Abstract:This essay responds to Patricia Werhane’s 1994 Ruffin Lecture address, “Moral Imagination and the Search for Ethical Decision-making in Management,” using institutional theory as an analytical framework to explore conditions that either inhibit or promote moral imagination in organizational problem-solving. Implications of the analysis for managing organizational change and for business ethics theory development are proposed.

This paper delineates the normative and empirical approaches to business ethics based upon five categories: 1) academic horne; 2) language; 3) underlying assumptions; 4) theory purpose and scope; 5) theory grounds and evaluation criteria. The goal of the discussion is to increase understanding of the distinctive contributions of each approach and to encourage further dialogue about the potential for integration of the field.

The dramatic increase in the number of corporate ethical codes over the past 20 years has been attributed to the Watergate scandal and the Foreign Corrupt Practices Act. Ethical codes differ somewhat from profesional codes and mission statements; yet the terms are frequently interchanged and often confused in the literature. Ethical code studies are reviewed in terms of how codes are communicated to employees and whether implications for violating codes are discussed. Most studies use content analysis to determine subjects in (...) codes. Little information is available about how codes are communicated, whether they are accepted and used by employees, and whether they affect employee/corporate behavior. More research on ethical codes is needed to answer some of these questions. (shrink)

In this essay, we argue that trust is a dynamic emotional relationship which entails responsibility. Trust is not a social substance, a medium, or a mysterious entity but rather a set of social practices, defined by our choices, to trust or not to trust. We discuss the differences and the relationship between trust and trustworthiness, and we distinguish several different kinds or “levels” of trust, simple trust, basic trust, “blind” trust, and authentic trust. We then argue that trust as an (...) emotional practice, can be “willful,” voluntary and amatter of personal responsibility. (shrink)

The institutionalization of ethics is an important task for today's organizations if they are to effectively counteract the increasingly frequent occurrences of blatantly unethical and often illegal behavior within large and often highly respected organizations. This article discusses the importance of institutionalizing organizational ethics and emphasizes the importance of several variables (psychological contract, organizational commitment, and an ethically-oriented culture) to the institutionalization of ethics within any organization.... institutionalizing ethics may sound ponderous, but its meaning is straightforward. It means getting ethics (...) formally and explicitly into daily business life. It means getting ethics into company policy formation at the board and top management levels and through a formal code, getting ethics into all daily decision making and work practices down the line, at all levels of employment. It means grafting a new branch on the corporate decision tree — a branch that reads right/wrong (Purcell and Weber, 1979, p. 6). (shrink)

This essay surveys the state of business ethics in North America. It describes the distinctive features of business ethics as an academic sub-discipline and as a pedagogical topic, and compares and contrasts three rival models of business ethics current among philosophers.

The current literature in business ethics is tending toward an unacknowledged moral pluralism, with all the problems this position entails. An adequate moral pluralism cannot be achieved by a synthesis of existing theoretical alternatives for moral action. Rather, what is needed is a radical reconstruction of the understanding of the moral situation that undercuts some of the traditional dichotomies, provides a solid philosophical grounding which is inherently pluralistic, and offers a new understanding of what it is to think morally. The (...) philosophical position of American pragmatism, as briefly sketched in this paper, offers one such possible reconstruction. (shrink)

The debate over corporate moral responsibility has become a fixture in business ethics research and teaching. Only rarely, however, does the sizable literature on that question consider whether the debate has important practical implications. This article examines that question from a corporate control perspective. After assuming corporate moral responsibility’s existence for purposes of argument, the article concludes that such responsibility makes a difference in cases where it is present but personal responsibility is absent. Then the article tries to identify the (...) forces that diminish personal responsibility when corporate responsibility exists. The most important such forces, it concludes, spring from the socialization processes people undergo when they enter groups. One example is the well-known phenomenon of groupthink, which can exculpate individuals by rendering them justifiably ignorant of foreseeable risks of harm. (shrink)

