Abstracts Abstracts to Presentations (as of July 7th, 2016) Cultural (Business) Ethics. A conceptual framework Thomas Beschorner, University of St.Gallen and Matthias Kettner, University Witten/Herdecke In this paper, we advance the conceptual framework of “cultural (business) ethics”, which is characterized by an attempt to bring descriptive and normative ethics into fruitful conversation with each other. The key idea is that a cultural perspective naturally contains both: normative perspectives as well as fact-stating perspectives. Our understanding of the term “culture” can be situated on a methodological level: Drawing on scholars such as Clifford Geertz, Max Weber, Georg Simmel, Ernst Cassirer and other authors in the scientific study of culture, we understand the reality of culture in a broad sense as “structured webs of meanings, incorporated in social practices and operating through the encultured subjects, i.e. persons, who produce and reproduce the practices”. Culture is an inherent part of every action, of every interaction and existent in every organization and every human societal context. This is obviously also true for business contexts and the context of the larger economy. Consequently, we do not understand culture primarily as a variable that is sometimes relevant to the matter at hand and sometimes not, but as an inherent part of the social world. Consequently, we can state: Businesses and economies do not merely “have” culture, they are patterns of culture. To broach the concept of “cultural (business) ethics”, we must first and foremost consider the normative dimensions of factual social life. In other words, using a cultural perspective is not merely a means of understanding businesses and economies in a more complex (and more appropriate) way, but it also allows approaching questions of normative ethics: namely, recognizing that factual normativity exists within concrete social contexts. As we will outline in greater detail, each and every social context is full of normative formations, filled with certain (normative) traditions; people argue with each other by referring to certain normative ideas and/ or certain “we-identities;” they give reasons and justify their actions, etc. Based on these general cultural perspectives we will briefly sketch a multi-level approach to business ethics that demonstrates (in contrast to traditional economics) a new way of thinking individual action, interactions, organizations, institutions, and societal systems. We will then elaborate in some detail on the methodological status of the issues raised in the two previous sections. Here we will make clear that our starting point is a theory of cultural processes that is social science orientated and can be regarded as “sociological enlightenment.” It is explicitly characterized by relativizing normative points of view to cultural positions and, thus, can be called a “cultural theory of morality.” Finally, we will attempt to extend the “cultural theory of morality” toward a “moral theory of culture” in order to search for standards of an ethical kind that would help to distinguish “good” from “bad” cultural practices. Note, we are focussing on grassroots ethics and, thus, sources of moral orientations within social practices. In modern societies, it is safe to assume that many members share a good deal of normative ideas in addition to common morality (e.g. human rights, sustainability and climate protection as a moral ideal, equality between men and women as a moral presupposition, etc.) which are, however, not (yet) practically realized to the fullest. Axel Honneth calls this phenomenon “normative surplus,” and he regards the realization of normative ideas as one of the crucial tasks in modern societies. Based on this pragmatic approach, whose philosophical credentials reach back to Hegel and Dewey, we will give good old discourse ethics a realistic relaunch. We think that this opens vistas towards a “good”—or at least “better society” within the debate in ethics in general and in business ethics in particular. _____________________________________________________________ Business, Ethics, and a Differentiation Thesis George G Brenkert, Georgetown University This paper examines the relation of business and ethics. Why are so many business actions and policies (seemingly) unethical, and sometimes spectacularly so? I do not consider what has been called the Separation Thesis, nor the claim that business ethics amounts to an oxymoron. Instead, I discuss the view that business and ethics are compatible such that we may demand that people in business act morally the same way that they do in everyday life. This view, I maintain, is too simple. I explore this relation by considering differences between private (or individual) morality and public morality. I adapt this distinction to present purposes by considering business as part of a semi‐public morality. This commercial morality then occupies a third realm between private and public morality. The paper then focuses on three distinctive features of business that various commentators have suggested distinguish it from private (individual) morality. First, I consider the significance of the impersonality that is attributed to business relations. Those in business are active through the offices and roles they occupy that define various impersonal relations to others (Nagel) in ways that private morality does not. Second, I discuss claims regarding various goods that are not available through market relations. Thus, friendship, intimacy, love, etc. are not goods that can be exchanged on the market (Anderson). Again this differentiates the relations that business (through the market) can encompass and distinguishes business morality from private morality. Finally, business morality involves features of toughness or ruthlessness (I use these terms interchangeably) that may involve protecting an organization’s purposes (Solomon; Nagel) or securing the leadership of an organization (Galston) by engaging in activities that would not be countenanced by private morality. Again, the ethics of business appears to be a differentiated ethics from individual or private morality. These three distinctive features form the Differentiation Thesis that I attribute to commercial or business morality that distinguish it from private morality and speak to the relation of business and