We argue that the Rawlsian social contract argument advanced for stakeholder theory by R. Edward Freeman, writing alone and with William M. Evan, fails in three main ways. First, it is true to Rawls in neither form, nor purpose, nor the level of knowledge (or ignorance) required to motivate the veil of ignorance. Second, it fails to tailor the veil of ignorance to the fairness conditions that are required to solve the moral problem that Freeman and Evan set out to solve (whereas Rawls’s own use of the device surely tailors the veil of ignorance to the problem of designing a just social order). Third, the argument, considered apart from its claimed Rawlsian pedigree, fails to bolster the stakeholder theory because it fails to demonstrate the rationality of adopting the institutional rules that Freeman and Evan favor.

Grounded upon the late 1970s phrase “institutionalizing ethics into business,” I present a multi-component model and research agenda to enhance our understanding of organizations' efforts to integrate ethics into the daily decision-making process of employees. Three research foci are emphasized: (1) the need to establish consistent categorical frameworks to describe business organizations' efforts in the field, (2) the study of the interrelationships between the various components presented in the model, and (3) the exploration of the linkage between organizational efforts to institutionalize ethics and ethical employee behavior. Research and organizational implications evolving from these research foci are discussed.

According to a widely credited model in the business ethics literature, ethical decisions are a function of two kinds of factors, personal (individual) and situational, and these factors interact with each other. According to a contrary view of decision making that is widely held in some areas of business research, individuals’ decisions about ethical issues (and subsequent actions) are purely a function of their self-interest.

The laboratory experiment reported in this paper provides a test of the person-situation interactionist model, using the general theoretical and experimental framework used in the experimental economics literature. One individual and two situational factors relating to moral intensity were examined which may influence decisions to misrepresent information in the course of business activities.

The individual and one situational variable were significantly related to participants’ actions. The interactions among individual and situation variables were not individually significant, although the model including interactions had a much higher level of statistical significance. Gender was significant, both directly and in interaction with moral development, suggesting that it may be worthy of further examination.

Existing research on certifiable management standards (CMS) and corporate social responsibility (CSR) tends to focus on large companies and is characterised by disagreement about the role of these standards as drivers of CSR. We contribute to the literature by shifting the analytical focus to the behaviour of small and medium-sized enterprises (SMEs) that subscribe to multiple CSR related standards. We argue that, in respect of motive and commitment, SMEs are not as different from large companies as the literature suggests, as they are guided by similar institutional and economic motives. Results, based on ISO 9001, ISO 14001 and OHSAS 18001 certified SMEs in Greece, demonstrate that later adopters are more susceptible to coercive and mimetic motives and are less likely to commit fully to the CMS requirements, while earlier adopters react to normative motives and considerations of internal efficiency gains and tend to carry out CMS requirements with greater diligence.

International business norms do not exist. Content and development of such norms is a significant research question for business ethics scholarship. Any norms must address difficult practical and moral problems facing multinational enterprises. The author’s thesis is as follows. A key circumstance is that international relations remain a Hobbesian state of nature. The theoretical solution of a global sovereignty for norm formulation and enforcement is unlikely. The business ethics literature proposes other insightful but theoretical and conflicting solutions to abstract wealth-responsibility and universalism-relativism controversies. Theoretical convergence seems unlikely. Evolution of multiple international policy regimes fragmented by policy arena is more probable. Regimes will typically be neither morals by agreement nor a morality of the marketplace. Regime development can occur in various other ways. Moral leadership, by firms, stakeholders, nongovernmental organizations or governments, can be a vital force. Formal ethical theories can inform and guide such leadership initiatives. This process perspective is applied to several recent case examples cited here as supporting evidence: anti-corruption, labor, environmental, human rights, and fiduciary responsibility initiatives.

Starting from the four theses that globalization is unavoidable, ambivalent, incalculable, and can be controlled rationally, ethics has an indispensable and important role to play in the process of globalization. Indeed, a number of international documents published in the 1990s not only acknowledge human rights but also speak explicitly of human responsibilities. The author pleads for the primacy of ethics over politics and economics and, in reviewing both the Interfaith Declaration for Jews, Christians, and Muslims, and the Caux Roundtable Principles for Business Conduct, he raises the question about the foundation for the unconditional validity of particular basic ethical values and attitudes. In Küng’s view, no universal ethic, but only religion, expressed by the three prophetic religions, the mystical religions of Indian origin, and the wisdom religions of Chinese origin, can provide this foundation. Yet, religion as a spiritual resource intends to influence concrete behavior and decision making. Therefore, the author stresses the importance of a personality culture for business executives and an “ethic of responsibility” to shape business culture and institutions. He then proposes the Declaration of the Parliament of the World’s Religions Toward a Global Ethic as a basis to develop a business ethics that can be supported by believers and non- believers alike.

