The Blackwell Encyclopedic Dictionary of Business Ethics provides clear, concise and highly informative definitions and explanations of the key concepts in one of the most important fields in contemporary business.

Despite the fact that a number of economists and philosophers of late defend insider trading both as a viable and useful practice in a free market and as not immoral, I shall question the value of insider trading both from a moral and an economic point of view. I shall argue that insider trading both in its present illegal form and as a legalized market mechanism undermines the efficient and proper functioning of a free market, thereby bringing into question its (...) own raison d'etre. It does so and is economically inefficient for the very reason that it is immoral. Thus this practice cannot be justified either from an economic or a moral point of view. Insider trading is the reverse of speculation. It is reward without risk, wealth generated — and injury done to others — by an unfair advantage in information ... [T]he core principle is clear: no one should profit from exploitation of important information not available to the public. (shrink)

Patricia Werhane synthesizes much of later Wittgensteinian thought, bringing together disparate arguments into a coherent text. Keeping in mind what Wittgenstein set out to accomplish in his later writings, the introduction of new material on the private language arguments, and the philosophical significance of these claims, Werhane develops the thesis that the notion of a rule is such a constitutive of language that a private language is impossible. Such a conclusion challenges many contemporary readings of the Philosphical (...) Investigations by bringing into question conventionalism, linguistic relativism, and idealism while defending the thesis that the notion of a private psychological experience makes sense. (shrink)

Taking the lead from Susan Wolf's and Linda Emanuel's work on systems thinking, and developing ideas from Moberg's, Seabright's and my work on mental models and moral imagination, in this paper I shall argue that what is often missing in management decision-making is a systems approach. Systems thinking requires conceiving of management dilemmas as arising from within a system with interdependent elements, subsystems, and networks of relationships and patterns of interaction. Taking a systems approach and coupling it with moral imagination, (...) now engaged on the organizational and systemic as well as individual levels of decision-making, I shall conclude, is a methodology that encourages managers and companies to think more imaginatively and to engage in integrating moral decision-making into ordinary business decisions. More importantly this sort of thinking is a means to circumvent what often appear to be intractable problems created by systemic constraints for which no individual appears to be responsible. (shrink)

_Employment and Employee Rights_ addresses the issue of rights in the workplace. Although much of the literature in this field focuses on employee rights, this volume considers the issue from the perspective of both employees and employers. Considers the rights of both employees and employers. Discusses the moral and legal landscape and traditional assumptions about right in employment. Investigates arguments for guaranteeing rights, particularly for employees, which are derived from relational, developmental, and economic bases. Explores new dimensions of employment including (...) a model that incorporates growing workplace diversity, builds upon our understanding of the legal landscape, and expands upon our justifications for recognizing and protecting rights. (shrink)

With the recent rash of mergers and friendly and unfriendly takeovers, two important issues have not received sufficient attention as questionable ethical practices. One has to do with the rights of employees affected in mergers and acquisitions and the second concerns the responsibilities of shareholders during these activities. Although employees are drastically affected by a merger or an acquisition because in almost every case a number of jobs are shifted or even eliminated, employees at all levels are usually the last (...) to find out about a merger transaction and have no part in the takeover decision. Second, if shareholders are the fiduciary beneficiaries of mergers and acquisitions, then it would appear that they have some responsibilities or obligations attached to these benefits, but little is said about such responsibilities. In this essay I shall analyze these two ethical issues, and at the end of the paper I shall suggest how they are related. (shrink)

After experiments with various economic systems, we appear to have conceded, to misquote Winston Churchill that "free enterprise is the worst economic system, except all the others that have been tried." Affirming that conclusion, I shall argue that in today's expanding global economy, we need to revisit our mind-sets about corporate governance and leadership to fit what will be new kinds of free enterprise. The aim is to develop a values-based model for corporate governance in this age of globalization that (...) will be appropriate in a variety of challenging cultural and economic settings. I shall present an analysis of mental models from a social constructivist perspective. I shall then develop the notion of moral imagination as one way to revisit traditional mind-sets about values-based corporate governance and outline what I mean by systems thinking. I shall conclude with examples for modeling corporate governance in multi-cultural settings and draw tentative conclusions about globalization. (shrink)

