Moral Theory and Business Ethics

The Market Failures Approach (MFA) is one of the leading theories in contemporary business ethics. It generates a list of ethical obligations for the managers of private firms that states that they should not create or exploit market failures because doing so reduces the efficiency of the economy. Recently the MFA has been criticised by Abraham Singer on the basis that it unjustifiably does not assign private managers obligations based on egalitarian values. Singer proposes an extension to the MFA, the (...) Justice Failures Approach (JFA), in which managers have duties to alleviate political, social, and distributive inequalities in addition to having obligations to not exploit market failures. In this paper I describe the MFA and JFA and situate them relative to each other. I then highlight a threefold distinction between different types of obligations that can be given to private managers in order to argue that a hybrid theory of business ethics, which I call the MFA +, can be generated by arguing that managers have obligations based on efficiency and duties based on equality to the extent that these latter obligations do not lead to efficiency losses. This argument suggests a novel theoretical option in business ethics, elucidates the issues that are at stake between the MFA and the JFA, and clarifies the costs and benefits of each theory. (shrink)

This paper explores the notion that business calls for an adversarial ethic, akin to that of sport. On this view, because of their competitive structure, both sport and business call for behaviours that are contrary to ‘ordinary morality’, and yet are ultimately justified because of the goods they facilitate. I develop three objections to this analogy. Firstly, there is an important qualitative difference between harms risked voluntarily and harms risked involuntarily. Secondly, the goods achieved by adversarial relationships in sport go (...) beyond the function of sport, i.e. to entertain audiences. Thirdly, the most plausible account of the athlete’s motivational development starts with their love of the sport, which can explain a commitment to the sporting ethics in a way that is not paralleled in business. I close by drawing attention to the ways in which an Aristotelian conception of business ethics may be able to accommodate these objections. (shrink)

In this article, I aim to clarify some key issues in the ongoing debate about the relationship between Rawlsian political philosophy and business ethics. First, I discuss precisely what we ought to be asking when we consider whether corporations are part of the “basic structure of society.” I suggest that the relevant questions have been mischaracterized in much of the existing debate, and that some key distinctions have been overlooked. I then argue that although Rawlsian theory’s potential implications for business (...) ethics are more extensive than some have suggested, the nature of the concern that we ought to have about the effects of corporate behavior on individuals’ economic and social conditions should lead us to reject the view that corporations are bound by principles of justice only if, and insofar as, they are part of the basic structure. (shrink)

This essay argues that the modern business corporations are robots that are taking over the world in their single-minded pursuit of their own goals.

This paper draws a distinction between ‘right MacIntyreans’ who are relatively optimistic that MacIntyre’s vision of ethics can be realised in capitalist society, and ‘left MacIntyreans’ who are sceptical about this possibility, and aims to show that the ‘left MacIntyrean’ position is a promising perspective available to business ethicists. It does so by arguing for a distinction between ‘community-focused’ practices and ‘excellence-focused’ practices. The latter concept fulfils the promise of practices to provide us with an understanding of the best work (...) for humankind and highlights the affinities between MacIntyre’s concept of a practice and Marx’s conception of good work as free, creative activity. The paper concludes with a suggestion that we reflect on the best forms of work so that we can strive to ensure the very best activities, those most consonant with our flourishing, one day become available to all. (shrink)

Whether an action is morally right depends upon the alternative acts available to the agent. Actualists hold that what an agent would actually do determines her moral obligations. Possibilists hold that what an agent could possibly do determines her moral obligations. Both views face compelling criticisms. Despite the fact that actualist and possibilist assumptions are at the heart of seminal arguments in business ethics, there has been no explicit discussion of actualism and possibilism in the business ethics literature. This paper (...) has two primary goals. First, it aims to rectify this omission by bringing to light the importance of the actualism/possibilism debate for business ethics through questions about the ethics of sweatshops. Second, it aims to make some progress in the sweatshop debate by examining and defending an alternative view, hybridism, and describing the moral and practical implications of hybridism for the sweatshop debate. (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)

