Contrasting the Behavioural Business Ethics Approach and the Institutional Economic Approach to Business Ethics: Insights from the Study of Quaker Employers

The chapter suggests that in a modern context, where value pluralism is a prevailing and possibly even ethically desirable interaction condition, institutional economics provides a more viable business ethics than behavioural business ethics, such as Kantiansim or religious ethics. The chapter explains how the institutional economic approach to business ethics analyses morality with regard to an interaction process, and favours non-behavioural, situational intervention with incentive structures and with capital exchange. The chapter argues that this approach may have to be prioritised over behavioural business ethics which tends to analyse morality at the level of the individual and which favours behavioural intervention with the individual’s value, norm and belief system, e.g. through ethical pedagogy. Quaker ethics is taken as an example of behavioural ethics. The chapter concludes that through the conceptual grounding of behavioural ethics in the economic approach, theoretical and practical limitations of behavioural ethics as encountered in a modern context can be relaxed. Probably only then can behavioural ethics still contribute to raising moral standards in interactions amongst the members (stakeholders) of a single firm, and equally, amongst (the stakeholders of) different firms.