David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 102 (S1):5-20 (2011)
Henry Hansmann has claimed we have reached the “end of history” in corporate law, organized around the “widespread normative consensus that corporate managers should act exclusively in the economic interests of shareholders.” In this paper, I examine Hansmann’s own argument in support of this view, in order to draw out its implications for some of the traditional concerns of business ethicists about corporate social responsibility. The centerpiece of Hansmann’s argument is the claim that ownership of the firm is most naturally exercised by the group able to achieve the lowest agency costs, and that homogeneity of interest within the ownership group is the most important factor in achieving lower costs. He defends this claim through a study of cooperatives, attempting to show that homogeneity is the source of the competitive advantage most often enjoyed by shareholders over other constituency groups, such as workers, suppliers and customers, when it comes to exercising control over the firm. Some business ethicists, impressed by this argument, have taken it to be a vindication of Milton Friedman’s claim that profit-maximization is the only “social responsibility” of management. I would like to suggest that this conclusion does not follow, and that the “Hansmann argument” lends itself to a less minimalist view, what I refer to as a “market failures” approach to business ethics
|Keywords||Shareholder primacy Cooperatives Ownership Henry Hansmann Efficiency|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
John R. Boatright (1994). Fiduciary Duties and the Shareholder-Management Relation. Business Ethics Quarterly 4 (4):393-407.
John Raymond Boatright (2008). Ethics in Finance. Blackwell Pub..
R. Edward Freeman (1994). The Politics of Stakeholder Theory. Business Ethics Quarterly 4 (4):409-421.
Kenneth E. Goodpaster (1991). Business Ethics and Stakeholder Analysis. Business Ethics Quarterly 1 (1):53-73.
Joseph Heath (2007). An Adversarial Ethic for Business: Or When Sun-Tzu Met the Stakeholder. [REVIEW] Journal of Business Ethics 72 (4):359 - 374.
Citations of this work BETA
No citations found.
Similar books and articles
Christopher J. Cowton (2011). Putting Creditors in Their Rightful Place: Corporate Governance and Business Ethics in the Light of Limited Liability. [REVIEW] Journal of Business Ethics 102 (S1):21-32.
Earl W. Spurgin (2001). Do Shareholders Have Obligations to Stakeholders? Journal of Business Ethics 33 (4):287 - 297.
Dwight R. Lee & Richard B. McKenzie (1994). Corporate Failure as a Means to Corporate Responsibility. Journal of Business Ethics 13 (12):969 - 978.
Jeffery D. Smith (2005). Moral Markets and Moral Managers Revisited. Journal of Business Ethics 61 (2):129 - 141.
Rafik Z. Elias (2004). An Examination of Business Students' Perception of Corporate Social Responsibilities Before and After Bankruptcies. Journal of Business Ethics 52 (3):267-281.
O. Scott Stovall, John D. Neill & Brad Reid (2006). Institutional Impediments to Voluntary Ethics Measurement Systems. Journal of Business Ethics 66 (2/3):169 - 175.
Bryan W. Husted (2005). Risk Management, Real Options, Corporate Social Responsibility. Journal of Business Ethics 60 (2):175 - 183.
Sybille Sachs & Marc Maurer (2009). Toward Dynamic Corporate Stakeholder Responsibility: From Corporate Social Responsibility Toward a Comprehensive and Dynamic View of Corporate Stakeholder Responsibility. Journal of Business Ethics 85 (3):535 - 544.
Brenda E. Joyner & Dinah Payne (2002). Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility. [REVIEW] Journal of Business Ethics 41 (4):297 - 311.
Jiyun Wu & Kirk Davidson (2010). How Corporate Social Responsibility and Business Ethics Are Perceived in China. Proceedings of the International Association for Business and Society 21:23-31.
Joseph Heath & Wayne Norman (2004). Stakeholder Theory, Corporate Governance and Public Management: What Can the History of State-Run Enterprises Teach Us in the Post-Enron Era? Journal of Business Ethics 53 (3):247-265.
Ordo-responsibility : conceptual reflections towards A. semantic innovation (2008). Founding Business Ethics and (Corporate) Social Responsibility. Adela Cortina / Corporate Social Responsibility and Business Ethics; Karl Homann / Profit and Morality in Global Responsibility; Markus Beckmann and Ingo Pies. In Jesús Conill Sancho, Christoph Luetge & Tatjana Schó̈nwälder-Kuntze (eds.), Corporate Citizenship, Contractarianism and Ethical Theory: On Philosophical Foundations of Business Ethics. Ashgate Pub. Company
William I. Sauser (2005). Ethics in Business: Answering the Call. [REVIEW] Journal of Business Ethics 58 (4):345 - 357.
Won Yong Oh, Young Kyun Chang & Aleksey Martynov (2011). The Effect of Ownership Structure on Corporate Social Responsibility: Empirical Evidence From Korea. [REVIEW] Journal of Business Ethics 104 (2):283-297.
Jacob M. Rose (2007). Corporate Directors and Social Responsibility: Ethics Versus Shareholder Value. [REVIEW] Journal of Business Ethics 73 (3):319 - 331.
Added to index2012-01-07
Total downloads7 ( #274,000 of 1,699,822 )
Recent downloads (6 months)1 ( #362,609 of 1,699,822 )
How can I increase my downloads?