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)

ABSTRACT:Globalization has brought increased attention to the notion that labor rights such asfreedom of association—the right of workers to organize a union—are fundamental human rights. However, the vigorous opposition to freedom of association by US firms is largely ignored in the business ethics literature and exacerbated by compensatory corporate citizenship rating mechanisms that tend to mask labor rights deficiencies. I argue that because freedom of association is a hypernorm, instrumental to fully realizing basic human rights, labor rights and human rights (...) are largely inseparable. Thus, respect for labor rights is a non-substitutable requisite of corporate citizenship. I conclude by providing examples of corporate labor relations strategies that respect freedom of association and business firms that are leading the way. (shrink)

Social norms are an important input for ethical decisions in any business context. However, the cross-cultural discovery of extant social norms presents a special challenge to international management because norms may be inscrutable to outsiders. This article considers the contribution of Integrative Social Contracts Theory (ISCT) to the analysis of social norms in business ethics. It questions the origins and dynamics of norms from a sociological perspective, and identifies a tension between prescriptive efforts to make norms obligatory and positivist accounts (...) that describe norms as evolving and unstable. In the presence of dynamic and incomplete norms, managers can either deliberate with stakeholders to make norms flexible or codify norms to make them rigid. This essay argues that deliberation is the only reliable method for anticipating emergent norms. (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 is a popular framework to assist managers in making decisions on international moral dilemmas. Although the theory has been praised for its comprehensiveness and sophistication, commentators have raised concerns regarding the justification and identification of substantive hypernorms, fundamental moral principles valid across cultures. This paper introduces the deliberative test, a new method for testing the cross-cultural validity of ethical norms in ISCT. The test relies on the concept of Deliberative Capacity, arising from new developments in system-level (...) deliberative democracy research, which studies deliberation at the level of national societies and over time. Based on this recent stream of research, the deliberative test has the potential of providing better guidance for managers to decide which norms to follow in case of conflicting standards between home and host countries. (shrink)

Research on ethical norms has grown in recent years, but imprecise language has made it unclear when these norms prescribe “what ought to be” and when they merely describe behaviors or perceptions (“what is”). Studies of ethical norms, moreover, tend not to investigate whether participants were influenced by the prescriptive aspect of the norm; the studies primarily demonstrate, rather, that people will mimic the behaviors or perceptions of others, which provides evidence for the already well-substantiated social proof theory. In this (...) review article, we delineate three streams of norms research in business ethics: behavioral, perceptual, and prescriptive. We argue that by properly categorizing norms, and designing studies to investigate when prescriptions, more than mere mimicry, improve ethical outcomes in organizations, researchers can enhance managers’ efforts to promote ethical outcomes in organizations. (shrink)

This paper argues that a sweatshop worker's choice to accept the conditions of his or her employment is morally significant, both as an exercise of autonomy and as an expression of preference. This fact establishes a moral claim against interference in the conditions of sweatshop labor by third parties such as governments or consumer boycott groups. It should also lead us to doubt those who call for MNEs to voluntarily improve working conditions, at least when their arguments are based on (...) the claim that workers have a moral right to such improvement. These conclusions are defended against three objections: 1) that sweatshop workers' consent to the conditions of their labor is not fully voluntary, 2) that sweatshops' offer of additional labor options is part of an overall package that actually harms workers, 3) that even if sweatshop labor benefits workers, it is nevertheless wrongfully exploitative. (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)

ISCT arguably forms the most promising impetus to a contractarian theory of business ethics presently available. In this article, I want to pay tribute to the lasting significance of Dunfee's contribution to the field of business ethics by analyzing the vital role of the idea of extant social contracts (ESCs) in the conceptual set up of the ISCT project. The construct of ESCs can be shown to shape the problem statement from which the ISCT project proceeds – indeed it helps (...) to conceptualize the basic question which defines and delineates the domain of business ethics. (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 paper explores expatriates’ ethical evaluations of and responses to guanxi in China through the lens of integrative social contracts theory. We conducted in-depth interviews with 14 expatriate managers who had spent, on average, 6.5 years working and living in China. Based on the content analysis of these interviews, we identified two different uses of guanxi: defensive and competitive. In general, the respondents found defensive guanxi moral in the Chinese context, while they considered competitive guanxi immoral. Based on our findings, (...) we identified fair competition as the substantive hypernorm that governed most respondents’ ethical evaluations of guanxi. The study has implications for all scholars who seek to utilize integrative social contracts theory to study the relationship between informal networks and corruption in developing countries. (shrink)

