This article uses concepts from sociology, history, and philosophy to explore the shifting relationship between moral values and business in the Western world. We examine the historical roots and intellectual underpinnings of two major business-society paradigms in ideal-type terms. In pre-industrial Western society, we argue that business activity was linked to society’s values of morality (the moral unity paradigm)—for good or for ill. With the rise of industrialism, we contend that business was freed from moral constraints by the alleged “invisible hand” of efficient markets (the amoral theory of business). Armed with this understanding of the intellectual history of the moral unity and amoral business-society paradigms, we suggest that some variant of the moral unity paradigm may be recurring in post-industrial society.

Hedge funds are targets of mounting ethical criticism. The most salient focuses on their opacity. Hedge funds are structured to block transparency for strategic reasons: that is, they systematically deny information to their own investors and to governments in order to protect their competitive advantage, even though the information they hide holds tremendous significance for the interests of both groups. In this article I will detail the ethical allegations made against hedge funds, showing why their opacity creates intractable conflicts that cannot be resolved through government regulation. Sometimes opacity be regulated away; but with hedge funds I show why it cannot because of “regulatory recalcitrance.” In the end a form of voluntary moral coordination, a form of “microsocial contract” instituted as an industry standard, is required relief. In a word, the solution to hedge fund opacity is ethical.

The distinction between what I call nonelective obligations and discretionary obligations, a distinction that focuses on one particular thread of the distinction between perfect and imperfect duties, helps us to identify the obligations that carry over from principals to agents. Clarity on this issue is necessary to identify the moral obligations within “shareholder primacy” (i.e., “shareholder theory”), which conceives of managers as agents of shareholders. My main claim is that the principal-agent relation requires agents to fulfill nonelective obligations, but it does not always require (and sometimes actually prohibits) discharging discretionary obligations. I show that the requirement to fulfill nonelective obligations is more far-reaching than has been acknowledged by most defenders and critics of shareholder primacy. But I also show that managers are not bound by certain discretionary obligations like charity, showing that their moral obligations are more circumscribed than the obligations that apply to human beings in general.

There is a moral dimension in all business decisions. When planning a corporate takeover, which substance to use for a product, whether to hire temps or full-time workers, or where to invest, all reflect values and hence moral considerations. It is not enough to change people, we must change the structure. Within the corporate structure it is important to have special divisions dedicated to the implementation of ethics such as internal audit committees. The same might be said about business schools; to enhance ethicality, we need both that all faculty become more committed to moral education and special departments dedicated to it. Also the neo-classsical, deontological paradigm needs to be combined with deontological, social paradigms. The challenge that one cannot teach ethics because it's unclear whose values we are going to teach, can be dealt with by teaching values we all share, and knowledge and respect for those that divide us.

M.B.A. programs in the United States continue to admit foreign students in record numbers, yet we know little about how this cultural diversity may impact the values and ethical decision making behavior of either American or foreign students. The research discussed here examined this issue within the context of a large M.B.A. program where non-U S. citizens comprise over twenty percent of the student population.

Comparisons of U.S. and Asian students supported existing notions about the independent vs. interdependent conceptions of the role of the individual within each culture. However, these differences were not a major factor in explaining the significantly different choices made by U.S. and Asian students in selected decision making vignettes.

The logic of the commons is applied to the U.S. labor pool. It is argued that the labor pool is an “active” commons, a commons in which the resource as well as the users of the resource can change voluntarily. For this commons to be tended properly, technical solutions are ineffective and inappropriate; both employer and employee must have trust in the mechanisms that tie them together. Collaborative control is given as a possible framework for making the morality shift necessary to avoid ultimate tragedy.

This study introduces Moscovici’s (1976, 1985) model of social influence to the accounting research domain, and uses an experiment to assess whether his theory explains how different types of discussion affects consensus in auditors’ ethical reasoning. Moscovici’s theory proposes three modalities of influence to describe how consensus is achieved following discussion: conformity, innovation, and normalization. Conformity describes the situation where individuals in the minority (e.g., auditors that do not accept the dominant view) accede to the majority (e.g., auditors that hold the dominant view) as a result of group discussion. Innovation describes the situation where individuals in the majority accede to the minority. Normalization describes the situation where there is reciprocal influence.

