Thomas Donaldson

Thomas Donaldson
  • Mark O. Winkelman Professor
  • Professor of Legal Studies & Business Ethics

Contact Information

  • office Address:

    644 Jon M. Huntsman Hall
    3730 Walnut Street
    Philadelphia, PA 19104

Research Interests: business ethics, corporate compliance, corporate governance, leadership

Links: CV

Overview

Education

PhD, University of Kansas, 1976; BS, University of Kansas, 1967

Recent Consulting

KPMG; Goldman Sachs; Ernst & Young. Areas: Ethics, leadership, and corporate governance

Career and Professional Awards

Lifetime Achievement Award, The Society for Business Ethics, 2019; Sumner Marcus Award, 2016 (Social Issues in Management Division of the Academy of Management); Aspen Institute’s Pioneer Award for Lifetime Achievement, 2009; “Most influential ‘thought leader’” in Ethisphere Magazine’s ranking of the 100 Most Influential People in Business Ethics; Outstanding Book of 2005, SIM Division of the Academy of Management (Given for Ties that Bind: A Social Contracts Approach to Business Ethics, Harvard Business School Press, coauthored with Thomas W. Dunfee.); Outstanding Book of 1998, SIM Division of the Academy of Management (Given for Ethics in International Business, Oxford University Press).
Wharton Excellence in Teaching Award: 2019, 2016, 2014, 2013, 2011, 2009; Outstanding Teacher of the Year award, 2005 (The Class of 1984 MBA Teaching Award); Rapaport Family Teaching Award, 2014, Undergraduate. Wharton Outstanding Teacher of the Year award, 1998 (The Class of 1984 MBA Teaching Award); Outstanding Teacher of the Year, 1991, Georgetown University Graduate School of Business.; Distinguished Researcher of the Year, Georgetown University School of Business, 1995.

Academic Positions Held

Wharton: 1996-present (named Mark O. Winkelman Professor, 1996). Previous appointments: The John Connolly Professor, Georgetown University 1990-1996; The C. Stewart Sheppard Professor , Darden School, University of Virginia 1988-89; The Henry J. Wirtenberger Professor of Ethics, Department of Philosophy, Loyola University of Chicago; 1984-88; Asst. and Assoc. Professor, Loyola University of Chicago, 1976-1984.

Professional Leadership

Associate Editor, Academy of Management Review, 2003-2007; Associate Editor, Business Ethics Quarterly, 2015-2020; Chair, Social Issues in Management Division of the Academy of Management, 2008; Director, Wharton PhD Program in Ethics and Legal Studies, 2002-2008; Co-founder and past president of the Society for Business Ethics.

Corporate and Public Sector Leadership

Appointed member of the National Adjudicatory Council of the Financial Industry Regulatory Authority FINRA (formerly the NASD) (2004-2009). Trustee, Carnegie Council on Ethics and International Affairs (1992-2018); Chair, FTSE4Good US Committee (2002-2018)

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Research

  • Thomas Donaldson (Forthcoming), A practical reasoning perspective on corporate integrity.

    Abstract: Business should become serious about words such as “integrity” or abandon high-minded pretense. Scholars and managers alike are confused by two language games, one of efficiency and the other of deep values. Each set of linguistic rules refuses translation into the other. Scholars patch stakeholder interests into optimization strategies even as managers patch heroic mission statements into profit targets. All current attempts to escape the trap, multilingual approaches, values-as-preferences approaches, and surrogacy approaches, fall short. The way forward is to focus on the acting agent, whether individual or corporate, and making the agent’s choices subject to the constraints of practical reason. Approaching the problem through the door of practical reasoning and a pattern of practical inference promises to integrate the languages of efficiency and values into a single-flow model while at the same time avoiding the steep requirement of inter-translatability.

  • Thomas Donaldson (2023), Intrinsic Values and Human Rights: Corporate Duties Depend on Industry Values,.

    Abstract: Drawing on the work of Donaldson and Walsh, this article explains why for-profit companies in industries denominated by intrinsic values such as health, education and justice, have heavier responsibilities when it comes to honouring the human rights reflected in their industry identity. Optimized collective value, the overarching aim of any system of business, is defined in terms of the satisfaction of intrinsic values, a definition that gives special meaning to firms operating in industries themselves defined in terms of intrinsic values. Nor are such companies’ responsibilities to human rights, such as the right to healthcare, conveniently reducible to the ‘enlightened’ pursuit of profit. For example, a pharmaceutical company such as Pfizer or Moderna may be required to make its COVID-19 vaccine more accessible to COVID-19 victims in developing countries at the expense of optimizing profits over the long run. Such companies have a special and mandatory correlative duty to honour the right to healthcare that derives from their corporate constitutional purpose.