ethics. __________________________________________________________________ Mapping Values, Descriptive Axiology and Applied Ethics: Lessons from four environmental ethics case studies Wesley Cragg, Schulich School of Business This paper outlines findings from a study whose purpose was to provide axiological maps of the values stakeholders were bringing to four natural resource development project debates. The study required a shift in focus from the normative task of examining the merits of positions being taken to the descriptive task of understanding the normative logic of the positions being taken. The paper outlines what was in involved in accomplishing that shift, some of the practical insights achieved and lessons to be derived for the theory of applied and business ethics. __________________________________________________________________ Who calls it? Agents of the Social Construction of Organizational Moral Failure Andrew Crane, University of Bath, coauthored with Masoud Shadnam and Thomas Lawrence In recent years, organization studies of morality have increasingly highlighted the significant role of social construction processes in a wide variety of moral phenomena. One of the core areas of inquiry in this literature focuses on the dynamics of how organizational conduct comes to be socially constructed as organizational moral failure. Researchers in this stream of research, however, have paid little attention to identifying and theorizing the key actors involved in those social construction processes and the types of accounts they construct. This paper delineates the key structural and cultural dimensions of the processes that enable us to distinguish between four categories of actors who engage in constructing the label of moral failure: dominant insiders, watchdog organizations, rank-and-file community members, and publics. The analysis further clarifies which category of actor is more likely to succeed in constructing the label of moral failure under which circumstances, and what accounts they are likely to use, namely: scapegoating, prototyping, shaming and protesting. __________________________________________________________________ Rethinking Right: Moral Epistemology in Management Research Thomas Donaldson, Wharton University of Pennsylvania, coauthored with Tae Wan Kim Most management researchers pause at the threshold of objective right and wrong. Their hesitation is understandable. Values imply a "subjective," personal dimension, one that can invite religious and moral interference in research. The dominant epistemological camps of positivism and subjectivism in management stumble over the notion of moral objectivity. Empirical research can study values in human behavior, but hard-headed scientists should not assume that one value can be objectively better than another. In this article we invite management researchers to rethink this presumption. We show how accepting at least a limited form of moral objectivity, namely, an epistemic orientation that seeks objective moral reasons, can benefit management research by 1.guiding research practice; 2. using patterns of moral objectivity as clues for formulating empirical hypotheses for psychological explanations; and 3. adding prescriptive power to empirical theories. __________________________________________________________________ Corporate Responsibility for Less Income Inequality Georges Enderle, University of Notre Dame Despite the urgent concern about increasing income inequality in our societies, virtually no literature exists on the connection between income inequality in companies on the one hand and in countries and worldwide on the other. Therefore, this paper explores the concept and substance of corporate responsibility for less income inequality, first, within the boundaries of the organization and, second, with regard to society at large. Instead of examining the entire range of income distribution, the focus is on the lower and upper ends. As for the “floor,” it is defined as a living wage, supported by strong economic and ethical arguments since the time of Adam Smith. It is proposed as a minimal income standard that can – and thus should – be implemented by companies, if not in the short, then in the medium term. As for the ethically acceptable “ceiling” of executive compensation, its identification and justification are more complicated. However, strong economic and ethical arguments can be made against the limitlessness of executive pay and in favor of a drastic reduction thereof. Based on the findings of corporate responsibility within the organization, corporate responsibility for less income inequality in society can be determined in a straightforward manner. First, it means to “walk the talk” and set an example. Second, it consists of being “a good corporate citizen” by supporting legislation for a living wage and an ethically acceptable ceiling of executive pay. As such legislation has a long way to go, still many initiatives can be taken with no further ado. __________________________________________________________________ Strategic Global Strategy: The Intersection of General Principles, Corporate Responsibility and Economic Value-Added Laura Pincus Hartman, Boston University, and Patricia Werhane, DePaul University The theme at a recent international business conference was “Changing habits, rethinking business models.”The conveners explained, “we want to explore the interrelationships between developing new, sustainable and ethical business models, and the changes in habits (values, mind-sets, life-styles) that are required for such business models to succeed.” In the description that followed, the conveners implied that what is a stake is changing corporate mind sets and business models to reflect more explicitly the ethical and corporate social responsibility dimensions of business. In this paper, we will defend a more nuanced analysis of the stake referred to above. We will make two arguments. First, using Prahalad and Bettis’s notion of “dominant logics,” we will argue that changing corporate habits and the minds sets that ground them entails changing a corporate dominant logic underlying these habits. One viable methodology to achieve this end is to operationalize and engage in the process of moral imagination. Second, however, we take issue with the implicit thesis we have surmised from that international conference theme. An ongoing argument often