Abstract
Social contract theory offers a powerful method and metaphor for the study of organizational ethics. This paper considers the variant of the social contract that has arguably gained the most attention among business ethicists: integrative social contracts theory or ISCT [Donaldson and Dunfee: 1999, Ties That Bind (Harvard Business School Press, Boston)]. A core precept of ISCT – that consent to membership in an organization entails obligations to follow the norms of that organization, subject to the moral minimums of basic human rights – is a reasonable and appealing notion. One potential challenge for those attempting to apply this idea, however, lies in the dynamic nature of social norms. Organizational norms evolve, often through the conscious efforts of community members and leaders. As currently formulated, ISCT offers a framework that under-appreciates the evolving nature of moral norms. In this paper, we extend ISCT by considering the circumstances under which the terms of and parties to social contracts change. We also consider a number of principles that should be considered as the terms and parties to organizational social contracts change.
Similar content being viewed by others
References
Badaracco J. L. Jr. (1997) Defining Moments: When Managers Must Choose Between Right and Right. Harvard Business School Press, Boston
Becker L. (1986) Reciprocity. University of Chicago Press, Chicago
Binmore K. (2003) Stable Social Contracts. In: Heugens P., J. (Hans) van Oosterhout, Vromen J. (eds) Social Institutions of Capitalism: Evolution and Design of Social Contracts. Edward Elgar, Cheltenham, UK
Boatright J. (2000) Contract Theory and Business Ethics: A Review of Ties that Bind. Business and Society Review 105(4): 452–466
Calton J. M., Payne S. L. (2003) Coping With Paradox: Multistakeholder Learning Dialogue as a Pluralist Sensemaking Process for Addressing Messy Problems. Business & Society 42(1):7–42
Calton J. M. (2001) Book Reviews: Ties That Bind. Business and Society 40(2): 220–240
Cialdini R. B. (1984) Influence. William Morrow, New York
Corbin A. (1952) Corbin on Contracts. West Publishing, New York
DiMaggio P. J. (1991) Constructing an Organizational Field as a Professional Project: US Art Museums 1920–1940. In: Powell W. W., DiMaggio P. J. (eds) The New Institutionalism in Organizational Analysis. Chicago University Press, Chicago, pp. 267–292
Donaldson T., Dunfee T. W. (1999) Ties That Bind. Harvard Business School Press, Boston
Donaldson T. and Dunfee T. W. (2000) Securing the ties that bind: a response to commentators. Business and Society Review 105(4): 480–492
Eastman W. and Santoro M. (2003) The Importance of Value Diversity in Corporate Life. Business Ethics Quarterly 13(4):433–452
Freeman R. E. and Gilbert D. R. Jr. (1988) Corporate Strategy and the Search for Ethics. Prentice Hall, Englewood Cliffs, NJ
Fuller L. L. (1964) The Morality of Law. Yale University Press, New Haven
Gutmann A. and Thompson D. (1996) Democracy and Disagreement. The Belknap Press of Harvard University Press, Cambridge, MA
Habermas, J: 1990, ‘Discourse Ethics: Notes on a Program of Philosophical Justification’, in Moral Consciousness and Communicative Action, Christian Lenhardt and Shierry Weber Nicholsen (trans.), (The MIT Press, Cambridge, MA)
Hannan M. T. and Freeman J. (1977) The Population Ecology of Organizations. American Journal of Sociology 82(5): 929–964
Hartman E. M. (1996) Organizational Ethics and the Good Life. Oxford University Press, New York
Heugens P., van Oosterhout H. and Vromen J. (eds) (2003) Social Institutions of Capitalism: Evolution and Design of Social Contracts. Edward Elgar, Cheltenham, UK
Hirschman A. O. (1970) Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States. Harvard University Press, Cambridge, MA
Hoffman A. (1997) From Heresy to Dogma: An Institutional History of Corporate Environmentalism. The New Lexington Press, San Francisco
Jensen M., Meckling W. (1976) Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics 3: 305–360
Johnson-Cramer, M.: 2003, Organization-level Antecedents of Stakeholder Conflict, unpublished doctoral dissertation, Boston University
Jones T. M. (1995) Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics. Academy of Management Review 20(2): 404–437
Kotter J. P. (1996) Leading Change. Harvard Business School Press, Boston
Locke, J.: 1690, Second Treatise of Government
McMahon C. (1981) Morality and the Invisible Hand. Philosophy and Public Affairs 10(3): 247–277
Nozick R. (1974) Anarchy State, and Utopia. Basic Books, New York
Phillips R. (2003) Stakeholder Theory and Organizational Ethics. Berrett-Koehler, San Francisco
Phillips R.A. (1997) Stakeholder Theory and a Principle of Fairness. Business Ethics Quarterly 7(1): 51–66
Phillips R. A., Margolis J. M. (1999) Toward an Ethics of Organizations. Business Ethics Quarterly 9(4): 619–638
Rawls J. (1993) Political Liberalism. Columbia University Press, New York
Rawls J. (1971) A Theory of Justice. The Belknap Press of Harvard University Press, Cambridge, MA
Rowan J. (2001) Review: Thomas Donaldson and Thomas Dunfee, Ties That Bind: A Social Contracts Approach to Business Ethics. Business Ethics Quarterly 11(2): 379–390
Scott W. R. (1995) Institutions and Organizations. Sage, Thousand Oaks, CA
Selznick P. (1949) TVA and the Grassroots. University of California Press, Berkeley
Smith, J. D.: 2004, ‘A Précis of a Communicative Theory of the Firm’, Business Ethics: A European Review 13(4)
Solomon R.C. (1993) Ethics and Excellence: Co-operation and Integrity in Business. Oxford University Press, New York
Van Oosterhout, J. (Hans), P. M. A. R. Heugens and M. Kaptein: forthcoming, ‘The Internal Morality of Contracting: Advancing the Contractualist Endeavor in Business Ethics’, Academy of Management Review
Walzer M. (1994) Thick and Thin. University of Notre Dame Press, Notre Dame, IN
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Phillips, R.A., Johnson-Cramer, M.E. Ties that Unwind: Dynamism in Integrative Social Contracts Theory1 . J Bus Ethics 68, 283–302 (2006). https://doi.org/10.1007/s10551-006-9015-7
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-006-9015-7