a precis of a communicative theory of the firm
DESCRIPTION
TRANSCRIPT
A precis of a communicativetheory of the firm
Jeffery D.Smithn
Introduction
Over the last two decades there have been
noteworthy attempts to apply normative moral
and political theory to the conduct of business
firms. These applications draw upon the work of
Aristotle, Immanuel Kant, John Rawls, various
figures of the social contract tradition, and the
writings of the so-called communitarians (see
Keeley 1988, Solomon 1993, Etzioni 1998, Do-
naldson & Dunfee 1999, Bowie 1999, Phillips
2003). A body of literature that has received
substantially less attention by business ethicists,
however, is the work of European theorists who
advocate an approach termed discourse, or com-
municative ethics.
This paper proceeds under the assumption that
there is room to develop a communicative theory
of the modern business firm that can provide a
perspective from which to evaluate an array of
normative issues in business ethics, e.g. corporate
social responsibilities, stakeholder entitlements
and obligations, managerial decision making,
and corporate governance. This task, however, is
quite complex and cannot be completed in its
entirety here; as a result, the purpose of this
analysis will be to provide a preview of a more com-
prehensive application of communicative ethics.
My focus will center on the first step of such an
application; that is, whether it is reasonable to
conceive of the relationships between business
stakeholders as part of the communicative, i.e.
consensus-building fabric of modern society, or
whether such relationships are merely strategic in
a way that emphasizes the satisfaction of private
over collective interest. Although the answer to
this general question remains open within the
communicative ethics literature, I take an ap-
proach that maintains that economic organiza-
tions are not only partly communicative in nature
but it is indeed appropriate that the ideals set
forth by communicative action structure the terms
of cooperation between their members. Business
actors, while strategically motivated in basic ways,
cannot be exclusively strategic without jeopardiz-
ing the successful attainment of their shared
interests. I also hold that communicative action
is only enabled through a complicated network of
social institutions. If businesses shape and affect
the possibility of consensual social action in other
spheres of modern society, then they too are
partly subject to the normative constraints pro-
vided by the ideal of communicative interaction.
In what follows, I will develop this position with
exclusive focus on the philosophical work of
arguably the most prominent communicative
ethicist, Juergen Habermas (1990: 43–115,
1996a). Since I do not purport to provide an
interpretation of Habermas as much as an
extension of some of his insights, I assume large,
controversial features of his work without de-
fense. The motive behind this exploration is a
curiosity in uncovering what entitlements and
responsibilities corporate stakeholders assume
when they are engaged in the mutually benefi-
cial acceptance of risk and reward that consti-
tutes business activity. Broadly speaking, I am
nAssistant Professor and Director of the Center for Business, Ethics
and Society, School of Business, University of Redlands, Redlands,
CA, USA.
r Blackwell Publishing Ltd. 2004, 9600 Garsington Road, Oxford OX4 2DQ, UKand 350 Main St, Malden, MA 02148, USA. 317
Business Ethics: A European Review
interested in what moral principles are implied
from the fact that business organizations are
composed of differently situated and differently
interested groups of individuals who sometimes
hold competing and mutually exclusive ends.
How can their diverse economic interests be justly
addressed given that these differences stand
in contrast to the shared interests they have in
the success of the firm? Although I will provide
no definitive answers to these questions in
this paper, I will begin the process of constructing
a communicative perspective from which these
questions can be asked.
Communicative and strategic action
Juergen Habermas maintains that moral princi-
ples are justified, and ultimately conferred valid-
ity, when they meet with the acceptance of
individuals engaged in an argumentative discourse
about the principle’s ability to satisfy the needs
and interests of all affected parties. His commu-
nicative ethics provides a procedure designed to
provide an examination of the principles that can
govern the interaction and cooperation of a
plurality of groups that have disparate value
orientations, interests, and conceptions of the
good. Institutionalizing argumentative discourse
enables a type of coordination of interests by
uncovering an insight into the interests of other
individuals. This, in turn, builds solidarity be-
tween those who reach collective agreement about
how to regulate the terms of their social lives.
Communicative ethics, unlike other contempor-
ary work in ethical theory, maintains that moral
norms governing social interaction are the result
of reasoned, dialogical exchanges between differ-
ently situated individuals. In this respect, com-
municative ethics is centrally procedural in that it
does not recommend substantive moral norms
but, instead, proposes that they result from
institutionalized discourses where those affected
jointly arrive at well-reasoned principles. Impor-
tance is placed on establishing reliable mechan-
isms for discursive interaction where different
constituencies and groups can address competing
interest claims on the basis of mutually recogniz-
able needs and solutions. The promise of com-
municative ethics for business ethicists is that it
can provide a procedural vantage point from
which the relationships that characterize the
modern corporation can be normatively assessed
and managed.
Habermas limits his normative theory to an
exploration of the moral principles that can be
rationally justified in the face of the persistent
disagreement that characterizes modern, pluralis-
tic societies. He begins this account with the
assumption that moral claims have the feature of
being made with the anticipation and expectation
that there are good reasons to support the validity
of the claim that every listener can, in principle,
acknowledge. Moral claims, thus, are a species of
what I have been calling communicative action, or
consent-oriented action (Habermas 1984: 286,
Baynes 1992: 80). Communicative action is social
activity with the primary aim of bringing about
mutual understanding, rational agreement, or
consent. Since communicative action is typically
mediated by language, Habermas focuses his
attention on moral claims and their purported
end of enabling the recognition of certain reasons
as warranted grounds upon which to accept a
normative, action-oriented claim about what
ought to be done. Moral assertions are distinctive
in that they specify universally valid human
interests that are capable of obliging individuals
whatever their specific value orientations or
limited set of interests. Linguistically mediated
moral action, then, is pragmatically based on the
presupposition that moral claims can lead to a
mutual recognition of the claim through inter-
subjectively acceptable reasons.
In this light, Habermas’ work can be broadly
viewed as an attempt to redeem the Kantian
project of uncovering a universal basis for moral
principles without appealing to an overly formal
conception of practical reason or otherwise
controversial metaphysical assumptions about
human autonomy. The possibility of universal
moral principles rests, instead, on the pragmatic
necessity of individuals to coordinate their activ-
ities amongst each other on the basis of shared
reasons. Habermas maintains that the reasons
that support the universal validity of moral claims
Volume 13 Number 4 October 2004
318 r Blackwell Publishing Ltd. 2004
can be uncovered through a process of dialogic
interaction among participants who may have
very different interests or conceptions of the good
life; hence, by identifying principles that express
universal interests, he takes seriously the liberal
notion that certain human interests can be
recognized by all individuals whatever their
concrete world views or particular ends. A society
that is able to coordinate its activities must rely on
claims that everyone can, even if only implicitly,
offer their assent. In Habermas’ terms (1984: 286–
287; 1990: 102), the restoration of communicative
action, oriented toward consensus, is necessary
for the basic processes of socialization, social
integration, and shared cultural reproduction.