In this essay we will try to highlight the interweaving of language and morality and also the principle of legitimacy that derives from it. In her famous essay Modern Moral Philosophy (written in 1958 and which later became the modern manifesto of a neo-Aristotelian type of ethics), Elizabeth Anscombe highlights the need for a philosophy of psychology as well as the abandonment of a specific language in moral philosophy. Taking a position against the consequentialist conception of morality, she implicitly stands (...) opposed to the principle that conse- quences define legitimacy; it is precisely when the binomial language-morality fails that the principle of legitimacy loses its substance; a political authority can lose its moral legitimacy if she/he betrays the common good. Starting from a specific language adopted, a morality is derived from it. In fact, depending on what is considered to be a good or an evil, a specific moral action follows. In this perspective, responsibility and awareness of which goods need to be shared in common play a central role, and an ontological foundation is discovered. (shrink)

Shortened version of an article first appearing in the African Journal of Business Ethics (2018).

The view of business ethics that Christopher McMahon calls the “implicit morality of the market” and Joseph Heath calls the “market failures approach” has received a significant amount of recent attention. The idea of this view is that we can derive an ethics for market participants by thinking about the “point” of market activity, and asking what the world would have to be like for this point to be realized. While this view has been much-discussed, it is still not well-understood. (...) This paper seeks to remedy this problem. I begin by showing, against some recent commentators, that McMahon’s view and Heath’s view are fundamentally the same. Second, I clarify the sense of “efficiency” at work in the market failures approach. Finally, I argue that, in its current form, this view has little relevance to the real world of business. I conclude by sketching two ways of modifying it to fit our world. (shrink)

This paper argues, through conceptual analysis, against an objection to the disapproval of banks for the 2007-8 crisis: the idea that they could not have acted otherwise (at least not rationally) and that no one should be blamed for a fact one could not have avoided. If true, it would threaten the justification of corporate social responsibility and the legal liability of managers. Identified as the ‘inevitability thesis’, this objection is illustrated by an analysis of the film Margin Call (2011) (...) and associated with other investigations on ethics and responsibility. The target thesis stems from a confusion between different notions of responsibility (for a task, for a decision, for causing an event and for repairing it) and leads to an incoherent form of fatalism. Finally, it is suggested that the invocation of ‘inevitability’ may be a way of rationalizing the decision, obscuring reasons to the contrary. (shrink)

The notion that business organizations are akin to Aristotelian political communities has been a central feature of research into virtue ethics in business. In this article, I begin by outlining this “community thesis” and go on to argue that psychological research into the “just world fallacy” presents it with a significant challenge. The just world fallacy undermines our ability to implement an Aristotelian conception of justice, to each as he or she is due, and imperils the relational equality required for (...) shared participation in communities. In the final section, I offer a description of what Aristotelian community might look like within organizations, and some suggestions about how it may be possible to resist the challenge posed by the just world fallacy. (shrink)

In the wake of high profile and recent events of blatant privacy violations, which also raise issues of democratic accountability as well as, at least potentially, undermining the legitimacy of current local and international governance arrangements, a rethinking of the justification of the right to privacy is proposed. In this paper, the case of the violation of the privacy of a bullied autistic youngster and the consequent prosecution of 3 Google executives will be discussed first. We will then analyse the (...) arguments made by both academic experts and pundits who agree with Google’s claim that if the first sentence had been left unchallenged, it would have opened the floodgates to several other jurisdictions that would as a consequence have used it as a pretext to increase control on the internet, jeopardising in such a way free speech, which has been seen so far as an inalienable right which should not be censored. Finally, by going beyond the sentences and their immediate contexts, we will propose a theoretical justification of our analysis. Our main claim is that the value of the right to privacy is based on the argument that its violation would undermine citizens’ capacity to participate effectively in democratic politics. (shrink)

