ETHICAL RELATIVISM: A REASON FOR DIFFERENCES IN CORPORATE SOCIAL REPORTING?

( )Critical Perspectives on Accounting 1999 10, 521]547Article No. cpac.1998.0280Available online at http://www.idealibrary.com on

ETHICAL RELATIVISM: A REASON FORDIFFERENCES IN CORPORATE SOCIAL

REPORTING?

LINDA LEWISU AND JEFFREY UNERMAN†

U Sheffield University Management School, Sheffield, UK and †TheManagement Centre, King’s College, University of London, UK

( )Much research into corporate social reporting CSR studies how organi-sations might account for their positive and negative impacts on society.Implicit in many such studies is an understanding of what members of

( ) ( )society regard as positive or good and negative or bad . A keyquestion in moral philosophy is whether ethical rules which determinewhat is good and bad are absolute, or vary relative to cultural differ-ences or individual beliefs. If ethics are relative then what is consideredgood at a particular point in time by one society, individual or stake-holder group might not be regarded as good at other times or by othersocieties, individuals or stakeholder groups, and CSR that addressesthese moral values will similarly vary.

This paper argues in favour of a reasoned form of relativism. While itdoes not maintain that ethical relativism is the only possible cause ofdifferences in CSR practices, it contends that relativism could be animportant cause of such differences and attempts to make explicit thearguments about what is regarded as good and bad in society as adetermining influence on CSR and as a way of raising the moral debateon the subject.

1999 Academic PressQ

Introduction

( )Views on the role of corporate social reporting CSR range from thenotion that managers actively seek to fulfil the obligations imposedupon their organisation by its social contract, with CSR being used todischarge the duty of accountability in reporting to stakeholders the

Address for Correspondence: Linda Lewis, Sheffield University Management School, 9Mappin Street, Sheffield S1 4DT, UK. e-mail: [email protected]

Received 4 June 1997; accepted 12 July 1998

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L. Lewis and J. Unerman522

( ) ( )positive or good and negative or bad effects on society arising from( )the organisation’s operations Ramanathan, 1976; Gray et al., 1988 ,

through to the view that managers in practice ignore any social obliga-tions while attempting to construct in key stakeholders’ minds a poten-

( )tially false reality Hines, 1988 that the organisation has operated in away these key stakeholders will regard as good. Implicit in the formerview is the idea that managers intend to behave in a socially responsi-ble manner and use CSR to accurately reflect the social impact of theirorganisation’s operations, while implicit in the latter view is the notionthat managers do not necessarily behave as key stakeholders or thewider society expects, yet try to legitimise their behaviour by using CSRto portray a socially responsible image irrespective of actual behaviour( )Lindblom, 1994, as cited in Gray et al., 1995 .

(Whichever view is more valid, accomplishing either of these roles or)any intermediate role requires an understanding of what either key

stakeholders or society as a whole regards as good or bad. To identifytheir social contractual obligations, managers of organisations who in-tend to fulfil their social contract need to understand what is regardedas good and bad in the society in which they operate, while managerswho in practice ignore their social contractual obligations need to under-

( )stand what their dominant stakeholders Ullmann, 1985 regard as rightand wrong in order to address their legitimation strategies to thesevalues. Moral philosophy, or ethics, is concerned with understandingwhat determines whether something is good or bad, right or wrong.CSR can therefore be considered to be grounded in ethics, as withoutthe understanding moral philosophy gives us about what is right andwrong, managers would not know in what respects the impacts of their

( )organisation real or illusory were regarded as good or bad. Arguably,without such insight the resulting CSR would lack direction and purpose.

( )In summarising some of the literature on CSR, Gray et al. 1995 findinter alia that the nature and volume of CSR tends to vary both overtime and between different countries, with the issues considered impor-tant in one country, or at one particular point in time, being regardedas less important in other countries or at other periods. Gray et al. alsopoint to a lack of theoretical explanations in the literature for suchvariations. This paper propounds a possible explanation based on ethicalrelativism for such inter-temporal and inter-cultural variations in CSR.

At a very broad level the study of ethics can be divided into twobranches. One of these branches, normative ethics, involves establishingrules for determining whether particular behaviour is right or wrong,and is therefore concerned with giving guidance as to how an individual

( )should behave in various circumstances Singer, 1993a . The otherbranch, meta-ethics, is concerned with ‘‘ the philosophical study of the

( )nature of moral judgement’’ Harrison, 1995, p. 555 . Rather than at-tempting to determine whether particular behaviour is right or wrong,meta-ethics analyses inter alia what the terms ‘right’ and ‘wrong’ mean.Such an analysis includes examination of whether these terms Bhavean absolute, invariant meaning, or whether the meaning ascribed to

Ethical relativism 523

them varies. If the former is the case then ethical values against whichjudgements are made might be objective, but if the latter is the casethen ethical judgements must be inherently subjective as the values andstandards against which behaviour is judged are themselves normative.

Alternatively, if the meaning of the terms ‘right’ and ‘wrong’ is( )invariant and objective or possibly universally intersubjective , broad

(normative ethical principles developed to guide our actions so we do)right and refrain from doing wrong might apply universally across all

individuals and societies1, as well as inter-temporally. However, even ifwe all agree that something is right or desirable and something else iswrong or undesirable, the detailed procedures developed by one individ-ual or society at a particular point in time to achieve desirable out-comes, or to avoid undesirable ones, might vary from those developedby other individuals or societies, or by the same individual or society atdifferent times.

If the meaning of ‘right’ and ‘wrong’ is variable and subjective, or thedetailed procedures aimed at achieving right and avoiding wrong varyrelative to different individuals, societies or times, rules and procedures

(regarded as ethical at a particular point in time in one society or by) (one individual might not be so regarded by another society or individ-

) ( )ual at the same point in time, or by the same society or individual ata different point in time. To the extent that CSR is a response bycompanies to the ethical concerns and anxieties of either their keystakeholders or society in general, ethical relativism has important rami-fications for CSR as the moral concerns and anxieties manifest within aparticular society or stakeholder group at one point in time may validlyvary from those of other societies/stakeholder groups or other times.Thus, if ethics are relative then CSR that is appropriate for one societyor stakeholder group at one point in time might not be appropriate forother societies/stakeholder groups or other times2.

We do not seek to establish in this paper that ethical relativism is theonly cause of differences in CSR, as we believe that other factors such

( )as cultural relativism Hofstede, 1983; Mathews, 1993 also play animportant role. Indeed, as discussed below, we believe the social andcultural experiences of each individual are an important factor in shap-ing that individual’s personal ethical beliefs, with one explanation formany individuals believing in the objectivity of their own personal moralvalues being that they fail to see that others have experienced life verydifferently from themselves, and therefore what they believe to beobjective is only one of many possible and equally valid ways ofexperiencing life. An acceptance of ethical relativism leads to the conclu-sion both that CSR which addresses ethical values will vary in practicebetween different corporations as the ethical values of their key stake-holders vary, and that ethical values driving CSR are not the onlypossible values, thus freeing us from the limits of ‘accepted’ ethical


values and enabling us to focus on designing CSR to meet other,possibly radically different, values.

