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Theories of management require normative justification; that is, they rely on some conception of what is morally good, right, and just. This chapter examines some of the normative reasons for adopting a stakeholder theory of management and for rejecting the once, and perhaps still, “dominant” shareholder-centric approach. This chapter then surveys some of the prominent “normative cores” that are used to ground stakeholder theory, that is, Kantian, contractarian, feminist ethics, and ethical pragmatism, and the moral obligations that each normative approach generates. Some pressing questions are raised with respect to each normative approach. To what extent ought we to recognize imperfect obligations to shareholders? Are contractarian hypernorms morally substantive? How exactly should we care about stakeholders, and is care even an appropriate attitudinal response? Without some commitment to objective ethical standards, how can pragmatists resolve stakeholder conflict?

Most economists are committed to some version of egoism. After distinguishing among the various sorts of egoistic claims, I cite the empirical literature against psychological egoism and show that attempts to account for this data make these economists' previous empirical claims tautological. Moreover, the assumption of egoism has undesirable consequences, especially for students; if people believe that others behave egoistically, they are more likely to behave egoistically themselves. As an alternative to egoism I recommend the commitment model of Robert Frank.The equivalent of egoism at the organizational level is that business firms seek (should seek) to maximize profits. I present arguments to show that a conscious attempt by managers to maximize profits is likely to fail. A committed altruism is more likely to raise profits. I suggest that a firm should take as its primary purpose providing meaningful work for employees.