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Throughout its meteoric rise over the last two decades, the field of business ethics has been troubled by a lack of direction and has become, like Alice, entangled in its own logic. Its problem stems from the discordant research methods used to explore ethics. On the one hand, business ethics research can be informed by empirical ideas, that is, by concepts that describe and explain factual states of affairs, such as managerial motivation, organizational accountability structures, and relationships between ethical behavior and financial performance. In other words, it can be informed by the "is" of economic affairs. On the other hand, business ethics research can be informed by normative(1) concepts, that is, by ideas which, although not necessarily grounded in existing business practices and structures, are what ethicists call prescriptive. They guide us to what we should do. In this vein, most philosophers remind us that no amount of empirical accuracy, including an infinite array of facts, can ever by itself add up to an "ought" (Sorley, 1904/1969). To suppose that one can deduce an "ought" from an "is," or, what amounts to the same thing, that one can deduce a normative ethical conclusion from empirical research, is to commit a logical mistake some dub the "naturalistic fallacy" (Moore, 1903/1951: 10-14).
These two approaches to business ethics, which we shall call the empirical and the normative, have produced two powerful streams of business research. During the last 15 years, researchers with philosophical training have introduced purely normative, nonempirical methods to the study of business ethics, just as they introduced them earlier to the fields of legal and medical ethics. In this way, the philosophical tradition of ethical theory has contributed rigor to ongoing discussions of business ethics(Barry, 1982; Bowie, 1988; Donaldson, 1982; Freeman & Gilbert, 1988; French, 1979: Gauthier, 1986; Ladd, 1970; May, 1987; Nickel, 1974; Sen, 1985; Shue, 1981).
Meanwhile, using the alternative perspective, business school researchers with training in empirical methods have applied their techniques (often adapted from existing approaches in marketing, finance, and elsewhere) to study important issues in corporate and organizational ethics (Akaah & Riordan, 1989; Cochran & Wood, 1984: Fritzsche & Becker, 1984: Hunt, Wood, & Chonko, 1989: Trevino & Youngblood, 1990: see particularly Randall & Gibson, 1990, and sources...