Social contract theory has a rich history. It originated among the ancients with recognition that social arrangements were not products of nature but convention. It developed through the centuries as theorists sought ethical criteria for distinguishing good conventions from bad. The search for such ethical criteria continues in recent attempts to apply social contract theory to organizations. In this paper, I question the concept ofconsent as a viable ethical criterion, and I argue for an alternate principle of impartiality as a (...) more appropriate moral norm in a social contracttheory of organizations. (shrink)

Abstract:Popular media, communitarian writings, and recent management literature suggest that communities and organizations are rent by factional mischief: by individuals and groups who pursue their own selfish interests without regard for the common good. An emerging solution to this problem is “transformational” leadership, which seeks to refocus individuals’ attention on higher visions and collective goals. The dangers of such a solution were identified by James Madison at the Constitutional Convention of 1787; and mechanisms to thwart it were designed into the (...) framers’ system of government. This article examines Madison’s objections and the implications of his political theory for the leadership of modern organizations. (shrink)

Abstract:Popular media, communitarian writings, and recent management literature suggest that communities and organizations are rent by factional mischief: by individuals and groups who pursue their own selfish interests without regard for the common good. An emerging solution to this problem is “transformational” leadership, which seeks to refocus individuals’ attention on higher visions and collective goals. The dangers of such a solution were identified by James Madison at the Constitutional Convention of 1787; and mechanisms to thwart it were designed into the (...) framers’ system of government. This article examines Madison’s objections and the implications of his political theory for the leadership of modern organizations. (shrink)

Opinion surveys and popular media suggest that American workers are disillusioned with their employers and bosses. Governance in organizations is becoming a recognized problem. Classical works on governance call for more virtuous leaders, less selfish followers, and closer attention to the common good. These works were rejected as a basis for governing nations in the 18th century. They are unlikely to provide a basis for governing organizations in the 21st century. This article outlines a liberal-democratic approach to governing corporations, applies (...) this approach to debates over shareholder-stakeholder accountabilities, and proposes specialaccountabilities to employees. (shrink)

Hirschman's (1970) exit, voice, and loyalty framework draws attention to both economic and political behavior as instruments for organizational change. The framework is simple but powerful; it has stimulated much cross-disciplinary analysis and debate. This paper extends this analysis by examining normative implications of Hirschman's basic premise: that exit and voice are primarily mechanisms for enhancing organizational (vs. individual) well-being.

Organizations in competitive markets are often assumed to be voluntary associations, involving free exchange between various participants for mutual benefit. Just how voluntary or free organizational exchanges really are, however, is problematic. Even the criteria for determining whether specific transactions are free or coerced are not clear. In this paper, I review three general approaches to specifying such criteria: consequentialist, descriptive, and normative. I argue that the last is the most reasonable, that freedom is an essentially moral concept, whose meaning (...) is relative to preconceptions of human rights. Implications for freedom of contract are discussed.[O]n the whole, market competition, when it is permitted to work, protects the consumer better than do the alternative government mechanisms that have been increasingly superimposed on the market. ... If one storekeeper offers you goods of lower quality or of higher price than another, you're not going to continue to patronize his store. If he buys goods to sell that don't serve your needs, you're not going to buy them. The merchants therefore search out all over the world the products that might meet your needs and might appeal to you. And they stand back of them because if they don't, they're going to go out of business. When you enter a store, no one forces you to buy. You are free to do so or go elsewhere. That is the basic difference between the market and a political agency. You are free to choose (Friedman and Friedman, 1979, 222–223). (shrink)