Communism lost the Cold War, not to pure free market capitalism, but to a range of diverse economic systems based on varying degrees and forms of social regulation of the market. Such social regulation was possible because both polities and economies were primarily national. Since the end of the Cold War, there has been rapid globalization of the economy, but not of effective social regulation. Incipient global political institutions are too weak to regulate global corporate power, while national governments no longer have sufficient reach to regulate large multinationals. Corporate self-regulation has begun, but only haltingly and mostly ineffectively.

While global prosperity has risen dramatically in recent decades, not everyone has progressed since the end of the Cold War. Since 1990 some 55 countries have had declining per capita incomes, while inequality has risen within and between countries. It is too soon to say whether global capitalism will be saved from itself by regulation, just as American national capitalism may have been saved by the New Deal reforms it opposed. As Pope John Paul II has warned, the world must not succumb to a “radical capitalist ideology” which “blindly entrusts” social problems to market forces.

Expectations and possibilities for employee loyalty are shifting rapidly, particularly in the for-profit sector. I explore the nature of employee loyalty to the organization, in particular, those elements of loyalty beyond the notion of the ethical demands of employee loyalty. I consider the moral significance of loyalty for the employee and whether the development of ties of loyalty to the work organization is in fact a good thing for the employee or for the employer. I argue that employees have a natural inclination to extend loyalty to the organization and that organizations consequently have an obligation to make clear to employees the degree to which the organization will recognize and reward employee loyalty.

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.

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.

This article studies multi-stakeholder initiatives (MSIs) as spaces for both deliberation and contestation between constituencies with competing discourses and disputed values, beliefs, and preferences. We review different theoretical perspectives on MSIs, which see them mainly as spaces to find solutions to market problems (economic approach), as spaces of conflict and bargaining (political approach), or as spaces of consensus (deliberative approach). In contrast, we build on a contestatory deliberative perspective, which gives equal value to both contestation and consensus. We identify four types of internal contestation which can be present in MSIs—procedural, inclusiveness, epistemic, and ultimate-goal—and argue that embracing contestation and engaging in ongoing revision of provisional agreements, criteria, and goals can enhance the democratic quality of MSIs. Finally, we explore the implications of this perspective for theorizing about the democratic quality in MSIs and about the role of corporations in transnational governance.

Vice is a neglected concept in business ethics. This paper attempts to bring vice back into the contemporary dialogue by exploring one vice that is destructive to employee and organization alike. Interestingly, this vice was first described by Aristotle as akolastos. Drawing extensively on the criminology literature, the findings challenge both common sense and popular images of white-collar crime and criminals. While not all instances of employee betrayal are attributable to vice, some most certainly are, and the paper offers a description of those violations of trust in which vice may play a role.

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.

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.

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.

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.

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.

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.

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.

I apply stigma-management strategies to corporate scandals and expand on past research by (a) describing a particular type of stigma management strategy that involves accepting responsibility while denying it, (b) delineating types of stigma that occur in scandals (demographic versus character), and (c) considering the moral implications of shifting stigmas that arise from scandals. By emphasizing the distinction between character and demographic stigma, I make progress in evaluating the moral implications of shifting different types of stigma.

Contemporary marketing is commonly characterized by the marketing concept which enjoins marketers to determine the wants and needs of customers and then to try to satisfy them. This view is standardly developed, not surprisingly, in terms of normal or ordinary consumers. Much less frequently is attention given to the vulnerable customers whom marketers also (and increasingly) target. Though marketing to normal consumers raises many moral questions, marketing to the vulnerable also raises many moral questions which are deserving of greater attention.

This paper has three objectives. First, it explores the notion of vulnerability which a target audience might (or might not) have. I argue that we must distinguish those who are specially vulnerable from normal individuals, as well as the susceptible and the disadvantaged - two other groups often distinguished in marketing literature. Second, I contend that marketing to the specially vulnerable requires that marketing campaigns be designed to ensure that these individuals are not treated unfairly, and thus possibly harmed. Third, I maintain that marketing programs which violate this preceding injunction are unethical or unscrupulous whether or not those targeted are harmed in some further manner. Accordingly, social control over marketing to the vulnerable cannot simply look to consumer injury as the measure of unfair treatment of the vulnerable.

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.

Responsible innovation in artificial intelligence (AI) calls for public deliberation: well-informed “deep democratic” debate that involves actors from the public, private, and civil society sectors in joint efforts to critically address the goals and means of AI. Adopting such an approach constitutes a challenge, however, due to the opacity of AI and strong knowledge boundaries between experts and citizens. This undermines trust in AI and undercuts key conditions for deliberation. We approach this challenge as a problem of situating the knowledge of actors from the AI industry within a deliberative system. We develop a new framework of responsibilities for AI innovation as well as a deliberative governance approach for enacting these responsibilities. In elucidating this approach, we show how actors from the AI industry can most effectively engage with experts and nonexperts in different social venues to facilitate well-informed judgments on opaque AI systems and thus effectuate their democratic governance.

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.