Joseph Heath defends competitive markets and conceptualizes business ethics with reference to Pareto efficiency, which he takes to be the “implicit morality of the market.” His justification for markets is that they generate Pareto efficient outcomes, meaning that markets optimally satisfy consumer preferences. And, for Heath, business ethics is the set of normative constraints—regulation and beyond-compliance norms—needed to preserve that outcome. The present paper accepts Heath’s claim that the economic justification for markets is ethical, in that satisfying consumer preferences is (...) a good. But, contra Heath, the ethical consideration at work is a consequentialist one; and acknowledging this consequentialism exposes limitations of Heath’s “market failures” approach to business ethics. We suggest two limitations, and we expect many will accept our argument that Heath’s conception of business ethics is too narrow. The present paper outlines two broader implications. First, acknowledging that the justification for markets is ethical eliminates the apparent—and false—conflict between purportedly amoral economic activity on one hand and ethical considerations on the other; instead, business ethics is a matter of weighing the consequentialist ethical benefit of economic activity and markets against other moral arguments/other ethical considerations. Second, Heath restricts business ethics to the constraints needed to protect the market’s ability to efficiently satisfy consumer preferences, constraints he calls “efficiency imperatives”; this restriction supports the widespread tendency to think that all social problems are economic; and, a business ethics so-conceived diminishes the perceived importance of noneconomic values—this attitude is dangerous. (shrink)
Across the management, social science, and business ethics literatures, and in much of the philosophy literature, trust is characterized as a disposition to act given epistemic states—beliefs and/or expectations about others and about the risks involved. This characterization of trust is best thought of as epistemological because epistemic states distinguish trust from other dispositions. The epistemological characterization of trust is the amoral one referred to in the title of this paper, and we argue that this characterization is conceptually inadequate. We (...) outline and defend an alternative conception of trust as a moral phenomenon: when A trusts B to do something, A invites B to acknowledge and accept an obligation; when B accepts the invitation, B takes on an obligation; in that way trust creates an obligation. We conclude with an application, drawing out the difference between the epistemological conception of trust and our own in the context of Ghoshal et al.'s (Sloan Management Review 40:9—20, 1995, Academy of Management Learning & Education 4:75—91, 2005) critique of transaction cost theories of the firm. (shrink)
Bernard Williams briefly discusses agent regret in his broader account of moral luck. The present paper first outlines one way to develop Williams’s notion with reference to the unintended harm; it then suggests that agent regret can be counteracted by externalizing the action that caused unintended harm, in Harry Frankfurt’s sense of externalization; and then the present paper argues that apology is a mechanism by which a person can externalize an offending action/effect—in that way counteracting agent regret. This function for (...) apology—self-repair—is different from others described in the literature, which address the role of apology in repairing relationships. The present paper describes a nonfictional example, that of a veteran of the U.S. war in Iraq who contacts a family gravely injured by him and his combat unit; the veteran is motivated to contact the family to apologize. The example serves as a prototypical case of agent regret. The example is taken from a recent literature on the clinical psychology of self-inflicted “moral injury”; categorizing this example of moral injury as agent regret also helps broaden our understanding of moral injury as a philosophical category and as a psychological phenomenon. (shrink)
This paper argues that Rawls’ principles of justice provide a normative foundation for stakeholder theory. The principles articulate (at an abstract level) citizens’ rights; these rights create interests across all aspects of society, including in the space of economic activity; and therefore, stakeholders – as citizens – have legitimate interests in the space of economic activity. This approach to stakeholder theory suggests a political interpretation of Boatright’s Moral Market approach, one that emphasizes the rights/place of citizens. And this approach to (...) stakeholder theory – in terms of citizens – raises a further question, what rights and obligations do economic agents have, beyond those attached to their roles as citizens? Rawls would reject additional rights and obligations of this sort for two reasons, one tied to freedom and one tied to pluralism. Rawls’ work therefore presses us to re-conceptualize the place of ethical claims in the economic context. (shrink)
This paper addresses the tactical question of how we ought to proceed in teachingbusiness ethics, taking as a starting point that business ethics should be concerned with cooperative,mutually beneficial outcomes, and in particular with fostering behavior that contributes to thoseoutcomes. This paper suggests that focus on moral reasoning as a tactical outcome—as a way ofachieving behavior in support of cooperative outcomes—is misplaced. Instead, we ought to focuson cultivating empathetic experiences. Intuitively, the problem we need to address in business ethicsis not (...) that our students (and that we ourselves) sometimes reason poorly, or that moral decisionmakingis subject to characteristic kinds of errors. The problem is that our students (and—again—we ourselves) do not always care enough, we do not modify our behavior consistently enough. (shrink)
The case "Caprica Energy and Its Choices" concerns a fictionalized energy corporation choosing between three potential drilling sites. According to the published Teaching Note, the case is an exercise in the stakeholder approach to business: it requires balancing profit considerations with potential harm to those who live near those drilling sites. Though unintended, the case raises a further question not addressed in the case or in the Teaching Note: what gives Caprica Energy the right to impose risk on members of (...) the communities surrounding its drilling sites? The first section of the present article argues that, in such cases, manage- ment can only justify imposing risk on the local community by securing those stakeholders' consent. The second section outlines the implications for stakeholder theory and stake- holder management. The third section outlines one con- nection between this material and recent literature on the imposition of risk and moral theory; that section offers an account of what make this particular instance of imposing risk morally problematic, with reference to the directedness of the imposition. (shrink)
This short paper defends Oliver Williamson’s (1993) claim that talk of trust is ‘redundant at best and can be misleading’ when trust is defined as a form of calculated risk (p. 463). And this paper accepts Williamson’s claim that ‘Calculative trust is a contradiction in terms’ (p. 463). But the present paper defends a conception of genuine, non-calculative trust that is compatible with calculative considerations and calculative antecedents. This conception of trust creates space for genuine (non-calculative) trust relationships in the (...) economic order—in which calculative considerations and antecedents (most often) play an essential role. (shrink)
Generalized trust is widely said to be essential for social and economic cooperation, but—despite the large empirical literature—there is disagreement and confusion over how to understand generalized trust. This paper develops the conceptual options that can be drawn from the social science literature—with attention to the moral dimension in each, and with some attention to the different ways that generalized trust can serve as a foundation for the social order.
