This article addresses the issue of whether and to what extent moral values can be attributed to collective actors. The paper starts from the premise that business ethics as the ethics of an organization is to be distinguished from the virtues of its members. This point is elaborated in both economic- and organization-theoretic terms within the framework of the New Economics of Organization. The result is the development of a concept of governance ethics. The ethics of governance is about the incorporation of moral conditions and requirements in the management, governance, and control structures of a firm. This is the contextual precondition for the long-lasting and beneficial effects of the virtues of individuals within the organizations.

Corporations are often considered as moral agents. Traditional ethical systems are directed toward human beings—how could human rules be expected to apply to corporations? In this paper an alternative system of ethics is proposed, tailored specifically for the corporate entity. I use the method of Aristotle, in which the character traits (virtues) that are conducive to the goal of human activity, happiness, are derived. For corporations, the goal is taken to be the traditional capitalist one of sustainable profit, and corresponding corporate virtues are derived. I argue that corporate virtues such as Efficient Production, Resource Management, Correct Pricing, and Right Relationship will be beneficial to human beings. It is profitable to consider the interests of human beings, because the corporation will avoid a costly war of offense and retaliation. A corporate ethics is developed that protects humans and has motivating force not based on human nature, but rather profit.

Behavioral ethics is an emerging field that takes an empirical, social scientific approach to the study of business ethics. In this special issue, we include six articles that fall within the domain of behavioral ethics and that focus on three themes—moral awareness, ethical decision making, and reactions to unethical behavior. Each of the articles sheds additional light on the specific issues addressed. However, we hope this special issue will have an impact beyond that of the new insights offered in these articles, by stimulating even more research in this burgeoning field.

Given that so many people think business ethics is oxymoronic, it might be prudent to investigate why and to determine what if any truth or partial truth they see. Thus, as a hueristic device, I propose to seriously examine the claim that business ethics is a contradiction in terms, and see what follows if business ethics is oxymoronic.

Our critics confuse the role normative ethical theory can take in business ethics. We argue that as a practical discipline, business ethics must focus on norms, not the theories from which the norms derive. It is true that our original work is defective, but not in its form, but in its neglect of contemporary advances in feminist ethics.

In the canonical view of the corporation, management is the agent of the owners of the corporation—the stockholders—and, as such, has a fiduciary duty to manage the corporation in their best interests. Most business ethicists condemn this arrangement as morally indefensible because it fails to respect the right of other corporate constituencies or “stakeholders” to self-determination. By contrast, the modern agency theory of the firm provides a defense of this arrangement on the grounds that it is the result of stakeholders’ right to self-determination. This paper uses the example of managers’ fiduciary duty to stockholders to argue that different normative judgments often mask empirical disagreements.

This essay articulates a crucial and neglected element of a general theory of the ethics of bureaucratic organizations, both private and public. The key to the approach developed here is the thesis that the distinctive ethical principles applicable to bureaucratic organizations are responses to the distinctive agency-risks that arise from the nature of bureaucratic organizations as complex webs of principal/agent relationships. It is argued that the most important and distinctive ethical principles for bureaucratic organizations express commitments on the part of bureaucrats that function to reduce the agency risks that are inherent in such organizations. This approach to the ethics of bureaucratic organizations is shown to be more illuminating than those that concentrate exclusively or primarily on determining the conditions for corporate responsibility or on the idea that the ethical obligations distinctive of bureaucracies are role-derived.

We explore the essential contestedness of corporate social responsibility (CSR) by framing the interplay between CSR activities and stakeholder evaluations as a contest for jurisdiction over what it means to be socially responsible. This contest arises because firms and stakeholders are often guided by incompatible sensemaking systems. To show why context matters we show how stakeholders evaluate the authenticity of CSR activities on the basis of schemas for responsible behavior on one hand and their perceptions of firm identity on the other. This process can generate complex evaluations whose meaning depends on the distribution of power in fields and the extent to which pluralistic sensemaking systems are compatible. By positioning authenticity evaluations within a framework that describes the state of power and pluralism within which they are produced, we are able to present a systematic explanation of how and why stakeholder responses to CSR vary over a range of settings.

