Can there be a social contract with business?

Professor Donaldson in his book Corporations and Morality has attempted to use a social contract theory to develop moral principles for regulating corporate conduct. I argue in this paper that his attempt fails in large measure because what he refers to as a social contract theory is, in fact, a weak functionalist theory which provides no independent basis for evaluating business corporations. I further argue that given the nature of a morality based on contract and the nature of the modern corporation, it is highly unlikely that any plausible contract theory of business ethics can be developed.Dr. Hodapp is an associate professor of philosophy at The University of Northern Colorado where he teaches courses in business ethics and legal philosophy. He earned a doctorate at Washington University, St. Louis. Dr. Hodapp also has a law degree from The University of Denver and practices law with a Denver law firm specializing in management labor relations.     

The ethical significance of corporate law

Corporate legal scholarship has failed in fundamental ways to grasp the ethical significance of corporate law and policy. While the broader economic and social consequences of particular legal developments are routinely debated, too little reflection is given to how such developments affect the moral quality of individual lives within the corporate hierarchy. What is needed is a framework for illuminating the interaction between developments in corporate legal doctrine and the ethical choices of corporate managers. The ethical significance of corporate law derives from two key factors. First, the corporation as an organization mediates between individuals in the corporate hierarchy and their ethical responsibilities. Second, the organizational choices and decision-making structure of the corporation are to a significant degree the product of corporate law. Jeffrey Nesteruk is an Assistant Professor of Business Policy and Environment at Rider College. In addition to his law degree, he holds a master's degree in philosophy. Professor Nesteruk's interests include both business ethics and corporate law. He has published a number of articles and book reviews in various legal journals such as the Columbia Business Law Review, University of Cincinnati Law Review,and DePaul Law Review.He is currently coauthoring a book, Corporations in the Moral Community,to be published by Holt, Rinehart & Winston, Inc.     

The developmental self-valuing theory: A practical approach for business ethics

Ethics in business has been an increasingly controversial and important topic of discussion over the last decade. Debate continues about whether ethics should be a part of business, but also includes how business can implement ethical theory in day-to-day operations. Most discussions focus on either traditional moral philosophy, which offers little of practical value for the business community, or psychological theories of moral reasoning, which have been shown to be flawed and incomplete. The theory presented here is called the Developmental Self-Valuing Theory, and adapts the general psychological theory of Albert Bandura for ethics in business. In this theory, individuals first learn moral values from associations with others who are significant in their lives. Secondly, self-regulation is learned through a process of self-observation, self-judgment and self-reaction. Thirdly, the individual must believe that he can act ethically. Situational constraints and inducements, as well as positive and negative consequences for specific behaviors, will also affect the level of ethical performance. Each of these elements is examined and combined to achieve a practical method for increasing the level of ethics in corporate activity through selection, training and situational enhancement. Larry Jensen is Professor of Psychology at Brigham Young University. He has published in the areas of moral reasoning, education, and behavior. Steve Wygant is a doctoral candidate in the area of Social Psychology with primary interests in the philosophy of science and personality research.     

Seven Pillars of Business Ethics: Toward a Comprehensive Framework

This article first addresses the question of “why” we teach business ethics. Our answer to “why” provides both a response to those who oppose business ethics courses and a direction for course content. We believe a solid, comprehensive course in business ethics should address not only moral philosophy, ethical dilemmas, and corporate social responsibility – the traditional pillars of the disciple – but also additional areas necessary to make sense of the goings-on in the business world and in the news. These “new pillars,” that we advocate include moral psychology, organizational design and behavior, motivational theory, and a unit on how society, business, and law interact. This last unit builds upon the work of Francis P. McHugh (1988) who urged an integration of “disciplines related to business ethics.” Our seventh pillar would encompass an integration of law, socio-political theory, and policy to demonstrate how business helps construct its own regulatory framework. The concluding recommendation is for a comprehensive “Seven Pillars” of business ethics approach. William Arthur Wines holds a B.S.B.A. with distinction from Northwestern University and a J.D. from the University of Michigan. He is admitted to the practice of law in Minnesota and the State of Washington. His research has appeared in over three dozen journals including the American Business Law Journal, Arizona Law Review, Economics of Education Review, Delaware Journal of Corporate Law, Denver Journal of International Law and Policy, Journal of Business Ethics, Labor Law Journal, Marquette Law Review, Nebraska Law Review, and The William and Mary Journal of Women and the Law. He is the author of two volumes of readings in business ethics and “Ethics, Law, and Business”, published by Lawrence Erlbaum Associates, Inc. in 2006. This material is subject to various copyright laws. Please do not transmit electronically, quote, or copy without the prior written permission of the author.     

