SA 8000 Pros and Cons in A Nut Shell

 

Dirk Ulrich Gilbert / Andreas Rasche 

DISCOURSE ETHICS AND SOCIAL ACCOUNTABILITY – THE ETHICS OF SA 8000 

Professor Dr. Dirk Ulrich Gilbert Institute of Economics University of Erlangen-Nuremberg Kochstrasse 4 (17) 91054 Erlangen, Germany Phone: +49-9131 85-22093 Fax: +49-9131-85-22060 E-Mail: [email protected]

Dipl.-Kfm. Andreas Rasche Department of Organization and Logistics Helmut Schmidt University, University of the Federal Armed Forces Holstenhofweg 85 22043 Hamburg, Germany Phone: + 49-40-6541 2973 Fax: + 49-40-6541-3767 E-Mail: [email protected]

Dirk Ulrich Gilbert received his PhD in international management from Frankfurt University, Germany. He was an Assistant Professor of International Management at The University of New South Wales, Sydney, Australia (20042005) and currently is a Professor of Management at the University of Erlangen-Nuremberg in Germany. His research interests include international business strategy, strategic networks and international business ethics.

Andreas Rasche is currently working at the Chair for Business Administration at the Helmut Schmidt University, Hamburg, Germany and is finishing his PhD in strategic management at EUROPEAN BUSINESS SCHOOL, Germany where he is also teaching business ethics. His research interests include the institutionalization of ethics initiatives in multinational corporations, reflections about the theory of strategic management, as well as the relation  between the sociology of practice to strategy and ethics.

 

Electronic copy available at: http://ssrn.com/abstract=1652151 http://ssrn.com/abstract=1652151

 

 

DISCOURSE ETHICS AND SOCIAL ACCOUNTABILITY – THE ETHICS OF SA 8000 

 Based on theoretical insights of discourse ethics as developed by b y Jürgen Habermas, we delineate a proposal to further develop the institutionalization of social accounting in multinational corporations (MNCs) by means of “Social Accountability 8000” 800 0” (SA 8000). To reach this research goal we proceed in four steps. First, we discuss the cornerstones of Habermas’s discourse ethics and elucidate how and why this concept can provide a theoretical justification of the moral point of view in MNCs. In a second step, the basic conception, main purpose, and implementation procedure of SA 8000 are presented. In the third section, we critically examine SA 8000 from a Habermasian perspective and discuss advantages and drawbacks of the initiative. Fourth, to address these drawbacks, we introduce a “discourse-ethically” extended version of SA 8000. We show that this approach is theoretically well-founded and able to overcome some of the current deficits of the certification initiative. We demonstrate that the extended version of SA 8000 can be successfully applied on a cross-cultural basis and that our  findings have significant implications for other international international ethics initiatives.

1 Electronic copy available at: http://ssrn.com/abstract=1652151 http://ssrn.com/abstract=1652151

 

  Social accounting went through a period of considerable discussion and practical implementation in the 70s but fell off the public agenda in the 80s. It was not until the mid-1990s that the field gained wider attention again (Gray, 2001; Gray, Owen & Adams, 1996; Lehman, 1999; Mathews, 1997; Ramanathan, 1976). A closer look at the recent literature shows that, since the turn of the century, social accounting has become one major growth area within the field of  business ethics (Gray, 2002, 2001; O’Dwyer, 2001; Unerman & Bennett, 2004). Particularly in the international context there has been a proliferation of different concepts providing multinational corporations (MNCs) with ways to systematically evaluate their social and ethical  performance and to communicate relevant information to affected stakeholders (Donaldson, 2003; Göbbels & Jonker, 2003; Mathews, 1997; McIntosh, Thomas, Leipziger & Coleman, 2003; Tulder & Kolk, 2001). Recently introduced social accountability standards offer ways to implement business ethics to cope with the increasing demand for transparency and ethical  performance measurement (Kell & Levin, 2003). Well-known examples of such standards are the Global Reporting Initiative (GRI), the Fair Labor Association (FLA), AccountAbility 1000 (AA 1000), and Social Accountability 8000 (SA 8000). All of these social accountability standards have in common that they represent formal ethics initiatives that aim at fostering ethical behavior by MNCs. Against the background of this special issue of  BEQ  BEQ   the question seems to be how ethical   these initiatives are and whether they represent genuine efforts to provide ethical guidance for MNCs. A closer look at the literature reveals that only limited attention has been given to the ethical qualities and basic normative assumptions of such initiatives (Göbbels & Jonker, 2003; Leipziger, 2001). In line with this, Gray (2002, 2001) argues that the field of social accounting has yet to gain maturity and is still under-theorized. From our perspective this criticism particularly applies to international   social

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  accountability standards because these tools face the problem of how to theoretically justify a common   moral basis to gain cross-cultural acceptance. To be coherent in the international common environment, it is of categorical importance to base initiatives like SA 8000, AA 1000 or the GRI on validity claims that can provide a “moral point of view,” which stakeholders in different countries, with diverse norms and values, v alues, can accept. Although international social accountability standards are mostly based upon a broad normative ground (e.g. certain ILO principles), their universal applicability is often criticized (Gilbert, Behnam & Rasche, 2003) and they are considered as a means of imposing Western norms on developing countries. Notwithstanding these problems, a critical discussion of problems for justifying social accountability standards has not been part of the literature. In fact, a closer look reveals that in papers on social accounting, researchers often inadequately discuss the ethical presuppositions on which theories and practices of all kinds of economic accountability must rest (Schweiker, 1993; Shearer, 2002). To discuss and overcome these problems, we propose to link critical theory (Adorno & Horkheimer, 1997; Hoy & McCarthy, 1994; McCarthy, 1991; Parker, 2003; White, 1980) and in  particular discourse ethics, ethics, as developed by Jürgen Habermas (1990, 1996, 1999, 2003), with the literature on social accounting. We consider discourse ethics and its adaptation to economic theory (Schnebel, 2000; Ulrich, 1998; Ulrich, 1996) as an appropriate concept for providing a framework to systematically assess international social accountability standards for three reasons: First, Habermas’s concept is a formal ethical approach developed for pluralistic societies that can no longer draw on a single moral authority and that differ on questions of value and the good life. In this context, he introduces a theory that refers to communicative action and to the  presuppositions that speakers unavoidably make when they engage in argumentation to describe how they can reach a shared understanding of the situation and resolve conflicts about norms and

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  values. Most important for this paper is the fact that Habermas has sought to redeem the notion of universally universally valid  valid norms on the basis of a theory of discourse and language (Habermas, 1996, 1999). He precisely outlines the conditions of how to achieve rational consensus among human  beings. Second, Habermas attempts to bring moral philosophy into the realm of political and social science. His approach seeks to develop a system of different forms of practical reason to validate moral and ethical choices, particularly those of how society and its institutions should be designed. By doing this, Habermas presents a theory that provides a framework of how to critically examine social accountability standards and their ethical assumptions. Third, we  believe that Habermas’s discourse ethics is of enormous relevance to the construction and legitimacy of a business ethics approach but so far has received only limited attention in the English-speaking business ethics literature (Hendry, 1999; Lozano, 2001; Reed, 1999). Certainly, a large number of publications related to different fields of business such as accounting (Chua & Degeling, 1993; Laughlin, 1987; Power & Laughlin, 1996; Unerman & Bennett, 2004), organization theory (Alvesson, 1991; Burrell, 1994; Froomkin, 2003), strategic management (Levy, Alvesson & Willmott, 2003) or information technology (Cecez-Kecmanovic, Janson & Brown, 2002; Cecez-Kecmanovic & Webb, 2000) deal with Habermas’s ideas, while the  business ethics literature is more or less unaffected. Starting from this, the objectives of this paper are threefold. First, we present an extended description of discourse ethics to provide a clear picture of this normative theory. Second, we  provide insights into why discourse ethics can be successfully applied to business ethics, despite Habermas’s own skepticism of such an endeavor. Third, based on the main lines of discourse ethics, we illustrate theoretical deficits and resulting practical problems of international social

