John R. Boatright

Fiduciary Duties and the Shareholder-Management Relation: Or, What's so Special About Shareholders?

The claim that managers have a fiduciary duty to shareholders to run the corporation in their interests is generally supported by two arguments: that shareholders are owners of a corporation and that they have a contract or agency relation with management. The latter argument is used by Kenneth E. Goodpaster, who rejects a multi-fiduciary, stakeholder approach on the grounds that the shareholder-management relation is “ethically different” because of its fiduciary character. Both of these arguments provide an inadequate basis for the fiduciary duties of officers and directors of corporations. The basis is to be found, rather, in considerations of public policy, a point that was established in the Dodd-Berle exchange of the 1930s. This conclusion also shows the inadequacy of Goodpaster’s solution to the so-called stakeholder paradox, and an alternative solution to the paradox is presented.

DOES BUSINESS ETHICS REST ON A MISTAKE

This presidential address to the Society for Business Ethics argues that business ethics rests upon the mistaken assumption that teaching and research in the field ought to aim at the incorporation of ethics into managerial decision making. An alternative to this Moral Manager Model is a Moral Market Model, in which the aim is to develop markets that produce ethical outcomes. The differences between the two models are discussed with reference to the themes of responsibility, participation, and relationships.

Assessing the Effectiveness of Instruction in Business Ethics: A Longitudinal Analysis

Abstract This article presents results from a continuing, multiterm project designed to assess the effectiveness of instruction in business ethics. Both univariate and multivariate analyses indicate that student abilities to identify the presence of ethical issues have been enhanced by instruction in business ethics. This study improves on previous research by (a) identifying more clearly the goals of ethics instruction, (b) focusing on a business ethics course as opposed to a course in business and society, and (c) replicating the study across a number of terms.

Globalization and the Ethics of Business

In addressing the theme of this special issue of Business Ethics Quarterly on business ethics in the new millennium, I want to focus not on business ethics as an academic field of study but rather on ethics in business. By ethics in business I mean the standards for ethical conduct that are generally recognized in business and the ways in which these standards are established. Ethics in business in this sense is, at least in part, what the field of business ethics studies.

Ethics and the role of the manager

In order to understand the way in which the results of a study of business ethics could enter into the actual conduct of business, I formulate and examine five models of the role of the manager which can be found in the literature of management theory. These I call the engineering model, the economic model, the “management of values” model, the formal organization model, and the political model. While none of these models is wholly adequate, each provides important theoretical insights into the relevance of ethics to management decision making which can be of use in the examination of specific cases.

Aristotle Meets Wall Street: The Case for Virtue Ethics in Business

Business, for Aristotle, is aperversion. Trading goods for money with a view to profit?which Robert Nozick has called capitalist acts between consenting adults?was regarded by Aristotle as an unnatural activity, since goods are not being used for their intended purpose. And since goods should be exchanged only for their real value, profit is a kind of theft, a charge which led to centuries of aversion to business. With some justification, therefore, Aristotle might be described as the Krafft-Ebing of economic theory. It is not Aristotle the economist, however, but Aristotle the moral philosopher that Robert C. Solomon draws on for an ethics of modern business. Solomon

Morality in Practice: Dees, Crampton, and Brer Rabbit On a Problem of Applied Ethics

In their article, “Shrewd Bargaining on the Moral Frontier,” J. Gregory Dees and Peter C. Crampton challenge us with a puzzle about deception in bargaining. How can the practice of misleading others about our settlement preferences—the terms on which we are willing to come to an agreement —possibly be justified? On any standard ethical theory, they claim, Brer Rabbits trick of professing fear of the briar patch in order to avoid being eaten by the fox would seem to be wrong, and yet we read this tale to our children for their moral edification. The discussion by Dees and Crampton of this apparent inconsistency is penetrating, instructive, and well-informed. It is also a delight to read.

BRIDGING THE GULF BETWEEN MANAGEMENT PRACTICE AND ETHICAL THEORY

Having taught management ethics for several years, l have been repeatedly frustrated by the practical mismatch between management problems and moral philosophy.... Unless we can connect ethical theory more closely with management practice, we may be dressing our business curriculum windows with philosophical finery but failing to meet the urgent need for clarity of tholught in management ethics. (F. Neil Brady, Ethical Managing; Rules and Results) To anyone who has ever taught a course in management or business ethics these words are bound to strike a responsive chord. Those of us on both sides the yawning gulf between philosophical ethics and management education feel at once the importance of connecting theory with practice and the immense difficulty of doing so. Philosophers (among whom I count myself) are unaccustomed to being practical, but we fancy that our abstract theories constitute an indispensable foundation for the field of business ethics. So far, though, attempts by philosophers to explain the connection have not been very convincing. Evidence on this point, if any is needed, can be obtained from a survey of the treatment of ethical theory in twenty-five leading business ethics texts done by Robbin Derry and Ronald Green (Derry and Green 1989). The picture they paint is one of indecision and confusion. Perhaps someone from the management side can do the job better. That was my hope, at least, as I began reading Ethical Managing: Rules and Resullss a short book by F. Neil Brady, who teaches in the Management Department at San Diego State University. Certainly, the passage quoted above raises high expectations. The task Brady has set for himself is to bridge the gulf between traditional ethical theory and the workaday world of corporate managers. His doubt about the usefulness of ethical theory as REVIEW ARTICLE 449

Aristotle Meets Wall Street

Business, for Aristotle, is aperversion. Trading goods for money with a view to profit?which Robert Nozick has called capitalist acts between consenting adults?was regarded by Aristotle as an unnatural activity, since goods are not being used for their intended purpose. And since goods should be exchanged only for their real value, profit is a kind of theft, a charge which led to centuries of aversion to business. With some justification, therefore, Aristotle might be described as the Krafft-Ebing of economic theory. It is not Aristotle the economist, however, but Aristotle the moral philosopher that Robert C. Solomon draws on for an ethics of modern business. Solomon

Aristotle Meets Wall Street: The Case for Virtue Ethics in BusinessEthics and Excellence: Cooperation and Integrity in Business

Business, for Aristotle, is aperversion. Trading goods for money with a view to profit?which Robert Nozick has called capitalist acts between consenting adults?was regarded by Aristotle as an unnatural activity, since goods are not being used for their intended purpose. And since goods should be exchanged only for their real value, profit is a kind of theft, a charge which led to centuries of aversion to business. With some justification, therefore, Aristotle might be described as the Krafft-Ebing of economic theory. It is not Aristotle the economist, however, but Aristotle the moral philosopher that Robert C. Solomon draws on for an ethics of modern business. Solomon