1993: GE’s NBC News unit issues an on-air apology to General Motors for staging a misleading simulated crash test. NBC agrees to pay GM’s estimated $1 million legal and investigation expenses.

February 1994: The Justice Department brought a criminal antitrust case against General Electric, accusing it of conspiring with an arm of the South African DeBeers diamond cartel to fix prices in the $600 million world market for industrial diamonds. General Electric denied wrongdoing...

The author sets out a realist defense of the claim that in the absence of an international enforcement agency, multinational corporations operating in a competitive international environment cannot be said to have a moral obligation to contribute to the international common good, provided that interactions are nonrepetitive and provided effective signals of agent reliability are not possible. Examples of international common goods that meet these conditions are support of the global ozone layer and avoidance of the global greenhouse effect. Pointing out that the conclusion that multinationals have no moral obligations in these areas is deplorable, the author urges the establishment of an international enforcement agency.

Sustainability standards are important governance tools for addressing social and environmental challenges. Yet, such tools are often criticized for being either too open-ended or too restrictive, thereby failing to contribute significantly to the development of sustainable practices. Both dimensions of the critique, however, miss the point. While all standards in principle combine elements of openness and closure, both of which are necessary to keep the sustainability agenda relevant and adaptive, sustainability standards often operate in contexts that favor closure. In this article, we draw on a research tradition that views communication as constitutive of organization to emphasize the significance of communicative mechanisms that stimulate organizational openness in the application of standards. With the notion of “license to critique,” we present a managerial philosophy designed to involve managers and employees, mobilize and develop their knowledge about sustainability and bring it forward for the benefit of both the organization and the environment.

Given the importance of voice in ethical leadership theory, we analyze the relationship of ethical leadership to employee voice and the relationship of voice to exit intentions. Building on the theory of work engagement, we further hypothesize that cognitive engagement mediates these proposed relationships. To test these propositions, we conduct a field study to relate ethical leadership of supervisors, measured at time 1, to employees’ cognitive job engagement, measured at time 2. The analyses show that the relationship between these variables can account for supervisory ethical leadership’s association with employee voice and exit intentions. In a supplementary study using a different sample, we find that supervisory ethical leadership is related to exit intentions through voice. We discuss how these findings contribute to the literature on ethical leadership, employee voice, and exit.

It may be nearly impossible to use standard principles to make a decision about a complex ethical case. The best decision, say virtue ethicists in the Aristotelian tradition, is often one that is made by a person of good character who knows the salient facts of the case and can frame the situation appropriately. In this respect ethical decisions and strategic decisions are similar. Rationality plays a role in good ethical decision-making, but virtue ethicists emphasize the importance of intuitions and emotions as well.

Virtue ethics suggests a reconciliation of the factual and the normative. Virtues may explain as well as justify actions. The same is true of other psychological states and events. That psychological terms have normative implications does not render them useless in explanation. As Aristotle does not distinguish cleanly between the normative and empirical, so many moral philosophers today reject the is-ought dichotomy. They are prepared to learn from economists, psychologists, and other empirical scientists who offer information about the nature of the good life and of values. Social psychologists who study community or corporate culture suggest a close relationship between organizational and ethical features, much as Aristotle saw a close relationship between politics and ethics. We should infer from all this that in business ethics there is good reason for philosophers and organization scholars to work closely together.

This paper examines corporate social responsibility in Japan today within the context of the paradigm of the moral unity of business. Under this paradigm, business is expected to operate under the same set of moral standards operative in other societal institutions. We suggest that a micro moral unity characterizes Japan—business activity is linked to that society’s moral values but only within carefully circumscribed communities of interest. Because of the strains brought on by the maturing of the Japanese economy, the negative consequences of this micro moral unity are now becoming apparent. A new paradigm will be required to address these challenges. A possible foundation for such a paradigm, based on the emerging notion of kyosei (living and working together for the common good), is discussed.

This article argues that Carol Gilligan's research in moral development psychology, work which claims that women speak about ethics in a “different voice” than men do, is applicable to business ethics. This essay claims that Gilligan's “ethic of care” provides a plausible explanation for the results of two studies that found men and women handling ethical dilemmas in business differently. This paper also speculates briefly about the management implications of Gilligan's ideas.

Firms possessing a unique competency to rescue the victims of a human catastrophe have a minimum moral obligation to devote substantial resources toward best efforts to aid the victims. The minimum amount that firms should devote to rescue is the largest sum of their most recent year’s investment in social initiatives, their five-year trend, their industry’s average, or the national average. Financial exigency may justify a lower level of investment. Alternative social investments may be continued if they have an equally compelling rationale. These duties apply to the global pharmaceutical companies in the context of the AIDS pandemic in sub-Saharan Africa.

