ABSTRACT:The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement (SSE) purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in (...) pursuit of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature. (shrink)

Abstract:We discuss the role that transnational corporations (TNCs) should play in developing global governance, creating a framework of rules and regulations for the global economy. The central issue is whether TNCs should provide global rules and guarantee individual citizenship rights, or instead focus on maximizing profits. First, we describe the problems arising from the globalization process that affect the relationship between public rules and private firms. Next we consider the position of economic and management theories in relation to the social (...) responsibility of the firm. We argue that instrumental stakeholder theory and business and society research can only partially solve the global governance issue, and that more recent concepts of corporate citizenship and republican business ethics deliver theoretically and practically helpful, fresh insights. However, even these need further development, especially with regard to the legitimacy of corporate political activity. (shrink)

The democratic boundary problem raises the question of who has democratic participation rights in a given polity and why. One possible solution to this problem is the all-affected principle, according to which a polity ought to enfranchise all persons whose interests are affected by the polity’s decisions in a morally significant way. While AAP offers a plausible principle of democratic enfranchisement, its supporters have so far not paid sufficient attention to economic participation rights. I argue that if one commits oneself (...) to AAP, one must also commit oneself to the view that political participation rights are not necessarily the only, and not necessarily the best, way to protect morally weighty interests. I also argue that economic participation rights raise important worries about democratic accountability, which is why their exercise must be constrained by a number of moral duties. (shrink)

Recent discussions of rational deliberation in science present us with two extremes: unbounded optimism and sober pessimism. Helen Longino (1990) sees rational deliberation as the foundation of scientific objectivity. Miriam Solomon (1991) thinks it is overrated. Indeed, she has recently argued (2006) that group deliberation is detrimental to empirical success because it often involves groupthink and the suppression of dissent. But we need not embrace either extreme. To determine the value of rational deliberation we need to look more closely at (...) the practice and practitioners of science. I offer a closer look here by exploring the joint agency of small research teams. Although there are factors that contribute to the suppression of dissent in group contexts, a closer look at the literature on group dynamics suggests that there are ways to mitigate the effects of groupthink. Thus, there is reason to be cautiously optimistic about the value of rational deliberation within certain scientific contexts. (shrink)

ABSTRACT:Whether at the executive or the line-management levels, businesspeople face moral decisions that cannot be easily resolved with reference to a shared ethos, whether because of diversity of ethea in the organization or its environment, or because the organization's ethos is inadequate for the problem at hand. These decisions are made more common by the changing norms of a pluralistic business environment, and require collective moral deliberation to be adequately resolved. Discourse ethics ideally characterizes the form of valid collective moral (...) deliberation. I argue that accommodation for the limitations of actual discourse makes discourse ethics, conceived in terms of the rules of practical discourse, practical for realizing improvements in the openness and validity of moral decision-making over states in which these rules are flagrantly violated. These rules have normative implications at the organizational level for the integrity approach to corporate ethics programs, and at the individual level for ethical leadership. (shrink)

This article assesses some of the implications of globalization for the scholarly debate on business ethics, CSR and related concepts. The argument is based, among other things, on the declining capacity of nation state institutions to regulate socially desirable corporate behavior as well as the growing corporate exposure to heterogeneous social, cultural and political values in societies globally. It is argued that these changes are shifting the corporate role towards a sphere of societal governance hitherto dominated by traditional political actors. (...) This leads to a discussion of the ambivalent results of such a process for a responsible corporate role in a globalized world. While assessing the current reception these changes have received in the management literature, the contributions of the four articles in this Special Issue are framed and evaluated. The argument closes by highlighting avenues of future research on this new challenge. (shrink)

This article assesses some of the implications of globalization for the scholarly debate on business ethics, CSR and related concepts. The argument is based, among other things, on the declining capacity of nation state institutions to regulate socially desirable corporate behavior as well as the growing corporate exposure to heterogeneous social, cultural and political values in societies globally. It is argued that these changes are shifting the corporate role towards a sphere of societal governance hitherto dominated by traditional political actors. (...) This leads to a discussion of the ambivalent results of such a process for a responsible corporate role in a globalized world. While assessing the current reception these changes have received in the management literature, the contributions of the four articles in this Special Issue are framed and evaluated. The argument closes by highlighting avenues of future research on this new challenge. (shrink)

