Can Ethics Drive Firms to Do the Right Thing if There Is No Business Case?

This paper examines whether ethics can drive good firm behavior even if no business case exists (i.e., good firm behavior will not improve financial performance). Using a version of the well-known Apple-Foxconn scenario as a test case, we first argue that the answer is no. Ethics cannot drive good firm behavior if no business case exists. This position relies upon agency theory grounded in Kantian and utilitarian ethics. We then pivot and explore arguments in favor of ethics driving good firm behavior even when no business case exists by considering moral permissibility, focusing on utilitarian, Kantian, and virtue ethics. Lastly, we examine a midway position, which rests upon the concept of moral motivation and the principle of ‘ought implies can.’ After laying out the different responses to the main research question, we propose paths for future research. Finally, we reformulate the main question to focus on the barriers that prevent firms from using their resources to behave ethically.