A moral basis for corporate philanthropy

The authors argue that corporate philanthropy is far too important as a social instrument for good to depend on ethical egoism for its support. They claim that rule utilitarianism provides a more compelling, though not exclusive, moral foundation. The authors cite empirical and legal evidence as additional support for their claim.Bill Shaw is the Woodson Centennial Professor in Business Administration at The University of Texas at Austin. He teaches courses in business ethics and in legal environment of business. Professor Shaw's articles have appeared in law and ethics journals, and he is co-author, with Art Wolfe, ofStructure of the Legal Environment (1991).Frederick R. Post is Assistant Professor of Business Law and Management at the College of Business Administration, University of Toledo, Toledo, Ohio. Professor Post teaches business law and labor policy courses. His research interests include business ethics and labor management relations. His publications have appeared inThe Journal of Business Ethics, The Mid-American Journal of Business andThe Journal of Legal Studies Education.     

Moral Markets and Moral Managers Revisited

In the wake of recent corporate scandals, this paper examines the claim made by John Boatright that business ethics, as it is currently conceived, “rests on a mistake.” Ethics in business should not be achieved through managerial vision, discretion or responsibility; rather, ethics should shape the design of institutions that regulate business from the outside. What ethicists should advocate for, according to Boatright, are moral markets not moral managers. I explore the empirical and normative dimensions of his claim with special attention paid to the extent to which Boatright’s development of the economic theory of the firm supports his position. I conclude by suggesting some reasons why moral markets and moral management are compatible frameworks for corporate reform.     

Ethics Programs, Perceived Corporate Social Responsibility and Job Satisfaction

Companies offer ethics codes and training to increase employees’ ethical conduct. These programs can also enhance individual work attitudes because ethical organizations are typically valued. Socially responsible companies are likely viewed as ethical organizations and should therefore prompt similar employee job responses. Using survey information collected from 313 business professionals, this exploratory study proposed that perceived corporate social responsibility would mediate the positive relationships between ethics codes/training and job satisfaction. Results indicated that corporate social responsibility fully or partially mediated the positive associations between four ethics program variables and individual job satisfaction, suggesting that companies might better manage employees’ ethical perceptions and work attitudes with multiple policies, an approach endorsed in the ethics literature. Sean Valentine (D.B.A., Louisiana Tech University) is an Associate Professor of Management in the college of Business at the University of Wyoming. His teaching and research interests include business ethics, organizational behavior, and human resource management. He has published in journals such as Behavioral Research in Accounting, Journal of Business Research, Journal of Personal Selling & Sales Management, and Journal of Business Ethics. Gary Fleischman (Ph.D., Texas Tech University) is an Associate Professor and is the McGee Hearne and Paiz Faculty Scholar in Accounting at the University of Wyoming. His teaching expertise is in accounting and entrepreneurship and his research interests are in business ethics and behavioral business research. He has published in journals such as Behavioral Research in Accounting, The International Journal of Accounting and Journal of Business Ethics.     

