Although BEQ is celebrating its tenth anniversary, business ethics is considerably older than that. Business ethics has been a staple of Catholic thinking on business for most of this century at least. For most philosophers, however, business ethics is about twenty-five years old. Philosophers became active in the field in the mid-1970s. I have chosen as my topic for this essay the role that the discipline of philosophy could play in the future.

In this updated and revised version of his 2008 Society for Business Ethics presidential address, Richard Nielsen documents the characteristics and extent of the 2007–2009 economic crisis and analyzes how the ethics issues of the economic crisis are structurally related to a relatively new form of capitalism, high-leverage finance capitalism. Four types of high-leverage finance capitalism are considered: hedge funds; private equity-leveraged buyouts; high-leverage, subprime mortgage banking; and high-leverage banking. The structurally related problems with the four types of high-leverage finance capitalism converged in something of a perfect economic storm. Explanations for the crisis are offered in the context of the type of the high-leverage finance capitalism system that permitted and facilitated the economic crisis. Ethics issues and potential reforms are considered that may be able to mitigate the destructive effects of what Schumpeter referred to as the “creative destructive” effects of evolutionary forms of capitalism while realizing the Aristotelian economic ideal of creating wealth in such a way as to make us better people and the world a better place.

This article examines how a firm’s prior record on corporate social responsibility (CSR) influences individual stakeholders’ perceptions of corporate hypocrisy in the wake of a corporate social irresponsibility (CSI) event. Our research extends extant corporate hypocrisy literature by highlighting the role of individual stakeholders’ inferences about a genuine CSR motive in their judgments of corporate hypocrisy. This can serve to differentiate perceived corporate hypocrisy from inconsistency that arises because of a lack of ability and/or resources. Our research further identifies a source for such perceptions: individual stakeholders’ perceptions of firm warmth generated by a firm’s prior record of CSR. In addition, we find that when CSR and CSI are in the same (vs. different) domains, it can strengthen perceptions of hypocrisy. This provides direct evidence to explain why markets react differently when CSR and CSI events occur in the same domain (vs. different ones).

The United States Sentencing Commission’s guidelines for the sentencing of organizations found guilty of violating federal laws recently became effective. Dramatically increased penalties are possible under these gudelines, but so too is a substantial reduction in the penalties imposed on organizations that have an effective program in place to prevent and detect violations. This provides corporations with a tremendous new incentive in inaugurate organizational ethics audits both to avoid violations in the first instance and to reduce the penalty imposed in the event that a violation occurs. We argue, however, that there have always been very good reasons for organizations to conduct such audits, which emphasize the identification of the organizational factors that create incentives for unethical behavior. Corporate ethics programs initiated without reference to such factors cannot reasonably be expected to be effective in improving a company’s internal ethical environment.

When prices for basic commodities increase following a disaster, these price increases are often condemned as 'price gouging.’ In this paper, I discuss what moral wrongs, if any, are most reasonably ascribed to accusations of price gouging. This discussion keeps in mind both practical and moral defenses of price increase following disasters. I first examine existing anti-gouging legislation for commonalities in their definitions of gouging and then present arguments in favor of the permissibility of gouging, focusing on the economic benefits of price increases following disasters. I argue that gouging takes the form of a specific failure of respect for persons by undercutting equitable access to essential goods. While I discuss anti-gouging legislation throughout this paper, my aim is to give an account of the moral wrongs associated with gouging rather than guidance for developing morally defensible anti-gouging legislation.

It is common for people to misstate their bargaining positions during business negotiations. This paper will focus on cases of the following sort: I am selling a house and tell a prospective buyer that $90,000 is absolutely the lowest price that I will accept, when I know that I would be willing to accept as little as $80, 000 for the house. This is a lie according to standard definitions of lying—it is a deliberate false statement which is intended to deceive others. I will defend the following two theses:

a. Appearances to the contrary, this kind of bluffing typically does not constitute lying. (I will argue that standard dictionary definitions of lying are untenable and defend an alternative definition hinted at, but never clearly formulated by, W. D. Ross. On my definition, deliberate false statements about one’s negotiating position would rarely constitute lies in this society.)

b. It is usually permissible to misstate one’s bargaining position when one has good reason to think that one’s negotiating partner is doing the same and it is usually impermissible to misstate one’s negotiating bargaining if one does not have good reason to think that the other party is misstating her position.

What a difference a decade makes. Ten years ago the term “stakeholder” was slang for any neglected group affected by a corporation. To be sure, the word had been molded with precision by a thin, important line of management theorists. And to be sure also the word was sometimes used by managers who wanted to justify their personal commitments to groups other than stockholders, such as employees and customers. But like slang, “stakeholder” seemed perfectly plastic and therefore conceptually flawed. It meant one thing to one person, something else to another.

