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Social Contracting as a Trust-Building Process of Network Governance

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  • Calton, Jerry M.
  • Lad, Lawrence J.

Abstract

Social contracting has a long and important place in the history of political philosophy (Hardin, 1991; Waldron, 1989) and as a theory of justice (Baynes, 1989; Rawls, 1971). More recently, it has been developed into an individual rights-based theory of organizations (Keeley, 1980, 1988), and as a way to integrate ethics and moral legitimacy into corporate strategy and action (Donaldson, 1982; Freeman & Gilbert, 1988). Currently, it is being proposed as an integrative theory of economic ethics (Donaldson & Dunfee, forthcoming). This paper will extend the Donaldson and Dunfee approach by arguing that social contracting can best be understood and applied in organizational settings if it is perceived and treated as a network governance process. This insight can benefit management scholars and practitioners alike, since it calls attention to the processes by which trust is created and sustained in on-going contractual relationships. It also strongly suggests that a new approach to applying managerial discretion, as moral agency, is needed to realize the full competitive and ethical potential of emerging network forms.

Suggested Citation

  • Calton, Jerry M. & Lad, Lawrence J., 1995. "Social Contracting as a Trust-Building Process of Network Governance," Business Ethics Quarterly, Cambridge University Press, vol. 5(2), pages 271-295, April.
    • Handle: RePEc:cup:buetqu:v:5:y:1995:i:02:p:271-295_01
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    Cited by:

    1. Do Khoi Nguyen & Le Ba Phong & Lei Hui, 2019. "Creating Competitive Advantage for Vietnamese Manufacturing and Service Firms: The Role of Collaborative Culture and Innovation Capability," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 10(2), pages 32-42, March.
    2. Sukhbir Sandhu & Marc Orlitzky & Céline Louche, 2018. "How nation-level background governance conditions shape the economic payoffs of corporate environmental performance," Post-Print hal-01916944, HAL.
    3. Brink, Alexander, 2011. "Spezifische Investitionen als Legitimationsgrundlage für Stakeholderansprüche," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 65(1), pages 50-68.
    4. Nielsen, Bo Bernhard, 2001. "Trust and Learning in International Strategic Alliances," Working Papers 8-2001, Copenhagen Business School, Department of International Economics and Management.
    5. Jeanne Logsdon & Harry Buren, 2009. "Beyond the Proxy Vote: Dialogues Between Shareholder Activists and Corporations," Journal of Business Ethics, Springer, vol. 87(1), pages 353-365, April.
    6. Ninghua Zhong & Shujing Wang & Rudai Yang, 2017. "Does Corporate Governance Enhance Common Interests of Shareholders and Primary Stakeholders?," Journal of Business Ethics, Springer, vol. 141(2), pages 411-431, March.
    7. Cam Caldwell, 2011. "Duties Owed to Organizational Citizens – Ethical Insights for Today’s Leader," Journal of Business Ethics, Springer, vol. 102(3), pages 343-356, September.
    8. Anthony J. Daboub & Jerry M. Calton, 2002. "Stakeholder Learning Dialogues: How to Preserve Ethical Responsibility in Networks," Journal of Business Ethics, Springer, vol. 41(1), pages 85-98, November.
    9. Chen, Yangyang & Gul, Ferdinand A. & Truong, Cameron & Veeraraghavan, Madhu, 2016. "Auditor client specific knowledge and internal control weakness: Some evidence on the role of auditor tenure and geographic distance," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(2), pages 121-140.

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