Although McMahon offers a potentially valuable extension of Joseph Raz's conceptualization of authority by distinguishing three different kinds of authority, this paper argues, first, that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in the␣explanation and justification of authority in economic␣organization. This paper explains, second, why McMahon's thesis of the justificatory similarity of (...) authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically. Finally, this paper raises some critical objections against McMahon's presumption of democratic governance in governments and NGO's alike. The thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because: it will not produce results that are fair or welfare maximizing, and it will undermine the legitimacy of managerial authority in such firms. (shrink)

An introduction to the March, 2005 symposium “The Political Theory of Organizations: A Retrospective Examination of Christopher McMahon’s Authority and Democracy” held in San Francisco as part of the Society for Business Ethics Group Meeting at the Pacific Division Meetings of the American Philosophical Association.

A number of recent authors, most notably Joseph Heath, have persausively defended a market‐centered account of corporate responsibility that grounds standards of business conduct upon the normative presuppositions of the market. They have us focus on two important items: first, the value of welfare, or Pareto efficient outcomes, which underwrites the legitimacy of market arrangements; and second, the behavioral requirements needed to assure that corporations conduct business in a manner consistent with this value. This article critically examines the aspirations of (...) this literature by embracing its basic method but questioning how well it understands the aim of the market. It puts forth a limited case for corporate responsibility anchored in other dimensions of the public good, distinct from the value of efficiency, and argues that a plausible understanding of corporate responsibility arises from the notion that market arrangements are sites of delegated social authority to provision other aspects of the common good. (shrink)

Sumantra Ghoshal’s condemnation of “bad management theories” that were “destroying good management practices” has not lost any of its salience, after a decade. Management theories anchored in agency theory (and neo-classical economics generally) continue to abet the financialization of society and undermine the functioning of business. An alternative approach (drawn from a more classic institutional, new ecological, and refocused ethical approaches) is reviewed.

This article addresses the recent call in business ethics literature for a better understanding of corporations as political actors or entities. It first gives an overview of recent attempts to examine classical issues in business ethics through a political lens. It examines different ways in which theorists with an interest in the normative analysis of business practices and institutions could find it desirable and fruitful to use a political lens. This article presents a distinction among four views of the relations (...) between corporations and politics: corporations as distributive agents, corporations as political communities, corporate practices and policies as citizenship issues, and corporations as active participants in the political process. This article finishes with an examination of three challenges that need to be overcome by the theory of the firm as a political actor. (shrink)

What, if anything, is wrong with high executive compensation? Is the common “lay reaction” of indignation and moral outrage justified? In this paper, my main goal is to articulate in a more systematic and philosophical manner the egalitarian responses to these questions. In order to do so, I suggest that we take some insights from recent debates on two versions of egalitarianism: a distributive one, according to which no one should be worse off than others because of unfair distributions of (...) goods and resources, especially ones based on matters of luck or arbitrary factors, and a relational one, which maintains that egalitarian justice requires members of a society to relate to one another as equals. Drawing on recent attempts to highlight the tricky nature of managerial authority, I argue that high inequalities in pay are not simply a distributional matter but should also be analyzed through a relational lens. I also attempt to show that relational egalitarians are well-equipped to question the now dominant “incentives” view of CEO compensation. (shrink)

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should support giving all (...) stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed. (shrink)

Abstract:The organization is importantly different from both the nation-state and the individual and hence needs its own ethical models and theories, distinct from political and moral theory. To develop a case for organizational ethics, this paper advances arguments in three directions. First, it highlights the growing role of organizations and their distinctive attributes. Second, it illuminates the incongruities between organizations and moral and political philosophy. Third, it takes these incongruities, as well as organizations’ distinctive attributes, as a starting point for (...) suggesting an agenda for an ethics of organizations. (shrink)

