Normative Theory and Business Ethics PDF
Preview Normative Theory and Business Ethics
S Business Ethics (cid:129) Philosophy m Series: New Perspectives in Business Ethics i Series Editor: Denis G. Arnold, University of North Carolina, Charlotte t h “Jeffery D. Smith has done the fi eld of business ethics a great service by collecting these provocative and foundational essays in one volume. It is a wonderful collection of fresh voices on the normative foundations of business ethics. These are signifi cant contributions Kenneth E. Goodpaster to the literature that truly add value.” — , N Koch Endowed Chair in Business Ethics, Opus College of Business o “As business ethics has become more interdisciplinary and practice-focused, the role of r m ethical theory has been both challenged and transformed. So the publication of these a essays comes at an opportune time for a fresh assessment of old developments and new t John R. Boatright i directions for ethical theory in business ethics.” — , v e Raymond C. Baumhart, S.J., Professor of Business Ethics, Loyola University Chicago T h “Jeffery D. Smith brings together some of the fi eld’s rising stars and ably highlights the e points they have to make about the importance of normative theory. There are a lot of o Edwin Hartman people in business ethics who really need to read this book. — , r y Professor of Business Ethics and Codirector of the Paduano Seminar a in Business Ethics at the Stern School of New York University n d NORMATIVE THEORY Since its inception thirty years ago, business ethics has benefi ted from the interdisciplinary B contributions by management, political theory, sociology, and, of course, philosophy. u s and Normative Theory and Business Ethics represents the work of new scholars and addresses i n a wide array of foundational issues such as distributive justice within fi rms, human rights, e Business Ethics ethics of international business, virtue in business management, and the relationship s s between markets and democratic institutions. This collection traces where philosophy has E been and where it is headed with business ethics. t h Contributors: i Denis G. Arnold, Norman E. Bowie, Mitchell R. Haney, Nien-hê c s Hsieh, Alexei Marcoux, Christopher Michaelson, Geoff Moore, Jeffrey Moriarty, Jeffery D. Smith, Ben Wempe Jeffery D. Smith is associate professor and director of the Banta Center for Business, Ethics, and Society at the University of Redlands. Edited by For orders and information J LR effery D. Smith pRloewasmea cno &n tLaictttl tehfi ee lpdu bPluisbhleisrhers, Inc. IISSBBNN--1130:: 907-87-402-57-442854-24-8242-8 ittlow Foreword by Norman E. Bowie A wholly owned subsidiary of 90000 em fia The Rowman & Littlefi eld Publishing Group, Inc. en New Perspectives in Business Ethics (cid:129) Denis G. Arnold, Series Editor 4501 Forbes Boulevard, Suite 200 9 780742 548428 ld & Lanham, Maryland 20706 1-800-462-6420 (cid:129) www.rowmanlittlefi eld.com Cover design by Maria Kauffman NNoorrmmaattiivveeTThheeoorryyPPBBKK..iinndddd 11 99//1188//0088 44::5577::2266 PPMM Normative Theory and Business Ethics New Perspectives in Business Ethics A new series which explores both foundational and cutting-edge issues in business ethics Series Editor Denis G. Arnold, Surtman Distinguished Professor in Business Ethics, Uni- versity of North Carolina at Charlotte Description Rowman & Littlefield’s engaging new series, New Perspectives in Business Ethics,has one core rationale: to find leading experts as well as rising stars in business ethics studies to bring their new, fresh perspectives on topics and is- sues which include both foundational questions as well as cutting-edge prob- lems which require ethical analysis and evaluation. Under the general editor- ship of Denis Arnold, the titles in this series encompass a broad range of topics with appropriate attention to both theoretical and practical dimensions. Titles Jeffery Smith, Normative Theory and Business Ethics (2009) Chris MacDonald, Business Ethics in Biotechnology: Theoretical Founda- tions and Practical Problems (2010) Normative Theory and Business Ethics Edited by Jeffery Smith ROWMAN & LITTLEFIELD PUBLISHERS, INC. Lanham •Boulder •New York •Toronto •Plymouth, UK ROWMAN & LITTLEFIELD PUBLISHERS, INC. Published in the United States of America by Rowman & Littlefield Publishers, Inc. Awholly owned subsidiary of The Rowman & Littlefield Publishing Group, Inc. 