Integrative Social Contracts Theory Research Articles

Stakeholder Deliberation as a Legitimation Principle of Companies’ Engagement in the Public Sphere

The aim of this paper is to propose a supplement to the concept of stakeholder deliberation as a legitimation principle of companies’ engagement in the public sphere. The article proposes two solutions for deficiencies of deliberation construct: the concept of hypernorms, which refers to the Donaldson & Dunfee’ integrative social contracts theory, and the rule of differentiation of entitlements as far as stakeholder deliberation is concerned. The research result is the answer to the question about an applicability of the deliberation concept proposed by J. Habermas, which is commonly used by the CSR researchers

Influence of Corporate Social Responsibility on Financial Performance of Listed Manufacturing Firms in Kenya

Purpose: The general objective of the study was to establish the influence of corporate social responsibility on financial performance of listed manufacturing firms in Kenya. The specific objectives of the study was to establish the influence of environmental responsibility, CSR initiative on public education, corporate philanthropy on financial performance of listed manufacturing firms in Kenya. The theories that anchored the study comprised of Triple Bottom Line Theory, Integrative Social Contracts Theory and The Stakeholder Theory.
 Methodology: A descriptive research design was employed in the study and the target population comprised of ten listed manufacturing firms in Kenya. The units of observation comprised of employees from upper, middle and lower management levels. A total of 90 employees were targeted. The study used questionnaires to gather primary data and secondary data was acquired from financial reports of the selected firms. Both descriptive and inferential statistics were employed in analyzing the collected data. The statistics were generated through Statistical Package for Social Scientists and MS Excel.
 Results: The findings of the study revealed that environmental responsibility and corporate philanthropy bears a positive and significant influence on the levels of financial performance of listed manufacturing firms. This is shown by beta values of 0.197 and 0.271 and significant values of 0.0122 and 0.0136 respectively. The results implies that increasing either environmental responsibility or corporate philanthropy with one unit results to increase in the levels of financial performance of listed manufacturing firms in Kenya with respective beta values. The study further revealed that CSR initiative on public education bears a positive but insignificant influence on financial performance of listed manufacturing firms in Kenya. This is shown by a beta value of 0.101 and an insignificant value of 0.0743. This bears the implication that increasing CSR initiative on public education with one-unit results to insignificant increase in the levels of financial performance of the listed manufacturing firms. 
 Unique Contribution to Theory, Policy and Practices: The study recommended the listed manufacturing in Kenya to enhance both environmental responsibility and corporate philanthropy practices in the firm’s operations since the practices increases the financial performance levels to a positive and significant level.

Bridging the global-local animal-based tourism divide

• The use of animals in tourism is hampered by global to local ethical discrepancies. • There is a knowledge gap in tourists and operators on the interests of animals. • Integrative Social Contracts Theory uses hypernorms to mediate global-local practices. • Seven hypernorms are used in building a new vision for animals used in tourism.

In search of pedagogical approaches to teaching business ethics in the era of digital transformation

The authors explore the challenges in teaching business ethics in an era of digital transformation, provide an understanding of the limitations of traditional ethics approaches, and explore emerging approaches that may more effectively deal with the ethical complexities of the new digital era. Building on prior research conducted during December 2018 and January 2019 regarding the skills required for jobs in the big data field, the authors argue that business ethics must be an essential skill for those working in this field. Ethical frameworks in big data and information management are explored including Universalist, Integrative Social Contract Theory and Care Theory, as well as agency, disciplinary, contextual and outcomes considerations. The authors posit that traditional ethical frameworks such as Universalist approaches, are no longer sufficient to guide decision making in an era of digital transformation and the “datafication” of society. Therefore, business educators have a duty to cultivate critical thinking mindsets in their students and the adoption of “responsible innovation” principles, similar to those developed in the science and technology innovation literature.
 

