Thursday, December 17, 2009

Dial M for mission.

We often get asked about how we got into this strange academic world, why we do work in responsible business, and, well, isn't it about time we got ourselves a proper job? Sometimes our answers are glib but with a touch of truth about them ... we like getting up late, we can wear what we want, it's cool to be able to do pretty much exactly what you want, whenever you want. Yes, the freedoms are pretty great, we have to say (though not everyone thinks that our sartorial choices should be quite so free).

But truth be told we also have a bit of a mission ... not a big capital M Mission to change the world, to reveal the truth to the great unwashed, or to convert all those immoral business people into saintly Crane and Matten disciples. OK, so we do like to occasionally come over all guru-like, but usually we can;t keep a straight face long enough. Who would believe that we really have all the answers? We have trouble enough just getting the questions right. But perhaps we do have a smaller, more modest mission of a sort. One that's something like making a difference to how people think about responsible business, whether they are students, researchers, practitioners, or just the random people that bump into our blog through the magic of google. Being a university professor gives you lots of opportunity to do this, and it's probably this more than anything that get's us out of bed in the morning. Either that or the thought of breakfast. Or a girlfriend who really does have a proper job. It's certainly not the money.

Anyway, you're probably wondering, why are Crane and Matten getting all existential on us today? Why the sudden need to talk about the ... ahem .... "mission". Is it the end of year reckoning getting the better of them, the need to put things in place, start listing achievements, and work out where it all went right/wrong (delete as appropriate). Maybe. But it's also because we just seem to be getting asked a lot recently. So to put you in the mood too, check out Andy's recent interview by the Association for the Advancement of Sustainability in Higher Education (AASHE). He talks about what got him started researching in this field, what students are looking for now, what the big trends are, and what gets him excited about his job (besides getting to wear the funny hat at graduation ceremonies, and the big end of year bonuses of course).

AASHE is an association of colleges and universities that are working to create a sustainable future. Their mission "is to empower higher education to lead the sustainability transformation." It sounds a bit more impressive than ours, so we were happy to chat with them about what we were up to in our research and teaching. We're not sure it's going to empower anyone, at least not without providing a whole lot of other tools and resources that organizations like AASHE typically try and deliver. But it might get them thinking. You can't ask for more than that.

Oh OK, you can. Just don't ask us for more than that. At least not before noon.

Photo by Martin Kingsley. Reproduced under Creative Commons license

Tuesday, December 1, 2009

Do we need a list of corporate responsibility lists?

As usual the fast approaching end of the year is bringing forward the typical slew of "best of" lists, though with a end-of-decade twist that is pushing the list-maniacs out there into overdrive. Of course there are the usual cultural lists - best album of the decade, best book of the year, best media moments, etc - but even in our own little world of corporate responsibility there has been a growing number of "best of" lists seeking to garner a little attention from the trend spotters out there.

For example, fresh in our inbox today was a notice about "the 100 ethics blogs every business student should read" put together by an outfit called It's an eclectic mix with a tendency towards the more scholarly corners of the blogosphere. Some that it lists, like the "brain ethics" blog, or "mindhacks" sound kind of intriguing, and will take the intrepid business ethics reader quite far away from their usual stamping grounds. They even give us a mention, which I guess is why they told us about the list.

Another list, which came out a little earlier in the year, but is still generating quite a bit of attention is Chris Jarvis's "51 Great Sites for Corporate Social Responsibility and Sustainability". Chris is a fellow Torontonian who writes his own blog on corporate volunteering called Realizing Your Worth, and also published the top 51 (why 51 Chris?!) with the business magazine Fast Company. It's a great list of blogs, resource pages, and a top 10 'must-have sites on CSR' .

If you're looking for something a little more international (and who isn't?), networked blogs has a list of top blogs on just about everything - and their top 39 blogs in CSR (is there a theme here with random list lengths?) includes CSR blogs in Hungarian, Romanian, Spanish, German, Indonesian, Swedish, Italian, you name it.

Finally, a mention for our two fave CSR magazines, Ethical Corporation and Corporate Knights. Ethical Corporation typically produces a "top 10 ethical leaders of the year" list in its December issue, but by the looks of it, may not be doing so this time round - probably because they are starting an official program of CSR awards in 2010 . Last year, though, in their ethical leaders feature they started the bandwagon for inappropriate awards that the Nobel Prize people jumped on by crowning Barack Obama as the top dog among "individuals we believe have done most to further the cause of responsible business".

