a number of ways, and while they take the legal and political status quo into account, their method does not deal with the historical reality that, as the economic and social environment changes, promoting greater justice requires new and sometimes coercive government interventions. Rawls's work, however, does acknowledge the historically demonstrable necessity of using the power of government to help to achieve desirable social outcomes. While he rejected Mill's methodology, Rawls was inspired by the earlier philosopher's concerns for social justice at a time of major economic change. The field would do well to follow the example of both men in this respect. (shrink)

So far overlooked by the international business ethics literature, we introduce, characterize, and normatively analyze the use of affective ties and networks in South Korea from an ethical point of view. Whereas the ethics of using Guanxi in China has been comprehensively discussed, Korean informal networks remain difficult to manage for firms in South Korea due to the absence of existing academic debate and research in this field. In this study, we concentrate mainly on the question of whether foreign firms (...) will and can use affective ties in Korea. The informal social network forms are classified and contrasted with the conventional ethical approaches used in international business ethics to assess which categories can be regarded as ethical or unethical. Finally, foreign firms are advised how to cope with and use different affective network types. Although the nature of affective ties and networks in Korea differs from that found for instance in China, consistent with the conclusion of prior research, we recommend particularistic analysis and decision making regarding the circumstances in which to conclude affective ties and networks and when to opt out. We conclude that foreign firms in Korea should invest in establishing Inmaek, refrain from engaging in Yonjul, and support host country nationals’ Yongo ties. Moreover, it is suggested that foreign firms should find ways to monitor and manage informal ties effectively. (shrink)

Abstract:This article argues that the important organizational values to study are organizational moral values. It identifies five moral values (honest communication, respect for property, respect for life, respect for religion, and justice), which allow parallel constructs at individual and organizational levels of analysis. It also identifies dimensions used in differentiating organizations’ moral values. These are the act, actor, person affected, intention, and expected result. Finally, the article addresses measurement issues associated with organizational moral values, proposing that content analysis is the (...) appropriate measurement technique to be used for an organization-level conception of moral values. (shrink)

This article develops contractarian business ethics by applying social contract arguments to a specific question: What are the pre-legal (or moral) rights and responsibilities of corporations? The argument uses a hypothetical social contract to show the existence of for-profit corporations in democratic capitalist societies is consistent with Rawls’s fundamental principles of justice. Corporations ought to have recognised their rights to be autonomous, to pursue private purposes, and to engage in economic activities. Corporations have a responsibility to respect the freedom and (...) human rights of all people, and not to interfere with government programs that ensure people have the education and training they need to find and keep corporate employment and that provide a safety-net that prevents destitution. If corporations have any other rights and responsibilities, those rights and responsibilities need to be established by actual social contracts, probably in the form of legitimate democratic processes. (shrink)

This paper carries forward the conceptual clarification of normative theories of business ethics ably begun by Hasnas in the January 1998 issue of BEQ. This paper proposes a normatively neutral framework for discussing and assessing such normative theories. Every normative theory needs to address these seven issues: it needs to specify a moral principle that identifies (1) recommended values and (2) the grounds for accepting those values. It also must specify (3) a decision principle that business people who accept the (...) theory can use. It must determine (4) who the normative theory applies to and (5) whose interests need to be considered. It must also outline (6) in what contexts it applies, and (7) what legal and regulatory structures it assumes. Once clarified, this paper applies the framework to the normative versions of stockholder theory, stakeholder theory, and ISCT. It is concluded that ISCT is the most promising normative theory currently under discussion, but that there are some major issues that ISCT has not dealt with yet. (shrink)

In this single industry study, the authors examine relationships between forest products companies in Maine and their stakeholders. The research question, why do firms work with stakeholders, is examined from both instrumental and normative perspectives. Specifically, it is hypothesized that stakeholder power and corporate social responsiveness affect the degree to which firms have working relationships with stakeholders. The study found support for the impact of the firm’s perception of stakeholder power on the strength of its relationships with stakeholders. Most notably, (...) it also found support for the firm’s corporate social responsiveness on the strength of its stakeholder relations, indicating that firms do work with stakeholders from both instrumental and normative bases. (shrink)

Abstract:Donaldson and Dunfee (1999) suggest in a brief discussion that a manager may in some cases rely on his or her own values in making organizational decisions. Our paper examines the role of diversity in values in an organizational context. Our central contention is that value diversity among managers, employees, and other stakeholders on dimensions such as prudence-boldness, clarity-flexibility, and rigor-mercy is highly useful for an organization. We introduce nontechnical models of individual and board decision-making in which value diversity cuts (...) across group interests that would otherwise control the decision. In these models, decision-makers who are influenced by values such as prudence or boldness as well as by their group interests are more likely to avoid suboptimal decisions, because their weaker but not their more intense group interests are likely to be overridden by their cross-cutting value inclinations. (shrink)