Abstract:The kind of commitment to moral rules that characterizes effective interaction between persons in among others places, manufacturing and commercial settings is characteristically treated by economists and game theorists as a public good, the securing of which requires the expenditure of scarce resources on surveillance and enforcement mechanisms. Alternatively put, the view is that, characteristically, rational persons cannot voluntarily guide their choices by rules, but can only be goaded into acting in accordance with such rules by the fear of social (...) and formal sanctions. On this way of thinking, rational individuals are condemned to having to settle for the “second-best” results that are thereby implied. This conclusion rests not only on an appeal to a consequentialist perspective, but also a separability principle. Against this, it is argued that consequentialism itself offers a basis for the rejection of the separability principle, and a defense of the thesis that, for a wide range of realistic cases, being disposed to voluntarily guide one’s choice by rules (on the condition that others can be expected to do so as well) is a necessary condition of engaging in rational interaction.Most people do not trust most other people, unmonitored, to honor obligations completely. Because of this they use substantial amounts of resources to specify the details of agreements, and to police them. Use of these resources … could be greatly reduced, if transacting parties would agree to honor the spirit of their agreement and simply shake hands. The resource saving to the two parties combined, from substituting this mode of “enforcing” agreements to those currently used, is clear. Why, then, does not this more efficient mode of transacting drive out the more costly methods through the normal competitive process? … The underlying rationale for this … is that it is privately profitable to engage in some degree of “cheating” on agreements, and to use resources to disguise this fact. — M. W. Reder, “The Place of Ethics in the Theory of Production”. (shrink)

A language of care and relationship-building has recently appeared with prominence in the business literature, driven by the realities of the marketplace. Thus, it seems a propitious time to reflect on a decade of writing in feminist morality that has focussed on the concept of an ethic of care, and examine its relevance for today's business context. Is the idea of creating organizations that “care” just another management fad that subverts the essential integrity of concepts of ethical caring? Conversely, are (...) these concepts capable of beginning an important dialogue that may help us to see new possibilities for simultaneously enhancingboththe effectiveness and the moral quality of organizations in the future? (shrink)

Ethicists and legal theorists have proposed models of corporate culpability that shift the standard of guilt determination from vicariousattribution of individual action and intention to an assessment of culture, policies, as well as organizational action and inaction. This paper briefly reviews four prominent models of corporate culpability, arguing that each makes claims that extend well beyond the limits of existing law. As an alternative to these models, a constructive corporate fault is described that relies on both objective and subjective reasonableness (...) judgments. The paper concludes with a consideration of constructive corporate fault in relation to an Accountability model of corporate liability. (shrink)

Efforts to institutionalize ethics in corporations have been discussed without first addressing the desirability of norm conformity or the possibility that the means used to elicit conformity will be coercive. This article presents a theoretical context, grounded in models of social control, within which ethics initiatives may be evaluated. Ethics initiatives are discussed in relation to variables that already exert control in the workplace, such as environmental controls, organizational controls, and personal controls.

Business ethicists have increasingly used Aristotelian “virtue ethics” to analyze the actions of business people and to explore the question of what the standard of ethical behavior is. These analyses have raised many important issues and opened up new avenuesfor research. But the time has come to examine in some detail possible limitations or weaknesses in virtue ethics. This paper arguesthat Aristotelian virtue ethics is subject to many objections because the psychology implicit within the ethic is not well-suited for analyzing (...) some problematic forms of behavior. Part One offers a brief overview of the firm and of the good life from a virtue ethics perspective. Part Two develops a number of criticisms of this perspective. (shrink)

This article explores differences in the ways in which utilitarian, deontological and virtue/aretic ethics treat of act, outcome, and agent. I argue that virtue ethics offers important and distinctive insights into business practice, insights overlooked by utilitarian and deontological ethics.

Social contract theory has a rich history. It originated among the ancients with recognition that social arrangements were not products of nature but convention. It developed through the centuries as theorists sought ethical criteria for distinguishing good conventions from bad. The search for such ethical criteria continues in recent attempts to apply social contract theory to organizations. In this paper, I question the concept ofconsent as a viable ethical criterion, and I argue for an alternate principle of impartiality as a (...) more appropriate moral norm in a social contracttheory of organizations. (shrink)

Abstract:Alasdair Maclntyre (1984) asserts that the ethical systems of the Enlightenment (formalism and utilitarianism) have failed to provide a meaningful definition of “good.” Lacking such a definition, business managers have no internal standards by which they can morally evaluate their roles or acts. Maclntyre goes on to claim that managers have substituted external measures of “winning” or “effectiveness” for any internal concept of good. He supports a return to the Aristotelian notion of virtue or “excellence.” Such a system of virtue (...) ethics depends on an interrelationship of the community, one’s roles in that community, and the virtues one needs to perform that role well. This article develops Maclntyre’s concept of virtue ethics and shows how this paradigm fits well with existing theories about organizational behavior. (shrink)