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  accountability standards to be able to make suggestions both to further develop the concepts and to contribute to the broader discussion on the “ethics of organizational ethics initiatives.” In this article, we primarily focus on a critical evaluation of only one of the abovementioned international social accountability standards, namely SA 8000, for three reasons. First, SA 8000 is the most important initiative in the corporate world when it comes to the institutionalization of  business ethics via accountability standards. SA 8000 is currently used by 710 production facilities in 45 countries (SAI, 2005), whereas only 64 MNCs report in accordance with the GRI and only 16 leading brand-name companies are participating in the FLA (as of June 2005). AA 1000 does not present a list of MNCs using its model. Second, SA 8000 is particularly representative of social accountability standards because it provides both an internationally accepted verification system for ethical performance and a comprehensive framework to create decent workplace conditions in MNCs (McIntosh et al., 2003; SAI, 2005). As we show in the course of our analysis, insights gained from a critical examination of SA 8000 can easily be applied to other social accountability initiatives. Third, notwithstanding its practical relevance, SA 8000 is not yet sufficiently represented in the literature on social accounting and business ethics (Göbbels & Jonker, 2003; Leipziger, 2001; McIntosh et al., 2003). By applying Habermasian discourse ethics to SA 8000, we hope to make a contribution not only to the discussion of social accounting but to the whole field of business ethics and to take up Gray’s (2002: 703) call for more meta-theoretical investigations in this field. To reach these research goals we proceed as follows. In the second section of the paper, we discuss the cornerstones of Habermas’s discourse theory and elucidate how and why this concept can provide a theoretical justification of the moral point of view in MNCs. We continue by introducing the basic principles of discourse ethics that specify the route by which discursive

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  agreements on different validity claims (e.g. effectiveness, goodness, and rightness) can be reached. Based on these insights, different forms of practical reason (viz. pragmatic, ethical, and moral) can be distinguished according to the type of validity claims to be redeemed. In the third section, the basic conception, main purpose, and implementation procedure procedur e of SA 8000 are  presented. In the fourth section, we critically examine SA 8000 from a Habermasian perspective and sketch out advantages and drawbacks of the initiative. Fifth, we introduce a “discourseethically” extended version of the standard. We demonstrate that this approach is theoretically well-founded and able to overcome some of the current deficits of SA 8000. We delineate that the extended version of the standard can be applied on a cross-cultural basis and represents an appropriate tool to institutionalize social accounting in MNCs. We close by outlining implications of our findings for other international ethics initiatives and provide some clues for further conceptual and empirical research.

HABERMASIAN DISCOURSE ETHICS In the tradition of critical theory (Adorno & Horkheimer, 1997), Jürgen Habermas’s main aim has been to construct a theory focusing on an analysis of advanced capitalist industrial societies and of democracy and the rule of law in a critical social-evolutionary context (Habermas, 1990, 1993, 1996, 2003). Over the last 20 years or so, Habermas has developed discourse ethics, ethics, which represents the pivotal program of his comprehensive social theory and tries to advance the goals of human emancipation, while maintaining an inclusive, universalist moral framework. For Habermas, members of modern, pluralistic societies find themselves in a dramatic situation of change, where the substantive background consensus on the underlying moral norms and values has been shattered and where global and domestic conflicts need to be

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  regulated. Discourse ethics proposes a morality of equal respect and solidaristic responsibility for everybody by outlining a way to arrive at a universally accepted and acceptable moral and ethical consensus through discourse (Habermas, 1990, 1996, 2003). The basic idea is that the universal validity of a moral norm cannot be justified in the mind of an isolated individual reflecting on an issue to be discussed but only in a process of argumentation between individuals. Every validity claim to normative rightness depends upon a mutual understanding achieved by individuals in argument (Habermas, 1998).  Normative validity cannot be understood as separate from the argumentative procedures used in everyday practice, such as those used to resolve issues concerning the legitimacy of actions and the validity of norms governing interactions. Discourse ethics states that the sources of moral consensus are contained in the formal pragmatic preconditions of speech and language, the communicative action action,, and are not drawn from particular religious convictions or the conception of a “good life” internal to a particular group or culture (Finlayson, 2000; Habermas, 1996). To understand what Habermas means by that, we first describe the notion of communicative action and how it provides a basis for an approach to normative theory. Second, based on the Habermasian concept of communicative action, we outline the principles of discourse ethics, which offer procedures for validating moral choices in discourses. Finally, we introduce forms of  practical reason that play a significant role in Habermas’s recent publications. As the focus of our  paper is an analysis of social accountability initiatives and related discourses between MNCs and their stakeholders, we only discuss those Habermasian concepts that are necessary to understand and criticize these topics. We do not examine the economic and political institutions within which discourses take place. It should be mentioned, though, that Habermas (1996, 1999, 2003) recently places emphasis on political science and the theory of democracy.

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Communicative Action

With his concept of communicative action Habermas tries to explain human rationality as a necessary outcome of the successful use of language. According to this, the potential for rationality and mutual understanding is inherent in communication itself. As Habermas (1996: 4)  puts it: communicative rationality is “inscribed in the linguistic telos of mutual understanding and forms an ensemble of conditions that both enable and limit. Whoever makes use of a natural language in order to come to an understanding with an addressee about something in the world is required to take a performative attitude and commit herself to certain presuppositions.” From this it follows that interpersonal communication and mutual understanding are at the heart of discourse ethics. Via communicative action individuals try to harmonize their action plans and achieve consensus on normative validity claims in the life world ( Lebenswelt ). ). However, individuals often do not turn to communicative action as a means of coordinating their actions  but to what Habermas (1990: 58) calls  strategic action. action. According to this, an actor who acts strategically primarily seeks to manipulate and influence the behavior of another by threatening sanctions or by the prospect of gratification and does not rely on the power of communicative understanding. Although Habermas (1996, 1999) admits that most corporations’ actions are strategic in nature and that in general firms simply follow price signals (and not mutual communication) to coordinate their activities, his concept of discourse theory, from our perspective, can make a significant contribution to the field of business ethics. In line with Sen (1993) and Ulrich (1998), we believe that the normative preconditions for legitimate business activities in an economy should be considered as predominant and not subordinate to economic interests. Likewise,

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  modern concepts of business ethics are concerned with critically reflecting on the institutional framework of the economy, which can be expected to generate results that are acceptable from  both an ecological and human point of view (Crane ( Crane & Matten, 2004; Ulrich, 1998; Unerman & Benett, 2004). Habermas himself, in his recent Studies in Political Theory (1999), Theory (1999), points out that we need a critical evaluation of general rules in existing market frameworks. By proposing the concept of communicative action, he provides the appropriate means to analyze the normative logic of market economies. Accordingly, the concept of communicative action should not be considered as an endeavor to limit (strategic) business activities from an outside perspective but as a process of critically reflecting on the normative preconditions of the legitimate valuecreation of firms from within  the economic system. Hence, despite Habermas’s own skepticism within the of the contribution of a business ethics (Habermas, 1991: 250–264), we see a chance for discourse theory to inform this field of research successfully. To understand how communicative action and mutual understanding are possible, Habermas  performs a pragmatic analysis of language and develops a theory of speech acts (Habermas, 1990). Speech acts constitute the basic unit of analysis and are of different types (e.g. constative, regulative, expressive, etc.) to make different validity claims (e.g. claims to effectiveness, goodness, rightness, etc.). According to Habermas (1999: 40), all individuals taking part in a conversation and making different validity claims share certain inescapable presuppositions of communication and argumentation in order for communication and argumentation to even begin. Habermas (1990: 87) distinguishes between three levels of presuppositions of argumentation (see Figure 1). These presuppositions ensure the equality of opportunity to offer speech acts and are collectively termed as the discourse rules of rules of the ideal speech situation  situation  (Habermas, 1996: 322). For Habermas (1990: 202), these presuppositions are not mere social conventions or subject of a

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  free personal decision; they are inescapable in discourses intended to reach rationally motivated moral consensus. Rational social agents who engage in discourses to validate contested norms inescapably follow these presuppositions. To disclaim them while being in a discourse is similar to denying that one is able to communicate in a discourse at all. All of these presuppositions are at the center of Habermas’s concept of communicative action and set down the conditions of how individuals can try to reach mutual understanding. --------------------------------Insert Figure 1 about here --------------------------------At this point, a particular advantage of Habermas’s concept becomes clear: By strictly referring to the presuppositions of argumentation to justify his theory, he circumvents a  formal   deduction of norms and finally gives up an “ultimate justification” without damage to his theory. He rather describes practically existing possibilities and prerequisites to achieve argumentative understanding among human beings (Habermas, 2001). Hence, discourse ethics does not attempt to  generate  generate   and  justify  justify   moral principles with universal validity but provides only a process of argumentation to test   them them (Phillips, 2003: 110). Based on these findings, we now introduce the  basic principles of discourse ethics and Habermas’s particular methodology for justifying moral norms via discourses.

