Ethics and Economic Affairs

410 Pages·1994·2.57 MB·English

by  Alan Lewis

Ethics and economic affairs

There has been a remarkable growth of interest in the ethical dimension of
economic affairs. Whilst the interest in business ethics has been longstanding, it has
been given renewed emphasis by high-profile scandals in the world of business
and finance. At the same time many economists— dissatisfied with the discipline’s
emphasis on self-interest and individualism and by the asocial nature of much
economic theory—have sought to enlarge the scope of economics by looking at
ethical questions.
In Ethics and Economic Affairs a group of interdisciplinary scholars provide
contributions of international interest in this aspect of socio-economics and
economic-psychology. The book is divided into four parts. The first looks at
Business Ethics and Management. This includes a discussion of moral issues for
multinational companies and goes on to look at the philosophical aspects of
business ethics and moral development. The final chapter focuses on the wider
implications of social responsibility and the firm. Part II enlivens the debate with
empirical data. The four papers in this section represent differing approaches to
descriptive ethics: case study, varying types of interview surveys and laboratory
experiments. The third part examines the implications for economic theory and
asks if the integration of ethics in the economy is possible or if they are
fundamentally different systems. Finally, Part IV introduces perspectives from
other disciplines, sets economics within its wider context and looks to the future.
The editors have brought together a group of contributors from nine different
countries and a broad range of disciplines. Ethics and Economic Affairs provides
a comprehensive and valuable insight into a complex and increasingly important
aspect of economics. As such it should be of interest to students and practising
management alike.
Alan Lewis is Director of the Centre of Economic Psychology at the University of
Bath. He has published a number of books on economic psychology. Karl-Erik
Wärneryd is Professor Emeritus of Economic Psychology at the Stockholm School
of Economics, Sweden. He has extensive research experience both in his native
Sweden and abroad. He is the author of various publications on the subject.

Ethics and economic affairs
Edited by Alan Lewis and Karl-
Erik Wärneryd

London and New York
First published 1994
by Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2002.
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
© 1994 Alan Lewis and Karl-Erik Wärneryd
All rights reserved. No part of this book may be reprinted or reproduced or utilized in
any form or by any electronic, mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Ethics and economic affairs/edited by Alan Lewis and Karl-Erik Wärneryd.
p. cm.
Includes bibliographical references and index.
ISBN 0-415-09396-1 (Print Edition)
1. Business ethics. 2. Social responsibility of business.
I. Lewis, Alan, 1952– . II. Wärneryd, Karl-Erik, 1927– .
HF5387.E826 1994 93–45693
174’.4–dc20 CIP
ISBN 0-415-09396-1 (Print Edition)
ISBN 0-203-02937-2 Master e-book ISBN
ISBN 0-203-20568-5 (Glassbook Format)
To Emma Strawford-Lewis wishing her well in her new
career in business and to Karl and Jan-Erik Wärneryd
wishing them continued success in developing
economic theory and financial practice, respectively.
Contents

