The globalization of society erodes established ideas about the division of labor between the political and economic spheres and calls for a fresh view concerning the role of business in society. Some multinational corporations have started to change their role from one of simply following the rules to one of creating the rules of the economic game. They already have assumed responsibilities that once were regarded as belonging to government. They engage in the production of public goods (e.g., public health, education), and in self-regulation to fill global gaps in legal regulation and to promote societal peace and stability. Some corporations do not simply comply with societal standards in legal and moral terms; they engage in discursive social and political processes that aim at setting or redefining those standards in a changing, globalizing world. Those activities go beyond the mainstream understanding of stakeholder responsibility and corporate social responsibility.

Utilitarianism is commonly defined in very different ways, sometimes in a single text. There is wide agreement that it mandates maximizing some kind of good, but many formulations also require a pattern of distribution. The most common of these take utilitarianism to characterize right acts as those that achieve “the greatest good for the greatest number.” This paper shows important ambiguities in this formulation and contrasts it (on any plausible interpretation of it) with the kinds of utilitarian views actually defended by major proponents of utilitarianism. The aim is not to defend any of these views but to formulate them in a way that facilitates using them—or, more likely, some revised version suggested by the paper—in guiding decisions in business. The analysis provided here should also facilitate appraisal of utilitarianism, contribute to clarity in discussions of business ethics, and suggest a range of ethical standards that merit consideration for certain kinds of decision. If the results of the analysis are correct, a distributive reading of utilitarianism is at best misleading as a representation of its central thrust; it should not be described as the view that ethics calls for achieving “the greatest good for the greatest number”; and, understood as its major proponents take it, utilitarianism differs more from Kantian ethics than distributive readings imply and is more difficult to defend than it appears to be when viewed as intrinsically distributive.

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.

Intermediaries, such as accountants, lawyers, and bankers, are gatekeepers, which are parties whose cooperation is necessary for corporations to function and who, by withholding cooperation, are able to prevent significant corporate misconduct. The recent scandals at Enron and other corporations were due, in part, to failures by gatekeeper institutions. However, intermediaries exist primarily to provide for-fee services and not specifically to detect and deter misconduct. Insofar as these institutions are gatekeepers or guardians, they serve reluctantly. Hence the question: What is the responsibility of intermediaries to act as gatekeepers? This article argues that the appropriate moral, as well as legal, principle for justifying responsibility in a gatekeeper role is cost effectiveness. This conclusion is reached by means of a hypothetical exercise called the investors’ bargain in which investors—who bear the costs and receive the benefits of intermediaries’ gatekeeper role—are asked to choose the best means of protecting their interests.

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.

In 1998, activist Marc Kasky sued Nike for alleged false advertising and unfair competition under California law. Kasky alleged that Nike made false statements in a variety of what we would usually consider non-advertising forums, including interviews and letters to the press. The Supreme Court of California permitted Kasky's suit to go forward, even though the statements were not a part of traditional paid commercial advertisements. The Supreme Court of the United States, which initially granted certiorari to review the case, dismissed the writ on June 26, 2003, leaving intact California's broad interpretation of its statute and narrow construction of the Constitutional speech protections that constrain that statute. What is typically referred to as “the Nike case” or “the Kasky case” can mean either Kasky v. Nike (as the case was originally filed) or Nike v. Kasky (when Nike appealed the lower court's judgment).

We combine prior research on ethical decision-making in organizations with a rational choice theory of corporate crime from criminology to develop a model of corporate offending that is tested with a sample of U.S. managers. Despite demands for increased sanctioning of corporate offenders, we find that the threat of legal action does not directly affect the likelihood of misconduct. Managers’ evaluations of the ethics of the act, measured using a multidimensional ethics scale, have a significant effect, as do outcome expectancies that result from being associated with the misconduct but not facing formal sanctions. The threat of formal sanctions appears to operate indirectly, influencing ethical evaluations and outcome expectancies. Obedience to authority also affects illegal intentions, with managers reporting higher prospective offending when they are ordered to engage in misconduct by a supervisor.

In the recent case of Nike v. Kasky both sides argued that their standard for distinguishing commercial speech from political speech would create the better policy for ensuring accurate and complete disclosure of social information by corporations. Using insights from information economics, we argue that neither standard will achieve the policy goal of optimal truthful disclosure. Instead, we argue that the appropriate standard is one of optimal truthful disclosure—balancing the value of speech against the costs of misinformation. Specifically, we argue that an SEC-sanctioned safe harbor available under a closely supervised system for social reporting will bring about optimal truthful disclosure. The scheme is intended to enhance stakeholder confidence in corporate social and political commentary, while at the same time encouraging corporations to provide accurate information in a fair playing field of public debate.

Hasnas is correct that ethicists should pay attention to law and be on guard for perverse effects from regulation and legal interpretations that may encourage or require unethical behavior. He is not correct that the business ethics literature assumes that law and ethics consistently pull in the same direction. Analysis of the relationship between law and ethics requires nuanced, in-depth treatment. An example is provided regarding the well-known case of United States v. Park. Ultimately, there is a need for more serious consideration of ethical principles and norms in legal policy making and practice.

