This article introduces an “ordonomic” approach to corporate citizenship. We believe that ordonomics offers a conceptual framework for analyzing both the social structure and the semantics of moral commitments. We claim that such an analysis can provide theoretical guidance for the changing role of business in society, especially in regard to the expectation and trend that businesses take a political role and act as corporate citizens. The systematic raison d'être of corporate citizenship is that business firms can and—judged by the criterion of prudent self-interest—“should” take on an active role in rule-finding discourses and rule-setting processes with the intent of realizing a win-win outcome of the economic game. We identify—and illustrate—four ways that corporate citizens can employ moral commitments as a factor of production to enhance their processes of economic value creation.

This paper addresses a fundamental problem in corporate sustainability: How can corporations transform trade-offs through win-win-oriented governance strategies aimed at creating value? Drawing on new strands of research in business ethics, we employ an 'ordonomic' perspective and proceed in four steps. First, we sketch how sustainability semantics has evolved historically from a societal searchlight to a heuristics for business practice. Second, we discuss how business firms can make strategic use of moral commitments as governance contributions by deploying individual or collective self-commitments as well as commitment services in their stakeholder relations. Third, we combine these four governance strategies with the three ESG ('ecological, social and governance') criteria of sustainability. We derive and illustrate with real-life examples a 12-box matrix as a tool for the strategic management of corporate sustainability. Fourth, we discuss the specific contribution of our ordonomic approach to the literature.

business ethics, management education, corporate citizenship, corporate social responsibility, new governance, ordonomics, social dilemmas, stakeholder theory, social entrepreneurship,

ABSTRACT:The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation (type I democracy) and a principle of legitimation that draws on consent (type II democracy). Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I democracy notions of participation and often take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging (and further improving) the legitimacy of both capitalistic firms and competitive markets.

The literature on nonprofit management has embraced the concept of "accountability" to target urgent challenges related to NGO probity and integrity, and the literature witnessed attempts to use rational-choice-based governance approaches to solve them. Though existing principal-agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the "stakeholder dilemma" between the NGO and a single accountability holder as a onesided social dilemma and (b) the "competition dilemma" among rival NGOs as manysided social dilemma. We show that improving NGO accountability in relation to 'intended' beneficiaries, peer organizations and the general public also requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.