The kind of commitment to moral rules that characterizes effective interaction between persons in among others places, manufacturing and commercial settings is characteristically treated by economists and game theorists as a public good, the securing of which requires the expenditure of scarce resources on surveillance and enforcement mechanisms. Alternatively put, the view is that, characteristically, rational persons cannot voluntarily guide their choices by rules, but can only be goaded into acting in accordance with such rules by the fear of social and formal sanctions. On this way of thinking, rational individuals are condemned to having to settle for the “second-best” results that are thereby implied. This conclusion rests not only on an appeal to a consequentialist perspective, but also a separability principle. Against this, it is argued that consequentialism itself offers a basis for the rejection of the separability principle, and a defense of the thesis that, for a wide range of realistic cases, being disposed to voluntarily guide one’s choice by rules (on the condition that others can be expected to do so as well) is a necessary condition of engaging in rational interaction.

Most people do not trust most other people, unmonitored, to honor obligations completely. Because of this they use substantial amounts of resources to specify the details of agreements, and to police them. Use of these resources … could be greatly reduced, if transacting parties would agree to honor the spirit of their agreement and simply shake hands. The resource saving to the two parties combined, from substituting this mode of “enforcing” agreements to those currently used, is clear. Why, then, does not this more efficient mode of transacting drive out the more costly methods through the normal competitive process? … The underlying rationale for this … is that it is privately profitable to engage in some degree of “cheating” on agreements, and to use resources to disguise this fact. — M. W. Reder, “The Place of Ethics in the Theory of Production”

In his Society for Business Ethics presidential address, “Does business ethics rest on a mistake?” John Boatright argues that we should move away from what he calls the Moral Manager Model of Business Ethics toward a Moral Market Model, in which the focus is not on the individual responsibilities of managers but on the regulation of economic markets to achieve ethical ends. Boatright’s message is a very important one. Market mechanisms and market values increasingly dominate our society, and it is important that business ethicists recognize this and ask how they can contribute to such a society. But this should not mean throwing out or even downplaying the Moral Manager Model. I shall argue here that economic markets are inherently hostile both to regulation and to moral values, and that their beneficence depends critically on the political context of traditional moral values and individual responsibility that the Moral Manager Model supports. Indeed, as we go through a period of commercial and cultural globalization, marked by a combination of rapid economic development and moral uncertainty, the need for moral managers has never been greater.

Boatright begins by identifying three problems with the Moral Manager Model of business ethics. First, to the extent that it describes the desired aims of business ethics, he contends that business ethics is fighting a losing battle. The most admired corporate executives today are not “moral managers” at all but hard-headed and ruthless economic actors. Secondly, its application is effectively restricted to the senior managers of large companies: it does not speak to the situation of the majority of managers and working people. Thirdly, he suggests, most people nowadays are primarily economic actors. In business and in our home lives we act and think as market participants, striving to get the best deal.

One so-called paradox of blackmail concerns the fact that “two legal whites together make a black.” That is, it is licit to threaten to reveal a person’s secret, and it is separately lawful to ask him for money; but when both are undertaken at once, together, this act is called blackmail and is prohibited. A second so-called paradox is that if the blackmailer initiates the act, this is seen by jurists as blackmail and illicit, while if the blackmailee (the person blackmailed) originates the contract, this is commonly interpreted as bribery and is not illicit.

But these are paradoxes only for legal theorists innocent of libertarian theory. The authors use that perspective to reject the claim that blackmail should be unlawful. If this act were legalized, then both paradoxes would disappear, precisely their contention.

Research on political ideology in law and psychology can be fruitfully applied to the question of whether business ethics is ideological, and, if so, what response is warranted. I suggest that legal and psychological research streams can be drawn upon to create a new genre of critical business ethics that differs from normative and empirical business ethics. In psychology, Moral Foundations Theory (MFT) suggests how the mainstream ideology within an academic field can be criticized as a reflection of a self-righteous, us-them mind-set. In law, Critical Legal Studies (CLS) suggests how a field’s mainstream ideology can be criticized as a rationalization of the status quo. I suggest that the MFT and CLS criticisms of ideology can be joined to develop a critical approach to business ethics that seriously examines science on normatively charged topics, such as liberal-conservative differences and implicit attitudes, and that frames it in terms of alternative narratives.

