This chapter contains sections titled: Background: mapping the field of business ethics The evolution of social contract approaches to business ethics Integrative social contracts theory (ISCT) Remaining issues and promising research directions for contractarian business ethics.

Extant social contracts, deriving from communities of individuals, constitute a significant source of ethical norms in business. When found consistent with general ethical theories through the application of a filtering test, these real social contracts generate prima facie duties of compliance on the part of those who expressly or impliedly consent to the terms of the social contract, and also on the part of those who take advantage of the instrumental value of the social contracts. Businesspeople typically participate in multiple (...) communities and, as a consequence, encounter conflicting ethical norms. Priority rules can be devised to resolve such conflicts. The framework of extant social contracts merges normative and theoretical research in business ethics and specifies a domain for empirical studies. (shrink)

This paper extends the discussion of guanxi beyond instrumental evaluations and advances a normative assessment of guanxi. Our discussion departs from previous analyses by not merely asking, Does guanxi work? but rather Should corporations use guanxi? The analysis begins with a review of traditional guanxi definitions and the changing economic and legal environment in China, both necessary precursors to understanding the role of guanxi in Chinese business transactions. This review leads us to suggest that there are distinct types of, and (...) uses for guanxi. We identify the potentially problematic aspects of certain forms of guanxi from a normative perspective, noting among other things, the close association of particular types of guanxi with corruption and bribery. We conclude that there are many different forms of guanxi that may have distinct impacts on economic efficiency and the well-being of ordinary Chinese citizens. Consistent with Donaldson and Dunfee (1999), we advocate a particularistic analysis of the different forms of guanxi. (shrink)

During the past ten years Integrative Social Contracts Theory (ISCT) has become part of the repertoire of specialized decision-oriented theories in the business ethics literature. The intention here is to (1)␣provide a brief overview of the structure and strengths of ISCT; (2) identify recurring themes in the extensive commentary on the theory including brief mention of how ISCT has been applied outside the business ethics literature; (3) describe where research appears to be headed; and (4) specify challenges faced by those (...) who seek to reform ISCT. Key themes in the critiquing literature relate to (a) the identification process for hypernorms; (b) justification of the recognition of hypernorms; (c) proposals for considering meso or meta norms; (d)␣clarification of the relationship between stakeholder concepts and ISCT; (e) problems with potentially unoccupied moral free space; (f) sources of ethical obligation within the ISCT framework; and (g) the potential role for concepts of stakeholder dialogue and engagement. (shrink)

Firms possessing a unique competency to rescue the victims of a human catastrophe have a minimum moral obligation to devote substantial resources toward best efforts to aid the victims. The minimum amount that firms should devote to rescue is the largest sum of their most recent year’s investment in social initiatives, their five-year trend, their industry’s average, or the national average. Financial exigency may justify a lower level of investment. Alternative social investments may be continued if they have an equally (...) compelling rationale. These duties apply to the global pharmaceutical companies in the context of the AIDS pandemic in sub-Saharan Africa. (shrink)

Last June, Moscow was the setting for a Russian‐sponsored conference on business ethics. One of the participants from the USA, Professor Thomas W. Dunfee, here gives his impressions of what was clearly an instructive occasion. Professor Dunfee is Kolodny Professor of Social Responsibility at the Wharton School of Business of the University of Pennsylvania and is an international authority on business ethics.“Older people have an ethics problem. By that, I mean they have ethics. To survive, I can (...) break a law if I need to and if the risks aren't too large. Older people wouldn't even think in such a way.” Dimitri Zotov, explaining why young people are in high professional demand in the new Russia, Wall Street Journal, p.A5, Col.1, 8/2/93.“Shell‐shocked men and women spend their days hacking through the post‐Soviet wilderness in search of a near‐mythical creature, an honest joint‐venture partner.” David Brooks, “Cracking That Post‐Soviet Market”, Wall Street Journal, editorial page, 8/24/93. (shrink)

Firms possessing a unique competency to rescue the victims of a human catastrophe have a minimum moral obligation to devote substantial resources toward best efforts to aid the victims. The minimum amount that firms should devote to rescue is the largest sum of their most recent year’s investment in social initiatives, their five-year trend, their industry’s average, or the national average. Financial exigency may justify a lower level of investment. Alternative social investments may be continued if they have an equally (...) compelling rationale. These duties apply to the global pharmaceutical companies in the context of the AIDS pandemic in sub-Saharan Africa. (shrink)

