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Social Contracting as a Trust Building Process of Network Governance
Business Ethics Quarterly (1995)
  • Lawrence J. Lad, Butler University
  • Jerry M. Calton
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.

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Citation Information
Lawrence J. Lad and Jerry M. Calton. "Social Contracting as a Trust Building Process of Network Governance" Business Ethics Quarterly Vol. 5 Iss. 2 (1995)
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