This paper is a preliminary attempt to better understand the concept of legitimacy in stakeholder theory. The normative componentof stakeholder theory plays a central role in the concept of legitimacy. Though the elaboration of legitimacy contained hereinapplies generally to all “normative cores” this paper relies on Phillips’s principle of stakeholder fairness and therefore begins with a brief description of this work. This is followed by a discussion of the importance of legitimacy to stakeholder theory as well as the general ambiguity (...) of the term. A distinction is then drawn between normative and derivative legitimacy. Reference to this distinction helps distinguish between a relationship with the organization based on direct moral obligation and one based on the power to help or harm the organization. It is concluded that stakeholders who retain the ability to affect the organization are legitimate (derivatively), but that this legitimacy is derived from the moral obligation owed other (normative) stakeholders and that the two sorts of legitimacy are importantly different from one another. An example of the normative/derivative distinction at work in managerial decision making is elaborated upon and managerial and research implications are then suggested. (shrink)
Stakeholder theory has become a central issue in the literature on business ethics / business and society. There are, however, a number of problems with stakeholder theory as currently understood. Among these are: 1) the lack of a coherent justificatory framework, 2) the problem of adjudicating between stakeholders, and 3) the problem of stakeholder identification. In this essay, I propose that a possible source of obligations to stakeholders is the principle of fairness (or fair play) as discussed in the political (...) philosophic literature of Rawls, Simmons, and Cullity among others. The principle of fairness states that, “Whenever persons or groups of persons voluntarily accept the benefits of a mutually beneficial scheme of co-operation requiring sacrifice or contribution on the parts of the participants and there exists the possibility of free-riding, there exist obligations of fairness on the part of these persons or groups to co-operate in proportion to the benefits accepted.” In this essay I discuss the gaps in the current stakeholder literature, elucidate and defend a principle of fairness that fills the gap, compare the fairness model to other similar models of business ethics, and draw some conclusions for the future of stakeholder theory. (shrink)
Abstract: The purpose of this paper is to suggest that at least one strain of what has come to be called “stakeholder theory” has roots that are deeply libertarian. We begin by explicating both “stakeholder theory” and “libertarian arguments.” We show how there are libertarian arguments for both instrumental and normative stakeholder theory, and we construct a version of capitalism, called “stakeholder capitalism,” that builds on these libertarian ideas. We argue throughout that strong notions of “freedom” and “voluntary action” are (...) the best possible underpinnings for stakeholder theory, and in doing so, seek to return “stakeholder theory” to its managerial and libertarian roots found in Freeman (1984). (shrink)
Social contract theory offers a powerful method and metaphor for the study of organizational ethics. This paper considers the variant of the social contract that has arguably gained the most attention among business ethicists: integrative social contracts theory or ISCT [Donaldson and Dunfee: 1999, Ties That Bind (Harvard Business School Press, Boston)]. A core precept of ISCT - that consent to membership in an organization entails obligations to follow the norms of that organization, subject to the moral minimums of basic (...) human rights - is a reasonable and appealing notion. One potential challenge for those attempting to apply this idea, however, lies in the dynamic nature of social norms. Organizational norms evolve, often through the conscious efforts of community members and leaders. As currently formulated, ISCT offers a framework that under-appreciates the evolving nature of moral norms. In this paper, we extend ISCT by considering the circumstances under which the terms of and parties to social contracts change. We also consider a number of principles that should be considered as the terms and parties to organizational social contracts change. (shrink)
Stakeholder theory is often unable to distinguish those individuals and groups that are stakeholders from those that are not. This problem of stakeholder identity has recently been addressed by linking stakeholder theory to a Rawlsian principle of fairness. To illustrate, the question of stakeholder status for the non-human environment is discussed. This essay criticizes a past attempt to ascribe stakeholder status to the non-human environment, which utilized a broad definition of the term "stakeholder." This paper then demonstrates how, despite the (...) denial of stakeholder status, the environment is nonetheless accounted for on a fairness-based approach through legitimate organizational stakeholders. In addition, since stakeholder theory has never claimed to be a comprehensive ethical scheme, it is argued that sound reasons might exist for managers to consider their organization's impact on the environment that are not stakeholder-related. (shrink)
As value chains become longer with increases in outsourcing and subcontracting, the challenges of fi xing responsibility become more diffi cult. Using concepts from the literature on social networks, this paper considers issues of diffusion of responsibility and plausible deniability in such relationships. Specifi cally, this paper isolates three sources of denial of – or defense against – attributions of responsibility: connection, control and knowledge. It goes on to consider the effects on network density and actor centrality as third parties (...) (tertius illuminans) alter the structure of these networks. Finally, preliminary conclusions are considered including suggestions for addressing these new challenges as well as the potential for conceptual cross-fertilization between network analysis and organizationalethics. (shrink)
The private provision of security services has attracted a great deal of recent attention, both professional and popular. Much of that attention suggests the questioned moral legitimacy of the private vs. public provision of security. Linking the literature on moral legitimacy and responsibility from new institutional and stakeholder theories, we examine the relationship between moral legitimacy and responsible behavior by both private security companies (PSCs) and their stakeholders. We ask what the moral-legitimacy-enhancing responsibilities of both might be, and contribute to (...) both literatures and their managerial implications by detailing the content of those responsibilities, emphasizing the reciprocal nature of moral obligations. We suggest that the moral legitimacy of the industry depends upon responsible behavior by both PSCs and their stakeholders. (shrink)
This essay attempts to provide a useful research agenda for researchers in both strategic management and business ethics. We motivate this agenda by suggesting that the two fields started with similar interests, diverged, and are beginning to converge again. We then identify several streams that hold particular promise for developing our understanding of the relationship between strategy and ethics: stakeholder theory, managerial discretion, behavioral strategy, strategy as practice, and environmental sustainability.