The law of successor criminal liability is simple—corporate successors are liable for the crimes of their predecessors. Always. Any corporation that results from any merger, consolidation, spin-off, etc., is on the hook for all the crimes of all the corporations that went into the process. Such a coarse-grained, onetrack approach fails to recognize that not all reorganizations are cut from the same cloth. As a result, it skews corporate incentives against reorganizing in more socially beneficial ways. It also risks punishing (...) corporate successors unjustly. -/- This Article offers a more sophisticated approach to successor liability: successors should be liable for the crimes of their predecessors only when they inherit their predecessors’ compliance vulnerabilities. In the terms developed by this Article, these successors share a “criminal identity” with their predecessors. Such an approach would incentivize corporations to structure reorganizations in ways that improve compliance and minimize the likelihood of future offenses. At the same time, it would do a better job of ensuring that. (shrink)

Many believe that employment can be wrongfully exploitative, even if it is consensual and mutually beneficial. At the same time, it may seem third parties should not do anything to preclude or eliminate such arrangements, given these same considerations of consent and benefit. I argue that there are perfectly sensible, intuitive ethical positions that vindicate this ‘Reasonable View’. The view requires such defense because the literature often suggests that there is no theoretical space for it. I respond to arguments for (...) the clearest symptom of this obscuration: the so-called nonworseness claim that a consensual, mutually beneficial transaction cannot be ‘morally worse’ than its absence. In addition to making space for the Reasonable View, this serves my dialectical goal of encouraging distinct attention to first- and third-party obligations. (shrink)

One of the central controversies in normative business ethics is the question whether transactions and economic relationships can be wrongfully exploitative despite being mutually beneficial and consensual. This article argues that anyone who accepts a shareholder theory of business ethics should accept deontological constraints on mutually beneficial, consensual exploitation.

For the past half century, there has been a large controversy within academic business ethics, in legal scholarship, and in the larger public about the role that corporations should have in addressing social injustices. Do corporations have a moral obligation to conduct business in a way that reduces poverty, racial inequality, other unjust economic and social inequalities, and unjust threats to the environment? Or should for-profit corporations focus on making money and leave solutions of these social problems to governments, nonprofit (...) organizations, and private individuals? -/- There are related but distinct controversies about corporations’ moral duties of transactional and relational justice. One important question is whether financial agreements or employment contracts can be wrongfully exploitative despite being fully consensual and beneficial to all parties. This question is distinct from the question whether corporations have a duty to promote distributive justice. Transactional unfairness is arguably possible in society with a just economic system, and fair transactions are presumably possible in a society with an unjust distribution. There are also important questions about the extent of firms’ moral obligation to avoid pollution, to refrain from discrimination, to treat employees fairly, and to respect the democratic process. These moral obligations may require more than obeying the relevant law. (shrink)

Moriarty argues that the Market Failures Approach to business ethics is inapplicable to “real world” problems, because it treats “market failure” as a failure to achieve Pareto efficiency. Depending upon how it is applied, Pareto efficiency is either trivially easy to satisfy or else so demanding that no real-world market could ever satisfy it. In this Commentary, I argue that Moriarty overstates these difficulties. The regulatory structure governing markets is best understood as an attempt to maximize the number of Pareto-improving (...) exchanges that occur. There is no reason to think business self-regulation cannot be guided by the same normative-conceptual framework. (shrink)

While researchers in business ethics, moral philosophy, and jurisprudence have advanced the study of corporate agency, there have been very few attempts to bring together insights from these and other disciplines in the pages of the Journal of Business Ethics. By introducing to an audience of business ethics scholars the work of outstanding authors working outside the field, this interdisciplinary special issue addresses this lacuna. Its aim is to encourage the formulation of innovative arguments that reinvigorate the study of corporate (...) agency and stimulate further cross-fertilization of ideas between business ethics, law, philosophy, and other disciplines. (shrink)

Etye Steinberg has recently raised a problem for Joseph Heath’s Market Failures Approach. In this paper we consider a response by Heath. We argue that Heath’s response not only leaves the original problem intact, but also raises a second one, analogous to stakeholder theory’s so-called “identification problem.”.