Basic Principles of Discourse Ethics

Habermas’s discourse ethics remains faithful to the Kantian position of establishing a  procedural principle that allows us to distinguish between norms of action which are morally valid and possible and those that are impossible (Finke, 2000: 23). However, whereas Kantian ethics links the process of justification to the individual  conducting   conducting a universalizing test (Kant,

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  1993, 2004) to see whether she or he wishes everyone else to act according to the same maxim, in discourse ethics Habermas (1990: 196–198) moves Kant’s categorical imperative beyond its “monological” reflection. The same criticism applies to Rawls’s (1971) “Theory of Justice,” where the morality of an action is determined by individuals individuals critically  critically evaluating actions behind a “veil of ignorance.” Habermas argues that individual reasoning and self-reflection are insufficient to justify acceptable norms because different individuals might come to different conclusions regarding the acceptability of particular norms. Achievement of general acceptance of any norm can therefore only be obtained through a process of dialogical   argumentation. Based on this criticism, discourse ethics provides a “ principle of universalization” universalization” (U), which has to be considered as the fundamental guideline of moral reasoning.

  (U) “A norm is valid when the foreseeable consequences and side-effects of its general

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observance for the interests and value-orientations of each individual   could be  jointly  jointly   accepted by all  concerned  concerned without coercion” (Habermas, 1999: 42). The principle of universalization forms the cornerstone of Habermas’s theory of moral validity. By introducing it he describes how how normative  normative claims can be justified in dialogues. As a rule of reasoning (U) is implied by the presuppositions of argumentation because, for Habermas, a prerequisite for reaching a consensus on generalizable maxims is that all participants in the discourse must speak honestly and comprehensibly and refer to the rules of the ideal speech situation (Habermas, 1990: 120–121). As a principle (U) states that the amenability to consensus is both a necessary and sufficient condition of the validity of a moral norm. The principle of universalization specifies the type of argumentation and hence the route by which an agreement on conflicting normative claims can be reached and should not be confused

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  with the “ principle of discourse ethics” ethics ” (D), which presupposes that norms exist that satisfy the conditions specified by (U). This principle of discourse ethics states:

  (D) “Only those norms can claim validity that could meet with the acceptance of all

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concerned in practical discourse” (Habermas, 1999: 41). A closer look at the principle of discourse ethics reveals that (D) makes reference to a  procedure of argumentation, namely the  practical discourse  discourse  and the discursive redemption of normative validity claims. This is why discourse ethics can be characterized as a formal  a  formal  concept,   concept, for it does not provide substantive guidelines of how to solve a conflict but only a procedure, the  practical discourse. A discourse has to be understood as a process that follows the guidelines of the “ideal speech situation” to guarantee an open, unbiased, and truthful argumentation to ensure that all participants in a discourse accept the force of the best argument (Habermas, 1996; Unerman & Bennett, 2004). Assuming that a practical discourse has been sufficiently well  prosecuted, failure to reach a consensus on a conflicting norm indicates that this norm is not valid (Finlayson, 2005). In other words, norms are not deduced from existing guidelines, but brought into being by being by consensus in a practical discourse. It is precisely this proceduralism that sets discourse ethics in opposition to the fundamental assumptions of other approaches to business ethics, for instance Donaldson & Dunfees (1994, 1999) “Integrative Social Contracts Theory” or Browns (2005) approach to “Corporate Integrity,” and makes us aware of the need to distinguish the procedure of discourse from the substantive content of argumentation. Habermas (1990: 122) states: “Any content, no matter how fundamental the action norms in question may be, must be made subject to real discourse.” As a consequence for norms to gain acceptance, every person needs to question her/his own subjective opinion and needs to freely consent to the discussed issues.

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  A crucial point of Habermas’s theory is that he introduces not only one but two basic  principles to justify discourse ethics. This is surprising and Habermas (1999: 41–42) does not  provide a clear-cut answer to the question where the exact differences between these principles are (Finlayson, 2005: 79). However, both principles (U) and (D) have slightly different meanings and are essential to his theory. The principle of universalization (U) seems to be the stronger  principle as it represents the “moral principle” of discourse ethics (Habermas, 1990: 93). It acts as a rule of argumentation enabling us to reach consensus on generalizable maxims and it  provides information about abou t the prerequisites for the acceptance of consensus in discourses. d iscourses. More  precisely, (U) makes validity dependent on the acceptability of the “foreseeable consequences and side effects” of an implementation of a norm; it states that a norm is valid if, and only if, it “could be jointly accepted by all   concerned without coercion” and therefore embodies a universalizable interest. Whereas (U) claims to be the rational reconstruction of the impartial moral point of view, which is at the heart of all moral theories, (D) expresses the fundamental idea of idea  of Habermas’s moral theory which he develops by drawing on communication theory and the notion of an ideal speech situation. Thus, (D) proposes that norms can be and must be impartially justified in “practical discourses” and that those to be affected by a norm must be able to participate in an argumentation concerning its validity (Habermas, 1996: 108). No thought experiment whatsoever can and should replace a communicative exchange in practical discourse regarding moral norms that may affect others. As a result, (D) imposes a very restrictive condition on individuals trying to resolve conflicts in discourses. That is why the practical achievement of Habermas’s theoretical concept might not be fully realizable in actual practical dialogues regarding working conditions.

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  Habermas recognizes that the consequences of (U) and (D) and the theoretical archetype of the ideal speech situation are difficult to realize in practical discourses; we will deal with these objections later. However, for him this does not in principle  principle  preclude the possibility that these assumptions usefully can inform the conduct of dialogues. Drawing upon discourse ethics, both  principles (U) and (D) can be b e regarded as catalysts for a moral learning process in organizations, which is guided by universal guidelines of communication extracted from the deep structures of argumentation. It is for this reason that this part of Habermasian theory has recently attracted the attention of scholars in the field of business ethics and organization studies (Levy et al., 2001; Lozano, 2001; Rasche/Esser, in press; Unermann & Bennett, 2004).

