This special issue is devoted to highlighting thinkers who have been overlooked within business ethics and who have important contributions to make to our field. We make the case that, as scholars of a hybrid discipline that also aims to address important issues of business practice, we need to look continually for new sources of insight and wisdom that can both enrich our discourse and improve our ability to generate ideas that have a positive impact on business practice. In this (...) introductory essay, we discuss our rationale for creating this special issue, summarize the articles contained within, and close with thoughts on its significance for the field going forward. (shrink)

Will stakeholder theory continue to transform how we think about business and society? On the occasion of this journal’s 60th anniversary, this review article examines the journal’s role in shaping stakeholder theory to date and suggests that it still has transformative potential. We conducted a bibliometric analysis of co-citations in the literature from 1984 to 2020. Reporting these results, we examine the field’s evolving structure. Contextualized theoretically as an accomplishment of institutional work—the creation of a meaningful and innovative field ideology—this (...) structure is remarkable for how it integrates ethical and behavioral arguments, invites engagement from adjacent domains, and arrives at important insights for business and society. We advance a research agenda consistent with this larger institutional project. (shrink)

Stakeholder engagement has grown into a widely used yet often unclear construct in business and society research. The literature lacks a unified understanding of the essentials of stakeholder engagement, and the fragmented use of the stakeholder engagement construct challenges its development and legitimacy. The purpose of this article is to clarify the construct of stakeholder engagement to unfold the full potential of stakeholder engagement research. We conduct a literature review on 90 articles in leading academic journals focusing on stakeholder engagement (...) in the business and society, management and strategy, and environmental management and environmental policy literatures. We present a descriptive analysis of stakeholder engagement research for a 15-year period, and we identify the moral, strategic, and pragmatic components of stakeholder engagement as well as its aims, activities, and impacts. Moreover, we offer an inclusive stakeholder engagement definition and provide a guide to organizing the research. Finally, we complement the current understanding with a largely overlooked dark side of stakeholder engagement. We conclude with future research avenues for stakeholder engagement research. (shrink)

Business ethics is often understood as a variety of professional ethics, and thus distinct from ordinary morality in an important way. This article seeks to challenge two ways of defending this claim: first, from the nature of business practice, and second, from the contribution of business. The former argument fails because it undermines our ability to rule out a professional-ethics approach to a number of disreputable practices. The latter argument fails because the contribution of business is extrinsic to business in (...) a way that distinguishes from the established professions. The article ultimately suggests we adopt a more aspirational approach to business ethics, which retains an appeal even in the face of charges of anti-capitalist irrelevance. (shrink)

This article extends the Humean example of evolutionary stakeholder theory introduced in Kline and McDermott (2019). In that article, it was established that the Cost of Service Regulation (COSR) rules created by regulatory commissions, courts, and legislation was an example of evolutionary stakeholder theory. Ultimately, the Supreme Court decision in the Hope Natural Gas case established that it was not the method, but the result reach that was important. If the result reach balanced the interests of stakeholders then the outcome (...) was just and reasonable. Kline and McDermott (2019) also established that the COSR process was rather robust in terms of stakeholder participation. The purpose of this article is to extend the analysis to examine one of the most turbulent periods in COSR's history: the Post‐OPEC oil crisis of the 1970s–1980s. The effects of this period called into question the efficacy of the COSR process and led, as evolutionary stakeholder theory predicts, to a series of engagements by stakeholders to modify the rules of the process to achieve a better balance in the publics' interest. While adjudicatory in nature, the COSR process enabled cooperative solutions to redress the imbalances created by the OPEC oil shocks, improvements in information gathering, processing and decision‐making were all products of the evolutionary stakeholder process that regulators engaged in with stakeholders. (shrink)

This article provides an overview of the field of business ethics.

