Corporate Social Responsibility and Business Performance Theories and Evidence about Organizational Responsibility
Theories and Evidence about Organizational Responsibility
Chapter 3: The Price of Morality: An Institutional Analysis of the Profitability of Responsibility
3. The price of morality: an institutional analysis of the profitability of responsibility Introduction Morality has a price. One cannot buy morality or pay a price for being a moral person. However, we can define prices, or shadow prices, for moral behaviour as opposed to immoral behaviour. At least for simple situations, it is possible to construct a cost–benefit analysis. The difference between the net result of the most efficient immoral choice in a situation and a moral choice in the same situation would be the price of morality in that situation. This study discusses whether or not it can be economically rational to behave morally, and describes the market mechanisms that determine the costs and benefits of morality. In business ethics, expressions like ‘morality pays’ or ‘good ethics is good business’ suggest that it is always economically efficient to behave morally or to be a moral person. Some political economists, on the other hand, argue that the systematic approach to ethics and moral behaviour can be found in the formal institutional setting of a society (Homann and Blome-Drees,1992; Brennan and Buchanan, 1985). This study describes the institutional setting of formal and informal institutions as a condition for morality of individual institutions. Given these conditions, this chapter draws conclusions for the price that individuals have to pay for moral behaviour and for the price that societies have to pay for the morality of their members. Individual morality This study describes morality as individual and intrinsic. Furthermore, morality is...
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