Abstract: In this article, I offer a proposal to clarify what I believe is the proper relation between value maximization and stakeholder theory, which I call enlightened value maximization. Enlightened value maximization utilizes much of the structure of stakeholder theory but accepts maximization of the long-run value of the firm as the criterion for making the requisite tradeoffs among its stakeholders, and specifies long-term value maximization or value seeking as the firm’s objective. This proposal therefore solves the problems that arise (...) from the multiple objectives that accompany traditional stakeholder theory. I also discuss the Balanced Scorecard, which is the managerial equivalent of stakeholder theory, explaining how this theory is flawed because it presents managers with a scorecard that gives no score—that is, no single-valued measure of how they have performed. Thus managers evaluated with such a system (which can easily have two dozen measures and provides no information on the tradeoffs between them) have no way to make principled or purposeful decisions. The solution is to define a true (single dimensional) score for measuring performance for the organization or division (and it must be consistent with the organization’s strategy), and as long as their score is defined properly, (and for lower levels in the organization it will generally not be value) this will enhance their contribution to the firm. (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:Previous research has identified multiple approaches to the design and implementation of corporate ethics programs (Paine, 1994; Weaver, Treviño, and Cochran, in press b; Treviño, Weaver, Gibson, and Toffler, in press). This field survey in a large financial services company investigated the relationships of the values and compliance orientations in an ethics program to a diverse set of outcomes. Employees’ perceptions that the company ethics program is oriented toward affirming ethical values were associated with seven outcomes. Perceptions of a compliance (...) orientation were associated with four of these outcomes. The interaction of values and compliance orientations was associated with employees’ willingness to report misconduct. In general, a values orientation makes a greater unique contribution to the measured outcomes when compared to a compliance orientation. (shrink)

ABSTRACT:Based on theoretical insights of discourse ethics as developed by Jürgen Habermas, we delineate a proposal to further develop the institutionalization of social accounting in multinational corporations (MNCs) by means of “Social Accountability 8000” (SA 8000). First, we discuss the cornerstones of Habermas's discourse ethics and elucidate how and why this concept can provide a theoretical justification of the moral point of view in MNCs. Second, the basic conception, main purpose, and implementation procedure of SA 8000 are presented. Third, we (...) critically examine SA 8000 from a Habermasian perspective, and discuss advantages and drawbacks of the initiative. Fourth, to address the drawbacks, we introduce a “discourse-ethically” extended version of SA 8000. We show that this approach is theoretically well-founded and able to overcome some of the current deficits of the certification initiative. We demonstrate that the extended version of SA 8000 can be successfully applied on a cross-cultural basis, and that our findings have significant implications for other international ethics initiatives. (shrink)

In this, the second of two articles outlining a theory of communicative competence, the author questions the ability of Chomsky's account of linguistic competence to fulfil the requirements of such a theory. ?Linguistic competence? for Chomsky means the mastery of an abstract system of rules, based on an innate language apparatus. The model by which communication is understood on this account contains three implicit assumptions, here called ?monologism?, ?a priorism?, and ?elementarism?. The author offers an outline of a theory of (...) communicative competence that is based on the negations of these assumptions. In opposing the first two assumptions he introduces distinctions, respectively, between semantic universals which process experiences and those that make such processing possible, and between semantic universals which precede all socialization and those that are linked to the conditions of potential socialization. Against elementarism, he argues that the semantic content of all possible natural languages does not consist of combinations of a finite number of meaning components. Differences in systems of classification preclude this, and such differences can be seen to infect all respects of intercultural comparison. Using the notion of ?performative utterance?, the author elucidates the role of dialogue?constitutive universals as part of the formal apparatus required of a?; speaker's capacity to communicate. He then notes what would be required of a general semantics based on a theory of communicative competence; and finally points out how this theory might be used for social analysis. (shrink)

