Wesley Cragg

Business Ethics and Stakeholder Theory

Stakeholder theorists have typically offered both a business case and an ethics case for business ethics. I evaluate arguments for both approaches and find them wanting. I then shift the focus from ethics to law and ask: “Why should corporations obey the law?†Contrary to what shareholder theories typically imply, neoclassical or profit maximization theories of the firm can offer answers based only on instrumental justifications. Instrumental justifications for obeying the law, however, are pragmatically and normatively incoherent. This is because the modern corporation is a legal artifact. It exists because communities create the legal framework necessary for its existence. Individual corporations can therefore be said to owe their existence to a partnership (what might be called a social contract) between shareholders and governments, a partnership that is itself built on the shared though often implicit understanding that corporations have an unconditional (categorical) obligation both to obey the law and to treat their stakeholders ethically while generating wealth for their shareholders.

Teaching Business Ethics: The Role of Ethics in Business and in Business Education

The paper begins with an examination of traditional attitudes towards business ethics. I suggest that these attitudes fail to recognize that a principal function of ethics is to facilitate cooperation. Further that despite the emphasis on competition in modern market economies, business like all other forms of social activity is possible only where people are prepared to respect rules in the absence of which cooperation is rendered difficult or impossible. Rules or what I call the ethics of doing, however, constitute just one dimension of ethics. A second has to do with what we see and how we see it; a third with who we or what I describe as the ethics of being. Of these three dimensions, the first and the third have been most carefully explored by philosophers and are most frequently the focus of attention when teaching business ethics is being discussed. I argue that this focus is unfortunate in as much as it is the second dimension which falls most naturally into the ambit of modern secular educational institutions. It is here that moral education is most obviously unavoidable, and most clearly justifiable in modern secular teaching environments. I conclude by describing the importance of this second dimension for the modern world of business.

The U.S. Foreign Corrupt Practices Act: A Study of Its Effectiveness

T he passage of the Foreign Corrupt Practices Act (FCPA) by the U.S. government in 1977 was a watershed event in the fight against corruption in the postwar era. Its criminalization of bribery on the part of U.S. citizens and corporations conducting business overseas, and its provisions for mandatory self-regulation through internal control mechanisms, maintenance of transaction records, and other accounting practices made it unique: between the passage of the Act in 1977 and the adoption of the OECD anti-corruption convention in 1997 no other nation initiated similar legislation. Recent studies, however, raise significant questions about the efficacy of this American initiative. Concerns have taken a number of forms. In 1999, Transparency International released the results of a survey ranking nineteen leading exporting countries by the degree to which their companies were perceived to be paying bribes abroad. The United States ranked ninth of nineteen countries in the resulting ‘‘Bribe Payers Index.’’ Accompanying the United States in ninth position was Germany, a country where, until very recently, bribes paid to

Ethics, surface mining and the environment

Abstract This paper describes what is involved in building an ethical component into mine planning, development, operations, closure and site rehabilitation. How best corporate practice measures up to ethical criteria is examined. Finally, reasons for adopting an ethical stance in mining are set out and evaluated.

Plato, Business and Moral Leadership

This paper looks to Plato for guidance on business and business leadership in the twenty-first century. It focuses on three themes. The first is the concept of “the market” as an agora, a meeting place where economic, political and social themes, activities and values intersect and are engaged. The second theme revolves around the concept of a “social contract” that dominates Plato’s account in the Crito of the life, mission and responsibilities of Socrates faced with responding to a death penalty imposed at the conclusion of a judicial process in which Socrates was on trial for corrupting the youth. The focus of the final theme is Plato’s attempt in The Republic to understand the proper relationship between and among what he defines as the three functions essential to any organized human society, functions that today we would identify as government or political leadership, the generation of economic wealth and the task of protecting the state from attack by external military forces, where the goal is the creation of a just and harmonious society. The paper concludes that Plato provides indirect but persuasive reasons for the view that business and the generation of material wealth must be harmoniously interwoven with the social and political dimensions of society and government if a just society is to be realized. What Plato’s insights suggest is that to abstract economic markets from the wider sphere of human activity is bound to result in a misleading account of the nature of business and economic activity more generally, and, if put into practice, is likely to result in social conflict and social and political degeneration.

ETHICS CODES: THE REGULATORY NORMS OF A GLOBALIZED SOCIETY?

This paper begins by examining the conditions under which self regulation guided by ethics codes might effectively supplement the law in regulating international commerce. Ethics codes have not had a decisive impact on corporate conduct to date, I argue. However, what the emergence of ethics codes demonstrates is a wide spread international consensus that corporations do have obligations that extend from obeying the law, to respect for fundamental labour and human rights. Can this consensus be given a theoretical grounding? Certainly not by appealing to currently dominant business paradigms grounded on shareholder and agency theories of management. Not only do these theories fail to account for the view that multi national enterprises do have public or social responsibilities, they are unable to explain or justify the minimalist view they all endorse namely that corporations have at the minimum an obligation to obey the law.