In the first section of this paper we link CSR practices to ethicalvalues through a discussion of the use of corporate reporting in general,and CSR in particular, in corporate legitimation strategies. We argue thatbecause much CSR is non-mandatory it is more likely to reflect specificand changing ethical values facing a corporation than are reflected bymandatory disclosures over which corporations have less discretion, andwe point to some evidence from the literature demonstrating that CSRis influenced by cultural and social factors. In the second section wedraw on literature from moral philosophy to reject the idea that ethicalvalues are absolute and objective, and also to reject extreme relativismwhich would imply that no behaviour can ever be judged morallywrong. Instead, in the third section, we argue for a more moderateform of relativism based on well reasoned arguments in the form ofuniversal prescriptivism. This holds any person’s moral values to beright if that person has arrived at these values through a process ofreasoning and believes these values should prescribe the behaviourrequired by all other people in society who might become faced with an

(identical situation and the behaviour required of themselves in thegiven circumstances if they were in the position of any other person in

)society . Universal prescriptivism tends to view extreme antisocial be-haviour as universally immoral, while admitting the possibility that manyforms of behaviour will be validly regarded as morally right in somesocieties, or to some individuals, while being regarded as morally wrongin other societies or to other individuals. In the fourth section wediscuss whether ethical values are likely to be homogenous or heteroge-neous within a particular society at a particular point in time. Following

( )Habermas 1983 , we maintain that moral values can only gain intersub-jective validity across all members of a society if they have beenagreed upon by all who are affected by them engaging in active debate,observing the procedures of an Ideal Speech Community. However, wedo not believe that such debates have been used in practice to arrive atmany norms of corporate social responsibility. Instead, we argue thatwhile in practice the broad ethical principles held by a particular societyare likely to depend upon shared social and cultural backgrounds of themembers of that society and are therefore likely to gain intersubjectiveagreement, there may be disagreement between individuals within thesociety regarding the morality of specific behaviour even where individu-als within their respective societies have arrived at their judgements onspecific moral codes following a reasoned process of universal prescrip-tivism. In these circumstances, the relative power of different stakeholdergroups is likely to determine which detailed moral codes are addressedby a particular corporation’s legitimation strategies. The final section ofthe paper draws some conclusions as a basis for research into specificdisclosure practices in different countries.


CSR and Ethical Values

Linking Corporate Reporting to Moral Values via Legitimation

Many researchers have claimed a key role of corporate reporting is to(legitimise the actions of the corporation see, for example: Gambling,

1977; Ullmann, 1985; Richardson, 1987; Gray et al., 1988; Roberts, 1992;)Schweiker, 1993; Aerts, 1994; Adams et al., 1995; Gray et al., 1995 .

( )Lindblom 1994 defines organisational legitimacy as:

‘‘a condition or status which exists when an entity’s value system iscongruent with the value system of the larger social system of whichthe entity is a part. When a disparity, actual or potential, exists betweenthe two value systems, there is a threat to the entity’s legitimacy’’( )Lindblom, 1994, p. 2 as quoted in Gray et al., 1995, p. 54 .

Lindblom outlines four broad legitimation strategies which can beadopted by companies in situations where their actual behaviour di-verges from that expected by their key stakeholders. The first of thesestrategies is for the company to change its actual behaviour so itsbehaviour conforms with the expectations of its key stakeholders, andthen to inform these stakeholders about this change in behaviour. Thesecond is for the company not to change its actual behaviour while atthe same time trying to convince its key stakeholders through discourseand socially constructed ‘knowledge’ that it has changed its behaviour.The third strategy is for the company not to change its behaviour, notto try to convince its stakeholders that it has changed its behaviour, butto redirect the attention of key stakeholders onto other aspects of thecompany’s operations which managers believe these key stakeholderswill regard as positive. The final legitimation strategy is for the com-pany to try to change its key stakeholders’ expectations so these revisedexpectations match the company’s actual unchanged behaviour, withdiscourse being used as a tool in attempting to change expectations.Corporate reporting has a role to play in each of these strategies asthey all involve discourse, and a company’s annual corporate report isoften regarded by external stakeholders as a highly credible form of

( )discourse Tilt, 1994 .We do not seek to discuss the validity of legitimacy theory as we

believe that all CSR will, by definition, conform to at least one of theabove strategies. Managers who are behaving in a socially responsiblemanner and using CSR to discharge their duty of accountability will beadopting the first of the above strategies, while managers who areignoring their social contractual duties but still practising CSR will beusing at least one of the three other legitimation strategies. As all ofthese legitimation strategies address the expectations of some stake-

(holders, it follows that all CSR will address such expectations Ullmann,)1985; Roberts, 1992 and will be influenced to an extent by changes in


( )expectations, even if, as described by Gray et al. 1997 , the resultant( )CSR is nothing more than ‘‘an organization-centred legitimacy’’ p. 333 .

While stakeholder expectations addressed by these legitimation strate-( )gies can be of many types, Richardson 1987 sees a key role of

corporate reporting in legitimation being the demonstration of how acompany’s actions have fulfilled moral values3. As discussed furtherbelow, depending upon the theoretical perspective taken, these moralvalues can be regarded as either homogenous or heterogeneous acrossindividuals within a particular society at a particular point in time. Tothe extent that legitimation strategies address stakeholders’ moral expec-tations, successful implementation of any legitimation strategy will in-volve addressing the current values of either the society in which abusiness operates, or the business’s dominant stakeholder groups. If,because of ethical relativism, such values vary both between differentstakeholder groups or societies, and over time, then the focus of legiti-mation, and the form and content of corporate reporting used to sup-port such legitimation, can also be expected to vary in this manner.Conversely, if ethical values are absolute, then the moral expectations ofall stakeholders in all societies at all times will be identical, and thereshould be no inter-cultural or inter-temporal differences in CSR due tochanges in moral values. Yet various papers have shown how changesin corporate reporting can arise from changes in society’s values, priori-

(ties or culture see, for example: Burchell et al., 1985; Gray, 1988; Hines,)1988; Francis, 1990; Neu, 1992 . In contrast, others, notably Adams et al.

( )1998 , allude not so much to changes in ethical and cultural values, but(to differences in CSR practices between ‘societies’ or more specifically,

)European countries which in some instances they suggest to be a( )product of a society’s history of interest in a particular issue p. 16 . In

practice, continued societal involvement in the issue thus influences thefocus of CSR disclosure. Many of the papers cited make no specificreference to ethical values, but we believe their examples of varyingCSR practices, when combined with Richardson’s argument that cor-porate reporting is used to fulfil stakeholders’ expectations of moralvalues, provides support for our belief that ethical values are not abso-lute. The problem lies in how moral values are determined or becomeinculcated in society and how they might then influence and explaincorporate reporting practices.

Mandatory v. Voluntary Disclosures and Differing Moral Values

Corporate reporting involves both mandatory and voluntary disclosures.While the rules governing mandatory disclosures evolve and vary

( )between different societies Nobes & Parker, 1995 , these disclosures arebased on explicit legal and quasi-legal requirements. Although legal andquasi-legal rules might be derived, at least in part, from the moralvalues of the society in which they have been enacted, they tend to lag

( )behind any changes in that society’s moral values Stone, 1975 and to


( )be a poor measure of such values Gray et al., 1988 . Thus, differencesbetween the mandatory corporate reporting of companies in differentcountries are not necessarily indicative of current differences in moralvalues between these countries. Furthermore, as companies have, bydefinition, less discretion over mandatory disclosures than voluntary dis-closures, they have less scope for actively using such disclosures selec-tively in their individual legitimation strategies.

As there are few, if any, legal or quasi-legal rules governing mostvoluntary disclosures, companies are much freer to selectively use thesedisclosures in their legitimation strategies, with research indicating thatin practice companies tend to selectively use voluntary disclosures to

( )portray a positive image Deegan & Rankin, 1996 . To the extent thatsuch legitimation strategies address the ethical values either of thesociety in which each company operates or of its key stakeholders,voluntary corporate disclosures will vary relative to any variations in

(these ethical values both between different societies or key stakeholder)groups and over time.