This essay reviews Deirdre McCloskey’s trilogy in political economy: Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality. In this trilogy McCloskey seeks to reestablish the ethical, historical, and political legitimacy of modern capitalism. Success of the project is offset by misapprehension of normativity and thus of how human economy is ethical.

In “The Responsibilities and Role of Business in Relation to Society,” Nien-hê Hsieh challenges Joseph Heath’s “market failure” or Paretian approach to business ethics by arguing for a “Back to Basics” approach. Here, I argue that two basics of Hsieh’s three-basics vision are flawed, because a. ordinary morality is in fact not sufficient for the adversarial realm of the market, and b. the ideal of a Pareto-optimal market economy with perfect competition does in fact provide an adequate basis for normative (...) rules against market failures. (shrink)

Many firms keep pay secret. They do not make information about what their employees are paid available inside or outside of the firm, i.e. to other employees or to the public at large. Indeed, many firms discourage their employees from, or sanction them for, disclosing their pay. Against this, I argue that there are good moral reasons for firms to be transparent about pay. Pay transparency prevents injustice, promotes autonomy, and increases efficiency. After presenting the positive case for pay transparency, (...) I defend it against objections, including the most common reasons firms give for keeping pay secret. (shrink)

This paper offers the concept of “justice failure,” as a counterpart to the familiar idea of market failure, in order to better understand managers’ ethical obligations. This paper takes the “market failures approach” to business ethics as its point of departure. The success of the MFA, I argue, lies in its close proximity with economic theory, particularly in the idea that, within a larger scheme of social cooperation, markets ought to pursue efficiency and leave the pursuit of equality to the (...) welfare state. As a result, the core ethical responsibility of business actors is to avoid profiting off of market failure. After reviewing this approach I challenge its emphasis on efficiency. I argue that just as we note the suboptimal efficiency of actual markets, we should also take seriously the suboptimal equality of actual welfare states. Taking this idea seriously results in a whole other set of ethical responsibilities for businesses to take into account; in addition to market imperfections and regulatory lacunae, managers should also avoid profiting from, and exacerbating, structural inequalities and injustices. I offer an outline of the kinds of injustices and inequalities that would have bearing on business ethics, and the kinds of ethical responsibilities that this approach suggests that business actors should take into account. (shrink)

MacIntyre argues that management embodies emotivism, and thus is inherently amoral and manipulative. His claim that management is necessarily Weberian is, at best, outdated, and the notion that management aims to be neutral and value free is incorrect. However, new forms of management, and in particular the increased emphasis on leadership which emerged after MacIntyre’s critique was published, tend to support his central charge. Indeed, charismatic and transformational forms of leadership seem to embody emotivism to a greater degree than do (...) more Weberian, bureaucratic forms of management; hence, MacIntyre’s central contention about our emotivistic culture seems to be well founded. Having criticised the details but defended the essence of MacIntyre’s critique of management, this paper sketches a MacIntyrean approach to management and leadership by highlighting the affinities between MacIntyre’s political philosophy and Greenleaf’s concept of servant leadership. (shrink)

One common justification for the pursuit of profit by business firms within a market economy is that profit is not an end in itself but a means to more efficiently produce and allocate resources. Profit, in short, is a mechanism that serves the market’s purpose of producing Pareto superior outcomes for society. This discussion examines whether such a justification, if correct, requires business managers to remain attentive to how their firm’s operation impacts the market’s purpose. In particular, it is argued (...) that the value of efficiency, despite views to the contrary, cannot be fully separated from the planning and intentions of business managers as long as those managers direct their firms in an ethically responsible fashion. This position is inspired by, and serves as a supportive clarification of Joseph Heath’s so-called “market failures approach” to business ethics. (shrink)

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)