The case "Caprica Energy and Its Choices" concerns a fictionalized energy corporation choosing between three potential drilling sites. According to the published Teaching Note, the case is an exercise in the stakeholder approach to business: it requires balancing profit considerations with potential harm to those who live near those drilling sites. Though unintended, the case raises a further question not addressed in the case or in the Teaching Note: what gives Caprica Energy the right to impose risk on members of (...) the communities surrounding its drilling sites? The first section of the present article argues that, in such cases, manage- ment can only justify imposing risk on the local community by securing those stakeholders' consent. The second section outlines the implications for stakeholder theory and stake- holder management. The third section outlines one con- nection between this material and recent literature on the imposition of risk and moral theory; that section offers an account of what make this particular instance of imposing risk morally problematic, with reference to the directedness of the imposition. (shrink)

Business ethics denial refers to one of two claims about moral motivation in a business context: that there is no need for it, or that it is impossible. Neither of these radical claims is endorsed by serious theorists in the academic fields that study business ethics. Nevertheless, public commentators, as well as university students, often make claims that seem to imply that they subscribe to some form of business ethics denial. This paper fills a gap by making explicit both the (...) various forms that business ethics denial can take, and the reasons why such views are ultimately implausible. The paper argues that this type of serious engagement with business ethics denial should be an important part of the job description for teachers of business ethics. (shrink)

We offer a precautionary account of why business managers should proactively rethink about what kinds of automation firms ought to implement, by exploring two challenges that automation will potentially pose. We engage the current debate concerning whether life without work opportunities will incur a meaning crisis, offering an argument in favor of the position that if technological unemployment occurs, the machine age may be a structurally limited condition for many without work opportunities to have or add meaning to their lives. (...) We term this the axiological challenge. This challenge, if it turns out to be persuasive, leads to a second challenge, to which managers should pay special attention: the teleological challenge, a topic especially relevant to the broad literature about corporate purpose and governance. We argue that both the shareholder profit-maximization model and its major alternative, stakeholder theory, are insufficient to address the meaning crisis. Unless rebutted, the two challenges compel business leaders to proactively rethink the purpose of business for future society. Otherwise, businesses will be contributors to a major ethical crisis and societal externality in the coming society. (shrink)

Fulfilling consumer expectations of corporate social responsibility can bring strategic advantage to firms. However, research on the topic is fragmented across disparate disciplines, and a comprehensive framework to connect CSR supply and demand is missing. As a result, firms often supply CSR that does not attract demand, as signified by pessimism about ethical consumerism in recent years and the inconclusive link between corporate financial and social performance. In this study, we propose a framework of strategic CSR management to define how (...) a company’s supply of CSR could meet consumer demand for ethical products by aligning managerial and consumer perspectives. We then investigate empirically whether such a strategic approach, which integrates potential demand in CSR management, would influence consumer choice of products with CSR components. Our hybrid choice modeling allows the inclusion of psychological biases caused by social desirability and cynicism to increase result validity. The findings support the explanatory power of the framework and reveal that consumers prefer some CSR elements while others adversely affect choices. This study advances the understanding of strategic CSR management and its impact on consumer choice and helps managers include the right mix of CSR characteristics in their products to satisfy ethical consumers. (shrink)

The vast majority of health research resources are used to study conditions that affect a small, advantaged portion of the global population. This distribution has been widely criticized as inequitable and threatens to exacerbate health disparities. However, there has been little systematic work on what individual health research funders ought to do in response. In this article, we analyze the general and special duties of research funders to the different populations that might benefit from health research. We assess how these (...) duties apply to governmental, multilateral, nonprofit, and for-profit organizations. We thereby derive a framework for how different types of funders should take the beneficiaries of research into account when they allocate scarce research resources. (shrink)

The year 2018 is the 150 anniversary of the Tata group. This article is an attempt to examine the role of spiritual family values in shaping Tata as a sustainable business. Jamsetji Nusserwanji Tata, the founder of Tata, was a trained Parsi priest, who was greatly influenced by Humata or good thoughts, Hukhta or good words, and Hvarshta or good deeds toward others. Since its founding in 1868, the Tata leadership legacy has persistently followed those watchwords of the Zoroastrian faith. (...) The extant workplace spirituality literature posits that the role of spiritual and religious values is vital for organizations and individuals to prosper. Employing historical data and biographical method, we trace the history of Tata to examine the causal mechanism between spirituality and sustainable business, under the influence of stakeholder concept, sustainability and family values-based leadership. Implications for research and practice are discussed. (shrink)