( )As there is very little regulation governing CSR Gray et al., 1988 , itcomprises mostly voluntary disclosures which companies can use selec-tively in the implementation of their legitimation strategies. Inasmuch asthese strategies address the values of a company’s key stakeholders( )Richardson, 1987 , CSR can be expected to vary much more than otherelements of corporate reporting when variations in such values arise.

However, we are not arguing that differences in ethical values arenecessarily the only key factor influencing differences in CSR. We recog-

(nise that other factors, such as differences in culture Hofstede, 1983;)Gray, 1988; Mathews, 1993 , might play an important part in shaping the

CSR practices of corporations in particular societies at particular times.Indeed, as we discuss below, cultural variables are an important factorin establishing moral views within a particular society at a particularpoint in time and differences in cultural variables will, to a certainextent, lead to some differences in accepted moral values held by a

( )particular society or individual Hare, 1993 . But cultural relativism is notsufficient to explain all differences in ethical expectations faced by cor-porations. Even though individuals within a society may have beenexposed to similar broad cultural experiences, detailed moral codes arenot always homogenous across all individuals within particular societies.This can be seen by differences, for example, between those in Westernmarket economies who believe in the moral superiority of free markets( )Friedman, 1962 and others who believe that unrestrained free markets

( )lead to immoral outcomes Hutton, 1996 , or by differences which canbe observed in moral views between different individuals within a partic-ular society on matters such as racial and sexual equality, ecological

(protection, and/or animal rights Henderson, 1991; Burritt & Lehman,)1995; Unerman, 1996; Hammond, 1997 . In practice, it is possible that

there could be a reflexive relationship between the development ofcultural variables and ethical values.


Social and Cultural Influences on CSR

( )Mathews 1993 identifies a wide variety of influences on accounting ingeneral and CSR in particular. Several of these influences in any individ-ual country are likely in some way to have resulted from ideas of whatis right and what is wrong. For example, many of the social values will

( )differ between societies Hofstede, 1983 , and no society is likely toadopt societal values it considers morally wrong. Similarly, the shape of

( )many of the ‘‘institutional consequences’’ Mathews, 1993, p. 38 arelikely to be influenced to some extent by what is regarded as morallyright and wrong within each country. However, these notions of what isright and wrong may well have been disproportionately influenced by

( )4dominant vested interests Mouck, 1994 , with the resulting ‘values’ignoring the views of many in a particular society.

Empirically, various studies have indicated how CSR in a particular(country changes over time see, for example: Burchell et al., 1985; Tinker

et al., 1991; Gray et al., 1995, and in particular see Gray et al., 1996 Fig.4.8 for a summary of several changes in CSR in different countries from

)the 1960s to the 1990s . Some of these studies link such developments( )to changes in social and cultural values. Burchell et al. 1985 show how

( )interest in value added statements a form of CSR grew and declinedwhen the relative power of different social groups changed and when

( )the interests of these groups changed. Gray et al. 1995 trace changesin the volume and content of CSR in the UK from 1979 to 1991 andlink these changes in CSR to changes in socio-political variables. Simi-

( )larly, Tinker et al. 1991 summarise a longitudinal study into the annualreports of General Motors in the US, covering a 60 year period, whichshows the changing ‘‘conflictual and antagonistic situations that em-broiled GM over that period, and the way the firm’s reports were used

( )to modify and ameliorate these conflicts’’ p. 39 .As evidence of some members of society articulating and enacting

financially their changing ethical values, there was a rise in ethical( )investment during the 1980s Harte et al., 1991 . In looking at ethical

( )investment in the UK, Harte et al. 1996 identify that the amount ofsuch investment has subsequently quadrupled over a five year period.They link this factor to an increasing interest in environmentalism whichhas implications for the type of information exemplified by corporatesocial disclosures. This might indicate a possible shift in notions held bymany in the UK of what is ethically correct with fewer people willing toinvest their capital in companies which exploit the environment just to

( )make higher, short-term, profits. Similarly, Unerman 1996 argues thatthere has recently been an increase in participation in single issue,direct action politics by a wide range of people in the UK, and this maybe indicative of a change in moral values which companies will need tobe aware of if the purpose of their CSR is legitimation.

The above evidence indicates that CSR does tend to vary both betweendifferent societies and over time. While there may be more than onefactor which would explain such variations, if CSR is being used in


corporate legitimation strategies which address what key stakeholdersregard as good or bad, differences in ethical values will constitute animportant explanation of such variations. Some managers may be actingin accordance with their organisation’s social contract, and using CSR inthe discharge of their duty of accountability by informing stakeholdersabout the socially good and bad outcomes of their activities, whereasothers may be ignoring their social contractual duties and using CSR tocreate a reality in the minds of key stakeholders that the organisation is

(fulfilling its moral duties irrespective of its actual behaviour Wiseman,)1982; Rockness, 1985; Hines, 1988 . Whatever the legitimation strategy,

managers need to understand what is regarded as good or bad byeither society as a whole, or by their key stakeholders, in order toeither target their behaviour or target their CSR.

Ethical Relativism

Public debate about whether ethical values are relative or absolute tendsto be dominated by emotive arguments drawing on the apparent unde-sirability of taking the opposite extreme to the one being argued for.Ethical absolutists argue that moral values have to be absolute becausethe opposite position of ethical relativism means that any behaviour ismorally acceptable and thus society cannot condemn any behaviour asimmoral, no matter how extreme such behaviour is. These argumentsmight focus, for example, on apparently universally held views thatbehaviour such as genocide is immoral and assert that as ethical rela-tivism implies any behaviour is morally right if the people carrying itout regard it as so, then others cannot morally censure the behaviourof those carrying out the genocide. Casual observation shows that

( )opinion formers such as politicians and religious leaders in the UKoften seem to partially justify their policies on the grounds that otherpolicies imply ethical values are relative and these other policies musttherefore be wrong. There thus appears to be an unquestioned assump-tion among these opinion formers that ethical values are absolute andanyone arguing in favour of any form of ethical relativism is quitesimply wrong. By frequently publicly stating that ethical relativism iswrong, and deriding anyone who argues in favour of a relativistic

(position although never giving any reasoned explanation as to why)relativism is wrong these opinion formers may reinforce views among

members of society that moral values are absolute. Indeed, as theobjectivity of moral values is such a strong underlying assumption ofmuch of the moral philosophy and guidance that most people havebeen exposed to for most of their lives, many people are socialised into

( )strongly believing in absolute ethical values Mackie, 1977 . It is perhapsunderstandable that many of us humans, whose perspective on life andsociety is conditioned by our necessarily relatively narrow life experi-ences, may come to the conclusion that life is lived as we havepersonally experienced it, and therefore the specific moral codes we


believe in, and which help to ensure that ‘our world’ functions in themanner we have become accustomed to, are the only possible correctmoral codes that should govern the lives of all other humans. In thesecircumstances a realisation that ‘our’ moral values are not objective and

( )absolute might result in very uncomfortable feelings Mackie, 1977 , but‘uncomfortable feelings’ are not a good enough reason for rejecting thevalidity of ethical relativism.