Attitudes of students and accounting practitioners concerning the ethical acceptability of earnings management

There are many ways that accountants and managers can influence the reported accounting results of their organizational units. When such influence is directed at changing the amount of reported earnings, it is known as earnings management. The purpose of this paper is to present the results of surveys of undergraduate students, MBA students, and practicing accountants concerning their attitudes on the ethical acceptability of earnings management. Analysis of the survey results reveals how the attitudes of the three groups differ and what variables are associated with these differences. Based on the analysis, the authors suggest changes in accounting education curriculum and ethics awareness programs in business which might increase students' and practitioners' sensitivity to the ethical ramifications of earnings management.Marilyn Fischer, is Assistant Professor of Philosophy at the University of Dayton in Dayton, Ohio. She specializes in workplace ethics, particularly in the nonprofit sector, and has published articles in business ethics, and social and political philosophy.Kenneth Rosenzweig, is Associate Professor of Accounting at the University of Dayton in Dayton, Ohio. He specializes in teaching management accounting, and has published articles in a wide variety of accounting areas.     

Business,ethics and law

The comparative seriousness of business law and business ethics gives some business people the impression that there is nothing important in business ethics. The costly penalties of illegal conduct compared to the uncertain consequences of unethical conduct support a common illusion that business ethics is much less important than law for business people. To dispel the illusion I distinguish two perspectives from which we can view the relation of business and normative systems: the internal and external perspectives. I show that in one perspective, ethics is hardly less important than law, and in the other perspective it is more important, more fundamental than law. I conclude with a discussion of why business persons must place ethical and legal rules ahead of profits.Richard McCarty has been a lecturer in the philosophy department at East Carolina University in Greenville, N.C. since 1986. He has published articles primarily in aesthetics and ethics.     

Moral Issues and Gender Differences in Ethical Judgment using Reidenbach and Robin’s (1990) Multidimensional Ethics Scale: Implications in Teaching of Business Ethics

In this study, we examined moral issues and gender differences in ethical judgment using Reidenbach and Robin’s [Journal of Business Ethics 9 (1990) 639) multidimensional ethics scale (MES). A total of 340 undergraduate students were asked to provide ethical judgment by rating three moral issues in the MES labeled: ‚sales’, ‚auto’, and ‚retail’ using three ethics theories: moral equity, relativism, and contractualism. We found that female students’ ratings of ethical judgment were consistently higher than that of male students across two out of three moral issues examined (i.e., sales and retails) and ethics theories; providing support for Eagly’s [1987, Sex Differences in Social Behavior: A Social-role Interpretation. (Lawrence Erlbaum Associates, Inc, Hillsdale, NJ, England)] social role theory. After controlling for moral issues, women’s higher ratings of ethical judgment over men’s became statistically non-significant. Theoretical and practical implications based on the study’s findings are provided. Nhung T. Nguyen, assistant professor of human resource management at Towson University, received her Ph.D. in management from Virginia Commonwealth University in 2001. Her research focuses on the use of situational judgement and personality tests in personnel selection, ethics in management education, and the application of meta-analysis and structural equations modeling in organizational research. Her research has appeared in the Journal of Applied Psychology, the International Journal of Selection and Assessment, Applied H.R.M. Research, and Journal of Applied Social Psychology among others. M. Tom Basuray, Professor of Management at Towson University, received his Ph.D. in Business Administration in 1974 from University of Oklahoma. His research interests are in areas of organizational effectiveness, leadership and development. His articles have appeared in Journal of Organizational Change Management, Education & Psychological Measurement, International Journal of Management, Leadership and Organizational Development Journal, and Journal of Experiential Learning and Simulation. He has consulted with U.S. Environmental Protection Agency, Public Broadcasting Corporation, and various state and municipal government agencies both in Maryland and North Dakota. William P.Smith, Associate Professor of Management in the College of Business and Economics at Towson University, received his Ph.D. in Business Administration from Arizona State University in 1982. His research interests include business ethics, privacy in the workplace and the role of social activism in corporate governance. Donald Kopka, an Assistant Professor at Towson University, received his Ph.D., in International Business from George Washington University in 1995. He teaches Business Strategy, Management Principles, and Entrepreneurship and Small Business, and was Director of the Cornerstone-Professional Experience Program in the College of Business and Economics from 1999–2003. In 2004 he was a Fulbright Scholar in Vietnam where he taught entrepreneurship and business strategy, worked on curriculum development, and conducted ongoing research on supporting industries. Information on his Fulbright experience can be found at his website . His research interests include entrepreneurship, business development, and teaching pedagogy. He formerly ran a property management business, was a program manager at the U.S. Small Business Administration, and served as a Peace Corps Volunteer in the Philippines. Donald N. McCulloh, Lecturer in Management at Towson University, received his M.S. degree in Financial Management from The George Washington Unversity in 1968. He teaches Management Principles and has also taught Leadership. He served as Vice President for Administration and Finance at Towson University until his retirement in 1997, since then he has been a full-time member of the Management faculty. He has also served in the United States Air Force, and worked in several manufacturing industries and the automotive industry. He was Executive Director of a non-profit community development corporation.     

