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

This paper presents the 'rationality-of-ends/market-structure grid'. With this grid, the article contrasts, in economic terms, different approaches to business ethics and addresses the question how far and what type of business ethics is feasible. Four basic scenarios for business ethics are outlined that imply different conceptualizations of business ethics. The grid interrelates a rationality-of-ends dimension with a market-structure dimension. The rationality-of-ends dimension ranges from opportunism and self-interested egoism to self-interested altruism and ultimately to authentic altruism. The market-structure dimension ranges from (...) perfect competition/no information problems/perfectly dispersed market power to imperfect competition/high information problems/concentrated power. Rather than presenting economic, legal, ethical and discretionary issues in a hierarchical fashion, the grid interrelates these issues. Conclusions are spelled out regarding the empirical observance of business ethics and the programmatic, 'theoretical' positions that are behind empirical observations. Practical implications for managers and public policy makers are outlined. (shrink)

This paper offers a novel situational approach to study organizational justice in which the proposed unit of analysis is managerial behavior manifested in argumentation rather than employee justice perceptions. The currently dominant theoretical framework in justice research, which is built on justice perceptions, neglects the unique features of organizational order and vulnerability of procedural justice perceptions. As the procedural justice concept belongs chiefly to a spontaneous market order under which the rule of law is made possible, it is inappropriate to (...) transfer this concept to an organization in which the rule of authority is dominant. Therefore, except the limited legal domain in which managerial freedom is restrained by laws, procedural justice in organizations represents a mirage that can give rise to hypocritical managerial actions that can legitimate morally controversial outcomes via eristic tactics. In contrast, interactional justice is of great importance to organizations in that employees and organizations can ensure their rational economic exchanges without deception. However, current formulations of interactional justice often regard interactions as a palliative recipe designed to alleviate reactions to outcomes and not as a constituent of distributive justice. Perelman’s argumentation theory can offer a new conceptualization of interactional justice that addresses this gap. (shrink)

The gap between economic rationality, as embedded in utility maximization, and ethical rationality, identified with a set of rules that prescribe the right course of action, has been a challenging issue for economists, philosophers, and business ethicists. Despite the difference and the noncompetition between a scientific economic approach of economics and business ethics, and a behavioral and philosophical one, we highlight the importance of the Aristotelian concept of prudence or phronesis applied to business activity. Phronesis allows for a conceptualization of (...) rationality that can be simultaneously applied to economics and ethics. It also allows conceiving the intrinsically ethical nature of economic rationality. This relationship requires an appropriate education and the intervention of the state. (shrink)

Based on the argumentation theory of new rhetoric, this paper offers an analytical framework to facilitate empirical investigations on how managers in organizations handle unfairness claims. The proposed framework advocates a rhetorical approach that seeks to understand whether managers absolve themselves of unfairness accusations by pseudo-legitimations. Pseudo-legitimation is defined as an attempt to legitimate an action without any genuine reasoning. While the precision of formal deductive reasoning tends not to apply to moral disputes, rhetoric enables rational argumentation and the use (...) of practical reasoning to achieve resolution. Therefore, if managerial judgments are genuine products of reasoning, managers' use of rhetoric to legitimate their actions should be respected in acknowledging value plurality within their boundaries of authority. By contrast, managerial legitimations that are based on irrational grounds should be disrespected, as they can lead to arbitrariness and abuse of power. Institutional dynamics may either permit or inhibit such uses of irrationality. Thus, the proposed framework should be considered alongside the perspective of rhetorical institutionalism. (shrink)

Moral identity and moral dissonance in business ethics have explored tensions relating to moral self-identity and the pressures for identity compartmentalization in the workplace. Yet, the connection between these streams of scholarship, spirituality at work, and business ethics is under-theorized. In this paper, we examine the Quaker tradition to explore how Quakers’ interpret moral identity and negotiate the moral dissonance associated with a divided self in work organizations. Specifically, our study illuminates that while Quakers’ share a tradition-specific conception of “Quaker (...) morality” grounded in Quaker theology and the Quaker testimonies to truth, integrity, peace, equality, and simplicity, they often foreground the pursuit of an undivided self through seeking work that enables an expression of Quaker moral identity, or by resigning from work organizations that do not. In most cases, however, Quakers’ face moral dissonance at work and engage in either identity compartmentalization and draw upon the metaphor of a ‘spiritual journey’ as a form of self-justification, or reframe, compartmentalize and engage in work tasks that are both subjectively moral and meaningful. We present a model that elaborates these negotiation processes and invite further research that examines how the spiritual traditions influence moral identity construction at work. (shrink)

This paper presents the ‘rationality‐of‐ends/market‐structure grid’. With this grid, the article contrasts, in economic terms, different approaches to business ethics and addresses the question how far and what type of business ethics is feasible. Four basic scenarios for business ethics are outlined that imply different conceptualizations of business ethics. The grid interrelates a rationality‐of‐ends dimension with a market‐structure dimension. The rationality‐of‐ends dimension ranges from opportunism and self‐interested egoism to self‐interested altruism and ultimately to authentic altruism. The market‐structure dimension ranges from (...) perfect competition/no information problems/perfectly dispersed market power to imperfect competition/high information problems/concentrated power. Rather than presenting economic, legal, ethical and discretionary issues in a hierarchical fashion, the grid interrelates these issues. Conclusions are spelled out regarding the empirical observance of business ethics and the programmatic, ‘theoretical’ positions that are behind empirical observations. Practical implications for managers and public policy makers are outlined. (shrink)

The paper critiques the relationship between personalist ethics and institutional economics, and accepts that institutional economics can be difficult to reconcile with humanistic management that builds on personalist ethics. Even so the paper connects impersonalist ethics with institutional economics. On this ground, the paper demonstrates how theory and practice of personalist humanist management can lean on impersonalist ethics, i.e., institutional economics. Three pathways are laid out for such leanings. It is argued that to understand these alignments is important to improve (...) the success of humanistic management, when a market economy context is given. The paper further contends that personalist humanistic management may imply abandoning the market economy when it positions itself in opposition to institutional economic reasoning that underpins the market economy. (shrink)