Although much of our day-to-day interaction
proceeds in a communicative fashion – i.e., we
act and speak in ways that implicitly rely on
agreement – Habermas admits that communica-
tive action often breaks down because of the
inability of certain claims to generate consensus.
The inability of individuals to act in consensual
fashion runs the risk of leading to what Habermas
(1990: 58) calls rational–purposive action – action
that is not oriented toward rational understanding
and mutual consent but premised on the attain-
ment of certain ends not tied to consensus as such.
Rational–purposive actions come in two forms:
instrumental actions that are goal-oriented inter-
ventions in the physical world, and strategic
actions that are attempts to influence the thoughts
and behavior of others for the purpose of
achieving private ends. Although there is an
overlapping area between instrumental and stra-
tegic action, strategic action is particularly worri-
some for Habermas because it is social interaction
that subordinates, or perhaps purposely avoids,
mutual understanding in order to achieve other
ends like power, economic efficiency, or other
egocentric aims. Breakdowns in communicative
action can naturally lead to strategic action
because coordination needs to take place even
without consensus.
Strategic acts such as deception, coercion,
manipulation, and instrumental purpose can be
avoided if breaks in the fabric of communicative
consensus are repaired through a discursive
process of argumentation; that is to say, action
oriented toward mutual understanding and con-
sensus can be preserved in the face of ongoing
disagreement when those who disagree ‘thematize
contested validity claims and attempt to vindicate
or criticize them through arguments’ (Habermas
1984: 18). For the special case of moral claims, the
efforts to preserve rational consensus through a
process of argumentative discourse presuppose a
number of rules. Indeed, Habermas (1990: 86–93)
explains that these rules are inescapable assump-
tions behind the very effort to engage in commu-
nicative action. As long as you are a participant
using language to make claims that are designed
to secure recognition from listeners, you presup-
pose that there can be reasons uncovered that
support your assertion. The ideal process of
presenting and reconstructing this search for
reasons just is the pragmatic expression of the
very rules that guide Habermasian discourse.
These rules include the equal rights of all affected
parties to participate in the process of argumenta-
tion, an absence of coercive actions, consistency in
the use of language, the right of everyone to offer
any relevant objection, the truthfulness of all
participants, and the right of everyone to express
their needs and interests (cf. Baynes 1992: 80).
Through a complex maneuver, Habermas con-
cludes that from these necessary presuppositions
of argumentative discourse and the idea that
moral claims are justified only if they can generate
consensus to coordinate social action between
individuals, there is one basic rule that all moral
norms must meet in order to carry the force
of reason (Habermas 1990: 57–68; Rehg 1994:
56–84). He labels this rule (U) because, like
Immanuel Kant’s Categorical Imperative, it sti-
pulates that all justifiable principles must be
universalizable. In Habermas’ case, however,
universalizability is not a formal requirement of
maxims of action, but a requirement concerning
the acceptability of a proposed principle within
argumentative discourse.
(U): a moral principle is justified just in case all
affected can freely accept the consequences and
side effects that the general observance of the
principle can be expected to have for the satisfac-
tion of the interests of each individual (Habermas
1990: 93)
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 319
(U) summarizes the basic procedural logic behind
moral argumentation and the discovery of accep-
table reasons to support a proposed principle: a
principle is rationally justified only on the
condition that all others who are affected by the
principle are rationally convinced of its validity.
So the consensus required by (U) is significant
because it identifies moral principles that partici-
pants in discourse ‘arrive at together’ by looking
for reasons that every other participant can
endorse (Rehg 1994: 77, 78).
Before exploring the applications of this
approach to themes in business ethics, it is worth
reiterating some important limitations to Haber-
mas’ theory. Moral discourse is a process whereby
individuals who are communicatively oriented
attempt to restore consensus on issues that have
temporarily resulted in disagreement. Habermas
is careful to stress that his theory itself does
not offer any substantive principles; rather, his
theory is purely procedural in that such principles
can only be determined through actual discourses.
Moral claims that are redeemed through dis-
course represent values that are generalizable
because claims that survive the process of moral
discourse are those that can be recognized by
everyone. Moral reasons, thus, can be understood
as discursive reasons, i.e., reasons that can be
recognized as acceptable warrants by participants
within discourse.
The domain of the moral is clearly limited by
Habermas to those normative issues that are
capable of expressing generalizable interests.
Ethical matters concerning individual or group
identity, value-oriented assessment of personal
ends, or questions of the good life are important
to be sure; however, discourses concerning these
questions are not geared toward the ‘mutually
expectable values’ discovered within moral dis-
course. Habermas envisions his communicative
ethics as providing the conceptual framework
needed to develop a theory of justice that
articulates the basic elements of a stable system
of public morality. Although he is reluctant to
specify the content of this system, the demands
of public recognition through individual rights,
liberties, formal opportunities, guarantees to a life
consistent with one’s lifeworld commitments, and
distributive schemes that acknowledge the impor-
tance of economic resources in the attainment of
these entitlements are likely candidates for uni-
versalizable moral principles.
Communicative ethics and business
There are two general ways in which commu-
nicative ethics is relevant to business. First, as an
institution that affects the distribution of rights,
responsibilities, benefits, and burdens in modern
society, businesses and their agents have respon-
sibilities to uphold the principles that are identi-
fied and justified through public moral discourse.
Insofar as consensus emerges about the appro-
priate ways to encourage and regulate business
activity there are norms to which businesses ought
to adhere. In other words, businesses, at a
minimum, need to further the interests of all
who are affected by their activity. Second,
corporations, despite being largely private asso-
ciations, are stable and successful only when it is
recognized that the relationships between their
stakeholders are communicative, and not merely
strategic in nature. This fact yields the interesting
result that discourse is not simply a mechanism to
regulate business at the level Rawls refers to as the
‘basic structure of society’, but is also germane to
the negotiation and management of moral con-
cerns between consociates within organizations. I
will take up each of these applications in turn
(Rawls 1971: 7).
Public morality, law, and business
Habermas’ discourse ethics is a theory of social
morality that governs the entire scope of public
interpersonal and institutional relations. To the
extent that businesses are units of civil society that
impact such core human interests as self-determi-
nation, opportunity, and welfare, there are well-
defined responsibilities to the general interest of
citizens. Reed (1999a, b), for example, has argued
that business activity functions in the general
interest only when three conditions are met. First,
individual profit seeking through cooperative
modes of production is justified only when
the firm intends to provide gains in economic
Volume 13 Number 4 October 2004
320 r Blackwell Publishing Ltd. 2004
welfare to its stakeholders and that these gains are
appropriately distributed to everyone who has
contributed to the firm’s productive activities.