ABSTRACT:We analyze corporate ethics programs as control systems, arguing that how control is exercised may have pernicious consequences and be morally problematic. In particular, the control cultivated by ethics programs may weaken employees’ ability and motivation to exercise their own moral judgment, especially in novel situations. We develop this argument first by examining how organization theorists analyze control as an instrument of management coordination, and by addressing the political implications of control. We discuss coercive and enabling control as variations that (...) help account for the distinction between compliance-based ethics programs and values-based ethics programs. We then explore three potential drawbacks of ethics programs: the specter of indoctrination, a politicization of ethics, and an atrophy of competence. Ethics programs that rely on coercive control may undermine their own effectiveness at stemming misbehavior. (shrink)

Abstract:Moral imagination is a reasoning process thought to counter the organizational factors that corrupt ethical judgment. We describe the psychology of moral imagination as composed of the four decision processes identified by Rest (1986), i.e., moral sensitivity, moral judgment, moral intention, and moral behavior. We examine each process in depth, distilling extant psychological research and indicating organizational implications. The conclusion offers suggestions for future research.The majority of men are subjective toward themselves and objective toward all others—terribly objective sometimes—but the real (...) task is in fact to be objective toward one’s self and subjective toward all others. (shrink)

If, like Hegel and Dewey, one takes a historicist, anti-Platonist view of moral progress, one will be dubious about the idea that moraltheory can be more than the systematization of the widely-shared moral intuitions of a certain time and place. One will follow Shelley, Dewey, and Patricia Werhane in emphasizing the role of the imagination in making moral progress possible. Taking this stance will lead one to conclude that although philosophy is indeed relevant to applied ethics, it is not more (...) relevant than many other fields of study. (shrink)

An integrity-based approach to ethics management combines a concern for the law with an emphasis on managerial responsibility for ethical behavior. Though integrity strategies may vary in design and scope, all strive to define companies’ guiding values, aspirations, and patterns of thought and conduct. When integrated into the day-to-day operations of an organization, such strategies can help prevent damaging ethical lapses while tapping into powerful human impulses for moral thought and action. Then an ethical framework becomes no longer a burdensome (...) constraint within which companies must operate, but the governing ethos of an organization. (shrink)

This article details the personal involvement of the author in the early stages of the infamous Pinto fire case. The paper first presents an insider account of the context and decision environment within which he failed to initiate an early recall of defective vehicles. A cognitive script analysis of the personal experience is then offered as an explanation of factors that led to a decision that now is commonly seen as a definitive study in unethical corporate behavior. The main analytical (...) thesis is that script schemas that were guiding cognition and action at the time precluded consideration of issues in ethical terms because the scripts did not include ethical dimensions. (shrink)

A tension between the professions' pursuit of autonomy and the public's demand for accountability has led to the development of codes of ethics as both a foundation and guide for professional conduct in the face of morally ambiguous situations. The profession as an institution serves as a normative reference group for individual practitioners and through a code of ethics clarifies, for both its members and outsiders, the norms that ought to govern professional behavior. Three types of codes can be identified (...) — aspirational, educational and regulatory. All codes serve multiple interests and, as a consequence, perform many functions, eight of which are discussed. The process of developing a code of ethics is assessed because of the role it plays in gaining consensus on professional values and ethical norms. After discussing some of the weaknesses in current approaches to professional self-regulation, several new private and public initiatives are proposed. (shrink)

The Challenger incident was a result of at least four kinds of difficulties: differing perceptions and priorities of the engineers and management at Thiokol and at NASA, a preoccupation with roles and role responsibilities on the part of engineers and managers, contrasting corporate cultures at Thiokol and its parent, Morton, and a failure both by engineers and by managers to exercise individual moral responsibility. I shall argue that in the Challenger case organizational structure, corporate culture, engineering and managerial habits, and (...) role responsibilites precipitated events contributing to the Challenger disaster. At the same time, a number of individuals at Morton Thiokol and NASA were responsible for the launch failure. Differing world views, conflicting priorities of the engineers and managers on this project, and the failure of either engineers or management to take personal moral responsibility for decision-making contributed significantly to the event. (shrink)