About the Editors xi

Preface xii

General Introduction: The Nature of Business Ethics 1

Part 1 Ethics and Business: From Theory to Practice 37

Introduction 37

1 Theories of Economic Justice 43

Justice as Fairness 43
John Rawls

Distributive Justice 49
Robert Nozick

Distributive Justice and Utilitarianism 55
J. J. C. Smart

The "Invisible Hand" 59
Jan Narveson

Corporate Ethics in a Devilish System 70
Kent Greenfield

Questions for Discussion 77

2 Ethics and Business Decision Making 78

Teaching Ethical Decision Making and Principled Reasoning 78
Michael Josephson

Business Ethics and Moral Motivation: A Criminological Perspective 86
Joseph Heath

Ethical Leadership and the Psychology of Decision Making 105
David M. Messick and Max H. Bazerman

Cost-Benefit Analysis: An Ethical Critique 120
Steven Kelman

Cost-Benefit Analysis Defended 127
Herman B. Leonard and Richard J. Zeckhauser

Questions for Discussion 130

Cases for Part 1 131

Mini-Cases 131

MBA Student Mini-Dilemmas 132

Cases

The Parable of the Sadhu 133
Bowen H. McCoy

The Ford Pinto 139
W. Michael Hoffman

The Analyst's Dilemma (A) 145
Joseph L. Badaracco Jr. and Jerry Useem

Walk Away From Your Mortgage! 149
Roger Lowenstein

The Ok Tedi Copper Mine 150
Manuel G. Velasquez

Part 2 The Nature of the Corporation 157

Introduction 157

3 Agency, Legitimacy, and Responsibility 163

Can a Corporation Have a Conscience? 163
Kenneth E. Goodpaster and John B. Matthews Jr.

Is Business Bluffing Ethical? 172
Albert Z. Carr

The Social Responsibility of Business is to Increase its Profits 180
Milton Friedman

Stakeholder Theory of the Modern Corporation 184
R. Edward Freeman

Ethics in Business: Two Skeptical Challenges 192
Robert E. Frederick

Commentary on the Social Responsibility of Corporate Entities: Bad and Not-so-Bad Arguments for Shareholder Primacy 202
Lynn A. Stout

Questions for Discussion 215

4 Corporate Governance and Accountability 216

Who Rules the Corporation? 216
Ralph Nader, Mark Green, and Joel Seligman

Power and Accountability: The Changing Role of the Corporate Board of Directors 224
Irving S. Shapiro

Who Should Control the Corporation? 231
Henry Mintzberg

Tone at the Top: An Ethics Code for Directors? 243
Mark S. Schwartz, Thomas W. Dunfee, and Michael J. Kline

Do CEOs Get Paid Too Much? 264
Jeffrey Moriarty

Questions for Discussion 274

Cases for Part 2 275

Mini-Cases 275

MBA Student Mini-Dilemmas 277

Cases

Fire Destroys Malden Mills 277
Anonymous

Merck & Co., Inc. (A) 279
David Bollier and Stephanie Weiss

Bailouts and Bonuses on Wall Street 284
Kirsten Martin and Michael Scotto

Citigroup's Chief Rebuffed on Pay by Shareholders 297
Jessica Silver-Greenberg and Nelson D. Schwartz

Part 3 Work in the Corporation 301

Introduction 301

5 Employee Rights and Duties 307

Employee Rights 307
Ronald Duska

Human Rights, Workers' Rights, and the "Right" to Occupational Safety 316
Tibor R. Machan

Whistle-Blowing 320
Richard T. De George

The Morality of Whistleblowing: A Commentary on Richard T. De George 338
W. Michael Hoffman and Mark S. Schwartz

Conflicts of Interest 350
Thomas L. Carson

The Moral Problem in Ins