In what way does the theory of justice in business ethics guide the practice of corporate governance?
Justice is defined as the act of ensuring fairness, by providing equal rights to all stakeholders in the process (Crane and Mattel, 2010). While the definition of ‘justice’ in business varies on different schools of thought, the theories of justice within business play a vital role in defining ‘moral’ or ‘ethical’ business operations. Justice theories, fall in three main schools of thought, namely: Utilitarianism, Rawls and Nozick (Nordberg, 2007). Each theory has both its proponents and critics and while the application varies based on a particular use case the importance and relevance of these theories cannot be undermined in real world business operations. The concept of corporate governance is driven by how an organisation gives back to a society (George, 2006). All theories of justice associated with business form a cohesive link with the corporate governance of current organisational models (Nordberg, 2011).
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These theoretical concepts allow an understanding of what is the right path in terms of a balance between ‘moral’ and ‘just’ obligations of a business operating in a community. These theories of justice allow setting up a benchmark, which then serves as a guideline for businesses to practice corporate governance as effectively as possible. Critics argue that these theories are not set in stone, in terms of application across multiple business domains but provide an understanding, based on empirical research allowing a clear path to follow (Johnson, 2007). Once modified to a firm’s business model, its operations and the community where it operates, these theories serve as an invaluable asset towards the implementation of corporate governance by a business.
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Crane, A. and Matten, D. (2010) Business Ethics, 3rd Edition, Oxford: Oxford University Press George, T. (2006) Business Ethics, 6th Edition, New York: Pearson Prentice Hall Johnson, C. (2007) Ethics in the Workplace, London: Sage Nordberg, D. (2011) Corporate Governance: Principles and Issues, Sage Journal of Business Ethics, Vol 1 Iss:1, pp. 1-18
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