Living in Agreement with a Contract: The Management of Moral and Viable Firm–Stakeholder Relationships

Journal of Business Ethics 68 (3):243-258 (2006)
  Copy   BIBTEX


In a contractual firm–stakeholder relationship the participants are expected to act according to the agreement and for mutual benefit. By acting against the agreement at the expense of the other participant, however, may result in higher individual profits within a short period of time. Building on the unlocked iterated prisoner’s dilemma (PD) setting, Scanlon’s [Scanlon, T.␣M.: 1998, What We Owe to Each Other (Belknap Press of Harvard University Press, Cambridge, Mass)] version of contractualism, and the social dilemma literature, this article considers what types of behaviors should be followed by both parties in an established firm–stakeholder relationship in order to reach an outcome that is defensible both in terms of morality and viability. It is argued that a normative foundation, which advises firms and stakeholders to ground their behavior on principles that could not reasonably be rejected by others, forms a basis for moral and viable behavior that can be expressed in the form of a strategic rule that excludes defection and utilizes the option to exit in response to the other participant’s defection. Then, a set of testable propositions is developed that describe how a firm and its stakeholders can further promote moral and viable relationships.



    Upload a copy of this work     Papers currently archived: 74,310

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Similar books and articles

A “Black Box” of Stakeholder Thinking.Kalle Pajunen - 2010 - Journal of Business Ethics 96 (S1):27-32.
Relational Capacity and Firm Performance: A Stakeholder-Relational Perspective.Raed Elaydi & Josetta S. Mclaughlin - 2012 - Proceedings of the International Association for Business and Society 23:229-239.
Stakeholder Management Theory, Firm Strategy, and Ambidexterity.Mario Minoja - 2012 - Journal of Business Ethics 109 (1):67-82.
Economic Contracts Versus Social Relationships as a Foundation for Normative Stakeholder Theory.John Hendry - 2001 - Business Ethics, the Environment and Responsibility 10 (3):223–232.
The Importance of Competency, Reputation, and Goodwill in Re-Establishing Stakeholder Relationships.Paul Dunn & Jill Brown - 2009 - Proceedings of the International Association for Business and Society 20:291-295.
Internal Effects of Stakeholder Management Devices.Sara A. Morris - 1997 - Journal of Business Ethics 16 (4):413-424.
Two Conflicting Models—Harmonious Relationships and Stakeholder Management—Can They Be Reconciled?Karen Paul & Inge Nickerson - 2009 - Proceedings of the International Association for Business and Society 20:296-301.


Added to PP

42 (#275,580)

6 months
1 (#415,900)

Historical graph of downloads
How can I increase my downloads?

References found in this work

What We Owe to Each Other.Thomas Scanlon - 1998 - Belknap Press of Harvard University Press.
Morals by Agreement.David P. Gauthier - 1986 - Oxford University Press.
After Virtue.A. MacIntyre - 1981 - Tijdschrift Voor Filosofie 46 (1):169-171.

View all 14 references / Add more references