Abstract:Social contract is rapidly becoming one of the significant alternatives for analyzing ethical issues in business. Contractarian approaches emphasizing consent as a means of justifying principles can provide needed context for rendering normative judgements concerning economic behaviors. Current research issues include developing tests of consent for both hypothetical and extant social contracts, and empirically testing the assumptions of the major contractarian approaches. Open questions include exploring the relationship between contractarian business ethics and other approaches, such as stakeholder management and virtue (...) based ethics; and analysis of the intersection of contractarian approaches with the findings and assumptions of the field of moral psychology. Finally, the managerial utility of social contract based approaches needs to be explored with emphasis on identifying “translator” concepts. (shrink)

Abstract:A marketplace of morality (MOM) is a place where individuals act under the influence of their moral desires. A MOM produces an output representing the aggregate acted-upon moral preferences of its participants. Individual behavior is influenced by POPs, or passions of propriety. People implement POP preferences when they buy stock, purchase goods and services, choose jobs and so on. Firms respond by social cause marketing and other devices which encourage customers to align their social preferences with those represented by the (...) firm. The outputs of MOM constitute an important reference point for understanding business morality. Even so, the normative status of MOM outputs must be subject to principles of universal morality. A principle of greater preponderance is offered as a means for determining when a MOM output is ethically legitimate.A theory of moral choice, based upon the concept of a MOM, may have potential for providing a unifying framework integrating moral preferences, reasoning, behaviors and organizational contexts with broader political and economic concepts. (shrink)

A project on teaching business ethics at The Wharton School concluded that ethics should be directly incorporated into key MBA courses and taught by the core business faculty. The project team, comprised of students, ethics faculty and functional business faculty, designed a model program for integrating ethics. The project was funded by the Exxon Education Foundation.The program originates with a general introduction designed to familiarize students with literature and concepts pertaining to professional and business ethics and corporate social responsibility. This (...) may be accomplished through orientation sessions, readings, packages, short classes and lectures. (shrink)

Abstract:A marketplace of morality (MOM) is a place where individuals act under the influence of their moral desires. A MOM produces an output representing the aggregate acted-upon moral preferences of its participants. Individual behavior is influenced by POPs, or passions of propriety. People implement POP preferences when they buy stock, purchase goods and services, choose jobs and so on. Firms respond by social cause marketing and other devices which encourage customers to align their social preferences with those represented by the (...) firm. The outputs of MOM constitute an important reference point for understanding business morality. Even so, the normative status of MOM outputs must be subject to principles of universal morality. A principle of greater preponderance is offered as a means for determining when a MOM output is ethically legitimate.A theory of moral choice, based upon the concept of a MOM, may have potential for providing a unifying framework integrating moral preferences, reasoning, behaviors and organizational contexts with broader political and economic concepts. (shrink)

In the recent case of Nike v. Kasky both sides argued that their standard for distinguishing commercial speech from political speechwould create the better policy for ensuring accurate and complete disclosure of social information by corporations. Using insights frominformation economics, we argue that neither standard will achieve the policy goal of optimal truthful disclosure. Instead, we argue that the appropriate standard is one of optimal truthful disclosure—balancing the value of speech against the costs of misinformation. Specifically, we argue that an (...) SEC-sanctioned safe harbor available under a closely supervised system for social reporting will bring about optimal truthful disclosure. The scheme is intended to enhance stakeholder confidence in corporate social and political commentary, while at the same time encouraging corporations to provide accurate information in a fair playing field of public debate. (shrink)

Although many challenges remain, business ethics is flourishing in North America. Prominent organizations give annual business ethics awards, investments in socially screened mutual funds are increasing, ethics officers and corporate ombudspersons are more common and more influential, and new ideas are being tested in practice. On the academic side, two major journals specializing in business ethics are well-established and other major journals often include articles on business ethics and new organizations emphasizing ethics have been initiated. Within business schools, the number (...) of endowed chairs is growing and the ethics curriculum is expanding. Canada is a major player in the business ethics discipline while business ethics in Mexico is just beginning to emerge as a focus of interest in both the business and academic communities. (shrink)

This article introduces several papers on social contracts and business ethics, published in the April 2005 issue of the journal "Business Ethics Quarterly.".

We present two studies that examine the effects of guanxi on multiple social groups from the perspective of Chinese business people. Study 1 (N = 203) tests the difference in perceived effects of six guanxi contextualizations. Study 2 (N = 195) examines the duality of guanxi as either helpful or harmful to social groups, depending on the contextualization. Findings suggest guanxi may result in positive as well as negative outcomes for focal actors and the aggregate.

