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)

This article explores how corporate governance processes and structures are being used in large Australian companies to develop, lead and implement corporate responsibility strategies. It presents an empirical analysis of the governance of sustainability in fifty large listed companies based on each company’s disclosures in annual and sustainability reports. We find that significant progress is being made by large listed Australian companies towards integrating sustainability into core business operations. There is evidence of leadership structures being put in place to ensure (...) that board and senior management are involved in sustainability strategy development and are then incentivised to monitor and ensure implementation of that strategy through financial rewards. There is evidence of a willingness to engage and communicate clearly the results of these strategies to interested stakeholders. Overall, there appears to be a developing acceptance amongst large corporations that efforts towards improved corporate sustainability are not only expected but are of value to the business. We suggest that this is evidence of a managerial shift away from an orthodox shareholder primacy understanding of the corporation towards a more enlightened shareholder value approach, often encompassing a stakeholder-orientated view of business strategy. However, strong underlying tensions remain due to the insistent market emphasis on shareholder value. (shrink)

Using a national survey of US consumers, this study demonstrates the positive effects of corporate social responsibility communication factors on consumers’ CSR knowledge, trust, and perceptions of corporate reputation. The study also examines the role of a stakeholder-specific factor of consumer–company identification in the process of CSR communication. The findings suggest that the positive effects of CSR informativeness are enduring and independent of consumers’ identification levels with a company, whereas the positive consequences of the personal relevance, transparency, and factual tone (...) of CSR communication intensify as the identification levels increase. Although CSR communication in which a self-promotional tone is adopted has a negative relationship with consumer trust and corporate reputation, such negative effects are not evident among consumers with very high identification levels with a company. Such CSR communication in fact improves consumers’ CSR knowledge and, in turn, has a positive effect on corporate reputation. (shrink)

In a series of articles, Thomas Dunfee defended the view that managers are permitted and at times, required, to utilize corporate resources to alleviate human misery even if this is at the expense of shareholder interests. In this article, I summarize Dunfee's defense of this view, raise some questions about his account and propose ways in which to answer these questions. The aim of this article is to highlight one of Dunfee's contributions to the debate about corporate governance and corporate (...) responsibility. (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)

The Global Economic Ethic Manifesto (" Manifesto") is a moral framework/code of conduct which is both interactive and interdependent with the economic function of the main institutions of the economic system: markets, governments, civil society, and supranational organizations, which lays out a common fundamental vision of what is legitimate, just, and fair in economic activities. The Manifesto includes five universally accepted principles and values: the principle of humanity; the basic values of non-violence and respect for life; the basic values of (...) justice and humanity; the basic values of honesty and tolerance; and the basic values of mutual esteem and partnership. We posit that the Manifesto provides an ethical foundation for explicitly assisting multinational enterprise's (" MNE") executive management and boards of directors to meet the moral failures criticisms associated with the expansion of global capitalism, and similarly how the U. N. Global Compact (" Compact") is focused on addressing complimentary market and institutional failures. In this article, we argue how the Compact and the Manifesto complement each other, explaining how the policies and guidelines of the Compact can now be implemented at the organizational/individual level through a comprehensive human resource management (HRM) plan supporting the ethical framework of the Manifesto. Finally, we have described how the Manifesto completes a comprehensive managerial framework (consisting of both the Compact and the Manifesto) for what we term an "MNE Moral Values-Based Corporate Governance Model." Ultimately, further research is needed in understanding how much impact external and internal influences make on creating a sustainable ethical culture in MNEs. (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)

This qualitative study indentifies how corporate responsibility (CR) practices are diffused to companies, as well as the factors that influence this diffusion process. Forest companies, industry associations, non-governmental organizations, and academics in Brazil, Canada, and the United States participated in this interview-based study. Data emerging from a grounded theory approach revealed three factors influencing the diffusion of CR practices to companies: (1) external contextual characteristics, (2) connectors, and (3) experts and expert organizations. These three factors influence each other, meaning that (...) the diffusion process of CR practices is somewhat cyclic. These interactions are usually manifested by companies and expert organizations influencing each other’s actions, being influenced by the external environment, and contributing to the CR trends that are observed in the external environment. (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)