Exploitation, Deontological Constraints, and Shareholder Theory (original) (raw)

Business Ethics -Deontologically Revisited

Journal of Business Ethics (2007) 72:17–25, 2006

In this paper we look at business ethics from a deontological perspective. We address the theory of ethical decision-making and deontological ethics for business executives and explore the concept of ''moral duty'' as transcending mere gain and profit maximization. Two real-world cases that focus on accounting fraud as the ethical conception. Through these cases, we show that while accounting fraud-from a consequentialist perspective-may appear to provide a quick solution to a pressing problem, longer term effects of fraud and misconduct make ethical implications more apparent. Widely used compensation schemes also may have the tendency to fuel unethical behavior. We argue that an ethical reinvigoration of the business world can only be accomplished by encouraging the business realm to impose upon itself some measure of self-regulating along the lines of deontological ethics. Principles of deontology should guide executive decision-making particularly when executives are tempted to operate outside of codified legislation or are bound to act under judicial-free conditions.

Shareholder Primacy and Deontology

This article argues that shareholder primacy cannot be defended on the grounds that there is something special about the position of shareholders that grounds a right to preferential treatment on part of management. The notions of property and contract, traditionally thought to ground such a right, are now widely recognized as incapable of playing that role. This leaves shareholder theorists with two options. They can either abandon the project of arguing for their view on broadly deontological grounds and try to advance consequentialist arguments instead. Or they can search for other morally relevant properties that could ground shareholder rights. The most sustained argument in that vein is Marcoux's (2003) attempt to show that the vulnerability of shareholders mandates that managers are their fiduciaries. I show that this argument leads to the unacceptable conclusion that it would be unethical for corporations to make incomplete contracts with non-shareholding stakeholders.

Handbook of the Philosophical Foundations of Business Ethics

2013

In this section we analyze the role, if any, of principles in distributive justice in business ethics. The business world is often criticized in morally condemning terms, many of them somehow related to the issue of distributive justice. Traders are accused of receiving indecently high bonuses; CEOs benefit from shockingly high packages upon dismissal-the "golden parachutes"; the announcement of a massive layoff boosts share value on the stock markets; and multinationals are said to exploit supplier companies and, indirectly, their workers in emerging countries. The list of complaints is endless. However, justice, more particularly distributive justice, is a complex issue. Moreover, the scope and the relevance of the different principles of distributive justice in the business world is not obvious.

Old and New in Business Ethics Theory

Business Ethics and Leadershi, 2020

This paper aims to show the need to study both classical and modern theories in business ethics. It is necessary because social relations in production change, as do production conditions, the relationship between owners and workers, employees. The aim of the article is also to demonstrate the possible deviations from the natural, basic principles of ethical behavior in business and to look for opportunities to regulate them and limit the opportunities for their manifestation. This study has an epistemological character, dedicated to studying the evolution of fundamental ethical theories explaining the interaction between subjects in the ethical ecosystem. In developing the article, descriptive analysis was used to identify, analyze, and summarize the main features of poodle theories in business ethics. This paper has its theoretical basis of a rich category of tools and classical theories in aesthetics; new business ethics theories are being developed as an inalienable part of the ethical ecosystem. The evolution of the productive forces has had its irreversible impact on the ethical relations in the social system and on each business unit as a whole. The interrelations between the main religions professed by mankind − Christianity, Judaism and Islamic religion with the main category assessing the return on investment, namely the interest rate, are analyzed. The conclusions have been drawn about this type of income in the older religions and newer religions. Basic new business ethics theories are analyzed, such as the Theory of moral hazard, Agency Theory, Diamond's Theory of delegated monitoring, Rent-Seeking. Research on the evolution of basic business economics theories is usually done based on theoretical analysis and much less based on specific business cases. Here is presented the manifestation of modern theories in business ethics, particular cases of changes in the state of business ecosystems and possibility that basis can also serve as a legal and regulatory initiative to precisely regulate these deviations and their sanction. The chosen form of research is sharing the opinions of the author of the study. In this article, the author seeks the connection, the integration of ethics in the functioning of the business system due to the severance of the direct relationship between owners and employees and the emergence of intermediaries as agents to whom decision-making rights are delegated. The severance of this relationship is at the heart of the evolutionary development of the ethical business side in the context of existing constraints.