Abstract:Alasdair Maclntyre (1984) asserts that the ethical systems of the Enlightenment (formalism and utilitarianism) have failed to provide a meaningful definition of “good.” Lacking such a definition, business managers have no internal standards by which they can morally evaluate their roles or acts. Maclntyre goes on to claim that managers have substituted external measures of “winning” or “effectiveness” for any internal concept of good. He supports a return to the Aristotelian notion of virtue or “excellence.” Such a system of virtue (...) ethics depends on an interrelationship of the community, one’s roles in that community, and the virtues one needs to perform that role well. This article develops Maclntyre’s concept of virtue ethics and shows how this paradigm fits well with existing theories about organizational behavior. (shrink)

This survey report is a follow-up to the survey done by the Center for Business Ethics in 1984/85 which was published in the Journal for Business Ethics under the title of 'Are Corporations Institutionalizing Ethics?' (Volume 5, 1986, pp. 85-91). This 1989/90 survey was again sent to Fortune 1000 industrial and service companies to find out what they have done to build ethical values into their organizations. It reveals some interesting comparisons with the 1984/85 survey with regard to expanding efforts, (...) objectives, progress, and methods of implementation, along with some new information on their perception of public pressure for ethics programs and the need for ethics education. The survey shows where some progress in building ethics into corporations seems to be occurring and where much more work needs to be done. (shrink)

Stakeholder theory, as a method of management based on morals and behavior, must be grounded by a theory of ethics. However, traditional ethics of justice and rights cannot completely ground the theory. Following and expanding on the work of Wicks, Gilbert, and Freeman (1994), we believe that feminist ethics, invoking principles of caring, provides the missing element that allows moral theory to ground the stakeholder approach to management. Examples are given to support the suggested general principle for making business decisions (...) under feminist moral theory. (shrink)

Difficult moral issues in economic life, such as evaluating the impact of hostile takeovers and plant relocations or determining the obligations of business to the environment, constitute the raison d'etre of business ethics. Yet, while the ultimate resolution of such issues clearly requires detailed, normative analysis, a shortcoming of business ethics is that to date it has failed to develop an adequate normative theory.1 The failing is especially acute when it results in an inability to provide a basis for fine-grained (...) analyses of issues. Both general moral theories and stakeholder theory seem incapable of expressing the moral complexity necessary to provide practical normative guidance for many business ethics contexts. (shrink)

Difficult moral issues in economic life, such as evaluating the impact of hostile takeovers and plant relocations or determining the obligations of business to the environment, constitute the raison d'etre of business ethics. Yet, while the ultimate resolution of such issues clearly requires detailed, normative analysis, a shortcoming of business ethics is that to date it has failed to develop an adequate normative theory.1 The failing is especially acute when it results in an inability to provide a basis for fine-grained (...) analyses of issues. Both general moral theories and stakeholder theory seem incapable of expressing the moral complexity necessary to provide practical normative guidance for many business ethics contexts. (shrink)

This paper concerns the influence of gender on a firm’s moral and economic performance. It supports Thomas White’s intimation of a male gender bias in the value system underlying extant business theory. We suggest that this gender bias may be corrected by drawing on the concept of substantive rationality inherent in virtue-ethics theory. This feminine-oriented relationship-based value system complements the essential nature of the firm as a nexus of relationships between stakeholders. Not only is this feminine firm morally desirable, but (...) it is also economically more efficient in that trust becomes a more feasible implicit contractual enforcement mechanism. In an organizational context, therefore, from both a moral and an economic perspective, long established economic man is dominated by nascent economic woman. (shrink)

This paper concerns the influence of gender on a firm’s moral and economic performance. It supports Thomas White’s intimation of a male gender bias in the value system underlying extant business theory. We suggest that this gender bias may be corrected by drawing on the concept of substantive rationality inherent in virtue-ethics theory. This feminine-oriented relationship-based value system complements the essential nature of the firm as a nexus of relationships between stakeholders. Not only is this feminine firm morally desirable, but (...) it is also economically more efficient in that trust becomes a more feasible implicit contractual enforcement mechanism. In an organizational context, therefore, from both a moral and an economic perspective, long established economic man is dominated by nascent economic woman. (shrink)