Different Forms of Practical Reason

Based on his understanding of communicative action and the principles of discourse ethics Habermas (1996: 109) distinguishes between various forms of practical reason and their corresponding types of discourse. This is because not every question at issue asks for a discussion of universal   moral   principles that need to be resolved in a discourse following the rules of the ideal speech situation. Habermas (1990, 1992, 1996, 1999) distinguishes between three distinct forms of practical reason, viz.  pragmatic  pragmatic,, ethical , and moral  reasoning,   reasoning, according to the validity claim to be redeemed. Pragmatic reason. Pragmatic reasoning occurs in situations where an actor is seeking advice

to choose the means to a given end but does not critically evaluate the choice of these ends (Habermas, 1996: 159). The issue being discussed is an empirical question of rational choice; therefore, the validity claim is one of effectiveness effectiveness   (e.g., you ought   to buy shares of different companies to spread the risk of your investment). In the case of an argument about the right or wrong of such a decision we engage in  pragmatic discourses in discourses in which the goal is to rationally 14

 

   justify the choice of technique or strategy and to provide a recommendation concerning a reliable  program of action (Habermas, 1996: 159). Under such circumstances, the ought  of  of the imperative derived is directly linked to an individual’s own interest and to an application of decision rules familiar to him or her (Reed, 1999: 459); therefore, the scope of the validity claim is nonuniversal . discourse is to critically evaluate the ends discussed in Ethical reason. The goal of an ethical discourse a pragmatic discourse. This form of practical reasoning involves important value decisions by assessing what is “good for me” or “good for us” (Habermas, 1996: 161). Thus, the validity claim being raised in an ethical discourse is that of  goodness  goodness.. It is important to note that for Habermas the answer to the question of what is “good” or “bad” is always defined in terms of the specific identity and particular life history of the person or the group and hence cannot claim to  be universal (Habermas, 1999). Accordingly, advice issued by an ethical discourse has only relative   validity and is only binding upon an individual or the members of the relevant group relative (Finlayson, 2005: 95). Moral reason.  Although the notion of ethical discourse plays an increasingly important role

in Habermas’s thought, discourse ethics primarily aims at explaining which role morality plays and how moral reasoning can set limits to ethics (Habermas, 1996, 2001, 2003). Actually, it is a defining characteristic and a particular strength of discourse ethics to draw a clear distinction  between ethical and moral reasoning (Habermas, 1996). Whereas the former investigates questions of the good life, the latter looks at generalizable norms and the procedures necessary for regulating conflicts between members from competing cultural traditions. According to this, ethical reasoning is a source of justification that always has to operate within the boundaries of moral justification and results of moral reasoning always have a certain priority over results of

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  ethical discourses (Habermas, 2003). The default concept for conflict resolution is the moral discourse which discourse  which refers to (U) as the principle of morality in order to find agreement concerning the just resolution of an issue in the realm of norm-regulated action (Habermas, 1999: 42; Reed, 1999: 461–462). A moral discourse leads to norms for a specific situation, which are an expression of a rational consensus of all concerned parties that had to comply with the criteria of the ideal speech situation such as impartiality, non-coercion, non-persuasiveness, and acceptance of the better argument (Habermas, 1993: 54–60). Thus, the validity claim that is raised in a moral discourse is that of rightness rightness and  and its scope is universal  in  in nature (Habermas, 1998). --------------------------------Insert Table 1 about here --------------------------------All three forms of practical reason are somehow distinct but represent complementary components of Habermas’s theory and ask for a certain type of discourse (see Table 1). This means that there is also a sense in which the three forms of practical reason overlap and that the same issue may be treated either as a pragmatic, an ethical or a moral question (Reed, 1999: 463). It is precisely this concept of three normative realms that most scholars see as a major strength of discourse ethics (Finlayson, 2005; Reed, 1999). As we shall see in the course of our analysis, this distinction provides some clues for a critical evaluation of the normative assumptions of SA 8000.

SOCIAL ACCOUNTABILITY 8000 Originally, the “Council on Economic Priorities Accreditation Agency” (CEPAA) established the idea of SA 8000. Today, the New York-based NGO “Social Accountability International”

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  (SAI), which emerged out of CEPAA, is the responsible body for the standard (Leipziger, 2001: 12). In 1996, SAI finally convened an international multi-stakeholder Advisory Board to develop and introduce SA 8000 as a global certification standard obligating companies to accept social responsibility in certain areas and to prove compliance by allowing for independ independent ent audits.

Basic Idea of SA 8000

SA 8000 is the first social accountability standard for retailers, brand companies, suppliers, and other organizations to maintain decent working conditions throughout the supply chain on a global basis. The standard defines minimum requirements for workplace conditions that need to  be met by b y corporations and an d their suppliers and is applicable to a wide range of industry sectors and to any size of organization (Göbbels & Jonker, 2003: 56). Using the procedures of the quality management standard ISO 9000 and the environmental management standard ISO 14000 as a reference (Jiang & Bansal, 2003), there are two options for corporations to implement SA 8000 (SAI, 2005): certification in compliance with SA 8000  8000  and participation in the Corporate Involvement Program: Program:

  Certification in compliance with SA 8000: 8000: corporations operating their own production

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facilities can aim to have individual facilities certified in compliance with SA 8000 through audits conducted by SAI S AI accredited certification bodies.

  Corporate Involvement Program (CIP):  (CIP):  The CIP helps companies, particularly retailers,

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 brand companies, wholesalers, and sourcing agents, to assure that goods are made under decent working conditions by seeking SA 8000 certification of their suppliers. The CIP is a two-level approach that assists corporations in implementing the standard and to report on implementation progress. CIP  Level One  One  is called “SA 8000 Explorer” and is designed for

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  companies trying to evaluate SA 8000 as an ethical sourcing tool via pilot audits. CIP  Level Two is Two  is entitled “SA 8000 Signatory” and helps companies to implement SA 8000 over time along their supply chain by demanding certification and communicating implementation  progress to stakeholders (e.g. Levi Strauss and Body Shop). The decisive difference with regard to common ethics programs (like codes of conduct) is that successful implementation of SA 8000 is monitored by external   auditors (certification  bodies). It should be mentioned that third-party monitoring of standards is still very rare. In an empirical study, Tulder and Kolk (2001) discovered that third-party monitoring was included in only three of 138 companies. Nevertheless, there is a significant increase in the number of companies starting to verify their sustainability reports on an independent basis (KPMG, 2002; Mamic, 2005). Figure 2 depicts the overall framework of SA 8000 and reflects the two-tiered character of the initiative by distinguishing between a macro and a micro-level. On the macro-level one can find the catalogue of consensus-based standards comprising three elements that shall be specified  below. The macro-level restricts actions on the micro-level where the certification process and audit are carried out in cooperation with affected stakeholders. A mutual consideration of both levels establishes an open dialogue around the initiative and thus drives the continuous improvement process. --------------------------------Insert Figure 2 about here ---------------------------------

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  Macro-Level: Catalogue of Consensus-Based Standards

On the macro-level one can find the specific contents of the standard consisting of (1)  purpose and scope of the standard , (2) normative basis of the standard and definitions, definitions, and (3)  specific guidelines for corporate action (SAI, action (SAI, 2005): 1.   Purpose and scope of the th e standard. Following standard.  Following SA 8000, corporations are under obligation to actively handle all areas of social accountability that can be controlled and influenced. The “controllable” area also includes suppliers. Certification is awarded only for a specific local  production facility but bu t not for the entire value chain of a company at a time. The guidelines have to be applied in consideration of the respective geographical, societal, political, and economic situation of the corporation. 2.   Normative basis of the standard and definitions.  definitions.  The normative basis emerges out of the claim that corporations have to meet all nationally and internationally valid laws. In addition, companies need to act in accordance with the United Nations Universal Declaration of Human Rights, the United Nations Convention on the Right of the Child, and a number of ILO-conventions (see SAI, 2005). SA 8000 does also provide a definition of certain terms (e.g. supplier, stakeholder, children, and child labor) that play a significant role in the scope of certification. 3.  Specific guidelines for corporate action.  action.   These guidelines are derived from the normative  basis of the standard. To be certified successfully, a production facility must meet the measurable, verifiable standards in the following areas (see Table 2). --------------------------------Insert Table 2 about here ---------------------------------

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Micro-Level: Implementation of the Standard

Operative implementation on the micro-level takes place at local production facilities. A “guidance document” issued by SAI provides instructions concerning the local adaptation and  basic compliance rules of SA 8000. 80 00. To foster implementation, SAI suggests dividing the process into four phases following Deming’s (2000) Plan-Do-Check-Act (2000) Plan-Do-Check-Act model (Leipziger, 2001: 60–63). In the first phase ( plan  plan), ), the corporation chooses a certification company (auditor) that is accredited by SAI and conducts a first self-assessment. During the second phase (do ( do), ), necessary modifications of production processes and management systems are accomplished. The auditor analyzes the production processes and informs the company about deviations from SA 8000. Within the third phase (check  ( check ), ), the actual audit takes place once a production facility meets all demanded requirements. Auditor, production facility, and affected stakeholders (e.g. unions) work together while the audit is conducted. In case of a successful certification, the production facility is awarded the SA 8000 seal for three years. The last phase ( act ) is supposed to guarantee constant compliance with SA 8000; auditors are allowed to make follow-up visits and are  permitted to withdraw certification. To ensure dialogue, corporations are asked to set up a system  by which employees can report their complaints in an anonymo anonymous us way. Independent stakeholders (e.g. NGOs) act as monitoring institutions by reporting violations to the auditor or to SAI. The description of the different phases demonstrates that corporations need to understand the reorganization of their production processes as an ongoing task and challenge—a challenge that is not completed once the certificate is awarded. Certification is not supposed to provide a snapshot at a single point in time but rewards sustainable rewards  sustainable efforts  efforts to improve working conditions.

