Codes of ethics as contractarian constraints on the abuse of authority within hierarchies: A perspective from the theory of the firm [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Journal of Business Ethics 21 (2-3):189 - 202 (1999)
Abuse of authority is an unsolved problem in the new institutional theory of the firm. This paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics. From the ex-ante standpoint the paper elaborates on the idea of a Social Contract based on Co-operative Bargaining Games and deduces from it the fair/efficient 'Constitution' of the firm endorsed by means of a well-devised corporate code of ethics. From the ex-post standpoint, codes of ethics are proved to be self-enforcing norms, by showing how they put at work the mechanism of a Repeated Game of Reputation within hierarchical transactions (firms) characterised by incomplete contracts and unforeseen events. To accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event, i.e. an event to which also the ex-ante unforeseen, unimaginable states of the world belong to a certain degree.
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Citations of this work BETA
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.
Frances Chua & Asheq Rahman (2011). Institutional Pressures and Ethical Reckoning by Business Corporations. Journal of Business Ethics 98 (2):307 - 329.
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