: We discuss the role that transnational corporations should play in developing global governance, creating a framework of rules and regulations for the global economy. The central issue is whether TNCs should provide global rules and guarantee individual citizenship rights, or instead focus on maximizing profits. First, we describe the problems arising from the globalization process that affect the relationship between public rules and private firms. Next we consider the position of economic and management theories in relation to the social (...) responsibility of the firm. We argue that instrumental stakeholder theory and business and society research can only partially solve the global governance issue, and that more recent concepts of corporate citizenship and republican business ethics deliver theoretically and practically helpful, fresh insights. However, even these need further development, especially with regard to the legitimacy of corporate political activity. (shrink)

ABSTRACT:Deliberative democratic theory, commonly used to explore questions of “political” corporate social responsibility, has become prominent in the literature. This theory has been challenged previously for being overly sanguine about firm profit imperatives, but left unexamined is whether corporate contexts are appropriate contexts for deliberative theory in the first place. We explore this question using the case of Starbucks’ “Race Together” campaign to show that significant challenges exist to corporate deliberation, even in cases featuring genuinely committed firms. We return to (...) the underlying social theory to show that this is not an isolated case: for-profit firms are predictably hostile contexts for deliberation, and significant normative and strategic problems can be expected should deliberative theory be imported uncritically to corporate contexts. We close with recent advances in deliberative democratic theory that might help update the PCSR project, and accommodate the application of deliberation to the corporate context, albeit with significant alterations. (shrink)

This paper extends scholarship on multi-stakeholder initiatives (MSIs) in the context of corporate social responsibility in three ways. First, I outline a framework to analyze the strength of couplings between actors participating in MSIs. Characterizing an MSI as consisting of numerous local networks that are embedded in a wider global network, I argue that tighter couplings (within local networks) and looser couplings (between local networks) coexist. Second, I suggest that this coexistence of couplings enables MSIs to generate policy outcomes which (...) address the conditions of a transnational regulatory context. I argue that MSIs’ way of organizing enables them to cope with three challenges: the stability, flexibility, and legitimacy of governance. Reflecting on these challenges, the article identifies a number of problems related to MSIs’ role in transnational governance. Third, I discuss the UN Global Compact as an illustrative case and examine problems and opportunities related to its stability, flexibility, and legitimacy. (shrink)

Confronted with mounting pressure to ensure accountability vis-à-vis customers, citizens and beneficiaries, organizational leaders need to decide how to choose and implement so-called accountability standards. Yet while looking for an appropriate standard, they often base their decisions on cost-benefit calculations, thus neglecting other important spheres of influence pertaining to more broadly defined stakeholder interests. We argue in this paper that, as a part of the strategic decision for a certain standard, management needs to identify and act according to the needs (...) of all stakeholders. We contend that the creation of a dialogical understanding among affected stakeholders cannot be a mere outcome of applying certain accountability standards, but rather must be a necessary precondition for their use. This requires a stakeholder dialogue prior to making a choice. We outline such a discursive decision framework for accountability standards based on the Habermasian concept of communicative action and, in the final section, apply our conceptual framework to one of the most prominent accountability tools (AA 1000). (shrink)

This study examines the impact of a social desirability response bias as a personality characteristic (self-deception and impression management) and as an item characteristic (perceived desirability of the behavior) on self-reported ethical conduct. Findings from a sample of college students revealed that self-reported ethical conduct is associated with both personality and item characteristics, with perceived desirability of behavior having the greatest influence on self-reported conduct. Implications for research in business ethics are drawn, and suggestions are offered for reducing the effects (...) of a socially desirable response bias. (shrink)

Using 94 published empirical articles in academic journals as a data base, this paper provides a critical review of the methodology employed in the study of ethical beliefs and behavior of organizational members. The review revealed that full methodological detail was provided in less than one half of the articles. Further, the majority of empirical research articles expressed no concern for the reliability or validity of measures, were characterized by low response rates, used convenience samples, and did not offer a (...) theoretic framework, hypotheses, or a definition of ethics. Several recommendations, including a reviewer rating form addressing methodological decisions and inclusion of methodologists on the review panel, are offered to improve methodological rigor in published ethics research. (shrink)

Modern society is challenged by a loss of efficiency in national governance systems values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy, which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all members (...) of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy. (shrink)

