A social contract account for CSR as an extended model of corporate governance (I): Rational bargaining and justification [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
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Journal of Business Ethics 68 (3):259 - 281 (2006)
This essay seeks to give a contractarian foundation to the concept of Corporate Social Responsibility (CSR), meant as an extended model of corporate governance of the firm. It focuses on justification according to the contractarian point of view (leaving compliance and implementation problems to a related article, [Sacconi 2004b, forthcoming in the Journal of Business Ethics]). It begins by providing a definition of CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm’s stakeholders. Then, by establishing the basic context of incompleteness of contracts and abuse of authority, it analyses how the extended view of corporate governance arises directly from criticism of the contemporary neo-institutional economic theory of the firm. Thereafter, an application of the theory of bargaining games is used to deduce the structure of a multi-stakeholder firm, on the basis of the idea of a constitutional contract, which satisfies basic requirements of impartial justification and accordance with intuitions of social justice. This is a sequential model of constitutional bargaining, whereby a constitution is first chosen, and then a post-constitutional coalition game is played. On the basis of the unique solution given to each step in the bargaining model, the quest for a prescriptive theory of governance and strategic management is accomplished, so that I am able to define an objective-function for the firm consistent with the idea of CSR. Finally, a contractarian potential explanation for the emergence of the multi-fiduciary firm is provided.
|Keywords||fiduciary duties stakeholder theory theory of the firm incompleteness of contracts social contract bargaining games distributive justice impartiality|
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References found in this work BETA
Michael C. Jensen (2002). Value Maximization, Stakeholder Theory, and the Corporate Objective Function. Business Ethics Quarterly 12 (2):235-256.
Robert Phillips, R. Edward Freeman & Andrew C. Wicks (2003). What Stakeholder Theory Is Not. Business Ethics Quarterly 13 (4):479-502.
K. G. Binmore (2005). Natural Justice. Oxford University Press.
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Thomas Donaldson & Thomas W. Dunfee (1995). Integrative Social Contracts Theory. Economics and Philosophy 11 (1):85.
Citations of this work BETA
Michelle Rodrigue, Michel Magnan & Charles H. Cho (2013). Is Environmental Governance Substantive or Symbolic? An Empirical Investigation. Journal of Business Ethics 114 (1):107-129.
Yves Fassin, Annick Van Rossem & Marc Buelens (2011). Small-Business Owner-Managers' Perceptions of Business Ethics and CSR-Related Concepts. Journal of Business Ethics 98 (3):425-453.
Frances Chua & Asheq Rahman (2011). Institutional Pressures and Ethical Reckoning by Business Corporations. Journal of Business Ethics 98 (2):307 - 329.
Alessandro Zattoni (2011). Who Should Control a Corporation? Toward a Contingency Stakeholder Model for Allocating Ownership Rights. Journal of Business Ethics 103 (2):255-274.
Paul Neiman (2013). A Social Contract for International Business Ethics. Journal of Business Ethics 114 (1):75-90.
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