Second, because of specific failures of the market
to deliver such gains in welfare, there are generally
recognizable reasons to prefer regulatory struc-
tures that ensure the protection of the natural
environment, public safety, and competition in
order that the public benefits of individual profit
seeking are realized. Finally, business activity
upholds the general interest as long as it does not
‘invade other realms’ that should be governed by
non-economic ends. Reed is particularly con-
cerned with the ways in which businesses have
been able to supplant reflective individual choice
by contributing to the creation of a ‘consumer cul-
ture’ and how the ends of business have distorted
the communicative aims of other institutions, e.g.,
political parties and administrative agencies.
Another way that the norms of public morality
are brought to bear on business is through the
creation of relevant laws by legislative, adminis-
trative, or judicial means. This issue receives
extensive treatment within Habermas’ (1996b)
theory of law in Between Facts and Norms. There
he develops a principle of democratic law forma-
tion whereby formal political institutions have a
central (although not exclusive) role to play in the
maintenance of legitimate law. According to his
so-called principle of democracy, Habermas
(1996b: 110) maintains that statutes can claim
legitimacy only when they meet ‘with the assent
(Zustimmung) of all citizens in a discursive process
of legislation that . . . has been legally constituted’.
Laws consistent with this principle reflect a kind
of popular autonomy among the citizenry to
reflectively endorse the laws to which they are to
be subjected (Habermas 1988, 1996b: 118–131;
Reed 1999b: 26). Habermas (1996b: 107) draws an
indirect, but important, connection between (U)
and the principle of democracy. Indeed Habermas
holds that both principles are ‘co-original’ in the
sense that the normative realms of morality and
legitimacy are derived from the same core
principle, (D), expressed in the very idea of
communicative action, i.e., that an action norm
is valid only on the condition that all of those who
are possibly affected by it could find reason to
accept its role in regulating social life. The key
difference for the domains of morality and
legitimacy rests in the fact that legal discourses
encompass moral, ethical and pragmatic reasons
in the course of examining the validity of a
proposed law. The creation of law characteristi-
cally takes into consideration a wider array of
functional questions and aims (e.g., assessments
of efficient means and strategies), focuses, at
times, on negotiation and bargaining processes,
and tends to be concerned with concrete problems
and policies rather than the mere implementation
of abstract moral insights (Rehg 1994: 219;
Habermas 1996b: 453). Still, the fact that Haber-
mas (Habermas 1988: 243–244) argues that
‘legality can produce legitimacy only to the extent
that . . . legal discourses are institutionalized in
ways made pervious to moral argumentation’
exposes the deep linkage between legitimacy and
morality that Habermas derives from the ideal of
communicative action. Law, in a fundamental
sense, is a mechanism for the integration of moral
interests into norms that are implemented and
enforced through positive means.
In this light, corporate agents can be said to act
illegitimately when their actions either (a) contra-
vene the established provisions of existing legit-
imate law or (b) undermine the conditions
necessary for the ongoing development of legit-
imate law (cf. Reed 1999b: 27). The former
requirement needs little explanation beyond the
fact that businesses are legal agents subject to the
constraints endorsed through a discursively struc-
tured legislative process. The latter provision is
more complicated, but no less important. Haber-
mas stresses that modern society must be under-
stood as a ‘self-legislating’ legal community that
seeks to organize its common life on the basis
of laws that receive the assent of all affected
individuals. The ideal of a self-legislating polity
necessitates the legal recognition of certain rights,
all of which are necessary to maintain a society
constituted on the basis of law, so construed
(Habermas 1996b: 121–126). Accordingly, basic
rights of private autonomy are necessary to
preserve the freedom of speech, conscience, move-
ment, and association necessary to engage in
public discourse. Habermas also outlines rights to
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 321
legal protection and due process under the law so
as to prevent capricious penalties against those
who express dissent or who are otherwise subject
to the authority of other, more powerful institu-
tions. Finally, he argues for two broad categories
of legal rights that protect individuals’ entitlement
to direct and indirect participation in legislative
processes as well as the welfare conditions nece-
ssary for the exercise of all other rights (Baynes
1994: 210–212). It is therefore incumbent upon
corporations to refrain from activities that under-
mine these rights because they serve as necessary
conditions for the development of legitimate laws.
Such expectations may include, for instance,
prohibitions on penalizing employees who are
interested in organizing labor unions, respect for
the privacy of employees in the workplace, an em-
ployer provision of due process before dismissals,
and the responsibility not to engage in political
activities that undermine the ability of individuals
and communities to effect legislative change.
With this said, we should resist the temptation
to conceive of corporate responsibility as arising
merely from the external constraints of public
morality discussed thus far. Viewing the firm as
simply one of many regulated institutions fails to
address the special divisions and relationships that
characterize life within the firm. As a number of
contemporary stakeholder theorists have argued,
the unique nature of commercial relationships,
and their associated risks and rewards, generates
special moral considerations beyond mere obedi-
ence to politically endorsed regulations (Phillips &
Margolis 1999). Moral matters in business are
characteristically matters about how agents within
the organization are to exercise moral discretion
and balance the interests of individuals who make
contributions to the success of firm. Such issues
are not exclusively a function of how the insti-
tution’s goals fit within the larger aims of civil
society or how the outcomes of business need to
be adjusted to suit norms that take into account
other socially endorsed principles. Letting moral
obligations trickle down to business merely from
the prior demands of the law similarly neglects the
observation made by others that business is itself
a union of individuals with shared, yet simulta-
neously distinct interests. Opting for a definition
of corporate responsibility that stipulates that
businesses have responsibilities only as members
of civil society ignores this complexity and leaves
businesses qua businesses immune from direct
moral scrutiny.
It is fruitful to understand how corporate
responsibilities fit within the politico-legal recog-
nition of universal moral norms; however, busi-
nesses, as organizations, are significant in their
own right in helping to shape the possibilities of
communicative action. Corporations are success-
ful to a large extent when their stakeholders can
identify and share interests that enable efficient
coordination of their efforts. The prevalence of
work, expansion of private enterprise into areas
formerly managed by public entities, and the
dependence of local communities on corporations
for development, underscore how the interests of
all corporate stakeholders are intimately con-
nected with one another. Thus, in approaching
the application of communicative ethics to busi-
ness, I contend that we must be attentive to both
the need for corporations to internalize moral
responsibilities as well as identify and apply such
responsibilities via moral discourse at the organi-
zational level. I will take up some challenges to
this contention in the following section and then
move to a more systematic review of the commu-
nicative dimensions of stakeholder relationships.
Communicative action within organization
The normative authority of Habermas’ procedure
of moral discourse originates from the practical
commitment of individuals to engage in commu-
nicative action. There is no a priori or otherwise
metaphysically controversial foundation for com-
municative ethics; its foundation rests simply in
the analysis of the normative presuppositions
behind actions oriented toward reaching mutual
understanding.