. Recent corporate scandals have focused the attention of a broad set of constituencies on reforming corporate governance. Boards of directors play a leading role in corporate governance and any significant reforms must encompass their role. To date, most reform proposals have targeted the legal, rather than the ethical obligations of directors. Legal reforms without proper attention to ethical obligations will likely prove ineffectual. The ethical role of directors is critical. Directors have overall responsibility for the ethics and compliance programs (...) of the corporation. The tone at the top that they set by example and action is central to the overall ethical environment of their firms. This role is reinforced by their legal responsibilities to provide oversight of the financial performance of the firm. Underlying this analysis is the critical assumption that ethical behavior, especially on the part of corporate leaders, leads to the best long-term interests of the corporation. We describe key components of a framework for a code of ethics for corporate boards and individual directors. The proposed code framework is based on six universal core ethical values: (1) honesty; (2) integrity; (3) loyalty; (4) responsibility; (5) fairness; and (6) citizenship. The paper concludes by suggesting critical issues that need to be dealt with in firm-based codes of ethics for directors. (shrink)

When an organization is pressured to respond to moral expressions in capital, consumer and labor markets, it faces a dilemma of how to respond. Should Shell have given in to Greenpeace in deciding how to dispose of the Brent Spar Oil Rig? Should Cracker Barrel give in to pressures to fire homosexual employees? Firms should consider the nature of the moral expressions pressuring them in deciding how to respond. Moral expressions can be divided into three descriptive categories: Benign, Disputed and (...) Problematic. Each carries different implications for corporate action and in some cases will justify corporate resistance to moral expressions by stakeholders. In order to appropriately respond to moral pressures, firms should first engage in a process of discovery aimed at identifying moral pressures relevant to the firmös missions and objectives and then engage in a process of justification concerning their responses. Such a conclusion is consistent with important trends of contemporary thought in ethics and political philosophy and is strongly supported by Kantian analysis. (shrink)

Looking at the Milken case has provided an opportunity to apply a social contracts based set of rule of thumb principles to insider trading and related issues. The actions involved were found to: * 1 always violate the principle of willing compliance with law * 2 in certain instances violate the principle of avoiding actual conflicts of interest * 3 in certain instances violate the principle of honoring confidentiality.

Last June, Moscow was the setting for a Russian‐sponsored conference on business ethics. One of the participants from the USA, Professor Thomas W. Dunfee, here gives his impressions of what was clearly an instructive occasion. Professor Dunfee is Kolodny Professor of Social Responsibility at the Wharton School of Business of the University of Pennsylvania and is an international authority on business ethics.“Older people have an ethics problem. By that, I mean they have ethics. To survive, I can (...) break a law if I need to and if the risks aren't too large. Older people wouldn't even think in such a way.” Dimitri Zotov, explaining why young people are in high professional demand in the new Russia, Wall Street Journal, p.A5, Col.1, 8/2/93.“Shell‐shocked men and women spend their days hacking through the post‐Soviet wilderness in search of a near‐mythical creature, an honest joint‐venture partner.” David Brooks, “Cracking That Post‐Soviet Market”, Wall Street Journal, editorial page, 8/24/93. (shrink)

This article provides an overview of current and prospective ethical issues facing commercial (as opposed to leisure) travel agents. Industry wide ethical issues include conflicting pressures from suppliers and clients, competency requirements for agents and misleading advertising and sales claims (vaporware in industry jargon). Issues with travel suppliers include calculation and payment of commissions, fare loopholes, frequent flyer plans and the use and abuse of benefits directed to individual employees. Issues with corporate clients of travel agents include hidden preferred carriers (...) or suppliers, client pressure to use fare loopholes and hidden relationships with corporate travel consultants. Future issues include protecting client privacy, free riding, and divergent international business practices. (shrink)

Hasnas is correct that ethicists should pay attention to law and be on guard for perverse effects from regulation and legal interpretations that may encourage or require unethical behavior. He is not correct that the business ethics literature assumes that law and ethics consistently pull in the same direction. Analysis of the relationship between law and ethics requires nuanced, in-depth treatment. An example is provided regarding the well-known case of United States v. Park. Ultimately, there is a need for more (...) serious consideration of ethical principles and norms in legal policy making and practice. (shrink)