Ethical leadership and sustainability of agro-allied firms: moderating role of environmental dynamism

PurposeThis paper aims to account for the direct effect of ethical leadership on the sustainability of agro-allied firms and the moderating effect of environmental dynamism on ethical leadership–organisational sustainability relation.Design/methodology/approachA total of 215 managers participated in the survey, which covered agro-allied firms from the 6 geo-political zones of the country, Nigeria. Partial least square structural equation model was conducted with the aid of SmartPLSv3.FindingsThe result confirms that ethical leadership positively affects the sustainability of firms in the agro-allied sector and also supports that environmental dynamism strengthens the relation between ethical leadership and sustainability of firms.Originality/valueThe study advances ethical leadership literature through a nuanced examination of its relevance in the agricultural sector, while also validating the integrative social contract theory as a theoretical lens used in exploring the relationship. The specific focus on “ethical” leadership and a specific sector of the economy – agro allied firms is a new ground by not just looking at leadership but the ethical consideration part in relation to a specific industry where competition is a key driver to management/leadership performance.

How do public companies respond to national challenges through sustainability reporting? – The case of Sri Lanka

PurposeThe purpose of this paper is to explore how sustainability reporting is shaped by the global influences and particular national context where businesses operate.Design/methodology/approachThe paper uses both content analysis of published sustainability information and semi-structured interviews with corporate managers to explore how sustainability reporting is used to address unique social and environmental challenges in a developing country – Sri Lanka. The use of integrative social contracts theory in investigating sustainability reporting offers novel insights into understanding the drivers for sustainability reporting practices in this particular country.FindingsThe findings reveal that managers’ perceptions about usefulness of sustainability reporting, local contextual challenges and global norms influence the extent to which companies engage in sustainability reporting and the nature of sustainability information reported. In particular, Sri Lankan company managers strive to undertake sustainability projects that are beneficial not only to their companies but also to the development of the country. However, while company managers in Sri Lanka are keen to undertake sustainability reporting, they face different tensions/expectations between global expectations and local contextual factors when undertaking sustainability projects and reporting. This is also showcased in what is ultimately reported in company annual reports, where some aspects of sustainability, e.g. social, tend to focus more on addressing local concerns whereas other disclosures are on issues that may be relevant across many contexts.Research limitations/implicationsImportant insights for government and other regulatory authorities can be drawn from the findings of this study. By capitalising on the strong sense of moral duty felt by company managers, policymakers can involve the business sector more to mitigate the social and environmental issues prevalent in Sri Lanka. The findings can also be used by other developing countries to enable pathways to engage with the corporate sector to contribute to national development agendas through their sustainability initiatives and projects.Originality/valueWhile the usual understanding of developing country’s company managers is that they try to follow global trends, in Sri Lanka, this research shows how managers are trying to align their responsibilities at a national level with global principles regarding sustainability reporting. Therefore, this paper highlights how both hypernorms and microsocial rules can interact to define how company managers undertake sustainability reporting in a developing country.

Plagiarism as a Social Contract, a New Way to Approach Plagiarism

Most cases of plagiarism involve a power differential where not every person has the same ability to enter into a social contract. A social contract requires that each party understands the expectations or norms of the contract, has a voice in setting or changing the norms and has the ability to exit the contract. If those with less power want to gain power then they have to engage in activities bound by norms set by others with little or no ability to exit and no voice. Even if one determines that it is an option to choose a role that requires academic writing, even at the earliest grades, then the social contract demands a shared norm of what constitutes correct behavior. This study reviewed the abstracts of articles indexed in Google Scholar from 1999–2019 through the lens of integrative social contract theory (ISCT) and found, in the case of plagiarism, an existing consensus of correct behavior does not exist. Recommendations for establishing a social contract conclude the article.

On integrative social contracts theory and corporate decision‐making in a polarized political economy

AbstractThe priority rules in Donaldson and Dunfee's Integrative Social Contracts Theory (ISCT) provide a useful tool for firms facing polarizing social issues in the United States. ISCT and its priority rules are applied here to divisive social issues such as contraception, gun control, and LGBTQ rights. The ISCT process also benefits firms that serve parts of the world where norms are evolving, and can help firms clarify and communicate their own values.

How do Expatriate Managers Draw the Boundaries of Moral Free Space in the Case of Guanxi?

This paper explores expatriates’ ethical evaluations of and responses to guanxi in China through the lens of integrative social contracts theory. We conducted in-depth interviews with 14 expatriate managers who had spent, on average, 6.5 years working and living in China. Based on the content analysis of these interviews, we identified two different uses of guanxi: defensive and competitive. In general, the respondents found defensive guanxi moral in the Chinese context, while they considered competitive guanxi immoral. Based on our findings, we identified fair competition as the substantive hypernorm that governed most respondents’ ethical evaluations of guanxi. The study has implications for all scholars who seek to utilize integrative social contracts theory to study the relationship between informal networks and corruption in developing countries.