In contrast to the absolutist position, ethical relativists might arguethat moral values have to be regarded as relative because the oppositeposition of ethical absolutism implies that we have the right to judgepeople in other societies against our own moral values, thereby impos-ing our moral codes on others. Equally those in other societies have theright to impose their moral codes on us. As empirical evidence hasshown that moral values do tend to differ between different societies( )Beauchamp & Bowie, 1983; Billington, 1993; Wong, 1993 , ethical abso-lutism must imply that many societies adopt moral values that arewrong. For example, while many societies may regard polygamy as

(immoral, in a society experiencing a severe shortage of men possibly)due to the men continually fighting and killing each other polygamy

will probably be regarded as morally correct because without polygamyit is likely that insufficient children will be born, thus endangering future

( )survival of the society Wong, 1993 . Ethical absolutists in a monoga-mous society will simply hold the behaviour of the polygamous societyto be morally wrong because it is different from the behaviour that ismorally acceptable within their own limited and narrow life experiences,even though such behaviour is necessary to ensure the continuation ofthe polygamous society. The ethical absolutists thus seem unable to freethemselves from the horizons of their own narrow world and acceptthat others experience the world in a very different, but equally real andvalid, way. In contrast to this absolutist position, ethical relativists might

( )argue that as we cannot objectively know which moral values if anyare right and which are wrong, trying to impose the moral values of

(one society or one individual on another society or individual thereby)implying that the other society’s or individual’s values are wrong is

somewhat offensive. Extreme ethical relativists will contend that if it isnot possible to objectively know the rightness and wrongness of moralvalues, and as these values do vary between different societies, allethical values must be valid.

In this paper we maintain that these extreme positions are far toosimplistic. It is very easy to attempt to demolish an opposing view bypointing out the absurdity of the ramifications likely to flow from takingan extreme position, but just because the outcomes of extreme rela-tivism seem unacceptable this does not preclude a more reasoned form5

of relativism being valid. While we reject ethical absolutism, we certainlydo not accept the extreme relativist position as we believe certain

(behaviour such as the Nazi Holocaust, and discrimination based onrace, sex, age, religion, physical ability, mental ability or sexual orienta-tion}other than in circumstances where a particular attribute is abso-


)lutely essential will be considered immoral by all people who engage inthe reasoned processes of moral evaluation we outline below, andtherefore can never be considered morally right. Instead, we argue infavour of the method of universal prescriptivism to identify both be-

(haviour which can never be considered morally right in any society andthe wrongness of which must therefore be regarded as an intersubjec-

)tive ethical absolute and behaviour which can validly be regarded asmorally right by one society or by one individual while being regardedas morally wrong by another society or individual. But first we set outsome arguments for and against the objectivity of the meaning of theterms ‘right’ and ‘wrong’, as without the ability to know any objectivemeanings of these terms it is difficult to see how ethical values can beregarded as absolutely right or absolutely wrong.

The Objectivity of ‘Right’ and ‘Wrong’

At the level of normative ethics, anthropologists have identified thatmorally acceptable behaviour varies between different societies( )Beauchamp & Bowie, 1983; Billington, 1993; Wong, 1993 , and casualobservation also indicates significant differences between, for example,

(accepted behaviour in Western and Islamic countries. Indeed, Gray 1990,)p. 18 states ‘‘ there is an infinite range of ‘moral’ positions’’ from inter

alia libertarian free market philosophies through to Islamic moral beliefs.Faced with such empirical differences it might be tempting to jump tothe conclusion that ethical values must be subjective. However, justbecause one society has an understanding of the meaning of what is‘right’ and what is ‘wrong’ which differs from that of another societydoes not necessarily indicate that these terms have no objective invari-ant meaning. Meta-ethical absolutists might argue instead that one orboth societies are simply mistaken in their understanding of the objec-

( )tive and correct meaning of ‘right’ and ‘wrong’ Mackie, 1977 .Conversely, meta-ethical subjectivists would argue that even if certain

behaviour is universally accepted to be right or wrong, such universality(might result from intersubjective agreement rather than objectivity Mac-

)kie, 1977 . Subjectivists believe that all moral value statements are(merely expressions of ‘‘personal desires or feelings’’ Rachels, 1993, p.

) 6432 and as such cannot be objectively either true or false . This is notthe same as holding the nihilistic view that nothing is right or wrongand therefore any behaviour is acceptable no matter how extreme andanti-social it may be. Rather, in more reasoned forms of subjectivism,moral values are considered to be right if the person arguing in favourof them has arrived at their ‘‘personal desires or feelings’’ through a

( )process of careful and impartial reasoning Rachels, 1993 . If this is thecase, then they will be able to defend their understanding of what isright and what is wrong, although this understanding might be differentto the understanding arrived at by others who have also engaged in aprocess of careful and impartial reasoning. Thus, from a reasoned sub-


jectivist viewpoint, while moral values are subjective and variant betweenindividuals, more extreme and anti-social views are unlikely to be heldas ‘right’ given that any impartial reasoning process should result inthem being rejected. As perceptions and processes of reasoning arelikely to be influenced by socialisation processes, the impartial reasoningprocesses engaged in by different members of one society might bevery similar, resulting in most members of that society holding similar

(understandings of what constitutes ‘right’ and ‘wrong’ behaviour Hare,)1993 . However, these meanings might be very different to those arrived

at by members of other societies.Another key argument against the objectivity of moral values is known

as the argument from queerness, which is that if there were objectivemeanings to ethical terms such as ‘right’ and ‘wrong’, then to come toknow these meanings would require sensory perception quite different tothe sensory perception required to come to know other objective pheno-

( )mena Mackie, 1977 . In other words, our sensory abilities equip most ofus with the ability to directly feel heat, hear sounds, see images, tasteflavours and feel pain. Through these direct senses we can experience

(most, if not all, objective phenomena although our individual judge-ments regarding whether these experiences are good or bad might bemediated by reasoning if epistemological processes are taken to be

( ))rationalist rather than empiricist Burrell & Morgan, 1979 . However,direct knowledge of any objective meaning of the terms ‘right’ and‘wrong’ would require sensory abilities very different to the five listedabove:

‘‘If there were objective values, then they would be entities or qualitiesor relations of a very strange sort, utterly different from anything else inthe universe. Correspondingly, if we were aware of them, it would haveto be by some special faculty of moral perception or intuition, utterly

(different from our ordinary ways of knowing everything else’’. Mackie,)1977, p. 38 .

(Conversely, ethical realists who believe that ethical values and judge-)ments can be objective, or ‘ true’ believe we gain knowledge of these

(objective moral facts through discourse and moral reflection Smith,)1993 . Ethical intuitionists also believe in the existence of objective

moral facts, but unlike ethical realists, they believe that we come toknow these objective facts through intuition, which ‘‘seems to suggestthat we have a moral faculty which reveals moral truth to us in muchthe same sort of way that our eyes reveal truths about our surround-

( )ings’’ Dancy, 1993, p. 412 . A key problem with this intuitionist episte-mological view is evinced by the argument from queerness, that it issomewhat difficult to conceive of how this mechanism of intuitive per-ception would work so as to give us a correct understanding of thetrue meanings of objective moral facts. Without an explanation of howintuition brings about a true knowledge of moral facts, it is not possibleto judge which person’s understanding of moral truths is correct whentwo people have a different intuitive understanding of moral truths


( ) ( )Dancy, 1993 . Hare 1993 argues that even if intuitionism is valid,many moral values are still likely to be relative given that the moral

( )intuitions or convictions of members of a particular society are likelyto be influenced by common experiences, and these experiences arelikely to vary between different societies.

