Business and Society

1. Business and Society Socio-Economic Theories of Sustainable Change A Theory of Business Ethics beyond Risk Management

2. Business Ethics … • Why? • Practical: some impressions • Theoretical: the lack of regulative frameworks • Businesses as drivers for sustainable change? • How? (contemporary concepts) • Theses: business ethics from an economic perspective • Antitheses: business ethics from an (discourse) ethical perspective • socio-economic perspective of business ethics: • not a syntheses of an economic and ethical approaches • critical social science perspective that opens “windows to possible worlds” (Giddens) • (1) questions “economic worlds” • (2) complementary to “impossible worlds” of ethical approaches

3. Why Business Ethics?(Practical problems) • business scandals • business ethics and global problems • intragenerational justice (North-South) • intergenerational justice (future generations) systemic push towards more intra- and intergenerational justice (through businesses?)

4. Why Business Ethics?(theoretical arguments) • Do we need businesses for business ethics? • Moral economics and the relevance of political regulations: • good games require more good rules than good players (Buchanan/ Brennan) • political regulations: necessary but not sufficient: • regulative frameworks are incomplete • regulative frameworks are merely reactive • the influence of the traditional national-state is increasinglylimited (globalization) • consequences: • social responsibility of businesses • business ethics is more than a supplement to moral economics

5. Why Business Ethics?(businesses as “drivers for change”) • businesses are de facto drivers for change • can they also become drivers for sustainable change? • difficult, very difficult but not hopeless and • depending on other conditions

6. Why? • How? (contemporary concepts) • Theses: business ethics from an economic perspective • Antitheses: business ethics from an (discourse) ethical perspective • socio-economic perspective of business ethics

7. business ethics: an economic perspective • risk management • organizational improvement • market positioning • civil positioning * Economy Ethics

8. business ethics: a (discourse) ethical perspective (1) • criticism of the utilitarian approaches of traditional economics and management • moral point of view as a critical position • theoretical status: regulative idea (not empirical facts) • transformation from an utilitarian to a communicative logic

9. business ethics: a (discourse) ethical perspective (2) • Two levels of responsibility • Level 1: ethics of business • innovative synthesis between ethics and economics (teleological orientation) • principal of categorical self-binding through deontological values (responsible profit-seeking; not profit-maximization) • Level 2: republican idea of business ethics • ordoliberal commitment (arrangement of the political framework) • critical public (as community of all citizens) is the authority of just businesses practices

10. contemporary business ethics: a criticism • (discourse) ethical perspective: • explication of the moral point of view as impossible worlds • normative orientations are necessary! • focus on “ideal communication communities” • neglecting “real communication communities” • chance of realization: about zero • economic perspective: • no normative orientation • argumentation within the economic paradigm • based on a specific understanding of “economic worlds” • helpful perspective but just one possible standpoint and not the objectively-given truth

11. business ethics: a socio-economic perspective (1) • general idea: • not impossible worlds • not economic worlds • possible worlds • critical social science approach • critical in the sense that the social scientist tries to develop new visions of social reality • social sciences as hunters of myths (Elias) • especially economical myths

12. 4 modern myths • Myth 1: individuals act according to the principle of utility maximization(theory of action) • Myth 2: organization are rational entities; businesses merely speak and understand the language of profit (maximization) (organizational theory) • Myth 3: institutions are the result of rational decisions or they are the result of an evolutionary process of natural selection (institutional theory) • Myth 4: the economic system is an autonomous societal sphere (system theory/ theory of spheres of values).

13. other myths economic perspective socio-economic perspective interpretative theory of action utility maximization • Myth 1(actions) • Myth 2(orga.) • Myth 3(inst.) • Myth 4(system/sphere) multilingual actors rational entities (profits) cultural science paradigm natural science paradigm institutions as symbolic orders optimal institutions conflicts between spheres of values autonomous system

14. M1: interpretative theory of action • interpretative: • not objectively-given situations (logic of the situation) but • definition of the situation through the actor • perspective of the actors ≠ perspective of the observer • cognitive frames, scripts of actions, routines • relevant theories: • Interpretative Sociology (Weber, Schütz, Berger/ Luckmann et al.) • New Economic Sociology (Granovetter et al.) • Evolutionary Economics (Nelson/ Winter, Witt et al.)

15. M 2 & 3: multilingual actorsand institutions as symbolic orders (1) • What are institutions? • institutions guide our action • shared meanings that enable free individuals to coordinate their actions • reduce uncertain while they help to frame situations • Institutions are relevant: • intraorganisational • interorganisational Next week: “Institutionalization of Sustainability. A Theoretical Framework and some Empirical Results” (same time, same place)

16. M 2 & 3: multilingual actorsand institutions as symbolic orders (2) (1) intraorganisational: • profit-seeking is the leading modus of businesses but not the only one (Wieland; transactions cost economics) • businesses also communicate in terms of law, politics, morality (ontological argument); • businesses are multilingual actors • morality is in principal available in business but not necessarily applicable forms • consequences: foster forms of application of morality • institutional level: • clear values, such as codes of conduct (stabilization)

17. M 2 & 3: multilingual actorsand institutions as symbolic orders (3) (2) intraorganisational: • explicit and implicit knowledge in businesses is crucial • businesses as bundle of individual competences and routines • evolutionary economics and organizational learning literature • consequences on two levels: • Individual level: • moral competences • institutional level: • institutional arrangements enable (moral) learning processes (sustainable change)

18. M 2 & 3: multilingual actorsand institutions as symbolic orders (4) intraorganisational: • (1): stabilization of values • (2): learning processes and sustainable change • Balance!

19. M 4: conflicts between spheres of values • the economic system has its own logic (Eigengesetzlichkeiten, Max Weber); however its is not an autonomous sphere • economic theories neglect the relation to other spheres (Religion, Politics, Science, Medias, Art etc.) • focus on the tensions and conflicts between different spheres is necessary • theories of societal differentiation are relevant • Weber: (theory of spheres of values) • geneses of institutions • Luhmann: (system theory) • organizations as mediators between different spheres • organizations as origin of change

20. Summary • “economic worlds” are seen as a possible worlds; however, it is merely one possible storywe can tell • socio-economic perspective hunts economic myths and tries to tell another story • questions certain assumptions of economic theories • develops “possible worlds” based on: • theory of action, • organizational and institutional theory • theory of spheres of values • develops another “how it is” or “how we can see it” • complementary to “impossible worlds” of ethical approaches • Linkage between possible and impossible worlds: still open