This point is crucial; for if businesses, as social
institutions, are thought to further communicative
ends, we should expect business relationships to
exhibit this pragmatic characteristic. Upon first
blush, however, this seems dubious; there is a
rehearsed history of argument in business ethics
that speaks to the inherent strategies that lurk
Volume 13 Number 4 October 2004
322 r Blackwell Publishing Ltd. 2004
behind the motives of business agents. The fact
that stakeholders often enter into business rela-
tionships with doubts about trust, solidarity, and
the extent to which other stakeholders may
employ strategies that compromise their interests
suggests that business relationships are inherently
strategic rather than communicative. More to the
point: business actors take their relationships with
other stakeholders as strategic in the sense that
they expect stakeholders to employ tactics that
further some specified goal (often a self-interested
goal) at the expense of mutual understanding and
consensus-building (French & Allbright 1998).
Would not this speak strongly against the insti-
tutional application of communicative ethics in
the way that his being suggested?
This question can be cast more precisely by
examining three distinct types of rational–purpo-
sive action in business that may, sometimes, be
rhetorically confused with communicative action.
First, competing stakeholder interests may con-
verge through happenstance. In this situation there
is little, if any, noticeable conflict between the
interests of stakeholders but it is nonetheless
accurate to assert that stakeholders are primarily
motivated by egocentric goals. Take, for instance,
the convergence of strategic interests that results
from technological innovation in product devel-
opment. Innovation often results in market
position, brand name recognition, and growth in
revenue for managers and shareholders. At the
same time, consumers often receive strategic
benefits from the development of products that
better suit their needs and preferences. Here the
motives behind manufacturer and consumer
decisions are not oriented toward the mutual
recognition of each others’ interests, i.e., through
respect and recognition of their interest claims,
but, rather, on the calculated satisfaction of self-
oriented aims. In this regard, the action exhibited
in this category of rational–purposive action is
instrumental in Habermas’s sense of the term
because while managers, shareholders and con-
sumers can be said to share the end of techno-
logical innovation, their reasons in favor of
innovation are completely self-interested.
Second, consider the category of cases where
there is a convergence of stakeholder interests not
through happenstance but through negotiated
collective action. The most obvious examples of
such forms of strategic action are negotiated labor
disputes. If we assume that a negotiated dispute is
strategic in character, then, again, the conver-
gence of assent between employees and managers
does not have its roots in mutual recognition of
some asserted interest, or a shared rationale as to
why the settlement is preferable, but simply an
agreement that relies on the contingent, over-
lapping aims of each party. A similar strategic
analysis might be offered for manufacturers and
suppliers who compromise in good faith about the
terms and conditions of a long-term contract only
in the name of their private accomplishments.
Finally, there are undoubtedly situations where
a stakeholding group asserts their interests by
attempting to subordinate or suppress the satis-
faction of another group’s interests. Call this kind
of strategic action intentional control of interest
satisfaction. Acts of manipulation, deceit, and
coercion are likely to be placed in this category.
A neglect of long-term shareholder wealth by
intentionally misleading investors through inac-
curate financial statements or overt attempts to
deceive through crafty advertising schemes may
serve as instances of the intention to control
interest satisfaction.
We should expect interesting cases of strategic
action under all of these headings. But notice that
while we can uncover examples, this, by itself,
leaves the question of whether agents implicitly or
explicitly engage in communicative action largely
unanswered. Habermas speaks of strategic action
as following the rules of rational choice so as to
efficiently influence the decisions of an opponent.
It is, in his terms, an attempt to purposefully
change the behavior of others to accomplish an
end to which you have committed yourself.
Individual success, defined by the attainment of
egocentric ends, is definitive of strategic action
(Habermas 1984: 286). It would certainly seem as
if the latter two categories of rational–purposive
action, i.e., convergence through negotiation and
intentional control of interest, exhibit features of
this sort of action. Yet the fact that business is
characterized by strategy need not imply that its
individual relationships are exclusively structured
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 323
by strategic motives; nor need it imply that
communicative purposes are absent from the
motives of stakeholders. It is a mistake, in short,
to point to instances of strategy and infer from
those instances that strategy is constitutive of any
business relationship whatsoever. It is one thing
to notice the presence of strategic action. It is
quite another to infer that its presence norma-
tively structures what we expect of actors.
Moreover, strategic and communicative mo-
tives hardly seem mutually exclusive in the way
suggested by these general categories. The reasons
that a labor union may have to support a
negotiated settlement can be simultaneously self-
directed and take account of the interests of other
stakeholders.1 A process of negotiation often
involves what is casually referred to as a give-
and-take process. A prior demand or condition is
sometimes given up by one party in order that
other, more pressing concerns are addressed
in a would-be settlement. Stakeholders take what
they find most important, in part, because of a
recognition of what other parties may legitimately
find objectionable. The motive in such a process
may be self-interested in the sense that each party
is motivated to negotiate on the basis of what
serves their interests; however, this would not
exclude the possibility that the interests of others
provide acceptable limits on what sort of settle-
ment is eventually endorsed. Communicative
action can, in short, drive a process of searching
for norms of social coordination that are none-
theless shaped by each party’s own interest in
discussing the norms in the first place.
It is also mistaken to assume from the fact that
stakeholders often compete for entitlements or the
satisfaction of interests that such competition is
preferably resolved through mere strategic means.
This comment is issued from the perspective of
stakeholders themselves. Political philosophers
often refer to situations characterized by a
competition for resources and entitlements as
exhibiting ‘circumstances of justice’ (Sandel 1982:
28). It is fair to say that, in many situations,
stakeholders are involved in circumstances of
justice where they, in effect, offer competing
claims for consideration and interest satisfaction.
The fact, however, that such circumstances are
characteristic of modern business life should not
deter us from noting that resolutions to such
conflict need not take the form of rational–
purposive attempts to assert one’s interests over
the interests of an opponent. Strategy, as a species
of rational–purposive action, is characteristically
a way that individuals respond to situations of
conflict and competition; however, it is unlikely
that stakeholders conceive of conflict resolution
purely in terms of asserting their interests at the
expense of others’ preferences.
Work in the area of multi-stakeholder dialogues
and the interaction between corporate constitu-
encies, especially between non-governmental or-
ganizations and high-level management, has
shown how dialogic processes facilitate the shared
goals of interest group consideration, trust,
flexibility, access to information, and agenda-
setting power (Bendell 2003: 67–68). Stakeholders
typically have shared goals about the long-term
success of the firm and the fact that they seek very
broad-based outcomes in common serves as an
impetus to address coordination problems in ways
that improve the chances of reaching these goals.
