The contention that ethical standards should reflect the collective views of multiple societies in establishing a set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundaries on actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actions of local cultures or groups (with their traditions and shared values), that further prescribe to what represents ethically permissible behavior and what does not, constitutes the basic principles of

integrative social contracts theory.

Explanation:

In business ethics, the theory of integrative social contracts theory postulates the idea of communitarian concept of economic morality where economic policies and standards reflect the views and consent of various societies.

The theory advocates that while drafting a set of universal ethical principles, managers and policy makers must adopt and take into consideration the existing customary principles of local cultures or groups.

Thus, it suggests that ethical business decisions must consists of culturally sensitive decision making capacities that represent ethically permissible behaviors of different societies and cultures.