A businessperson acts, qua businessperson, in two institutional contexts which in principle are completely distinct, and normally entail two different ways of relating to other people; on the one hand as an actor in the market, and on the other as the employees’ manager. We shall assume that different sets of norms govern how to relate to trading partners in the market and how to relate to subordinates in the company. The moral problems which arise in the two different institutions for conducting human relations consequently also differ. The main problem relating to market operations originates in the fact that one achieves the most desirable consequences when the objective as such is difficult to justify on moral grounds. Profit is the target, if necessary at the expense of the person one is dealing with. In this context—i.e. in the market—altruistic considerations, or acting out of consideration for the other party, can produce socially undesirable results. The problems confronting the businessperson as manager are of a different nature. We shall not be considering all aspects of management or consultancy ethics, only what we regard as in principle the fundamental problem, one which in fact applies to all management in modern society.

The corporate scandals of the past few years have brought renewed attention to the problem of curtailing dishonest and fraudulent business practices, a problem on which strategic, ethical, and law enforcement interests should be aligned. Unfortunately, several features of federal criminal law and federal law enforcement policy have driven a wedge into this alignment, forcing managers to choose between their ethical obligations and their obligation to obey the law or aid law enforcement. In this article, I examine the nature and implications of the growing divergence between managers’ ethical and legal obligations. After describing the traditional approach to business ethics analysis, I identify the features of federal criminal law and law enforcement policy that are responsible for the divergence and show how they are undermining the efficacy of the traditional approach. I illustrate this effect with the issue of workplace confidentiality. I then argue that the traditional approach must be reformed to give explicit recognition to the legal dimension of normative analysis, and demonstrate how such a reformed approach would function by applying it to three illustrative issues—organizational justice, privacy, and ethical auditing—and supplying a case study—KPMG's allegedly abusive tax shelters.

In this paper we explore challenges facing leadership in a culture of “all consuming images” from a perspective which claims that images have a moral or normative dimension. The cumulative effect of contemporary image saturation is increased resistance to the normative power of an image. We also suggest that in a culturally diverse global economy, it is necessary to expand the moral aspects of good business leadership beyond providing a basis for productive, coherent group identity within a firm at the expense of seeing outsiders as “others.” We also explore what imagining leadership in business might be like in a world in which visual images shape our understandings of individual and group identity. While our focus is on leadership in business, we also use examples from the political arena. We also suggest that imagining business leadership in the ways we propose may be helpful to women, providing them with an image of business leadership more closely reflective of their experience of corporate culture, its limits, and possibilities.

In this paper, we argue that the use of the term “rationality” in Judgment in Managerial Decision Making (JMDM) is extremely useful, and creates a useful dialogue between philosophical and psychological perspectives of ethics and morality. We conclude that while behavioral decision research can gain important insights by more fully including philosophical discussions of rationality, both intellectual communities should be clear in their definitions, provide falsifiable predictions, and offer insights that can be tested empirically. We believe that these are important contributions of behavioral decision research not currently incorporated in philosophical critiques.

In mid-1993 a provocative piece on business ethics appeared on the pages of the Harvard Business Review. Andrew Stark’s “What’s the Matter with Business Ethics?” (1993a) found plenty wrong with business ethics, arguing that the product served up to managers and potential managers by traditional ethicists in their articles and classrooms is without practical value. Since it is supposed to be “applied” ethics, he finds something seriously amiss with a business ethics that offers nothing to help a manager resolve moral dilemmas in business. While some “new” ethicists are now beginning to appear, ethicists who are willing to get their hands dirty and acknowledge the legitimacy of normal business practices, the traditional ethicists continue to dominate the field and continue to offer a product unable to satisfy the manager’s needs. According to Stark, “[Business ethicists] have been too preoccupied with absolutist notions of what it means for managers to be ethical, with overly general criticisms of capitalism as an economic system, with dense and abstract theorizing, and with prescriptions that apply only remotely to managerial practice” (1993a, p.38). Or, as he puts it in a more detailed discussion, traditional business ethics fails because it is a deadly combination of “too general,” “too theoretical,” and, worst of all, “too impractical” (1993a, p.44). In short, the “old” approach is idealistic and academic, irrelevant to the rough-and-tumble of real business.

Employee-employee conflicts are common occasions for managerial intervention. In judging such disputes, managers bring to encounters a frame that is not conducive to employee due process. Making managers aware of their legal responsibilities in resolving employee disputes is a poor substitute for managers’ understanding and implementation of their ethical due process obligations. Moreover, moral imagination is necessary in order to counter the effects of the managerial frame that employees are either not worthy of due process protections or that such protections are not a priority.

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.

