Endörfer and Larue (2022) argue that Joseph Heath’s Market Failures Approach to business ethics (MFA) implies a demandingness dilemma: under conditions of imperfect competition, they argue, the MFA is either too demanding, if requiring that firms should seek to generate Pareto efficiency or “social optima”, or not demanding enough, if it gives up on social optima and focus instead on incremental Pareto improvements. I argue the MFA can be combined with an excusability principle to overcome the problem of over-demandingness. Since (...) this means the MFA can hold on to the obligation to promote social optima, the under- demandingness problem too is avoided, and the dilemma is solved. (shrink)

We reply to a comment by Hargrave and Smith on a paper in which we use Ostrom’s design principles to develop theory about stakeholder governance. We agree with most of the issues that Hargrave and Smith raise, but disagree with their statement that the systems view of stakeholder governance that they advocate stands in contrast to our approach. The two approaches are complementary.

I (mostly) accept Ancell’s argument that my proposal for dealing with the radical behavioral challenge entails what he calls ‘the excessive recusal problem’. I argue that this is no reason to reject my proposal, but rather an opportunity for further reflection on what behavioral and normative ethicists can learn from each other. I make some suggestions for future lines of inquiry for both fields.

Bridoux and Stoelhorst (2022) employ Nobel laureate Elinor Ostrom’s institutional design principles to develop two models of stakeholder governance. They argue that these “community governance” models will help achieve a fairer distribution of stakeholder value compared with approaches that centralize governance in the hands of management. We identify four characteristics, however, that thwart any straightforward application of these community governance models to business firms: ease of exit; lack of legacy social capital; heterogeneity of interests; and power imbalances. We then conclude, (...) following Ostrom herself, that governance often requires external institutional arrangements that stakeholder theorists have not fully appreciated. (shrink)