Meanwhile, on this side of the Atlantic, Corporate Knights have become a listing powerhouse, providing well researched rankings of all things sustainable business related. Top 100 sustainable companies globally - they rank 'em. Top sustainable cities in Canada - that too. Top MBA programs dealing with responsible business - uh huh. In fact, they rank just about anything you might want ranked. And if they don't? Well, we're sure if it's a good idea, they'll give it a try.

We could go on with the list, but to be honest we don't quite have the stamina to do them all justice. We're not even sure we need a full blown list of lists. In fact, our list doesn't even meet the basic requirements for a good list at all - it isn't even numbered, for a start. So let's just say that we're glad the lists are out there ... but don't go expecting us to turn into fellow listers. Even if it is December.

Photo by anitacanita, reproduced under creative commons license.

Monday, November 23, 2009

Here’s to Communism!

A while ago we blogged about the bizarre usages of the term ‘socialism’ in North America. But in an attempt to be fair, we have to say they are not the only ones. Today’s blog comes from the Indian state of Kerala, where we find an equally fudged notion of, this time, ‘communism’, albeit in a slightly different way.

Kerala, back in 1957, was the first ever state in the world to freely and democratically elect, yes, a communist government. The communists have been in power there for most of the time ever since. On closer examination though, it is not really communist: Kerala, by and large, still is basically part of capitalist and free market system, most notably with private property of the means of production. So this is the slight misnomer then, it’s more a government strongly committed to social-democratic policies.

This said, however, it is fairly impressive to see the track record of those ‘communists’. Kerala is a success story, ‘the most socially advanced state in India’ according to Nobel Laureate Amartya Sen. Land reform, infrastructure investment, good health care and education systems have put Kerala at the top of most developing countries globally. Its literacy rate of 91% is the highest in the developing world and its life expectancy (73 years) is 10 years higher than the Indian average. Infant mortality rates are a fifth of the entire Indian subcontinent.

So the Kerala story – labels aside – is a success story. And it shows that it is possible to change social and economic conditions with policies which are geared towards the ‘greatest good of the greatest number’, see Chapter 2 in Crane&Matten. In this context it is also illuminating to see that Kerala boasts a vibrant, powerful and active civil society movement. Our readers will recollect that we have an Ethics in Action box on Coca Cola’s fate in Kerala some years ago in Chapter 11 of our book. It was here, where a global protest movement started. And as we are happy to point out, it was here, where some of the most innovative policies of a multinational company with regard to water management were triggered. In some ways, Coca Cola benefitted from the vibrant civil society and NGO scene in Kerala…

All said then, it is no surprise that the ‘communism’ label has deterred investment by corporations and Kerala suffers from it. The only major source of extra business opportunities then is tourism. Crane&Matten are more than happy to hasten to rescue here…

Tuesday, November 17, 2009


While in New York recently, we took in Edward Burtynsky’s latest exhibition, ‘Oil’, at the Hasted Hunt Kreutler Gallery in Chelsea. It’s an impressive collection, put together over more than a decade, and tracing the value chain of oil from extraction to use, and disposal.

Some of the shots are simply stunning, more akin to abstract art than photojournalism. From Australian mines to Azerbaijani wells, and Shanghai car factories to LA freeways the overwhelming scale and embeddedness of oil as a feature of the contemporary global landscape is thrown right in our faces. Burtynsky’s large format pictures are simultaneously shocking and beautiful, prompting for us a strong, but somewhat ambiguous response. Yes, this addiction to oil has got out of hand; yes, our thirst for oil has ravaged the environment; but, wow, isn’t this pinnacle of modernity also in some ways just downright amazing?

Now for those of us interested in issues of corporate responsibility such ambiguity is nothing new. Balancing the good with the bad, the value creation for some with the value destruction for others, is what much of what our field is all about. But Burtynsky takes this a little further. By seeking to absorb us in the global experience of oil, by joining up the dots in ways that make us want to learn more about what we’re looking at, what we are … yes, enjoying, he draws into the debate not just business ethics nerds like Crane and Matten, but also people that might like a good picture but who might never otherwise give much of a second thought to the ‘oil problem’.