ABSTRACT: What kinds of markets, market regulations, and business organizations are compatible with contemporary egalitarian theories of justice? This article argues that any thoughtful answer to this question will have to draw on recent developments in political philosophy that are concerned not only with the equality of the distribution of core goods but also with the requirements for equality of status, voice, and so on, in the relations between individuals and within organizations. The dominance of theories of distributive justice in (...) egalitarian political philosophy since Rawls may have contributed, on the one hand, to the oft-recognized gulf between these theories and their theorists and, on the other, to discussions of corporate governance and business ethics. The main purpose of this article is to introduce business ethicists to some of the less-familiar features of recent relational theories of justice and equality, and to suggest that some of these notions may help bridge the gap between business ethics and political philosophy more generally. (shrink)

This article addresses the recent call in business ethics literature for a better understanding of corporations as political actors or entities. It first gives an overview of recent attempts to examine classical issues in business ethics through a political lens. It examines different ways in which theorists with an interest in the normative analysis of business practices and institutions could find it desirable and fruitful to use a political lens. This article presents a distinction among four views of the relations (...) between corporations and politics: corporations as distributive agents, corporations as political communities, corporate practices and policies as citizenship issues, and corporations as active participants in the political process. This article finishes with an examination of three challenges that need to be overcome by the theory of the firm as a political actor. (shrink)

In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy is (...) typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy. (shrink)

This essay asks why Aristotle, certainly no friend to unlimited democracy, seems so much more comfortable with unconstrained rhetoric in political deliberation than current defenders of deliberative democracy. It answers this question by reconstructing and defending a distinctly Aristotelian understanding of political deliberation, one that can be pieced together out of a series of separate arguments made in the Rhetoric, the Politics, and the Nicomachean Ethics.

This paper argues that the personal interview method is particularly appropriate for the kind of exploratory and complicated theory-building research that ethical decision-making, as a topic, represents at present. In doing so, it examines the key tasks of the ethics researcher, the suitability of interviews for obtaining the kind of data needed to accomplish these tasks, and the ensuing problems faced by the interview methodologist. It concludes with suggestions for enhancing the validity and reliability of interview-based ethics research.

Transnational corporations have become actors with significant political power and authority which should entail responsibility and liability, specifically direct liability for complicity in human rights violations. Holding TNCs liable for human rights violations is complicated by the discontinuity between the fragmented legal/political structure of the TNC and its integrated strategic reality and the international state system which privileges sovereignty and non-intervention over the protection of individual rights. However, the post-Westphalian transition—the emergence of multiple authorities, increasing ambiguity of borders and jurisdiction (...) and blurring of the line between the public and private spheres—should facilitate imposing direct responsibility on transnational firms. Mechanisms for imposing direct responsibility on TNCs are considered including voluntary agreements and international law. However, I conclude that a hybrid public-private regime which relies on non-hierarchical compliance mechanisms is likely to be both more effective and consistent with the structure of the emerging transnational order. (shrink)

Abstract:Suppose we want to know whether the ethics of persons with one characteristic differ from the ethics of persons having another characteristic. Self-selection bias occurs if people have control over that characteristic. When there is self-selection bias, we cannot be sure observed differences in ethics are correlated with the characteristic or are the result of individual self-selection. Self-selection bias is germane to many important business ethics questions. In this paper I explain what self-selection bias is, how it relates to business (...) ethics research, and how to correct for it. I also illustrate the correction process in an empirical analysis of the effect of organizational rank on worker ethics. Using data from the European Values Survey, I find that being a supervisor is positively correlated with worker ethics. However, I also find a negative self-selection effect. Workers with relatively lower ethics are selected into supervisory roles. (shrink)

The most widely debated conception of democracy in recent years is deliberative democracy--the idea that citizens or their representatives owe each other mutually acceptable reasons for the laws they enact. Two prominent voices in the ongoing discussion are Amy Gutmann and Dennis Thompson. In Why Deliberative Democracy?, they move the debate forward beyond their influential book, Democracy and Disagreement.What exactly is deliberative democracy? Why is it more defensible than its rivals? By offering clear answers to these timely questions, Gutmann and (...) Thompson illuminate the theory and practice of justifying public policies in contemporary democracies. They not only develop their theory of deliberative democracy in new directions but also apply it to new practical problems. They discuss bioethics, health care, truth commissions, educational policy, and decisions to declare war. In "What Deliberative Democracy Means," which opens this collection of essays, they provide the most accessible exposition of deliberative democracy to date. They show how deliberative democracy should play an important role even in the debates about military intervention abroad.Why Deliberative Democracy? contributes to our understanding of how democratic citizens and their representatives can make justifiable decisions for their society in the face of the fundamental disagreements that are inevitable in diverse societies. Gutmann and Thompson provide a balanced and fair-minded approach that will benefit anyone intent on giving reason and reciprocity a more prominent place in politics than power and special interests. (shrink)