Hasnas is correct that ethicists should pay attention to law and be on guard for perverse effects from regulation and legal interpretations that may encourage or require unethical behavior. He is not correct that the business ethics literature assumes that law and ethics consistently pull in the same direction. Analysis of the relationship between law and ethics requires nuanced, in-depth treatment. An example is provided regarding the well-known case of United States v. Park. Ultimately, there is a need for more (...) serious consideration of ethical principles and norms in legal policy making and practice. (shrink)

In the recent case of Nike v. Kasky both sides argued that their standard for distinguishing commercial speech from political speechwould create the better policy for ensuring accurate and complete disclosure of social information by corporations. Using insights frominformation economics, we argue that neither standard will achieve the policy goal of optimal truthful disclosure. Instead, we argue that the appropriate standard is one of optimal truthful disclosure—balancing the value of speech against the costs of misinformation. Specifically, we argue that an (...) SEC-sanctioned safe harbor available under a closely supervised system for social reporting will bring about optimal truthful disclosure. The scheme is intended to enhance stakeholder confidence in corporate social and political commentary, while at the same time encouraging corporations to provide accurate information in a fair playing field of public debate. (shrink)

Social investing, though not yet fully mainstream, has the potential to obtain such status. Questions relating to the future of social investing include the following. (1) What properly falls within the ambit of social investing? Assuming that no single definition of social responsibility is feasible, what then are the limits? (2) What do we need to know about investor psychology concerning social investing? What motivates people to buy socially screened investments and why do they sometimes act inconsistently? (3) How can (...) we improve the measures of social performance? Is it possible to develop GAAP and GAAS equivalents for social reporting? (4) Should social reports by firms be audited? If so, how? (5) What sorts of public policies are necessary to support the social screening of investments? (shrink)

This article reports on a telephone survey of business school faculty in the United Kingdom, Asia and North America concerning efforts to internationalize the teaching of business ethics. International dimensions of business ethics are currently given only limited coverage in the business school curriculum with over half of the faculty surveyed indicating that less then 10% of their ethics teaching focuses on global issues. Teaching objectives vary widely with some faculty emphasizing a relativistic, diversity oriented perspective while others stress the (...) universality of values. The respondents identified a great need to develop teaching materials based upon non-U.S. corporations and/or non-U.S. incidents. (shrink)

This latest volume in the acclaimed Ruffin Series in Business Ethics brings together the contributions to the annual Ruffin Lecture series, in which some of the leading scholars in business ethics addressed the question: Can business, and business education, be considered one of the humanities, or is it in a class by itself? At a time when business is coming under attack for its apparent transgressions, this book iluminates the special values that inhere in the business world. Arguing all sides (...) of the issue, the distinguished contributors include Richard DeGeorge, Ronald Green, Thomas Dunfee, Robert Solomon, Edwin Hartman, Peter French, Patricia Werhane, Clarence Walton, W. Michael Hoffman, David Fedo, Kenneth Andrews, Joanne Ciulla, Manuel Velasquez, and George Brenkert. The editors contribute an informative Introduction and an Epilogue to set the debate in its proper context. (shrink)

In Freedom: An Impossible Reality, Ray Tallis argues that we escape imprisonment by causal determinism, and thus gain free will, by the virtual distance from natural laws afforded us by intentionality, a human capacity that he claims cannot be naturalized. I respond that we can’t know in advance that intentionality will never be subsumed by science, and that our capacities to entertain possibilities and decide among them are natural cognitive endowments that supervene on generally reliable neural processes. Moreover, any disconnection (...) from the multi-level determinants that account for human behavior cannot augment, but would likely undermine, effective human agency. Our full inclusion in nature, understood in terms of a pragmatic, explanatory determinism, is therefore not a prison from which we need to escape. (shrink)

THE INTERPRETIVE TASK The aim of ethical inquiry is to understand moral experience, not simply as a given, but with reference to human potentialities. ...