Burtynsky’s exhibition, which is showing simultaneously in New York, Toronto and Washington, is also accompanied by a book, also called simply ‘Oil’. As he says in the introduction:

“In 1997 I had what I refer to as my oil epiphany. It occurred to me that the vast, human-altered landscapes that I pursued and photographed for over twenty years were only made possible by the discovery of oil and the mechanical advantage of the internal combustion engine. It was then that I began the oil project. Over the next ten years I researched and photographed the largest oil fields I could find. I went on to make images of refineries, freeway interchanges, automobile plants and the scrap industry that results from the recycling of cars. Then I began to look at the culture of oil, the motor culture, where masses of people congregate around vehicles, with vehicle events as the main attraction. These images can be seen as notations by one artist contemplating the world as it is made possible through this vital energy resource and the cumulative effects of industrial evolution.”

Growing up in Ontario as the son of a former GM worker, Burtynsky had his initiation into these cumulative effects at first hand. He has described for instance how his father’s death from cancer (and that of many of his co-workers) might be linked to PCBs in oil used in the workplace. The moral ambivalence of flying in a helicopter to take beautiful shots of the substance that likely killed his father injects an urgency into his work that makes it all the more compelling. Of course, as fellow Ontarians now, this has particular resonance for us. It’s perhaps no surprise that a Burtynsky piece hangs in the boardroom on our school … and next week the film based on his work, Manufactured Landscapes, is going to be shown in our Responsible Business Movie Night series. But Burtynsky speaks not just to his neighbours; his captivating depictions of the global culture built around oil have something for everyone. And you don’t even need to grow your carbon footprint flying to New York to see it. Click here for some large format shots at Photo District News and here for some previews from The Guardian newspaper.

Friday, November 13, 2009

‘Responsible Luxury’

If one takes a taxi from the airport in Bangalore, India, into the city, the first billboard you will see boasts the words: ‘Responsible Luxury!’ It's an ad for a hotel chain, presumably one of those that recently opened another 7-star hotel in the business processing outsourcing capital of the world.

Whatever this phrase means - it pretty much uncovers the enormous contrasts and ambiguities of the economic wonder in India, much of which are epitomized in the 8m population of Bangalore. On the one hand there are the shiny, super stylish office buildings – or ‘campuses’ – of many western and Indian MNCs which have made the city the world’s leading place for IT services and software development. Being on the premises of these companies feels a lot like being in an office environment somewhere in North America or Europe.

On the other hand, Bangalore is a typical ‘third world city’ with constantly jammed up streets, poverty, pollution and shanty towns. The difference between the luxuries of the ‘first’ and the plights of the ‘third’ world could be nowhere more visible.

Now, there are two ways of going about this gap. One option would be to just hermetically isolate those two worlds against each other. We mentioned this approach – referred to as ‘brazilianization’ - in another blog. By the looks of it though, this is not the way things are going in India. India is a long standing democracy, has a vibrant media scene and fairly strong civil society organizations. So what we see here is more an ongoing struggle between these two worlds.

It is interesting to see the role of business in this. For sure, there is a long tradition of business engagement for social needs in India. Companies such as Tata and others have a long legacy of philanthropy and many of the new IT ‘stars’ such as Infosys have followed their example. Talking to business people here one can see a sincere commitment to not just indulge in the luxuries brought along by a booming IT industry but rather make it trickle down to wider parts of society. Responsible Luxury, as it were. How good a proposition that is and if it works ... well, we'll just have to keep you posted.

Sunday, November 1, 2009

The state of CSR in Canada

In our last post we commented on the No.1 position claimed by the Schulich School of Business in Toronto in the Beyond Grey Pinstripes ranking of business schools – a global survey which assesses the performance of schools in integrating responsible business into MBA curricula and research. Overall, Canadian business schools did well in the ranking with several schools making the top 50 – McGill (31st), Concordia (34th), and the University of British Columbia (49th).