Pharmaceutical firms seek to fulfill their responsibilities to stakeholders by developing drugs that treat diseases. We evaluate the social and financial costs of developing new drugs relative to the realized benefits and find the industry falls short of its potential. This is primarily due to legislation-mandated reliance on animal test results in early stages of the drug development process, leading to a mere 10 percent success rate for new drugs entering human clinical trials. We cite hundreds of biomedical studies from (...) journals including Nature, Science, and the Journal of the American Medical Association to show animal modeling is ineffective, misleading to scientists, unable to prevent the development of dangerous drugs, and prone to prevent the development of useful drugs. Legislation still requires animal testing prior to human testing even though the pharmaceutical sector has better options that were unavailable when animal modeling was first mandated. We propose that the U.S. Food and Drug Administration and Congress should work together to abolish regulations and policies that require animal use. Doing so will benefit pharmaceutical industry stakeholders, including patients whose health depends on drugs and the many people who rely on the financial well-being of pharmaceutical firms. (shrink)

It has long been recognized that accountants practicing in business settings have a dual role: as employees, they are bound to the organization, and as professionals, they are bound by the profession’s code of ethical conduct : 119–128, 1986). These two roles highlight the need to recognize and consider both the ethical and economic implications of their decisions. Practicing industry accountants are commonly involved in a broad range of their firm’s business practices and decision making, and are increasingly exposed to (...) the commercial aspects of their companies. Also, during their education, they were trained on their professional responsibilities. However, in general, this education was not recent and may not have been reinforced. By contrast, accounting students have been recently and repeatedly exposed to and have knowledge about their professional responsibilities as an accountant, but limited, if any, exposure to the commercial aspects of business. Consequently, our first hypothesis predicts that the ethical sensitivity of practicing industry accountants will be lower than that of accounting students. We find limited support for this hypothesis. Second, we also examine company reward structure and predict that ethical sensitivity will be lower for those in a company with a reward structure narrowly focused only on financial goals as compared to those in a company with a broad reward structure. Third, we predict that the difference in ethical sensitivity levels between those in a company with a narrow reward structure as compared to those in a company with a broad financial reward structure will be higher for practicing industry accountants compared to accounting students. Results from our study generally support these last two predictions. Ethical sensitivity is lower for those in a company with a reward structure narrowly focused only on financial goals as compared to those in a company with a broad reward structure, suggesting that companies may be able to increase ethical awareness in their organizations by including non-financial goals in their reward structures. (shrink)

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should support giving all (...) stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed. (shrink)

This article discusses plant-closing decisions by multinational enterprises applying a stakeholder theory approach. In particular, we focus on the emergence of “intra-stakeholder alliances,” that is, alliances among the various stakeholder groups of a specific corporation. We analyze the emergence of stakeholder alliances in reaction to MNEs' decisions to terminate production locally and discuss their influence on the outcomes of such decisions. Our research is inspired by two exceptional case studies of two multinational breweries that announced their decisions to close niche (...) breweries in small towns in Italy and Belgium. In both cases, the initial decision was ultimately reversed through the actions of intra-stakeholder alliances. We combine insights from stakeholder theory and the social movement literature to analyze the action and influence of intra-stakeholder alliances in seven cases of plant-closing decisions. We conclude by formulating four general propositions that can provide guidance to MNE management in plant-closing decisions. Our findings extend managerial stakeholder theory, show how this approach can improve strategic management analysis, emphasize the importance of the relationships among stakeholders in the value-creation process, and shed light on the collective action and influence of intra-stakeholder alliances. (shrink)

ABSTRACT:This study examines whether the empirical evidence on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) differs depending on the publication outlet in which that evidence appears. This moderator meta-analysis, based on a total sample size of 33,878 observations, suggests that published CSP-CFP findings have been shaped by differences in institutional logics in different subdisciplines of organization studies. In economics, finance, and accounting journals, the average correlations were only about half the magnitude of the findings published (...) in Social Issues in Management, Business Ethics, or Business and Society journals (mean corrected correlation coefficientof.22 vs..49, respectively). Specifically, economists did not find null or negative CSP-CFP correlations, and average findings published in general management outlets (=.41) were closer to Social Issues in Management, Business Ethics, and Business and Society results than to findings reported in economics, finance, and accounting journals. (shrink)

Abstract:Work on stakeholder theory has proceeded on a variety of fronts; as Donaldson and Preston (1995) have noted, such work can be parsed into descriptive, instrumental, and normative research streams. In a normative vein, Phillips (1997) has made an argument for a principle of fairness as a means of identifying and adjudicating among stakeholders. In this essay, I propose that a reconstructed principle of fairness can be combined with the idea of consent as outlined in integrative social contract theory (ISCT) (...) to bring about a more normative stakeholder theory that also has ramifications for corporate governance. (shrink)

