While much has been written on specificity (e.g., in texts on new institutional economics, agency theory, and team production theory), there are still some insights to be learnt by business ethicists. This article approaches the issue from the perspective of team production, and will propose a new form of corporate governance: enlightened corporate governance, which takes into consideration the specific investments of employees. The article argues that, in addition to shareholders, employees also bear a residual risk which arises due to (...) their specific investments. This residual risk presents a valid and legitimate basis for residual claims. In this way, employees can be seen as residual claimants due to the fact that their income depends upon a hazardous quasi rent. Therefore, this article will call on the fiduciary duty of board members to protect those employees who are exposed to such residual risks and may thus be vulnerable as a result. This leads to a fundamental change of perspective on the “theory of the firm” – a change which will adopt the theories of new institutional economics, agency theory, and team production theory in order to promote business ethics research. Against this background, enlightened corporate governance aims to follow the criterion of specific investments as a legitimate basis for residual claims. Furthermore, it seeks to understand the consequences for board members, and to promote the sharing of control and ownership. The article will close with some discussion of the implications and future prospects for business ethics. (shrink)

The intention of the article is to offer stakeholders affected by mergers a criterion from which moral arguments may be generated for the organization of each individual case. The criterion: "Any operation causing legitimate interests to suffer vital infringement should be avoided in a merger process." A vital infringement of these interests is assumed when the merger undermines unique positive opportunities or considerable impairment in the future, impossible to overcome for the person affected without an unacceptable level of difficulty. Therefore, (...) we mainly concentrate on implicit contracts – which should be based on the principle pacta sunt servanda as well. These contracts are mandatory to run an economy that produces increasingly more knowledge-based goods. (shrink)

In recent times, representatives of American management science have been arguing increasingly for a functionalization of ethics to change economic thinking: what they are seeking is the systematic integration of ethics into the economic paradigm. Using the insights developed by Hirschman, I would like to show how one must first expose the rhetoric of those critics of change in order then to implement that which is new. Such an 'unmasking' works particularly well when one can defuse the arguments of the (...) reactionaries — which is precisely what one achieves by strategically integrating ethics into economics. In his work The Rhetoric of Reaction Hirschman examines three basic forms of reactionary thought: the perversity thesis, the futility thesis, and the jeopardy thesis. According to the perversity thesis, intended goals are transformed into their opposites. The futility thesis argues that the setting of goals is useless since history runs its own course independent of those goals. The jeopardy thesis claims to preserve what already exists since change might substantially endanger that which has already been achieved. The importance of Hirschman's ideas for the strategic interplay between the academic disciplines can be seen quite clearly in the example of German business ethics. This will be displayed below with reference to Hirschman's three theses. Finally, implications will be drawn for business ethics in general and for management theory in particular. (shrink)

Recognition is a basic precondition of participation. This article applies the dimension of recognition to business ethics. A case is made for normative stakeholder management as a voluntary commitment at the level of corporate leadership; this also meets management’s strategic demands. A vitality criterion is offered as a heuristic instrument, suggesting that any operation should be avoided which would violate the legitimate interests of stakeholders. For this reason, the recognition of mutually-conditioned stakeholder claims is understood as the central management idea.

The health care sector is currently in a process of economization which, undoubtedly, has an impact on the relationship of physician and patient. In this article, elements of the new institutional economics are applied to the physician-patient-relationship in the sense of a descriptive heuristics. The authors find out that based on the principal-agent-theory paradoxical action settings ofthe physician can be located. 1t is necessary for policy makers involved in health care to consider these paradoxes. Furthermore, health literacy of lay persans (...) supported by widespread information technology lessens the information gap between physician and patient which changes their interaction with a Iasting effect. Based on this analysis the authors recommend not only to focus on individual ethics of the physician but rather to consider approaches of institutional ethics and incentive systems. (shrink)

In recent times, representatives of American management science have been arguing increasingly for a functionalization of ethics to change economic thinking: what they are seeking is the systematic integration of ethics into the economic paradigm. Using the insights developed by Hirschman, I would like to show how one must first expose the rhetoric of those critics of change (referred to below as conservatives or reactionaries) in order then to implement that which is new (representatives of this approach are referred to (...) below as progressives). Such an ‹unmasking’ works particularly well when one can defuse the arguments of the reactionaries – which is precisely what one achieves by strategically integrating ethics into economics. In his work The Rhetoric of Reaction Hirschman examines three basic forms of reactionary thought: the perversity thesis, the futility thesis, and the jeopardy thesis. According to the perversity thesis, intended goals are transformed into their opposites. The futility thesis argues that the setting of goals is useless since history runs its own course independent of those goals. The jeopardy thesis claims to preserve what already exists since change might substantially endanger that which has already been achieved. The importance of Hirschman’s ideas for the strategic interplay between the academic disciplines can be seen quite clearly in the example of German business ethics. This will be displayed below with reference to Hirschman’s three theses. Finally, implications will be drawn for business ethics in general and for management theory in particular. (shrink)

In this article, the authors attempt to build a bridge between economic theory and medical ethics to offer a new perspective to tackle ethical challenges in the physician–patient encounter. They apply elements of new institutional economics to the ethically relevant dimensions of the physician–patient relationship in a descriptive heuristic sense. The principal–agent theory can be used to analytically grasp existing action problems in the physician–patient relationship and as a basis for shaping recommendations at the institutional level. Furthermore, the patients’ increased (...) self-determination and modern opportunities for the medical laity to inform themselves lead to a less asymmetrical distribution of information between physician and patient and therefore require new interaction models. Based on the analysis presented here, the authors recommend that, apart from the physician’s necessary individual ethics, greater consideration should be given to approaches of institutional ethics and hence to incentive systems within medical ethics. (shrink)