This paper examines the ways in which the history curriculum in UK schools has been subject to contestation in recent years and considers the implications of the impact of postmodernism -particularly consumption - upon history teaching. It explores the relationship between 'official history' taught in schools and the 'unofficial histories' which influence children in the community, in the media and through the heritage industry. It argues that the powerful images gained outside the 'official' environment have profound implications for the ways (...) in which children are influenced and socialized, which may cause schools to reconceptualize the way history is taught. In particular, it considers the implications of Giroux's (1992) concept of a 'border pedagogy' for history teaching. (shrink)
There are explicit claims to Darwinian thinking in numerous fields of study. A common temptation associated with this method across disciplines is to call some attributes “natural” and others “cultural” in origin. But this distinction can be dangerous—particularly when applied to ethics. When employing the Darwinian method, ideas should be evaluated in the same way whether the characteristics are described as natural or as cultural. We should ascertain the moral usefulness of a trait irrespective of its genetic basis or lack (...) thereof. The nature/culture distinction is irrelevant to ethics. If Darwinian thinking connotes or implies an important difference, it is a dangerous idea to moral theory. I don’t believe the method denotes such a distinction, and in fact helps ethicists ask and answer many interesting questions that would not have arisen without it. But great care should be taken. (shrink)
The three papers interpret the American regime in different ways. Stack thinks that the American regime is the best of available alternatives, and may evenbe fundamentally healthy. Shankman finds the regime presently in ill health, but suggests how a neglected thread of American political thought could help to restore its health. Holloway, while silent on the direct issue of the American regime, argues that modernity is deeply flawed and thus suggests that the American regime is systemically unhealthy. Phillips addresses these (...) papers in tum. (shrink)
American and international involvement in war-torn regions such as Bosnia and Somalia has come under increasing scrutiny by politicians and scholars. Here, two distinguished philosophers debate military intervention from just-war and pacifist perspectives. Describing the range of values and issues facing governments as they consider intervening in the affairs of other nations, each scholar makes his case and then responds to the opposing argument.
Phillips traces the history of communitarianism through Aristotelian and Judeo-Christian writings, clarifying the proper function of the community in helping individuals help themselves by mobilizing church resources and countering anti-religious movements such as Nazism and communism.
The trend toward increased levels of business interconnectedness in the value chain has clouded the issue of responsibility for business practices. Firms havehistorically denied responsibility for many questionable practices by suggesting that such acts were committed somewhere else in the value chain and that, because they are separated by an arm’s length transaction, they are not responsible. Emerging evidence suggests that in light of the interconnected and networked business environment, the arm’s length defense is growing less effective. We discuss the (...) practical realities that firms are facing in the highly networked environment and offer examples of each. We also offer practical guidance about each example within a total responsibility management framework. (shrink)
This study explored the relation between state medical liability reform measures, hospital malpractice costs, and hospital solvency. It suggests that state malpractice caps are desirable but not essential for improved hospital financial solvency or viability.
Competency to be executed evaluations are conducted with a clear understanding that no physician-patient relationship exists. Treatment however, is not so neatly re-categorized in large measure because it involves the physician's active provision of the healing arts. A natural tension exists between what practices may be legally permissible and what are ethically acceptable. We present an overview of the existing positions on this matter in the process of framing our argument.
The just war tradition stands as the moral and prudential alternatie to both pacifism and realism. It forms the only reasonable ethical basis for the understanding of state initiated force. As applied to questions of nuclear deterrence, just war theory is incompatible with Mutual Assured Destruction and with the threat of MAD. Just war theory entails a move toward counterforce with discriminate targeting of military capabilities and away from city targeting. This is now becoming possible technically and is morally indicated. (...) The counterforce option is realistic in that nuclear disarmament is an extremely remote possibility and alternate strategies such as bluff are not workable. A counterforce strategy would be both discriminate and proportional as well as being in accord with political realism. (shrink)
The private provision of security services has attracted a great deal of recent attention, both professional and popular. Much of that attention suggests the questioned moral legitimacy of the private vs. public provision of security. Linking the literature on moral legitimacy and responsibility from new institutional and stakeholder theories, we examine the relationship between moral legitimacy and responsible behavior by both private security companies and their stakeholders. We ask what the moral-legitimacy-enhancing responsibilities of both might be, and contribute to both (...) literatures and their managerial implications by detailing the content of those responsibilities, emphasizing the reciprocal nature of moral obligations. We suggest that the moral legitimacy of the industry depends upon responsible behavior by both PSCs and their stakeholders. (shrink)