  • Thomas Donaldson (2023), Value creation and CSR,.

    Abstract: A more robust, inclusive model of value creation will sharpen dominant normative theories of Corporate Social Responsibility (CSR) such as stakeholder theory and the theory of communicative/deliberative democracy. When measuring value creation, CSR theories oscillate between traditional, exchange-based approaches utilizing narrow financial metrics and value-oriented approaches embedded in prominent CSR theories. The two are often in conflict. The problem is aggravated by CSR’s assumption that all firms, regardless of industry, possess the same generic responsibilities. A mining company, a sports betting service, and a medical device manufacturer are on all fours when measuring CSR success. The paper identifies a contradiction between settled normative convictions and the corporate decision making that normative CSR theories prescribe. Using the pharmaceutical industry as an example, it references the widespread conviction that during the 2019 Covid-19 pandemic some pharmaceutical companies had a responsibility to reach beyond the goal of financial optimization. It then explains why this conviction cannot be rationalized using two prominent normative theories of CSR, namely, stakeholder theory and the theory of communicative/deliberative democracy. The problem hinges on a defective model of value creation. One implication of the analysis is that healthcare companies should readjust corporate governance in order to make health a focal goal alongside that of profit. At the same time, a semiconductor firm might satisfy its CSR responsibilities by only designating profit as its focal goal. The thrust of the paper is to show why reconceiving the model of value creation can advance not only stakeholder and communicative/deliberative democracy theories, but all CSR.

  • Thomas Donaldson (2021), How Values Ground Value Creation: The practical inference framework, Organization Theory, 27. 10.1177/26317877211036712

    Abstract: After more than two decades of searching, the holy grail of integrating norms into management and organization research remains elusive. Researchers still lack a clear framework that explains value creation in relation to normative values, and, in turn, a means to incorporate values into research methods and generate value-based practical insights. To fill that need, this article presents an epistemological framework for understanding value creation. The practical inference framework centers on the activity of practical reasoning, a kind of reasoning that is legitimized by intrinsic values. It turns the ordinary epistemic equation on its head by seeking reasons rather than causes, and justifications rather than descriptions. In doing so, it shows how both factor-analytic and newer, divergent methods of research can integrate with a robust architecture of value creation in ways that offer relevant knowledge for managers and society.

  • Thomas Donaldson, John Hooker, Tae Wan Kim (2021), Taking Principles Seriously: A Hybrid Approach to Value Alignment in Artificial Intelligence, Journal of Arti cial Intelligence Research, 70, pp. 871-890.

    Abstract: An important step in the development of value alignment (VA) systems in articial intelligence (AI) is understanding how VA can re ect valid ethical principles. We propose that designers of VA systems incorporate ethics by utilizing a hybrid approach in which both ethical reasoning and empirical observation play a role. This, we argue, avoids committing \naturalistic fallacy," which is an attempt to derive \ought" from \is," and it provides a more adequate form of ethical reasoning when the fallacy is not committed. Using quantied modal logic, we precisely formulate principles derived from deontological ethics and show how they imply particular \test propositions" for any given action plan in an AI rule base. The action plan is ethical only if the test proposition is empirically true, a judgment that is made on the basis of empirical VA. This permits empirical VA to integrate seamlessly with independently justied ethical principles.

  • Thomas Donaldson, “How Methods of Moral Philosophy Inform Business”. In, edited by, (2019), pp. 677-691

    Abstract: How can moral theory be applied to the human actions, institutions, and practices in business? Popular methods from sociology, psychology, economics, and other business school disciplines often fail because they aim at empirical truth rather than normative guidance. Researchers often err in simple ways that reflect the naturalistic fallacy and use descriptive evidence to arrive at normative conclusions. Moreover, simple methods of applying moral theories to business, methods that use standard theories such as consequentialism and deontology, fail for lack of precision. This chapter outlines three methods for successfully analyzing problems in business ethics, namely, (1) “reflective equilibrium,” (2) guiding (or “regulative”) ideals, and (3) thought experiments.