We find that conformity occurs when auditors are asked to prescriptively discuss what ideally “should” be the resolution to an ethical dilemma. Normalization occurs when auditors are asked to deliberatively discuss what realistically would be the resolution to an ethical dilemma. The results of this study suggest that prescriptive discussion of an ethical dilemma encourages auditor groups to strive to find the best response to a moral dilemma if it is represented by the majority view. In contrast, deliberative discussion of an ethical dilemma may encourage the elimination of multiple viewpoints. The results of this study have important implications for understanding the social influence process that affects auditors’ ethical reasoning.

The ethical sensemaking approach stands as an essential alternative to the dominant rational and objectivist paradigm of ethical decision-making in organizations. From this perspective, this research explores the intrapersonal interplay of emotions and reflexivity in ethical sensemaking. We analyzed thirty-seven semi-structured interviews conducted with executive coaches sharing a critical incident about an issue they framed as ethical. Our findings show that their ethical decisions unfolded over a three-phase emotional reflexive sensemaking process, where reflexivity allowed for the management of emotions in the form of emotional awareness, emotional unpacking, and emotional (dis)engagement. Therefore, we portray ethics as a fabric, produced through the knitting of emotions and reflexivity. And, while ethics certainly appear to be produced by the subject, we suggest a reciprocal relationship, whereby the very fabric of ethics contributes to the production of the ethical subject.

Private governance raises important questions about democratic representation. Rule making is rarely based on electoral authorisation by those in whose name rules are made—typically a requirement for democratic legitimacy. This requires revisiting the role of representation in input legitimacy in transnational governance, which remains underdeveloped. Focussing on private labour governance, we contrast two approaches to the transnational representation of worker interests in global supply chains: non-governmental organisations providing representative claims versus trade unions providing representative structures. Studying the Bangladesh Accord for Fire and Building Safety, we examine their interaction along three dimensions of democratic representation: 1) creating presence, 2) authorisation, and 3) accountability to affected constituents. We develop a framework that explains when representative claims and structures become complementary but also how the politics of input legitimacy shape whose interests get represented. We conclude by deriving theoretical and normative implications for transnational representation and input legitimacy in global governance.

The purpose of this paper is to formulate and defend a set of moral principles applicable to management. Our motivation is twofold: 1) to increase the coherence and utility of Integrative Social Contracts Theory (ISCT); and 2) to initiate an alternative stream of business ethics research. To those ends, we specify what counts as adequate guidance in navigating the ethical terrain of business. In doing so, a key element of ISCT, Substantive Hypernorms, is found to be flawed beyond repair. So we propose and defend a remedy: prima facie moral principles. After delineating the appropriate criteria and format for such principles, we formulate, explain, and defend five of them. We conclude with a brief comment on future research possibilities.

The detrimental impact of fraud on organisations, the economy, and society makes the fight against it imperative. The objective of this article is to show that a proper understanding of the phenomenon of fraud is required in order to be able to undermine it. Such an understanding required firstly a sufficient definition of fraud that can distinguish it clearly from the related phenomenon of corruption. Secondly, a theoretical framework for understanding and explaining fraud is needed. After providing both such a definition and a theoretical framework, the latter is then used in the analysis of interviews conducted with persons who were convicted on charges of fraud in South Africa. The findings of this analysis are thenused to suggest various avenues for fighting fraud. Among these suggestions are proposals indicating the role that ethical values can play in undermining fraud.

Drawing a framework from strategic stakeholder theory and using 1999 to 2010 panel data from the United Kingdom’s (UK) non-life insurance industry, we examine the effect of reinsurance on the decisions to donate to charities, and the amount given. We find that reinsurance substitutes for charitable giving as it optimizes the interests of multiple stakeholders. We further note that corporate giving is directly related to the size and age of insurers, proportion of female directorships and insider ownership, but generally inhibited by chief executive officer (CEO) bonus plans, dominant shareholders, and financial experts on the board. Interestingly, when reinsurance interacts with board-level variables we find that the donations decision is positively related to CEO bonus plans, and negatively linked with inside ownership and the proportion of female board members. Our research results could have important implications for stakeholders.

