ABSTRACT:Profit maximizers have reasons to agree with stakeholder theorists that managers may need to consider different values simultaneously in decision making. However, it remains unclear how maximizing a single value can be reconciled with simultaneously considering different values. A solution can neither be found in substantive normative philosophical theories, nor in postulating the maximization of profit. Managers make sense of the values in a situation by means of the many thick value concepts of ordinary language. Thick evaluation involves the simultaneous (...) consideration of different values: making sense of a value always involves knowing how to engage with it given the other values in the situation. This also goes for profit: maximization is only one way of engaging with the value of profit, and grasping whether maximization is appropriate involves considering other values. We discuss some consequences of our approach for stakeholder theorists and profit maximizers. (shrink)

Stakeholder theorists have traditionally objected to the neoclassical conception of the firm as a vehicle for maximizing profit or shareholder wealth, thus opening up space for controversial engagement with neoclassical economics. The present paper fills some of this space by elaborating the parallels between stakeholder theory and classical institutional economics, a heterodox school of economic thought that has long been critical of a broad range of neoclassical ideas. Rooted in the writings of Veblen and Commons, classical institutional economics explores how (...) the social provisioning process is coordinated or hindered by real-world business institutions. From this standpoint, stakeholder theory highlights the possibility of overcoming the institutionally ingrained conflicts and trade-offs for the sake of realizing common human interests in organizing the social provisioning process in an orderly and reasonable way. This argument not only illuminates the relationship of stakeholder theory to the wider societal context of modern capitalist economies but also elaborates novel aspects of the moral nature of stakeholder management. (shrink)

In this article, we first provide evidence that Scandinavian contributions to stakeholder theory over the past 50 years play a much larger role in its development than is presently acknowledged. These contributions include the first publication and description of the term “stakeholder”, the first stakeholder map, and the development of three fundamental tenets of stakeholder theory: jointness of interests, cooperative strategic posture, and rejection of a narrowly economic view of the firm. We then explore the current practices of Scandinavian companies (...) through which we identify the evidence of relationships to these historical contributions. Thus, we propose that Scandinavia offers a particularly promising context from which to draw inspiration regarding effective company-stakeholder cooperation and where ample of examples of what is more recently referred to as “creating shared value” can be found. We conclude by endorsing the expression “Scandinavian cooperative advantage” in an effort to draw attention to the Scandinavian context and encourage the field of strategic management to shift its focus from achieving a competitive advantage toward achieving a cooperative advantage. (shrink)

This article examines the way that for-profit businesses should take into account the interests of the citizens in the liberal democratic societies in which they operate. I will show how a contractualist version of stakeholder theory identifies the relevant moral interests of both shareholders and citizen stakeholders, and provides a method for giving their interests appropriate consideration. These include (1) the interests that individuals have with respect to private property, (2) the interests citizens have in receiving equitable consideration in the (...) political process, and (3) citizens' interests which give them the collective right to determine the legal and economic structure of their societies. Using this contractualist analysis, I argue that corporations should consciously take into account the interests of citizen stakeholders when there is no other social mechanism for protecting their interests as citizens. (shrink)

ABSTRACT:This essay attempts to provide a useful research agenda for researchers in both strategic managementandbusiness ethics. We motivate this agenda by suggesting that the two fields started with similar interests, diverged, and are beginning to converge again. We then identify several streams that hold particular promise for developing our understanding of the relationship between strategy and ethics: stakeholder theory, managerial discretion, behavioral strategy, strategy as practice, and environmental sustainability.

Most theory in business ethics is still steeped in rationalist and moral-realist assumptions. However, some seminal neuroscientific studies point to the primacy of moral emotions and intuition in shaping moral judgment. In line with previous interpretations, I suggest that a dual-system explanation of emotional-intuitive automaticity and deliberative reasoning is the most appropriate view. However, my interpretation of the evidence also contradicts Greene’s conclusion that nonconsequentialist decision making is primarily sentimentalist or affective at its core, while utilitarianism is largely rational-deliberative. Instead, (...) I propose that current research on the human brain, in conjunction with converging experimental evidence, hints at moral subjectivism and its evolutionary basis as the most persuasive explanation of morality. These anti-realist conjectures have far-reaching implications for a wide range of topics in business ethics, as illustrated with the specific case of corporate social responsibility as a potentially tribal conception of the good. (shrink)

The aim of this paper is to think business ethics with the help of philosopher Alain Badiou, focusing on Badiou's critique of ethics and the concepts of ‘event’, ‘truth’ and especially ‘subject’. Based mainly on review articles, I construct an understanding of business ethics (comprising corporate social responsibility and sustainability) and its history as a field of research. With the help of a framework developed from Badiou's work on ethics, I conduct a metacritique of business ethics as being intolerant (exclusion (...) of voices), nihilist (concerned with necessity and economics), reactive (to social movements in the 1960s, arguing that there has always been an ethics of business) and obscure (building upon the atemporal body of knowledge in ethics). Opposed to these tendencies, with the help of the constructive Badiou, I argue that business ethics should move towards the creation of faithful subjects possibly formed by ‘inexistent’ research in the field, as well as concerning itself with closely studying and identifying empirical cases of faithful subject formations and their deviations. (shrink)