    Description: Donaldson, T. (2019). How Methods of Moral Philosophy Inform Business. Handbook of Philosophy of Management. C. Neesham, M. Reihlen and Schoeneborn, Springer International Publishing: 677-691.

  • Thomas Donaldson (2019), Androids and Corporations: Why Their Rights Derive from Purpose, Georgetown Journal of Law and Public Policy.

  • Thomas Donaldson (2018), Rethinking Right: Moral Epistemology in Management Research, with Kim, TaeWan, Journal of Business Ethics.

  • Thomas Donaldson (2017), Donaldsonian Themes: A Commentary, Business Ethics Quarterly, 18.

    Abstract: Here I comment on articles in the special issue of Business Ethics Quarterly devoted to my work (2015), “Normative Business Ethics in a Global Economy: New Directions on Donaldsonian Themes.”  The articles were written by a set of outstanding scholars: Margaret M. Blair, Joseph P. Gaspar, Nien-hê Hsieh, Peter L. Jennings, Marietta Peytcheva, Andreas Georg Scherer, Amy J. Sepinwall, Andrew Stark, Danielle E. Warren, and Manuel Velasquez. In this commentary I reply to my colleagues, arranging my reply around the following themes: 1) the corporate moral agent; 2) the idea of a social contract for business; 3) managing ethics within corporations; and 4) values in business. I discuss each in turn. However, I reflect first on my idiosyncratic approach to business ethics.

  • Thomas Donaldson, Thomas Jones, R. E. Freeman, J. Harrison, C. Leana, J. T. Mahoney, J. Pearce (2016), Management Theory and Social Welfare: Contributions, Extensions, and Challenges, Academy of Management Review, 41 (2), pp. 216-228.

Teaching

Current Courses (Fall 2023)

  • LGST1000 - Ethics & Social Resp

    This course explores business responsibility from rival theoretical and managerial perspectives. Its focus includes theories of ethics and their application to case studies in business. Topics include moral issues in advertising and sales; hiring and promotion; financial management; corporate pollution; product safety; and decision-making across borders and cultures.

    LGST1000001 ( Syllabus )

  • LGST6110 - Resp In Global Mgmt

    This course uses the global business context to introduce students to important legal, ethical and cultural challenges they will face as business leaders. Cases and materials will address how business leaders, constrained by law and motivated to act responsibly in a global context, should analyze relevant variables to make wise decisions. Topics will include an introduction to the basic theoretical frameworks used in the analysis of ethical issues, such as right-based, consequentialist-based, and virtue-based reasoning, and conflicting interpretations of corporate responsibility. The course will include materials that introduce students to basic legal (common law vs. civil law) and normative (human rights) regimes at work in the global economy as well as sensitize them to the role of local cultural traditions in global business activity. Topics may also include such issues as comparative forms of corporate governance, bribery and corruption in global markets, human rights issues, diverse legal compliance systems, corporate responses to global poverty, global environmental responsibilities, and challenges arising when companies face conflicting ethical demands between home and local, host country mores. The pedagogy emphasizes globalized cases, exercises, and theoretical materials from the fields of legal studies, business ethics and social responsibility.

    LGST6110004 ( Syllabus )

All Courses

  • LGST1000 - Ethics & Social Resp

    This course explores business responsibility from rival theoretical and managerial perspectives. Its focus includes theories of ethics and their application to case studies in business. Topics include moral issues in advertising and sales; hiring and promotion; financial management; corporate pollution; product safety; and decision-making across borders and cultures.

  • LGST2470 - Value of Values: Eth Bus

    This course explores the concepts of value and values in economic life. All strategic and many tactical decisions begin with a value proposition of some kind. Investors, customers, employees, suppliers, and community members are potential sources of value in the creation, exchange, distribution and sale of a good or service. This course examines different conceptions of "value/values" in business life and the role they play in interpreting issues such as artificial intelligence, corporate governance, business and professional education, international business, value theory, and personal values. The class will utilize a combination of theoretical readings, class exercises, student presentations and case discussions.

  • LGST2990 - Seminar in Law & Society

    A study of the nature, functions, and limits of law as an agency of societal policy. Each semester an area of substantive law is studied for the purpose of examining the relationship between legal norms developed and developing in the area and societal problems and needs. Please see department for current offerings.

