Today’s international business environment is complicated by human rights abuses and social and economic repression in various countries. This paper introduces controversies with foreign investment in Burma to develop and describe alternative terms of global business engagement in ethically challenging settings. Two forms of engagement—unrestricted and constructive—and two forms of non-engagement—principled and sanctioned—are discussed. All four alternatives are examined for their ethical, social change, and cultural foundations. Additional considerations are posed in respect to constructive engagement, moral leadership by global business executives, needs for model building and evaluative research, and realities in the ethical context of global business.

Business negotiations often involve cooperative arrangements. Sometimes one party will renege on a cooperative enterprise for short-term opportunistic gain. There is a common assumption that such behavior necessarily leads to a spiral of mutual antagonism. We use some of the philosophical literature to frame general research questions and identify relevant variables in dealing with defection. We then describe an experimental approach for examining the possibility of reconciliation and discuss the results of one such experiment where participants were the victims of defection. In contrast to the initial assumptions we found that many participants were willing to reconcile, and that penance conditions, when demanded, were less stringent than expected. We suggest that these findings warrant further study and have implications for business dealings.

Very little can be learnt about [retribution] from Aristotle’s Politics or his three ethics. In modern ethico-political concepts of justice (in Hobbes, Rousseau and Hegel), the problem of retribution appears in conjunction with other problems and is not of central importance.—Agnes Heller

The introduction of ethics in the running of a corporate firm is functional to the reaching of its business purposes.

The adoption of values of distributive justice (equity) and respect (trust) concurs and determines the building of trust both inside the corporation itself and externally, making the birth of solid relationships based on collaboration and a lasting sense of loyalty possible in a productive world, which tends to praise efficiency throughout the entire production line. Therefore, the judgment that ethics pays and the conclusion that the growth of an “ethical sense” in the organization makes up one of the most difficult challenges of modern management.

While the business ethics literature has devoted a tremendous amount of discussion in recent years to the question of whether the corporate manager has obligations to parties other than shareholders, it has failed to apply any of its insights to particular ethical concerns. This leaves the corporate manager with almost no guidance for resolving particular dilemmas he or she encounters. I bridge the gulf between theory and practice by focusing on the issue of corporate downsizing. I argue that corporate downsizing is, in many instances, morally contentious.

This paper reports a phenomenological sub-study of a larger project investigating the way Hong Kong Chinese staff tackled their own ethical dilemmas at work. A special analysis was conducted of eight dilemma cases arising from a request by a boss or superior authority to do something regarded as ethically wrong. In reports of most such cases, staff expressed feelings of contractual or interpersonally based obligation to obey. They sought to save face and preserve harmony in their relationship with authority by choosing between “little potato” obedience, token obedience, and undercover disobedience. Only where no such obligation existed was face in relation to authority unimportant, and open disobedience chosen. In Kohlbergian terms, ethical reasoning at the conventional stages (three and four) predominated in dilemmas of obedience. Findings imply that if corruption were to originate at the top, codes of conduct recently introduced into Hong Kong may be of limited effect in stalling it.

Previous research has identified multiple approaches to the design and implementation of corporate ethics programs (Paine, 1994; Weaver, Treviño, and Cochran, in press b; Treviño, Weaver, Gibson, and Toffler, in press). This field survey in a large financial services company investigated the relationships of the values and compliance orientations in an ethics program to a diverse set of outcomes. Employees’ perceptions that the company ethics program is oriented toward affirming ethical values were associated with seven outcomes. Perceptions of a compliance orientation were associated with four of these outcomes. The interaction of values and compliance orientations was associated with employees’ willingness to report misconduct. In general, a values orientation makes a greater unique contribution to the measured outcomes when compared to a compliance orientation.

This paper examines judge Richard A. Posner’s “The Concept of Corrective Justice in Recent Theories of Tort Law,” as well as a restatement of that position in The Problems of Jurisprudence, and argues that Judge Posner has mistakenly claimed Aristotle’s notion of corrective justice as a significant component of the economic theory of law.

Concern for one’s “reputation” has been introduced in recent game theory enabling theorists to demonstrate the rationality of cooperative behavior in certain contexts. And these impressive results have been generalized to a variety of situations studied by students of business and business ethicists. But it is not clear that the notion of reputation employed has much explanatory power once one sees what is meant. I also suggest that there may be some larger lessons about the notion of rationality used by decision theorists.

