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Stakeholder Theory, Fact/Value Dichotomy, and the Normative Core: How Wall Street Stops the Ethics Conversation

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  • Lauren Purnell
  • R. Freeman

Abstract

A review of the stakeholder literature reveals that the concept of “normative core” can be applied in three main ways: philosophical justification of stakeholder theory, theoretical governing principles of a firm, and managerial beliefs/values influencing the underlying narrative of business. When considering the case of Wall Street, we argue that the managerial application of normative core reveals the imbedded nature of the fact/value dichotomy. Problems arise when the work of the fact/value dichotomy contributes to a closed-core institution. We make the distinction between open- and closed-core institutions to show how in the case of the closed-core, ethical decision-making is viewed by the institution as a separate domain from the core business of the institution. The resulting blind spot stifles meaningful exchanges with stakeholders attempting to address the need for reform. We suggest in conclusion that ethical considerations are less about casting a value judgment and more about creating a process for meaningful conversation throughout an institution and its stakeholders. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Lauren Purnell & R. Freeman, 2012. "Stakeholder Theory, Fact/Value Dichotomy, and the Normative Core: How Wall Street Stops the Ethics Conversation," Journal of Business Ethics, Springer, vol. 109(1), pages 109-116, August.
    • Handle: RePEc:kap:jbuset:v:109:y:2012:i:1:p:109-116
    DOI: 10.1007/s10551-012-1383-6
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    References listed on IDEAS

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    Cited by:

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    4. Andrew Abela & Ryan Shea, 2015. "Avoiding the Separation Thesis While Maintaining a Positive/Normative Distinction," Journal of Business Ethics, Springer, vol. 131(1), pages 31-41, September.
    5. Zhu, Qinghua & Liu, Junjun & Lai, Kee-hung, 2016. "Corporate social responsibility practices and performance improvement among Chinese national state-owned enterprises," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 417-426.
    6. Susan Castro, 2014. "The Morality of Unequal Autonomy: Reviving Kant’s Concept of Status for Stakeholders," Journal of Business Ethics, Springer, vol. 121(4), pages 593-606, June.
    7. José Alberto Camargo & Paulo Sérgio Miranda Mendonça & Jorge Henrique Caldeira Oliveira & Charbel José Chiapetta Jabbour & Ana Beatriz Lopes Sousa Jabbour, 2019. "Giving voice to the silent: a framework for understanding stakeholders’ participation in socially-oriented initiatives, community-based actions and humanitarian operations projects," Annals of Operations Research, Springer, vol. 283(1), pages 143-158, December.
    8. Anna Lašáková & Anna Remišová & Ľubica Bajzíková, 2021. "Differences in Occurrence of Unethical Business Practices in a Post-Transitional Country in the CEE Region: The Case of Slovakia," Sustainability, MDPI, vol. 13(6), pages 1-33, March.
    9. Annor Silva Junior & Priscilla Oliveira Martins-Silva & Katia Cyrlene Araújo Vasconcelos & Vitor Correa Silva & José Michel Rocha Monteiro & Sarah Luiza Martins Silva Brito & Tássia Calile Souza Santo, 2021. "Sustainability for Brazilian management students: integrity and opportunism," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 1292-1315, February.
    10. Frank Jan Graaf, 2019. "Ethics and Behavioural Theory: How Do Professionals Assess Their Mental Models?," Journal of Business Ethics, Springer, vol. 157(4), pages 933-947, July.

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