The profit motive, which guides the behavior of companies in a modern market economy, has been the object of controversial discussions in business ethics as well as business and society scholarship for decades. In this chapter, we trace the underlying structure and offer an ordonomic perspective we deem capable of reconciling the controversy that characterizes these debates. To do so, we first distinguish between the economic and the accounting concept of profit, which clarifies some widespread misunderstandings that hinder an objective conversation. Second, we present the various arguments in support and against the profit orientation of companies that have come to dominate debates. Third, we sketch an ordonomic perspective that aims at sublating, that is “aufheben” in the Hegelian sense, the antinomies inherent in these discussions. Finally, we propose a novel way for how to legitimize the entrepreneurial profit orientation of companies in competitive market systems.

Increased competition and scarce public funds have led non-profit organizations to include commercial revenue streams, changing their donation-based models toward more enterprising ones. While research has extensively studied business models in the context of social enterprises, business model changes for traditional non-profit organizations such as non-governmental organizations are not as well understood. The purpose of this paper is to provide novel insights into the adoption of enterprising business models by non-profit organizations. Using an original database of non-governmental organizations, we conclude that, contrary to expectations, mission-oriented organizations are less likely to develop strongly enterprising business models when the dominant logic of the organization’s existing donors is commercial. However, when strongly enterprising business models are adopted, NPOs tend to create separate organizational structures to manage the new commercial logic. Drawing on the business model and hybrid literatures, this research identifies how transitions in business models for the non-profit sector are influenced by dominant logics.

Das ordonomische Forschungsprogramm blickt mittlerweile auf fast drei Jahrzehnte eigener Theoriegeschichte zurück. Bereits in den frühen 1990er Jahren wurden grundlegende Theorieelemente entwickelt. Seit 2006 firmieren diese Elemente unter dem Begriff „Ordonomik“.

Can private companies legitimately regulate sharing markets, and if yes, how? Whereas scholars have either criticized sharing platforms for expanding into private and public arenas or welcomed them to counterbalance encroaching government regulations, studies document their unbridled popularity. On the basis of a special version of social contracts theory pioneered by James Buchanan, we develop a heuristics that helps guide reasoning about the legitimacy of the sharing economy’s regulatory function. First, we discuss the conditions under which free and responsible individuals deliberately subject themselves to rules without their prior direct participation, that is, exit, voice, and constitutional limits. Second, we suggest sharing platforms can use novel ordo-responsibilities to establish a sharing constitution that takes these conditions into account. Third, we argue that sharing platforms can legitimately do so within an enabling institutional environment in society, the provision of which relies on the joint efforts of sharing platforms, political actors, and civil society.

We extend theories of sharing institutions in contexts of strong public institutions to analyze sharing institutions in contexts of weak public institutions. We posit that when weak public institutions suppress mutually beneficial exchange in service, labor and credit markets, sharing institutions can overcome these obstacles by creating trust on sharing markets. Drawing on qualitative data from a ride-sharing platform in Monterrey, Mexico, we find sharing institutions to enable mutually beneficial exchange in service-, credit- and labor-market relationships. First, we provide a fine-grained analysis of how sharing institutions can overcome these trust problems using rules and rule-enforcement mechanisms, including the monitoring, disclosure, and sanctioning mechanisms embedded in payment, feedback, admission and screening, loan financing, and pricing rules. Second, we find risks being associated with a lack of competition on platforms and between platforms, and political elites interfering with sharing institutions in an effort to create rents.

We extend theories of competing institutional logics to include convincing as a new conflict management strategy in hybrid organisations. Relying on longitudinal data of a hybrid organisation of the sharing economy, we find that decoupling, compromising, and combining, while explicitly or implicitly accepting the underlying disagreement, all aggravate most conflict intensities – weak, medium, and strong – while compromising and combining only temporally reconcile strong and weak conflicts, respectively. Convincing strategies, in contrast, view the goals and practices of competing logics as interdependent and deliberately use these interdependencies to transcend – i.e., to go beyond the perceived limits of – a given conflict. We find four mechanisms that facilitate transcend-ing, including (i) developing novel persuasive arguments as to why given practices can promote another logic’s goal, (ii) suggesting a new distinction previously unappreciated that separates controversial from uncontroversial practices, (iii) proposing a novel overarching goal agreeable to a competing logic and (iv) providing an “enabling environment” for open discussions about goal-practice interdependencies. We posit that these mechanisms provide opportunities for competing logics to overcome conflicts and, thus, can make hybrid organisations more enduring, innovative, and sustainable.

The sharing economy is a hotbed of hybridity and sustainability owing to the reduction in transactions costs that create information, trust, and trade. However, the hybridization also challenges the sustainability of sharing business models, a tension often criticized but rarely addressed. This paper identifies and solves three challenges of hybridization. First, we show that there is no deterministic link between organizational missions and sustainability outcomes. This means that not-for-profits or social businesses are not necessarily more sustainable than for-profits. Second, all business models set different default goal priorities, but face the same governance challenge of achieving sustainability. Third, to meet this challenge, all business models can use the same governance strategies of creating value—rule reforms that implement credible commitments to overcome social dilemmas. Understanding and managing these three hybridity challenges are an essential task for the strategic management of sustainable business models in the sharing economy.

In this paper, we argue that antecedents of modern corporate social responsibility (CSR) prior to the Industrial Revolution can be referred to as "proto-CSR" to describe a practice that influenced modern CSR, but which is different from its modern counterparts in form and structure. We develop our argument with the history of miners' guilds in medieval Germany-religious fraternities and secular mutual aid societies. Based on historical data collected by historians and archeologists, we reconstruct a long-term process of pragmatic experimentation with institutions of mutual aid that address social problems in the early mining industry, and thus before the rise of the modern state and the capitalist firm. Co-shaped by economic and political actors, these institutions of mutual aid have influenced the social responsibility programs of early industrialists, modern social welfare legislation, and contemporary CSR. We conjecture that other elements of proto-CSR might have evolved according to similar trajectories.

