Abstract

This paper responds to the Radical Behavioral Challenge to normative business ethics. According to RBC, recent research on bounded ethicality shows that it is psychologically impossible for people to follow the prescriptions of normative business ethics. Thus, said prescriptions run afoul of the principle that nobody has an obligation to do something that they cannot do. I show that the only explicit response to this challenge in the business ethics literature is flawed because it limits normative business ethics to condemning practitioners’ behavior without providing usable suggestions for how to do better. I argue that a more satisfying response is to, first, recognize that most obligations in business are wide-scope which, second, implies that there are multiple ways of fulfilling them. This provides a solid theoretical grounding for the increasingly popular view that we have obligations to erect institutional safeguards when bounded ethicality is likely to interfere with our ability to do what is right. I conclude with examples of such safeguards and some advice on how to use the research findings on bounded ethicality in designing ethical business organizations.