In a competitive and morally imperfect world, business people are often faced with serious ethical challenges. Harboring suspicions about the ethics of others, many feel justified in engaging in less-than-ideal conduct to protect their own interests. The most sophisticated moral arguments are unlikely to counteract this behavior. We believe that this morally defensive behavior is responsible, in large part, for much undesirable deception in negotiation. Drawing on recent work in the literature of negotiations, we present some practical guidance on how (...) negotiators might build trust, establish common interests, and secure credibility for their statements, thereby promoting honesty. We also point out the types of social and institutional arrangements, many of which have become commonplace, that work to promote credibility, trust, and honesty in business dealings. Our approach is offered not only as a specific response to the problem of deception in negotiation, but as one model of how research in business ethics might offer constructive advice to practitioners. (shrink)

Abstract:The aim of this paper is to create a framework which can serve as a guide to the understanding of organizational ethicality. This is done by linking ethical and organizational theory. Organizational ethicality is about “being” as well as “doing”: relevant ethical theory is therefore both substantive (agent-centred, concerned with the “good”) as well as procedural (act-centred, concerned with the “right” in the sense of the moral or just thing to do). The ethical theories of Alasdair MacIntyre and Jurgen Habermas, (...) as representatives of these two traditions, are mapped onto a framework which characterises organizations as assemblages of practices supported by a climate embedded within an organizational culture. Organizational practice is articulated and given meaning within a discourse of “sensemaking” in which narrative creates space-time links between people and events. Within that same communicative climate practices are evaluated and decisions taken. This theoretical framework is specified in such a way as to highlight the parallels with the ethical theories of MacIntyre, who uses notions of practice, tradition and the narrative unity of moral experience to create an ethical theory of the “good,” and Habermas, who spells out the process of moral argumentation by which consensus on the “just” or “right” is reached. Some possibilities for further research are suggested at the end of the paper. (shrink)

Abstract:Our critics confuse the role normative ethical theory can take in business ethics. We argue that as a practical discipline, business ethics must focus on norms, not the theories from which the norms derive. It is true that our original work is defective, but not in its form, but in its neglect of contemporary advances in feminist ethics.

A review of the literature on Corporate Codes of Ethics suggests that whilst there exists an informative body of literature concerning the prevalence of such codes, their design, implementation and promulgation, it is also evident that there is a relative lack of consideration of their impact upon members' everyday organizational behaviour. By drawing upon organizational sociology and psychology this paper constructs a contextualist and interpretive model which seeks to enable an analysis and evaluation of their effects upon individual, group and (...) organizational behaviour. (shrink)

Codes of conduct are viewed here as a community’s attempt to communicate its expectations and standards of ethical behavior. Many organizations are implementing codes, but empirical support for the relationship between such codes and employee conduct is lacking. We investigated the long term effects of a collegiate honor code experience as well as the effects of corporate ethics codes on unethical behavior in the workplace by surveying alumni from an honor code and a non-honor code college who now work in (...) business. We found that self-reported unethical behavior was lower for respondents who work in an organization with a corporate code of conduct and was inversely associated with corporate code implementation strength and embeddedness. Self-reported unethical behavior was also influenced by the interaction of a collegiate honor code experience and corporate code implementation strength. (shrink)

Ethical problems in business include not only genuine moral dilemmas and compliance problems but also problems arising from the distinctive characteristics of imperfect duties. Collective action by business to perfect imperfect duties can yield significant benefits. Sucharrrangements can (1) reduce temptations to moral laxity, (2) achieve greater efficiency by eliminating redundancies and gaps that plague uncoordinated individual efforts, (3) reap economies of scale and achieve success where benefits can be provided only if a certain threshold of resources can be brought (...) to bear on a social problem; (4) solve assurance problems where voluntary compliance by some parties depends upon their perception that competitors are doing their fair share, and (5) produce higher levels of contribution than would occur through independent action in response to imperfect duties, stimulated by the perception that there is a fair distribution of burdens of contribution among all parties involved. (shrink)

The main purpose of this paper is to defend traditional ethical theory (utilitarianism and deontology) for its application in business against a more recent model consisting of utility, rights, and justice. This is done in three parts: First, we provide a conceptual argument for the superiority of the traditional model; second, we demonstrate these points through an examination of three short cases; and third, we argue for the capability of the traditional model to account for universals and particulars in ethics.