The present paper argues that a right to work, defined as social and legal guarantees to fair conditions of employment, should be an essential part of a democratic state with market arrangements. This argument proceeds along the following lines. First, I reconstruct an account of rights that defends the “correlativity” thesis of rights and duties. The basic idea is that a social member’s legitimate demand to something of value, such as gainful employment, implies duties on the part of others to (...) respect and fulfill it. These duties include the following with regard to that demand: avoiding actions that cause the harm, protecting it against standard threats, and otherwise providing aid in case it is deprived. Second, I sketch an outline of what a right to work will entail in terms of the correlative duties just described. This means that respect and fulfillment of the demand will require both social members and the democratic state alike to guarantee fair conditions of employment: first, by forbearing from actions that deprive members of access to work; and second, by protecting members against threats of deprivation and aiding them when they are so deprived. Third, I answer some ethical and empirical objections to the idea of a right to work: that it violates the legal rights of owners and employers, fails to impart self-respect, lacks economic efficiency, and erodes human capital by undermining competitive incentives. Finally, I make some concluding observations that a democratic right to work so conceived is ethically and economically superior to alternative arrangements that neither respect nor fulfill these correlative duties to avoid harm, protect against threats, and provide aid in cases of deprivation. (shrink)

In a recent critique of the so-called “market failures approach” to business ethics Abraham Singer maintains that business firms have ethical responsibilities to voluntarily restrain their profit-seeking activities in accordance with the demands of justice. While I ultimately share Singer’s intuition that the MFA has overlooked the importance of justice in business ethics, I argue that he has not presented a fully adequate case to explain why justice-related responsibilities should be assigned to business firms. I conclude by offering a brief (...) – and supportive – alternative to his position. (shrink)

Until Joseph Heath came along, philosophical business ethics was in a bad way. To the extent it’s still in a bad way, perhaps it’s because Heath has had insufficient influence. Before Heath, much of the debate in the field was between two major theories—stockholder and stakeholder theory. Both of these theories are either false, or vacuous and empty, depending on the interpretation. Heath has to some degree rescued the field by providing what is perhaps the only good general theory of (...) business ethics, which Heath calls the Market Failures Approach. (To be clear, there is some good casuistical work in business ethics, but the Market Failures Approach is perhaps the only good general theory of.. (shrink)

[Requested essay for George Washington Leadership Institute curriculum, Fred W. Smith National Library for the Study of George Washington, Mt. Vernon.] Honor is often equated with integrity, dignity, courage, and unimpeachable reputation. But what is the underlying essence of honor that explains those associations? This essay provides a framework for thinking about honor, and explores a theory of honor that understands it in terms of agonism---that is, as an ethic regulating our pursuit of prestige according to principles of fair and (...) respectful contest. We begin by distinguishing between honor-as-prestige and honor as an ethical system. We then canvass honor’s commitment to fair competition, noblesse oblige, integrity, independence, and martial valor. After forwarding the agonistic theory of honor, we conclude with some suggestions for leaders interested in fostering honor-mindedness in their organizations. (shrink)

Corporate Social Responsibility (CSR) has been traditionally framed within business ethics as a discourse attempting to identify certain moral responsibilities of corporations (as well as get these corporations to fulfill their responsibilities). This theory has often been normatively grounded in the idea that a corporation is (or ought to be treated as) a moral agent. I argue that it is a mistake to think of (or treat) corporations as moral agents, and that CSR’s impotency is a direct result of this (...) mistake. I then outline a distinction between business ethics and business politics, arguing that CSR might be better framed as a political goal – one which might be able to take better advantage of the resources of corporate governance and a renewed (albeit shifted) focus on agency theory. (shrink)

Jason Brennan and Peter Jaworski reject expressive objections to markets on the grounds that market symbolism is culturally contingent, and contingent cultural symbols are less important than the benefits markets offer. I grant and, but I deny that these points suffice as grounds to dismiss expressive critiques of markets. For many plausible expressive critiques of markets are not symbolic critiques at all. Rather, they are critiques grounded in the idea that some market transactions embody morally inappropriate normative stances toward the (...) goods or services on offer. (shrink)