The stakeholder approach offers the opportunity to consider corporate responsibility in a wider sense than that afforded by the stockholder or shareholder approaches. Having said that, this article aims to show that this theory does not offer a normative corporate responsibility concept that can be our response to two basic questions. On the one hand, for what is the company morally responsible and, on the other hand, why is the corporation morally responsible in terms of conventional and post-conventional perspectives? The (...) reason why the stakeholder approach does not offer such a definition, as we shall see, is because the normative stakeholder approaches tend to confuse the social validity with the moral validity or legitimacy. It leads us to a conventional definition of corporate moral responsibility (CMR) that is not relevant to the pluralistic and global framework of our societies and economies. The purpose of this paper is to demonstrate this intuition. (shrink)

Despite the rapid adoption of technology in human resource departments, there is little empirical work that examines the potential challenges of algorithmic decision-making in the recruitment process. In this paper, we take the perspective of job applicants and examine how they perceive the use of algorithms in selection and recruitment. Across four studies on Amazon Mechanical Turk, we show that people in the role of a job applicant perceive algorithm-driven recruitment processes as less fair compared to human only or algorithm-assisted (...) human processes. This effect persists regardless of whether the outcome is favorable to the applicant or not. A potential mechanism underlying algorithm resistance is the belief that algorithms will not be able to recognize their uniqueness as a candidate. Although the use of algorithms has several benefits for organizations such as improved efficiency and bias reduction, our results highlight a potential cost of using them to screen potential employees during recruitment. (shrink)

This article discusses five propositions about managerial moral tractability -- that is, a morality that is amenable to the complexity of managers’ continual pressure to decide and act -- in their customer relations. The propositions come from the comparison of three case studies of different types of managers. To analyze the morality of managers, discursive practices of managers are studied. At the end of the article also some consideration is given to “information strategies” of managers, in relation to their tractable (...) morality. (shrink)

Friedman’s view on corporate social responsibility is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom. Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to (...) reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ. Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses. (shrink)

This article proposes a specific logic of dynamics for integrative social contracts theory that combines two empirically oriented process extensions strengthening concreteness of Donaldson and Dunfee’s conceptualization, namely international policy regime theory and Tiebout migration. While either would help “dynamize” and “concretize” ISCT, the two combined are even more insightful. Real-world policy regime processes can develop concrete action-guiding norms instantiating hypernorms to guide business decisions. Donaldson and Dunfee placed empirical reliance on expectation of converging parallel evolution of universal principles and (...) authentic local values. ISCT remains vague on how global or local norms can develop and change, for two reasons. First, ISCT does not explain mechanisms for how proposed hypernorms can become actual global norms and also become accepted across extant authentic communities. International policy regime theory explains how hypernorms can become instantiated as global norms expressed in policy regimes. Second, a basic element in ISCT is implied consent positing free exit from voluntary moral communities. Empirically, individuals or businesses may be unable to exit from undesired membership in authentic communities to which they do not consent. The Tiebout migration model provides valuable insights concerning how substantive mobility or its absence improves on the minimum ISCT assumption of implied consent. An integrated logic of ISCT dynamics generates a three-level framework in which instantiated hypernorms and authentic community norms can empirically change, and individuals or businesses can migrate more freely across extant communities. (shrink)

Numerous universal standards have been proposed to provide ethical guidance for the actions of business. The result has been a confusing mix of standards and their defenses. Thus, there is widespread recognition that business requires a common framework to provide ethical guidance. One of the most prominent conceptual frameworks recently offered, which addresses issues of international business ethics, is that of integrative social contracts theory (ISCT) developed by Thomas Donaldson and Thomas Dunfee. By integrating normative and empirical matters, and drawing (...) on the concepts of social contracts and hypernorms, ISCT seeks to provide a workable, comprehensive theory of business ethics. In this article I argue that, in fact, ISCT offers two different views of hypemorms and the theoretical structure surrounding them. A Principlist View that understands hypernorms as the most general, universal moral principles that hold moral sway over all microsocial contracts. A Contextualist View is that hypernorms are not special, additional norms, but refer to a certain status that the most general norms or principles of each community achieve that are part of a convergence with the norms of other societies. I maintain that the Contextualist View offers a plausible view of ISCT while avoiding many of the criticisms that have been made against the Principlist interpretation of ISCT. Further, the Contextualist View suggests other areas in which ISCT needs further development, such as in the area of human rights which I also briefly explore. (shrink)