The above arguments indicate that it is not possible to know anyobjective meaning of the terms ‘right’ and ‘wrong’. Even if they dohave an objective meaning. if it is not possible to know what thismeaning is, interpretations of right and wrong must be subjective irre-spective of any certainty a person might feel about the correctness of

( )their understanding of the meaning of these terms Billington, 1993 . Ifunderstanding of what constitutes a morally right value and what consti-tutes a morally wrong value is subjective, then it is not possible tovalidly argue that any particular moral value is absolutely right orwrong. In our opinion, as it is not possible to validly argue for suchabsolute meanings, the ethical absolutist position is itself invalid andethics must be, to some extent, relative. The moral philosophy literatureconcerning meta-ethical relativism, however, goes beyond the questionof whether the terms ‘right’ and ‘wrong’ can have any objectivelyknowable meaning and some arguments from the literature which seemrelevant to this paper are discussed below.

Meta-ethical Relativism

Analogous to the subjectivist view, the meta-ethical relativist view canbe summed up as ‘‘moral truth is nothing other than internal cultural

( )consensus’’ Donaldson, 1989, p. 13 . This implies that there are noethical rules which apply universally, and therefore each individual may

(live by their own moral code although the moral codes of mostindividuals within a particular society should be similar as they will

( ))probably share a common cultural experience Hare, 1993 . Philosopherswho argue in favour of meta-ethical relativism tend to advance subjec-tivist type arguments that ‘‘rightness is contingent on individual orcultural beliefs and that the concepts of rightness and wrongness aretherefore meaningless apart from the specific contexts in which they

( )arise’’ Beauchamp & Bowie, 1983, p. 11 . What is considered morally( )right in one society or even by one individual is determined by that

( ) (society’s or individual’s socialised beliefs and another society or indi-)vidual with different cultural experiences may well hold a different, but

equally valid, view of what constitutes right or wrong.( )Wong 1993 identifies the following main arguments which have been

advanced in support of meta-ethical relativism along with counter argu-ments which support the opposite position of the existence of universal,or absolute, moral values.

Firstly, concepts of what is ‘good’ or ‘bad’ in any one society aredetermined by the behaviour that is required of individuals in order tosustain that society’s specific needs, institutions, environmental and so-


cial conditions and other functional characteristics, which might be dif-ferent from such characteristics in other societies. If this is the case,then what is taken to be morally acceptable behaviour in one society

[ ]may not be acceptable in another society as ‘‘ d isagreement aboutmoral codes seems to reflect people’s adherence to and participation in

( )different ways of life’’ Mackie, 1977, p. 36 . Thus, if capitalism is one ofthe key institutions of a particular society and corporate social responsi-bility is seen as a challenge to capitalism, corporate social responsibility

(is likely to be regarded as morally wrong in that society or ‘‘a funda-( ))mentally subversive doctrine’’ Friedman, 1962, p. 133 and CSR will be

unnecessary7. However, arguing that any behaviour is morally acceptableif it serves to maintain the key structures of a society ignores thepossibility that following a process of reasoned ethical reflection these

(structures may, in themselves, be judged as morally unacceptable or as)leading to morally unacceptable outcomes . For example, because racist

beliefs were necessary to sustain the former apartheid society in SouthAfrica does not make such racist beliefs morally acceptable, even if theywere held by many in South Africa at the time.

Secondly, as discussed above, anthropological studies have shown thatmany societies do appear in practice to adopt different moral rules fromthose adopted in other societies. However, just because different soci-eties adopt different rules does not in itself mean that one society’smoral rules are not superior to those of another society. ‘‘Diversity inbelief, after all, may result from varying degrees of wisdom. Or it maybe that different people have their own limited perspectives of the truth,

( )each perspective being distorted in its own way’’ Wong, 1993, p. 444 .If this is the case, then any moral rules developed by a society thateither has more wisdom than others, or has the broadest possibleperspective on the ‘ truth’, may be superior to the moral rules adoptedby other less wise societies. One practical difficulty with this argumentis that it is likely to be almost impossible in practice to gain acceptancefrom any society that another society has greater wisdom about whatconstitutes moral truth.

Thirdly, in practice there appears to be a fundamental difference inmoral traditions and beliefs between Western societies, which tend tofocus on the rights of individuals, and the moral traditions and beliefsof many other societies in many parts of the world which tend to focuson ‘‘ the central value of a common good that consists in a certain sort

[ ] (of ideal community life and a network of relationships’’ Wong, 1993,)p. 445 . Each of these fundamentally different traditions leads to radi-

cally different moral values and behaviour, and it is difficult for ethicalabsolutists to argue that one of these traditions is objectively morallyright while the other is objectively morally wrong as ‘‘each type focuseson a good that may reasonably occupy the centre of an ethical ideal for

( )human life’’ p. 446 .The final argument Wong advances in favour of ethical relativism is

drawn from the idea that moral values are developed by societies toharmonise the interactions between members of society and to set rules


to help prevent and resolve conflicts. While this may be a commonbasic purpose behind all societies developing moral rules, it is alsolikely that different societies have different priorities and place differentvalues on particular social goods. It is therefore highly likely that thedetailed moral rules developed by each isolated society will differ fromthose developed by other societies, while the basic purpose of moral

( )rules might be common to all societies. Mackie 1977 points out thatsuch an argument implies that while some very broad and generalmoral principles might be universal, any detailed moral codes derivedfrom such general principles are, at best, ‘‘only derivatively and contin-

( )gently’’ p. 37 universal, and in many instances will be relative. How-ever, he argues that in practice most people judge ‘rightness’ and‘wrongness’ of specific behaviour based on what they think about thebehaviour itself without consideration of the morality of underlying broadgeneral principles. Accordingly, even if some very broad general moralprinciples could be demonstrated to be universal, these broad moralprinciples might not guide day-to-day ethically motivated behaviour.

While some of the above arguments advanced in support of ethical(relativism have absolutist counter arguments and it seems a matter of

)opinion whether the relativist or absolutist argument is the stronger , thethird argument seems to have no absolutist defence. Having advanced

( )these arguments and counter arguments, Wong 1993 concludes thatthere are no universal moral truths while at the same time admittingthe possibility that not all moral standards are equally acceptable. Al-though certain types of behaviour are unlikely to ever be regarded asmorally acceptable in any society at any time, within the sphere ofacceptable behaviour many different moral codes can be equally valid.This is evident, and further supports ethical relativism, when differencesin ethical values between individuals in the same society are observed.For example, while some people within a particular society at a particu-

(lar point in time might accept the moral validity of capitalism Friedman,)1962 , others might reject this view and believe instead in the morality

( )of Marxism Fisk, 1980 . Similarly, differences have been identifiedbetween the moral values held by different members of the samesociety at the same point of time in relation to a number of issues,such as racial equality, sexual equality, animal rights and the environ-

(mental impact of human economic activity Adams et al., 1995; Unerman,)1996; Hammond, 1997 . This is analogous to the implications of univer-

sal prescriptivism, discussed below.

Postmodernist Accounting Literature and Relativism

Much non-positivist accounting literature adopts a methodological frame-work drawing on subjectivist ontological and epistemological assump-tions. From this postmodernist perspective, the characteristics requiredfor something to be considered as ‘good’ are socially constructed andtherefore what is considered good in one society might not be con-


sidered good in another society which has a different socially con-(structed notion of the characteristics of ‘goodness’ Arrington & Francis,

) ( )1993 . Similarly, Neimark 1995, p. 93 argues that ‘‘what constitutesethical behaviour at any time} like knowledge more generally} is so-cially constructed; it is a product of time and place’’. Postmodernistaccounting theories therefore seem to imply acceptance of some form ofethical relativism, with the morality of items such as pollution, employeewelfare and community involvement by business being socially con-structed, and possibly differing between different individuals, societiesand/or times.