Stakeholders are thus likely to engage in co-
operative behavior at the level of conflict resolu-
tion and policy creation; for a lack of such
procedural cooperation tends to undermine the
satisfaction of shared interests (Cohen 2003). This
underscores the extent to which the distinction
between strategic and communicative action with-
in economic organizations is not to be taken as an
unquestioned dualism, but two interlocking pieces
of coordinated social action.2
The communicative dimensions of
business
To make these points more plausible it will
be argued in this section that there are four
important reasons to suppose that business actors
proceed with communicative, rather than exclu-
sively rational–purposive, intentions. These rea-
sons include the shared purposes of stakeholders,
the collaborative nature of decision making
in organizations, the tendency to seek mutual
recognition, and the need of communicative
Volume 13 Number 4 October 2004
324 r Blackwell Publishing Ltd. 2004
action to sustain the coordination necessary for
the firm to achieve its economic goals.
Shared purposes and collaboration
Business stakeholders have a number of interests
that not only coincide but, in a stronger sense, are
shared. These shared interests express an under-
lying sense of purpose that circumscribes the
expectations and shared intentions of each corpo-
rate stakeholder. First and foremost, each stake-
holder implicitly recognizes the importance of
economic ends like market share, growth, innova-
tion, cost minimization, return on investment, and
meritocratic rewards. This is an obvious truism
for the most immediate stakeholders such as
employees, financiers, and suppliers. Customers
too tend to have an interest in such goals because
the increased price competitiveness of goods and
product innovation tend toward preference satis-
faction. Even communities that often have little
input in the eventual location of businesses
typically come to recognize the importance of a
relationship with a competitive, stable corporate
partner. Second, it is arguable that many stake-
holders share interests to the extent that their
identities are tied to the firm’s operations as a
persistent and purposeful community (cf. Bowie
1999: 82–119). Employees that have long-standing
relationships with management teams, for in-
stance, understand themselves and their cohort
as part of a larger network of individuals with
similar histories, problems, and experiences.
Indeed, a corporation’s mission statement, code
of conduct, and organizational structures will
often implicitly define itself as a social union
based on a shared identity because of the
commitment and concern stakeholders have for
the success of the firm.
This observation highlights Habermas’s point
that different groups often share a core set of
interests that naturally leads them to coordinate
their activities to further what they perceive to
have in common. Many times this coordination
operates in the background without examination;
at other times, common purposes need to be
brought to the fore in the context of discourse in
order to articulate generalizable solutions to
identifiable conflicts between stakeholder inter-
ests. In either case, however, the fact that
stakeholder relationships are measured by this
ideal of mutuality indicates that the pragmatic
foundation behind communicative ethics has
relevance to economic organizations. Moreover,
the fact that stakeholders have core interests in
common will often provide the basis for ongoing
interest exploration that yields ‘co-created mean-
ings’ that tends to enhance problem identification,
conflict resolution, and managerial responsiveness
within organizations (Crane & Livesey 2003:
48–49). Consider, for instance, the experimenta-
tion with the so-called ‘farm out committees’ in
industries dependent upon highly technical main-
tenance and production. A fine example of such a
committee was established by Northwest Airlines
(NWA) as part of negotiated labor settlement
where technicians gave up wage increases in
exchange for stock ownership and control over
sourcing decisions (Smith 1998). These commit-
tees disseminate information to labor unions who
wish to competitively bid on work that would
otherwise be outsourced. The ability of labor
unions to compete for work that would normally
be sent to other firms creates a sense of
accomplishment, tangible recognition of their
achievement, savings on maintenance costs and,
of course, job stability. In a real sense, manage-
ment and labor both discover, through a process
of exchanging information and creative problem
solving with the other party, that their shared
interests in cost minimization and information
sharing are mutually recognizable from the
others’ perspective.
A similar sort of linkage between shared
organizational ends and communicatively or-
iented action is illustrated by other well-known
cases of collaboration between employers, man-
agers, and suppliers. The Saturn Corporation,
for instance, responded to customer complaints
during the late 1980s by developing a ‘relational
employment contract’ that stipulated how labor
and management ‘team members’ should strive to
have joint decision-making responsibility at all
levels of the organization (Calton & Lad 1995:
15). Inspired in part by Japanese management
models, Saturn encouraged critical exchanges
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 325
among labor and management as a means to
generate more widely recognized solutions to
problems faced in the automobile industry. A
special committee was formed that made the
union, the United Auto Workers, an institutional
partner in participating in ‘consensus-based deci-
sion-making from the shop floor to the levels of
senior management’ (Kochan 1999: 1). The union
and its membership were integral members of the
‘decision rings’ established throughout depart-
ments and production facilities that helped to
make strategic decisions regarding supplier con-
tracts, product development, implementation of
technology, and marketing (Calton & Lad 1995:
15; Kochan & Rubinstein 2000). Grounding this
effort was the commitment that all stakeholders
had something to gain by becoming more aware
of the interests of customers and creating efficient
production and supply chain policies.
Collaboration of the sort being described by
NWA’s outsourcing committee and Saturn’s
management committee are noteworthy because
there is a presumption in both cases that mutual
consent is a large part of how strategic problems
are resolved. Solutions are not sought that merely
look for a convergence of stakeholder interests in
proposing policies and decision-making proce-
dures – although this is certainly part of the
motivation. The entire explanation behind these
avenues of organizational policy making rests on
the fact that collaborative decision making is a
way to fully understand organizational problems
and solutions. This commitment is prior to the
advantages provided by mere negotiation; it
recognizes that negotiation is more fruitful and
sustainable when decisions are sought which
integrate interests, objections and proposals of
different stakeholders. So, like Habermas’s pro-
cedural rule of moral discourse (U), participants
in such collaborative techniques view solutions as
justified only after seeking the assent of others
who are critically engaged and take seriously the
multiple stakes of a proposed course of action.
Mutual recognition
A second observation relevant to the commu-
nicative dimensions of business activity concerns
what business actors expect of others: stake-
holders naturally seek to meaningfully address
moral conflicts through an implied exchange of
reasons. It is clearly true that stakeholders
disagree about how interests should be balanced
in difficult circumstances. This disagreement,
however, is meaningful and important to resolve
only because stakeholders tend to acknowledge
that their needs and interests are most effectively
satisfied through a sort of joint resolution that
enables a continuation of the productive activities
of the firm. This point is subtle but important: any
self-interest a stakeholder may have in resolving a
conflict in a particular way is preempted by the
realization that sustainable conflict resolution is a
matter of uncovering consensus through shared
value orientations and reasonable expectations of
other stakeholders. The particular interests of any
one stakeholder are best serviced when that
stakeholder engages in activities where there is
consensus about what corporate decisions have a
rationale endorsed by all affected stakeholders.