One’s philosophical points of view, which form the bases for assumptions that we bring to management theory and practice matter, and matter deeply, to management thinking and corporate behavior. In this paper I outline three related threads of philosophical conversations and explain how they are important in management theory and practice: the “linguistic turn” in philosophy, deriving from the later writings of Ludwig Wittgenstein, a social constructionist perspective: a set of theories at least implicitly derived from the linguistic turn in (...) philosophy, and the notion of the impartial spectator. I then use these three theories to analyze the idea of the corporation, corporate cultures and corporate mission statements, stakeholder theories and their differences, and the limitations of the popular notion of “corporate social responsibility.” I conclude that how one frames these management ideas makes a difference, a difference in theory and in practice. (shrink)

This article presents a response to Richard Rorty's paper "Is Philosophy Relevant to Business Ethics?" The author questions Rorty's views on the depreciation of the role of philosophy in applied ethics, and outlines four reasons why philosophy retains its relevance. The author addresses the role of moral reasoning in the development of the moral imagination. The author also concludes that humans have the means necessary to make moral progress and are capable of moral reasoning, and need only to develop a (...) strong moral imagination. (shrink)

Abstract:During recent years, the principle and practice of employment-at-will have been under attack. While progress has been made in eroding the practice, the principle still governs the philosophical assumptions underlying employment practices in the United States, and, indeed, EAW has been promulgated as one of the ways to address economic ills in other countries. This paper will briefly review the major critiques of EAW. Given the failure of these arguments to erode the underpinnings of EAW, we shall suggest new avenues (...) for approaching employment issues to achieve the desirable goal of employee dignity and respect. (shrink)

Abstract:Most papers in this issue carefully analyze normative and empirical methodologies. I shall argue that (a) there is no purely empirical nor purely normative methodology; (b) some terms escape the division of the normative and descriptive. (c) Most importantly, dialogues such as this one point to a form of integration that allows us to reflect on what it is that each approach presupposes in its study of business ethics. Thus we have made progress in recognizing the importance of each methodology, (...) how each is dependent on the other, and how neither is singularly The Approach to business ethics. (shrink)

While there is a large and ever-expanding body of work on the fields of business ethics and corporate social responsibility, there is a noted absence of a single source on the methodology and research approaches to these fields. In this book, the first of its kind, leading scholars in the fields gather to analyse a range of philosophical and empirical approaches to research in business ethics and CSR. It covers such sections as historical approaches, normative and behavioural methodologies, quantitative, qualitative (...) and experimental perspectives, grounded theory and case methodologies, and finally a section on the role of the researcher in research projects. This book is a valuable and essential read for all researchers in business ethics and CSR, not only for those starting out in the fields, but also for seasoned scholars and academics. (shrink)

This special issue marks the first in a series of special issues of Business Ethics Quarterly that are sponsored by the Ruffin Foundation and the Olsson Center for Applied Ethics at the University of Virginia. The editors of Business Ethics Quarterly want to thank the Ruffin Foundation and the Olsson Foundation for their generosity in funding these issues for our subscribers at no extra cost.

With the demise of Marxism and socialism, the United States is becoming a model not merely for free enterprise, but also for employment practices worldwide. I believe that free enterprise is the least worst economic system, given the alternatives, a position I shall assume, but not defend, here. However, I shall argue, a successful free enterprise political economy does not entail mimicking US employment practices. I find even today in 1998, as I shall outline in more detail, these practices, when (...) consistently carried out, by and large erode trust in the workplace, they are, on balance unfair to workers and managers, and, if Jeffrey Pfeffer is correct, they do not maximize long-term corporate earnings or growth. Getting clear on US employment practices and their weaknesses may help to shape other models for employment that neither contravene free enterprise nor are degrading to workers. (shrink)

