The Responsibilities and Role of Business in Relation to Society: Back to Basics?

Abstract

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.

Accountability and Moral Competence Promote Ethical Leadership

“…In today's rapidly changing business environment, leaders must make ethical decisions on a regular basis (Hsieh, 2017;Khokhar & Zia-ur-Rehman, 2017) and function as ethical leaders to promote, sustain, and maintain ethical behavior in followers (Jeewon, Jung Hyun, Yoonjung, Pillai, & Se Hyung, 2018;Kalshoven, Den Hartog, & De Hoogh, 2011;Northouse, 2013). Continual scandals in business and public sectors over the last decades have increased interest in ethical leadership (Khokhar & Zia-ur-Rehman, 2017;Marquardt, Brown, & Casper, 2018).…”

The problem of imposing risk and the procedural dimension of stakeholder management

“…This point—that the imposition of risk is morally problematic, consent could justify it—is addressed in the third section below (in the context of recent literature on risk imposition and moral theory), but the point shouldn't be controversial: if there is a fundamental moral duty to avoid harming others, then it should follow directly that imposing risk of harm violates that moral duty. (Nien‐he Hsieh's recent article, about going “back to basics” in business ethics, begins with the fundamental duty to avoid imposing harm.) Andreas Teuber makes this point directly in an early article on the subject, suggesting that, if it is wrong to harm another without that person's consent, then it is equally wrong to impose risk on that person without consent (Teuber, , pp.…”

The Social Purpose of Corporations

“…Virtually all companies ask questions which cannot be answered in terms of Pareto efficiency, such as what quality of products and services to offer, which sales practices to adopt, how to treat staff, which customer groups to target, where to produce, and many others. Answering these questions requires reflection on values such as autonomy, freedom, access to livelihood, and good work, as values that corporations can help realise (Hsieh 2017).…”

“…This subsystem is embedded in political and social institutions that seek to regulate the private sphere and protect those interests that are not adequately protected by it (Granovetter 1985, Polanyi 2001). The social responsibility of firms cannot be determined without considering the basic structure of social and political institutions that they are part of (Heath et al 2010, Hsieh 2017, Rawls 1999.…”