According to recent literature in philosophy and psychology, there is a set of basic emotions that were preserved over the course of evolution because they serve adaptive functions. However, the empirical evidence fails to support the claim that there are basic emotions because it fails to show that emotions can be identified with specific functions. Moreover, work on basic emotions lacks the conceptual space to take emotional experience into account and so fails to amount to an adequate theory of emotion: (...) in the literature basic emotions are identified with emotional responses, but these responses — even if they did exist as characterized — are not emotions or emotional. That said, recent empirical discoveries about the brain structures responsible for emotional responses, discoveries that are often cited in the basic emotions literature, nevertheless form the foundation for a comprehensive theory of emotion — a theory that is broadly Jamesian in that an emotion is the experience and interpretation of a prior, physiological response. (shrink)
Data from the World Values Survey shows that generalized trust in Mainland China—trust in out-group members—is very low, but generalized trust in Taiwan is much higher. The present article argues that positive interactions with out-group members in the context of Taiwan’s export-oriented economy fostered generalized trust—and so explains this difference. This line of argument provides evidence for Albert O. Hirschman’s doux commerce thesis, that market interaction can improve persons and even stabilize the social order. The present article defends this point (...) by separating two theses that Hirschman combines under that label, a countervailing forces thesis and a doux commerce thesis narrowly understood. These theses offer different explanations (or mechanisms) for how commerce could have those positive effects. The data about Taiwanese trust practices provides evidence for the latter. (shrink)
When A wrongs B while C observes, or when B tells C afterward, C might apologize. This could seem to be an imprecise or merely metaphorical use of the word ‘apology’ to refer to an expression of sympathy. But this short paper explains how third-party apologies function as apologies (they restore respect to B, the victim, that was undermined by the wrongdoer A); it explains why such an apology could be morally necessary on C's part; and it provides a preliminary (...) account of the components of a third-party apology. (shrink)
Empirical evidence shows that non-conscious appraisal processes generate bodily responses to the environment. This finding is consistent with William James’s account of emotion, and it suggests that a general theory of emotion should follow James: a general theory should begin with the observation that physiological and behavioral responses precede our emotional experience. But I advance three arguments (empirical and conceptual arguments) showing that James’s further account of emotion as the experience of bodily responses is inadequate. I offer an alternative model, (...) according to which responses (physical states) are perceived and interpreted by a separate cognitive process, one that assigns meaning to those responses. The non-conscious appraisal process and the interpretive process are distinct, hence a two-stage model of emotion. This model is related to Schachter and Singer’s two-factor theory. Their often-discussed experiment showed that interpretation can play a role in producing emotions. But they do not show that interpretation is necessary for producing emotions in general, outside of the experimental conditions that generated unexplained arousal in subjects. My two-stage model supports this stronger claim by situating the interpretive process in a comprehensive model of emotion. (shrink)
The most recent restatements of stakeholder theory formulate that approach in terms of the distribution of value: “A stakeholder approach to business is about creating as much value as possible for stakeholders, without resorting to tradeoffs” (Freeman et al. 2010: 28). This formulation marks a shift from earlier work, which included a procedural dimension—a requirement that stakeholders participate in organization decision making. The present paper pushes back against this shift: it argues that orienting the stakeholder approach around the participation requirement (...) provides for a different moral logic, one not available to (now) conventional stakeholder theorizing (without that requirement), and one that may be more compelling to many. This argument requires critical re-examination of the moral arguments offered in the most recent restatements of the stakeholder approach. (shrink)
This short essay argues for a thematic connection between Emmanuel Levinas’s Time and the Other and his Totality and Infinity. Time and the Other directly addresses the problem of salvation, and this concern with salvation can be traced through Totality and Infinity, where it is implicit in Levinas’s conception of desire—so there is a religious concern at the core of that (purportedly) secular work. And this thematic connection suggests a further interpretive question about the role of fecundity in both books, (...) which is addressed in the final section. (shrink)
Joseph Heath states that our paper “misinterpret[s]” and so misrepresents his account. The present Commentary corrects the record. Our paper (Cohen and Peterson 2019) outlined Heath’s account on his own terms; it explained that Heath distances himself from consequentialism. But then we argued that Heath is mistaken and so offered a repaired version of the market failures approach. Our central concern, in the original paper and in this short Commentary, is showing that the economic argument for markets is at the (...) same time ethical, and then being more precise about the ethical consideration that does the work. (shrink)
My original paper (Cohen 2012) argued that business ethics education should focus on cultivating empathetic concern. This response clarifies terminology used in that paper and responds to criticisms presented by David Ohreen (2013).