But though Canadian business schools are starting to punch above their weight in the world of responsible business education, the performance of the country’s corporate sector in responsible business practice remains in question. For example, you’d be hard pressed to find any Canadian companies in the top 50 of Corporate Responsibility Officer’s Best Corporate Citizens of 2009. Still, rankings like this don’t tell you everything. So we thought we’d take the pulse of responsible business in Canada by checking out a couple of practitioner conferences taking place in downtown Toronto this last week. Clearly it is full-on conference season in Canada’s responsible business community with 3 major gatherings happening in 2 weeks – the first two of which we dipped into to test the waters.

First up was the ‘In Good Company’ CSR Conference organized by the Orenda consulting firm that took place on Tuesday 27th October 2009. This was a first-time outing for Orenda on the CSR conference circuit, and it was interesting to see the differences with some of the more mainstream conferences. We didn’t stay for the whole event but it was notable just how much the CSR agenda here was dominated by corporate community investment (CI) issues. This no doubt reflected to some extent the particular orientation of the consultancy running the show, but still, it was something of a surprise for a gig billed as a ‘CSR conference’. As Peggie Pelosi, the CEO of Orenda told us, the event was mainly aimed at engaging SMEs – and issues like CI are where most of them are with respects to CSR.

That said, the level of expertise demonstrated by the speakers on CI was pretty impressive. Clearly the leaders in Canada have been quick on the uptake in terms of developing well-managed CI programs with plenty of measurable impacts and meaningful metrics, good attention to employee involvement, and a genuine desire to both make a positive social contribution and generate greater meaning for employees. All good stuff, even with what looks like relatively limited resources compared to some of their overseas counterparts.

Strikingly missing from much of the debate however was a genuinely strategic approach to CI where firms focus their attention not just on doing good, but on leveraging their own competencies, and focusing on social problems within their own value chain or ‘sphere of influence’. Given we are in the middle of a financial crisis, and an energy situation that is rapidly heating the planet, it was somewhat disconcerting to hear a finance company talking about investments in homework clubs, tree planting and affordable home-building, whilst an energy firm regaled us with stories of their success in supporting food banks. All very laudable, and all very successful, but haven’t they got more pressing business-critical social issues they should be concentrating on? Aren’t food banks just a bit of a distraction when we’ve got climate change to solve? To be honest it was quite a relief when the Director of Corporate Citizenship at Microsoft got up and starting talking about investments in technology projects. Here was clearly a company that demonstrated that it got CSR in a deeper way.

And so it was onto the Conference Board of Canada event ‘Creating Business Value with Integrated Sustainability’ two days later. Unsurprisingly a somewhat more suited-up corporate event, but again one where, with one or two notable exceptions, the real leaders seemed to be, like Microsoft Canada over at the Orenda event, the Canadian subsidiaries of US corporations who had picked up their best tricks from over the border …. or even back in Europe. Companies like the American carpet manufacturer Interface, or even IBM, appear to be leading the pack here. And it's regulation from Europe that appears to be driving attention to environmental issues - though whether catching up with Europe's regulatory requirements is really a 'proactive' strategy, as one presenter claimed, is a moot point.

Funny how Canada manages to maintain a reputation for being all socially responsible and environmentally friendly, when corporate Canada actually seems to be dragging its feet somewhat in developing a progressive approach to responsible business. Obviously we didn’t hear everything said at either event. But from what we could gather from our admittedly brief forays into both of them, the debate here seems little more than a warmed up version of what we were hearing in the UK and other places years ago.

This is not to say there are not some impressive movers and shakers in the corporate CSR world here – but whole sectors of the economy don’t appear to have quite got it yet. The Conference Board organizers had put together a good program, but in oil and minerals rich Canada where were the energy and mining companies with something to say about ‘creating business value with integrated sustainability’? Holed up in the tar sands no doubt. Still, it was good to see consumer products companies at least starting to think seriously about green innovation issues.

So what can we conclude from our conference crawl this week? Well, let’s just say that Canada still has plenty of untapped potential when it comes to responsible business. As Peggie Pelosi acknowledged, Canadian companies are doing a pretty good job on community investment initiatives but are still well behind their overseas counterparts in sustainability and other key areas of CSR practice. As glass-half-full kind of guys, we’d like to think this means that Canada has a real opportunity to leapfrog the US, the UK and others. But we won’t be holding our breath….