This article seeks to defend and develop a stakeholder pragmatism advanced in some of the work by Edward Freeman and colleagues. By positioning stakeholder pragmatism more in line with the democratic and ethical base in American pragmatism (as developed by William James, John Dewey and Richard Rorty), the article sets forth a fallibilistic stakeholder pragmatism that seeks to be more useful to companies by expanding the ways in which value is and can be created in a contingent world. A dialogue (...) between a defence company and peace and arbitration society is used to illustrate the main plot of this article. (shrink)

Milton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman’s position, nevertheless, has retained currency among many business thinkers. In this article, we argue that Friedman’s economic writings assume an economy in which (...) businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To achieve consistency with his economic principles, Friedman must either abandon limited liability or modify his doctrine on CSR and his related shareholder model of business. (shrink)

ABSTRACT:This essay attempts to provide a useful research agenda for researchers in both strategic managementandbusiness ethics. We motivate this agenda by suggesting that the two fields started with similar interests, diverged, and are beginning to converge again. We then identify several streams that hold particular promise for developing our understanding of the relationship between strategy and ethics: stakeholder theory, managerial discretion, behavioral strategy, strategy as practice, and environmental sustainability.

Domestic violence is a serious issue, and the costs for business of failing to address the impacts of domestic violence in the workplace are high. New technologies and economic shifts towards services sector industries are fast dissolving the boundaries between the workplace and the home in many national labor markets. Moreover, companies are now expected to meet higher standards of behavior in fulfilling their responsibilities to employees and wider society. These developments present challenges for ethical reasoning about the limits of (...) employer responsibility in relation to domestic violence. While a number of possible approaches have something to contribute, this paper argues that feminist theories provide the most useful framework for ethical reasoning about the issues domestic violence raises for business organizations. The practical value of such reasoning is then illustrated by applying the organizing framework developed by Yuan et al. to examine how recurring domestic violence-related initiatives can be integrated as routine practices in firm operations. The paper thus provides a structured qualitative study of theory and practice for dealing with the impacts of domestic violence in the workplace. (shrink)

The growing popularization of stakeholder theory among management scholars has offered a useful framework for understanding the multiple and interdependent roles of government and business in an increasingly challenging political and regulatory environment. Despite this trend, attention to the role and responsibility of government to protect citizen rights has been limited. To the two traditional stakeholder theory views of government where the focal organization remains the firm, we propose to add two views by pivoting the government’s place and making it (...) the focal organization. We thus describe governments as serving four roles in the business–government–society nexus. For each role, we analyze typical governmental activities/behaviors, relationships with firms’ stakeholders, as well as the challenges and limits to these roles. We also focus on the central notion of salience amplification, as a means of checks and balances across stakeholders in order to safeguard citizen rights and reveal the greater good. (shrink)

This paper aims to integrate insights from psychoanalytic theory into business ethics research on the sources of ethical failures within organizations. We particularly draw from the analysis of sources and outcomes of neurotic processes that are part of human development, as described by the psychoanalyst Karen Horney and more recently by Manfred Kets de Vries; we interpret their insights from a stakeholder theory perspective. Business ethics research seems to have overlooked how “neurotic management styles” could be the antecedents of unethical (...) behavior within organizations. After showing the connection between five managerial neuroses and the corresponding potential ethical failures within organizations that have been already identified within business ethics research, we suggest three organizational strategies to counteract these failures. First, we argue that managers should pay greater attention at the complexity of human motivation, avoiding the simplistic view of compliance‐based approaches. Second, we discuss the importance of developing a conversation around values within organizations, enabling healthy individual growth and limiting the emergence of neurotic processes. Finally, we discuss the role of the business ethicist in facilitating such a process, suggesting a parallel between the role of the business ethicist and that of the psychoanalytic therapist. (shrink)

This study integrates insights from stakeholder theory and the literature on competitive dynamics and incumbent responses to entry. While research in economics and strategy has examined how market incumbents respond to new entrants, little is known about the heterogeneity in these responses to the entry of a stakeholder-oriented firm; our study addresses this research gap. Findings from a novel, longitudinal dataset of 206 granularly defined pharmaceutical markets in India suggest that stakeholder-oriented firm entry in these markets is associated with an (...) impact on prices and product differentiation with heterogeneous responses from high-end and low-end incumbents. Specifically, entry by a stakeholder-oriented firm results in a reduction in prices and dosage sizes from high-end incumbents, whereas low-end incumbents respond in the opposite direction. (shrink)

While many scholars agree that the ‘‘separation thesis’’ (Freeman in Bus Ethics Quart 4(4):409–421, 1994)—that business issues and ethical issues can be neatly compartmentalized—is harmful to business ethics scholarship and practice, they also conclude that eliminating it is either inadvisable because of the usefulness of the positive/ normative distinction, or actually impossible. Based on an exploration of the fact/value dichotomy and the pragmatist and virtue theoretic responses to it, we develop an approach to eliminating the separation thesis that integrates ‘‘business’’ (...) with ‘‘ethics’’ while still permitting a positive/ normative distinction, which we call ‘‘ethics from observation.’’. (shrink)