This communicative feature of business also
explains why the demands of stakeholders are
typically voiced as claims concerning the unwar-
ranted exclusion of interests from corporate
decision making. To see this, reflect upon the
second category of strategic action from above. In
that situation, it was suggested that some labor
union disputes proceed only because both parties
are strategically motivated to achieve some self-
interested aims and they can effectively influence
and change the behavior of their negotiating
partners. This picture of negotiated settlement,
however, fails to acknowledge the kinds of claims
made by stakeholders in labor disputes. For
instance, the recent claims made by members of
the United Food and Commercial Workers Union
(UFCW) in Los Angeles were, quite explicitly,
demands for recognition and fair treatment. They
asserted that management’s plan to require
grocery store employees to shoulder a greater
share of health insurance costs was unjust in light
of the continued growth in net income of Safeway
and its subsidiaries (Greenhouse 2003: A10).
UFCW members were not merely making a
strategic claim cloaked in the language of
distributive justice; rather, they were intending
Volume 13 Number 4 October 2004
326 r Blackwell Publishing Ltd. 2004
to make a claim that other stakeholders could
recognize and find reasons to support. If this is
correct, then the claims made by stakeholders are
intended to ‘secure uptake’ or generate assent
among those involved in negotiation. There were
reasons that could, in principle, be recognized by
other individuals and groups despite their parti-
cular stakeholder affiliation. The intention of the
UFCW certainly does not guarantee that other
stakeholders would accept the reasons voiced.
Nonetheless, it does indicate an orientation to-
ward recognition rather than mere strategic play.
Coordination and strategic advantage
Third, business problems are inherently intra-
organizational. By this I mean that problems, and
their corresponding solutions, are nuanced, com-
plicated and involve multiple stakeholders. This
observation has led stakeholder theorists, such as
Freeman & Evan (1990), to speak of stakeholder
contracting as a kind of ‘multilateral interdepen-
dence,’ and Aram (1989) to claim that organiza-
tional management is premised on viewing
decisions as systemic, i.e., as managing ‘inter-
dependent relations.’ In the midst of such com-
plexity it is rarely the case, if at all, that
organizational challenges can be addressed by
‘simple, one-time, dyadic solutions’ arrived at
through a one-on-one negotiation between stake-
holders (Calton & Lad 1995: 7). The more
interdependent problems and solutions become,
the more likely multiple parties are needed to
identify solutions that can address the separate
stakeholder interests that are jeopardized by any
one problem. Hence, an individualized assessment
of the interests of each stakeholder fails to
recognize that each stakeholder’s interests are
implicated in a web of mutually supportive and
sometimes mutually detrimental organizational
arrangements. Shared problems, in short, demand
collectively rendered solutions – not simply
because it is valuable to have the input of all
affected stakeholders, but because collective solu-
tions to problems tend toward outcomes that
would otherwise not be identified on a stake-
holder-by-stakeholder basis. The NWA and
Saturn cases illustrate how product development,
human resource management, and customer
satisfaction are not challenges to be addressed
through straightforward agreements but, instead,
issues that render effective, long-term solutions
only when multiple stakeholders arrive at solu-
tions together (Calton & Lad 1995: 7).
To understand the collective dimension of
organizational decisions, recall that Habermas’s
interest in communicative action can be recast in
terms of an interest in social action; that is, how is
collective social action possible? How is it that
differently situated individuals, with distinct
interests, can come together and sustainably work
to achieve common ends? The possibility of such
social action relies, in part, upon the ability of
individuals within civil society’s institutions to
coordinate their activities and move together with
a sense of mutuality. Identifying business as a
purely private entity where decisions are reduced
to individuated calculations of self-interest has the
effect of obscuring the interdependent complexity
of organizational decision making from view. As
Sen (1993) aptly points out, a firm’s shared
productive activities are themselves a public good;
they play an essential role in satisfying interests
for distinct groups while simultaneously repre-
senting a unified rather than merely convergent
interest in organizational life.
This point has implications, as well, for a firm’s
economic performance. Successful attainment of
strategic ends is unlikely when actions are
motivated purely by strategic end-seeking. This
seemingly counter-intuitive conclusion is analo-
gous to a position made famous by Robert Frank
and applied more directly by Norman Bowie
(Frank 1988, Bowie 1991, Frank 2002). Frank
and Bowie assert that the satisfaction of ego-
centric interests, whether individual or corporate,
is only possible in business settings when the
conscious pursuit of self-interest is limited by an
individual commitment to morality. Self-interest
is achieved, in short, only when it is appropriately
subordinated (from time to time) to the demands
of morality; furthermore, acting morally pays self-
interested dividends only insofar as individuals
adhere to the requirements of morality for its
own sake – not because morality turns out to
maximally satisfy other non-moral private aims.
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 327
Similarly, it seems implausible to think that the
ends set forth by mere strategic action could be
achieved without a cohesive and stable organiza-
tional climate in which individual purposes
become public and consensus is the norm. Iterated
strategic actions are far less effective in achieving
one’s private ends than action that expresses a
commitment to share the experiences, values, and
reasons held by other stakeholders. Without a
serious commitment to the interests of others, and
the interests you share with them, the ends that
motivate strategic action could not be realized.
Conflict resolution based upon the face-to-face
interaction of stakeholders exposes motives that
might otherwise remain hidden behind the man-
euvering of mediators, attorneys, and other
representatives. Stakeholders are more likely to
engage in agreement and explore mutually bene-
ficial alternatives when genuine dialogue is
sought, i.e., dialogue that demonstrates an open-
ness to revise or place on hold one’s preferred
action in light of objections leveled by others
(Payne & Calton 2003: 123–126).
The collective approach to the assessment of
organizational objectives and participatory deci-
sion making discussed thus far is essential to
generating high levels of trust. Trust, in turn, is a
prerequisite to long-term interest satisfaction.
There have been a number of studies that
emphasize the relationship between the costs of
production and corporate efforts that weave trust-
building initiatives into the fabric of their business
culture. Social environments where, for instance,
genuine trust between management and suppliers
is measured at high levels seem to have lower
moments of doubt when engaging in new ventures
with tangible risk (Bromiley and Cummings
1995). Trust generates consistency, stability, and
ongoing confidence in business relationships; if
suppliers thought that the trustworthiness of
management was only as strong as management’s
perceived regulatory obligations, they may ques-
tion the viability of their continued agreements.
Accordingly, some have argued that unlike
weaker forms of trust that are motivated simply
by the avoidance of costly non-compliance,
cultivating genuine trust within and between
businesses tends to cost less than a system where
organizations must pay for the protections that
accompany feelings of distrust.
When two or more strong form trustworthy
individuals or firms engage in an exchange, they
can all be assured that any vulnerabilities that
might exist in this exchange will not be exploited
by their partners. This assurance comes with no
additional investment in social or economic forms
of governance . . . . Exchanges . . . between strong
form trustworthy firms are burdened neither by the
high cost of governance nor any residual threat of
opportunism. Strong form trustworthy firms will
be able to pursue these valuable. . .exchanges while
[other] firms will not . . . . This may represent a
source of competitive advantage for strong form
trustworthy exchange partners (Barney & Hansen
1994: 186).