  • LGST6110 - Resp in Global Mgmt

    This course uses the global business context to introduce students to important legal, ethical and cultural challenges they will face as business leaders. Cases and materials will address how business leaders, constrained by law and motivated to act responsibly in a global context, should analyze relevant variables to make wise decisions. Topics will include an introduction to the basic theoretical frameworks used in the analysis of ethical issues, such as right-based, consequentialist-based, and virtue-based reasoning, and conflicting interpretations of corporate responsibility. The course will include materials that introduce students to basic legal (common law vs. civil law) and normative (human rights) regimes at work in the global economy as well as sensitize them to the role of local cultural traditions in global business activity. Topics may also include such issues as comparative forms of corporate governance, bribery and corruption in global markets, human rights issues, diverse legal compliance systems, corporate responses to global poverty, global environmental responsibilities, and challenges arising when companies face conflicting ethical demands between home and local, host country mores. The pedagogy emphasizes globalized cases, exercises, and theoretical materials from the fields of legal studies, business ethics and social responsibility.

Awards and Honors

  • Teaching Awards, 1995-2011 Description

    Wharton Excellence in Teaching Award: 2019, 2016, 2014, 2013, 2011, 2009.

    Outstanding Teacher of the Year award, 2005 (The Class of 1984 MBA Teaching Award).

    Rapaport Family Teaching Award, 2014, Undergraduate.

    Wharton Outstanding Teacher of the Year award, 1998 (The Class of 1984 MBA Teaching Award).

    Outstanding Teacher of the Year, 1991, Georgetown University Graduate School of Business.

  • Wharton Undergraduate Teaching Award, 2014
  • Excellence in Teaching Award for MBA Core Curriculum, 2011 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Aspen Institute’s Pioneer Award for Lifetime Achievement, 2009
  • Most influential “thought leader” by Ethisphere Magazine’s ranking of the 100 Most Influential People in Business Ethics., 2009
  • Excellence in Teaching, 2009 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Excellence in Teaching, 2007 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Excellence in Teaching, 2006 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Class of 1984 Award, 2005 Description

    The Class of 1984 Award is awarded to the faculty member with the highest average instructor rating over the same time period. The faculty member must have taught at least one semester’s worth of course hours during the prior academic year in order to be eligible. A WGA subcommittee, the Excellence in Teaching Committee, calculates the award winners, along with a selected faculty advisor. Each of the recipients is awarded a plaque.

  • Excellence in Teaching, 2005 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Excellence in Teaching, 2002 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Excellence in Teaching, 2001 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Excellence in Teaching, 1999 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Award for Outstanding Book, SIM Division of the Academy of Management (Given for Ethics in International Business, Oxford University Press), 1998
  • Class of 1984 Award, 1998 Description

    The Class of 1984 Award is awarded to the faculty member with the highest average instructor rating over the same time period. The faculty member must have taught at least one semester’s worth of course hours during the prior academic year in order to be eligible. A WGA subcommittee, the Excellence in Teaching Committee, calculates the award winners, along with a selected faculty advisor. Each of the recipients is awarded a plaque.

  • Excellence in Teaching, 1998 Description

    The Excellence in Teaching Awards are awarded annually to eight (8) MBA faculty members who receive the highest average instructor rating on their course evaluation forms over the three prior semesters. The course evaluation forms are filled out by the students at the conclusion of every course.

  • Miller-Sherrerd MBA Core Curriculum Teaching Award, 1997
  • Distinguished Researcher of the Year, Georgetown University School of Business, 1995

In the News

Knowledge at Wharton

Activity

Latest Research

Thomas Donaldson (Forthcoming), A practical reasoning perspective on corporate integrity.
All Research

In the News

Tightening the Noose: Can the SEC and Its New Chairman Be Tougher on Wall Street?

Although the SEC has always been the federal government's chief guardian of integrity in the financial markets, critics have a long list of grievances, including claims that the agency is too unsophisticated and too soft on wrongdoers. Assuming she is confirmed as the new SEC chairman, Mary Jo White will need almost superhuman skills to make the SEC more effective, some observers suggest.…Read More

Knowledge at Wharton - 3/13/2013
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Wharton Magazine

Ethics Beyond Borders

Globalization, technology and the integration of markets have created a frightening new frontier in the realm of business ethics. So how can we build a new ethical code for a fast-changing world?

Wharton Magazine - 04/01/2011