Abuse of authority is an unsolved problem in the new institutional theory of the firm. This paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics. From the ex-ante standpoint the paper elaborates on the idea of a Social Contract based on Co-operative Bargaining Games and deduces from it the fair/efficient 'Constitution' of the firm endorsed by means of a well-devised corporate code of ethics. From the ex-post standpoint, codes of ethics are proved to be self-enforcing norms, by showing how they put at work the mechanism of a Repeated Game of Reputation within hierarchical transactions (firms) characterised by incomplete contracts and unforeseen events. To accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event, i.e. an event to which also the ex-ante unforeseen, unimaginable states of the world belong to a certain degree.

Codes of Ethics as Contractarian Constraints on the Abuse of Authoirty within Hierarchies: A Perspective from the Theory of Firm / L. Sacconi. - In: JOURNAL OF BUSINESS ETHICS. - ISSN 0167-4544. - 21:2-3(1999), pp. 189-202. ((Intervento presentato al 11. convegno EBEN Conference on the Ethics of Participation - How to Share Work, Profit and Ownership tenutosi a Leuven nel 1998.

Codes of Ethics as Contractarian Constraints on the Abuse of Authoirty within Hierarchies: A Perspective from the Theory of Firm

L. Sacconi
1999

Abstract

Abuse of authority is an unsolved problem in the new institutional theory of the firm. This paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics. From the ex-ante standpoint the paper elaborates on the idea of a Social Contract based on Co-operative Bargaining Games and deduces from it the fair/efficient 'Constitution' of the firm endorsed by means of a well-devised corporate code of ethics. From the ex-post standpoint, codes of ethics are proved to be self-enforcing norms, by showing how they put at work the mechanism of a Repeated Game of Reputation within hierarchical transactions (firms) characterised by incomplete contracts and unforeseen events. To accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event, i.e. an event to which also the ex-ante unforeseen, unimaginable states of the world belong to a certain degree.
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Settore SECS-P/01 - Economia Politica
Settore SECS-P/02 - Politica Economica
Settore SPS/01 - Filosofia Politica
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/598491
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