By considering what we identify as a problem inherent in the ‘nature of the firm’—the risk of abuse of authority—we propound the conception of a social contract theory of the firm which is truly Rawlsian in its inspiration. Hence, we link the social contract theory of the firm with the general theory of justice. Through this path, we enter the debate about whether firms can be part of Rawlsian theory of justice showing that corporate governance principles enter the “basic structure.” (...) Finally, we concur with Sen’s aim to broaden the realm of social justice beyond what he calls the ‘transcendental institutional perfectionism’ of Rawls’ theory. We maintain the contractarian approach to justice but introduce Sen’s capability concept as an element of the constitutional and post-constitutional contract model of institutions with special reference to corporate governance. Accordingly, rights over primary goods and capabilities are granted by the basic institutions of society, but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post-constitutional institutional domains. The constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post-constitutional level anyone may achieve her/his functionings in the corporate domain by exercising such capabilities. In the absence of such a condition, post-constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes. (shrink)

The capability approach is gaining momentum as a theory of corporate responsibility and business ethics at a time when the UN Guiding Principles have become a most important framework. A novel approach is now emerging that seeks to understand and specify human rights obligations of businesses within the framework provided by the capability approach. This article partially examines the triad corporate responsibility–human rights–capability approach by exploring the relationship between human rights and capabilities. Thus, it offers conceptual and practical implications for (...) a human rights perspective on corporate responsibility. The bulk of our thesis focuses on studying Nussbaum’s and Sen’s claim that human rights are entitlements to capabilities by means of a discussion of the notion of human dignity. In particular, we show the capability approach’s ability to dissipate theoretical and practical challenges posed by the notion of dignity. This article does not offer a detailed explanation of the implications of our investigation for human rights responsibilities of business. However, an outline of its potential contribution toward unfolding those obligations, conceptually and practically, is provided. (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)

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)

In his tripartite theory of corporate responsibility, Kenneth Goodpaster argues for the inclusion of “Comprehensive Moral Thinking (CMT)” as the third part alongside shareholder and stakeholder thinking. CMT requires managers sometimes to act for reasons of dignity or a just community, against what shareholder and stakeholder thinking recommend. To address concerns about the demandingness of CMT, Goodpaster argues that the responsibilities it imposes are significant but qualified or conditional: they require only that managers make efforts to address problems of dignity (...) and justice, especially in cooperation with other willing firms. If extreme efforts are required or if other firms are unwilling to cooperate, managers can be justified in deciding in favor of shareholder or stakeholder values, even when dignity or justice is at stake. I raise two problems for the appeal to qualified responsibility—an extensional problem about the inability of the account to yield the correct judgment in important cases and an internal problem about the coherence of the account when qualified responsibility is included. I conclude by considering the prospects of a theory that includes CMT but rejects qualified responsibility. (shrink)

The capability approach developed by Amartya Sen focuses on the enhancement of people’s capabilities, i.e. their real freedom to choose a life course they have reason to value. Applying the CA to the organizational context, the focus of human resource management is transformed, shifting away from the needs of the organization to the freedoms of the individual. This shift happens also inside the so-called ‘liberated companies,’ firms with an organizational form that allows employees the complete freedom, along with the responsibility, (...) to take any actions they decide are best. In this paper we show the contribution of the capability approach for management and for organizational ethics by focusing on this innovative model of ‘liberated companies.’. (shrink)

ABSTRACT:Although the literature on multi-stakeholder initiatives for sustainability has grown in recent years, it is scattered across several academic fields, making it hard to ascertain how individual disciplines, such as business ethics, can further contribute to the debate. Based on an extensive review of the literature on certification and principle-based MSIs for sustainability, we show that the scholarly debate rests on three broad themes : theinputinto creating and governing MSIs; theinstitutionalizationof MSIs; and theimpactthat relevant initiatives create. While our discussion reveals (...) the theoretical underpinnings of the 3Is, it also shows that a number of research challenges related to business ethics remain unaddressed. We unpack these challenges and suggest how scholars can utilize theoretical insights in business ethics to push the boundaries of the field. Finally, we also discuss what business ethics research can gain from theory development in the MSI field. (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)