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The Social Contract Theory and Corporation Moral Obligation

Author

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  • Husein Inusah
  • Peter Sena Gawu

Abstract

Contractual moralists, such as Bowie and Donaldson, have argued that contractual agreement explains why corporations have a moral obligation towards the society in which they operate. They argue that a corporation's moral obligation emerges from a hypothetical social contract that establishes its legitimacy to operate in society. Their assumption appears to indicate a logically necessary relationship between a corporation's moral obligation and contractual agreement that establishes the corporation. We argue that there is no such relationship: a corporation's moral obligation does not necessarily emerge from a social contract. We suggest that instead of assuming that a corporation's moral obligation emerges from a social contract, it should be said that a corporation's moral obligation is sustained by a social contract. This helps answer the question of why corporations have a moral obligation towards the society where they operate in a better light.

Suggested Citation

  • Husein Inusah & Peter Sena Gawu, 2021. "The Social Contract Theory and Corporation Moral Obligation," E-LOGOS, Prague University of Economics and Business, vol. 2021(1), pages 4-16.
    • Handle: RePEc:prg:jnlelg:v:2021:y:2021:i:1:id:480:p:4-16
    DOI: 10.18267/j.e-logos.480
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