Green Canada flag copyright Realc. Reproduced under Creative Commons license

Friday, October 23, 2009

How to integrate responsible business into the MBA

This week saw the release of the Aspen Institute's biennial 'alternative ranking' of business schools. Rather than the usual focus of b-school rankings on criteria like how much MBA students manage to increase their salaries by, what proportion of students get employed after graduating, or how well networked the student body is internationally, the Aspen institute looks at how well the school does in integrating social, ethical and environmental issues across its MBA curriculum and faculty research. "Our mission" they say, "is to spotlight innovative full-time MBA programs that are integrating issues of social and environmental stewardship into curricula and research."

The list of top schools includes a lot of the world's leading business schools - names such as Yale, Stanford, Michigan, and Berkeley consistently feature in the top 10. But there, right at the top, in number one spot, is our own school, the Schulich School of Business at York University. For two professors who spend day-in, day-out working on responsible business issues, this is a source of some pride for us. So we hope you'll forgive us if for a moment we bask in the reflected glory of our school's achievement, and take the afternoon off to sink a glass of celebratory champagne.

But we're not writing this blog just to boast. Well maybe we are. But what we've noticed since we've been here, and especailly in the last few days, is that along with the congratulatory messages, we've also received a lot of requests from faculty at other schools to provide insight into Schulich's secrets of success. After all the school has not been out of the top 5 since the Aspen ranking was launched in 2001. This may be our first time at no.1, but Schulich has been ranked no.3 for the last two cycles, taking us back to 2005 (before that, the ranking only grouped top schools but did not give specific placings).

So as far as we're concerned, being at the top also means we have a certain responsibility to help disseminate good practice. The Aspen Institute has traced a strong trend towards increasing integration of responsible business in business schools over the years, and part of the reason for celebrating good performance is is that it prompts others to respond and emulate these successes. B-School deans in general respond pretty well to the incentives offered by rankings, so they can be quite a force for change in the sector.

So what then accounts for Schulich's success? As relative newcomers to teh school (we joined Schulich in Jan 2007), we can't say we have all of the answers. Nor, certainly, can we claim all the credit. As it goes, we can't even claim much of the credit, which is a point we'll explain a little more in a minute. But we do have a pretty good view of what's going on here and what seems to be working (and what isn't). We've also benefited from working at other top schools in the area, especially the University of Nottingham, which is no.1 in the UK. So, here goes for a very unscientific analysis of the top 5 critical success factors for bringing responsible business into the MBA curriculum and research:

1. Start early and take the long view
Schulich started on this path way back, long before most other business schools even thought about social, ethical and environenmental issues as relevant for mainstream business education. By the time we arrived, the school was already well advanced; responsible business was widely embraced across the school, not just by a few dedicated faculty. This takes time to achieve. Success won't come overnight, however much money and other resources you throw at it.

2. Create a virtuous cycle
Related to the above is the very real fact that success in this arena breeds success. Schools that are high in the ranking attract students committed to responsible business who then demand even more courses and events - and even better ones - which keeps us constantly on our toes. Success in the Aspen rankings also attracts faculty who work on responsible business issues, who then go on to produce yet more research papers, and introduce even more specialized courses related to their own particular area. We now have almost 40 faculty members that spent at least some of their time on responsible business issues. Features like this introduce a 'built to last' competence in the area

3. Don't build a CSR ghetto
Most schools now have a centre or unit for CSR or something like that. This is great. But it can also pose a danger to real integration across the school. Sometimes it can be just a little too much fun to play in your own sand pit, and not get out there and build up competence across the entire faculty. Success in this field requires a huge team effort, not just one or two stars. At Schulich, the current ranking reflects some 162 separate MBA courses and 54 research papers during a two year period. Crane and Matten have been busy, but not that busy. So centres are good, but they have to work in a way that inspires and galvanises the school, and doesn't simply take over the CSR agenda.

4. Encourage innovation
OK, so it sounds obvious, but lots of schools are not too innovative when it comes down to it, and various systems and turf wars over the MBA curriculum can stymie real change. Faculty and students involved in responsible business are often very ambitious and entrepreneurial ... and typically have something of a mission behind them too. So they need to feel that they can start new courses and projects rathe than having to fight with administrators all the time just to get started. Give em enough room and they'll start swinging some cats for sure.