This article compares the ‘enfranchisement lottery’, a novel method for allocating the right to vote, with universal suffrage. The comparison is conducted exclusively on the basis of the expected consequences of the two systems. Each scheme seems to have a relative advantage. On the one hand, the enfranchisement lottery would create a better informed electorate and thus improve the quality of electoral outcomes. On the other hand, universal suffrage is more likely to ensure that elections are seen to be fair, (...) which is important for political stability. This article concludes that, on balance, universal suffrage is prima facie superior to the enfranchisement lottery. Yet the analysis shows that the instrumental case for the ‘one person, one vote’ principle is less conclusive than democratic theorists usually suppose. (shrink)

ABSTRACT:This article provides a normative justification for unions. It discusses three arguments. The argument from consent justifies unions in some circumstances, but if the employer prefers to not bargain with unions, it may provide very little justification. The argument from contestability takes as its starting point the fact that employment contracts are incomplete contracts, where authority takes the place of complete contractual terms. This theory of contracts implies that consent to authority has been given under ignorance, and, therefore, that authority (...) cannot be justified by consent. Contestability is a mechanism that can handle this problem for consent theory. It demands transparency, channels for voice, and a forum where contestations can be evaluated. This idea can be implemented in firms in different ways, but the argument from the separation of powers implies that unions are uniquely suited to implement contestability, since they are organized outside of the employer’s domain of authority. (shrink)

Is it a requirement of justice to democratize private companies? This question has received renewed attention in the wake of the financial crisis, as part of a larger debate about the role of companies in society. In this article, we discuss three principled arguments for workplace democracy and show that these arguments fail to establish that all workplaces ought to be democratized. We do, however, argue that republican-minded workers must have a fair opportunity to work in a democratic company. Under (...) current conditions, this means that a liberal order must actively promote workplace democracy. (shrink)

According to Palazzo and Scherer, the changing role of business corporations in society requires that we take new measures to integrate these organizations into society-wide processes of democratic governance. We argue that their model of integration has a fundamental problem. Instead of treating business corporations as agents that must be held accountable to the democratic reasoning of affected parties, it treats corporations as agents who can hold others accountable. In our terminology, it treats business corporations as “supervising authorities” rather than (...) “functionaries.” The result is that Palazzo and Scherer’s model does not actually address the democratic deficit that it is meant to solve. In order to fix the problem, we advocate removing business corporations from any policymaking role in political CSR and limiting participation to political NGOs and other groups that meet the standards we set out for a politically representative organization (PRO). (shrink)

In this paper, I examine the case made by Christopher McMahon for managerial democracy. Specifically, I examine the extent to which McMahon’s account is able to address a series of objections against the case for managerial democracy as articulated by Thomas Christiano. Christiano articulates two sets of objections. First, Christiano argues that McMahon does not succeed in ruling out the possibility that managerial authority is best understood as promissory in its basis, in which case there is no presumption in favor (...) of its democratic exercise. Second, Christiano raises a series of objections to the effect that even if we accept McMahon’s account of the nature of managerial authority, the conclusion for the democratic exercise of that authority by workers at the level of individual economic enterprises does not follow. In the end, I argue that McMahon’s account contains the resources to address these objections if one adopts a specific view about the moral limits to relationships that involve the submission of the will on the part of one person to another. Adoption of this view, however, appears to come at the expense of what I take to be the account’s commitment to liberalism. As such, what I understand this paper to reflect more generally is the apparent difficulty for liberals in arguing that there is something inherently morally troubling about capitalist work relations. (shrink)

Abstract:There is good reason to take a virtue-based approach to business ethics. Moral principles are fairly useful in assessing actions, but understanding how moral people behave and how they become moral requires reference to virtues, some of which are important in business. We must go beyond virtues and refer to character, of which virtues are components, to grasp the relationship between moral assessment and psychological explanation. Virtues and other character traits are closely related to (in technical terms, they supervene on) (...) personality traits postulated by personality psychologists. They may therefore be featured in respectable psychological explanations. But good character fits no familiar psychological pattern. A person of good character is sufficiently self-aware and rational that his or her virtues are not accompanied by the vices that psychologists find usually associated with them. A course in business ethics can help develop this self-awareness, which a good life in business requires. (shrink)

