Extant social contracts, deriving from communities of individuals, constitute a significant source of ethical norms in business. When found consistent with general ethical theories through the application of a filtering test, these real social contracts generate prima facie duties of compliance on the part of those who expressly or impliedly consent to the terms of the social contract, and also on the part of those who take advantage of the instrumental value of the social contracts. Businesspeople typically participate in multiple (...) communities and, as a consequence, encounter conflicting ethical norms. Priority rules can be devised to resolve such conflicts. The framework of extant social contracts merges normative and theoretical research in business ethics and specifies a domain for empirical studies. (shrink)

During the past ten years Integrative Social Contracts Theory (ISCT) has become part of the repertoire of specialized decision-oriented theories in the business ethics literature. The intention here is to (1)␣provide a brief overview of the structure and strengths of ISCT; (2) identify recurring themes in the extensive commentary on the theory including brief mention of how ISCT has been applied outside the business ethics literature; (3) describe where research appears to be headed; and (4) specify challenges faced by those (...) who seek to reform ISCT. Key themes in the critiquing literature relate to (a) the identification process for hypernorms; (b) justification of the recognition of hypernorms; (c) proposals for considering meso or meta norms; (d)␣clarification of the relationship between stakeholder concepts and ISCT; (e) problems with potentially unoccupied moral free space; (f) sources of ethical obligation within the ISCT framework; and (g) the potential role for concepts of stakeholder dialogue and engagement. (shrink)

This paper extends the discussion of guanxi beyond instrumental evaluations and advances a normative assessment of guanxi. Our discussion departs from previous analyses by not merely asking, Does guanxi work? but rather Should corporations use guanxi? The analysis begins with a review of traditional guanxi definitions and the changing economic and legal environment in China, both necessary precursors to understanding the role of guanxi in Chinese business transactions. This review leads us to suggest that there are distinct types of, and (...) uses for guanxi. We identify the potentially problematic aspects of certain forms of guanxi from a normative perspective, noting among other things, the close association of particular types of guanxi with corruption and bribery. We conclude that there are many different forms of guanxi that may have distinct impacts on economic efficiency and the well-being of ordinary Chinese citizens. Consistent with Donaldson and Dunfee (1999), we advocate a particularistic analysis of the different forms of guanxi. (shrink)

Firms possessing a unique competency to rescue the victims of a human catastrophe have a minimum moral obligation to devote substantial resources toward best efforts to aid the victims. The minimum amount that firms should devote to rescue is the largest sum of their most recent year’s investment in social initiatives, their five-year trend, their industry’s average, or the national average. Financial exigency may justify a lower level of investment. Alternative social investments may be continued if they have an equally (...) compelling rationale. These duties apply to the global pharmaceutical companies in the context of the AIDS pandemic in sub-Saharan Africa. (shrink)

We present two studies that examine the effects of guanxi on multiple social groups from the perspective of Chinese business people. Study 1 (N = 203) tests the difference in perceived effects of six guanxi contextualizations. Study 2 (N = 195) examines the duality of guanxi as either helpful or harmful to social groups, depending on the contextualization. Findings suggest guanxi may result in positive as well as negative outcomes for focal actors and the aggregate.

Abstract:A marketplace of morality (MOM) is a place where individuals act under the influence of their moral desires. A MOM produces an output representing the aggregate acted-upon moral preferences of its participants. Individual behavior is influenced by POPs, or passions of propriety. People implement POP preferences when they buy stock, purchase goods and services, choose jobs and so on. Firms respond by social cause marketing and other devices which encourage customers to align their social preferences with those represented by the (...) firm. The outputs of MOM constitute an important reference point for understanding business morality. Even so, the normative status of MOM outputs must be subject to principles of universal morality. A principle of greater preponderance is offered as a means for determining when a MOM output is ethically legitimate.A theory of moral choice, based upon the concept of a MOM, may have potential for providing a unifying framework integrating moral preferences, reasoning, behaviors and organizational contexts with broader political and economic concepts. (shrink)

A project on teaching business ethics at The Wharton School concluded that ethics should be directly incorporated into key MBA courses and taught by the core business faculty. The project team, comprised of students, ethics faculty and functional business faculty, designed a model program for integrating ethics. The project was funded by the Exxon Education Foundation.The program originates with a general introduction designed to familiarize students with literature and concepts pertaining to professional and business ethics and corporate social responsibility. This (...) may be accomplished through orientation sessions, readings, packages, short classes and lectures. (shrink)

In the recent case of Nike v. Kasky both sides argued that their standard for distinguishing commercial speech from political speechwould create the better policy for ensuring accurate and complete disclosure of social information by corporations. Using insights frominformation economics, we argue that neither standard will achieve the policy goal of optimal truthful disclosure. Instead, we argue that the appropriate standard is one of optimal truthful disclosure—balancing the value of speech against the costs of misinformation. Specifically, we argue that an (...) SEC-sanctioned safe harbor available under a closely supervised system for social reporting will bring about optimal truthful disclosure. The scheme is intended to enhance stakeholder confidence in corporate social and political commentary, while at the same time encouraging corporations to provide accurate information in a fair playing field of public debate. (shrink)