This paper conceptualizes the sharing economy as a hybrid form of market governance. Using an economic governance perspective, we distinguish two alternative ways how sharing hybrids establish and develop governance for sharing markets. Sharing cooperatives, the ideal-typical form of self-governance of sharing partners, organize consent bottom-up through voice mechanisms. Commercial sharing platforms, the paragons of today’s sharing economy, organize consent top down through exit mechanisms, as governance services to sharing partners. Based on this positive analysis, we argue that the normative analysis should bear in mind that both hybrids provide alternative and potentially valuable forms of serving the needs of sharing partners. As an alternative to interventionism and deregulation, the sharing economy requires a functional framework governance for effective self-regulation–second-order governance –, one which strengthens platform competition as a way to set incentives for commercial platform operators to respond to the feedback provided by sharing partners through exit.

PurposePublic debates on the use of genetically modified organisms (GMOs) are strongly influenced by the nongovernmental organization (NGO)-led advocacy, most of which is harshly critical of genetic engineering. This advocacy has resulted in discourse failures marked by the disregard for the scientific consensus on the risks and benefits of GMOs. This paper aims to present a theoretical inquiry into this phenomenon.Design/methodology/approachDrawing on American institutionalism and Niklas Luhmann social systems theory, the paper explains these discourse failures in terms of the problematic relationship between institutions and technology.FindingsClarence Ayres would likely see these discourse failures as a form of “institutional resistance” to the progress of science and technology. In contrast, Marc Tool’s social value principle stresses the importance of democratic legitimation and public acceptance of new technologies, while being sensitive to the possibility of ideologically biased discourses. It is argued that the institutionalist understanding of the interplay between democracy, science and technology would benefit from a better account of Niklas Luhmann’s concept of “complexity reduction”.Social implicationsThe study shows that some NGOs are powerful enough to actively shape, if not manipulate, public attitudes and sentiments against GMOs.Originality/valueThe case of the anti-GMO advocacy calls for a new conceptualization of how democracy, science and technology fit together.

The literature on nonprofit management has embraced the concept of “accountability” to target urgent challenges related to NGO probity and integrity, and there have been attempts in the literature to use rational-choice-based governance approaches to solve them. Though existing principal-agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the “stakeholder dilemma” between the NGO and a single accountability holder as a one-sided social dilemma and (b) the “competition dilemma” among rival NGOs as many-sided social dilemma. We show that improving NGO accountability in relation to ‘intended’ beneficiaries, peer organizations and the general public also requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.

Drawing on a cybernetic understanding of systems, this paper introduces the broader notion of "second order responsibility" and distinguishes it from a traditional model of responsibility, which, in terms of cybernetics, can be described as "first order responsibility." We regard this concept as being capable of addressing major shortcomings related to the standard concept of individual responsibility without retreating to a rejectionist position, which dismisses the concept of responsibility in modern society at all. Instead of ascribing responsibility to actors, and analyzing it in terms of actors, actions and consequences—which is becoming more and more difficult in light of interdependent and increasingly competitive interactions in modern societies—we propose a perspective that applies responsibility to responsibility itself, i.e. to the process of negotiating the norm of ascribing responsibilities, which, a priori, cannot be taken as universally given in a pluralistic, modern society.

The literature on nonprofit management has embraced the concept of “accountability” to target urgent challenges related to NGO probity and integrity, and there have been attempts in the literature to use rational-choice-based governance approaches to solve them. Although the existing principal–agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the “stakeholder dilemma” between the NGO and a single accountability holder as a one-sided social dilemma and (b) the “competition dilemma” among rival NGOs as a many-sided social dilemma. We show that improving NGO accountability in relation to intended beneficiaries, peer organizations, and the general public also requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.

This chapter compares an applied ethics of philosophical origin with the application of an economic ethics. It outlines the way of an economic ethics conceptualizes both the problem and its solution. Thomas Pogge's approach, which focuses on issues of global justice, is compared to an economic approach to a theory of global ethics, which is based on rational-choice theory and focuses on the institutional framework. The chapter explores the similarities and differences of both approaches with a particular emphasis on those aspects that could be important for learning processes at both the practical and theoretical levels. The philosopher Thomas Pogge is one of the most prominent representatives of a normative approach to global justice. The health problems inherent in the ineffective international market for pharmaceuticals cannot be solved by policy measures applicable to the health sector alone.

This presenter symposium brings together leading scholars in the field of business ethics, corporate social responsibility (CSR) and management history interested in the history of CSR thought and practice. The symposium identifies three major strands of research as particularly important starting points to advance this emerging field of study, the history of CSR thought, historic CSR, and the history of CSR practice. Each of the four presentations of this symposium elaborates on and contributes to one of these research streams and suggests further ways ahead. In the discussion, the presenters and the discussant will facilitate and encourage a debate with other participants and listeners to develop promising avenues for future research.

The literature on nonprofit management has embraced the concept of “accountability” to target urgent challenges related to NGO probity and integrity, and the literature witnessed attempts to use rational- choice-based governance approaches to solve them. Though existing principal-agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the “stakeholder dilemma” between the NGO and a single accountability holder as a one-sided social dilemma and (b) the “competition dilemma” among rival NGOs as many-sided social dilemma. We show that improving NGO accountability in relation to ‘intended’ beneficiaries, peer organizations and the general public requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.