The popularity of the stakeholder model has been achieved thanks to its powerful visual scheme and its very simplicity. Stakeholder management has become an important tool to transfer ethics to management practice and strategy. Nevertheless, legitimate criticism continues to insist on clarification and emphasises on the perfectible nature of the model. Here, rather than building on the discussion from a philosophical or theoretical point of view, a different and innovative approach has been chosen: the analysis will return to the origin (...) of stakeholder theory and will keep the graphical framework firmly in perspective. It will confront the stakeholder model’s graphical representation to the discussion on stakeholder definition, stakeholder identification and categorisation, to re-centre the debate to the strategic origin of the stakeholder model. The ambiguity and the vagueness of the stakeholder concept are discussed from managerial and legal approaches. The impacts of two major shortcomings of the popular stakeholder framework are examined: the boundaries and the level of the firm’s environment, and the ambivalent position of pressure groups and regulators. Working pragmatically, with a focus on the managerial and organisational perspective, an attempt is made to clarify the categorisations and classifications by introducing new terminology with a distinction between stakeholders, stakewatchers and stakekeepers. The analysis will finally lead to a proposed upgraded and refined version of the stakeholder model, with incremental ameliorations close to Freeman’s original model and a return of focus to its essence, the managerial implications in a strategic approach. (shrink)

Corporate social responsibility (CSR) is increasingly becoming a popular business concept in developed economies. As typical of other business concepts, it is on its way to globalization through practices and structures of the globalized capitalist world order, typified in Multinational Corporations (MNCs). However, CSR often sits uncomfortably in this capitalist world order, as MNCs are often challenged by the global reach of their supply chains and the possible irresponsible practices inherent along these chains. The possibility of irresponsible practices puts global (...) firms under pressure to protect their brands even if it means assuming responsibilities for the practices of their suppliers. Pressure groups understand this burden on firms and try to take advantage of the situation. This article seeks to challenge the often taken-for-granted-assumption that firms should be accountable for the practices of their suppliers by espousing the moral (and sometimes legal) underpinnings of the concept of responsibility. Except where corporate control and or corporate grouping exist, it identifies the use of power as a critical factor to be considered in allocating responsibility in firm-supplier relationship; and suggests that the more powerful in this relationship has a responsibility to exert some moral influence on the weaker party. The article highlights the use of code of conducts, corporate culture, anti-pressure group campaigns, personnel training and value reorientation as possible sources of wielding positive moral influence along supply chains. (shrink)

Today's sweatshops violate our notions of justice, yet they continue to flourish. This is so because we have not settled on criteria that would allow us to condemn and do away with them and because the poor working conditions in certain places are preferable to the alternative of no job at all. In this paper, we examine these phenomena. We consider the definitional dilemmas posed by sweatshops by routing a standard definition of sweatshops through the precepts put forward in the (...) literature on justice and virtue ethics. We conclude that fixing on definitions is pointless and misleading and that we are better off looking at whether or not a workplace violates the basic human rights of workers and whether or not the working conditions there cohere with situations on which we have already rendered judgments. In the end, we suggest guidelines for businesses that operate in the global workplace to help them avoid charges of running sweatshops. These recommendations account for the harsh living conditions in certain developing and emerging countries as well as the norms of societies in developed countries. (shrink)

. Atomic individualism is embedded in most definitions of stakeholder theory, and as a result, stakeholders are not integral to the basic identity of the corporation which is considered to be independent of, and separate from, its stakeholders. Feminist theory has been suggested as a way of developing a more relational view of the corporation and its stakeholders, but it lacks a systematically developed conceptual framework for undergirding its own insights. Pragmatic philosophy is offered as a way of providing this (...) theoretical undergirding for . a relational understanding of the firm and its stakeholders. (shrink)

The charged debate on the ‘C‐S‐R‐ization’ of organizational practices seems to have produced two opposing and seemingly incompatible explanations for why organizations should engage in corporate social responsibility (CSR): one, the normative rationale based on an appeal to ethics; and the other, the instrumental rationale, based on an appeal to business pragmatism. This paper argues that a missing link in this debate is the failure to recognize that the normative and instrumental approaches to corporate social responsibility are underpinned by substantively, (...) differentiating, relative logics of emotional rationalism on the one hand, and instrumental rationalism on the other. The paper makes a case that for CSR as a management practice to be practicable and actionable within a sustainable business agenda, it will need to be stripped of its current normative undertone and reconstructed in the instrumentally, pragmatic (utlish) language of business. Otherwise, the whole concept of CSR may continue to dwell in the realm of abstract theorizing without yielding many beneficial and practicable outcomes. The paper concludes that such an approach that situates CSR within a pragmatic business lingua, rather than a non‐business lingua, will help in legitimizing CSR as a ‘neutral’ management practice. (shrink)