5. Gain commitment from the top
Anyone who's been involved in this field knows how important it is for senior management to be leading the agenda - this is as true for business schools as it is for businesses. At Schulich we've been lucky enough to have a Dean that is as committed to this stuff as we are. Never a speech goes by that he doesn't mention the importance of the triple bottom line and a multiple stakeholder orientation. It's an important part of the school's positioning. If you don't have that kind of support, it's going to be a whole lot tougher to get any real traction across the faculty.

We can think of a whole lot of other factors that can play a role in achieving success, but these 5 at least capture some of what we regard as the main reasons, at least here at Schulich. Of course, it helps to have resources, to be a relatively large school, and to have some decent management systems in place, too. But those can be good things to have whatever it is you want to achieve as a school. Integrating responsible business in the b-school represents a unique set of challenges. We're not saying we've got there yet; there's still a long way to go before even the schools at the top of list really get responsibility at the very heart of the MBA. But we'll worry about that next week. For now, it's time for that champagne....

Thursday, October 15, 2009

Rethinking the division of labour between business and government

We liked this interview with Richard Haass in the McKinsey Quarterly where he talks about the implications of the new division of labour between and government. As he says, "the lines between what is government and what is the private sector of business will get blurred.... CEOs, when they get up in the morning and look out through their window or across their desk, they are dealing with a range of constituencies that looks an awful lot like what a cabinet member might look at." The basic ideas align pretty much with our own work on corporate citizenship and global governance, but seeing them getting such prominence from McKinsey shows just how much the whole agenda is starting to be taken seriously by the business community.

We were particularly interested in his thoughts on how companies should adapt to this 'new normal', as McKinsey likes to put it. Haass promotes a new way of thinking about business-government relations - an expanded perspective that not only thinks in terms of lobbying and political action committees, but about what the changing division of labour means for the company as a whole. As he says, we need to, "think about government and government-related issues not as something that you have a small side office [for], some vice president for government relations who maybe calls a congressional staffer when he’s got an issue. But it’s something now much more intrinsic, and every person in the company—certainly the upper echelon of leadership—needs to take this into account, needs to think very hard about what is the proper, desirable role of government for that company. ... the entire issue of government, and the division of labor between the company and government, needs to be something that is thought through from the outset."

Haass is short on specifics in the interview, but it certainly sends a clear message that we need to go further in working through what the expanded set of political responsibilities might look like. And it definitely crashes a rather large plank over the heads of most of our colleagues doing research on corporate political action who seem to simply be blind to the bigger picture of what's happening around business and politics. Dirk's article reviewing recent books by Robert Reich and Naomi Klein explains a little more where we think some of the problems are in this respect. If even the McKinsey Quarterly is getting it, surely our fellow management researchers won't be too far behind. We live in hope.

Tuesday, October 6, 2009

Ringing the changes at France Telecom?

Crane and Matten have both been spending time in different parts of Europe this week, and the big business ethics story of the moment here is the fall-out around the France Telecom suicides. The company has experienced some 24 suicides among its employees in the last 20 months, leading to a very public denouncement of the company's increasingly aggressive human resources policies. Many of the suicides have been accompanied by complaints or even suicide notes by the victims about extreme pressure at work, and the anxiety brought on by forced relocation, demanding targets, and insensitive management practices.

This week saw the announcement that the company's no.2, Louis-Pierre Wenes, has stepped down in response to the worsening crisis, as reported here by the BBC. Wenes had been responsible for pushing through the harsh cost cutting measures at the firm and had been widely regarded as a key architect of the new management practices at the firm, as well as the 22000 lay-offs that have befallen France Telecom employees since 2006. The company had earlier announced a moratorium on its controversial job reassignment policy.

The starkness of the personal tradegies involved is pretty much unavoidable. What can a company say when its employees are terminating themselves in the most extreme way and laying the blame directly on the work culture? Probably the worst way to handle it of course is to deny the problem and just hope it goes away, which is pretty much the strategy that France Telecom appears to have adopted before this week. Suicide is hardly an early warning signal that something is amiss in the human resource area. The company clearly should have dealt with the issues long before they bubbled up into this kind of crisis. Whatever the numbers of suicides - even if it was only a handful - there must have been a whole host of other indicators - absenteeism, poor performance, harassment etc, - that should have been picked up months if not years ago. To say, as Paul Betts does in the Financial Times, that the company simply "mishandled" the crisis, and that the government was in effect to blame for forcing the changes on the company seems woefully inadequate as an analysis of a seriously flawed ethical culture prevailing in the firm and the very real executive accountability that the firm's leaders will have to acknowledge.