This article examines the “Choice Argument” for sweatshops, i.e., the claim that it is morally wrong or impermissible for third parties to interfere with the choice of sweatshop workers to work in sweatshops. The Choice Argument seeks, in other words, to shift the burden of proof onto those who wish to regulate sweatshop labor. It does so by forcing critics of sweatshops to specify the conditions under which it is morally permissible to interfere with sweatshop workers’ choice. My aim in this article is to meet that burden. Unlike other critics of sweatshop labor, however, my argument does not proceed from contested economic or moral assumptions. To the contrary, my strategy will be to demonstrate that even if we grant the truth of the economic and moral assumptions made by defenders of the Choice Argument, it nevertheless does not follow that it is morally wrong to interfere with the choice of sweatshop workers to work in sweatshops. The Choice Argument thus fails on its own terms.

Organization and management researchers praise the value of care in the workplace. However, they overlook the conflict between caring for work and for coworkers, which resonates with the dilemma of care allocation highlighted by ethicists of care. Through an in-depth qualitative study of two organizations, we examine how this dilemma is confronted in everyday organizational life. We draw on the concept of boundary work to explain how employees negotiate the boundary of their caring responsibilities in ways that grants or denies care to coworkers. We argue that the possibility of an ethics of care for coworkers requires boundary work that suspends the separation of personal and professional selves and constitutes the worker as a whole person. We contribute to research on care in organizations by showing how care for coworkers may be enabled or undermined by maintaining or suppressing the care allocation dilemma.

In this article thinking on corporate social responsibility (CSR) is compared with the dominant political theory of the market: the neoclassical theory. The comparison shows that thinking on CSR fundamentally collides with that theory. For example, their respective normative views on man are incompatible, as are their respective views on the modus operandi of the market. Given that CSR is desirable it follows that a new political theory of the market is needed. This article suggests some initial steps toward developing that new political theory of the market. For example, it defends the proposition that the neoclassical idea of the market as a harmonic sphere must be replaced by the idea of the market as a fragile system.

This paper examines two issues about professionalism and business that appear at first blush to be entirely separate. The first is the question of who counts as a “professional,” and whether, in particular, business people are “professionals.” The second issue is how acknowledged professionals that regularly interact with business, such as accountants, lawyers, and physicians, can find the moral free space necessary to maintain professional integrity in the face of financial pressures. Conflicts of interest for professionals working in corporations recur with disturbing regularity, and often have serious consequences. In the end I will show how both issues share a common solution. The solution involves understanding the normative function of the manager in the modern corporation, a function, I will argue, made more conspicuous by work over the last two decades done in the areas of stakeholder theory, corporate social performance (CSP), and social contract theory. The remainder of the paper is devoted to articulating these two problems and clarifying their common solution.

This paper argues that business can be helpfully conceived of as a mediating institution. Drawing upon neo-conservative theology, the author argues that mediating institutions serve a vital function in a free society to provide social justice out of an expanded civil society and provide a framework for a flourishing free market. Such institutions also nourish the attitudinal orientation of solidarity in applying the principle of subsidiarity by which self-interest becomes fulfilled through concern for others.

The author further argues that businesses also be conceived of as mediating institutions and thereby be held to criteria of meeting associational needs. In addition to normative reasons for revising the social contract so that businesses do serve the role of mediating institutions, contemporary management theories demonstrate that businesses can also meet their social obligations of creating wealth while meeting associational needs.

During recent years, the principle and practice of employment-at-will have been under attack. While progress has been made in eroding the practice, the principle still governs the philosophical assumptions underlying employment practices in the United States, and, indeed, EAW has been promulgated as one of the ways to address economic ills in other countries. This paper will briefly review the major critiques of EAW. Given the failure of these arguments to erode the underpinnings of EAW, we shall suggest new avenues for approaching employment issues to achieve the desirable goal of employee dignity and respect.