Since Hilary Putnam offered multiple realization as an empirical hypothesis in the 1960s, philosophical consensus has turned against the idea that mental processes are identifiable with brain processes, and multiple realization has become the keystone of the 'antireductive consensus' across philosophy of science. Thomas W. Polger and Lawrence A. Shapiro offer the first book-length investigation of multiple realization, which serves as a starting point to a series of philosophically sophisticated and empirically informed arguments that cast doubt on the generality (...) of multiple realization in the cognitive sciences. They argue that mind-brain identities have played an important role in the growth and achievements of the cognitive sciences, and suggest that there is little prospect for multiple realization in an empirically-based theory of mind. This leads Polger and Shapiro to offer an alternative framework for understanding explanations in the cognitive sciences, as well as in chemistry, biology, and other non-basic sciences. (shrink)

In Natural Minds Thomas Polger advocates, and defends, the philosophical theory that mind equals brain -- that sensations are brain processes -- and in doing so brings the mind-brain identity theory back into the philosophical debate about consciousness. The version of identity theory that Polger advocates holds that conscious processes, events, states, or properties are type- identical to biological processes, events, states, or properties -- a "tough-minded" account that maintains that minds are necessarily indentical to brains, a position held (...) by few current identity theorists. Polger's approach to what William James called the "great blooming buzzing confusion" of consciousness begins with the idea that we need to know more about brains in order to understand consciousness fully, but recognizes that biology alone cannot provide the entire explanation. Natural Minds takes on issues from philosophy of mind, philosophy of science, and metaphysics, moving freely among them in its discussion.Polger begins by answering two major objections to identity theory -- Hilary Putnam's argument from multiple realizability and Saul Kripke's modal argument against mind-brain identity. He then offers a detailed account of functionalism and functional realization, which offer the most serious obstacle to consideration of identity theory. Polger argues that identity theory can itself satisfy the kind of explanatory demands that are often believed to favor functionalism. (shrink)

May lethal autonomous weapons systems—‘killer robots ’—be used in war? The majority of writers argue against their use, and those who have argued in favour have done so on a consequentialist basis. We defend the moral permissibility of killer robots, but on the basis of the non-aggregative structure of right assumed by Just War theory. This is necessary because the most important argument against killer robots, the responsibility trilemma proposed by Rob Sparrow, makes the same assumptions. We show that the (...) crucial moral question is not one of responsibility. Rather, it is whether the technology can satisfy the requirements of fairness in the re-distribution of risk. Not only is this possible in principle, but some killer robots will actually satisfy these requirements. An implication of our argument is that there is a public responsibility to regulate killer robots ’ design and manufacture. (shrink)

This paper critiques the view that consciousness is likely something extra which accompanies or is produced by neural states, something beyond the functional cognitive processes realized in the brain. Such a view creates the `explanatory gap'between function and nomenology which many suppose cannot be filled by functionalist theories of mind. Given methodological considerations of simplicity, ontological parsimony, and theoretical conservatism, an alternative hypothesis is recommended, that subjective qualitative experience is identical to certain information-bearing, behaviour-controlling functions, not something which emerges from (...) them. This hypothesis explains the isomorphism between the structure of experience and neural organization, while providing a naturalistic account of qualiait's relational properties of informational states, not a sparate ontology of phenomenal essences. On this functionalist view, the hard, empirical problem of consciousness is to discover precisely which neural functions constitute subjective experience. (shrink)

Phenomenal consciousness is often thought to involve a first-person perspective or point of view which makes available to the subject categorically private, first-person facts about experience, facts that are irreducible to third-person physical, functional, or representational facts. This paper seeks to show that on a representational account of consciousness, we don't have an observational perspective on experience that gives access to such facts, although our representational limitations and the phenomenal structure of consciousness make it strongly seem that we do. Qualia (...) seem intrinsic and functionally arbitrary, and thus categorically private, because they are first-order sensory representations that are not themselves directly represented. Further, the representational architecture that on this account instantiates conscious subjectivity helps to generate the intuition of observerhood, since the phenomenal subject may be construed as outside, not within, experience. Once the seemings of private phenomenal facts and the observing subject are discounted, we can understand consciousness as a certain variety of neurally instantiated, behaviour controlling content, that constituted by an integrated representation of the organism in the world. Neuroscientific research suggests that consciousness and its characteristic behavioural capacities are supported by widely distributed but highly integrated neural processes involving communication between multiple functional sub- systems in the brain. This 'global workspace' may be the brain's physical realization of the representational architecture that constitutes consciousness. (shrink)

Trust is difficult to define. Instead of doing so, I propose that the best way to understand the concept is through a genealogical account. I show how a root notion of trust arises out of some basic features of what it is for humans to live socially, in which we rely on others to act cooperatively. I explore how this concept acquires resonances of hope and threat, and how we analogically apply this in related but different contexts. The genealogical account (...) explains both why the notion has such value for us and why it is difficult to define. (shrink)