Reference Work Entry

Handbook of the Philosophical Foundations of Business Ethics

pp 675-691

The Capability Approach as Guidance for Corporate Ethics

  • Georges EnderleAffiliated withDepartment of Marketing, Mendoza College of Business, University of Notre Dame Email author 

Abstract

The article attempts to make the capability approach fruitful for corporate ethics (i.e., the ethics of business organizations) in two parts. The first part presents the capability approach. After a short historic overview of its development advanced by Amartya Sen and Martha Nussbaum, the question about an adequate informational basis for interpersonal comparisons is raised, and traditional answers of the utility-based and resource-based approaches are criticized. Against this backdrop, the essential elements of the capability approach, common to Sen and Nussbaum, are highlighted, and some foundational implications of Sen’s capability approach in particular are explained, followed by a few considerations on the limitations of the capability approach. The second part discusses the application of the capability approach to corporate ethics. Beginning with three basic assumptions on corporate ethics, the application includes a critique of “value-free” economics and other business disciplines and an enrichment of the notion of rationality. It stipulates a sensitivity to issues of poverty and distribution and elaborates on the focus on functionings and capabilities. The article ends with a few concluding remarks.

Keywords

Business ethics Capabilities Corporate ethics Ethics-related approach Functionings Human development Human rights Primary goods Inequality Informational basis Nussbaum Pareto criterion Poverty Rationality Rawls Self-interest Sen Stiglitz-Sen-Fitoussi Report Utilitarianism Wealth creation