Corporations,minors, and other innocents — A reply to R. E. Ewin

R. E. Ewin has argued that corporations are moral persons, but Ewin describes them as being unable to think or to act in virtuous and vicious ways. Ewin thinks that their impoverished emotional life would not allow them to act in these ways. In this brief essay I want to challenge the idea that corporations cannot act virtuously. I begin by examining deficiencies in Ewin's notion of corporate personhood. I argue that he effectively reduces corporations to the status of incompetent patients. I shall make use of a richer notion of corporate personhood as I explore the logical relationship between corporate action and the quality of the corporate emotional life. After discussing an alternate methodology for making moral assessments of action I consider briefly two corporate disasters: the crash on Mt. Erebus, the Imperial Foods plant fire. These cases are used to show the inadequacy of Ewin's thesis that only corporate managers are capable of displaying vice.P. Eddy Wilson taught philosophy full time for two years after graduation at the University of the South and he was a participant in Peter French's 1990 NEH Summer Seminar. He is currently employed as a member of the Department of Philosophy and Religion of Shaw University to teach philosophy at their High Point CAPE Center in High Point, North Carolina. He is interested in philosophy of religion, process philosophy, and ethics. Two of his articles have been accepted for publication by theJournal of Social Philosophy.     

The Canadian Research Strategy For Applied Ethics: A new opportunity for research in business and professional ethics

InTowards a Canadian Research Strategy ForApplied Ethics, I put forward proposals to advance Canadian research in applied ethics. I focus on the assessment made of Canadian teaching, consulting, and research in business and professional ethics and then on the strategy proposed for advancing work in these areas. I argue for research which is [1] oriented to the ethical needs of those in business and the professions, [2] interdisciplinary, and [3] involves the creation of national and international networks. I then offer some preliminary observations on the first two years of the new research strategy's operation.Michael McDonald occupies the Maurice Young Chair of Applied Ethics at the University of British Columbia, where one of his principal roles is in the establishment of a university-wide Centre for Applied Ethics. He is currently President of the Canadian Philosophical Association and a past Editor of the Philosophical journalDialogue. He has published in ethics, philosophy of law, and political philosophy.     

On monopoly in business ethics: Can philosophy do it all?

Arguing that the grounding of philosophical ethics is more complex than De George's reference to reason and human experience reflects, and that religious ethics is less doctrinaire and less given to indoctrination than De George suggests, Camenisch maintains that De George has portrayed an artifically wide gap between the two fields. Rejecting De George's typology of religious ethics as unhelpful, Camenisch suggests that the crucial distinction between philosophical and religious/theological ethics is the community or lived nature of the latter. The implications of this dimension of religious ethics for business ethics is briefly explored in relation to the use of cases, the role of the lives of moral exemplars, corporate responsibility, and obligations to future generations, to indicate not that religious ethics generates answers different from those of philosophy, but that it provides a different perspective on some central moral matters. Paul F. Camenisch is Professor of Religious Studies at DePaul University. He has published numerous articles in professional journals and is the author of Grounding Professional Ethics in a Pluralistic Society (1983).     

