In an effort to establish some ethical guidelines for business, three normative ethical theories have evolved in Western capitalist societies. 41 The unsupported and counter-intuitive assumption that people are ethically entitled to a say in any decision which affects their interests appears to lie at the heart of most attempts to ground the stakeholder theory, and can be found even in those that predate the ones presently under consideration. Rev. As business ethics has become more interdisciplinary and practice-focused, the role of ethical theory in the field has been both challenged and transformed. 6 Consider, for example, the recent special issue of Business Ethics Quarterly devoted to the social contract theory. Bitte versuchen Sie es erneut. Shareable Link. 27 See Evan and Freeman, supra note 14, at 76. These are significant contributions to the literature that truly add value.--Kenneth E. Goodpaster, Koch Endowed Chair in Business Ethics, Opus College of Busin. This raises the thorny problem of how one can be said to consent to an agreement without being aware one is doing so. Recently, Thomas Donaldson and Lee Preston have further clarified the situation by identifying and distinguishing three different “types” of stakeholder theory; descriptive/empirical, instrumental, and normative. 42 Donaldson and Preston, supra note 17, at 82. "comments": true, The category of normative ethics involves creating or evaluating moral standards. Despite this, the stockholder theory can be applied to all forms of business. and Business Ethics - and in particular Stakeholder Theory (Freeman et al., 2010) - offers a critical view on the purpose of business, traditionally seen as “to maximize shareholder value” (Friedman, 1970). View all Google Scholar citations This data will be updated every 24 hours. See infra notes 24, 45, 64. Leider ist ein Problem beim Speichern Ihrer Cookie-Einstellungen aufgetreten. However, I will attempt to show how each of the theories may be generalized to apply to other forms of business as well. Glas, Miroslav See Norman E. Bowie and R. Edward Freeman, “Ethics and Agency Theory: An Introduction,” in Ethics and Agency Theory 3, 3-4 (Norman E. Bowie and R. Edward Freeman, eds., 1992). Bucar, Branko 33 See, e.g., Donaldson and Preston, supra note 17, at 72, who point out that in most of the stakeholder literature “the fundamental normative principles involved are often unexamined.”. Bitte versuchen Sie es erneut. 58 Because this version of the social contract theory appears to be based on what is essentially a Rawlsian theory of justice, this task would indeed be a formidable one. "clr": false, This feature of the normative stakeholder theory immediately gives rise to the objection that it is based on an oxymoron. At any rate, it is entirely unclear how the comments cited by Donaldson and Preston provide any support for the assertion that the stockholder theory is normatively unacceptable. I should point out that Friedman does not always describe the constraints on the pursuit of profit this precisely. 54 Indeed, many entrepreneurs forum-shop, electing to go into business in the state whose legal regime appears least burdensome to them. This volume provides an updated examination of the role that moral and political philosophy can play in addressing problems in business ethics. Mgmt Rev. 66 Robert Hessen, “A New Concept of Corporations: A Contractual and Private Property Model,” 30 Hastings L.J. 25 Unlike ‘agency theory,’ however, the phrase ‘stakeholder theory’ cannot be avoided. 1327, 1330 (1979). 16 This argument can be expressed in more philosophically sophisticated language by stating that one who breaches an agreement that induced another to deal with him or her is treating the other merely as a means to his or her own ends, and is thus violating the Kantian principle of respect for persons. * Views captured on Cambridge Core between September 2016 - 11th December 2020. Since its inception thirty years ago, business ethics has benefited from the interdisciplinary contributions by management, political theory, sociology, and, of course, philosophy. 43 Donaldson and Preston, supra note 17, at 82-4. 22 This highly telescoped formulation of what is, in truth, a considerably more sophisticated consequentialist argument is employed strictly in the interest of conciseness. The treatments of normative ethics found in textbooks on business or professional ethics are often far too cursory, given the weight attributed to them in the course as a whole. It hardly needs repeating, however, that this is not the claim made by the stockholder theory, but that of the straw man the theory’s opponents trot out to stand in its stead. However, because the purpose of the present work is limited to the critical examination of the arguments offered in support of the three main normative theories of business ethics, an attempt to fully evaluate the theories’ adequacy would clearly be beyond its scope. 