The modern corporation offers significant potential to contribute to the human rights project, in part because it is free from the challenges posed by national sovereignty. That promise has begun to be realized in businesses practicing corporate due diligence with regard to the human rights of persons involved in or affected by those enterprises. Yet due diligence preserves the self-seeking orientation of the conventional corporation and seeks only to protect itself from committing human rights abuses. This approach, typified by the (...) UN Guiding Principles on Business and Human Rights, does not address background conditions for and root causes of vulnerability to human rights abuses. My alternative, the human rights corporation, takes an other-regarding orientation that advances human rights within the corporation and in its human, social, economic, and natural environments. It moves beyond the due diligence carrot-and-stick model to a model in which the corporation produces not only goods and services but also human rights consciousness and practice as well. (shrink)

While there may be several practical concerns regarding the practice of corporate lobbying of government officials, there is the more basic question of a corporation’s moral right to do so. I argue that group agents such as corporations have no moral rights, and thereby cannot have the right to lobby. There may be a basis for some legal rights for corporations, but I argue that lobbying cannot be one of the legal rights, even by reference to the rights of the (...) individuals that make up the corporation. I end the paper by a discussion of how this argument applies to all private organizations, including public interest organizations. (shrink)

The article reviews the recent debate about workplace democracy. It first presents and critically discusses arguments in favor of democratizing the firm that are based on the analogy with states, meaningful work, the avoidance of unjustified hierarchies, and beneficial effects on political democracy. The second part presents and critically discusses arguments against workplace democracy that are based on considerations of efficiency, the difficulties of a transition towards democratic firms, and liberal commitments such as the rights of employees and owners to (...) work for or invest in nondemocratic firms. The conclusion summarizes the debate and argues that experiments with democratic workplaces as what Erik Olin Wright calls “real utopias” could deliver new insights and thus move the discussion forward. (shrink)

Journal of Social Philosophy, EarlyView.

Controversy surrounds the ‘intrusion’ of the discourse of rights into workplace relationships. This is explored by examining the nature of rights through the analysis of the idea of a ‘right to manage’. Purported justifications of the right to manage in terms of either property or contract are shown to be inadequate, thus illustrating the need to incorporate a degree of consequentialism in the articulation and justification of rights. The value of a rights-approach is argued to lie in the identification of (...) the morally relevant interests affected by management decisions and the correlative obligations of those involved in the workplace, rather than in the introduction of a special set of moral considerations distinctively connected with the idea of rights. (shrink)

In response to conventional rationalistic approaches to management and corporate governance, the Aristotelian tradition is emerging as a basis for alternative theories in which practical wisdom is central. This paper, following Aristotle and Thomas Aquinas, considers the specificity of “political wisdom” -directed to the common good- as being different from individual practical wisdom. We suggest that the business firm is a “political community”, understood as a whole formed by free and intelligent individuals called to cooperate for common goals and to (...) pursue a common good. This orientation toward the common good requires political wisdom. After discussing the concepts of “political wisdom” and the business firm as “political community” we propose a number of implications of political wisdom in management and corporate governance. (shrink)

This paper approaches the question of corporate integrity and leadership from a civic perspective, which means that corporations are seen as members of civil society, corporate members are seen as citizens, and corporate decisions are guided by civic norms. Corporate integrity, from this perspective, requires that the communication patterns that constitute interpersonal relationships at work exhibit the civic norm of reciprocity and acknowledge the need for security and the right to participate. Since leaders are members of corporate relationships, their integrity (...) will be determined by the integrity of these interpersonal relationships, and by their efforts to improve them. (shrink)

Employee governance, which includes employee ownership and employee participation in decision making, is regarded by manyas morally preferable to control of corporations by shareholders. However, employee governance is rare in advanced market economies due to its relative inefficiency compared with shareholder governance. Given this inefficiency, should employee governance be given up as an impractical ideal? This article contends that the debate over this question is hampered by an inadequate conception of employee governance that fails to take into account the difference (...) between employees and shareholders. It offers a different, more adequate conception of employee governance that recognizes a sense in which employees currently have some ownership rights. The argument for this conception of employee governance is built on an expanded understanding of the ownership of a firm. The article also suggests new strategies for strengthening the role of employees in corporate governance. (shrink)

