Business Ethics and Stakeholder Theory

Freeman, E, Martin, K and Parmar, B. In Press.  The Logic of AND: Responsible Business without Trade-Offs. Columbia University Press.

Ed Freeman, Bobby Parmar, and I extend our work on stakeholder theory in a book The Logic of AND: Responsible Business without Trade-Offs  (Freeman, Martin, and Parmar, in press, Columbia University Press) articulating a more expansive model of business built on five key ideas that undergird the new story of responsible business:  (1) Purpose, values, and ethics are as important as money/profits; (2) Business is about value creation for stakeholders; (3) Business is embedded in society and in a physical world; (4) People are complex; and, (5) Business and ethics must be integrated into holistic business models.  This more holistic model of business is framed against the simple version about business focused only on self-interest and profits.  The book will be published spring 2020.

Martin, K.  2017. Review: Confronting the Internet’s Dark Side. Business Ethics Quarterly 

Raphael Cohen-Almagor’s book, Confronting the Internet’s Dark Side: Moral and Social Responsibility on the Free Highway, seeks to examine “moral and social responsibility on the internet” (11). Cohen-Almagor focuses on four problems online—terrorism, cyberbullying, child porn, and hate speech—as antisocial forms of internet expression. The book examines each problem to identify the morally responsible actors. The goal itself is a contribution as he names an important set of problems that merit a general, public discussion.

Pirson, M., Martin, K., & Parmar, B.  Accepted.  Public Trust in Business.  Business and Society.

Pirson, M., Martin, K., & Parmar, B.  Accepted.  Initial Trust Formation, Personal Values, and Trustworthiness Salience for Stakeholder Trust.  Journal of Business Ethics.

Freeman, R.E., Parmar, B., and Martin, K. Forthcoming. “Responsible capitalism: Creating value for stakeholders” In D. Barton, D. Horváth, & M. Kipping (Eds.) Re-imagining Capitalism: Building a responsible, long-term model, Oxford University Press.

We believe that we are at an inflection point in the history of capitalism. It is time to think broadly and creatively about the very best in capitalism, and how to avoid its historical weaknesses. In this chapter we have outlined that many of the weaknesses of capitalism come from inaccurate and unhelpful assumptions about the nature of business including its purpose and level of interdependence, as well as assumptions about the complexity of human beings.

Pirson M., Martin, K., and Parmar, B. 2014.  Public trust in business, in A. Wicks, J. Harris, & B. Moriarty (Ed.) Public Trust in Business. Cambridge: Cambridge University Press.

As the importance of public trust in business becomes ever more obvious to both practitioners and scholars, the levels of generalized trust in business have reached alarmingly low levels....

Is an emerging trust gap – where the need for trust outpaces the actualization of trust in business – likely to impair successful business development? What are the determinants of public trust in the insti- tution of business? Do stakeholder-role-specific perspectives impact public trust in business? If so, how do they do so?

Men tend to be more trusting of business than are women. Age plays a role in people’s trust in business, with those 23 years old or younger being much more likely to trust business. While it is commonly supposed that the public has greater trust in smaller companies, this study finds that changing the size of the firm from small, regional, national, or global does not substantially “move the dial” for trust. The authors’ research, however, does find that public trust in business will be affected by a firm’s industry

Martin, K. & Parmar B. 2012. Assumptions in Decision Making Scholarship: A taxonomy of assumptions. Journal of Business Ethics 105(3): 289-306.

While decision making scholarship in management has specifically addressed the objectivist assumptions within the rational choice model, a similar move within business ethics has only begun to occur. Business ethics scholarship remains primarily based on rational choice assumptions. ...

In this article, we examine the managerial decision making literature in order to illustrate equivocality within the rational choice model. We identify four key assumptions in the decision making literature and illustrate how these assumptions affect decision making theory, research, and practice within the purview of business ethics. Given the breadth of disciplines and approaches within management decision making scholarship, a content analysis of management decision making scholarship produces a greater range of assumptions with finer granularity than similar scholarship within business ethics. By identifying the core assumptions within decision making scholarship, we start a conversation about why, how, and to what effect we make assumptions about decision making in business ethics theory, research, and practice. Examining the range of possible assumptions underlying current scholarship will hopefully clarify the conversation and provide a platform for future business ethics research.

Freeman, R.E., Martin, K., & Parmar, B. 2008. Global Business in a Stakeholder Society: Stakeholder Capitalism in S. Gerhardt (Ed.) Global CSR Casebook. ICEP ­ Institut zur Cooperation bei Entwicklungs-Projekten.

Freeman, R.E., Martin, K., & Parmar, B. 2006. Stakeholder Capitalism. Journal of Business Ethics 74: 303-314.

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. ...

These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept.

Freeman, R.E., Martin, K., & Parmar, B. 2006. Ethics and Capitalism, in Epstein and Hanson (Eds.) The Accountable Corporation. Westport, CT: Praeger Publishers.

Freeman, R.E., Martin, K., Parmar, B., Cording, M., & Werhane, P. 2006. Leading Through Values and Ethical Principles, in Cooper and Burke (Eds.) Inspiring Leaders. Oxford: Routledge Publishing.

The purpose of this chapter is to introduce a view of leadership that infuses ethics into its definition. This chapter will demonstrate that previous conceptions of leadership within management literature define leadership as either amoral or only having an instrumental use for values. ...

However, we are able to develop an ethics view of leadership from research outside the management literature. As we will demonstrate, the common principles that cross different types of leadership, situations, organizations, and goals are infused with moral implications – one could say that the only commonality across various types of leadership is ethics. The implications to theory, research, and practice are outlined based on these ethics leadership principles.