Economic ethics, business ethics and the idea of mutual advantages

Business Ethics: A European Review, 2005

Many traditional conceptions of ethics use categories and arguments that have been developed under conditions of pre-modern societies and are not useful in the age of globalisation anymore. I argue that we need an economic ethics which employs economics as a key theoretical resource and which focuses on institutions for implementing moral norms. This conception is then elaborated further in the area of business ethics. It is illustrated in the case for banning child labour.

A Theory of Wrongful Exploitation

2009

© 2009 Mikhail Valdman T ypically, we consider mutually beneficial transactions between consenting adults to be legitimate and binding, especially if third parties are unaffected. Yet such transactions can be deeply exploitative. Suppose, for instance, that I fall over the side of a cruise ship and the sole witness demands an exorbitant price for throwing me a life preserver. If I accept his offer, this transaction would be mutually beneficial and, arguably, consensual. Still, it would be deeply exploitative and deeply wrong, and our agreement’s bindingness would be open to question. In this paper I attempt to explain what exploitation is, when it is wrong, and what makes it so. I argue that exploitation is not always wrong, but that it can be, and that its wrongness cannot be fully explained with familiar moral constraints against harming people, coercing them, or using them as a means, or with familiar moral obligations such as an obligation to rescue those in distress or not to t...

Foundations and Applications for Contractualist Business Ethics

Journal of Business Ethics, 2006

Contractualism is one of the most promising Ôcenters of gravityÕ in business ethics. In this guest editorial we provide a concise roadmap to the field, sketching contractualismÕs historic and disciplinary antecedents, the basic argumentative structure of the contract model, and its boundary conditions. We also sketch two main dimensions along which contributions to the contractualist tradition can be positioned. The first dimension entails positive versus normative theorizing -does a given contribution analyze the world as it is or how it ought to be? The second dimension involves four different levels of analysis that are commonly employed in contractualist business ethics: the nano, micro, meso, and macro levels. We then proceed to position the articles comprising this special issue along these two dimensions.

Contract Theory and Business Ethics: A Review of Ties that Bind

Business and Society Review, 2000

T o the familiar jibe that business ethics is an oxymoron might be added another incongruous juxtaposition, that of business ethics theory. The contradictory flavor of this phrase is not due to a low estimate of the moral tone of business but to skepticism about the practicality of ethical theory. How can any theory of ethics that is rigorous enough to pass muster with picky philosophers possibly give guidance to busy, hardheaded business managers? This challenge is faced squarely by Thomas Donaldson and Thomas W. Dunfee in their book, Ties That Bind: A Social Contracts Approach to Business Ethics. 1 For moral philosophers, Donaldson and Dunfee offer a grand theory, called Integrative Social Contracts Theory, or ISCT for short, which follows in the contract tradition of Hobbes, Locke, and, more recently, John Rawls. However, ISCT does not consist solely of general, ideal principles that result from most contract approaches, but includes specific agreements made in actual communities. The concreteness of their theory enables the two authors to provide managers with useful tools for ethical decision making in cases of conflicting standards. Ties That Bind is an important contribution to both moral philosophy and the field of management that amply illustrates how ethical theory can yield practical business results. The theory is also intended to guide business ethics research, and the authors themselves apply ISCT to the problem of providing a normative

Courting Shareholders: The Ethical Implications of Altering Ownership Structures

The relationship between corporate executives and shareholders has riveted the attention of business ethicists since the inception of the field. Most ethicists agree that corporate executives owe their investors the duties of loyalty, candor, and care. These fiduciary duties undergird the promises made to shareholders at the time of incorporation, placing on executives moral obligations to engage in fair dealing and to avoid conflicts of interest.We concur that executives owe all of their existing shareholders both promise-keeping and fiduciary duties and argue that some corporate executives violate these responsibilities by attempting to withhold information from or limit information to some shareholders while courting others. We analyze the ethical implications of six techniques and tools that executives use to attract certain types of shareholders while deterring others. We conclude with recommended structural and behavioral changes to these current managerial and investor practices.

Discussing Corporate Misbehavior: The Conflicting Norms of Market, Agency, Profit and Loyalty

Brooklyn Law Review, 2005

Foundation for organizing and making possible this fascinating Symposium and to the participants and Leslie Francis, Daniel Medwed and Manuel Utset for helpful comments. I use the term 'share" rather than the more common "shareholder" because corporate law and scholarship alike normally ignore the portfolios and people who own the shares (i.e., the shareholders), instead focusing on a purely imaginary creature with no views, interests or desires other than maximizing the value of the particular corporate stock at issue. In corporate law, then, the term "shareholder" while misleadingly invoking images of a human being, actually refers only to a role. See