Organizational climates where honesty and trust
are heartfelt tend to produce higher levels of job
satisfaction and productivity that result in lower
labor costs (Chami & Fullenkamp 2002).
Similarly, others, like Lynn S. Paine (2000),
have highlighted the ways in which moral
commitments produce monitoring and coordina-
tion advantages. The costs of intra-organizational
cooperation are lowered when subordinates view
directors’ decisions as legitimate. When fairness
motivates managers, the tendency to engender
conflict is minimized. Moral commitment facil-
itates a more complete understanding of situa-
tional contexts, an ability to mobilize human
resources, and communicate with others regard-
ing solutions. In environments where mangers
take seriously the spirit of loyalty and fidelity,
agreements are more flexible and creative.
Even in situations where certain stakeholders
shoulder a greater proportion of costs associated
with a particular decision, it is likely to meet with
acceptance when those affected can trust that
decision makers have acted with their interests in
mind. Consider various accounts of how Cad-
bury–Schweppes has approached downsizing
decisions (Phillips 2003: 113–115). Since the
company was founded upon a belief in decision
making by consensus, a now famous move to
consolidate its packaging facilities was done
only after consulting with a team of managers,
engineers, and shop stewards. The consolidation
Volume 13 Number 4 October 2004
328 r Blackwell Publishing Ltd. 2004
resulted in the displacement of workers; however,
the stakeholders who participated in the ‘working
party’ not only recognized that there were good
reasons to consolidate on the basis of Cadbury’s
commitment to its workforce as a whole, but the
workers who were displaced recognized that the
decision was not made in ignorance of their
particular interests. Managers sought out their
voice as part of the decision-making process; as a
result, Cadbury engaged in a process of coopera-
tive learning that cultivated a sense of trust – even
among those whose positions were eliminated. All
of this, it seems, would be extremely difficult to
imagine if it were not for an allegiance on the part
of all organizational members to corporate objec-
tives that everyone found reasonable to endorse.
Once stakeholders, in particular shareholders,
engage in business activity, they enter into an
arrangement that requires them to consider how
their efforts impact those who are also instru-
mental in achieving the end of accumulating
wealth. Without this orientation, the nexus of
social relationships that characterize the modern
firm are only as strong as the contingent, and
merely strategic, interests adopted by stakeholders
at a particular moment in time. Communicative
relationships, thus, are what can sustain the
existence of business organization without con-
tinual breakdowns in collective action. Individual
stakeholders acquire and sustain their identities
and interests by belonging to corporations, appro-
priating the culture of the organization, and
taking part in interactions that expressed shared
values (Habermas 1990: 102). The choice to
pursue mere strategic action is, perhaps, possible
in any one case; but it is untenable in the long-
term if stakeholders intend to further their own
interests in an environment where their satisfac-
tion is dependent upon the joint activity of others.
Conclusion
Modern society is a vast array of institutions in
which multiple forums for discourse overlap
(Baynes 1992: 167–181); Habermas himself em-
phasizes that moral discourse can occur in more
or less informal movements and associations in
civil society where solidarities are formed. This is
the core reason to take seriously the need for
discourse within firms. In A Theory of Commu-
nicative Action, Habermas stresses that modern
society can be analyzed from two different
perspectives (Habermas 1987). The first, following
Max Weber and others, emphasizes society as a
system of practices and institutions with distinct
forms of rationalization and social hierarchies.
Administrative elements of the state and corpo-
rations, for example, are part of society as a
complicated network of subsystems with see-
mingly disparate goals, rules, and bureaucratic
forms of social control. Society, however, is also a
lifeworld in the sense that individuals are members
of institutions that foster shared need interpreta-
tions, mutual understanding, and consensus.
From this second perspective, society is composed
of practices that are communicative and thereby
focus our attention on regulating society for the
attainment of shared interests.
Habermas is deeply concerned with the extent
to which the maintenance of social subsystems
interferes with or otherwise distorts the commu-
nicative activities of society as lifeworld. The
private ends of business ‘colonize’ spheres of life
that are premised on consensus and discourse
(Habermas 1987: 355). A natural way to end this
disruption is to expect economic organizations to
internalize the ends of communicative action
broadly construed. This means that corporations
acknowledge their role and influence in the
maintenance of communicative action and take
appropriate steps to engage in the process of
uncovering modes of social life and principles that
express the general interest. This is what leads
Daryl Reed to conclude that, all things consid-
ered, businesses should include decision-making
processes that are ‘participatory’ unless stake-
holders voluntarily accept less participatory
schemes for the sake of improvements that they
can reflectively endorse (Reed 1999b: 30). The
remarks offered in the preceding sections are an
attempt to provide a conceptual framework for a
communicative theory of business. Businesses are
not merely bound by moral constraints in virtue
of being institutions subject to the demands of
public morality through legitimate law; firms are
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 329
also moral communities in which communicative
action explains their ability to enhance the inter-
ests of all members.
The intersection of communicative ethics and
the modern business firm is an area ripe for
additional exploration. In this discussion I have
not addressed a number of obvious concerns with
a complete extension of this approach. One
noteworthy problem centers on the extent to
which the demand for consensus (as expressed in
Habermas’ principle (U)) within business is a
realistic and/or conceptually appropriate goal.
Indeed there is a case to be made, it seems, that
being oriented toward consensus need not imply
that consensus serve as a normative standard for
right action (McMahon 2000). Another issue
concerns how, exactly, discourse is to be institu-
tionalized within organizations. I have given
cursory examples of such practices but others
naturally surface, e.g., formal stakeholder board
representation, management teams, problem-sol-
ving committees and strategic collaboration be-
tween different units within an organization. Still
others will be skeptical that discourse can be
maintained in the face of numerous examples of
short-term, strategically minded attempts to assert
private over-shared interests. While I am sympa-
thetic to this worry (in light of the great conflicts
that have surfaced between shareholders, man-
agers, and employees), it is important to remem-
ber that breakdowns in communicative action do
not justify the inference that communicative aims
are wholly misplaced in business. The same
concern could easily be raised within spheres of
modern society where consensus is accepted
as a norm; democratic politics, for example, is
ripe for strategic maneuvering and, despite
this, communicative assessments of democratic
procedures is nonetheless appropriate. All of
these issues warrant further investigation and
shape the research questions for the future
development of communicative ethics in organi-
zational contexts.
Notes
1. I owe this point to an anonymous reviewer for the
Society for Business Ethics.
2. I owe this point to an anonymous reviewer from
this journal and a reviewer for the Society for
Business Ethics.
References
Aram, J. 1989. ‘The paradox of interdependent
relations in the field of social issues in management’.
Academy of Management Journal, 14:2, 266–283.
Barney, J. and Hansen, M. 1994. ‘Trustworthiness as a
source of competitive advantage’. Strategic Manage-
ment Journal, 15:2, 175–190.