The republican case for workplace democracy is presented and defended from two alternative means of ensuring freedom from arbitrary interference in the firm—namely, the right to freely exit the firm and workplace regulation. This paper shows, respectively, that costless exit is neither possible nor desirable in either perfect or imperfect labor markets, and that managerial discretion is both desirable and inevitable due to the incompleteness of employment contracts and labor legislation. The paper then shows that WD is necessary, from a (...) republican standpoint, if workers’ interests are to be adequately tracked in the exercise of managerial authority. Three important objections are finally addressed— that WD is redundant, that it is unnecessary provided that litigation and unionism can produce similar outcomes, and that it falls short of ensuring republican freedom compared to self-employment. (shrink)

The article reviews the recent debate about workplace democracy. It first presents and critically discusses arguments in favor of democratizing the firm that are based on the analogy with states, meaningful work, the avoidance of unjustified hierarchies, and beneficial effects on political democracy. The second part presents and critically discusses arguments against workplace democracy that are based on considerations of efficiency, the difficulties of a transition towards democratic firms, and liberal commitments such as the rights of employees and owners to (...) work for or invest in nondemocratic firms. The conclusion summarizes the debate and argues that experiments with democratic workplaces as what Erik Olin Wright calls “real utopias” could deliver new insights and thus move the discussion forward. (shrink)

The article aims to bridge divides between political theory and management and organization studies in theorizing workplace democracy. To achieve this aim, the article begins by introducing a new definition of democracy which, it is contended, is better suited than mainstream accounts to highlight the democratizing potential of employee involvement. It then defines employee involvement as an offshoot of early twentieth-century humanistic psychologies, from which it inherits an emancipatory ambition. In a third step, the article presents employee involvement as a (...) set of organizational practices liable to transform dominant patterns of authority and social interaction in the workplace. The article concludes by contending that, apart from representation/participation and the employee’s voice, employee involvement must be considered the third necessary pillar of workplace democracy, endowed with distinctive normative features that neither representation/participation nor voices can aptly capture. (shrink)

In the wake of the 2008 global financial crisis, an important conceptual battleground for democratic theorists ought to be, it would seem, the capitalist firm. We are now painfully aware that the typical model of government in so-called investor-owned companies remains profoundly oligarchic, hierarchical, and unequal. Renewing with the literature of the 1970s and 1980s on workplace democracy, a few political theorists have started to advocate democratic reforms of the workplace by relying on an analogy between firm and state. To (...) the extent that a firm is an organization comparable to the state, it too ought to be ruled along democratic lines. Our paper tests the robustness of the analogy between firm and state by considering six major objections to it: the objection from a difference in ends, the objection from shareholders’ property rights, the objection from worker’s consent, the objection from workers’ exit opportunities, the objection from workers’ expertise, and the objection from the fragility of firms. We find all of these objections wanting. While the paper does not ambition to settle the issue of workplace democracy at once, our goal is to pave the way for a more in-depth study of the ways in which firms and states can be compared and the possible implications this may have for our understanding of the nature of managerial authority and the governance of firms. (shrink)

The increasing centrality of business firms in contemporary societies calls for a renewed attention to the democratization of these actors. This paper sheds new light on the possibility of democratizing business firms by bridging recent scholarship in two fields—deliberative democracy and business ethics. To date, deliberative democracy has largely neglected the role of business firms in democratic societies. While business ethics scholarship has given more attention to these issues, it has overlooked the possibility of deliberation within firms. As argued in (...) the paper, a combination of reforms based on the ideas of workplace deliberation and business deliberation is necessary in order to promote the prospect of deliberation in different business contexts. The paper also discusses the importance of more democratic firms for deliberative democracy at large and, in particular, for the recent debate on deliberative systems. Finally, the paper suggests new areas of investigation to better understand the prospect of democratic deliberation in business firms. (shrink)

