Towards a conceptual framework for corporate ethics: problems of justification and implementation

Abstract

Purpose

The paper aims to integrate central ideas about corporate ethics into an overall framework of corporate governance in modern market economies. A proposal for an adequate understanding of corporate ethics is outlined and, with this understanding as a background, problems of justification and implementation of corporate ethics are to be discussed.

Design/methodology/approach

In its philosophical part, the paper draws heavily on ideas developed around the German philosophical school of “methodological constructivism” (not to be confused with “radical constructivism”) which goes back to the works of Lorenzen, Mittelstraß, Kambartel, Gethmann, Janich, Wohlrapp et al. and which unfolds and defends a concept which C.F. Gethmann proposed to designate as “cultural pragmatism” as against the concept of “natural pragmatism” which originated in the USA. In its management part the paper relies on an interpretive approach to understand (reconstruct) the “raison d'être” of the private corporation in today's market economies and its implications for management and management theory.

Findings

The process of justification of norms, intended to give useful orientation to our common life, must start on the pragmatic (instead of the semantic) level by reconstructing those basic differences and notions which have (thus far) proven as being successful for the coordination human actions. This is in our case the difference between peaceful conflict resolution (which is dialogic in character) and the use of power (in its manyfold forms). Corporate ethics is, thus, understood here as a dialogical concept which contributes to the public interest (and national law) of making peace in and between societies more stable, and this by peacefully solving such conflicts with corporate stakeholders which result (or may result) from the choice of means (strategy) with which a corporation tries to make profits. It is in this capacity that corporate ethics adds a second dimension to the economic responsibility of management of private corporations which is to make sufficient profits (for the firm to survive under competitive conditions). This second dimension is part of what is called today corporate social responsibility. Integrating corporate ethics into the management process (planning, organizing, staffing, directing, control) requires that the principle of “primacy of corporate ethics” dominates all decisions and activities of the corporation, especially in dilemma situations.

Originality/value

The paper is part of the old dispute (in management theory, company law, etc.) about the “modern corporation and private property” stimulated (anew) through the seminal work of Berle/Means as early as 1932 and, later on, through institutional economics (“corporate governance”). It contributes to this discussion the proposal to integrate some (new) philosophical ideas of “cultural pragmatism” (a term proposed by the German philosopher C.F. Gethmann to mark the difference to the well‐known “natural pragmatism” which originated in the USA) into management theory; moreover, some steps are made towards a conceptional framework of corporate ethics with the aim in mind to gain a new understanding of the relationship between private business and the public interest.

Citation

Steinmann, H. (2008), "Towards a conceptual framework for corporate ethics: problems of justification and implementation", Society and Business Review, Vol. 3 No. 2, pp. 133-148. https://doi.org/10.1108/17465680810880062