Contract-based approaches have been a focus of attention in business ethics. As one of the grand traditions in political philosophy, contractarianism is founded on the notion that we will never resolve deep moral disagreement. Classical philosophers like Hobbes and Locke, or recent ones like Rawls and Gaus, seek to solve ethical conflicts on the level of social rules and procedures. Recent authors in business ethics have sought to utilize contract-based approaches for their field and to apply it to concrete business (...) dilemmas. However, the application of contractarianism to management contexts can cause difficulties. Our article discusses this conceptual problem of contractarian business ethics and presents the idea of order ethics as an alternative. Order ethics, as we argue, can make a difference by conceptually bridging the gap between contractarianism and business ethics. (shrink)

This book examines the theoretical foundations of order ethics and discusses business ethics problems from an order ethics perspective. Order ethics focuses on the social order and the institutional environment in which individuals interact. It is a well-established paradigm in European business ethics. The book contains articles written by leading experts in the field and provides both a concise introduction to order ethics and short summary articles homing in on specific aspects of the order-ethical paradigm. It presents contributions describing fundamental (...) concepts, historical roots, and the economic, social, and philosophical background of the theory. The second part of the handbook focuses on the theory's application in business, society, and politics, casting new light on an array of topics that loom large in contemporary ethical discourse.​. (shrink)

Karl Homann ist vor allem als Wirtschaftsethiker bekannt. Er war der erste Inhaber eines wirtschaftsethischen Lehrstuhls und gilt als einer derjenigen Autoren, die das Fach Wirtschaftsethik im deutschen Sprachraum maßgeblich geprägt haben. Dabei hat Homann seinen wirtschaftsethischen Theorieentwurf nie als eine schlichte Anwendung ethischer Grundsätze auf Fragen des Wirtschaftens verstanden. Vielmehr begriff er ihn als allgemeinen ethischen Ansatz mit ökonomischer Methode. Im Rahmen dieses Ansatzes sollte die abendländische Moral ökonomisch rekonstruiert werden, um sie so unter den Bedingungen moderner Gesellschaften mit (...) institutionalisiertem marktwirtschaftlichen Wettbewerb überlebensfähig zu machen. Mit seiner neuen Monographie Sollen und Können stellt Karl Homann dieses Grundmodell einem weiteren Leserkreis vor. Er will sein Buch also nicht als einen neuen Beitrag zur Wirtschaftsethik-Debatte verstanden wissen, sondern als allgemeinen philosophischen Ethikentwurf. Die Argumentation, die Homann in Sollen und Können vorstellt, soll im Folgenden selektiv zusammengefasst und kritisch gewürdigt werden. (shrink)

In defense of his Market Failures Approach to business ethics Joseph Heath relies on an understanding of business as essentially oriented towards competition and profit maximization. In these remarks I defend an alternative understanding of business that is centered on the creation of valuable goods and services. It is preferable because it: creates less pressure to take advantage of vulnerable stakeholders, can readily recognize “beyond compliance” norms that do not relate to efficiency, provides a more meaningful framework for people who (...) work in and with corporations, may mitigate negative moral impacts outside the market, and better captures the range of what actually counts as business activity. (shrink)

Peg Tittle’s ambitious business ethics text brings together readings, cases, and the author’s own informed opinions. The second edition includes over a dozen new readings and case studies, as well as a new chapter on issues in Information and Communication Technology. _Includes_ - Canonical and topical readings on issues ranging from whistleblowing and advertising to international business, the nature of capitalism, and the environment - Engaging overviews from the author encourage careful reflection and critical examination of conventional assumptions - _What (...) to Do?_ scenarios and _Case Studies_ illustrate the practical relevance of each topic - Comprehensive introductions to ethical theory and the ethics of business - Questions following each selection test understanding and promote active reading - A primer on ethical institutions examines the role of ethics consultants, codes of ethics, and more. (shrink)

