Corporate Ethics

Disciplinary Approaches and Definitions

Scholarship in corporate ethics falls into two general disciplines: moral philosophy and social science. Moral philosophers approach corporate ethics by outlining ideals for how corporations and their managers should behave. Prescriptions for moral action and policy are the substance of this approach. That is, moral philosophers try to articulate the principles that organizations should adopt, regardless of the actual effectiveness of one or another approach. The social scientific approach, on the other hand, attempts to describe the social and psychological variables associated with moral action and, to a lesser extent, the effectiveness of ethical actions and policies. Synthesizing the larger, long-standing tensions between prescriptive and descriptive approaches, recent discussion among management scholars has attempted to combine these approaches.

Moral philosophy generally focuses on stakeholder theory, an outgrowth of classical social contacts theory. In its simplest from, social contracts theory argues that membership in work organizations involves tacit consent among parties to accomplish their purposes. Accompanying this basic consent among parties are obligations relating to attitudes and norms of conduct. That is, expectations about how people should approach tasks and how they should behave with one another are the substance of corporate ethics. Corporate ethics in this framework is defined in terms of people meeting obligations and maintaining expected conduct. Importantly, this philosophical definition does not rely on ethical expectations being openly stated or officially acknowledged.

In his critique of integrative social contracts theory, Robert Phillips argues that these unstated bases for social contracts do not adequately describe the content of social obligations. Following from recent political theory, stakeholder theory explores these issues further. First, the conditions that give parties a legitimate stake in organizational decisions—who has stakeholder status?—are a central concern in this theory. For example, do students have a legitimate stake in the decisions made by their professors about what they will teach? Should environmentalists be given a place in making a corporation's decisions about the resources the corporation uses? Second, an explicit norm of fairness is discussed in this theoretical application that answers the question, how are norms of conduct derived? Several approaches have been proposed. Stakeholder theory, therefore, is a derivative of social contracts theory, but it is concerned with these questions of stakeholder legitimacy and the derivation of norms through fair discourse. Using this framework, corporate ethics can be defined not only by obligations and conduct but also by the processes used for arriving at agreement about them.

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