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10. The Person and the Enterprise: Management Models
- University of Notre Dame Press
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230 C H A P T E R t e n The Person and the Enterprise Management Models Two approaches to dealing with the tension between the person and the organization are the proceduralist and the communitarian models. Both are of interest to the multinational manager who is faced with crosscultural issues on a network-wide basis and must discern appropriate actions within local communities. I. PROCEDURALIST MODELS Proceduralist approaches can be grouped roughly into three categories: deontological (e.g., the moral philosophies of Immanuel Kant, John Rawls, and Lawrence Kohlberg); utilitarian (e.g., John Stuart Mill and some readings of Adam Smith); and contractarian. The basis of the claim for moral authority is different in each case. The deontological approach relies on the person and the enterprise 231 abstract analysis, based on principles of fairness which are asserted to be universal; the utilitarian approach relies on maximization of net benefit; and the contractarian approach relies on the importance of honoring contracts in order to establish and maintain social order. The essential argument is the same for all three: The broad social good is best achieved by structuring the interaction among a group’s members rather than by attempting to improve the character of each member. In the terminology of this volume, the common good is best achieved by an emphasis on the right rather than on the good. Whatever their philosophical basis, proceduralist models focus on rules and their application. These explicit and implicit rules guide the interaction among individuals, between individuals and the communities of which they are members, and among the communities. At all of these levels, the concentration on procedure as the determinant of correct action leads in application to a focus on contracts, first among individuals, and then extending to contracts among organizations, among countries, and among global systems. Thus, at the level of implementation, all proceduralist models become contractarian in the sense that they rely on contracts among participants for their viability. (It is noteworthy that Rawls, perhaps the preeminent contemporary liberal rights theorist, melds both deontological and contractarian elements in his theory.) Rule definitions can be approached on a macro basis, with a view toward the rules and constraints imposed by the systems, or at the micro level of interaction among individuals. On a macro basis, the discussion in chapter 3 of the basic market model and its extensions to long-term enterprise sustainability was based on contractarian models. Both the shareholder and stakeholder models are contractarian. In this market model, contracts are not devoid of values beyond those reflected in law and regulation. Certain social values are implicit in the contractual relationship itself. For example, trust among the individual contracting parties is a necessary foundation for the pyramid that becomes the market. Philosopher Robert Audi makes the following comparison: Utilitarians maintain that to maximize the good we must not only cooperate with others but also respect their rights, even when we have no ongoing relationship with them. Instrumentalists tend to [3.236.19.251] Project MUSE (2024-03-28 23:31 GMT) 232 managing the firm as a community hold a similar view concerning desire satisfaction: Concentrate exclusively on your own and you will tend to get little of it. Kantians see us as properly aiming at coexistence in a kingdom of ends, and they insist, as do virtue theorists, on honesty with others and, within certain limits, beneficence toward them.1 Richard De George proposes that a fair negotiation is one in which each participant must be satisfied with the fairness of the process itself, distinct from the outcomes. “All interested parties must be allowed to have a say.”2 In addition, “agreements in general are fair if both parties enter into them freely, both sides benefit from the arrangement, and both sides believe the terms fair.”3 De George thus extends the moral requirement from the individual to the process itself. Mattias Storme and James Gordley emphasize the legal tradition that contracts be negotiated in good faith.4 The contractarian emphasis can also be found in organizational theories that have been developed to counter traditional shareholder models. For example, the difference between the stakeholder and shareholder models lies in the priority given to shareholders, not in the underlying contractarian base. In stakeholder theory, the manager becomes the arbiter among the interests, needs, and rights of the stakeholder, each possessing an implicit or explicit contract with the firm. The contractarian model serves well the individual drive for more. Each of us...