Integrative social contracts theory (ISCT) has been an influential theory in normative business ethics for well over a decade, drawing attention both as an object of criticism and as a source of inspiration. In this paper I argue that, despite this attention, the fact that it is a genuinely pluralistic theory, in the tradition of pluralistic theories of political philosophy, is often overlooked. It is in the notion of moral free space that this pluralism is most clearly expressed. This oversight (...) is unfortunate for two reasons. Firstly, it prevents the potential of ISCT, as a normative theory of business ethics, from being appreciated fully; secondly, it leads us to ignore resources that could help tackle its most problematic flaws. In this second respect, I show how some of these flaws could be addressed by paying closer attention to the similarities between ISCT and John Rawls' theory of Political Liberalism. (shrink)

Business ethics in Japan has developed in five stages. Especially in the last stage (in the 1990s), there have appeared two clear-cut trends in business ethics activities: positive and passive. For the rise of business ethics, the passive trend is much more important. Once entered the 1990s, an increasing number of business scandals have been revealed. Because of this, the Japanese business community cannot but help take business ethics much more seriously than it ever has.Not only business practitioners but also (...) business ethicists have inaugurated a variety of ethics-related studies and activities. This article mainly puts focus on the studies, which have been done in the 1990s. At the end of the article, ethical challenges, which the Japanese business and academia meet presently, are described. (shrink)

The notion of extant social contracts (ESC), which was the original contribution that Tom Dunfee provided to contractualist business ethics (CBE) and Integrated Social Contracts Theory (ISCT) more specifically, has commanded less research attention to date than one would expect based on its apparent empirical face validity and its disciplinary spanning potential. This article attempts to revive the ESC concept in both normative and positive research at the intersection of business, management, and ethics and law. After identifying three features that (...) positively distinguish ESC from ISCT, this article argues that the yet unrealized conceptual potential of ESC is most likely to be cashed out when it is applied to the field of private international business regulation and when it is conceptually connected to the legitimizing perspective of institutional theory. (shrink)

Mounting evidence suggests that socioeconomic status is a determinant of health. As nations around the globe increasingly rely on market-based economies, the corporate sector has come to have a powerful influence on the socioeconomic gradient in most nations and hence upon the health status of their populations. At the same time, it has become more difficult for any one nation to influence corporate activities, given the increasing ease with which corporations relocate their operations from country to country, As a result (...) of all of these factors, nations wishing to assure the health of their populations will need to both involve the corporate sector and cooperate with other nations.In this article, we review the business ethics literature and consider what justification it might provide for requiring multinational corporations to attend to concerns about population health. (shrink)

This paper presents a conceptual link among green marketing, environmental justice, and industrial ecology. It argues for greater awareness of environmental justice in the practice of green marketing. In contrast with the type of costs commonly discussed in the literature, the paper identified another type of costs, termed "costs with positive results," that may be associated with the presence of environmental justice in green marketing. A research agenda is finally suggested to determine consumers'' awareness of environmental justice, and their willingness (...) to bear the costs associated with it. (shrink)

This article introduces several papers on social contracts and business ethics, published in the April 2005 issue of the journal "Business Ethics Quarterly.".

Drawing on ethical principles of fairness and integrative social contracts theory, moral obligations of fair dealing exist between the firm and all shareholders. This study investigates empirically whether privileged investors of publicly traded firms engage in legal, but morally questionable, trading that at the expense of non-privileged institutional or atomistic investors. In this context, we define privilege as the access to material, nonpublic earnings surprise information. Our results show that the opportunity for procedural unfairness increases with the presence of privileged (...) investors. However, this procedural unfairness does not appear to lead to distributive unfairness even though the level of abnormal trading also increases with the presence of privileged investors. That is, our findings suggest that other shareholders are in fact better off from an outcome perspective given that the abnormal stock price returns upon the announcement of an earnings surprise are either more positive or less negative when the firm has a high proportion of privileged investors. We extract the important implications of our study for future research on the fairness of capital markets and information asymmetry amongst classes of investors, as well as for public policy. (shrink)

Corruption presents an assurance problem to businesses: all businesses are best off if none act corruptly but in the event that corruption occurs are better off if they act corruptly than if they do not, and because there is no assurance that other actors are not cheating a business does not know how to act. The usual solution to an assurance problem – criminal sanctions imposed on cheaters – does not work in a corrupt system. Integrative Social Contract Theory suggests (...) a solution to the assurance problem. Application of Integrative Social Contract Theory to corruption demonstrates that in the case of corruption it has advantages over international law, and that the theory's elegance lies in its recognition of norms generated by multiple communities. (shrink)