Muddying the waters somewhat is the debate that has arisen around the typical suicide rate among any large number of people. Earlier suggestions by the FT that the per capita rate of suicides at France Telecom was no more than the national average seem somewhat disingenious when what we are talking about here is not simply whether this is a statistically significant number of suicides but whether the suicides have arisen from a common cause. We're not seeing anyone saying that in fact France Telecom was really a happy and friendly place to be, or that it was a successful nurturing culture that made people feel rewarded and respected. Employee suicides are just one extreme manifestation of a toxic culture - they naturally become the media story but they're not the beginning and the end of the story by any means.

Of course, all this is easy to see in hindsight ... though clearly the unions involved have been warning of problems at the company for some time - warnings that in the main have gone unheeded. You'd have thought that such a company would have been on top of the basics such as having an ethics hotline. What could be more natural for a telecoms company? As for companies watching the crisis unfold at France Telecom, they may well be sighing in relief that its not them caught in the maelstorm. The smarter ones though will be thinking its probably about time to check on the employee satisfaction ratings. The even better-prepared ones won't even need to check because they'll have been tracking them all along. There is no excuse for waiting until even one employee cracks under the pressure and takes their own life. Twenty-four is beyond any boundaries of acceptability. Whatever the stats on 'normal' rates.

Photo by Leo Reynolds. Reproduced under creative commons license

Friday, September 25, 2009

Britain's bribery shame to end?

For the past few years, we have watched with sagging spirits the abject failures of the UK authorities to get to grips with overseas bribery by British firms. It's been a real stain on the reputation of the country, its rule of law, and its businesses. With the US pressing ahead with numerous convictions under its beefed up enforcement of the Foreign Corrupt Practices Act (i.e. any firm listed in the US is liable to prosecution for bribery wherever in the world it may have occurred), Britain has become something of an international embarrassment. So much so, that at the end of last year, the former head of Transparency International UK, Laurance Cockcroft bemoaned "Britain's bribery shame".

Cockcroft's article in the magazine Ethical Corporation, written following a damning report from the OECD's working group on bribery, made the case pretty starkly:

"This extraordinarily feeble performance by the UK is regarded as symptomatic of a profound lack of commitment to addressing corruption. The report of the OECD working group suggests the UK government’s inaction is creating a situation where UK-based companies can behave with impunity in the payment of bribes to win overseas business. ... [Earlier] the OECD had raised the question of whether the UK’s failure was effectively “systemic”. This implied that the nexus of inadequate legislation, feeble prosecuting agencies and a political willingness to buckle to an ally (Saudi Arabia) made uncomfortable by a criminal investigation meant that the UK was totally unable to address corruption. This fear was quietly reinforced by the fact that in Transparency International’s corruption perceptions index, published in September this year, the UK fell from 12th to 16th place."

We've talked here before about the huge BAE scandal in the UK, and the country's decline on the TI rankings. In the new edition of our business ethics book, which is just going into production, we explore the events in even more detail. But those of you that want the 2 second overview, the bottom line is that the Serious Fraud Office was forced by the British government to cave in on its investigation of BAE's alleged millions in bribes paid to Saudi Arabian officials after heavy lobbying from the company and the Saudi government. The whole episode spoke of a huge ethical failure - and even a wrenching of the basic rule of law. As Cockcroft put it (and he was among the more reserved commentators): "Ten years ago, the international community relied on the UK to be progressive in this arena. Now, disappointment at the lack of a serious stand has turned to disbelief, and disbelief to anger."

Today though, comes news of a small but significant breakthrough, with the announcement by the SFO of its first conviction of a major British firm for overseas bribery. The firm, Mabey and Johnson, a signifant player in the world of bridge-building firm, was found to have paid bribes totalling £1m to foreign politicians and officials to secure export orders. Operated through covert middlemen, the bribes were paid to officials in a range of developing countries in Africa, Asia and the Caribbean. The SFO, learning something from its US cousins, tconcluded its first plea bargain type conviction which saw Mabey and Johnson slapped with more than £6.5m in fines and reparations to foreign governments.

