The Normative Theories of Business Ethics: A Guide for the Perplexed

Abstract

Abstract:The three leading normative theories of business ethics are the stockholder theory, the stakeholder theory, and the social contract theory. Currently, the stockholder theory is somewhat out of favor with many members of the business ethics community. The stakeholder theory, in contrast, is widely accepted, and the social contract theory appears to be gaining increasing adherents. In this article, I undertake a critical review of the supporting arguments for each of the theories, and argue that the stockholder theory is neither as outdated nor as flawed as it is sometimes made to seem and that there are significant problems with the grounding of both the stakeholder and social contract theory. I conclude by suggesting that a truly adequate normative theory of business ethics must ultimately be grounded in individual consent.

The Differences in Corporate Environmental Disclosures on Websites and in Annual Reports: A Case Study of Companies Listed in Thailand

“…In the ethical branch, all stakeholders have rights from companies to assess information, and their rights should not be violated because their acknowledgement can lead to improved corporate financial performances. Management should organise the benefits of all stakeholders (Hasnas, 1998). Within the ethical branch, environmental disclosures are considered to be responsibility driven (Deegan, 2001).…”

Social and Environmental Reporting and Auditing in Indonesia: Maintaining Organizational Legitimacy?

“…A number of reasons for managers to voluntarily disclose social and environmental information has been identified in the literature such as to comply with legal requirements (Deegan and Blomquist 2001), to gain competitive advantage by appearing as socially responsible (Hasnas 1998), to comply with borrowing requirements and community expectations (Deegan and Blomquist 2001), to manage powerful stakeholder groups (Ullman 1985), to legitimize various aspects of their respective organizations (Patten 1992), and to attract investment fund (Deegan and Blomquist 2001).…”

CSR and indirect impacts of core business products/services of financial services institutions

“…A broader application of CSR can reflect a truer social responsibility (Hasnas, 1998); otherwise there may be seen as a greenwash effect (Athanasiou, 1996;Beder, 2000;Tilt, 2007) or corporate spin (Owen et al, 2001) as perceived by some stakeholders. Constant and consistent stakeholder pressure, such as around highly publicised legal actions on FSIs' dealings with socially and environmentally dubious clients, could perhaps one day initiate FSIs and/or regulatory bodies to consider a broad view of CSR more seriously.…”