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  SA 8000 tries to guarantee that standards are still met after the external auditor has left to ensure a continuous improvement of workplace conditions (Leipziger, 2001: 59).

CRITICAL EVALUATION OF SA 8000 FROM A HABERMASIAN VIEW Having presented both an overview of discourse ethics and an account of SA 8000, we are now in a position to provide a critical evaluation of this standard from a Habermasian  perspective. To be coherent with our previous findings, the critical discussion draws heavily upon the insights gained from the concept of communicative action, the basic principles of discourse ethics, as well as the distinction between the three different forms of practical reason.

Advantages of SA 8000

Our investigation revealed that SA 8000 is currently one of the most developed and widely used social accounting standards for MNCs. The opportunity to gain even wider acceptance seems to be substantial, sub stantial, at least at first glance, because SA 8000 not only provides proper guidelines to improve working conditions but also is auditable auditable (Leipziger,  (Leipziger, 2001; McIntosh et al., 2003). In fact, SA 8000 is the first  the  first  auditable   auditable standard on workers’ rights. Corporations receive a quasi-objective confirmation for socially responsible production and represent themselves as “good corporate citizens” on an international level. McIntosh et al. (2003: 117–120) consider auditability to be the major advantage and most important distinguishing feature of the standard. Regular audits help companies to ensure that they are respecting workers’ rights and enable them to take responsibility for the consequences consequences of  of their economic activities.

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  In accordance with (U), the “foreseeable consequences and side-effects” of business operations come to the fore and, due to independent auditing processes, working conditions  become highly transparent. SA 8000 does not only ask for pragmatic discourses to enhance the effectiveness of effectiveness  of production by improving workplace conditions, introducing better management systems, lowering the risk of liabilities, and increasing product quality (Gilbert, 2003; McIntosh et al., 2003) but also fosters authentic ethical  reflection  reflection on the ends ends of  of business practices. From a Habermasian perspective, the auditing process can be considered as an ethical discourse where the question of the  goodness  goodness of  of production is critically discussed in collaboration with affected stakeholders on the local level. As stated by the principle of discourse ethics (D), in such a  process of ethical reasoning all  stakeholders  stakeholders affected by SA 8000 are basically entitled to express their opinion in order to foster a reformulation of the proposed guidelines and to criticize the auditing process. Because of this, SA 8000 should not be considered as just another fashion or trend in management (Abrahamson, 1996), implemented solely to protect a firm’s reputation, but as a real effort to foster stakeholder dialogues and to draw the attention of MNCs to the consequences of their international business operations. If we deem firms to be responsible for the consequences and side effects of their actions, business ethics needs to develop and advance concepts like SA 8000 to support executives in exploiting the potential syntheses between morality and (market) success (Ulrich, 1998).

Drawbacks of SA 8000

Despite the advantages of SA 8000, a closer assessment of the initiative, from a Habermasian  perspective, reveals three problems: First, the norms contained in SA 8000 are based on an insufficient  justification  justification;; second, the standard does not provide any idea of how how   to design

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  dialogues with affected stakeholders; and third, commitment to the standard often seems to be a result of coercion (and thus of strategic of strategic action) action) and does not reflect voluntary participation. Insufficient justification of norms.   The macro-level norms, contained in the “catalogue of

consensus-based standards,” claim to be moral   maxims for corporate behavior which make the scope of these validity claims universal   in in nature. Following the principle of universalization (U), norms can only be sufficiently justified to claim universal validity when all stakeholders affected  by a norm jointly and freely accept the consequences and side effects of its general observance (Habermas, 1999: 42). Taking a closer look at how SA 8000’s norms were developed, one needs to doubt that all   affected stakeholders, not even all key stakeholders, were involved in the  process of justifying the proposed principles. SAI (2005) states that the standard was developed  by an international multi-stakeholder “Advisory “Advi sory Board” and that the representatives included in cluded in this body compiled guidelines that were supposed to be applicable on a worldwide basis (Leipziger, 2001; McIntosh et al., 2003). A closer look at the composition of the Advisory Board shows that the development process was dominated by particular groups, namely experts from trade unions, businesses, and NGOs (Leipziger, 2001; SAI, 2005). Representatives of other key stakeholder groups, particularly suppliers, employees of production facilities, and consumers were not invited to take part in this working group, although they are heavily affected by SA 8000. The Advisory Board also seems to be b e dominated by representatives rep resentatives from a small number of developed (Western) countries resulting in an imbalance between stakeholders from industrialized and less-developed nations. That is why the standard is often considered to be just another initiative trying to impose Western standards on people from other cultural backgrounds (Gilbert, 2003).

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  Consequently, the maxims included in SA 8000, which claim to be moral   norms with universal  validity,   validity, can only be considered as ethical  norms   norms with relative relative validity,  validity, reflecting the intentions and cultural backgrounds of the members of the Advisory Board. A more profound  justification of SA 8000 and a consensus on a catalogue of moral   maxims on the macro-level would not only be an interesting academic endeavor but also a starting point to distinguish this initiative from other social accounting standards. It would b boost oost the acceptance of SA 8000 mainly by reducing the likelihood of conflicts among stakeholders on the micro-level. Under conditions of scarce resources, firms must choose which initiatives they want to adopt; a solid normative-grounding provides a central criterion to make a decision in favor of SA 8000. How to organize stakeholder dialogues?  The problem of an insufficient justification is

closely related to a second major weakness of SA 8000, the question of how how   to organize stakeholder dialogues. In discourse ethics, normative validity cannot be understood as separate from the argumentative procedures  procedures  used to resolve issues concerning the legitimacy of ethical and moral norms (Habermas, 1996). Every validity claim to normative rightness depends upon a mutual understanding achieved by individuals in discourse. Although the current version of SA 8000 asks for stakeholder discourses to further develop the consensus-based norms on the macro-level and to locally apply the guidelines on the micro-level, no clues are given how these dialogical processes are supposed to be organized. The only advice provided is that “[…] the company shall establish and maintain procedures to communicate regularly to all interested  parties” (Leipziger, 2001: 121). We argue that the absence of a structured idea about how to organize stakeholder dialogues presents a fundamental shortcoming of the current version of SA 8000. Many companies lack experience in designing stakeholder engagement eng agement processes (Belal, 2002). Others have such processes in place but put an exclusive focus on key stakeholders

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  like employees, customers, and shareholders while neglecting the legitimate interests of other  parties (KPMG, 2002: 24–25). To T o be able to arrive at universally accepted maxims (macro-level) and to locally adapt these maxims (micro-level), a more developed concept of communication is needed. Coercion as a driver to implement SA 8000.  The principle of universalization (U) requires

achieving agreements on conflicting norms in practical discourses under the condition of the ideal speech situation and it states that a consensus should be the result of an agreement reached without coercion coercion   (Habermas, 1996: 42). When looking at the practice of MNCs, firms often  place an obligation on their suppliers to comply with SA 8000. Then, the acceptance of the standard is not based on the integrity of the supplier but represents a response to external  pressure and fear of sanctions in case of non-compliance. This results in an odd situation: suppliers try to formally comply with the standard, but do not alter their internal decision  processes (Treviño, Weaver, Gibson & Toffler, 1999: 135). 1 35). From a discourse ethics perspective such an enforced certification can be termed as strategic action and therefore barely ensures legitimate actions. Of course, it is comprehensible that MNCs are trying to place special emphasis on strategic motives to increase economic performance. Nevertheless, the application of the whole initiative should not be limited  to  to such an understanding, at least from the viewpoint of discourse ethics. Sustainable Sustainable   ethical reflection does not consider the implementation of SA 8000 as a mere result of strategic calculation. MNCs need to understand that externally imposed standards do not automatically enhance the willingness of companies to accept ethical responsibility. On the contrary, there is increased risk that corporations will attempt to get around imposed  rules or even try to get rid of them. imposed