made by most business ethicists is that a singular preoccupation on profitability without taking into account the context in which a company operates, its stakeholders, or a consideration in broad terms of social and environmental value added, will lead, in the long run, to disvalue for all the stakeholders and the communities it affects, and often, (but alas not always) for the company. In contrast, while we do not dispute the critical importance of ethics and CSR in commerce, we contend that these have become a preoccupation of academia, non-governmental organizations, and international voluntary mandates such as the U.N. Global Compact, the Caux Principles, various other international sets of principles, most recently the U.N. Sustainable Development Goals for 2030, and various other mandates and codes of conduct for CSR. We will argue that this preoccupation as the sole aim of a for-profit company is, on its own, like a preoccupation with profitability, unsustainable. Indeed, without economic largesse, a company will fail. Both of these contentions point to our conclusion that one must take care in changing habits and rethinking business models. Merely being ethical and socially responsible is insufficient for the long-term well-being of commerce just as a preoccupation with profits for their own sake also is insufficient. What is realistic, practical, pragmatic, sustainable and profitable for corporations, and what also serves the interests of multiple stakeholders including those in the communities they serve, is a true balance of ethics, CSR, and economic value-added. __________________________________________________________________ Corruption in Extractive Industries – Changing the Scenario? Eleanor O’Higgins, University College Dublin and London School of Economics and Political Science This paper discusses the special case of extractive industries in relation to susceptibility to corruption, especially in states with weak institutional and governance structures. The systemic nature of this corruption is shown in a vicious cycle of extractive resource dependency and corruption which reinforce each other. The paper then concentrates on the supply side of corruption, and the role of the private sector with domestic and foreign natural resources companies feeding into systemic corruption. Corruption is underpinned by a high demand, high prices for extractive resources scenario, and mitigated by a low demand, low prices scenario. Transparency oriented, anti-corruption measures may not be effective in their own right, but a low demand, low prices scenario could provide an opening for such measures to take root, with accompanying benefits to the citizens of resource rich states and their environment. This suggests taking a contingency approach to dealing with corruption. __________________________________________________________________ CSR: What’s Wrong with Harm? Nien-hê Hsieh, Harvard Business School A number of responsibilities have been attributed to for-profit business enterprises in relation to members of society. Expansive accounts require business enterprises to advance the welfare of individuals and to protect their rights independently of considerations of financial performance. For example, it has been argued that apparel companies sourcing from developing economies have a duty to ensure that factory workers are paid a “living wage” even if doing so comes at the expense of profits. Collectively, such responsibilities have been categorized as “corporate social responsibility” or “CSR.” Justifications range from the principle of beneficence and conceptions of fairness to the idea that business enterprises are public actors akin to states in their responsibilities. This paper explores what follows if CSR is mainly grounded in the idea that business managers ought to avoid harm to third parties (parties with whom they do not transact directly). In contrast to the sorts of justifications invoked above, this justification sidesteps long-standing controversies in the field of business ethics, including debates about the purpose of for-profit corporations and whether corporations are moral agents. The thought is that a responsibility to avoid harm is one that applies to all natural persons, including managers of business enterprises, and as such, applies independently of their role responsibilities and whether the corporation itself is a moral agent. At the same time, the objection may be raised that grounding CSR along these lines is either 1) too limited (avoiding harm may be seen as a negative duty whereas CSR includes positive duties) or 2) too demanding (almost any activity involves some risk of harm). In response to the former objection, the paper draws upon earlier research, which argues that under certain circumstances, a duty not to harm requires positive interventions on the part of business enterprises, and not merely the avoidance of harmful activities. In response to the latter objection, the paper distinguishes between permissible and impermissible harms in the context of business activity, and characterizes situations in which causing (or not avoiding) a harm counts as a wrong. This is the first sense in which the paper asks, “What’s wrong with harm?” – that is, what is the wrong in causing harm. The second sense is this. CSR is often presented as a conception of the positive responsibilities of business enterprises with respect to members of society. However, if the account in this paper is correct, avoiding harm may require just as much on the part of business enterprises. In this sense, we would do well to consider the extent to which avoiding harm is just as important, if not more important, for business enterprises to meet their responsibilities to society. This is the second sense in which the paper asks, “What’s wrong with harm?” – that is, what is wrong in focusing on avoiding harm as a conception of CSR. __________________________________________________________________ Moral Business Innovation and the Common Good Daryl Koehn, DePaul University and Tim Rolph, DePaul University The terms “the common good," ”innovation” and “moral” have many meanings. There is, therefore, no univocal relationship among them. This paper begins to explore systematically some of the major possible relations among these terms. We are interested, in particular, in exploring relations between 1) innovation by business or in