A social contract account for CSR as an extended model of corporate governance (II): Compliance, reputation and reciprocity [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 75 (1):77 - 96 (2007)
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. Whereas, justificatory issues have been discussed in a related paper (Sacconi, L.: 2006b, this journal), in this essay I focus on the implementation of and compliance with this normative model. The theory of reputation games, with reference to the basic game of trust, is introduced in order to make sense of self-regulation as a way to implement the social contract on the multi-fiduciary model of corporate governance. This affords understanding of why self-regulation, meant as mere recourse to a long-run strategy in a repeated trust game, fails. Two basic problems for the functioning of the reputation mechanism are examined: the cognitive fragility problem, and the motivational problem. As regards the cognitive fragilities of reputation (which result from the impact of unforeseen contingencies and from bounded rationality), the paper develops the logic and the structure that self-regulatory norms must satisfy if they are to serve as gap-filling tools with which to remedy cognitive limitations in the reputation mechanism. The motivation problem then arises from the possibility of sophisticated abuse by the firm. Developed in this case is an entirely new application of the theory of conformism-and-reciprocity-based preferences, the result of which is that the stakeholders refuse to acquiesce to sophisticated abuse on the part of the firm.
|Keywords||self-regulation ethical norms reputation games unforeseen contingencies fuzzy logic and default reasoning reciprocity and fairness conformist preferences|
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References found in this work BETA
David Lewis (1969). Convention: A Philosophical Study. Harvard University Press.
David P. Gauthier (1986). Morals by Agreement. Oxford University Press.
Thomas Nagel (1986). The View From Nowhere. Oxford University Press.
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.
Citations of this work BETA
Carmelo Cennamo, Pascual Berrone & Luis R. Gomez-Mejia (2009). Does Stakeholder Management Have a Dark Side? Journal of Business Ethics 89 (4):491 - 507.
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.
Simone de Colle, Adrian Henriques & Saras Sarasvathy (2013). The Paradox of Corporate Social Responsibility Standards. Journal of Business Ethics 125 (2):1-15.
Nancy Christie, Bruno Dyck, Janet Morrill & Ross Stewart (2013). CSR and Accounting: Drawing on Weber and Aristotle to Rethink Generally Accepted Accounting Principles. Business and Society Review 118 (3):383-411.
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