It has been argued above that there is no true objective and absolutemeaning to the terms ‘right’ and ‘wrong’, with a well reasoned form ofsubjectivism and relativism being apparently more valid, in which ideasof what is ethically correct are related to social and cultural variables.As these social and cultural variables are likely to vary between differ-

(ent societies and possibly between different individuals as well as)inter-temporally , concepts of what constitutes ethically right and wrong

behaviour are also likely to vary relative to different social contexts.Thus, what is considered morally acceptable corporate behaviour is alsolikely to vary relative to different social contexts, and CSR practiceswhich address societal or individual notions of corporate moral valueswill be similarly relative. In the next section we discuss the method ofuniversal prescriptivism which seems to be an effective method fordetermining which moral values are likely to be universal and which arelikely to be relative.

Universal Prescriptivism

( )Hare 1993 rejects simplistic forms of relativism and subjectivism infavour of universal prescriptivism which, like more reasoned versions ofsubjectivism, requires that moral values must be arrived at throughreasoning, but also requires that for any individual to legitimately hold amoral value to be right that individual must believe the value should be

( )universalised so as to apply and prescribe required behaviour in allidentical situations. Such a process of moral reasoning entails consider-ing oneself in the position of all others affected by the moral valuebeing determined, and only accepting the value as right if it would beacceptable to you if you were in the position of each other person.Thus, while a simplistic and nihilistic form of relativism would implythat, for example, obtaining false confessions through torture and then

(executing the person who confessed could not be considered wrong ifthe person ordering the torture and execution felt it was right to treat

)in this way the particular person being tortured and executed , universalprescriptivism would only judge this behaviour right if the person order-ing or carrying out the torture and execution thought such behaviourwould also be right if they were in the position of the person beingtortured then executed. As it seems unlikely that anybody would agree


to the moral correctness of having a false confession extracted fromthemselves under torture and being executed on the basis of this falseconfession, such behaviour is unlikely to ever be considered as morallyright in any society at any time and must therefore be intersubjectivelyuniversally morally wrong. While this example is likely to apply acrossall societies and all times there are many other issues where, from auniversal prescriptivist perspective, moral values might legitimately varyacross societies and time as they depend on social and cultural factorswhich vary between societies and over time. For example, the majorityof people in one society might argue in favour of capital punishment formurderers in the belief that it benefits society by deterring murder andbenefits the murderer by ‘enabling their soul to go to heaven’. Anyperson who strongly believed in these effects of capital punishmentmight argue in favour of capital punishment even if they had committeda murder and were effectively arguing in favour of their own execution.If this were the case then capital punishment would be consideredmorally right to that person and that society from a universal prescrip-tivist perspective. However, in another society where people believedcapital punishment did not act as a deterrent to murder and did not‘ free the soul of the murderer’, universal prescriptivism might lead tothe conclusion that capital punishment is morally wrong. This might beso especially if people realised that sometimes the judicial processresulted in wrongful convictions, in which case they would not acceptbeing executed for a murder they had not committed but for whichthey had been found guilty.

Universal prescriptivism is similar to Kant’s categorical imperative which( )underlies many moral philosophies Habermas, 1983 and which states ‘‘I

ought never to act except in such a way that I can also will that my(maxim should become a universal law’’ Beauchamp & Bowie, 1983, p. 35:

)emphases in original . However, Kant’s categorical imperative results inmoral values which are formally universal and objective and does not

( )allow for any moral values which are relative Mackie, 1977 , whereasuniversal prescriptivism admits the possibility that some moral valuesmay validly differ between different societies.

Applying universal prescriptivism to different economic systems, it ispossible that people who believe in the moral correctness of the norma-

( )tive ethical position of Friedman 1962 , that the only moral responsibil-ity of a business is to maximise profits while obeying the laws andcustomary ethical practices of the society in which it is based, mightbelieve in its validity irrespective of the position in society they findthemselves in, as they believe all members of society will be better off

(as a result of all businesses adopting this moral position the so-calledtrickle down effect, under which the moral responsibility of individualsfor their own behaviour is considered to be discharged by each personacting solely in their own self-interest and relying on the operation ofthe ‘market mechanism’ to ensure the collective result of this individual-

)istic behaviour is enhanced wealth for all in society . For those believingin the trickle down effect, such behaviour by corporations is morally


correct from a universal prescriptivist perspective. However, others mightpoint to evidence that under capitalism those worst off in society donot tend to benefit from any increase in the overall wealth of society( )Fisk, 1980 and accordingly would not wish to make unrestrained freemarket economics universally prescriptive as they would not be preparedto live under such a system if they were among the economically worstoff in society. For example, under the Thatcherite economic regime in

(the UK during the 1980s which was largely based on free market)principles and deregulation of many markets the wealthy became even

better off, with the incomes of the wealthiest tenth of society increasingby more than 50% in real terms, but none of this increased prosperitytrickled down to the poorest sixth of society whose real incomes actu-

( )ally fell Hutton, 1996, p. 172 . For people who believe that trickle downeconomics does not work in practice, and leads to increased poverty forthe economically worst off in society, ethical reasoning based on univer-sal prescriptivism will result in the view that businesses striving purelyfor maximum profitability are not engaging in morally correct behaviour.

If universal prescriptivism means that the view that businesses do nothave wider social responsibilities can be regarded as equally morallyright as the view that businesses do have wider social responsibilities,then as CSR entails reporting on the wider social responsibility ofbusinesses, difficulties are likely to arise in developing theories andpractices of CSR that meet the whole of society’s needs as the natureof these needs is morally contested.

Agreeing on Moral Values

We have rejected ethical absolutism and extreme forms of ethical rela-tivism in favour of individuals arriving at acceptable moral values througha reasoned process of universal prescriptivism. One problem with univer-sal prescriptivism in practice is that while members of a particularsociety might apply similar reasoning processes based on shared social

(and cultural experiences and arrive at common moral values Hare,)1993 , this cannot be guaranteed. If individuals within a particular soci-

ety at a particular point in time do not hold homogenous moral views,then the question arises regarding which individuals’ moral expectationscorporations will address their legitimation strategies to.

( )Richardson 1987 discusses three different perspectives from the litera-ture on legitimation, each of which make different assumptions over thelevel of consensus regarding the moral values facing businesses. Firstly,

( )the ‘‘structural]functionalist perspective’’ p. 343 assumes that membersof a particular society at a particular point in time will have a consen-sus view on moral values, with a society regarding particular behaviouras morally right if it serves to maintain that society, and the morality ofparticular behaviour changing with changes in external factors impactingon that society. It is assumed that, in practice, specific moral codes arebest established by ‘‘ those groups in society with superior scientific


( )training and knowledge’’ p. 344 who would have the ability to recog-nise both behaviour necessary to maintain the society, and any changesrequired in this behaviour following changes in external factors. Underthe structural]functionalist perspective, an organisation addressing its le-gitimation strategies towards moral expectations would only need toidentify one set of moral expectations in each society in which itoperates, as all of its stakeholders in a particular society at a particularpoint in time would share common moral values and expectations.

Secondly, the ‘‘social constructionist perspective’’ recognises that differ-ent individuals have different interests and priorities, and assumes that aconsensus moral view emerges within a particular society at a particularpoint in time as a result of discourse among members of that society.