The criticism that voluntary codes of conduct are ineffective can be met by giving greater centrality to human rights in such codes. Provided the human rights obligations of multinational corporations are interpreted as moral obligations specifically tailored to the situation of multinational corporations, this could serve to bring powerful moral force to bear on MNCs and could provide a legitimating basis for NGO monitoring and persuasion. Approached in this way the human rights obligations of MNCs can be taken to include support for political as well as economic rights. This will go some way towards filling the regulatory gap created by the difficulty of controlling the activities of corporations operating globally. However, such a proposal will require a measure of ‘meta-regulation’ whereby the operations of MNCs are legally required to be sufficiently transparent to create the conditions for effective external moral scrutiny

We extend the Base of the Pyramid (BoP) poverty-alleviation approach by recognizing the poor as valuable suppliers—specifically of intellectual property. Although the poor possess huge reserves of intellectual property, they are unable to participate in global knowledge networks owing to their illiteracy and poverty. This is a crippling form of social exclusion in today’s growing knowledge economy because it adversely affects their capabilities for advancement at several levels. Providing the poor access to global knowledge networks as rightful participants—as suppliers of intellectual property—leads to poverty alleviation as a result of their increased social inclusion, not only through economic benefits, but also through the poor’s improved well-being as a result of their increased self-esteem and dignity. Using concepts from social network theory, we develop a poverty-alleviation approach to harness and integrate the intellectual property of the poor into global knowledge networks through trust-based partnerships among the poor, non-governmental organizations, and multinational corporations.

A synthesis of the two theoretical bases of business ethics—normative philosophy and descriptive social science—is called for. Examples from the literature are used to demonstrate that to ignore the descriptive aspects of moral behavior is to risk unreal philosophy, and that to ignore the normative aspects is to risk amoral social science. Business ethics is portrayed as a single unified field, in which fact-value distinctions are inappropriate.

Virtue ethics, the authors believe, is distinct and superior to other options because it considers, in the first place, which preferences are worth pursuing, rather than just blindly maximizing preferences, and it takes into account intuitions, emotions and experience, instead of acting solely on abstract universal principles. Moreover, virtue ethics is seen as firmly rooted in human biology and psychology, particularly in our freedom, rationality, and sociability. Work, business, and management are presented as vital areas for the development of virtues, not the least with a view to human flourishing. We conclude by introducing the articles included in this special issue.

Alasdair Maclntyre (1984) asserts that the ethical systems of the Enlightenment (formalism and utilitarianism) have failed to provide a meaningful definition of “good.” Lacking such a definition, business managers have no internal standards by which they can morally evaluate their roles or acts. Maclntyre goes on to claim that managers have substituted external measures of “winning” or “effectiveness” for any internal concept of good. He supports a return to the Aristotelian notion of virtue or “excellence.” Such a system of virtue ethics depends on an interrelationship of the community, one’s roles in that community, and the virtues one needs to perform that role well. This article develops Maclntyre’s concept of virtue ethics and shows how this paradigm fits well with existing theories about organizational behavior.

It is proposed that mangers have to be moral, have to be concerned about the distribution of benefits and the allocation of harms brought about by their decisions and actions, in order to build trust, commitment, and effort among the stakeholders of the firm. Trust, commitment, and effort on the part of all of the stakeholders are essential for long-term corporate success, given the economic conditions of intense global competition that now exist for the foreseeable future.

This paper develops and explores a pedagogical innovation for integrating virtue theory into business students’ basic understanding of general management. Eighty-seven students, in 20 groups, classified three managers’ real-time videotaped activities according to an elaboration of Aristotle’s cardinal virtues, Fayol’s management functions, and Mintzberg’s managerial roles. The study’s empirical evidence suggests that, akin to Fayol’s functions and Mintzberg’s roles, Aristotle’s virtues are also amenable to operationalization, reliable observation, and meaningful description of managerial behavior. The study provides an oft-called-for empirical basis for further work in virtue theory as an appropriate conceptual framework for the study and practice of management. The results indicate that virtue theory may be used to re-conceive our fundamental understanding of management, alongside its capacity to weigh moral judgment upon it. Implications and suggestions for future research are discussed.

Whether at the executive or the line-management levels, businesspeople face moral decisions that cannot be easily resolved with reference to a shared ethos, whether because of diversity of ethea in the organization or its environment, or because the organization's ethos is inadequate for the problem at hand. These decisions are made more common by the changing norms of a pluralistic business environment, and require collective moral deliberation to be adequately resolved. Discourse ethics ideally characterizes the form of valid collective moral deliberation. I argue that accommodation for the limitations of actual discourse makes discourse ethics, conceived in terms of the rules of practical discourse, practical for realizing improvements in the openness and validity of moral decision-making over states in which these rules are flagrantly violated. These rules have normative implications at the organizational level for the integrity approach to corporate ethics programs, and at the individual level for ethical leadership.

Popular media, communitarian writings, and recent management literature suggest that communities and organizations are rent by factional mischief: by individuals and groups who pursue their own selfish interests without regard for the common good. An emerging solution to this problem is “transformational” leadership, which seeks to refocus individuals’ attention on higher visions and collective goals. The dangers of such a solution were identified by James Madison at the Constitutional Convention of 1787; and mechanisms to thwart it were designed into the framers’ system of government. This article examines Madison’s objections and the implications of his political theory for the leadership of modern organizations.

In this article, we explore the Corporate Social Performance (CSP) of Developing Country Multinationals (DMNCs). We argue that in competing internationally, DMNCs often face both reputation and legitimacy deficits, which they address by improving their CSP. We develop a series of hypotheses to explain the variation in CSP between DMNCs and domestic-only firms from developing countries and also examine variations in CSP between DMNCs depending on the extent of their multinationality and portfolio of host countries. Our findings support all our hypotheses, which suggest that DMNCs display enhanced levels of CSP compared to their domestic-only counterparts. CSP is also found to be positively related to the DMNCs’ degree of multinationality, but with a declining incremental impact, whereas entry into developed markets leads to a greater improvement in DMNCs’ CSP than expansion into developing markets. We highlight the implications of our findings for managers and researchers.