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A “DISCOURSE-ETHICALLY” EXTENDED VERSION OF SA 8000 Based on our critical evaluation of the current model of the initiative we are now able to introduce a “discourse-ethically” “discourse-ethically” extended version of SA 8000  8000   which provides both reasonable answers to the criticism outlined above and a more developed system to justify and implement international labor standards to improve working conditions. The extended version draws on the  basic conception of SA 8000 as introduced in section three. However, to address the problems outlined above, we suggest including a number of Habermas’s ideas on the macro as well as on the micro-level of the standard (see Figure 3).1  --------------------------------Insert Figure 3 about here ---------------------------------

Macro-Level: Moral Discourses and a Catalogue of Discursively Legitimized Standards

As a response to the insufficient justification of norms and due to the fact that SA 8000 does not address the question of how to set up stakeholder dialogues, we propose to integrate the basic  principles of discourse ethics (U) and (D) as well as the discourse rules ru les (ideal speech situation) into the macro-level. SAI would have to supplement the current version of the standard with a  preamble comprising  preamble  comprising (U) and (D) and the discourse rules of the ideal speech situation. This has three particular advantages: First, the principle of universalization (U) provides an impartial moral point of view for SA 8000 to capture the practice of moral argument, particularly the  process of universalization which is of utmost impo importance rtance for a social accounting standard trying to assure humane workplaces across cultures and their respective norms and values. By drawing upon (U), SAI can refer to a process of argumentation to justify the standard and is able to test whether a norm achieves the status of an intersubjectively held moral principle.

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  Second, the principle of discourse ethics (D) provides SA 8000 with a stronger stakeholder focus because it expresses the strict obligation that norms can and must be impartially justified in  practical discourses where affected members of society have the opportunity to raise their voice. Third, an integration of the procedural principles of the ideal speech situation offers SAI and its stakeholders a more precise idea of how to design and maintain stakeholder dialogues between  people from different cultural backgrounds to ensure that norms can claim normative validity. Although the archetype of the ideal speech situation is not fully realizable in practical communication, the discourse rules have a counterfactual potential to facilitate a greater degree of equity among stakeholders and to move away from a one-sided prioritization of economically  powerful stakeholders (Unermann & Bennett, 2004). In more practical terms, this means that the SAI Advisory Board has to initiate a practical discourse to critically evaluate the current normative basis of the standard and the specific guidelines for corporate action. As the present version of SA 8000 can only be referred to as a catalogue of ethical  values   values with relative relative validity,  validity, SAI needs to initiate a moral   discourse discourse at  at the macro-level to be able to derive a catalogue of moral maxims with universal  validity.  validity. This moral discourse aims at balancing the interests of all , or at least the most concerned stakeholders, by achieving a mutual agreement on the guidelines included in SA 8000. SAI has to ensure that not only members of the Advisory Board have a voice in advancing the standard but also fringe stakeholders like suppliers, workers, and customers. As an outcome of such a debate norms that are not accepted in an unconstrained way have to be reformulated or eliminated from the standard whereas missing norms need to be included. We propose to label the result of this moral discourse a catalogue of discursively legitimized standards, standards, representing the macro-level of SA 8000 and providing a point of reference for auditing procedures at the micro-level.

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Micro-Level: Dealing with Cultural Diversity through Local Discourses 

Contrary to the macro-level, where SAI needs to foster moral discourses to provide a solid  justification of the normative basis of SA 8000, a discursive extension of the micro-level needs to deal with cultural diversity and the local adaptation of the macro-level norms. According to Habermas’s concept of different forms of practical reason, local discourses can be characterized as ethical   discourses discourses   because they involve decisions on what is  good   for a specific group, community, or culture. As ethical norms always have to operate within the limits of moral  justification, the macro-level restricts the activities of affected stakeholders at the micro-level. In In  practice, this means that the norm-catalogue proposed at the macro-level needs to be operationalized via ethical discourses on the micro-level since every norm (and every law as well) shows room for interpretation and needs to be applied to a context (Derrida, 1992). Because local production conditions differ widely, affected stakeholders cannot simply reproduce the standard at the micro-level but rather need to “fill the pre-given rules” with a contextualized interpretation. Within ethical discourses they need to develop a mutual  mutual  understanding of how they interpret terms like “discrimination,” “child labor,” and “secure working conditions” in their specific local context. The dialogical justification and interpretation of norms on the micro-level and not just their plain reproduction become central to the concept to provide affected stakeholders with concrete guidance regarding specific actions. Hence, ethical discourses that occur on the micro-level can eventually lead to a revision of norms and standards on the macrolevel. A continuous assessment and improvement of the normative contract proposed on the macro-level should take place to further develop the standard.

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  A discursively extended certification process offers yet another advantage: once affected stakeholders have agreed on certain moral standards on the macro-level and their local specification on the micro-level, they are freed from a permanent ethical   reflection on their operative business practices under discursive conditions. As long as the issue being discussed on the micro-level does not evoke an ethical conflict and therefore is only a question of rational   choice,  pragmatic discourses  discourses  are the appropriate means to justify actions and compliance regulations. Pragmatic discourses are not supposed to refer to the assumptions of the ideal speech situation and thus allow for quick and efficient decision-making. Hence, the discursive approach to SA 8000 would ensure economic efficiency in management and production processes because ethical discourses at the micro-level only take place when certain normative issues call for further regulation (e.g., “How do we define child labor in a local context?”) and/or when (compliance) norms for certain issues do not exist at all (e.g., “Is there an ethical responsibility for suppliers who are not able to pay for certification?”). Inevitably, this raises the question of how micro-level discourses should operate when the macro-level rules are not yet determined? In a world of radically different cultures and values the development of moral norms may take some time, whereas local production facilities have to  preserve their capacity to (re)act. In this case, micro-level discourses can be considered as “trading zones” created by stakeholders. According to Galison (1997, 1999), trading zones are ad hoc   spaces that coordinate locally where broader meanings clash. Such zones are based upon hoc interlanguages that are generated by stakeholders. Interlanguages contain terms specific to the context at hand (e.g., “child labor”) that are redefined by stakeholders according to the social systems they are scrutinizing and the feelings and passions they share. An interlanguage occurs where people lacking a common speech and cobble together a temporary set of terms, not to

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  homogenize various groups, but to translate back and forth in a local context. According to Galison (1997: 49), there are three aspects of interlanguages: (a) they set broader meanings aside to serve a local communicative function, (b) they are time-variant, coming into being and fading out fairly quickly, and (c) they are historically contingent. Therefore, an interlanguage connects stakeholder groups by providing a common, yet locally conditioned, set of terms. Like pragmatic discourses, trading zones do not operate with regard to particular rules but are ad hoc  hoc  cultural spaces that are dependent on the local context for both their character and their duration. Although we cannot outline the idea of trading zones in detail, we believe that it provides an appropriate supplement to Habermasian ideas to factor in the limits of macro-level consensus  building in a postmodern world. Against this background, trading zones provide temporary solutions as long as macro-level norms are missing and, recently, scholars have found empirical evidence for their existence (Fuller, 2005).

Limitations of the “Discourse-Ethically” Extended Version of SA 8000

As already indicated, the implementation of Habermasian ideas to advance SA 8000 is somewhat problematic. The conditions of real-world communication, affected by unequal power distribution between SAI, MNCs, suppliers, and other stakeholders, weaken the applicability of the principles of discourse ethics. In addition, the ideal speech situation proposed by Habermas works with rather idealized assumptions. Critics argue that a discourse is never free from constraints and they do not believe that the “unforced force of the better argument” will rationally motivate stakeholders to recognize the validity of a normative claim (Spaemann, 2000; Alvesson & Willmott, 2003).