This paper explores the relationship between attitudes to corporate social responsibility (CSR) and the cultural dimensions of business activity identified by Hofstede & Hofstede using a sample of nearly 90,000 stakeholders drawn from 28 countries. We develop five general propositions relating attitudes to CSR to aspects of culture. We show that the propensity of consumers to punish firms for bad behaviour varies in ways that appear to relate closely to the cultural characteristics identified by Hofstede. Furthermore, this variation appears to (...) be understandable in terms of the standard interpretation of the Hofstede dimensions, suggesting that cultural variation in the attitudes of consumers may play an important role in helping us to understand variations in CSR across countries. This in turn has implications for how managers of multinational companies should implement CSR strategies in different cultural contexts. (shrink)

Stakeholder theory is widely accepted but elementary aspects remain indeterminate as the term ‘stakeholder’ is an essentially contested concept, being variously describable, internally complex and open in character. Such contestability is highly problematic for theory development and empirical testing. The extent of essential contestability, previously unknown, is demonstrated in this paper through a bounded systematic review of 593 different stakeholder theory definitions. As an essentially contested concept, the solution does not lie in a universal stakeholder definition, but in debating the (...) boundaries of stakeholder identification. To this end, this paper presents the first major attempt at sorting, filtering and ordering stakeholder theory and stakeholder definitions to produce a comprehensive, multi-dimensional classification of stakeholder theory. The constructs of the classification model juxtapose existing stakeholder theories and contributions from across the multi-contextual applications of stakeholder theory, thereby providing an invaluable overview of what we know about stakeholder theory in one model. The classification model is then tested with positive results. The paper concludes with a comprehensive discussion of the implications of classification stakeholder theory definitions, which has for future research. (shrink)

There has, in recent decades, been considerable scholarship regarding the moral aspects of corporate governance, and differences in corporate governance practices around the world have been widely documented and investigated. In such a context, the claims associated with moral relativism are relevant. The purpose of this paper is to provide a detailed consideration of how the metaethical and normative claims of moral relativism in particular can be applied to corporate governance. This objective is achieved, firstly, by reviewing what is meant (...) by metaethical moral relativism and identifying two ways in which the metaethical claim can be assessed. The possibility of a single, morally superior model of corporate governance is subsequently considered through an analysis of prominent works justifying the shareholder and stakeholder approaches, together with a consideration of academic agreement in this area. The paper then draws on the work of Wong, firstly in providing an argument supporting metaethical moral relativism and secondly regarding values of tolerance and/or accommodation that can contribute to the normative claim. The paper concludes by proposing an argument that it is morally wrong to impose a model of corporate governance where there are differences in moral judgements relevant to corporate governance, or to interfere with a model in similar circumstances, and closes with consideration of the argument’s implications. (shrink)

Supported by a qualitative study of triple bottom line firms—those that simultaneously prioritize economic, social, and environmental objectives—we investigated the market logic and practices of TBL firms to better understand how they fulfill their mission and achieve their goals. We explored if and how TBL firms may differ in their approach to stakeholders and the management of their resources, including dynamic capabilities. We employed a research design that emphasizes the iterative comparison of narrative data within themselves and with scholarly literature (...) [i.e., resource-based view ] to develop new theoretical insights. Because the RBV is commonly used to theorize how firms achieve competitive advantage, we explored whether TBL firms achieve competitive advantage differently from what RBV theory would predict. Our data suggest that how a firm defines value has a significant influence on the capabilities it creates and how it treats its resources. We find that TBL firms redefine value to not only focus on the end product or service but also to include the systemic cost of delivering goods. As a result, TBL firms differ from prevailing scholarly thought in RBV. They strive to have resources that are sustainable and therefore imitable, commonly found, and substitutable. Moreover, they are not only transparent in their processes but also collaborate with others in the value chain and in their sector. In doing so, they deliberately create new markets from which other firms can benefit. Rather than focusing on competitive advantage, they focus on collaborative advantage. (shrink)

Stakeholder theory claims to promote moral values in business and this claim is generally accepted. Yet, literature shows that the theory is fundamentally strategic and only incidentally normative. This paper explores the assumptions of philosophical pragmatism that underpin the theory and concludes that the theory does not qualify as normative, since its conception of morality is basically hypothetical.