30 In stating that management must give equal consideration to the interests of all stakeholders, I am not ignoring the work being done to distinguish among different classes of stakeholders. If you continue browsing the site, you agree to the use of cookies on this website. On this point, it is essential to distinguish between the stakeholder theory as a normative theory of business ethics on the one hand and as either a theory of corporate social responsibility or a theory of management on the other. Bus. Currently, the three leading normative theories of business ethics are the stockholder, stakeholder, and social contract theories. 10 Milton Friedman, Capitalism and Freedom 133 (1962). IV, ch. Render date: 2020-12-11T10:57:09.916Z See supra note 4 and the material immediately preceding this note. "relatedCommentaries": true, Normative ethics is the study of ethical action. However, the theory also claims that for there to be any more extensive restrictions on managers, it is the job of society as a whole to impose them through the legislative process. For example, an attorney who represented two parties with conflicting interests would clearly be guilty of a violation of the canon of ethics. Amazon.in - Buy Normative Theory and Business Ethics (New Perspectives in Business Ethics) book online at best prices in India on Amazon.in. for this article. Because several groups are affected by managerial decisions, legitimacy depends on acceptance of this authority by several types of ‘stake holders.’” Jones and Goldberg, supra note 34, at 606 (emphasis added). See Milton Friedman, The Social Responsibility of Business is to Increase Its Profits, supra note 10. 19 Robert C. Solomon, Ethics and Excellence 45 (1992). Dennis, Bryan 70 This may well be an understatement. For purposes of either evaluating a business’s responsiveness to societal demands or describing effective management techniques, it can make perfect sense to distinguish among different classes of stakeholders. To find such a third way in normative ethics, one has to analyze the elements of these classical theories and to look if they are justified. However, given the arguments that have been provided in support of the stakeholder theory as a normative theory of business ethics (to be discussed below), it can not. & Phil. This last requirement is apparently intended as an antidiscrimination provision. This, in turn, implies that the stockholder theory is not self-sufficient, but is dependent upon the political theory (which delimits the scope of the state’s power to legislate) within which it is embedded. 17 See Evan and Freeman, supra note 14, at 76-7; Thomas Donaldson and Lee E. Preston, “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications,” 20 Acad. 2001. and 2 J.D., Ph.D., Philosophy, Duke University, LL.M. Bucar, Branko This volume provides an updated examination of the role that moral and political philosophy can play in addressing problems in business ethics. "subject": true, 9 I wish to emphasize again that the stockholder theory is a normative and not a descriptive theory. Wir verwenden Cookies und ähnliche Tools, um Ihr Einkaufserlebnis zu verbessern, um unsere Dienste anzubieten, um zu verstehen, wie die Kunden unsere Dienste nutzen, damit wir Verbesserungen vornehmen können, und um Werbung anzuzeigen. 7 In this article, I intentionally speak in terms of ‘the stockholder theory’ rather than ‘agency theory’ to emphasize that I am discussing a normative theory. 67 This is as true of corporations as it is of any other type of business organization. Normative Theory and Business Ethics (New Perspectives in Business Ethics) (English Edition) eBook: Jeffery D. Smith, Norman E. Bowie, Denis G. Arnold, Mitchell R. Haney, Nien-hê Hsieh, Alexei Marcoux, Christopher Michaelson, Geoff Moore, Jeffrey Moriarty, Jeffery … 8 Historically, the normative theories of business ethics grew out of the literature on corporate social responsibility. Zugelassene Drittanbieter verwenden diese Tools auch in Verbindung mit der Anzeige von Werbung durch uns. Total loading time: 0.259 The theory contemplates the possibility of one simultaneously belonging to several communities with incompatible social contracts and asserts that such conflicts must be resolved on the basis of an unspecified “priority rule.” (It should be noted that, like the filtering test discussed below, as long as the priority rule remains unspecified, it is impossible to fully evaluate this theory.) 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