Journal of Business Ethics 72 (4):359-374 (2007)

Joseph Heath
University of Toronto, St. George
In the economic literature on the firm, especially in the transaction-cost tradition, a sharp distinction is drawn between so-called “market transactions” and “administered transactions.” This distinction is of enormous importance for business ethics, since market transactions are governed by the competitive logic of the market, whereas administered transactions are subject to the cooperative norms that govern collective action in a bureaucracy. The widespread failure to distinguish between these two types of transactions, and thus to distinguish between adversarial and non-adversarial relations, has led many business ethicists to develop a “uniform” moral code. Yet in market transactions, the checks and balances built into the system of commercial exchange are such as to permit more instrumental forms of behavior. In administered transactions, by contrast, these checks and balances are absent, and thus the institutional context calls for much greater exercise of moral restraint. In this paper, I begin the task of developing an adversarial ethic for business. According to this view, the competitive environment licenses a greater range of “self-interested” behavior, but also imposes its own constraints on the strategies that firms may adopt in the pursuit of their interests.
Keywords Philosophy   Quality of Life Research   Management   Economic Growth   Ethics
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DOI 10.1007/s10551-006-9175-5
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References found in this work BETA

Capitalism and Freedom.Milton Friedman - 1963 - Ethics 74 (1):70-72.
Business Ethics and Stakeholder Analysis.Kenneth E. Goodpaster - 1991 - Business Ethics Quarterly 1 (1):53-73.
Stakeholders and the Moral Responsibilities of Business.Bruce Langtry - 1994 - Business Ethics Quarterly 4 (4):431-443.
The Moral Point of View: A Rational Basis of Ethics.Vincent Tomas - 1958 - Philosophical Review 69 (4):548-553.

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