Until recently, business issues in healthcare organizations were relatively insulated from clinical issues, for several reasons. The hospital at earlier stages of its development operated on a combination of charitable and equitable premises, allowing for providing care to be separated from financial support. Physicians, who were primarily responsible for clinical care, constituted an independent power nexus within the hospital and were governed by their own professional codes of ethics. In exchange for a great deal of control over their conditions of (...) practice, they took almost complete responsibility for patient care. Thus clinical and professional ethics could to some extent be compartmentalized from the business issues—a much easier feat when, as in much of the last few decades, virtually all care was reimbursed from some source or other. In addition, many HCOs were not categorized or treated as businesses, although of course they were presumed to be governed by the same expectation for good management as any other organization. (shrink)

Over the last decade, and culminating in the 2008 global financial meltdown, there has been an erosion of trust and a concomitant rise of distrust in domestic companies, multinational enterprises, and political economies.In response to this attrition, this article presents three arguments. First, we suggest that trust is the “glue” of any viable political economy, and we propose that the stakes of violating public trust are particularly high in light of the asymmetry between trust and distrust. Second, we identify a (...) constellation of key barriers to overcoming distrust that companies face in the current environment: (1) corporate mind-sets that promote a preoccupation with quantification, hierarchical leadership models, and “blind trust” in authority; (2) the anonymity of core stakeholders; (3) the agency of the media as a driver of the political economy; and (4) firm-centric models of stakeholder relationships.Third, we argue that, notwithstanding these challenges, these phenomena are not fatal and can be addressed through a holistic transformation in corporate culture. Such a transformation might include a shift to collaborative leadership models and replacing authority models with responsibility, a “names and faces” approach to stakeholders through cases and stories, more egalitarian communication exchanges with external stakeholders, and a reprioritization of the firm as a vital element among others within a system rather than the central core of a network.We conclude that the value of trust at the individual, institutional, national, and global levels cannot be overstated. Without a reinvigoration of trust in our political economies, at all levels, the future of an economically vibrant planet is indeed bleak. (shrink)

This chapter contains sections titled: Two Traditional Topics in Business Ethics: Agency and Responsibility Traditional Business Ethics and the Separation Thesis Stakeholder Theory Emerging Lines of Research Some Contemporary Topics Conclusion.

The article, Inside Trading Revisited, has taken the stance that insider trading is neither unethical nor economically inefficient. Attacking my arguments to the contrary developed in an earlier article, The Ethics of Inside Trading (Journal of Business Ethics, 1989) this article constructs careful arguments and even appeals to Adam Smith to justify its conclusions. In my response to this article I shall clarify my position as well as that of Smith to support my counter-contention that insider trading is both unethical (...) and inefficient. (shrink)

This volume brings together a selection of papers written by Patricia Werhane during the most recent quarter century. The book critically explicates the direction and development of Werhane’s thinking based on her erudite and eclectic sampling of orthodox philosophical theories. It starts out with an introductory chapter setting Werhane’s work in the context of the development of Business Ethics theory and practice, along with an illustrative time line. Next, it discusses possible interpretations of the papers that (...) have been divided across a range of themes, and examines Werhane’s contribution to these thematic areas. Patricia H. Werhane is a renowned author and innovator at the intersection of philosophy and Applied Business Ethics. She is professor emerita and a senior fellow at the Olsson Centre for Applied Ethics at Darden and was formerly the Ruffin Professor of Business Ethics. She is also professor emerita at DePaul University, where she was Wicklander Chair in Business Ethics and director of the Institute for Business and Professional Ethics. A prolific author whose works include Moral Imagination and Management Decision-Making and Organization Ethics for Health Care, Werhane is an acclaimed authority on employee rights in the workplace, one of the leading scholars on Adam Smith and founder and former editor-in-chief of Business Ethics Quarterly, the leading journal of Business Ethics. She was a founding member and past president of the Society for Business Ethics and, in 2001, was elected to the executive committee of the Association for Practical and Professional Ethics. Before joining the Darden faculty in 1993, Werhane served on the faculty of Loyola University Chicago and was a Rockefeller Fellow at Dartmouth College and Senior Fellow at Cambridge University. (shrink)

This article will defend a very simple thesis. In a diverse globalized “flat” world with expanding economic opportunities and risks, we will need to revisit and revise our mindsets about free enterprise, corporate governance, and leadership. That we can change our mindsets and world view is illustrated by studies of primate behavior, and the kind of leadership necessary in a global economy is, interestingly, exemplified by women.