In her recent article, “The One Necessary Condition for a Business Ethics Course: The Teacher Must be a Philosopher,” Ellen Klein argues that philosophers are best qualified to teach business ethics by virtue of their expertise in ethical theory. Klein likens her claim to that of Plato’s “philosopher-king,” who claimed that the philosopher is best suited to be “king,” because he possesses a theoretical understanding of justice. In response to Klein, I point to Aristotle’s objection to Plato, which shows that theoretical knowledge of ethics is not sufficient for making a person ethical, because ethics requires both theoretical and practical knowledge. Ultimately, I argue that in order to have a successful business ethics class, one must address both the issues unique to ethical theory, and the particular structures and contexts that are unique to making an ethical decision within the business environment.

This article examines the question of private coercion in market societies, arguing for an unconditional basic income guarantee from a classical liberal viewpoint. It proposes three main arguments. First, classical liberals view the purpose of government to be the reduction of coercion, both public and private. Second, a proper understanding of the nature of coercion indicates that parties subject to certain types of hardship are being coerced. Third, where the total amount of coercion is reduced by eliminating the hardship, the classical liberal state must do so as to fulfill its purpose. Hence, this article argues that if the total amount of coercion in society can be reduced by the state employing the amount of coercion necessary to maintain an unconditional basic income guarantee, then the classical liberal state is obligated to maintain such a guarantee by its underlying justification.

This article contributes to the business ethics literature by applying and extending an emerging theoretical perspective—stakeholder capability enhancement (Westermann-Behaylo, Van Buren, & Berman, 2016)—to previously unexplored areas of business ethics inquiry related to work, dignity, and relationships between firms, ex-offenders, and other stakeholders. In particular, I direct attention to ex-offenders as critical community-based stakeholders pursuing employment opportunities with employers in these communities. I discuss how prevailing hiring practices in firms restrict opportunities for ex-offenders to obtain meaningful work and undermine stakeholder capabilities and dignity. I consider three primary pathways for expanding employment opportunities for ex-offenders, enhancing the capabilities and dignity of ex-offenders and other community-based stakeholders, and maintaining critical employer rights. The article concludes with a discussion of potential directions for future research.

The papers by Mele, Randels, and Schrag call attention to the proper work that the concept of loyalty can perform. All three authors argue that loyalty is not taken seriously enough in modern corporations. As Mele, Randels, and Schrag independently ascribe special status to the concept of loyalty, their analyses converge along numerous conceptual margins. Along these margins, a singular conception of loyalty comes into focus. Along these margins, we can see simultaneously why each author assigns extraordinary status to loyalty and why, ironically, each turns the special concept of loyalty over to the service of conventional management thinking. Mele, Randels, and Schrag leave it for us to ponder whether this ironic twist is unique to the concept of loyalty.

In this paper I try to enlarge the scope of the questions commonly treated in business ethics. I first argue that not motives but action structures should form the basis of our analytical endeavours. I then distinguish three basic structures in human action: self-directed, other-including and other-directed actions. These structures, when linked with the concepts of interests and legitimate claims or rights, lead to a taxonomy of moral behaviour in business that I describe as, respectively, transactional, recognitional and participatory ethics, three distinct realms of moral behaviour, each characterized by a specific set of moral principles and a special relation between moral agents. My contention is that, up to now, analysis in business ethics has largely been focused on issues in the field of recognitional ethics. The discipline itself as well as ethical practices in business may greatly profit by paying explicit attention to market morality and transactional ethics as well as to the non-enforceable we-alliances of a participatory ethics, increasingly possible and needed in present-day civil society.

In my article “Understanding the Separation Thesis” I noted that most scholars in the business ethics field seemed to have accepted R. Edward Freeman’s argument to the effect that what he calls “the separation thesis” should be rejected. I argue, however, that they seemed to understand this thesis (and its rejection) in quite different ways. This volume contains three responses to my article which, interestingly enough, can be taken to corroborate my original argument. I here make some brief comments on these responses.

This article provides a normative justification for unions. It discusses three arguments. The argument from consent justifies unions in some circumstances, but if the employer prefers to not bargain with unions, it may provide very little justification. The argument from contestability takes as its starting point the fact that employment contracts are incomplete contracts, where authority takes the place of complete contractual terms. This theory of contracts implies that consent to authority has been given under ignorance, and, therefore, that authority cannot be justified by consent. Contestability is a mechanism that can handle this problem for consent theory. It demands transparency, channels for voice, and a forum where contestations can be evaluated. This idea can be implemented in firms in different ways, but the argument from the separation of powers implies that unions are uniquely suited to implement contestability, since they are organized outside of the employer’s domain of authority.