The specific purpose of this introductory paper is to explicitly introduce readers to some of the important Biblical, Talmudic, andpost-Talmudic texts which deal with business ethics. As the discussion will show, Judaism’s traditional texts treat an amazing variety of issues emphasizing responsibilities in the business context. These texts are both legalistic and aspirational in character. The theme of this study is that an authentic Jewish business ethics needs to grow out of an understanding of the needs of modern, complex economies (...) but need not accept the status quo as binding. Jewish business ethics texts provide rules of behavior, but more importantly, the texts reveal a vision encouraging us to incorporate the highest human and spiritual ideals into the common world of business.The second section of the paper emphasizes that in order to develop Jewish business ethics, especially (but not exclusively) at the levelof the organization, models of aspiration will of necessity play an integral role. A Jewish business ethics which conceptualizes Judaismas merely a set of legal rules is bound to failure. A key conclusion of this section is that Jewish business ethics needs to continue to self-consciously promote models of aspirations, as well as rely on fixed legal norms.Finally, the third section of the paper examines a specific corporate policy (no smoking) in light of a Jewish business ethics. (shrink)

One of the most striking findings of the study by Foglia and colleagues (2009) was that clinicians and managers were most concerned with limited resources while ethics committee chairpersons focuse...

In this article it is argued that there are notable parallels between all of the different strands within ethics on the one hand, and accountancy on the other that, in teaching, can be drawn upon to enhance students’ understanding of the latter. Accountancy, part of economics, draws on utilitarian ethics, but not solely so. Accounting, in addition, draws on deontological and communitarian strands in ethics. The article suggests that the teaching of accounting – especially to non-economists – would benefit substantially (...) from highlighting and developing these parallels. (shrink)

Shareholders of corporations have their liability for actions of the corporation limited by law. Unlike the equity holder in a partnership or proprietorship, the assets that a shareholder has distinct from her holdings in the enterprise can not be taken to satisfy liabilities arising from actions of the enterprise itself. This paper argues that a reasonable principle of fairness argues for an alternative to limited liability, proportional liability. Proportional liability makes a shareholder liable for the same proportion of a corporation''s (...) excess of liabilities over assets that her number of shares bears to the total number of shares outstanding. The key idea is that it is unfair in situations in which explicit agreements can not be reached for shareholders to bear only limited risk when they may receive gains from stock dividends and appreciation that are not limited to any pre-determined amount. Proportional liability has not been much examined in the financial literature. Good utilitarian arguments have been given for limited liability over unlimited liability for corporate shareholders, but these arguments do not clearly support the choice of limited liability over proportional liability. (shrink)

Global society issues are putting increasing pressure on both small and large organizations to communicate ethically at all levels. Achieving this requires social skills beyond the choice of language or vocabulary and relies above all on individual social responsibility. Arguments from social contract philosophy and speech act theory lead to consider a communication contract that identifies the necessary individual skills for ethical communication on the basis of a limited number of explicit clauses. These latter are pragmatically binding for all partners (...) involved and help to ensure that the ground rules of cooperative communication are observed within a group or an organization. Beyond promoting ethical communication, the communication contract clarifies how individual discursive behaviour can be constructively and ethically monitored by group leaders in business meetings. A case study which shows what may happen when ground clauses of ethical communication are violated is presented. The conclusions of the study highlights why attempting to respect the communication contract is in the best interest of all partners at all levels within any group or organization. (shrink)

Until recently, businesses and corporations could argue that their only real commitments were to maximise the return to their shareholders whilst staying within the law. However, the world has changed significantly during the last ten years and now most major corporations recognise that they have significant responsibility to local and global societies beyond simply making profit. This means that there is now an increasing concern with the question of how corporations, and their employees, ought to behave, and this leads us (...) to consider ethics as the appropriate theoretical and philosophical domain.I will bring into the debate two relatively recent approaches to ethics: Jürgen Habermas's discourse ethics ; and the critical realist approach of Roy Bhaskar. These are interesting for several reasons: they both draw on traditional ethical theories, although different ones; they bring in innovations of practical relevance; and they both share an over-arching critical perspective. After a critical introduction to both ethical theories, their similarities and differences are explored. The article ends by considering the extent to which they may be practically useful within business. (shrink)

Some libertarians argue that informed consent alone makes transactions in the labour market morally justified. In contrast, some of their critics claim that such an act of consent is no guarantee against coercion. To know whether agreements are voluntary, we need to assess the quality of the offers or the prevailing background conditions. ISCT theorists argue that it is imperative to take social norms into account when evaluating the labour market. We present a novel framework for moral assessment in the (...) labour market, which takes consent, background conditions and norms into account, but which mainly focuses on the offers and demands made. Consent renders a transaction legitimate in the same way we regard a fair election legitimate even if we object to its outcome. For offers to be substantially justified, exploitation must be avoided and offers must give expression to the value of community. Only then they are morally justified. (shrink)