Global Economic Ethic is a stunning set of principles. However, in this response I shall raise some questions concerning its implementation. First, from the perspective of a global Western-based transnational corporation, there are ambiguities in the principles and implementation in practice. Second, from a non-Western cultural perspective, one has to to think about whether and how these principles could be interpreted in different non-European/non–North American cultural settings. Finally, the biggest challenge is whether or how we as individuals, as executives and (...) managers, and as part of the global community work to change political climates of corruption, domination, patronage, and protectionism, climates that hinder or preclude going forward with the adoption and operationalization of these principles everywhere. (shrink)

There are important synergies for the next generation of ethical leaders based on the alignment of modified or adjusted mental models. This entails a synergistic application of moral imagination through collaborative input and critique, rather than "me too" obedience. In this article, we will analyze the Milgram results using frameworks relating to mental models (Werhane et al., Profitable partnerships for poverty alleviation, 2009), as well as work by Moberg on "ethics blind spots'' (Organizational Studies 27(3): 413-428, 2006), and by (...) Bazerman and Chugh on "bounded awareness" (Harvard Business Review, 2006; Mind & Society 6: 1-18, 2007) Using these constructs to examine the Milgram experiment, we will argue that the ways in which the experiments are framed, the presence of an authority figure, the appeal to the authority of science, and the situation in which the naïve participant finds herself or himself, all create a bounded awareness, a narrow blind spot that encourages a climate for obedience, brackets out the opportunity to ask the moral question: "Am I hurting another fellow human being?" and may preclude the subject from utilizing moral imagination to opt out of the experiment. We will conclude that these forms of almost blind obedience to authority are correctable, but with difficulty. We will argue that linking the modification of mental models to an unbinding of awareness represents an important synergistic relationship and one that can build effectively on the lessons learned from our experience with moral imagination. (shrink)

In commerce, many moral failures are due to narrow mindsets that preclude taking into account the moral dimensions of a decision or action. In turn, sometimes these mindsets are caused by failing to question managerial decisions from a moral point of view, because of a perceived authority of management. In the 1960s, Stanley Milgram conducted controversial experiments to investigate just how far obedience to an authority figure could subvert his subjects' moral beliefs. In this thought-provoking work, the authors examine the (...) prevalence of narrow mental models and the phenomenon of obedience to an authority to analyse and understand the challenges which business professionals encounter in making ethical decisions. Obstacles to Ethical Decision-Making proposes processes - including collaborative input and critique - by which individuals may reduce or overcome these challenges. It provides decision-makers at all levels in an organisation with the means to place ethical considerations at the heart of managerial decision-making. (shrink)

The most serious ethical challenge facing multinational corporations in the next century is their exportation of the mental model of Western-style capitalism. This model promises that industrialized free enterprise in a free trade global economy, where businesses and entrepreneurs can pursue their interests competitively without undue regulations or labor restrictions, will produce growth and well-being, i.e., economic good, in every country or community where this phenomenon is allowed to operate. This paper points to some limitations to this model and illustrates (...) how multinational corporations might meet this challenge. (shrink)

Bioethics, clinical ethics, and professional ethics are mature, well-developed fields of applied ethics that focus on medical research, patient autonomy and patient care, patient–healthcare professional relationships, and issues that arise in clinical and other medical settings. However, despite these developments, little attention has been paid to the organizational aspects of healthcare in these fields. This is surprising, because in the last 30 years healthcare has become more and more institutionalized in provider, management, and insurer organizations. Despite JCAHO's preoccupation with organizational (...) ethics during the last decade, the philosophical underpinnings of their requirements have been less explored in the literature. Clinical ethics remains preoccupied with clinical patient care and professional ethics with individual professional guidelines; even the American College of Healthcare Executives focuses primarily on healthcare managers, not on healthcare organizations. (shrink)