Like most egalitarian political philosophers, John Rawls believes that a just society will rely on markets and business firms for much of its economic activity—despite acknowledging that market systems will tend to create very unequal distributions of goods, opportunities, power, and status. Rawls himself remains one of the few contemporary political philosophers to explore at any length the way an egalitarian theory of justice might deal with fundamental options in political economy. This article examines his arguments and conclusions on these topics. It argues that contemporary Rawlsians will reach different conclusions if they take more seriously than Rawls himself did: (1) the implications, for the political culture and the democratic regulatory state, of large firms competing in adversarial markets characterized by the inevitable “fact of market failure,” and (2) the relevance of ownership and governance relationships involving different kinds of business firms. And with respect to the second point, Rawlsians and other egalitarians have much to learn from contemporary economic, legal, and sociological theories of the firm, and the role of these theories in the structure of and rationale for corporate law. This is the kind of social theory that Rawls believes is relevant to the justification and application of theories of justice, but he himself did not appeal to it in his writings on political economy. Contemporary egalitarians can and should appeal to it now, and in doing so correct errors and omissions in Rawls’s analysis. But taking seriously the two points mentioned above will also force egalitarians who support efficient markets to face difficult dilemmas or compromises of their own.

The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement (SSE) purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in pursuit of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature.

Does effective moral judgment in business ethics rely upon the identification of a suitable set of moral principles? We address this question by examining a number of criticisms of the role that principles can play in moral judgment. Critics claim that reliance on principles requires moral agents to abstract themselves from actual circumstances, relationships and personal commitments in answering moral questions. This is said to enforce an artificial uniformity in moral judgment. We challenge these critics by developing an account of principle-based moral judgment that has been widely discussed by contemporary Kantian scholars. In so doing we respond to some basic problems raised by so-called “moral particularists” who voice theoretical objections to the role of principles as well as to contemporary business ethicists who have criticized principle-based moral judgment along similar lines. We conclude with some future areas of research.

Many scholars and managers endorse the idea that the primary purpose of the firm is to make money for its owners. This shareholder wealth maximization objective is justified on the grounds that it maximizes social welfare. In this article, the first of a two-part set, we argue that, although this shareholder primacy model may have been appropriate in an earlier era, it no longer is, given our current state of economic and social affairs. To make our case, we employ a utilitarian moral standard and examine the apparent logical sequence behind the link between shareholder wealth maximization and social welfare. Upon close empirical and conceptual scrutiny, we find that utilitarian criteria do not support the shareholder model; that is, shareholder wealth maximization is only weakly linked to social welfare maximization. In view of the dubious validity of this sequential argument, we outline some of the features of a superior corporate objective—a variant of normative stakeholder theory. In the second article, we will advance and defend our preferred alternative and then discuss some institutional arrangements under which it could be implemented.

Noncompete clauses (NCCs), or agreements by employees to not work for a competitor or start a competing business, have recently faced increased public scrutiny and criticism. This article provides a qualified defense of NCCs. I focus on the argument that NCCs should be banned because they unfairly restrict the options of employees. I argue that this argument fails because it neglects the economist Thomas Schelling’s insight that limiting exit options can be beneficial for a person. This employee-based defense of NCCs does not absolve all their uses, but it does give us a rough test for evaluating the permissibility of NCCs. With this test in hand, I turn to some of the more controversial uses of NCCs. For those who weigh heavily the interests of employees, the question is not whether NCCs, but when.

This paper argues that attempts to apply Alasdair MacIntyre’s positive moral theory to business ethics are problematic, due to the cognitive closure of MacIntyre’s concept of a practice. I begin by outlining the notion of a practice, before turning to Moore’s attempt to provide a MacIntyrean account of corporate governance. I argue that Moore’s attempt is mismatched with MacIntyre’s account of moral education. Because the notion of practices resists general application I go on to argue that a negative application, which focuses on regulation, is more plausible. Large-scale regulation, usually thought antithetical to MacIntyre’s advocacy of small-scale politics, has the potential to facilitate practice-based work and reveals that MacIntyre’s own work can be used against his pessimism about the modern order. Furthermore, the conception of regulation I defend can show us how management is more amenable to ethical understanding than MacIntyre’s work is often taken to imply.

The number of corporate apologies has increased dramatically during the past decade. This article delves into the ethics of apologies offered by chief executive officers (CEOs). It examines ways in which public apologies on the part of a representative (CEO) of a corporate body (the firm) differ from both private, interpersonal apologies, on the one hand, and nation-state/collective apologies, on the other. The article then seeks to ground ethically desirable elements of a corporate apology in the nature or essence of the corporate apology itself. It explores the largely ignored roles played by the speaker’s ethos and audience pathos in genuine or ethical apologies and suggests that attention needs to be paid to the problems posed by “role contamination,” context, and other overlooked factors. The reception by the actual audience of a given apology is a highly contingent matter. Ethicists should concentrate, therefore, on what makes a proffered apology, in principle, trustworthy and not merely efficacious for a given audience.

