MIS Quarterly Executive


Information systems executives, and other executives, are often prodded to "do the right thing" when they face ethical quandaries. But how do they determine what is "right" ethically, especially when the ethical quandaries occur in the corporate domain? Some individuals rely solely on their own emotions, but they often have a hard time convincing rational thinkers to embrace their position. Other individuals rely on traditional philosophical theories, but this approach is seldom optimal in the corporate domain because the traditional philosophical theories do not specifically address the corporate setting. However, two theories do address ethical quandaries in the private sector: stockholder theory and stakeholder theory. This article discusses these two theories. Stockholder theory holds that executives should resolve ethical quandaries by taking actions that maximize the long-term profits to stockholders without violating the law or engaging in fraud or deception. Stakeholder theory claims that executives should resolve ethical quandaries by balancing stakeholder interests without violating the rights of any stakeholder. These theories are explored by first applying them to a specific real-world quandary: Blockbuster Video's reported plans to market its customer lists. Then the theories are applied to several other current quandaries. Finally, the article explores action steps for applying each theory.