Since ought implies can, i.e., one cannot be obligated to do what one cannot do, the question of corporate responsibility cannot be discussed intelligibly without an inquiry into the range of corporate or managerial discretion. Hence, the moral relevance of a theory of the firm. Within classical or neo-classical economic theory, for instance, firms which act other than to maximize profit are eliminated. They cannot do otherwise, and thus either have no obligations at all or only the duty to maximize profit. The thesis of the Managerial Revolution, if true, establishes only that management is free from direct stockholder control. By asserting that corporations have responsibilities to do other than maximize profit, philosophers assume a wide degree of managerial discretion, without considering recent developments in the theory of the firm which suggest that new incentives and constraints radically restrict managerial liberty in a capitalist society.
Philosophers have worried, at least since the time of Hume, about the relationship between the "is" and the "ought," between science and ethics, between the world of facts, as it were, and the world of values. Amidst all the controversy surrounding the thorny issues involved, one consensual principle, an almost Archimedean point, has emerged. This principle, which can be characterized as the Physical Possibility Principle, asserts that "ought" implies "can", and is variously invoked in criticisms or defenses of one or another ethical theory. In what follows, I will focus upon this principle as it applies to the question of corporate moral obligation.