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George G. Brenkert
Chapter 2 by George G. Brenkert seeks to start a discussion about moral innovation, its role in business and how such innovations might be evaluated. It considers three main issues. First, what do we mean by innovation and does moral innovation make sense? Do innovations simply introduce something new into our lives, or must they be more dramatic than that? And must something be successful to be an innovation? Second, should we recognize different kinds of moral innovations that business brings about? Third, by what standards should such moral innovations be evaluated? Who has the right or responsibility to introduce moral innovation in a society and by what principles should they be considered?
Patricia H. Werhane and David Bevan
Chapter 12 by Patricia H. Werhane and David Bevan takes up the critical view of present day ‘market capitalism’ – already expressed in several previous chapters. The authors rectify the widely held misinterpretation of Adam Smith’s understanding of free enterprise and demonstrate, with numerous examples, the expanding drive of alternative businesses in different parts of the world. This constructive trend from the bottom-up is articulated and exemplified also in several other chapters.
Joanne B. Ciulla
Chapter 6 by Joanne B. Ciulla compares the actions of ethically innovative leaders with drops of water in a pond. They often radiate out like ripples into larger spheres, from the personal, to the organizational, and finally to the systemic level. Recalling key notions in leadership studies such as vision, moral imagination, and both ethics and effectiveness, the chapter applies them to a timely challenge for business leaders, namely to pay their employees’ living wages (with a focus on the fast food and other industries). Ethically innovative leaders can fix this problem if they are willing to make waves by thinking of business as a means of improving the well-being of all stakeholders, including employees.
Edited by Georges Enderle and Patrick E. Murphy
Chapter 1 by Georges Enderle explicates some major perspectives of this book. It places, first, the question of ethical innovation in business and the economy in the contemporary context of globalization, sustainability, and financialization. It then discusses and clarifies the concepts of business ethics, innovation, and creativity. Thereafter, as innovation plays a central role in business and the economy, their purpose is defined as the creation of wealth in a comprehensive sense. The chapter concludes with an overview of the book and a short introduction to the subsequent chapters.
Chapter 7 by Daryl Koehn discusses the evolving nature of the Maker Movement and analyzes its ethical underpinnings. Because the Maker Movement is relatively new, it is difficult to state with any certainty what will ultimately prove to be ethically good or ethically worrisome about it. However, precisely because the movement is in its early stages, now is a good time to take stock so that those in the movement can be encouraged to become ever more mindful about the ethical issues that may arise as the Maker Movement gathers momentum.
Michael A. Santoro
Chapter 9 by Michael A. Santoro focuses on executive compensation in the financial industry. It highlights the important role of cash-based incentive compensation in the financial crisis, which contributed to the failure of many firms and the accumulation of trillions of dollars of systemic risk. A brief survey then recalls important legal and industry-related reforms of executive compensation that have been undertaken to date in the United States and Europe. By examining the infamous London Whale trade of JPMorgan Chase, the chapter demonstrates the need for innovative approaches to linking executive compensation more closely to risk management and concludes with suggesting a number of elements for an innovative compensation system.
Christoph Luetge and Matthias Uhl
Chapter 4 by Christoph Luetge and Matthias Uhl focuses on an innovative methodology, that is, on an experimental approach to ethics. The contributions of experimental disciplines are particularly important if business ethics is to be understood as an interdisciplinary field that includes not only a normative-ethical but also a descriptive-explicative dimension. After a brief summary of experimental philosophy and experimental ethics with its philosophical precursors, the chapter explores future opportunities and key research questions facing experimental ethics. Drawing on recent ethical experiments, it discusses practical implications and possible types of criticisms.
Chapter 11 by Antonio Tencati critically examines corporate reporting. Corporate performance has been conceptualized and measured in multiple forms that traditionally focus on financial and economic aspects while disregarding social, environmental, and governance aspects. The chapter presents and analyzes in detail major initiatives for sustainability evaluation and reporting. While acknowledging their progress compared to mainstream reporting, it criticizes the fact that they do not clarify what is the (not only monetary) value provided by the firms to the different constituencies. Therefore, it proposes an innovative scheme for stakeholder-based and integrated reporting, the so-called SERS2.