Unfair offers in bargaining may have disruptive effects because they may reduce interpersonal trust. In such situations future trust may be strongly affected by social accounts (i.e., apologies vs. denials). In the current paper we investigate when people are most likely to demand social accounts for the unfair offer (Experiment 1), and when social accounts will have the highest impact (Experiment 2). We hypothesized that the need for and impact of social accounts will be highest when the intentions of the other party are uncertain. The results provided support for this reasoning.

In the current paper we present an instrumental approach to deception. This approach incorporates the notion that bargainers (a) will use deception as a means to reach their goals in bargaining but (b) will refrain from using deception when they have alternative means to reach their goals. We demonstrate that different goals can lead to differences in the use of deception (Experiment 1). Furthermore, we demonstrate that reactions to deceit can also be understood from an instrumental perspective (Experiment 2).

This paper develops a framework for examining decision making about ethical issues and tests the applicability of a social contract perspective. Using two separate samples of students and salespeople, we determine that community members (salespeople) tend to judge a potentially unethical act to constitute a violation of an implicit social contract and non-community members (students) do not. Also, consistent with the emphasis on context specificity of integrative social contracts theory, situational variables influence perceptions of ethicality for the community members, but do not affect the perceptions of individuals outside the community. The study finds considerable support for the use of a social contractarian perspective in the study of decision-making processes about ethical issues.

Since St. Thomas Aquinas was one of the first scholastics to analyze the idea of a “just price,” economists, economic historians and philosophers interested in the philosophical underpinnings of the market have focused on Aquinas’s writings. One group insists that Aquinas defined the just price as the payment needed to cover sellers’ labor and material costs. A second camp vehemently counters that Aquinas’s just price is simply the going market price. We argue that neither of these views is correct. The Thomistic just price is the price that would be agreed to by a just person as part of an exchange. This “just person price” takes into account the well-being of the individual transactors and the good of the entire community. Such a price reduces neither to the cost-covering price nor to the market exchange price. A Thomistic concept of the just person price deserves to be reconsidered, especially because a Thomistic approach offers some useful ways to deal with issues quite differently from the popular neoclassical approach directed toward arriving at a socially optimal market price.

Although central to stakeholder theory, stakeholder value is surprisingly neglected in the literature. We draw upon prospect theory to show how stakeholder judgments of value depend crucially on the reference state, how there are several alternative reference states that may be operative when stakeholders judge value, how the choice of reference state for stakeholders’ value judgments can occur intuitively or deliberately, and how the level of the operant reference state may change with time and may also be incorrectly perceived by stakeholders or managers. Our theorizing results in a fundamentally different way of perceiving the value of corporate actions to stakeholders and shifts understanding of the avenues available for companies and others to influence stakeholder judgments of value. This novel perspective has implications both for theory and management practice, and not least for normative business ethics, if business is about stakeholder value creation.

Recalling several profound disagreements about business ethics as it is currently discussed in Western societies, I emphasize the need for business ethics as an academic discipline that constitutes the “backbone” for both teaching business ethics and improving business practice (section 1). Then I outline a conceptual framework of business ethics that promotes a “bottom-up” approach (section 2). This “problem-and action-oriented” conception appears to be fruitful in terms of both practical relevance and theoretical understanding. Finally, I argue for (section 3) the relevance of discussing goals at all levels of human action (i.e., individuals, organizations, systems) as well as the indispensability of human rights, and propose Amartya Sen's “goal-rights-system” approach as a normative-ethical framework for business ethics that integrates these two fundamental aspects.

The extension of human rights obligations to corporations raises questions about whose rights and which rights corporations are responsible for. This paper gives a partial answer by asking what legal rights corporations would need to have to fulfil various sorts of human rights obligations. We should compare the chances of human rights fulfilment (and violations) that are likely to result from assigning human rights obligations to corporations with the chances of human rights fulfilment (and violations) that are likely to result from giving corporations the legal rights needed to undertake those human rights obligations. Corporations should respect basic human rights of all people. Non-complicity in human rights violations requires that corporations have the right to political freedom of speech. To actively protect people from human rights violations, corporations need the right to hire armed security personnel; such obligations should be limited to protecting corporate property and narrowly defined stakeholders. Obligations to spend corporate resources on human rights fulfilment are confined to contributing to specific projects. Corporations have no obligation to ensure a society in which human rights are fulfilled. This principle helps us understand why corporate obligations are substantially different from those of governments.

The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation (type I democracy) and a principle of legitimation that draws on consent (type II democracy). Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I democracy notions of participation and often take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging (and further improving) the legitimacy of both capitalistic firms and competitive markets.