Moral Responsibility for Systemic Financial Risk

This paper argues that some of the major theories in current business ethics fail to provide an adequate account of moral responsibility for the creation of systemic financial risk. Using the trading of credit default swaps (CDS) during the 2008 financial crisis as a case study, I will formulate three challenges that these theories must address: the problem of risk imposition, the problem of unstructured collective harm and the problem of limited knowledge. These challenges will be used to work out key shortcomings of stakeholder approaches and Integrative Social Contracts Theory. I will argue that pluralist connection models used in political theory can help to overcome these shortcomings. Adopting an approach based on these models shows that financial institutions incur obligations in five main areas: managing their own risk profile; remedying some of the harms caused by financial crises; supporting the development of better epistemic methods; curbing the transmission and amplification of initial losses; and instigating structural reforms.

Digital Trust and Cooperation with an Integrative Digital Social Contract

I argue for the role of trust and cooperation as part of the foundation of digital commerce by expanding the reach of the Integrative Social Contract Theory (ISCT) of Donaldson and Dunfee (Ties that Bind, 1999). I propose that a digital business community can be a community in the morally relevant ways that Donaldson and Dunfee describe, and that the basic framework of ISCT can apply to the digital business world similarly to its application in the offline business world. I then analyze the roles of trust and cooperation in e-commerce, showing how they are important to the digital business community and explaining their moral relevance under a digital form of ISCT. I use the ISCT framework to show that trust and cooperation are an instantiation of the hypernorm of necessary social efficiency, and that authentic microsocial norms developed for the ends of trust and cooperation carry moral responsibility.

The Enduring Potential of Justified Hypernorms

ABSTRACT:The profound influence of Thomas Donaldson and Thomas Dunfee’s integrative social contracts theory (ISCT) on the field of business ethics has been challenged by Andreas Scherer and Guido Palazzo’s Habermasian approach, which has achieved prominence of late with articles that expressly question the defensibility of ISCT’s hypernorms. This article builds on recent efforts by Donaldson and Scherer to bridge their accounts by providing discursive foundations to the hypernorms at the heart of the ISCT framework. Extending prior literature, we propose an ISCT* framework designed to retain ISCT’s practical virtue of managerial guidance while answering the demands of Scherer and Palazzo’s discursive account. By subscribing to a suitable portfolio of discursively justified hypernorms, we argue, companies unlock the valuable moral guidance of ISCT*, which says to treat these hypernorms as unequivocal outer bounds to the pursuit of business and as a starting point to tailor local norms through discursive stakeholder engagement.

The Enduring Potential of Justified Hypernorms

The profound influence of Thomas Donaldson and Thomas Dunfee’s Integrative Social Contracts Theory (ISCT) on the field of business ethics has been challenged by Andreas Scherer and Guido Palazzo’s Habermasian approach, which has achieved prominence of late with articles that expressly question the defensibility of ISCT’s hypernorms. This article builds on recent efforts by Donaldson and Scherer to bridge their accounts by providing discursive foundations to the hypernorms at the heart of the ISCT framework. Extending prior literature, we propose an ISCT* framework designed to retain ISCT’s practical virtue of managerial guidance while answering the demands of Scherer and Palazzo’s discursive account. By subscribing to a suitable portfolio of discursively justified hypernorms, we argue, companies unlock the valuable moral guidance of ISCT*, which says to treat these hypernorms as unequivocal outer bounds to the pursuit of business and as a starting point to tailor local norms through discursive stakeholder engagement.

Linking Quality with Social and Financial Performance: A Contextual, Ethics‐Based Approach

The objectives of this study are to test the relationships among total quality management (TQM) practices, corporate social performance (CSP), and financial and market performance (FMP); and to determine the moderating effects of two contextual factors—country and sector—on these relationships through the lenses of several theories, including stakeholder theory, integrative social contracts theory (ISCT), and legitimacy theory. Using data from the various sectors of the economies of two developing countries, Turkey and North Cyprus (NC), we tested the proposed model utilizing structural equation modeling (SEM). The results from both samples supported the proposed model relationships, providing support for the idea that focusing on stakeholder interests embedded in various TQM practices helps improve both CSP and FMP. Country of origin had no moderating effects on these relationships, whereas sectoral effects were highly significant. The study also discusses the managerial and research implications of these findings.