By combining normative philosophy and empirical social science, we craft a research framework for assessing differential expectations embodied in normative conceptions of the economic social contract in the United States. We argue that there are distinct views of such a contract grounded in individualist and communitarian philosophical ideologies. We apply this framework to organizational downsizing, postulating that certain human resource practices, in combination with the respective ideological orientations, will affect perceptions of the justice of downsizing policies.

This paper examines corporate social responsibility in Japan today within the context of the paradigm of the moral unity of business. Under this paradigm, business is expected to operate under the same set of moral standards operative in other societal institutions. We suggest that a micro moral unity characterizes Japan—business activity is linked to that society’s moral values but only within carefully circumscribed communities of interest. Because of the strains brought on by the maturing of the Japanese economy, the negative consequences of this micro moral unity are now becoming apparent. A new paradigm will be required to address these challenges. A possible foundation for such a paradigm, based on the emerging notion of kyosei (living and working together for the common good), is discussed.

Here I synthesize certain ideas presented in two different articles that appeared in the same issue of Business Ethics Quarterly. One article (Hasnas) invokes the stockholder model as a valid normative theory of business ethics, the other article (Dunfee) invokes a marketplace of morality. Both articles imply that the accepted financial-economic view of the firm is a view that can accommodate ethics. I offer empirical support for this view. I also identify the ethic of the stockholder model as a variant on might-makes-right and consider the social acceptance of this ethic as a postmodern phenomenon.

The kind of commitment to moral rules that characterizes effective interaction between persons in among others places, manufacturing and commercial settings is characteristically treated by economists and game theorists as a public good, the securing of which requires the expenditure of scarce resources on surveillance and enforcement mechanisms. Alternatively put, the view is that, characteristically, rational persons cannot voluntarily guide their choices by rules, but can only be goaded into acting in accordance with such rules by the fear of social and formal sanctions. On this way of thinking, rational individuals are condemned to having to settle for the “second-best” results that are thereby implied. This conclusion rests not only on an appeal to a consequentialist perspective, but also a separability principle. Against this, it is argued that consequentialism itself offers a basis for the rejection of the separability principle, and a defense of the thesis that, for a wide range of realistic cases, being disposed to voluntarily guide one’s choice by rules (on the condition that others can be expected to do so as well) is a necessary condition of engaging in rational interaction.

Most people do not trust most other people, unmonitored, to honor obligations completely. Because of this they use substantial amounts of resources to specify the details of agreements, and to police them. Use of these resources … could be greatly reduced, if transacting parties would agree to honor the spirit of their agreement and simply shake hands. The resource saving to the two parties combined, from substituting this mode of “enforcing” agreements to those currently used, is clear. Why, then, does not this more efficient mode of transacting drive out the more costly methods through the normal competitive process? … The underlying rationale for this … is that it is privately profitable to engage in some degree of “cheating” on agreements, and to use resources to disguise this fact. — M. W. Reder, “The Place of Ethics in the Theory of Production”

This paper deals with the ethical perceptions of business people and the current state of business ethics in east China. After surveying 800 business people in 59 enterprises and interviewing 42 chief executive officers, chairs and senior managers among them, the following conclusions can be drawn: First of all, business ethics has become a new and popular topic in east China. Second, quite a lot of business people are pessimistic about the ethical standards of their superiors and co-workers, and about the ethical climate of their enterprises. Third, more and more business leaders begin to realize the importance of business ethics. Finally, in east China, the establishment of the market economy and the improvement of business ethics will depend on each other. In short, business people in east China have various ethical perceptions, and the current state of business ethics in east China is also complex and changeable.

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.

In a recent contribution to this journal, Etzioni (1998) has introduced a “communitarian note on stakeholder theory” based on a principle of fairness. While we do not challenge the principle of fairness itself, we claim that when this principle is applied only to those who invest in the corporation, it cannot serve as the ground for an ethical stakeholder theory. A focus on low-skilled workers as a stakeholder group will help us to illustrate this claim.

Joining the dialogue on the relationship between the law and business ethics, Jeffrey Nesteruk and Eric W. Orts have offered conceptions of the law as a positive influence rather than a negative curb on corporate behavior. While these “legal optimists” pursue a noble end in promoting higher ethical standards for corporations through the law, they may be overly optimistic in their suggestion that these more skillfully wielded legal models will influence corporate behavior for the better. Reviewing the basic tenets of their two approaches, this paper uses corporate responses to environmental statutes to suggest that while legal optimism may offer hope for promoting corporate ethics, it has definite limitations in its current stage of development.