Today the term has arrived. Management journals and consultants flaunt it, and articles devoted to one or another interpretation of stakeholder theory are commonplace. Both the Encyclopedia of Management (Freeman 1998) and the Blackwell Encyclopedic Dictionary of Business Ethics (Freeman 1997) identify stakeholder theory as one of a tiny handful of recognized models for interpreting corporate responsibility. As the term rose to prominence, it acquired more solidity, and while varying interpretations of it can be found, a core of meaning pervades current stakeholder literature.

The success of the stakeholder terminology and of its accompanying theory has not been accidental. One of the influential forces galvanizing attention was the six-year effort on the definition of the corporation, sponsored by the Sloan Foundation, that situated the stakeholder concept at the center of its project. Through this project, books, conferences, meetings with stakeholder groups, and finally the “Principles of Stakeholder Management,” commonly referred to as the “Clarkson Principles,” brought energy and interest to stakeholder research.

After a brief historical introduction, three interpretations of dignity in relation to management theory and business ethics are elaborated: Dignity as a general category, Human Dignity as Inherent and Universal, and Human Dignity as Earned and Contingent. Next, two literature reviews are presented under the headings of “Dignity and Business Research” and “Dignity and Business Ethics Research.” The latter discussion identifies three subcategories of business ethics research involving human dignity: the role of dignity as a cornerstone for paradigmatic shifts, the role of dignity as the ‘ultima ratio’ for the protection of human rights, and the role of dignity in organizing business practices. The article concludes with summaries of the three articles chosen for this special section.

While many aspects of stock and option based compensation for corporate officers remain controversial, we suggest that the growing trend for similar practices in favor of boards of directors will prove to be even more contentious. High-ranking corporate managers do not set their own salaries nor authorize their own stock options. By contrast, boards of directors do, in fact, set their own compensation packages. Other potential conflicts of interest include setting option performance targets, stock buybacks, stock option resets and reloads, consolidations (mergers and acquisitions), and service on multiple boards. As trust is the most valuable commodity in a capitalist society, we suggest that these potential conflicts of interest and related outcomes may ultimately serve to erode any anticipated benefits of director stock compensation.

This study aims to develop an ethical branding framework that determines whether a corporate brand’s functional and emotional values, that is, product, service quality, and perceived price (antecedents), influence ethical branding and, consequently, company reputation and brand loyalty (consequences) among industrial buyers of electronic office equipment in Malaysia. Using structural equation modelling, the article demonstrates the effects of perceived price, quality of product and service on ethical branding, company reputation, and brand loyalty. The results reveal that product quality directly influences ethical brand perceptions and, consequently, company reputation. Perceived price and service quality do not directly affect company reputation; instead, they affect its identification through ethical branding. The findings thus demonstrate that product quality, perceived price, and service quality affect company reputation through the mediation of ethical branding. This highlights that an ethical brand is effective for companies to maintain their reputation among industrial buyers.

Norms of discrimination against women and blacks, norms of revenge still alive in some Mediterranean countries, and norms that everybody dislikes and tries to circumvent, such as the invisible norms of reciprocity that hold among the Iks studied by Turnbull, are all examples of unpopular and inefficient norms that often persist in spite of their being disliked as well as being obviously inefficient from a social or economic viewpoint. The world of business is not immune to this problem. In all those countries in which corruption is endemic, bribing public officials to get lucrative contracts is the norm, but it is often true that such a norm is disliked by many, and that it may lead to highly inefficient social outcomes (Bicchieri and Rovelli 1995).

From a functionalist viewpoint such norms are anomalous, since they do not seem to fulfill any beneficial role for society at large or even for the social groups involved in sustaining the norm. In many cases it would be possible to gain in efficiency by eliminating, say, norms of racial discrimination, in that it would be possible to increase the well-being of a racial minority without harming the rest of society. To social scientists who equate persistence with efficiency, the permanence of inefficient norms thus presents an anomaly. They rest their case on two claims: when a norm is inefficient, sooner or later this fact will become evident. And evidence of inefficiency will induce quick changes in the individual choices that sustain the norm. That is, no opportunity for social improvement remains unexploited for long. Unfortunately, all too often this is not the case, and this is not because people mistakenly believe inefficient norms to be good or efficient.

Mentoring is an age-old process that continues to be practiced in most contemporary organizations. Although mentors are often heralded as virtuous agents of essential continuity, mentoring commonly results in serious dysfunctions. Not only do mentors too often exclude people different from themselves, but also the people they mentor are frequently abused in the process. Based on the conception of mentor as a quasi-professional, this paper lays out the ethical responsibilities of both parties in the mentoring process.