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   Nevertheless, in line with other scholars (Froomkin, 2003; Power & Laughlin, 1996; Schnebel, 2000; Unerman & Bennett, 2004), we believe in the potential of discourse ethics to be achieved, at least partially, in the social accounting practice of MNCs. It does not make sense to conduct a debate based on the simple dichotomy between fully between fully implementing  implementing the theoretical ideal of discourse ethics and implementing no elements no elements of the concept. In line with this, Unerman and Bennett (2004: 688, 692) conclude that “[…] there is a continuum of possible positions between these two extremes, with the counterfactual potential of the ideal speech situation […] to introduce a greater degree of equity into the determination of corporate responsibilities, and the morality of corporate behaviour, than would be the case in the absence of debate informed by these procedures.” A partial fulfillment of the theoretical ideas of the ideal speech situation need not   be be seen as a failure of Habermas’s program but as a constant reminder of how much further the implementation of discursive ideas has to progress (Power & Laughlin, 1996). In accordance with Habermas (1996, 1998), we interpret discourse ethics as a regulative idea that does not call for compliance with all demanded aspects at every point in time. Rather, we propose that SAI and other key stakeholders should try to take institutional precautions in order to neutralize the restrictions practical discourses are faced with. Under empirical conditions, the best we can hope for is to achieve provisionally legitimate rules at the macro and micro-levels of SA 8000 through a process of collaboration in which affected stakeholders attempt to meet the conditions proposed in the principles of discourse ethics. We argue that discourse ethics is one of the most developed concepts available to cope with different normative claims on an international level as well as to handle conflicts among stakeholders. Habermas’s approach to moral theory captures a formal and universal procedure to which there seems to be no viable alternative (Finlayson, 2005: 103). In addition, Habermas does

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  not propose that different stakeholders can resolve all problems simply by sitting together and talking about them. He recognizes that, in real conflicts, discourses must take place under all sorts of constraints and much of this interaction is actually “strategic,” which means that stakeholders seek to exercise their power and try to influence others to achieve what they consider to be an advantageous result (Froomkin, 2003; Habermas, 1996). However, the significance of Habermas’s approach in relation to these objections is that it provides a way for deciding which which   forms of power and which which   validity claims are legitimate and which are not. Keeping this in mind, discourse ethics can make at least two contributions to the discussion of what is commonly referred to as “stakeholder theory” (Freeman, 1984; Harrison & Freeman, 1999; Mitchell, Agle & Wood, 1997; Phillips, 2003). First, from a Habermasian perspective, stakes based upon morality (macro-level) always take  precedence over those based upon ethics (micro-level). This does not mean that questions of ethics are in some sense less important, but unlike morality, ethics does not provide generalizable norms for resolving conflicts (Reed, 1999). Some local stakeholders, for instance, may have strong ethical beliefs that conflict with moral norms proposed by SA 8000 at the macro-level. In such a case, the relative ethical considerations, however important they might be, would be overridden by moral norms n orms with universal validity. Second, with the principle of universalization (U) Habermas provides a guideline for critically evaluating the legitimacy of stakeholders’ claims via discourse. We would like to point out that this implies neither that all stakeholders should be treated equally nor that they would have an equality of voice and share of outputs (Phillips, 2003: 162; Phillips, Freeman & Wicks, 2003: 488–490). As the power to influence a firm and the urgency of stakeholders’ claims vary across both time and issue (Mitchell et al., 1997: 854), stakeholders continuously need to search

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  for a discourse-based consensus in regard to their different claims, or at least explain to the  public how a prioritization of claims has been achieved. More powerful stakeholders are not per not  per  se  se   a threat to the ideas of discourse ethics, as long as they are willing and able to convince affected parties via discourse of the legitimacy of their claims. Consequently, the task for SAI would be to guard the implementation of SA 8000 against pure strategic communication of more  powerful stakeholders and to support particularly p articularly those tho se groups who are poor, remote, and weak  but nevertheless matter (e.g., child workers). In such a case, following Habermas (1990), it would be appropriate at least to name advocates for those stakeholders who cannot raise their voice in order to include their legitimate claims in practical discourses. In the long run, however, the aim of every discourse should be to reduce the gap between the idealistic situation of full  participation of all affected stakeholders and the shortcomings of real argumentation processes. processes.

IMPLICATIONS FOR OTHER INTERNATIONAL ETHICS INITIATIVES SA 8000 is not the only means to institutionalize ethical reflection in MNCs and to cope with the increasing demand for transparency. Among the myriad of so called “international corporate citizenship initiatives” (for an overview see Goodell, 1999; McIntosh et al., 2003; Zadek, Pruzan & Evans, 1997), particularly the Global Reporting Initiative, AccountAbility 1000, the OECD Guidelines for Multinational Enterprises, and the UN Global Compact have attained a high degree of recognition and a significant following (Göbbels & Jonker, 2003; McIntosh et al., 2003). Although we cannot describe these initiatives in detail, we would like to highlight a few implications of our findings for the discussion on these concepts. Despite their differences, all of these initiatives have a few commonalities. First, they draw on conventions of the ILO and/or the UN Declaration on the Rights of the Child and/or the

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  Universal Declaration of Human Rights. Second, based on these principles, the initiatives intend to promote corporate responsibility to ensure that MNCs are respecting the environment and/or workers’ rights. Third, all initiatives refer to the importance of communication with stakeholders and the power of dialogue as a means to solve conflicts on an international level. Fourth, and most important for this paper, despite a common focus on stakeholder relations, in none of these initiatives can one find an elaborated concept of how to actually perform such stakeholder dialogues and how to justify their normative basis. Although the UN Global Compact explicitly fosters stakeholder collaboration and AA 1000 operates under the leading principle pr inciple of “stakeholder inclusivity” (Göbbels & Jonker, 2003: 57; ISEA, 1999), neither concept provides sufficient justification and assistance in establishing a well-organized stakeholder engagement  process. Having said this, the implications of our findings for these initiatives become clear. As stakeholder engagement is at the core of every concept based on discourse ethics, we propose to integrate Habermasian ideas not only into SA 8000 but also into the Global Reporting Initiative, AccountAbility 1000, the OECD Guidelines for Multinational Enterprises, and the UN Global Compact. We believe that the initiatives can benefit from Habermas’s findings because he  provides a sound justification for his concept of communicative action and the procedural discourse rules, both of which can be applied in the context of other standards. Although, the  practical achievement of Habermas’s ideas is often deemed to be problematic, the framework  provides a clear-cut guideline of how to design stakeholder dialogues to promote open and unbiased discourses. Moreover, the option of distinguishing between different forms of practical reason (viz., pragmatic, ethical, and moral discourses) offers the chance to really bring the national voice of stakeholders into the global debate about universal norms and values and to test

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   both validity claims that are normative in nature (viz., goodness and rightness) and more  pragmatic claims of effectiveness. Although other ethical theories may also be appropriate to inform the current discussion on international ethics initiatives, we wish to start a critical discourse on the application of Habermas’s ideas in the field of international business ethics. Business ethics scholars, in their role as stakeholders, then need to initiate dialogues with representatives of international ethics initiatives to further develop these standards.