統合社会契約論における超規範とプライオリティ・ルールの意義(自由論題)

統合社会契約論における超規範とプライオリティ・ルールの意義(自由論題)

統合社会契約論の研究動向と課題 : 超規範の議論を中心に(自由論題)

統合社会契約論の研究動向と課題 : 超規範の議論を中心に(自由論題)

The Deliberative Test, a New Procedural Method for Ethical Decision Making in Integrative Social Contracts Theory

Integrative Social Contracts Theory (ISCT) is a popular framework to assist managers in making decisions on international moral dilemmas. Although the theory has been praised for its comprehensiveness and sophistication, commentators have raised concerns regarding the justification and identification of substantive hypernorms, fundamental moral principles valid across cultures. This paper introduces the deliberative test, a new method for testing the cross-cultural validity of ethical norms in ISCT. The test relies on the concept of Deliberative Capacity, arising from new developments in system-level deliberative democracy research, which studies deliberation at the level of national societies and over time. Based on this recent stream of research, the deliberative test has the potential of providing better guidance for managers to decide which norms to follow in case of conflicting standards between home and host countries.

How Friedman’s View on Individual Freedom Relates to Stakeholder Theory and Social Contract Theory

Friedman’s view on corporate social responsibility (CSR) is often accused of being incoherent and of setting rather low ethical standards for managers. This paper outlines Friedman’s ethical expectations for corporate executives against the backdrop of the strong emphasis he puts on individual freedom. Doing so reveals that the ethical standards he imposes on managers can be strictly deduced from individual freedom and that these standards involve both deontological norms and the fulfillment of particular stakeholder expectations. These insights illustrate the necessity to reconsider how Friedman’s approach relates to other important normative theories of business ethics. Contrasting Friedman’s approach with stakeholder theory and integrative social contract theory—when considering the importance he assigns to individual freedom—shows how and why these approaches differ. Still, the comparison also highlights striking similarities. This paper contributes to a better understanding of Friedman’s position—which is still one of the most influential approaches in business ethics research—because it enables a differentiated look at its strengths and weaknesses.

Dynamics for Integrative Social Contracts Theory: Norm Evolution and Individual Mobility

This article proposes a specific logic of dynamics for integrative social contracts theory (ISCT) that combines two empirically oriented process extensions strengthening concreteness of Donaldson and Dunfee’s conceptualization, namely (1) international policy regime theory and (2) Tiebout migration. While either would help “dynamize” and “concretize” ISCT, the two combined are even more insightful. Real-world policy regime processes can develop concrete action-guiding norms instantiating hypernorms to guide business decisions. Donaldson and Dunfee placed empirical reliance on expectation of converging parallel evolution of universal principles and authentic local values. ISCT remains vague on how global or local norms can develop and change, for two reasons. First, ISCT does not explain mechanisms for how proposed hypernorms can become actual global norms and also become accepted across extant authentic communities. International policy regime theory explains how hypernorms can become instantiated as global norms expressed in policy regimes. Second, a basic element in ISCT is implied consent positing free exit from voluntary moral communities. Empirically, individuals or businesses may be unable to exit from undesired membership in authentic communities to which they do not consent. The Tiebout migration model provides valuable insights concerning how substantive mobility or its absence improves on the minimum ISCT assumption of implied consent. An integrated logic of ISCT dynamics generates a three-level framework in which instantiated hypernorms and authentic community (microsocial) norms can empirically change, and individuals or businesses can migrate more freely across extant communities.

Managing the Poverty–CO2 Reductions Paradox

This article examines the “Poverty–CO2 (carbon dioxide) Reductions Paradox,” wherein reducing poverty through economic growth simultaneously increases CO2 emissions from increased production and consumption, at a time in history when CO2 emissions must be reduced to avoid climate change catastrophes. Paradox theory and integrative social contracts theory are applied to help understand the evolving behaviors of China, the world’s largest CO2 emitter, and the European Union, a CO2 reduction leader, from 1990 to 2015 at the national and international levels. The environmental results of these activities have become species-threatening. The principle of fairness/justice is offered in order to guide efforts to resolve the paradox in a way that avoids irreversible climate changes projected to begin around 2050. Prominent stakeholder injustice claims are highlighted for future scholarship and policymaking considerations.