According to the Market Failures Approach to business ethics, beyond-compliance duties can be derived by employing the same rationale and arguments that justify state regulation of economic conduct. Very roughly the idea is that managers have a duty to behave as if they were complying with an ideal regulatory regime ensuring Pareto-optimal market outcomes. Proponents of the approach argue that managers have a professional duty not to undermine the institutional setting that defines their role, namely the competitive market. This answer (...) is inadequate, however, for it is the hierarchical firm, rather than the competitive market, that defines the role of corporate managers and shapes their professional obligations. Thus, if the obligations that the market failures approach generates are to apply to managers, they must do so in an indirect way. I suggest that the obligations the market failures approach generates directly apply to shareholders. Managers, in turn, inherit these obligations as part of their duties as loyal agents. (shrink)

Several European and North American states encourage or even require, via good Samaritan and duty to rescue laws, that persons assist others in distress. This paper offers a utilitarian and contractualist defense of this view as applied to corporations. It is argued that just as we should sometimes frown on bad Samaritans who fail to aid persons in distress, we should also frown on bad corporate Samaritans who neglect to use their considerable multinational power to undertake disaster relief or to (...) confront widespread social ills such as those currently befalling public health (obesity) and the environment (climate change). As such, the corporate duty to assist approach provides a novel justification for sustainable business practices in such cases. The paper concludes by arguing that traditional stakeholder approaches have not articulated this duty of assistance obligation, though a new utilitarian stakeholder theory by Thomas Jones and Will Felps may be coextensive. (shrink)

This book questions the often implicit assumption of many contemporary political philosophers that a society needs its citizens to adopt some shared basic qualities, views, or capabilities. Christoph Luetge provides an alternative view, which relies on mutual advantages as the fundamental basis of society.

The theme of this issue of the St. Gallen Business Review is "Harmony". For this reason, we would like to discuss whether two aspects of our life- world are in harmony, namely economic optimization and morality. What is the relation between them? According to a widely shared view, which is one aspect of the doctrine of "mainstream economics", the functioning of an economic system does not require moral behaviour on the part of the individual economic agent. In what follows, we (...) will try to convince you that this is false. If all economic agents – managers, employees, bankers, consumers and so on – were purely self-interested, as mainstream economics assumes, our economic practice would fail. There are various reasons for this. Here we will focus on one of them, namely the pivotal role of interpersonal communication. (shrink)

It is commonly believed that the moral norms of “everyday” or “traditional” morality apply uniformly in all business contexts. However, Joseph Heath has recently argued that this is not the case. According to Heath, the norms of everyday morality apply with respect to “administered” transactions, but not “market” transactions. Market transactions are, he argues, governed by a distinct, “adversarial” morality. In this essay, I argue that Heath’s attempt to show that competitive contexts are governed by a distinct, adversarial morality does (...) not succeed. I then undertake the task of showing that, contrary to what is commonly thought, competitive actions can be reconciled with the norms of traditional morality. (shrink)

In four new and nine previously published essays, Joseph Heath provides a compelling new framework for thinking about the moral obligations of economic actors. The "market failures" approach to business ethics that he develops provides the basis for a unified theory of business ethics, corporate law, economic regulation, and the welfare state.

Joseph Heath lumps in quotas and protectionist measures with cartelization, taking advantage of information asymmetries, seeking a monopoly position, and so on, as all instances of behavior that can lead to market failures in his market failures approach to business ethics. The problem is that this kind of rent and rent seeking, when they fail to deliver desirable outcomes, are better described as government failure. I suggest that this means we will have to expand Heath’s framework to a market and (...) government failures approach. I then try to defuse objections that as a government failure, rent seeking may not appear relevant to what managers ought to do. Solving this conceptual issue will also give us an excuse to revisit a separate conceptual issue: the normatively thick conception of “rent” and rent seeking behavior that some use. This normatively thick conception is problematic, I argue, and I offer the beginnings of a novel, normatively neutral conception that is useful for our purposes in making the ethics of rent and rent seeking behavior more than a merely trivial exercise. (shrink)