ABSTRACT:The profound influence of Thomas Donaldson and Thomas Dunfee’s integrative social contracts theory on the field of business ethics has been challenged by Andreas Scherer and Guido Palazzo’s Habermasian approach, which has achieved prominence of late with articles that expressly question the defensibility of ISCT’s hypernorms. This article builds on recent efforts by Donaldson and Scherer to bridge their accounts by providing discursive foundations to the hypernorms at the heart of the ISCT framework. Extending prior literature, we propose an ISCT* (...) framework designed to retain ISCT’s practical virtue of managerial guidance while answering the demands of Scherer and Palazzo’s discursive account. By subscribing to a suitable portfolio of discursively justified hypernorms, we argue, companies unlock the valuable moral guidance of ISCT*, which says to treat these hypernorms as unequivocal outer bounds to the pursuit of business and as a starting point to tailor local norms through discursive stakeholder engagement. (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)

For more than three decades, business ethics has suggested and evaluated strategies for multinationals to address abject deprivations and weak regulatory institutions in developing countries. Critical appraisals, internal and external, have observed these concerns being severely constrained by the overwhelming prioritization of economic values, i.e., economism. Recent contributions to business ethics stress a re-imagination of the field wherein economic goals are downgraded and more attention given to redistribution of wealth and well-being of the weaker individuals and groups. Development ethics, a (...) lesser known field of normative enquiry, already offers nuanced justifications against economism which business ethicists can use in their current attempts to wean the field from old habits. (shrink)

ABSTRACT:After a brief historical introduction, three interpretations of dignity in relation to management theory and business ethics are elaborated: Dignity as a general category, Human Dignity as Inherent and Universal, and Human Dignity as Earned and Contingent. Next, two literature reviews are presented under the headings of “Dignity and Business Research” and “Dignity and Business Ethics Research.” The latter discussion identifies three subcategories of business ethics research involving human dignity: the role of dignity as a cornerstone for paradigmatic shifts, the (...) role of dignity as the ‘ultima ratio’ for the protection of human rights, and the role of dignity in organizing business practices. The article concludes with summaries of the three articles chosen for this special section. (shrink)

This project investigates salient stakeholder forces of socially responsible supply chain orientation (SRSCO) in the apparel and footwear sector focusing on fair labor management issues. SRSCO was conceptualized as a composite of internal organizational direction and external partnership for a creation and continuation of fair labor conditions throughout the supply chain. Primary stakeholders identified were consumers, regulation, industry, and media. A total of 209 mail survey responses from sourcing managers of U.S. apparel and footwear companies were analyzed. Two dimensions of (...) SRSCO were confirmed: internal direction and external partnership. Consumer and industry peer pressures were found significantly related to internal direction, while industry peers and media were significantly related to the external partnership. Regulation was not significantly related to either internal direction or external partnerships. Lack of regulation forces to govern labor issues and roles of consumers, industry peers, and media in promoting fair labor management are discussed in this article. (shrink)

Increased and active involvement of multinational corporations in the promotion of social welfare, in developing countries in particular, through the facilitation of partnerships and cooperation with public and nonprofit sectors, challenges the existing framework of our social and political institutions, the boundaries of nation-states, the distinction between the private and public spheres of our lives, and thus our freedom. The blurring of certain distinctions, which ought to be observed between the political and the economic is most manifest in the gradual (...) saturation of the field of business ethics with rights-based arguments and analyses. In this article, I first argue against endorsing positive rights as having the same status as negative rights, and then try to demonstrate that, with the transportation of 'rights talk' into business ethics, the dangers of conflating positive and negative rights are superimposed on the dangers of conflating the private and the political. I conclude by presenting my own stance on the debate on what our basic institutionally sanctioned rights should be, and what the corresponding duties of multinational corporations really are. (shrink)