Although a research focus on the increasing involvement of corporations in shaping and maintaining the global rules of the game points out promising avenues for future research, it simultaneously makes clear how little currently established, mostly managerial conceptual frameworks have to offer in making sense of these developments. It is argued that we need to expand the rather restricted perspectives that these frameworks provide, in order to explore new conceptual foundations that will not only enable us to travel the confines of the different disciplines involved with the study of the changing role of business in shaping the global rules of the game, but that can also systematically connect normative and positive research questions at the conceptual level. Three directions for this search for new foundations are briefly explored.

Individuals often lie for psychological rewards (e.g., preserving self image and/or protecting others), absent economic rewards. We conducted a laboratory experiment, using a modified dictator game, to identify conditions that entice individuals to lie solely for psychological rewards. We argue that such lies can provide a ready means for individuals to manage others’ impression of them. We investigated the effect of social distance (the perceived familiarity, intimacy, or psychological proximity between two parties) and knowledge of circumstances (whether parties have common or asymmetric information) on the frequency of lying. We found that lying occurs more frequently when social distance is near and that the effect is exacerbated when information is asymmetric. Our theoretical development suggests that, under these conditions, individuals’ need to manage others’ impression is magnified. We discuss the implications of our findings.

In this article, we describe evolutionary psychology and its potential contribution to business ethics research. After summarizing evolutionary theory and natural selection, we specifically address the use of evolutionary concepts in psychology in order to offer alternative explanations of behavior relevant to business ethics, such as social exchange, cooperation, altruism, and reciprocity. Our position is that individuals, groups, and organizations all are affected by similar natural, evolutionary processes, such that evolutionary psychology is applicable at multiple levels of analysis (e.g., individual and group). We introduce a variety of experiments and instruments employed by evolutionary psychologists to illustrate how ethics-relevant cultural norms and practices evolve and are regulated, and to raise the prospect that these experiments and instruments can be useful in future business ethics research.

The problem this paper is concerned with is the politics of reforming embedded, parasitic, sometimes predatory, network-based, corruption subsystems. The politics of corruption subsystems is often embedded in social structures sustained by the collective action of interest groups who benefit from the corruption. Therefore, the long-term effectiveness of approaches that focus solely on isolated, individual acts of corruption are limited. The politics of long-term corruption reform can benefit from a combined action-learning and social movement–based collective approach.

The new push to move political issue activity from the federal to the state and local levels—a new New Federalism—has implications for the ethical and political legitimacy of business political activity. While business political activity at the federal level may be both less costly and less risky than when action shifts to states or localities, at the state or local level it is likely to be more visible, and individual firms may be perceived to have more power. Increased corporate power raises questions about the legitimacy of firm involvement in the political process at the state and local levels. The issue of legitimacy is viewed in the context of the literature on political subcultures being used to study state economic development.

Business ethics courses have been launched with professors from business pulling on one oar, and professors of philosophy pulling on the other, but they lack a sense of direction. Let's begin with the basics: What is an ehtical decision? More fundamentally, why the interest in professional ethics in the first place?

There are over 300 centers for the study of applied ethics in this country—why? The events which face our society today (income and wealth disparity, environmental degradation, etc.) are outside the business-oriented collection of shared beliefs that set our public policy agenda. Our beliefs are too narrow, thus we see, understand, and control small slices of life.

Business ethics should be the study of the structure and impact on us of what we call “business science,” e.g., accounting, marketing, economics, law, etc., and the corresponding study of the process of what Carl Jung called individuation: learning to become one's own unique self in the face of these bodies of professional knowledge which have structured our lives and charted the direction for our sensibilities for too long.

Ethics surely matters to people, but to ignore the fact that other things matter as well is to oversimplify human motivation and behavior. Human action is often the ungainly resolution of conflicts between ethical and egotistical impulses, and the challenge for moral psychology is to understand these conflicts and their resolution.