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706 www.rowmanlittlefield.com Estover Road Plymouth PL6 7PY United Kingdom Copyright ©2009 by Rowman & Littlefield Publishers, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the publisher. British Library Cataloguing in Publication Information Available Library of Congress Cataloging-in-Publication Data: Normative theory and business ethics / edited by Jeffery D. Smith. p. cm. — (New perspectives in business ethics) Includes bibliographical references and index. ISBN-13: 978-0-7425-4841-1 (cloth : alk. paper) ISBN-10: 0-7425-4841-4 (cloth : alk. paper) ISBN-13: 978-0-7425-4842-8 (pbk. : alk. paper) ISBN-10: 0-7425-4842-2 (pbk. : alk. paper) eISBN-13: 978-0-7425-6468-6 eISBN-10: 0-7425-6468-1 1. Business ethics. 2. Normativity (Ethics) I. Smith, Jeffery D., 1971- HF5387.N67 2008 174'.4--dc22 2008021875 Printed in the United States of America (cid:2)™ The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992. Contents Foreword vii Norman E. Bowie Acknowledgments xiii Introduction: Past and Present: The Role of Normative Theory in Business 1 Jeffery Smith 1 Business-Focused Business Ethics 17 Alexei Marcoux 2 Virtue Ethics and Business Organizations 35 Geoff Moore 3 The Human Rights Obligations of Multinational Corporations 61 Denis G. Arnold 4 Contractarian Business Ethics Today 73 Ben Wempe 5 The Normative Study of Business Organizations: ARawlsian Approach 93 Nien-hê Hsieh 6 Deserving Jobs, Deserving Wages 119 Jeffrey Moriarty 7 Institutions and Organizations: Communicative Ethics and Business 147 Jeffery Smith v vi Contents 8 On the Need for Theory in Business Ethics 173 Mitchell R. Haney 9 Values and Capitalism 195 Christopher Michaelson Bibliography 209 About the Contributors 227 Foreword Far too many essays in business ethics begin with an extended attack on the use of traditional normative theory as applied to problems in business ethics. I confess that I find such attacks extremely off-putting. My annoyance is in- tensified when the author is a philosopher or other humanist scholar rather than a person doing empirical research. I understand an empirical researcher who does not appreciate the contribution that normative disciplines make to the complete understanding of our complex world. That person needs to be more broadly educated. But I cannot understand those philosophers or other humanist scholars who denigrate theory. After all, if traditional moral and po- litical philosophy cannot be fruitfully applied to problems in business, ar- guably the most influential institution in contemporary society, then norma- tive ethics is in a crisis. The wisdom of the ages no longer applies. That seems counterintuitive on its face. However, this skepticism about the utility of applying traditional moral and political theory to business problems is so widespread that relatively few nor- mative business ethics articles have a normative theory as their theoretical base. There are of course some exceptions here. Tom Donaldson and Tom Dunfee have created integrated social contracts theory, the only “new” ethi- cal theory to come out of theorizing about business ethics. The late Robert Solomon theorized from an Aristotelian perspective, although Bob never felt obliged to apply Aristotelian ethics completely or systematically. As a con- trarian I have consistently and I believe fruitfully applied Kantian ethics to problems in business ethics. The publication of Normative Theory and Business Ethics is a truly impor- tant event, because Jeffery Smith has skillfully and comprehensively edited a volume that makes normative theory front and center. He has put together a vii viii Foreword set of articles that does an outstanding job of showing the important logical and insightful role that moral and political theory can play in business ethics. This volume should rejuvenate the interest in and discussion of normative theory in business ethics writing. It should also encourage others to contribute to the development and application of theory in business ethics. Indeed sev- eral of the authors will, I am sure, make additional contributions to the de- velopment of a specific theory in future research. I am genuinely excited by the publication of this volume. Such a volume is long overdue and we are in Jefferey Smith’s debt for publishing it. THE APPLICATION OF ETHICAL THEORIES IN BUSINESS ETHICS In this foreword I cannot comment in depth on each individual article, but I would like to say a few words about every article and comment on some ar- ticles in greater depth. It is interesting that several authors show the applica- bility of contemporary statements of traditional normative theorists to busi- ness ethics rather than simply apply the original theory. I generally applaud that move since it enables the traditional theories to be applied in all their richness. One example of this strategy