This paper presents an argument for the democratic (or 'labor-managed') firm based on ordinary jurisprudence. The standard principle of responsibility in jurisprudence ('Assign legal responsibility in accordance with de facto responsibility') implies that the people working in a firm should legally appropriate the assets and liabilities produced in the firm (the positive and negative fruits of their labor). This appropriation is normally violated due to the employment or self-rental contract. However, we present an inalienable rights argument that descends from the (...) Reformation and Enlightenment which argues that the self-rental contract, like the self-sale or voluntary slavery contract, is inherently invalid. The key intuition of the inalienable rights theory is that one cannot in fact voluntarily transfer de facto responsibility for one's actions to another person. One can only voluntarily co-operate with another person, but then one is de facto jointly responsible for the results. Just as the legal authorities legally reconstruct the criminous employer and employee as a partnership with shared responsibility, so justice demands that every firm be legally reconstructed as a partnership of all who work (working employers and employees) in the enterprise, i.e., as a democratic firm. (shrink)

Democratic theorists often place deliberative innovations such as citizen's panels, consensus conferences, planning cells, and deliberative polls at the center of their hopes for deliberative democratization. In light of experience to date, the authors chart the ways in which such mini-publics may have an impact in the “macro” world of politics. Impact may come in the form of actually making policy, being taken up in the policy process, informing public debates, market-testing of proposals, legitimation of public policies, building confidence and (...) constituencies for policies, popular oversight, and resisting co-option. Exposing problems and failures is all too easy. The authors highlight cases of success on each of these dimensions. (shrink)

How should liberal democratic states respond to cultural practices and arrangements that run afoul of liberal norms and laws? This article argues for a reframing of the challenges posed by traditional or nonliberal cultural minorities. The author suggests that viewed from up close, such dilemmas are revealed to be primarily intracultural rather than intercultural conflicts, and reflect the political and practical interests of factions of communities much more than deep moral differences. Using the example of the reform of customary marriage (...) laws in post-apartheid South Africa, this article makes the case for a more pragmatic, politically focused approach to resolving conflicts of culture that it is argued is both more democratic and effective than alternatives recently advanced by liberals and deliberative democracy theorists. (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)

Tocqueville pessimistically predicted that liberty and equality would be incompatible ideas. Robert Dahl, author of the classic _A Preface to Democratic Theory,_ explores this alleged conflict, particularly in modern American society where differences in ownership and control of corporate enterprises create inequalities in resources among Americans that in turn generate inequality among them as citizens. Arguing that Americans have misconceived the relation between democracy, private property, and the economic order, the author contends that we can achieve a society of real (...) democracy and political equality without sacrificing liberty by extending democratic principles into the economic order. Although enterprise control by workers violates many conventional political and ideological assumptions of corporate capitalism as well as of state socialism. Dahl presents an empirically informed and philosophically acute defense of "workplace democracy." He argues, in the light of experiences here and abroad, that an economic system of worker-owned and worker-controlled enterprises could provide a much better foundation for democracy, political equality, and liberty than does our present system of corporate capitalism. (shrink)

The pathologies of the democratic public sphere, first articulated by Plato in his attack on rhetoric, have pushed much of deliberative theory out of the mass public and into the study and design of small scale deliberative venues. The move away from the mass public can be seen in a growing split in deliberative theory between theories of democratic deliberation (on the ascendancy) which focus on discrete deliberative initiatives within democracies and theories of deliberative democracy (on the decline) that attempt (...) to tackle the large questions of how the public, or civil society in general, relates to the state. Using rhetoric as the lens through which to view mass democracy, this essay argues that the key to understanding the deliberative potential of the mass public is in the distinction between deliberative and plebiscitary rhetoric. (shrink)

In this paper, I argue that the asymmetrical mediated communication of the broad democratic public sphere can profitably be understood through the lens of deliberative democracy only if we adopt a system approach to deliberation. A system approach, however, often introduces a division of labor between ordinary citizens and experts. Although this division of labor is unavoidable and I believe compatible with a deliberative principle of legitimacy, it flirts with elitist theories of democracy: epistemic elites come up with the agendas, (...) ideas, and policy positions and democratic publics ratify or repudiate the agendas but do not generate or really engage with them. This I argue would violate an essential defining feature of deliberative democracy, namely that epistemic quality and equal participation are tightly linked. I turn to Habermas and his idea of a feedback loop as a possible solution to this dilemma. (shrink)