Social scientists widely believe that trust begets trustworthiness, meaning that persons reward actions that they view as expressing trust. But evidence from the trust game (also known as the investment game)—introduced by Berg, Dickhaut, and McCabe and frequently used to test this relationship—is surprisingly inconclusive. The present article therefore reexamines this hypothesis (Experiment 1), using the trust game but incorporating mediation analysis and distinguishing between trust and distrust effects. The trust game has been used to study the effects of trust (...) within a relationship: when A trusts B, does this affect B’s behavior toward A? This research (in Experiment 2) extends the question: when A trusts B, is B more likely to trust another player C in a second (unrelated) game? If so, then trust relationships have a transitive structure. Taken together, findings from these experiments show that trust begets trustworthiness and also trust in others. (shrink)
Across the social sciences and even in philosophy, trust is most often characterized in terms of expectations and probabilities. This book defends an alternative conception of trust as a moral phenomenon. -/- When one person trusts another to do something, the first relies on the second’s commitment(s). So, trust reflects—and is a product of—agreement about the commitments and obligations that bind persons who live and work together. These commitments and obligations can be implicit, but building (or rebuilding) trust often requires (...) making these commitments and obligations explicit, defining the terms of cooperation. Part 1 argues that this account of trust better captures our actual trust practices, and it draws out connections with both the philosophy and the social science literatures. It also describes the process of creating trust relationships with reference to trust invitations. Part 2 addresses practical applications of the account defended here, in the context of social relationships, economic systems, and within business organizations. These applications emphasize the material benefits of trust but, separate from those, Part 2 argues that trust is an intrinsic good—so we have moral reason to trust. -/- The Nature and Practice of Trust will appeal to scholars and advanced students working in ethics, social and political philosophy, and the social sciences. -/- Chapter 6 of this book is available for free in PDF format as Open Access from the individual product page at the Routledge web site. It has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. (shrink)
Jared D. Harris, Brian T. Moriarty, and Andrew C. Wicks’ recent book collects eleven chapters by well-known scholars on the question of public trust in business, published along with an introduction and conclusion by the editors. But the collection doesn’t make progress on what this reviewer takes to be the two essential questions. This review outlines those questions and then addresses a further, more technical difficulty with the conceptualizations of trust at work across the chapters. The central theme here is (...) that business as an institution has obligations to society; we—the public—trust business to act on those obligations; and when business violates those obligations our trust is betrayed. The essays collected in this volume do not directly address the question of what those obligations are, but this should be the starting point for an investigation of public trust in business. (shrink)
According to Emmanuel Levinas, the individual bears an infinite obligation to the other person. In the Talmudic reading “Judaism and revolution,” Levinas suggests that we move from the ethical encounter to social relationships using contracts—both particular contracts and the social contract. So social relationships are created by limiting obligation, and as a result these relationships can only be practically acceptable, not ethical. Jewish religious practice for Levinas should also be understood as a set of negotiated limits to our infinite obligation.
El presente ensayo sostiene que los principios de justicia de Rawls proporcionan una fundamentación normativa para la teoría de los stakeholders. Los principios articulan (en un nivel abstracto) los derechos de los ciudadanos; estos derechos crean intereses en todos los aspectos de la sociedad, incluyendo el ámbito de la actividad económica; y, por lo tanto, los stakeholders –en calidad de ciudadanos–tienen intereses legítimos en dicho ámbito. Así, la obra de Rawls nos obliga a fundamentar cuestiones de la ética de la (...) empresa en la filosofía política: los derechos e intereses de los stakeholders (que son los derechos e intereses de los ciudadanos en la esfera económica) están protegidos en el nivel institucional, por lo que no pueden venir determinados por los directivos ni las corporaciones. (shrink)