Baynes, K. 1992. The Normative Grounds of Social
Criticism: Kant, Rawls, and Habermas. Albany:
SUNY Press.
Baynes, K. 1994. ‘Democracy and the Rechtsstaat:
Habermas’s >Faktizitaet und Geltung’. In White,
S.K. (Ed.), The Cambridge Companion to Habermas:
201–232. Cambridge: Cambridge University Press.
Bendell, J. 2003. ‘Talking for change?: reflections on
effective stakeholder dialogue’. In Andriof, J. and
Waddock, S. (Eds.), Unfolding Stakeholder Think-
ing, Vol. 2: 53–69. Sheffield: Greenleaf Publishing.
Bowie, N. 1991. ‘New directions in corporate social
responsibility’. Business Horizons, 34, 56–65.
Bowie, N. 1999. Business Ethics: A Kantian Interpreta-
tion. Oxford: Blackwell.
Bromiley, P. and Cummings, L. 1995. ‘Organizations
with trust’. In Bies, R. Lewicki, R., and Sheppard, B.
(Eds.), Research in Negotiation: 219–247, 5th edn,
Greenwich, CN: JAI Press.
Calton, J. and Lad, L. 1995. ‘Social contracting as a
trust building process of network governance’.
Business Ethics Quarterly, 5:2, 271–295.
Chami, R. and Fullenkamp, C. 2002. ‘Trust and
efficiency’. Journal of Banking and Finance, 26:9,
1785–1809.
Cohen, J. 2003. ‘State of the union: NGO-business
partnership stakeholders’. In Andriof, J. and Wad-
dock, S. (Eds.), Unfolding Stakeholder Thinking,
Vol. 2: 106–127. Sheffield: Greenleaf Publishing.
Crane, A. and Livesey, S. 2003. ‘Are you talking to
me?: stakeholder communication and the risks and
rewards of dialogue’. In Andriof, J. and Waddock,
S. (Eds.), Unfolding Stakeholder Thinking, Vol. 2:
39–52. Sheffield: Greenleaf Publishing.
Donaldson, T. and Dunfee, T. 1999. Ties that Bind: A
Social Contracts Approach to Business Ethics. Cam-
bridge, MA: Harvard Business School Press.
Etzioni, A. 1998. ‘A communitarian note on stakehol-
der theory’. Business Ethics Quarterly, 8:4, 679–691.
Volume 13 Number 4 October 2004
330 r Blackwell Publishing Ltd. 2004
Frank, R. 1988. Passions Within Reason. New York:
Norton.
Frank, R. 2002. ‘Can socially responsible firms survive
in a competitive environment?’. In Donaldson, T.
and Werhane, P. (Eds.), Ethical Issues in Business: A
Philosophical Approach: 252–261. Upper Saddle
River, NJ: Prentice-Hall.
Freeman, R.E. and Evan, W. 1990. ‘Corporate
governance: a stakeholder interpretation’. Journal
of Behavioral Economics, 19:4, 337–359.
French, W. and Allbright, D. 1998. ‘Resolving moral
conflict through discourse’. Journal of Business
Ethics, 17:2, 177–194.
Greenhouse, S. 2003. ‘Two sides seem entrenched in
supermarket dispute’. New York Times, November
10, A10.
Habermas, J. 1984. The Theory of Communicative
Action: Communication and Evolution of Society.
Boston, MA: Beacon Press. (Trans. T. McCarthy).
Habermas, J. 1987. The Theory of Communicative
Action: Lifeworld and System – A Critique of
Functionalist Reason. Boston, MA: Beacon Press.
(Trans. T. McCarthy).
Habermas, J. 1988. ‘Law and morality’. In McMurrin,
S. (Ed.), The Tanner Lectures on Human Values, Vol.
8: 217–279. Salt Lake City: University of Utah
Press. (Trans. K. Baynes).
Habermas, J. 1990. Moral Consciousness and Commu-
nicative Action. Cambridge, MA: MIT Press. (Trans.
C. Lenhardt and S.W. Nicolsen).
Habermas, J. 1996a. ‘On the cognitive content of
morality’. Proceedings of the Aristotelian Society, 96,
331–337.
Habermas, J. 1996b. Between Facts and Norms:
Contributions to a Discourse Theory of Law and
Democracy. Cambridge, MA: MIT Press. (Trans.
W. Rehg).
Keeley, M. 1988. A Social Contract Theory of
Organizations. South Bend: University of Notre
Dame Press.
Kochan, T. 1999. ‘Saturn.’ Retrieved June 11, 2004
from the Aspen Institute Business and Society
Program: http://www.caseplace.org/cases/
Kochan, T. and Rubinstein, S. 2000. ‘Toward a
stakeholder theory of the firm: the Saturn Partner-
ship’. Organization Science, 11:4, 367–386.
McMahon, C. 2000. ‘Discourse and morality’. Ethics,
110:3, 514–536.
Paine, L.S. 2000. ‘Does ethics pay?’. Business Ethics
Quarterly, 10:1, 319–330.
Payne, S. and Calton, J. 2003. ‘Towards a managerial
practice of stakeholder management’. In Andriof, J.
and Waddock, S. (Eds.), Unfolding Stakeholder
Thinking, Vol. 1: 121–135. Sheffield: Greenleaf
Publishers.
Phillips, R. and Margolis, J. 1999. ‘Toward an ethics
of organizations’. Business Ethics Quarterly, 9:4,
619–638.
Phillips, R. 2003. Stakeholder Theory and Organiza-
tional Ethics. San Francisco: Berrett-Koehler Pub-
lishers.
Rawls, J. 1971. A Theory of Justice. Cambridge, MA:
Harvard University Press.
Reed, D. 1999a. ‘Stakeholder management theory: a
critical theory perspective’. Business Ethics Quar-
terly, 9:3, 453–483.
Reed, D. 1999b. ‘Three realms of corporate social
responsibility: distinguishing legitimacy, morality,
and ethics’. Journal of Business Ethics, 21:1,
23–53.
Rehg, W. 1994. Insight and Solidarity: The Discourse
Ethics of Jurgen Habermas. Berkeley: University of
California Press.
Sandel, M. 1982. Liberalism and the Limits of
Justice. Cambridge, MA: Cambridge University
Press.
Sen, A. 1993. ‘Does business ethics make economic
sense?’. In Mincus, P. (Ed.), The Ethics of Business in
a Global Economy: 59–62. Dordrecht: Kluwer.
Smith, H. (Executive Producer) 1998. In-Sourcing
at Northwest Airlines [Public Broadcasting
Service Series]. New York: Hedrick Smith
Productions.
Solomon, R. 1993. Ethics and Excellence: Cooperation
and Integrity in Business. New York: Oxford
University Press.
Business Ethics: A European Review
r Blackwell Publishing Ltd. 2004 331