ABSTRACT
This chapter covers the tradition of contractarian business ethics from the appearance of Thomas Donaldson's Corporations and Morality to current debates. It focuses on the justifications of the social contract in business ethics. The chapter describes the major elements common to contractarian business ethics (CBE) theories. It focuses on the influential theory of Thomas Donaldson and Thomas Dunfee, the Integrative Social Contracts Theory. The chapter summarizes other approaches to CBE. It also summarizes significant critical stances towards CBE and indicates new directions of inquiry within the tradition. CBE is often presented as a philosophical argument for the legitimacy of large corporations. CBE comes in a variety of forms. In CBE the "state of nature" was defined by T. Donaldson as a state of "individual production" inferior to a state in which all agree to allow the existence of firms provided that they respect employees' and consumer's rights.