This paper assesses employees’ moral agency within corporate capitalism from a politically liberal standpoint. While political liberalism has spelt out its key institutional implications at state level, it has neglected moral agency at work, assuming that a rights-based state that secures freedom of contract, free choice of occupation and a free labour market within a fair context would protect it sufficiently. Yet two features of corporate capitalism constrain employees’ moral agency: the relation of authority that forms part of the work (...) contract and organisations’ fragmented decision-making processes. Both seem at odds with the liberal ideal of allowing people to live by their own conception of the good. Consequently, this paper examines whether political liberalism should recommend greater safeguards for protecting workers’ moral agency. It proposes a criterion for assessing corporate capitalism: the ‘moral space’ defined as the socially shaped opportunities for action that can be enacted or endorsed from a comprehensive perspective. It argues that liberals should favour arrangements that widen workers’ moral space and suggests institutional designs that may achieve this while remaining within liberal boundaries. (shrink)

In this paper, I set out to defend the claim that a central principle in democratic theory, the all-subjected principle, applies not only when one is subject to a rule by a state but also when one is subject to a rule by a ‘non-state’ unit. I argue that self-government is the value underlying the all-subjected principle that explains why a subjected individual should be included because she is subjected. Given this, it is unfounded to limit the principle to the (...) state, as subjection which threatens self-government occurs in non-state units such as corporations and families. This means that following the all-subjected principle surprisingly implies that we ought to have family and workplace democracy. (shrink)

This article provides an overview of the field of business ethics.

This paper clarifies the usage of Albert Hirschman’s categories of market behaviour as of exit and voice in debates about workplace democracy by taking seriously his critique of the neoclassical analysis of competition. Pro-market liberals are generally hostile to the idea of workplace democracy and tend to favour top-down hierarchies as a way of organising labour. This hostility is generally inspired by the neoclassical analysis of exploitation and efficiency, which leads them to defend distributions achieved through exit-based competitive equilibria. Following (...) Hirschman, I propose to consider a hypothetical alternative: a democratic equilibrium, reached through the use of voice. I show that it would present the same appealing characteristics than its competitive counterpart while also accounting for the non-ideal conditions in which markets operate. Support for free markets should entail support for workplace democracy minimally understood as a strengthening of voice. (shrink)

The paper discusses the structure, applications, and plausibility of the much-used parallel-case argument for workplace democracy. The argument rests on an analogy between firms and states according to which the justification of democracy in the state implies its justification in the workplace. The contribution of the paper is threefold. First, the argument is illustrated by applying it to two usual objections to workplace democracy, namely, that employees lack the expertise required to run a firm and that only capital suppliers should (...) have a say over the governance of the firm. Second, the structure of the argument is unfolded. Third, two salient similarities between firms and states regarding their internal and external effects and the standing of their members are addressed in order to asses the potential and limits of the argument, as well as three relevant differences regarding the voluntariness of their membership, the narrowness of their goals, and the stiffness of the competition they face. After considering these similarities and differences, the paper contends that the the parallel-case argument provides a sound reason in favor of democracy in the workplace—a reason, however, that needs to be importantly qualified and that is only pro tanto. (shrink)

My aim in this article is twofold. First, I will illuminate the triangular conceptual connections between responsibility, authority, and power as they are exposed in the organizational realm; second, I will show how the three concepts are distinct. Relying on the work of Peter Strawson and his followers on responsibility for my point of departure, I will show that the connection between the inner corporational authority and its inner matching responsibility is different from the connection between the outer corporational forces (...) and influences and the CSR that they develop in reaction to these. This will expose another important distinction between two kinds of responsibility: the organizational kind, as instantiated in organizations, and the social kind, which constitutes the outer aspect of the CSR. Though many thinkers address different kinds of responsibility, a comparative perspective of these different concepts is missing. I attempt to bring three of these separate discourses together to examine them alongside one another, evaluating them in the light of their differences and similarities. This will expose a new typology of ‘responsibility’ that penetrates and illuminates the relations between corporations and society and as such enhance our understanding of organizational responsibility. (shrink)