Examining Justice Failure: Efficiency and Equality in Business Ethics

This essay introduces the concept of "justice failure" as a complement to the well-known idea of market failure, aiming to enhance the understanding of managers' ethical responsibilities. It builds upon the "market failures approach" (MFA) to business ethics, recognizing its success due to its alignment with economic theory, particularly the notion that markets should prioritize efficiency while the welfare state addresses equality. The paper challenges the MFA's emphasis on efficiency, arguing that just as market failure highlights suboptimal efficiency, "justice failure" acknowledges the suboptimal equality of welfare states. This perspective broadens the ethical responsibilities of businesses, urging managers to avoid profiting from and exacerbating structural inequalities and injustices, in addition to addressing market imperfections and regulatory gaps. The essay outlines relevant injustices and inequalities, suggesting corresponding ethical responsibilities for business actors, advocating for a more comprehensive approach to managerial ethics that considers both efficiency and equality.