Almost thirty years after its initial use in the Brundtland Report, the concept of “sustainability” has become ubiquitous within business, with virtually every company division across a broad range of industries developing “sustainable” models and practices. While the original Brundtland idea of sustainable development has the potential to do much good in guiding business practice, this potential is being undermined by the systematic misuse, misunderstanding, and flawed application of the concept in many business settings. Under the guise of sustainability, business is being asked to do both less than and more than what should be required by a commitment to sustainable development. As a result, serious ethical and practical questions go unanswered, questions that must be addressed before sustainability can become a meaningful business strategy. This address situates sustainable business within its original context of sustainable development and argues against attempts to convert sustainability either into a narrow concept of risk management or into a broad concept of social responsibility. It then lays out a sustainability research agenda that helps us understand how to create businesses that can meet present and future needs without jeopardizing future generations via the destruction of the biosphere.

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.

Despite widespread attention to corruption and organizational change in the literature, to our knowledge, no research has attempted to understand the linkages between these two powerful organizational phenomena. Accordingly, we draw on major theories in ethics, sociology, and management to develop a theoretical framework for understanding how organizational change can sometimes generate corruption. We extend anomie theory and ethical climate theory to articulate the deinstitutionalization of the normative control system and argue that, through this deinstitutionalization, organizations have the potential to become incubators for corruption. We qualify this process by proposing conditions more ripe for anomie and under which this deinstitutionalization is more likely to occur, propounding moderating relationships that influence organizational reconfiguration. Examples of turbulence in the contemporary business environment that can trigger change highlight our discussion. We conclude with managerial implications, offering means by which the deleterious effects of corruption may be arrested or controlled.

Corporate governance and finance are dynamic academic fields that offer myriad opportunities for business ethics analysis. Within the corporate governance triad in recent years, shareholders have increased their power over boards of directors and executives through both regulation and movements to change corporate by-laws. The impact of board characteristics on firm performance has proven elusive, leading to questions concerning board processes and individual director beliefs and behaviors. At the same time, CEOs have lost considerable power, leaving many struggling to regain their control and maintain their compensation levels, while others adopt a stewardship approach to their posts. In the field of finance, the recent financial debacle has led to a reexamination of financial regulation and of the fundamental nature and purpose of the industry. All of these issues provide business ethicists fodder for investigation and analysis.

Alasdair MacIntyre’s After Virtue has made a significant impact within business ethics. This impact has centered upon applications of the virtues-goods-practices-institutions schema (Moore & Beadle, 2006). In this article, I develop an extension of the practices-institutions schema (Moore, 2017), drawing upon MacIntyre’s later text, Dependent Rational Animals. Two key concepts drawn from this text are “networks of giving and receiving” and “the virtues of acknowledged dependence.” Networks of giving and receiving are non-calculative relationships that enable participants to cope with vulnerability. These relationships are sustained by the virtues of acknowledged dependence, including just generosity, misericordia, and beneficence, virtues that direct participants to treat the needs of others as reasons for action. Drawing upon research in social network theory, I develop an example illustrating the application of these concepts within an organizational and interorganizational context. I then suggest a number of applications and research questions related to this extension of the practices-institutions schema.

This paper analyzes the rhetoric surrounding the profession’s presentations of auditor independence. We trace the evolution of the character of the auditor from Professional Man in the early years of the twentieth century to the more public and abstract figures of Judicial Man and Economic Man. The changing character of the auditor in the profession’s narratives of legitimation reflects changes in the role of auditing, in the economic environment, and in the values of American society. Economic man is a self-interested and shallow character who offered the auditing profession little protection against involvement in corporate scandals. In the wake of recent accounting scandals, the profession is calling for a return to the character of Professional Man to restore trust in audits and the financial markets.

We also analyze the philosophical bases of the metaphors surrounding auditor independence. These metaphors, particularly the metaphor of independence as separation, create problems in conceptualizing independence concepts. How can you discuss appropriate relationships when your basic concept is one of separation, or no relationship? On the other hand, relational concepts of independence are also flawed if they are not based on a firm moral foundation. We suggest how the profession can act to rebuild its moral foundation through recognition of collective responsibility.