We explore offshore outsourcing through the lenses of Catholic Social Teaching (CST). First, we review the outcomes of the 30-year debate in business ethics on issues related to offshore outsourcing. We then cluster authors into two groups—the justice-centered approach and the welfare-centered approach—corresponding to different perspectives on the ethical challenges of offshoring. In the second part, we present and apply the four fundamental principles of the CST (human dignity, subsidiarity, solidarity and the common good) to offshoring, in dialogue with the (...) previous debate. The unity and interconnection among the CST’s fundamental tenets provide a cohesive framework that integrates the points made by the justice-centered and welfare-centered approaches, while introducing the principle of solidarity, more focused on the worker as a person and their flourishing. CST also stresses the need to initiate processes oriented toward structural changes for the sake of human dignity and the common good. (shrink)

ABSTRACT:This article contributes to the business ethics literature by applying and extending an emerging theoretical perspective—stakeholder capability enhancement —to previously unexplored areas of business ethics inquiry related to work, dignity, and relationships between firms, ex-offenders, and other stakeholders. In particular, I direct attention to ex-offenders as critical community-based stakeholders pursuing employment opportunities with employers in these communities. I discuss how prevailing hiring practices in firms restrict opportunities for ex-offenders to obtain meaningful work and undermine stakeholder capabilities and dignity. I consider (...) three primary pathways for expanding employment opportunities for ex-offenders, enhancing the capabilities and dignity of ex-offenders and other community-based stakeholders, and maintaining critical employer rights. The article concludes with a discussion of potential directions for future research. (shrink)

For more than three decades, Integrative Social Contracts Theory (ISCT) has been lauded as a business ethics theory particularly well suited to the international arena, especially because of its alleged ability to reconcile respect for cultural idiosyncrasies and normative teeth. However, this theory has also faced various objections, many of which its authors have responded to with varying degrees of satisfaction. As a contribution to this debate, this article provides a unifying rationale for many of those objections by exploring their (...) rooting in the Separation thesis. It submits that this fact negatively impacts the theory with three major challenges, namely: significant limitations to correctly frame moral issues and situations; poor identification of hypernorms; and insufficient theoretical grounding of hypernorms. This critique highlights the need for the entanglement of the normative and the empirical in business ethics theorizing. (shrink)

Integrative social contracts theory is a novel approach to normative questions and has been widely evaluated, discussed, and applied by academics and practitioners alike. While the "I" in ISCT leads the title, it has not received the analytical attention it deserves, especially since the "integrative" component in ISCT is multifaceted and at the conceptual core of the theory. In this paper we therefore take a closer look at two facets of integration. First, we examine the normative integration that takes place (...) in ISCT. For our analysis we draw on theories of legitimacy and obligation. Second, given that empirical inquiry is an important part of the normative integration, we take a closer look at how research that has applied or used ISCT has embraced the empirical components of the theory. This analysis of the normative–empirical integration focuses on problems and realities of empirical inquiry in ISCT. (shrink)

We critically assess integrative social contracts theory (ISCT) and show that the concept particularly lacks of moral justification of substantive hypernorms. By drawing on Habermasian philosophy, in particular discourse ethics and its recent application in the theory of deliberative democracy , we further advance ISCT and show that social contracting in business ethics requires a well-justified procedural rather than a substantive focus for managing stakeholder relations. We also replace the monological concept of hypothetical thought experiments in ISCT by a concept (...) of practical discourse to better govern business activities on the macro-level of organizational actors such as firms, governments, and NGOs. (shrink)

ABSTRACT:Globalization has brought increased attention to the notion that labor rights such asfreedom of association—the right of workers to organize a union—are fundamental human rights. However, the vigorous opposition to freedom of association by US firms is largely ignored in the business ethics literature and exacerbated by compensatory corporate citizenship rating mechanisms that tend to mask labor rights deficiencies. I argue that because freedom of association is a hypernorm, instrumental to fully realizing basic human rights, labor rights and human rights (...) are largely inseparable. Thus, respect for labor rights is a non-substitutable requisite of corporate citizenship. I conclude by providing examples of corporate labor relations strategies that respect freedom of association and business firms that are leading the way. (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)