CONCLUSIONS In this paper, we first aimed to introduce SA 8000 as a means of social accounting in MNCs and, second, to test whether discourse ethics can successfully inform this concept to better answer the needs of SAI and its international stakeholders. Above all, we consider the practical quality of a “discourse-ethically” extended version of SA 8000 as a major strength. When meaningfully  based on discourse ethics, SA 8000 supports SAI, MNCs, suppliers and other stakeholders to effectively communicate about conflicting issues in order to finally “live” social responsibility in their organizations. The principles of discourse ethics and the discourse rules can be applied at the macro-level of SA 8000 (moral discourses to develop a legitimized norm-catalogue) and the micro-level (ethical discourses to resolve local conflicts). Furthermore (and maybe most important for a concept trying to offer guidance in the field of international   business ethics), based on the assumption of unavoidable presuppositions of argumentation, Habermas presents a general theory of justification with formal and processual characteristics that (a) allows for a sharp differentiation between ethical and moral validity and

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  (b) can be found in and applied to all  cultures.  cultures. Whoever enters into a discussion with the serious intention of becoming convinced of something via dialogue with other stakeholders has to accept that “[…] true propositions are resistant to spatially, socially, and temporally unconstrained attempts to refute them. What we hold to be true has to be defendable on the basis of good reasons not merely in a different context but in all possible contexts, that is, at any time and against anybody” (Habermas, 1998: 367). By drawing on discourse ethics, stakeholders are  provided with a normative point of reference to handle certification processes and to further develop SA 8000 on a truly international level. Nevertheless, the conditions of real-world communication, for instance affected by unequal power distribution between MNCs and fringe stakeholders, weaken the applicability of the basic principles of discourse ethics. Under empirical conditions, the goal of discursively oriented communication must be to realize these principles as far as possible. It is important to note that an implementation of a “discourse-ethically” extended version of SA 8000 does not only depend on endeavors encouraged by SAI, MNCs, and other businessrelated stakeholders. From a Habermasian perspective, the successful promotion of moral  behavior of firms heavily depends on an integrative approach to democracy comprising different levels of social systems (Habermas, 1996). To prevent free riding from taking place, political institutions and the civil society need to establish frameworks of laws and international lawrelated codes (e.g., ILO principles) within which economic pressures are domesticated and moral  behavior of firms (e.g., the implementation of SA 8000) cannot be easily exploited by free-riding competitors. It was not our focus and we do not have the space to outline the consequences of such a program in this paper, thus we can only refer the reader to Habermas’s recent work, where

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  he provides an extensive framework of how to justify a theory of law and how to design (international) democratic institutions based on discourse ethics (Habermas, 1996, 1999). 1999 ). Starting from this, some implications for future research can be identified. First, the relation  between international social accountability standards like SA 8000 or the Global Reporting Initiative and other spheres of democratic societies needs to be investigated in more detail. This research would address the question of how such voluntary initiatives can be successfully linked to each other and to existing political institutions. Second, our Habermasian approach to advance SA 8000 is a purely normative theory theo ry and wo would uld benefit from empirical findings on the  practicality of the concept. Empirical insights are especially required to learn more about applying the discourse guidelines to local contexts and integrating fringe stakeholders into  practical discourses. Unerman & Bennett (2004) provide initial empirical evidence and show that the regulative idea of an ideal discourse in a specific local context can be at least partially achieved. To extend this line of inquiry, we suggest designing a qualitative empirical study to investigate to what degree SAI’s norm-development process (macro-level) and local stakeholder dialogues (micro-level) meet the proposed discursive framework. The results together with the  presented conceptual arguments can affect the future co-operation of SAI, auditing bodies, corporations, and other stakeholders. Third, more research is necessary to address the cultural differences with regard to the implementation of SA 8000 and other international ethics initiatives. Approaches to handle normative issues in business vary greatly across cultures (Watson & Weaver, 2003: 77) and have an impact on the implementation of international social accounting standards. In the light of these findings, a broad research agenda for the field of international business ethics is opening up and we suggest considering Habermasian discourse ethics as a promising candidate to tackle these problems.

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   Endnotes  We gratefully acknowledge the detailed comments of BEQ editor Gary Weaver as well as two anonymous reviewers. Michael Darroch provided much appreciated editorial advice.

1

  Analogous to Donaldson and Dunfee’s (1994, 1999) “Integrated Social Contracts Theory” (ISCT), as the  prevailing concept to address business ethics e thics in an international context, we propose to design the process ffor or the  justification and implementation o off norms and values in a two-stage manner, comprising a m acro and a micro-level. In their approach Donaldson and Dunfee emphasize the importance of several universal hypernorms (e.g., human rights, respect for human dignity and good citizenship) that are ethical principles fundamental to human existence. As such, these hypernorms constitute the basis of macro contracts and act as overarching principles to limit the design and interpretation of micro-contracts within specific local communities (e.g., local codes of conduct of the subsidiaries of MNCs). Relevant to this article is the fact that Donaldson and Dunfee (1999: 52) deliberately decline to provide any justification for the hypernorms in ISCT. They admit that hypernorms may be justified in different ways, but the particulars of those justifications are not relevant to ISCT. As a consequence Donaldson and Dunfee (1999: 23) consider ISCT as “[…] independent from the truth of any particularly traditional ethical theory.” We consider this lack of moral justification as a major deficit of ISCT. From our perspective it does play a significant role how hypernorms are ultimately justified. To develop an international business ethics framework we need  particular ethical theories—like theori es—like discourse ethics—in order to provide such justifications. justif ications. The point is that we cannot make ethical judgments about the right or wrong of norms and values without having some ground on which to legitimize them. The Habermasian approach can make a significant contribution to further develop the field of international business ethics. Concepts, like Donaldson and Dunfee’s ISCT, could benefit from an application of the  principles (U) ( U) and (D) as well w ell as the discourse rules r ules of the ideal speech situation to improve existing processes of argumentation and to better justify hypernorms.  

38

 

 

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48

 

  FIGURE 1 

Habermas’s Rules for an Ideal Speech Situation (Source: Habermas, 1990: 87–89)

49

 

  TABLE 1 

Different Forms of Practical Reason (Source: Reed, 1999)

Form of Practical

Type of Validity

Scope of the

Type of Discourse

Goal of Discourse

Reason  pragmatic reason

Claim effectiveness

Validity Claim non-universal

pragmatic discourse

a recommendation concerning suitable technologies or a realizable program of action

ethical reason

goodness

relative

ethical discourse

value-oriented assessment of ends to  provide both advice concerning the correct conduct of life and a clarification of a collective identity

moral reason

rightness

universal

moral discourse

agreement on generalizable interests and proper procedures for a just resolution of interpersonal conflicts

50

 

  FIGURE 2 

Basic Conception of SA 8000

Macro-Level

Catalogue of Consensus-Based Standards Purpose and Scope of  the Standard

Information (e.g., alteration of the normative basis)

Cooperation with Affected Stakeholders

 Normative Basis of the Standard and Definitions

Limitation of the Micro-Level

Specific Guidelines for Corporate Action

Open Dialogue to Develop the Standard

Certification Process and Audit

Continuous Monitoring of Production Processes

Implementation of the Standard Micro-Level

 

51

 

  TABLE 2

Specific Guidelines for Corporate Behavior (Source: SAI, 2005)

Specific Guidelines Provided by SA 8000

1. 

Child Labor: No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 developing-country exception; remediation of any child found to be working

2. 

Forced Labor: No forced labor, including prison or debt bondage labor; no lodging of deposits or identity papers by employers or outside recruiters

3. 

Health and Safety: Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to  bathrooms and potable potabl e water

4. 

Freedom of Association and Right to Collective Bargaining:  Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining

5. 

Discrimination: No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment

6. 

Discipline: No corporal punishment, mental or physical coercion or verbal abuse

7. 

Working Hours: Comply with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement

8. 

Compensation: Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic need of workers and their families; no disciplinary deductions

9. 

Management Systems: Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices.

52

 

  FIGURE 3 

”Discourse Ethically” Extended Version of SA 8000

Macro-Level Preamble:

Principle of Universalization Universalization (U), Principle of Di Discourse scourse Ethic Ethicss (D), Discourse Rules (Ideal Speech Situation) Catalogue of Discursively Legitimized Standards Purpose and Scope of the Standard Information (e.g., alteration of the normative basis)

 Normative Basis of the Standard and Definitions Limitation of the Micro-Level

Specific Guidelines for Corporate Action Open Dialogue to Develop the Standard

Discursive Implementation of the Standard within the Certification Process and Audit

Local Discourses SA 8000 Standards

(local justification and application of the SA 8000 standards in cooperation with all affected stakeholder)

Locally SpecifiedStandards Specified Standards

Micro-Level

 

53