The importance of business ethics is not contrdicted in any way by Adam Smith’s pointer to the fact that our “regards to our own interests” provide adequate motivation tor exchange. There are many important economic relationships other than exchange, such as the institution of production and arrangements of distribution. Here business ethics can playa major part. Even as far as exchange is concerned, business ethics can be crucially important in terms of organization and behavior, going weil beyond basic motivation.

The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. (...) It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of “business” together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business. (shrink)

In his “Why be Moral? A Different Rationale for Managers,” , La Rue Tone Hosmer argues that managers should be moral because “acting in ways that can be considered to be ‘right’ and ‘just’ and ‘fair’ is absolutely essential to the long-term competitive success of the firm.” According to Hosmer, moral behavior generates trust among stakeholders, which leads to stakeholder commitment, which leads to increased stakeholder effort, which ultimately leads to corporate success. Though we agree with Hosmer’s causal reasoning, we (...) are concerned about an ancient loophole, namely, cases where the mere appearance of morality will generate the same trust, and commitment, and so on, and will thus enable managers to reap the material benefits of morality while nevertheless engaging in immoral practices. We conclude that a virtue ethics perspective will strengthen Hosmer’s model so as to cover such cases. (shrink)

Abstract:A synthesis of the two theoretical bases of business ethics—normative philosophy and descriptive social science—is called for. Examples from the literature are used to demonstrate that to ignore the descriptive aspects of moral behavior is to risk unreal philosophy, and that to ignore the normative aspects is to risk amoral social science. Business ethics is portrayed as a single unified field, in which fact-value distinctions are inappropriate.

In his “Why be Moral? A Different Rationale for Managers,” (Business Ethics Quarterly, Vol. 4, April, 1994), La Rue Tone Hosmer argues that managers should be moral because “acting in ways that can be considered to be ‘right’ and ‘just’ and ‘fair’ is absolutely essential to the long-term competitive success of the firm.” According to Hosmer, moral behavior generates trust among stakeholders, which leads to stakeholder commitment, which leads to increased stakeholder effort, which ultimately leads to corporate success. Though we (...) agree with Hosmer’s causal reasoning, we are concerned about an ancient loophole, namely, cases where the mere appearance of morality will generate the same trust, and commitment, and so on, and will thus enable managers to reap the material benefits of morality while nevertheless engaging in immoral practices. We conclude that a virtue ethics perspective will strengthen Hosmer’s model so as to cover such cases. (shrink)