When an organization is pressured to respond to moral expressions in capital, consumer and labor markets, it faces a dilemma of how to respond. Should Shell have given in to Greenpeace in deciding how to dispose of the Brent Spar Oil Rig? Should Cracker Barrel give in to pressures to fire homosexual employees? Firms should consider the nature of the moral expressions pressuring them in deciding how to respond. Moral expressions can be divided into three descriptive categories: Benign, Disputed and (...) Problematic. Each carries different implications for corporate action and in some cases will justify corporate resistance to moral expressions by stakeholders. In order to appropriately respond to moral pressures, firms should first engage in a process of discovery aimed at identifying moral pressures relevant to the firmös missions and objectives and then engage in a process of justification concerning their responses. Such a conclusion is consistent with important trends of contemporary thought in ethics and political philosophy and is strongly supported by Kantian analysis. (shrink)

Although many challenges remain, business ethics is flourishing in North America. Prominent organizations give annual business ethics awards, investments in socially screened mutual funds are increasing, ethics officers and corporate ombudspersons are more common and more influential, and new ideas are being tested in practice. On the academic side, two major journals specializing in business ethics are well-established and other major journals often include articles on business ethics and new organizations emphasizing ethics have been initiated. Within business schools, the number (...) of endowed chairs is growing and the ethics curriculum is expanding. Canada is a major player in the business ethics discipline while business ethics in Mexico is just beginning to emerge as a focus of interest in both the business and academic communities. (shrink)

This article introduces several papers on social contracts and business ethics, published in the April 2005 issue of the journal "Business Ethics Quarterly.".

This chapter contains sections titled: Background: mapping the field of business ethics The evolution of social contract approaches to business ethics Integrative social contracts theory (ISCT) Remaining issues and promising research directions for contractarian business ethics.

Last June, Moscow was the setting for a Russian‐sponsored conference on business ethics. One of the participants from the USA, Professor Thomas W. Dunfee, here gives his impressions of what was clearly an instructive occasion. Professor Dunfee is Kolodny Professor of Social Responsibility at the Wharton School of Business of the University of Pennsylvania and is an international authority on business ethics.“Older people have an ethics problem. By that, I mean they have ethics. To survive, I can break a law (...) if I need to and if the risks aren't too large. Older people wouldn't even think in such a way.” Dimitri Zotov, explaining why young people are in high professional demand in the new Russia, Wall Street Journal, p.A5, Col.1, 8/2/93.“Shell‐shocked men and women spend their days hacking through the post‐Soviet wilderness in search of a near‐mythical creature, an honest joint‐venture partner.” David Brooks, “Cracking That Post‐Soviet Market”, Wall Street Journal, editorial page, 8/24/93. (shrink)

This article provides an overview of current and prospective ethical issues facing commercial (as opposed to leisure) travel agents. Industry wide ethical issues include conflicting pressures from suppliers and clients, competency requirements for agents and misleading advertising and sales claims (vaporware in industry jargon). Issues with travel suppliers include calculation and payment of commissions, fare loopholes, frequent flyer plans and the use and abuse of benefits directed to individual employees. Issues with corporate clients of travel agents include hidden preferred carriers (...) or suppliers, client pressure to use fare loopholes and hidden relationships with corporate travel consultants. Future issues include protecting client privacy, free riding, and divergent international business practices. (shrink)

Hasnas is correct that ethicists should pay attention to law and be on guard for perverse effects from regulation and legal interpretations that may encourage or require unethical behavior. He is not correct that the business ethics literature assumes that law and ethics consistently pull in the same direction. Analysis of the relationship between law and ethics requires nuanced, in-depth treatment. An example is provided regarding the well-known case of United States v. Park. Ultimately, there is a need for more (...) serious consideration of ethical principles and norms in legal policy making and practice. (shrink)

Looking at the Milken case has provided an opportunity to apply a social contracts based set of rule of thumb principles to insider trading and related issues. The actions involved were found to: * 1 always violate the principle of willing compliance with law * 2 in certain instances violate the principle of avoiding actual conflicts of interest * 3 in certain instances violate the principle of honoring confidentiality.

Social investing, though not yet fully mainstream, has the potential to obtain such status. Questions relating to the future of social investing include the following. (1) What properly falls within the ambit of social investing? Assuming that no single definition of social responsibility is feasible, what then are the limits? (2) What do we need to know about investor psychology concerning social investing? What motivates people to buy socially screened investments and why do they sometimes act inconsistently? (3) How can (...) we improve the measures of social performance? Is it possible to develop GAAP and GAAS equivalents for social reporting? (4) Should social reports by firms be audited? If so, how? (5) What sorts of public policies are necessary to support the social screening of investments? (shrink)

Moralogy is an indigenous six-decade-old Japanese approach to business ethics which has been particularly influential among middle-sized business. The core themes of moralogy are the inseparability of morality and economic activities, the recognition of a difference between social justice and universal justice, and an emphasis on identification of principles of supreme or universal morality. Moralogy recognizes moral liberty and a principle of "omni-directional fairness"; and may be best described as a virtue-based stakeholder approach to business ethics. It differs in significant (...) ways, however, from Rawls' Theory of Justice and Donaldson and Dunfee 's Integrative Social Contracts Theory. (shrink)

This article reports on a telephone survey of business school faculty in the United Kingdom, Asia and North America concerning efforts to internationalize the teaching of business ethics. International dimensions of business ethics are currently given only limited coverage in the business school curriculum with over half of the faculty surveyed indicating that less then 10% of their ethics teaching focuses on global issues. Teaching objectives vary widely with some faculty emphasizing a relativistic, diversity oriented perspective while others stress the (...) universality of values. The respondents identified a great need to develop teaching materials based upon non-U.S. corporations and/or non-U.S. incidents. (shrink)