Leader-managers face a myriad of competing values when they engage in ethical decision-making. Few studies help us understand why certain reasons for action are justified, taking precedence over others when people choose to respond to an ethical dilemma. To help address this matter we began with a qualitative approach to disclose leader-managers' moral motives when they decide to address a work-related ethical dilemma. One hundred and nine military officers were asked to provide their reasons for taking action, justifications of their (...) reasons, and to explain these justifications. We used network analysis techniques to identify a hierarchical motive structure. The motive structure is a cognitive map that identifies ethical motives and perceptions of how these ethical motives relate to each other. The motives identified represent classic conceptualizations of moral behavior; namely, virtue theories, consequentialism, and deontological theories, along with another category that expressed the emotional significance of the moral judgment, which we refer to as emotional empiricism. (shrink)

Gender greatly impacts access to opportunities, potential, and success in corporate leadership roles. We begin with a general presentation of why such discussion is necessary for basic considerations of justice and fairness in gender equality and how the issues we raise must impact any ethical perspective on gender in the corporate workplace. We continue with a breakdown of the central categories affecting the success of women in corporate leadership roles. The first of these includes gender-influenced behavioral factors, such as the (...) requirements and expectations of gendered verbal and nonverbal communication styles as well as appearance. We move on to address the impact of family on corporate leadership opportunities and success, discussing the asymmetrical evaluation of an individual’s potential, authority, and competence based on gender stereotypes of familial obligations and expectations. Finally, we address how gender impacts access to networking and sponsorship opportunities and the long-term effects of systematic limitations on women’s inclusion in the upper echelons of corporate leadership. We conclude with a summary of the questions and issues raised by our discussion and direct individuals to consider how different ethical systems and moral requirements might influence their interpretations of gender and leadership in the corporate workplace. (shrink)

This paper argues that the notion of value has been overly simplified and narrowed to focus on economic returns. Stakeholder theory provides an appropriate lens for considering a more complex perspective of the value that stakeholders seek as well as new ways to measure it. We develop a four-factor perspective for defining value that includes, but extends beyond, the economic value stakeholders seek. To highlight its distinctiveness, we compare this perspective to three other popular performance perspectives. Recommendations are made regarding (...) performance measurement for both academic researchers and practitioners. The stakeholder perspective on value offered in this paper draws attention to those factors that are most closely associated with building more value for stakeholders, and in so doing, allows academics to better measure it and enhances managerial ability to create it. (shrink)

This essay, and the special issue it introduces, sets out to reignite ethical interrogations of the theory and practice of Human Resource Management (HRM). To cultivate greater levels of boundary-spanning debate about the ethics of HRM, we develop a framework of four tenors for scholarly work: the ethical-declarative, the ethical-subjunctive, the ethical-ethnographic, the ethical-systemic. Each of these tenors denotes particular grounds for ethical critique and encourages scholars to consider the subjects and objects of their enquiry, the disciplinary scope of their (...) work and the limits to subsequent claims about ethics and HRM. We provisionally locate each of the papers comprising the special issue with regard to one, or more, of these tenors. (shrink)

The nature of stakeholder theory and its fundamental normative prescriptions are the subject of much confusion and academic debate. This article attempts to provide an account of both the fundamental normative implications of stakeholder theory and the theory’s range of application that both stakeholder advocates and critics can agree upon. Using exclusively the language of leading stakeholder theorists, the article identifies the essential prescriptions of the theory and the type of organizations to which stakeholder theory applies in the hope of (...) facilitating effective discussion and evaluation of the normative dimension of stakeholder theory. (shrink)

The ongoing global economic and financial crisis has exposed the risks of considering market and business organizations only as instruments for creating economic wealth while paying little heed to their role in ethics and values. Catholic Social Teaching (CST) could provide a useful contribution in rethinking the role of values in business organizations and markets because CST puts forward an anthropological view that involves thinking of the marketplace as a community of persons with the aim of participating in the Common (...) Good (CG) of society. In the light of the CST tradition, and in particular Caritas in Veritate , this article investigates the thinking of some of the historical scholars of the Italian Economia Aziendale ( EA ), by focusing on the concept of azienda , in order to reinterpret in a more humanistic way the role of business organizations in society. By linking CST and EA , the dichotomy between for-profit and not-for-profit organizations and the stereotype of the so-called business amorality that has, for a long time, driven business managers can be transcended. The conclusions imply a forward-looking application of the ethical concepts embedded in the Italian science of EA. (shrink)