Evidence abounds that when ethics initiatives are decoupled from the actual work of organizations, ethics policies may become little more than “window dressing” (Weaver, Trevino, and Cochran 1999; Collen and Gonella 2002). We found, however, an unexpected, positive feature of decoupling in the study of a local government; namely, when organizational members engage in discussions that turn away from the letter of an ethics code they often do so to address higher ethical principles embedded in the spirit of the code. The decoupled understanding of the code in these cases becomes a symbolic, legitimating gesture grounded not in strict provisions but in creative and complex interactions. This counterintuitive explanation of decoupling capitalizes on discourse that evolves from a legalistic interpretation to rich discussions that value the multiplicity of voices within organizational life. What follows is that ethical decision making emerges as creative, dynamic, and responsive to its constituents.

The relationship between corporate executives and shareholders has riveted the attention of business ethicists since the inception of the field. Most ethicists agree that corporate executives owe their investors the duties of loyalty, candor, and care. These fiduciary duties undergird the promises made to shareholders at the time of incorporation, placing on executives moral obligations to engage in fair dealing and to avoid conflicts of interest.

We concur that executives owe all of their existing shareholders both promise-keeping and fiduciary duties and argue that some corporate executives violate these responsibilities by attempting to withhold information from or limit information to some shareholders while courting others. We analyze the ethical implications of six techniques and tools that executives use to attract certain types of shareholders while deterring others. We conclude with recommended structural and behavioral changes to these current managerial and investor practices.

John Hasnas's fine article, “Up from Flatland: Business Ethics in the Age of Divergence,” fails in its stated goal of challenging the mainstream business ethics community's methods of analyzing normative issues. However, it achieves what is likely Hasnas's true goal of alerting both business ethicists and managers of the bigger stakes now in play when the federal government indicts employees and seeks their employers’ cooperation in establishing the prosecutor's case. While prosecutorial overreaching is a legitimate concern that deserves to be highlighted, it requires no qualitative change in normative ethical analysis. That analysis now involves different inputs (greater stakes for firms and employees), but continues to involve a familiar but complicated weighing of shareholder interests against employee interests and, sometimes, a weighing of both against the requirements of the law.

This article explores the law and ethics of lobbying. The legal discussion examines disclosure regulations, employment restrictions, bribery laws, and anti-fraud provisions as each applies to the lobbying context. The analysis demonstrates that given the social value placed on the First Amendment, federal law generally affords lobbyists wide latitude in determining who, what, when, where, and how to lobby.

This article explores the law and ethics of lobbying. The legal discussion examines disclosure regulations, employment restrictions, bribery laws, and anti-fraud provisions as each applies to the lobbying context. The analysis demonstrates that given the social value placed on the First Amendment, federal law generally affords lobbyists wide latitude in determining who, what, when, where, and how to lobby.

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.

This response to Professor Hasnas recasts the apparent divergence between the legal and ethical obligations of managers in light of the rhetorical claims and counterclaims that accompany the interaction between regulators and the regulated. It is argued that this divergence is more apparent than real, and that the convincing but often empty rhetorical statements that accompany reforms should be seen in context and largely disregarded. This rhetoric is designed to claim integrity, and reclaim legitimacy with the hope that “burdensome” reforms will be minimized.

Work is a place where many adults devote significant portions of their waking lives, but it is also a place where civil liberties, including freedom of speech, are significantly constrained. I examine the regulation and control of expressive activity in and around the workplace from legal, managerial, and ethical perspectives. The focus of this article is on workplace freedom of expression: the ability to engage in acts of expression at or away from the workplace, on subjects related or unrelated to the workplace, free from the threat of discipline or discharge. I present a taxonomy of workplace-relevant acts of expression, describe the present legal status of workplace expression, review and integrate theoretical perspectives on free speech, drawn mainly from legal theory and philosophy, and critically assess the state of freedom of expression in the workplace, arguing that it is excessively and unnecessarily limited in both law and management practice.

In the Kasky case, the Supreme Court of California determined that Nike, Inc., might be accountable in a civil action for misleading statements that it made to the press and to the public about its operations in Southeast Asia. The Kasky case is examined here in its legal and ethical aspects. The U.S. Supreme Court's First Amendment cases that distinguish between commercial speech and political speech are explained, and the arguments in favor of greater protection for Nike's statements about its overseas operations are evaluated in light of Donaldson and Dunfee's integrative social contracts theory. The hypernorm of “necessary social efficiency” is invoked to claim that the arguments made by Nike and various “friends of the court” in favor of greater protection for corporate speech are problematic. Reliable information is the lifeblood of both democracy and efficient free markets. Thus, the more ethical approach is for corporations to support systemic legal reforms that would predictably sanction false and misleading statements in accordance with clear guidelines.

This paper argues that sweatshop workers’ choices to accept the conditions of their employment are morally significant, both as an exercise of their autonomy and as an expression of their preferences. This fact establishes a moral claim against interference in the conditions of sweatshop labor by third parties such as governments or consumer boycott groups. It should also lead us to doubt those who call for MNEs to voluntarily improve working conditions, at least when their arguments are based on the claim that workers have a moral right to such improvement. These conclusions are defended against three objections: 1) that sweatshop workers’ consent to the conditions of their labor is not fully voluntary, 2) that sweatshops’ offer of additional labor options is part of an overall package that actually harms workers, 3) that even if sweatshop labor benefits workers, it is nevertheless wrongfully exploitative.