Ethical problems in business include not only genuine moral dilemmas and compliance problems but also problems arising from the distinctive characteristics of imperfect duties. Collective action by business to perfect imperfect duties can yield significant benefits. Such arrrangements can (1) reduce temptations to moral laxity, (2) achieve greater efficiency by eliminating redundancies and gaps that plague uncoordinated individual efforts, (3) reap economies of scale and achieve success where benefits can be provided only if a certain threshold of resources can be brought to bear on a social problem, (4) solve assurance problems where voluntary compliance by some parties depends upon their perception that competitors are doing their fair share, and (5) produce higher levels of contribution than would occur through independent action in response to imperfect duties, stimulated by the perception that there is a fair distribution of burdens of contribution among all parties involved.

Expectations and possibilities for employee loyalty are shifting rapidly, particularly in the for-profit sector. I explore the nature of employee loyalty to the organization, in particular, those elements of loyalty beyond the notion of the ethical demands of employee loyalty. I consider the moral significance of loyalty for the employee and whether the development of ties of loyalty to the work organization is in fact a good thing for the employee or for the employer. I argue that employees have a natural inclination to extend loyalty to the organization and that organizations consequently have an obligation to make clear to employees the degree to which the organization will recognize and reward employee loyalty.

Communism lost the Cold War, not to pure free market capitalism, but to a range of diverse economic systems based on varying degrees and forms of social regulation of the market. Such social regulation was possible because both polities and economies were primarily national. Since the end of the Cold War, there has been rapid globalization of the economy, but not of effective social regulation. Incipient global political institutions are too weak to regulate global corporate power, while national governments no longer have sufficient reach to regulate large multinationals. Corporate self-regulation has begun, but only haltingly and mostly ineffectively.

While global prosperity has risen dramatically in recent decades, not everyone has progressed since the end of the Cold War. Since 1990 some 55 countries have had declining per capita incomes, while inequality has risen within and between countries. It is too soon to say whether global capitalism will be saved from itself by regulation, just as American national capitalism may have been saved by the New Deal reforms it opposed. As Pope John Paul II has warned, the world must not succumb to a “radical capitalist ideology” which “blindly entrusts” social problems to market forces.

Shareholders’ relationship to the firm is a central theme in corporate governance, yet the investors’ perspective has been virtually ignored in governance research. This paper attempts to explain the previously unexplored role of trust in the investor decision-making process. The proposed model suggests that trust acts as the antecedent of the risk variable in existing investor decision-making models. Stock ownership involves both financial and ethical risk, which by definition requires some level of implicit trust in management and the market.

The paper examines the problematic understanding of “risk” in entrepreneurial literature that locates courage in either the loss or gain of having or in the difficulty and hardship of the doing. We argue in this paper that what is lost in this vernacular view of courage is a deeper notion of the subjective dimension of work and the social need of society. Grounded within the Catholic social and moral tradition, we find a richer notion of courage, which in part corrects and rounds out the insufficient description of the vernacular understanding of courage in entrepreneurship. What we also find in this account of the virtues and subjective dimension of work is greater explanatory power of what happens to the entrepreneur in the work that he or she does. The end result of this analysis is a more spiritual, ethical and social understanding of entrepreneurship.

In 2003, CEOs of the 365 largest U.S. corporations were paid on average $8 million, 301 times as much as factory workers. This paper asks whether CEOs get paid too much. Appealing to widely recognized moral values, I distinguish three views of justice in wages: the agreement view, the desert view, and the utility view. I argue that, no matter which view is correct, CEOs get paid too much. I conclude by offering two ways CEO pay might be reduced.

In this address, I outline a “back to basics” approach to specifying the responsibilities and role of business in relation to society. Three “basics” comprise the approach. The first is arguing that basic principles of ordinary morality, such as a duty not to harm, provide an adequate basis for specifying the responsibilities of business managers. The second is framing the role of business in society by looking to the values realized by the basic building blocks of contemporary economic activity, i.e., markets and firms. The third is making explicit the basic institutions that structure the background against which business operates. The aim is to develop a plausible framework for managerial decision making that respects the fact of value pluralism in a global economy and that fosters meaningful criticism of current business practices while remaining sufficiently grounded in contemporary circumstances so as to be relevant for managers.

In a competitive and morally imperfect world, business people are often faced with serious ethical challenges. Harboring suspicions about the ethics of others, many feel justified in engaging in less-than-ideal conduct to protect their own interests. The most sophisticated moral arguments are unlikely to counteract this behavior. We believe that this morally defensive behavior is responsible, in large part, for much undesirable deception in negotiation. Drawing on recent work in the literature of negotiations, we present some practical guidance on how negotiators might build trust, establish common interests, and secure credibility for their statements, thereby promoting honesty. We also point out the types of social and institutional arrangements, many of which have become commonplace, that work to promote credibility, trust, and honesty in business dealings. Our approach is offered not only as a specific response to the problem of deception in negotiation, but as one model of how research in business ethics might offer constructive advice to practitioners.

—Niccolo Machiavelli

—George Bernard Shaw