Stanley Cavell’s moral perfectionism places the task of cultivating richer self-understanding and self-expression at the center of corporate life. We show how his approach reframes business as an opportunity for moral soul-craft, achieved through the articulation of increasingly reflective inner life in organizational culture. Instead of norming constraints on business activity, perfectionism opens new possibilities for conducting commercial exchange as a form of conversation, leading to personal growth. This approach guides executives in designing businesses that foster genius and channel creativity, while giving all stakeholders a meaningful voice within a culture of trust. We first give an account of Cavellian perfectionism. Then, we explain how this underrepresented strand of moral reflection challenges and enriches, but does not supplant, prevailing ethical theories—including other versions of perfectionism. We then demonstrate the salience of Cavellian perfectionism to business ethics through examples from marketing, human resources, and executive organizational design and development.

This paper takes up recent challenges to consequentialist forms of ethically evaluating risks and explores how a non-consequentialist form of deliberation, Kantian ethics, can address questions about risk. I examine two cases concerning ethically questionable financial risks: investing in abstruse financial instruments and investing while relying on a bailout. After challenging consequentialist evaluations of these cases, I use Kant’s distinction between morality and prudence to evaluate when the investments are immoral and when they are merely imprudent. I argue that the investment practices are imprudent when they do not take adequate precautions to secure the firm’s long-term flourishing. They are immoral in a Kantian sense when they risk the destruction of the financial system upon which the firms depend. The upshot of my analysis is that moral actions require more risk aversion than prudent actions and prudent actions require more risk aversion than expected-value-maximizing actions.

The profound influence of Thomas Donaldson and Thomas Dunfee’s integrative social contracts theory (ISCT) on the field of business ethics has been challenged by Andreas Scherer and Guido Palazzo’s Habermasian approach, which has achieved prominence of late with articles that expressly question the defensibility of ISCT’s hypernorms. This article builds on recent efforts by Donaldson and Scherer to bridge their accounts by providing discursive foundations to the hypernorms at the heart of the ISCT framework. Extending prior literature, we propose an ISCT* framework designed to retain ISCT’s practical virtue of managerial guidance while answering the demands of Scherer and Palazzo’s discursive account. By subscribing to a suitable portfolio of discursively justified hypernorms, we argue, companies unlock the valuable moral guidance of ISCT*, which says to treat these hypernorms as unequivocal outer bounds to the pursuit of business and as a starting point to tailor local norms through discursive stakeholder engagement.

Experience often manifests a gap between moral principles that are both rationally defensible and widely accepted, and the actual practice of business. In this article, I adapt Pope Francis’s discussion of conscience, gradualness, and discernment, in Amoris Laetitia, for the philosophical context of business ethics in order to better conceptualize and to identify means of narrowing the gap between objective moral principles and business practice. Specifically, right conscience allows for a better understanding of the scope and boundary conditions of moral principles, gradualness highlights the need to identify ways that moral principles can be properly implemented within organizations, and discernment draws attention to the importance of solidarity, in order to avoid one-sided, self-serving action descriptions. In these ways, Francis’s discussion contributes to the narrowing of the gap between objective moral principles and business practice. I conclude by discussing ways that Francis’s framework can inform business ethics courses.

This paper re-examines the import of Rawls’s theory of justice for private sector institutions in the face of the decline of the welfare state. The argument is based on a Rawlsian conception of justice as the establishment of a basic structure of society that guarantees a fair distribution of primary goods. We propose that the decline of the welfare state witnessed in Western countries over the past forty years prompts a reassessment of the boundaries of the basic structure in order to include additional corporate institutions. A discussion centered on the primary good of self-respect, but extensible to power and prerogatives as well as income and wealth, examines how the legislator should intervene in private sector institutions to counterbalance any unfairness that results from the decline of the welfare state.

Since St. Thomas Aquinas was one of the first scholastics to analyze the idea of a “just price,” economists, economic historians and philosophers interested in the philosophical underpinnings of the market have focused on Aquinas’s writings. One group insists that Aquinas defined the just price as the payment needed to cover sellers’ labor and material costs. A second camp vehemently counters that Aquinas’s just price is simply the going market price. We argue that neither of these views is correct. The Thomistic just price is the price that would be agreed to by a just person as part of an exchange. This “just person price” takes into account the well-being of the individual transactors and the good of the entire community. Such a price reduces neither to the cost-covering price nor to the market exchange price. A Thomistic concept of the just person price deserves to be reconsidered, especially because a Thomistic approach offers some useful ways to deal with issues quite differently from the popular neoclassical approach directed toward arriving at a socially optimal market price.

Partnerships between companies and NGOs have received considerable attention in CSR in the past years. However, the role of NGO legitimacy in such partnerships has thus far been neglected. We argue that NGOs assume a status as special stakeholders of corporations which act on behalf of the common good. This role requires a particular focus on their moral legitimacy. We introduce a conceptual framework for analysing the moral legitimacy of NGOs along three dimensions, building on the theory of deliberative democracy. Against this background we outline three procedural characteristics which are essential for judging the legitimacy of NGOs as potential or actual partners of corporations.

Price discrimination is the practice of charging different customers different prices for the same product. Many people consider price discrimination unfair, but economists argue that in many cases price discrimination is more likely to lead to greater welfare than is the uniform pricing alternative—sometimes for every party in the transaction. This article shows i) that there are many situations in which it is necessary to engage in differential pricing in order to make the provision of a product possible; and ii) that in many such situations, the seller does not obtain an above-average rate of return. It concludes that price discrimination is not inherently unfair. The article also contends that even when conditions i) and/or ii) do not obtain, price discrimination is not necessarily unethical. In itself, the fact that some people get an even better deal than do others does not entail that the latter are wronged.