In this article, we examine the empirical association between corporate governance (CG) and corporate social responsibility (CSR) engagement by investigating their causal effects. Employing a large and extensive US sample, we first find that while the lag of CSR does not affect CG variables, the lag of CG variables positively affects firms’ CSR engagement, after controlling for various firm characteristics. In addition, to examine the relative importance of stakeholder theory and agency theory regarding the associations among CSR, CG, and corporate (...) financial performance (CFP), we also examine the relation between CSR and CFP. After correcting for endogeneity bias, our results show that CSR engagement positively influences CFP, supporting the conflict-resolution hypothesis based on stakeholder theory, but not the CSR overinvestment argument based on agency theory. Furthermore, firms’ CSR engagement with the community, environment, diversity, and employees plays a significantly positive role in enhancing CFP. (shrink)

Henry Hansmann has claimed we have reached the “end of history” in corporate law, organized around the “widespread normative consensus that corporate managers should act exclusively in the economic interests of shareholders.” In this paper, I examine Hansmann’s own argument in support of this view, in order to draw out its implications for some of the traditional concerns of business ethicists about corporate social responsibility. The centerpiece of Hansmann’s argument is the claim that ownership of the firm is most naturally (...) exercised by the group able to achieve the lowest agency costs, and that homogeneity of interest within the ownership group is the most important factor in achieving lower costs. He defends this claim through a study of cooperatives, attempting to show that homogeneity is the source of the competitive advantage most often enjoyed by shareholders over other constituency groups, such as workers, suppliers and customers, when it comes to exercising control over the firm. Some business ethicists, impressed by this argument, have taken it to be a vindication of Milton Friedman’s claim that profit-maximization is the only “social responsibility” of management. I would like to suggest that this conclusion does not follow, and that the “Hansmann argument” lends itself to a less minimalist view, what I refer to as a “market failures” approach to business ethics. (shrink)

The speed and degree to which e- commerce is infiltrating the very fabric of our society, faster and more pervasively than any other entity in history, makes an examination of its ethical dimensions critical. Though ethical lag has heretofore hindered ourexplorations of e- commerce ethics, it is now time to identify and confront them. In this paper we define e- commerce and describe thecharacteristics that set it apart from traditional brick and-mortar business. We then examine the ethical foundation of e- (...) commerce, focusing on the question, “Is there a special e- commerce ethics?” Our answer is “no.” We support our answer by showing that the current issues in e- commerce ethics and brick-and-mortar business are fundamentally the same, but that e- commerce issues have different manifestations and scope. We then demonstrate that ethical principles and rules in e- commerce and brick-and-mortar business are fundamentally the same, but have different manifestations at the most specific level. We elucidate this point by discussing the use of personal information and the opt-in, opt-out debate. We conclude with a call for research on trust, a key value in the success of e- commerce. (shrink)

Abstract:This paper is a preliminary attempt to better understand the concept of legitimacy in stakeholder theory. The normative component of stakeholder theory plays a central role in the concept of legitimacy. Though the elaboration of legitimacy contained herein applies generally to all “normative cores” this paper relies on Phillips’s principle of stakeholder fairness and therefore begins with a brief description of this work. This is followed by a discussion of the importance of legitimacy to stakeholder theory as well as the (...) general ambiguity of the term. A distinction is then drawn between normative and derivative legitimacy. Reference to this distinction helps distinguish between a relationship with the organization based on direct moral obligation and one based on the power to help or harm the organization. It is concluded that stakeholders who retain the ability to affect the organization arelegitimate(derivatively), but that this legitimacy is derived from the moral obligation owed other (normative) stakeholders and that the two sorts of legitimacy are importantly different from one another. An example of the normative/derivative distinction at work in managerial decision making is elaborated upon and managerial and research implications are then suggested. (shrink)

Abstract:Work on stakeholder theory has proceeded on a variety of fronts; as Donaldson and Preston (1995) have noted, such work can be parsed into descriptive, instrumental, and normative research streams. In a normative vein, Phillips (1997) has made an argument for a principle of fairness as a means of identifying and adjudicating among stakeholders. In this essay, I propose that a reconstructed principle of fairness can be combined with the idea of consent as outlined in integrative social contract theory (ISCT) (...) to bring about a more normative stakeholder theory that also has ramifications for corporate governance. (shrink)