This study explores a phenomenon that has been shown to adversely affect managers’ decisions—competitive irrationality. Managers are irrationally competitive in their decisions when they focus on damaging the profits of competitors, rather than improving their own profit performance. Studies by Armstrong and Collopy (1996) and Griffith and Rust (1997) suggest that the phenomenon is common but not universal. We examine the question of why some individuals exhibit competitive irrationality when making decisions, while others do not by focusing on four aspects of moral philosophy—deontological orientation, cognitive moral development, idealism, and relativism. Results suggest that individuals high in deontological orientation, high in cognitive moral development, high in idealism, and low in relativism will be less competitively irrational than those who are not.

This article defines and analyzes the nature of a trust relation. It specifically examines the internal and external morality of trust relations and the ethical limits of those relations. It examines both the ends pursued by trust relations as well as the means by which trust is developed. It shows that the ends need to be evaluated by traditional ethical theories, while the ethical constraints of the trust process depend upon the specific bases of trust. In addition, the consequences of the trust process differ in their impact on the trustor and third parties. Despite the popularity of trust in the literature, this study recommends caution in the use of trust as an ethical basis for economic organization. The optimal form of trust, although still subject to limitations, is fairness-based trust.

Opportunism impacts the behavior of firms in market situations where they purchase goods and services externally and create dependency relationships with other firms. Opportunism as a business issue is addressed in economics and marketing literature as an important factor in transaction cost analysis and market governance. Management and business ethics scholars, however, do not address this issue in depth, if at all.

The recent bankruptcy of MCI WorldCom highlights some of the risks inherent in a world economy where customers and companies of one society are dependent upon the business practices of partner companies in other societies. Telecommunications customers and companies in Asia, Europe and other places, who depended upon MCI WorldCom for connections to North America, now have important areas of their business in jeopardy because of the uncertainty about the fate of a critical business partner.

MCI WorldCom’s situation appears to be the result of an attempt to obtain personal gain, at the expense of others, by at least one senior manager. This is called opportunism. Williamson (1985) defined opportunism as “self-interest seeking with guile.” It can wreak havoc with companies, customers, stock markets and economies and is demonstrated regularly in press accounts of misstatements on financial reports and other ways senior managers use their positions to enhance their personal wealth and influence.

This paper will focus on the ethical issues surrounding business relationships and how Confucianism, with its focus on trust, reciprocity and mutual benefit in relationships, can offer a moral foundation to the inter-firm arrangements that are so much a part of the contemporary business landscape.

The moral theory of Thomas Aquinas meets the present need for a business ethics that transcends the legal realm by linking the ideas of justice and virtue in an ingenious way. Thomas's virtue theory coordinates private and public activities through a set of context-invariant, justice-oriented norms with conceptual appeal to contemporary questions of global business ethics. In our article, we first sketch how Aquinas's theory can be also of relevance to a non-confessional audience through its appeal to the ‘natural light of reason.’ Then we explain how his theory of ‘natural law’ aligns his ideas of virtue and justice. From this vantage point, we address the tension between cultural diversity and moral uniformity in the economic sphere in general and in today's globalized business world in particular. Throughout the article, we aim to show how Aquinas's conception of virtuous business conduct gains inter-personal and inter-cultural validity that establishes social justice as the global virtue of business.

This paper carries forward the conceptual clarification of normative theories of business ethics ably begun by Hasnas in the January 1998 issue of BEQ. This paper proposes a normatively neutral framework for discussing and assessing such normative theories. Every normative theory needs to address these seven issues: it needs to specify a moral principle that identifies (1) recommended values and (2) the grounds for accepting those values. It also must specify (3) a decision principle that business people who accept the theory can use. It must determine (4) who the normative theory applies to and (5) whose interests need to be considered. It must also outline (6) in what contexts it applies, and (7) what legal and regulatory structures it assumes. Once clarified, this paper applies the framework to the normative versions of stockholder theory, stakeholder theory, and ISCT. It is concluded that ISCT is the most promising normative theory currently under discussion, but that there are some major issues that ISCT has not dealt with yet.