( )Within this perspective, Habermas 1983 argues that the process ofdeciding upon the morality of a particular value using universal prescrip-tivism is not in itself, sufficient to justify the moral validity of this valueto the whole of a particular society. For values to be universally morallyvalid in any society it is also necessary for them to address commoninterests, and only if they do so will they deserve moral recognitionand intersubjective acceptance by all members of society who share thiscommon interest. Determining what interests are common to membersof a particular society, and which moral values should be universallyprescriptive, requires agreement arrived at through some form of co-op-erative discourse among members of the society. Individual reflectionupon the moral values each individual regards as universally prescriptiveis insufficient as it does not guarantee that other members of societywill assent to the moral values determined by the individual. However,through the process of active discourse the strength of all the moralarguments advanced can be tested, and each individual can make suretheir interests are actually considered, thereby ensuring the likely affectson all individuals of the behaviour being morally evaluated are takeninto account.

Habermas sets out certain procedural conditions which must be ful-filled in order to arrive at valid intersubjective moral values throughdiscourse. These procedures are termed the ‘‘Ideal Speech Community’’( )Arrington & Puxty, 1991, p. 45 and require that: all members of societyare included in the debate equally; all members of society can bothmake their own proposals and criticise the proposals made by others;and there must be no coercion on members to either participate, make

(proposals or criticise proposals Rasmussen, 1990; Arrington & Puxty,)1991 . Through public debate following these Ideal Speech Community

procedures, moral values can be democratically arrived at which shouldbe accepted by all members of a particular society.

While such moral values might be regarded as absolute within individ-ual societies at a particular point in time, this does not mean theycannot validly differ from those held by other societies or at othertimes. Individuals within a particular society are likely to share commonlife experiences which shape their cultural values, but these experiencesmight be very different to those shared by members of another society


( )Hare, 1993 . In this situation, the experiences informing moral debate inone society will be different to those in other societies, so the out-comes of ethical discourse in different societies are likely to validlydiffer, leading to differences in accepted moral values. Under the socialconstructionist perspective, as with the structural]functionalist perspective,moral values will be homogenous within a particular society at a partic-ular point in time, so corporations addressing their legitimation strate-gies towards stakeholders’ moral values need only identify one set ofmoral values which will be accepted by all members of a society.

Although we agree that the procedures of an Ideal Speech Communityshould result in specific moral values which all members of a particularsociety ought to find acceptable, we are not convinced that in practiceany values associated with corporate morality have been arrived atusing such procedures within any individual societies, let alone globally.While debates might take place over the moral values businesses shouldadopt, we do not believe that all members of society participate in suchdebates equally. Some parties with valid interests might be unable toactively participate because they are, for example, mentally handicapped,or lack the education or ability to effectively marshal their ideas and putforward forceful arguments. Non-human animals are unable to engage insuch debates even though they may have interests equal or superior to

( )those of humans in many instances Singer, 1993b . Apart from theinterests of many being marginalised through a comparative lack ofability to articulate views, debate is likely to be influenced by the massmedia. Much of these media are controlled by business interests which

(might seek to influence the debate either through paid advertisementsand other forms of ‘public relations’ communication, or through editorial

)control in favour of outcomes seen as beneficial to business owners( )Mouck, 1994 . Furthermore, as businesses hold considerable economicpower within market economies, they are likely to be able to exert

( )significant influence on governments Neimark, 1992 thus further distort-ing the debate. Even in the absence of these factors, a consensusarrived at through debate following the procedures of an Ideal SpeechCommunity risks marginalising minorities who may have very differentneeds and values to those of the majority community. Within accountingitself, there has been a tendency for positivist theories to dominate and

(effectively exclude mainstream consideration of CSR practices Mouck,)1994 , thereby further hampering discourse of corporate social responsi-

bility. This implies that in practice relative power might be a stronginfluence on the ability of individuals or stakeholder groups to establishthe supremacy of their particular moral values.

Such relative power is the third perspective discussed by Richardson( )1987 . Moral values within this perspective are considered to be hetero-geneous, with different individuals seeking to ensure their particularmoral values dominate others rather than seeking a moral consensusamong all members of their society. The implications of this ‘‘hegemonic

( )perspective’’ p. 349 for organisations addressing their CSR to moralvalues is that they will be facing competing, and possibly conflicting,


moral demands from different stakeholders. In this situation a corpora-tion might address its legitimation strategies to the moral expectationsof stakeholders who are in a position to exert the most power over thebusiness. This complicates any analysis of inter-cultural and inter-tem-poral differences in CSR resulting from differences in moral values, asethical relativism will also cause differences in CSR between businessesin an individual society at a moment in time, if the balance of powerbetween competing stakeholder groups differs between different busi-nesses. For example, a company selling a largely homogenous product,such as petrol, is likely to be more susceptible to pressure from con-

( )sumers who can easily switch to another brand than a company whichhas a near monopoly of supply of a product. Consumers will thereforehave more economic power over the former company than the lattercompany, so the former company will need to take more notice of themoral expectations of its customer stakeholders than the latter company.

There are growing signs that certain members of society are recognis-ing they might have been marginalised from moral debates and arestarting to take action to ensure ‘accepted’ moral norms change toincorporate their views. For example, within the UK there is growingparticipation by a wide range of people in single issue, direct actionpolitics, and this could indicate that many people are becoming dissatis-fied with their ethical views being largely ignored by the establishment

(and are taking action to make sure their views are heard Unerman,)1996 . Broadening the debate about ethical values in this way is likely

to result in changes in the accepted ethical values faced by businessesin the UK, and to the extent that CSR practised by UK businesses isgrounded in these ethical values, it will also need to change.

Conclusions

The arguments set out above indicate that moral values are unlikely tohave objective meanings, and that even if some very general moralvalues are intersubjectively held by all societies in the world. the de-tailed moral codes adopted by different societies aimed at fulfilling thesegeneral universal values are likely to vary relative to culture specificbeliefs, conditions and practices. Although it is easy to dismiss simplistic

(and extreme forms of subjectivism and relativism which usually lead tothe nihilistic conclusion that no behaviour can ever be considered as

)unacceptable , the opposite extreme of objectivism and absolutism ap-pears equally unacceptable as it is difficult to see how knowledge ofany objective and true meanings of moral values can come about andas it is highly intolerant because it does not allow for differing moralvalues held by others. More developed and reasoned forms of subjec-tivism and relativism seem plausible in that they do not hold all viewsand behaviour to be equally morally acceptable, but only those viewsand behaviour which result from a process of impartial reasoning, andwhich the person carrying out the reasoning believes should be univer-


sally prescriptive, will be considered morally acceptable. Such processesof reasoning and universal prescriptivism are likely to limit the type ofbehaviour regarded as morally acceptable. Even in the absence of moraldiscourse through an Ideal Speech Community, in practice it is likelythat many members of one society at one point in time will come to aconsensus on many broad moral issues given that they have sharedcommon social and cultural experiences which inform their reasoning

( )processes Hare, 1993 , and will have shared the same dominating( )influences exerted by powerful vested influences Mouck, 1994 . How-

ever, members of other societies, and members of the same society atdifferent times, might not share common social and cultural experiences( )Hofstede, 1983 and will therefore have a different understanding of themeaning of right and wrong. Even where such understandings areintersubjectively agreed upon by many members of many societies,differing social and environmental factors might result in differing waysof striving for what is right and avoiding what is wrong. Also, differentmembers of the same society at the same point in time while agreeingabout broad moral values might disagree about detailed moral codesdetermining the morality of specific behaviour.