The Virtuous Manager: A Vision for Leadership in Business

This article seeks to contribute to a vision for leadership in business based on a recovery of virtue. The vision for leadership articulated here draws principally on the writings of the classical philosopher Aristotle and of the contemporary philosopher Josef Pieper. Without discounting the ever-increasing complexity of modern business, this essay will attempt to reconstruct Aristotle’s emphasis on virtue and moral character, and argues for the philosopher’s relevance to modern management and corporate leadership. The paper concludes that the message of virtue is a message of hope and attempts to find plain language to articulate its value to those engaged in business or concerned with the formulation of government policy. Gabriel Flynn teaches at Mater Dei Institute, Dublin City University in Dublin. He holds higher degrees in moral and systematic theology. He received his doctorate from the University of Oxford. He is editor of Leadership and Values for Business: European and American Perspectives (New York/Berlin: Springer, forthcoming 2007). He has contributed scholarly articles to Louvain Studies, Concilium, New Blackfriars and elsewhere.     

Aesthetics as a Foundation for Business Activity

This paper identifies the ultimate justification for business activity as an aesthetic justification. Aesthetics, loosely defined as the appreciation of beauty, subsumes both ethics and economics within an holistic justificatory mechanism for business decisions. Five essential qualities of aesthetic judgment are identified: disinterest, subjectivity, inclusivity, contemplativity, and internality. The quality of aesthetic judgment, exercised by the individual through the organization, will determine the extent to which business activity enhances quality of life. John Dobson is Professor of Finance at California Polytechnic State University. His primary area of interest is financial ethics, in particular how the theory of ethics relates to financial side of business activity. He has published articles on ethics and finance in various academic journals, and has published two books, both of which investigate the synthesis of finance and ethics. His current research focuses on the connections between psychology, finance theory, and moral philosophy.     

Two concepts of communication as criteria for collective responsibility

In part one I review the literature, exposing some of the ambiguities, contradictions, and antinomies involved in the notion of communication. The literature presents us with two rather contradictory notions of communication: one rhetorical, the other responsible. Disparity between the two may be seen to jeopardize a new moral mandate to corporate business. In part two I develop more explicitly the models of rhetorical and responsible communication, locating the issue at the center of a solution to the problem of collective responsibility. A proper exercise of corporate moral responsibility, I argue, is compatible only with a model of responsible communication. I conclude by challenging top management to strive toward a goal of responsible communication at all levels in their respective corporate institutions. Dennis Weiser received his B.A. in Philosophy from Westminster College in 1978. Since then he has worked at a variety of occupations, including a brief stint as deckhand on the Mississippi River System. In 1986 he embarked on graduate study in philosophy at The University of Kansas in Lawrence, where his chief interests are in aesthetics and applied ethics. He is currently engaged in working out the implications of Hannah Arendt's theory of judging for institutional design and public policy. Mr. Weiser is the author of several collections of poetry and fiction. He was formerly regular editorial columnist for The Kansas City Business Journal.     

An Exploration into the Developmental Psychology of Ethical Theory with Implications for Business Practice and Pedagogy

This article is an attempt to understand ethical theory not just as a set of well-developed philosophical perspectives but as a range of moral capacities that human beings more or less grow into over the course of their lives. To this end, we explore the connection between formal ethical theories and stage developmental psychologies, showing how individuals mature morally, regarding their duties, responsibilities, ideals, goals, values, and interests. The primary method is to extract from the writings of Kohlberg and his students the cues that help to flesh out a developmental picture of a wide range of ethical perspectives. Thus, developmental psychology benefits from gaining a broader understanding of “morality” and “ethics,” and ethical theory benefits from a richer understanding of how moral maturity arises from youthful beginnings in juvenile and adolescent thinking. Results of this study offer insight into the difficulty of teaching ethics and a refined ability to assess moral maturity in business activity. F. Neil Brady is the Jack R. Wheatley Professor of Management Ethics in the Romney Institute of Public Management and a member of the Ethics Group at the Marriott School of Management at Brigham Young University. He has published over thirty articles on ethics in a variety of journals including the Academy of Management Review, Administration & Society, and the Journal of Public Administration Research and Theory. He has authored Ethical Managing (Macmillan 1990) and edited Ethical Universals in International Business (Springer Verlag 1996). For twenty years, his research has focused on the application of ethical theory to managerial decisions. David W. Hart is assistant professor of public management in the Romney Institute of Public Management and a member of the Ethics Group at the Marriott School of Management at Brigham Young University. He received his PhD from the State University of New York at Albany. His current research focuses on administrative ethics, business-government interaction, and the external environment of organizations. He has published in a variety of journals and is the co-author of a book. Wall Street Polices Itself: How Securities Firms Manage the Legal Hazards of Competitive Pressures (Oxford University Press, 1998).     