This paper argues that Rawls’ principles of justice provide a normative foundation for stakeholder theory. The principles articulate (at an abstract level) citizens’ rights; these rights create interests across all aspects of society, including in the space of economic activity; and therefore, stakeholders – as citizens – have legitimate interests in the space of economic activity. This approach to stakeholder theory suggests a political interpretation of Boatright’s Moral Market approach, one that emphasizes the rights/place of citizens. And this approach to (...) stakeholder theory – in terms of citizens – raises a further question, what rights and obligations do economic agents have, beyond those attached to their roles as citizens? Rawls would reject additional rights and obligations of this sort for two reasons, one tied to freedom and one tied to pluralism. Rawls’ work therefore presses us to re-conceptualize the place of ethical claims in the economic context. (shrink)

In the field of business and society, several complementary frameworks appear to be in competition for preeminence. Although debatable, the primary contenders appear to include (a) corporate social responsibility, (b) business ethics, (c) stakeholder management, (d) sustainability, and (e) corporate citizenship. Despite the prevalence of the five frameworks, difficulties remain in understanding what each construct really means, or should mean, and how each might relate to the others. To address the confusion, the authors propose three core concepts—value, balance, and accountability—that (...) might be used to better integrate the five frameworks and potentially provide the basis for further discussion and theoretical development of the business and society field. (shrink)

This article argues that attempting to overcome moral silence in organizations will require management to move beyond a compliance-oriented organizational culture toward a culture based on integrity. Such cultural change is part of good corporate governance that aims to steer an organization to enhance creativity and moral excellence, and thus organizational value. Governance mechanisms can be either formal or informal. Formal codes and other internal formal regulations that emphasize compliance are necessary, although informal mechanisms that are based on relationship-building are (...) more likely to achieve moral excellence. Such a shift can be viewed as a transformative strategy for overcoming the destructive side effects and business risks of the tendency within corporate cultures to remain mute when faced with issues that violate personal or corporate values. Genuine dialogues and appropriate ethical decisionmaking training can deepen the understanding and create a mindful awareness (of ethical values) and induce trust that embrace both complying with rules and regulations, as well as inciting creative "ethical innovation" with respect to human interaction in multinational companies. (shrink)

Peace through Commerce literature has discussed how business can engage in more responsible behavior in order to mitigate conflict risk and promote conflict resolution. However, in many conflict situations, the question arises at what point does it become impossible for a firm to remain engaged on the ground and still function as an ethical business? This article discusses the role of divestment activist groups in changing institutional norms among MNCs operating in conflict situations. Institutional norms shift from firms conducting "business (...) as usual" without heed to conflict impact, to engagement policies promoting more responsible business practices, to divestment from conflict zones when circumstances are seen to preclude ethical business conduct. Engagement and divestment are explored as tools for discouraging unethical and promoting ethical business activity, considering conflict situations in South Africa and Sudan as case examples. (shrink)

The aim of the study was to explore the effects of the Responsible Care programme and how it is applied in practice. The present research questions include the following focus: how should we assess the performance of an organization's RC activity and what are the different criteria for assessing RC practices? The results indicate that the RC programme provides practical tools for developing health, environmental and safety operations. RC companies are committed to developing their products and processes, and continuously strive (...) to minimize emission levels and improve the efficiency of their use of raw materials and energy. The RC partnership between the chemical industry and its customers is executed in the form of responsibility for the product and its safe use. The product stewardship approach provides companies with tools that help secure safe usage throughout the product life cycle. (shrink)

In light of the recent crisis and its aftershocks, it becomes crucial to reflect on the relationship between finance and accounting and on how to integrate ethics and efficiency, as well as on how to motivate and empower practitioners in the world of finance to commit to justice, fairness and enhanced understanding, and to improving their personal integrity. This article, written as an editorial introduction to a special issue includes works related to control measurement and ethical behavior, misbehaviors in finances (...) and accounting, professionalism in accounting, ethical investing and corporate reporting. We conclude by suggesting further research for a better integration of technical aspects of accounting and finances into business activity—human activity actually—and an for understanding of ethics not limited to rules, but as a mutual and interdependent system of values, virtues and principles. (shrink)