response to commercial activities; and 2) such innovation’s relation to the common good. Part One of this paper lays out our working definitions of “innovation” and “moral innovation” and identifies an ambiguity with the terminology. Part Two sketches four major traditions’ understanding of the term “the common good” and explores how and why some moral innovations may lie outside of the morality in question. The conclusion specifies some of the difficulties in thinking about the common good and moral innovation in any systematic way. __________________________________________________________________ The Problem of Unilateralism in Agency Theory: Towards a Bilateral Formulation Sareh Pouryousefi, University of Nottingham, coauthored with Jeff Frooman Some business ethicists view agency theory as a cautionary tale – a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary tale view presents a nuanced normative characterization of agency, but its unilateral focus betrays a descriptively limited understanding of the structure of cooperation in principal-agent relationships. This paper moves beyond unilateralism by presenting a descriptive and normative argument for a bilateral cautionary tale approach to agency. Specifically, we introduce hat swaps and role dualism in asymmetric information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse selection and moral hazard problems. Our novel bilateral argument assigns a more extensive normative scope to agency relationships than prior business ethics approaches, while leaving the fundamental economic assumptions of agency theory intact. __________________________________________________________________ Integrative social contract theory and the enduring promise of justified hypernorms Markus Scholz, FHWien – University of Applied Sciences and Gastón de los Reyes, George Washington University Our paper builds on the encounter between two popular camps in business ethics: Integrative Social Contracts Theory (ISCT) and the discourse-based approach championed by Scherer and Palazzo. Whereas the latter have rejected ISCT upon finding an absence of normative legitimacy in one of ISCT’s central pillars—hypernorms—a compromise strategy has been advanced by Gilbert and Behnam (2009) to rescue the framework by arguing for the possibility of a discursive justification for hypernorms. We evaluate this middle way and conclude that ISCT cannot be salvaged from Scherer and Palazzo’s critique on the basis of “justified hypernorms,” which we claim are best modeled by the United Nations Global Compact (UNGC) and ISO 26000. Nevertheless, we articulate and defend a conclusion that both camps should embrace: the enduring promise of justified hypernorms to provide global corporations defensible moral bounds in business. __________________________________________________________________ Employees and Organizational Social Purpose: Will Employees Sacrifice Pay to Work for a More Socially Responsible Organization? Craig Smith, INSEAD Business School, coauthored with Douglas H. Frank We study the question of whether social responsibility can help organizations to attract and retain talent by enhancing the employee value proposition. In two experiments—one in an MBA classroom, the other in an online labor market—that present competing job offers, we find that participants will sacrifice 12 to 18 percent of their wages to work for the organization whose mission they view as more socially beneficial. We argue that this “willingness to pay” for socially useful work represents a novel form of prosocial compensating wage differential. We also investigate recent claims that social responsibility attracts more desirable workers. The evidence is mixed and suggests that the type of worker attracted by a socially responsible mission may be more context-specific than heretofore recognized. __________________________________________________________________ On Normativity in Business Ethics Florian Wettstein, University of St.Gallen This contribution explores the nature and aim of normative research in and for the business ethics field. It carefully examines its basic traits and delineates it from other (perhaps more ‘applied’) perspectives on business ethics research (e.g., empirical, conceptual, managerial, institutional). The research will be situated within the landscape of established and more recent general critique of business ethics and will broadly fit with the conference theme. It builds on the perception that normative business ethics is in decline while such other forms claim an ever-larger part of new research output in the business ethics field. If this is correct, the implications both present and future for business ethics as a field are worrisome. The basic claim shall be verified through an extensive literature review as well as a survey among business ethics researchers (note: the TABEC contribution likely will not include the survey due to time constraints). Implications for the future relevance of business ethics research as well as for business ethics as a field will then be derived. __________________________________________________________________ Business Ethics in the Anthropocene Laszlo Zsolnai, University of Budapest, Knut J. Ims, Norwegian School of Economics and Antonio Tencati, Università degli Studi di Brescia The currently unsustainable state of the Earth (rightly called the “Anthropocene”) is largely due to business, so reconsidering the role of business in society and nature is unavoidable. Without transforming business into a progressive social institution which respects nature, future generations and the common good of society there will be no chance of creating a Sustainable Earth. Business ethics has a major role to play in the development of sustainable business organizations. The main areas of analysis and action include (i) promoting frugal production and consumption models, (ii) accepting the intrinsic value of nature, and (iii) catalyzing the emergence of ecological consciousness in organizations. Integrating different kinds of knowledge and creating a new epistemology is required for finding the proper role of business in the Anthropocene. Business ethics should use the latest results of natural, social, and behavioral sciences in parallel with the wisdom traditions of humankind and contemporary arts to capture the interconnectedness of life and human economic activities on Earth.