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Philosophical Theories of Management and Corporations

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Handbook of the Philosophical Foundations of Business Ethics

Abstract

This chapter presents the problem of legitimacy as the central question of the philosophy of management and corporations. This problem is then presented with the economic theory of Adam Smith and with the concept of legitimacy from Max Weber. Further on, the contributions of recent theories to the question of legitimacy of the corporation in the modern world are presented, in particular, a number of American approaches that are related to institutional theory and recent efforts to determine the legitimacy of management and corporations. Finally, we briefly discuss Habermas’s concept of legitimacy as the foundation of corporate citizenship.

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Notes

  1. 1.

    We may distinguish between different paradigms of legitimacy of the corporation in modernity: (1) Weber’s paradigm of Protestant ethics; (2) the Keynes/Samuelson paradigm of the mixed economy; (3) the Friedman/Knight paradigm of libertarian and existentialist capitalism; (4) the paradigm of the closed economic organization; (5) the paradigm of open organization theory based on the legitimacy of the corporation in its environment; (6) the paradigm of spiritual foundations for corporation values; (7) the critical paradigm of corporations as alienators of humanity, where religion is reduced to a strategic instrument of profit maximization; (8) the paradigm of republican business ethics based on stakeholder management and the idea of the good life with and for the other in just institutions. These different paradigms represent ways to approach the issue of good corporate citizenship. From this, we will argue that the framework of republican business ethics is the most appropriate: (9) the paradigm of the criticism and deconstruction of the metaphysics of the firm in Western philosophy.

  2. 2.

    Deidre N. McCloskey helps to understand the role of the virtues in capitalism in her work on the origins and history of capitalism. Although she goes further back toward Aristotelian and Catholic virtues, there is a similarity with Weber’s argument in the emphasis that ethics and virtues are essential for good and well-functioning markets.

  3. 3.

    Although the Hawthorne experiments represented a breakthrough for the theory of humanistic management, they can be criticized from the viewpoint of the ethics of science. The experiment was the background for the so-called Hawthorne effect, which denotes the phenomenon of behavior changes among people when they are subject to research observation. The experiments showed that it is difficult to measure performance objectively. We can mention a number of methodological issues regarding the reliability of the results of the experiments. Maybe the only thing we can learn from the Hawthorne experiments, aside from the Hawthorne effect, is that there was no other lesson to be learned from the experiment. The workers did not have the opportunity to know what the real aim of the experiments was. Facts were concealed from them. Moreover, it can be argued that it is unethical to use people as objects for productivity in experiments. In addition, we can mention a number of methodological issues regarding the reliability of the results of the experiments. It may, for example, be argued that the workers in the experiments faked their productivity because they were watched by the researchers and had a strategic approach to their participation in the experiments. Moreover, there are many similarities between the Hawthorne experiments and the Milgram experiments on disobedience where participants of the research also did not have total access to the results and premises of the experiments. In the Milgram experiments, much of the reason for the strong obedience to obsolete experiments was the respect for the authority of the researcher. A similar research effect may be the case of the Hawthorne experiments.

  4. 4.

    The Hawthorne experiments were important for developing another attitude to the relation between employees and management. It can be said to have spurred one of the first movements toward a conception of corporate citizenship involving concern for improving the life of employees. The different problems with the research and the unforeseen results made researchers realize, however, that it is very difficult to determine how to make work relations better. Despite these difficulties, efforts to democratize corporate culture and to make employees more responsible for production and work organization found good support in the experiments.

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Authors and Affiliations

  1. Department of Communication, Business and Information Technologies, Roskilde University, Po Box 260, 4000, Roskilde, Denmark

    Prof. Jacob Dahl Rendtorff

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  1. Prof. Jacob Dahl Rendtorff
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Correspondence to Jacob Dahl Rendtorff .

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  1. Peter Löscher-Stiftungslehrstuhl für Wirtschaftsethik, Technische Universität München, München, Germany

    Christoph Luetge

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Rendtorff, J.D. (2013). Philosophical Theories of Management and Corporations. In: Luetge, C. (eds) Handbook of the Philosophical Foundations of Business Ethics. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1494-6_66

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  • DOI: https://doi.org/10.1007/978-94-007-1494-6_66

  • Publisher Name: Springer, Dordrecht

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