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 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.

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.

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.

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).

After a transgression has occurred within an organization, a primary concern is the reintegration of the affected parties (namely offenders and victims) back into the organizational community. However, beyond offenders and victims, reintegration depends on the views of organizational peers and their desire to interact with these parties. In two studies, we demonstrated that offender amends and victim forgiveness interact to predict peer reintegrative outcomes. We found evidence of backlash against unforgiving victims: Peers wanted to work the least with victims who rejected appropriate amends, thus penalizing them for their failure to contribute to the restoration process. This backlash effect was due to decreased liking of the victim and the perceived failure to repair the offender-victim relationship. These findings demonstrate that peers expect both offenders and victims to do their part to achieve reconciliation following transgression, and both may suffer the consequences of failing to meet peer expectations. Implications for reintegration within organizations are discussed.

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.

This article argues that the important organizational values to study are organizational moral values. It identifies five moral values (honest communication, respect for property, respect for life, respect for religion, and justice), which allow parallel constructs at individual and organizational levels of analysis. It also identifies dimensions used in differentiating organizations’ moral values. These are the act, actor, person affected, intention, and expected result. Finally, the article addresses measurement issues associated with organizational moral values, proposing that content analysis is the appropriate measurement technique to be used for an organization-level conception of moral values.

Analysis of ethical conduct of business organizations has hitherto placed primary emphasis on the conduct of that corporation’s managers because ethical conduct, like all conduct, must manifest itself through individual behavior. This paper argues that in the real world corporate actions are influenced, to a considerable extent, by external market-based conditions. Therefore, a more comprehensive explanation of ethical business conduct must incorporate both corporate, i.e., internal considerations, and competitive, industry structure-based, i.e., external considerations. A framework is presented that provides a systematic analysis of the interactive effect between different types of external market-based competitive conditions, institutional opportunities to engage in ethical behavior, and the likelihood that corporations would do so. The analytical framework leads to recommendations as to the types of actions that might be more effective in improving business ethical conduct under varying sets of market-based competitive conditions.

We examine the writings of Adam Smith and Milton Friedman regarding their interpretation and use of the concept of self-interest. We argue that neither Smith nor Friedman considers self-interest to be synonymous with selfishness and thus devoid of ethical considerations. Rather, for both writers self-interest embodies an other-regarding aspect that requires individuals to moderate their actions when others are adversely affected. The overriding virtue for Smith in governing individual actions is justice; for Friedman it is non-coercion.

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.

This paper challenges some of the basic epistemological assumptions that underpin our current conceptions of accountability. Recent legislative developments like Sarbanes-Oxley attempt to enhance accountability in the business environment through the employment of checks and balances and the threat of individual liability. This kind of legalistic strategy still seems to assume the existence of an individual agent who employs moral principles to come to decisions in a deliberate, impartial manner. This paper will emphasize that moral decision-making often does not take place in this manner, but is rather a tacit process of sensing what the appropriate behavior would be. Accountability, both with respect to individuals and organizations, is less a matter of “accounting for” a set of concrete assets, than a question of being accountable to a set of internal and external stakeholders, or in terms of the tacit sense of moral propriety that develops among business associates and colleagues over time.

In response to criticism of empirical or “positive” approaches to corporate social responsibility (CSR), we defend the importance of these approaches for any CSR theory that seeks to have practical impact. Although we acknowledge limitations to positive approaches, we unpack the neglected but crucial relationships between positive knowledge on the one hand and normative knowledge on the other in the implementation of CSR principles. Using the structure of a practical syllogism, we construct a model that displays the key role of empirical knowledge in fulfilling a firm’s responsibility to society, paying special attention to the implications of the “ought implies can” dictum. We also defend the importance of one particular class of empirical claims; namely, claims from the field of economics. Even positive economic theory, which is often criticized for endorsing profits rather than values, can cooperate in intriguing ways with non-economic concepts in the implementation of CSR goals.

This article addresses the fundamental question of what is ethical leadership by rearticulating relations between leaders and followers in terms of “affective leadership.” The article develops a Spinozian conception of ethics which is underpinned by a deep suspicion of ethical systems that hold obedience as a primary virtue. We argue that the existing research into ethical leadership tends to underplay the ethical capacities of followers by presuming that they are in need of direction or care by morally superior leaders. In contrast, affective leadership advocates a profoundly political version of ethics, which involves people in the pursuit of joyful encounters that augment our capacity to affect and be affected by others. Instead of being led by people in leadership positions, we are led by active affections that enhance our capacity for moral action.

Social contract theory has a rich history. It originated among the ancients with recognition that social arrangements were not products of nature but convention. It developed through the centuries as theorists sought ethical criteria for distinguishing good conventions from bad. The search for such ethical criteria continues in recent attempts to apply social contract theory to organizations. In this paper, I question the concept of consent as a viable ethical criterion, and I argue for an alternate principle of impartiality as a more appropriate moral norm in a social contract theory of organizations.

Despite the recent rash of corporate scandals and the resulting rush to address the problem by adding more laws and regulations, seemingly little attention has been paid to how the nature (not the substance) of rules may or may not affect ethical decision-making. Drawing on work in law, ethics, management, psychology, and other social sciences, this article explores how several characteristics of rules may interfere with the process of reaching and implementing ethical decisions. Such a relationship would have practical implications for regulatory policy and managers of organizations, and the article concludes by suggesting how regulations and corporate ethics programs should be able to improve the ethical culture of business and enhance the ethical decision-making skills of employees.

One might suppose that where law is largely absent, behavior is pretty bad. Yet it turns out to be nearly the other way around. The two areas where law is arguably the largest presence in ordinary life—driving cars and paying taxes—are probably the two areas where there is the largest amount of self-conscious cheating.

NASA’s culture of bureaucratic accountability emphasized chain of command, procedure, following the rules, and going by the book. While rules and procedures were essential for coordination, they had an unintended but negative effect. Allegiance to hierarchy and procedure had replaced deference to NASA engineers’ technical expertise.

A complex organization is in effect a commons, which supervisory techniques cannot preserve from free riding. A corporate culture strong enough to create the requisite community-minded second-order desires and beliefs may be morally illegitimate. What morality requires is not local enforcement of foundational moral principles—a futile undertaking—but that the organization be a good community in that it permits the disaffected to exit, encourages reflective consideration of morality and the good life, and creates appropriate loyalty.

Our approach in this response is as follows. In § 1, we try to identify accurately Boatright’s central claims—both about Goodpaster’s original paper and about matters of substance independent of that paper. In § 2 and 3, we discuss the plausibility of those claims, first from a legal point of view and then from a moral point of view. Finally, in § 4, we defend the concept of paradox (and, in particular, the Stakeholder Paradox) as a limitation on practical reason which is not necessarily to be lamented. In fact, we believe, some paradoxes are better preserved from rather than guided toward resolution.

What kinds of markets, market regulations, and business organizations are compatible with contemporary egalitarian theories of justice? This article argues that any thoughtful answer to this question will have to draw on recent developments in political philosophy that are concerned not only with the equality of the distribution of core goods (or as John Rawls famously put it, with the “distribution of the benefits and burdens of social cooperation”) but also with the requirements for equality of status, voice, and so on, in the relations between individuals and within organizations. The dominance of theories of distributive justice in egalitarian political philosophy since Rawls may have contributed, on the one hand, to the oft-recognized gulf between these theories and their theorists and, on the other, to discussions of corporate governance and business ethics. The main purpose of this article is to introduce business ethicists to some of the less-familiar features of recent relational theories of justice and equality, and to suggest that some of these notions may help bridge the gap between business ethics and political philosophy more generally.