is provided by Geoff Moore, who de- fends the Aristotelian position. What makes his essay unique is his attempt to show how MacIntyre’s version of Aristotelianism can be applied to business. Moore shows how MacIntyre’s concept of a practice and an institution can provide us with a better understanding of a virtuous business organization. Another example is Denis Arnold’s use of Kant to ground a rights-based ap- proach to business ethics. In his essay Arnold shows how a Kantian rights ap- proach can help resolve ethical issues in international business ethics, where he uses Kantian rights theory to provide a list of minimum moral duties for any multinational corporation. No volume on normative theory and business would be complete without a discussion of social contract theory, or contractarianism. Smith has included two articles with very different perspectives on the topic. The article by Ben Wempe critiques Donaldson and Dunfee’s integrated social contracts theory (ISCT). Wempe proposes four design criteria for any contractarian business ethics and argues that traditional social contract theory does a better job of meeting those criteria than does integrated social contracts theory. Integrated social contracts theory has certainly come in for its share of criticism, but since it is the only original normative theory in contemporary business ethics, I would have liked to see an article that emphasized the contributions that the theory has made to the study of business ethics. Foreword ix Although Donaldson and Dunfee’s ISCTis the leading social contract the- ory in contemporary business ethics, the leading social contract theorist in the twentieth century was John Rawls. Nien-hê Hsieh shows how Rawls’s theory can be fruitfully applied to business ethics. Hsieh’s work is particularly im- portant because Rawls’s statement that his theory only applies to the basic structure of society has, I believe, impeded the use of Rawls as a theoretical foundation for certain normative conclusions in business ethics. Hsieh points out that other scholars have tried to circumvent the limitation of Rawls’s the- ory to the basic structure of society. Although Hsieh is sympathetic to these approaches, his own work shows how Rawls can be meaningfully applied “in a manner keeping with Rawls’s focus on the basic structure of society.” Hsieh believes that the concepts of non-ideal theory, natural duties, as well as an un- derstanding of the appropriate relationship between business and the legal and political institutions of society, will provide support for a number of im- portant normative conclusions in business ethics. In addition to a cursory mention of how these features can be applied to several issues in business ethics, there is an extended discussion of the implication of these aspects of Rawls’s theory on compensation as well as worker participation. Hsieh’s ar- ticle gives a good overview of the work of scholars using Rawls, as well as a good understanding of his own Rawlsian approach. Of course, the features of Rawls’s theory that Hsieh uses are not those most related to the contractarian portion of Rawls’s theory, so my discussion of Hsieh’s Rawls with contrac- tarianism may be a bit off the mark. Rawls is surely in the contractarian tradition, but he was also heavily in- fluenced by Kant. The continental philosopher Jürgen Habermas is often overlooked by business ethicists, even by those who are strongly influenced by other continental philosophers. Readers will immediately notice that Habermas is also influenced by Kant and features of his normative theory are comparable to those of Rawls’s theory of justice. Editor Jeffery Smith pro- vides an excellent overview of Habermas’s normative theory, which has two focal points—a theory of communication action that provides universal norms for cooperative behavior and a theory of discourse for achieving agree- ment on such norms or for rediscovering them when they break down. Smith then applies Habermas’s normative theory to business ethics at two levels. At the institutional level, Smith points out that when business organizations are embedded within a democratically organized political society they have re- sponsibilities to respect and uphold the universal norms necessary for the process of democratic law formation. At the organizational level, managerial discretion needs to be legitimized. Smith describes how this is to be done. Readers familiar with traditional stakeholder theory and Kantian approaches to the firm will see many similarities between a Habermasian approach and stakeholder or Kantian theories.
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