Relating these arguments to CSR, it might be the case that certainvery general moral principles relating to social and environmental issuesare universally held. However, universal agreement on any such generalmoral principles will not necessarily result in agreement on the detailedmoral rules that guide behaviour aimed at achieving these generalmoral principles. For example, while it might be the case that allsocieties throughout time believe in the general moral principle that it isright to ensure survival of the human species and the planet, it isunlikely that all societies will agree upon how to achieve this. It mighteven be universally held that one important element in ensuring survivalof the species and the planet is to reduce overall consumption ofenvironmentally sensitive resources. However, individuals within devel-oped societies might argue that to achieve this general principle it is

( )necessary to halt the increase in the world’s population Mies, 1993 ,and as most of this increase comes from third world countries, peoplein such countries should be forcefully encouraged to adopt birth controlpractices. Inhabitants of these third world countries might, however,point to the vastly greater per capita energy and resource consumption

( ) (of developed countries Mies, 1993; Mies & Shiva, 1993 with, forexample, an ecological footprint of 5.1 hectares required to sustain the1991 consumption levels of the average person living in the USA asagainst only 0.4 of a hectare for the average person living in India( ))Wackernagel & Rees, 1996, p. 85 and argue that the best way toconserve resources is for all countries to reduce their per capita levels

(of consumption to a certain level which might be higher than the)existing per capita level in most third world countries . Both the devel-

oped countries’ moral rule that people should have fewer children, andthe third world countries’ moral rule that per capita usage of environ-mentally sensitive resources should be reduced, are universalisable and


prescriptive and might be agreed upon by members of the respectivesocieties through discourse following Ideal Speech Community proce-dures. The problem is that the third world societies might not accept areduction in the number of children it is acceptable for people to have,and the developed societies might not accept a reduction in theireconomic standard of living. It seems somewhat offensive to try anddictate the moral rules other societies should adopt based on what suitsour society, when the social, cultural and economic circumstances ofthese other societies might be very different to those of our ownsociety.

Some companies will have management teams who seek to ensuretheir companies fulfil their social contractual obligations by doing whatis considered morally right and refraining from doing what is considered

( )morally wrong or even actively working against others who do wrong .Such managers will use CSR in the discharge of their duties of account-ability to stakeholders, by informing these stakeholders about the socialimpact of their operations. Other companies will have managers who donot seek to fulfil their social contractual duties, but use CSR in legitima-tion strategies which aim at convincing key stakeholders that the com-pany has behaved in a morally correct manner. With both of these

( )types of behaviour and any behaviour between these positions , CSRwill be grounded in what is considered morally right and wrong eitherto a particular society or to particular stakeholder groups, as the CSR ofthe former type of company will report how the company has per-formed against what is considered to be right and wrong, whereas theCSR of the latter type of company will state that the company has donewhat is right irrespective of its actual behaviour. If concepts of whatconstitutes morally right behaviour vary between societies or key stake-holder groups, then CSR can also be expected to vary.

In practice, the nature and extent of CSR does appear to vary betweendifferent countries. To the extent that corporate social responsibility is

(influenced by culture specific moral rules and moral judgements based)on these rules rather than being directly based on intersubjectively held

universal general moral principles, corporate social responsibility and itsresultant CSR is also likely to be ethically relative. This provides apossible explanation for the variation in the nature and volume of CSRboth over time and between different countries as identified by Gray et

( )al. 1995 .If subjectivism and relativism are accepted, and if CSR is simply

reflecting whatever behaviour companies in a particular country at aparticular time regard as moral, social accountants from one countryand time cannot maintain that the CSR in another country and/or atanother time is inappropriate simply because it is different from the CSRpracticed at the present time at home. However, this does not precludecriticism of the CSR practised in other countries or at other times. Justas we can validly criticise our present domestic CSR for failing to meetour society’s needs, we can criticise the CSR of another country oranother time for failing to meet that country’s or time’s needs, while


recognising that these needs might differ from those of our country atthe present time as they are relative to culture specific factors. Thus, inaccepting well reasoned and advanced forms of subjectivism and ethical

(relativism rather than the simplistic and extreme forms which lead to)nihilistic conclusions , we must accept that valid and appropriate CSR

grounded in corporate ethical values can differ between societies, butthis does not mean that we have to accept the CSR practised in anyone particular society at a particular point in time if it fails to addressthat society’s values. Furthermore, acceptance that the moral values heldby individuals are based on relatively narrow specific life experiencesopens the possibility of raising the level of moral debate in respect ofCSR to question the moral values accepted by particular individualsand/or societies which underlie specific CSR practices. The reportingpractices of multinational corporations, who may be reporting on differ-ent issues in different spheres of interest, would seem to provide fertileground for further research in this area.

Acknowledgements

We are very grateful to David Owen, Jane Broadbent, Carol Adams, ClaireRoberts, Frank Birkin, Tony Tinker, the two anonymous Critical Perspectives onAccounting reviewers, and participants at The Fourth Critical Perspectives on

( )Accounting Symposium New York City, April 1996 and the Centre for Social(and Environmental Accounting Research 1997 Summer School University of

)Dundee, September 1997 for their invaluable comments on previous versions ofthis paper. All errors are the sole work of the authors.We are also very grateful to the Institute of Chartered Accountants in Englandand Wales for funding towards Jeffrey Unerman’s PhD research programme, outof which part of this paper has resulted.

Notes

1. While the term society can refer to any group of people with broadly commoninterests, we use it in this paper mostly to refer to national or regional groupings.

2. Some multinational companies might be influenced by the specific moral values ofmore than one country, while some might apply the ethical values of their homecountry globally even if these values require ‘better’ corporate behaviour than that

( )practiced by local companies Donaldson, 1989 . Consequently, CSR practices of individ-ual multinationals might be guided either by the specific moral values of selected

( )countries in which key stakeholders Ullmann, 1985 are located, while in other casesthey might be influenced by moral values of many of the countries in which themultinational operates. If the latter becomes prevalent, then many international differ-ences in the CSR of multinationals might be reduced as they will all be addressingsome form of global moral values. However, such global moral values are likely to beat a very general level given that detailed moral codes tend to vary between differentsocieties.

3. It has further been argued that corporate reporting is a medium through which( )businesses actually construct their moral identities Schweiker, 1993 .

4. We discuss below some of the possible processes through which society arrives atparticular values, processes in which some members of society may be disadvantaged.

5. The reasoning processes referred to do not imply exclusive use of formal logicalanalysis. While logical analysis is very useful to ensure sound reasoning in somecircumstances, there are other circumstances where formal logic will not be helpful

( )and more intuitive reasoning processes are required Kirwan, 1995 .


6. Arguing that ethical values are subjective is not the same as saying that ethical valuestatements can never be objective. In circumstances where a value is measured againstanother value of the same type, or against a specified benchmark, it is possible for

( )the resultant value statement to be objectively either true or false Mackie, 1977 . Forexample, a legal system in a particular society might specify that certain behaviour willresult in the incarceration of any person engaging in that behaviour. Meta-ethicalsubjectivists would argue that whether the specific law was just or unjust is asubjective judgement. However, if a person has proved beyond all doubt that theyhave not engaged in such illegal behaviour, but the court still sends them to jail, thensuch action on behalf of the court can be objectively said to be unjust relative to thestandards of behaviour set out in the law.

( )7. Benston 1982 uses similar reasoning to reject any role for accountants in CSR while,( )in contrast, Tinker et al. 1991 argue that accountants should not engage in CSR as by

doing so they are legitimising the morality of the capitalist system.

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ETHICAL RELATIVISM: A REASON FOR DIFFERENCES IN CORPORATE SOCIAL REPORTING?

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