Just Doing Business or Doing Just Business: Google,Microsoft, Yahoo! and the Business of Censoring China’s Internet

This paper addresses the criticism recently directed at Internet companies who have chosen to do business in China. Currently, in order to conduct business in China, companies must agree to the Chinese government’s rule of self-censoring any information the government deems inappropriate. We start by explaining how some of these companies have violated the human rights of Chinese citizens to freely trade information. We then analyze whether the justifications and excuses offered by these companies are sufficient to absolve them of moral responsibility. We argue that both justifications and excuses offered are insufficient. Wilfully abiding by unjust laws, albeit necessary to do business in China, should not trump moral actions that protect rights. “This is not something we did enthusiastically, or not something that we are proud of at all.”– Elliot Schrage answering questions from Congress regarding Google’s decision to censor its Internet searches in China Neil Haddow is currently finishing his PhD in philosophy at the University of Waterloo. His interests are moral and political philosophy at the theoretical and applied levels. He is the co-author of another paper forthcoming in The Journal of Business Ethics on age discrimination and automobile insurance. G. Elijah Dann presently lectures for the Department of Philosophy at the University of Toronto. He is author of After Rorty: The possibilities for ethics and religious belief (Continuum Press, 2006), and is editor of a forthcoming book on Christianity entitled, Leaving Fundamentalism (Wilfrid Laurier University Press, 2007).     

Foreign Corrupt Practices Act: A legal and moral analysis

The author examines the categories of bribes that are prohibited under the Foreign Corrupt Practices Act from the perspective of three significant moral theories: utility, rights and justice. He concludes that the Act does not go too far in demanding ethical behaviors from U.S. business people doing business in foreign markets, therefore, it is not in need of a major revision. With regard to accounting provisions, movement from a reasonableness standard to one of materiality would be appropriate however. Bill Shaw is Professor of Business Law at the University of Texas at Austin. His research interests are in the area of business ethics, corporate social responsibility, and environmental law. During the Spring Semester, 1987, he held the Lynn S. Autrey Visiting Chair of Business Ethics, Rice University. His articles have appeared in various journals and he is the author of Environmental Law: People Pollution and Land Use (1976) and The structure of the Legal Environment (1987) (with Art Wolfe).     

Unredistributable corporate moral responsibility

Certain cases of corporate action seem especially resistant to a shared moral evaluation. Conservatives may argue that if bad intentions cannot be demonstrated, corporations and their managers are not blame-worthy, while liberals may insist that the results of corporate actions were predictable and so somebody must be to blame. Against this background, the theory that sometimes a corporation's moral responsibility cannot be redistributed, even in principle, to the individuals involved, seems quite attractive.This doctrine of unredistributable corporate moral responsibility (UCMR) is, however, ultimately indefensible. I show this in several steps. After first locating UCMR in the context of the evolving debate about corporate moral agency, the paper reexamines cases cited in defense of UCMR and takes up the attempt to defend it by identifying corporate moral agency with corporate practices. A further section explores the claim that UCMR is a convention distinct from, yet compatible with, traditional natural notions of responsibility. The final section develops a notion of combined akratic agency to provide an alternate explanation, compatible with rejection of UCMR, of the phenomena which make the doctrine attractive. Jan Edward Garrett is Associate Professor of Philosophy at Western Kentucky University, with major interests in business ethics, the metaphysics of social organizations, and ancient philosophy. He has published on Aristotle's conception of techne (craft) in The Modern Schoolman (1987) and his article Persons, Kinds and Corporations: An Aristotelian View has appeared in Philosophy and Phenomenological Research. He attended Peter French's NEH Summer Seminar on Corporate Responsibility in 1983.