List of figures, tables and exhibits viii
About the contributors x
The contents of the book xvii
Preface by Amitai Etzioni xxi
Acknowledgements xxii
1 The longstanding interest in business ethics: An introduction 1
Karl-Erik Wärneryd and Alan Lewis
Part I Business ethics and management
2 Exit or voice? Lessons from companies in South Africa 17
Philip J.Stone
3 Moral and ethical dimensions of managing a multinational 39
business
Lynne M.H.Rosansky
4 Management by ethics: A new paradigm and model for 51
corporate ethics
Richard H.Guerrette
5 Moralization as a link between idealism and naturalism in the 115
ethical discourse
Claes Gustafsson
6 Social responsibility in the human firm: Towards a new theory
of the firm’s external relationships 125
John F.Tomer
Part II Case, questionnaire and experimental studies
7 Fairness in consumer pricing 151
Patrick J.Kaufmann, Given Ortmeyer and N.Craig Smith
Contents vii
8 Social and ethical investing: Beliefs, preferences and the
willingness to sacrifice financial return 171
Alan Lewis and Paul Webley
9 Ethical issues in the world of finance: Two empirical studies 183
Karl-Erik Wärneryd, Lars Bergkvist and Kristin Westlund
10 Ethical regulation of economic transactions: Solidarity frame
versus gain-maximization frame 215
Paul E.M.Ligthart and Siegwart Lindenberg
Part III A new economics?
11 Ethics, ideological commitment and social change:
Institutionalism as an alternative to neoclassical theory 233
Peter Söderbaum
12 Interpersonal relations: A disregarded theme in the debate on
ethics and economics 251
Benedetto Gui
13 Economy and ethics in functionally differentiated societies:
History and present problems 264
Josef Wieland
14 Social ownership: A comparison of the property rights, social
choice and economic justice approaches 286
Robert Stallaerts
Part IV Interdisciplinary perspectives
15 Niklas Luhmann’s sociology of the economic system:
Some moral implications 297
William Ossipow
16 Ideology and morality in economics theory 313
Monroe Burk
17 Politics, public choice and ethical progress 335
Ralph E.Miner
18 Economics and the Enlightenment: Then and now 348
Norman E.Bowie
19 Endpiece 367
Alan Lewis and Karl-Erik Wärneryd
Index 375
Figures, tables and exhibits
FIGURES
6.1 A socio-economic model of the firm’s socially responsible
behaviour 133
6.2 Spectrum of socially responsible behaviour 137
8.1 Preferences for ethical investments with varying returns 176
9.1 Factors influencing ethical judgments 190
9.2 Average total scores on case judgment scales 192
9.3 The unethicalness of the six cases 194
9.4 Illegality and unethicalness for the six cases 195
9.5 Illegality and frequency in Sweden 196
9.6 Average total scores on case judgment scales 200
9.7 The unethicalness of the seven cases 201
9.8 Average total scores of unethicalness 202
9.9 The unethicalness of the cases used in both studies 203
9.10 Illegality and unethicalness for the seven cases 204
9.11 Illegality and frequency in Sweden 205
10.1 The different forms of solidarity orientation in terms of the
principles of gain-maximizing behaviour and normative
behaviour 217
10.2 The effect of the solidarity orientation by the salience of gain
on the selling prices asked; the purchase price is fl. 10.– 222
10.3 The effect of the solidarity orientation by the level of the
proposed selling price on the acceptability of asking such a
selling price 225
10.4 The effect of three types of relationship on the relative
importance of profit over the relationship (midpoint=4.5) 228
17.1 The C-R (constituent-representation) model 337
Figures, tables and exhibits ix
TABLES
4.1 The six stages of moral judgment 62
4.2 Criteria upon which heteronomy—autonomy distinction is
based 84
7.1 Results of pricing experiment 156
8.1 Overall percentage of money invested ethically as a function
of trust performance and green attitudes 179
8.2 Percentage of money invested ethically in the last quarter
as a function of trust performance and green attitudes 179
8.3 The relationship between actual and perceived ethical trust
performance 179
8.4 Overall percentage of money invested ethically as a function of
perceived trust performance and green attitudes 179
9.1 Study 1. Regression analyses of ethical judgments with the
attitude index among the independent variables. Standardized
coefficients 197
9.2 Study 2. Regression analyses of ethical judgments with the
attitude index among the independent variables. Standardized
coefficients 206
10.1 The results of the MANOVA; dependent variable is the
selling price asked by the subjects, the factors are solidarity
orientation and salience of gain 222
10.2 The means of the involvement variable by solidarity
orientation (within subject) and salience of gain (between
subjects) 224
10.3 The means of the value of the relationship and the profit for
the different solidarity orientation conditions (between
subjects) 228
EXHIBITS
4.A Kohlberg’s moral development scale (commentary by
Richard H.Guerrette, PhD) 67
4.B Kohlberg’s moral development scale (commentary by
Richard H.Guerrette, PhD) 69
4.C Moral development scaling and authority—subordinate
interaction 71
16.A Locus of selected serious problems of American soceity 334