Business Ethics Quarterly · 1998 · 409 citations · 0 references
BusinessBusiness AdministrationBusiness EthicsContract TheoryEthicsNormative EthicsStakeholder TheoryIndividual ConsentNormative Stakeholder Theory
Business ethics is framed by three main normative theories—stockholder, stakeholder, and social contract—with the stockholder theory falling out of favor, the stakeholder theory widely accepted, and the social contract theory gaining traction. The article critically reviews the arguments for each theory, contends that the stockholder theory is less flawed than often portrayed, highlights issues with stakeholder and social contract foundations, and proposes that a sound normative theory must rest on individual consent. The authors conduct a critical review of the supporting arguments for each of the three theories.
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review of the supporting arguments for each of the theories, and argue that the stockholder theory is neither as outdated nor as flawed as it is sometimes made to seem and that there are significant problems with the grounding of both the stakeholder and social contract theory.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.