This can only be good news for the beleagured SFO which only a few months ago had been left dispirited and demoralized by the BAE failure. Its head and the main BAE investigator had both left the organization soon after the government had effectively closed down their biggest ever bribery investigation. Now, media reports suggest that the new director, Richard Alderman, may be ready to push for a plea bargain at BAE too.

Today's news can only be welcomed by those of us with an interest in seeing the UK get back into the driving seat on dealing with overseas bribery. However, it will take more than one prosecution to wash away the shame of its pitiful performance over the past decade. The country's record of investigating and prosecuting bribery is still woeful in comparison to its peers – at the end of 2008, only two cases had been brought, compared with 103 in the US, 43 in Germany and 19 in France. Let's not pretend that this is because British companies are so much more honest when it comes to bribery than their contemporaries - it's more a case of them simply being able to get away with it. And realistically, only a conviction of BAE is going to change the perception of Britain as a soft-touch country, at least in the short to medium term. The SFO has little time to lose - especially if they don't want to be further embarassed by the Americans prosecuting the iconic British firm before they do. But it's still not clear if the ethics will simply get submerged by the politics again.

Monday, August 24, 2009

Business and climate change

Observant readers will notice that we've started adding some of our favourite blogs on business ethics-related subjects in the blogroll that you'll find on the right hand side of the screen. The latest addition is Climate Change Inc, the new blog on business and climate change by David Levy, a professor at the University of Massachusetts, Boston. Levy always has something pretty interesting to say, particularly on the politics of business responses to climate change. He's someone whose work we've found stimulating, and have always enjoyed bumping into him at conferences and collaborating on a few things along the way.

The new blog deals with all things business and climate change related, though with a particular slant towards politics and policy issues. We particularly liked this recent post on how the oil industry has recently resurrected its "carbon wars" strategy, including the mobilization of American citizens to protest against proposed climate change regulation. Here's what he says....

"....large numbers of Americans are suddenly getting excited about climate change. They are not, however, worried about rising CO2 levels and the impact on sea levels, hurricanes, or glaciers. They are jumping on buses and crowding into rallies to oppose the proposed energy legislation, which is intended to address climate change. Through placards, slogans, and speeches, the attendees demonstrate their concern that their very way of life – cheap fuel and electricity, even their jobs in energy-rich states – is under imminent attack. This threat is apparently more palpable and galvanizing than climate change, a distant and abstract concern, if not a hoax perpetrated by the same intellectual East Coast Europhiles trying to impose socialist medicine on beleaguered overtaxed Americans.

Perhaps a few of these angry citizens spontaneously joined the rallies in a state of high dudgeon after perusing the 1200 page Waxman Markey bill. Most likely, their transportation and placard messages were organized by Energy Citizens, whose website proclaims that it is “a nationwide alliance of organizations and individuals formed to bring together people across America to remind Congress that energy is the backbone of our nation’s economy and our way of life.” In fact, Energy Citizens was set up and financed primarily by the American Petroleum Institute (API), the US oil industry association, with support from the National Association of Manufacturers and other groups. It has contracted with a professional events management company to plan about 20 rallies against forthcoming energy and climate legislation in Southern US states, with a focus on energy producing states such as Texas. Member companies are encouraging their employees to join in. This project complements a massive increase in lobbying efforts by the fossil fuel industry in the last six months."

Fascinating stuff. And, as Levy notes, a real return to the oil industry's seemingly dead-in-the-water tactics of the 1990s when climate change denial was all the rage and various political strategies were deployed by the sector to derail the gathering climate change consensus. Levy goes on to offer an analysis of why the industry appears to have engaged in Carbon Wars round 2, but admits that a final conclusion is difficult to arrive at given the mixture of motives, interests and positions among some of the key players. However, as we mentioned not too long ago in relation to BP's "Back to Petroleum" strategy, a new conservatism appears to be blowing in the oil industry around sustainability issues (or at least the pretense of progressiveness has lost its allure), so there is much to be gained in the run up to Copenhagen by seeking to tweak the political climate towards a more accommodating pro-fossil fuel position.

Our best bet is that a range of different company strategies may start to emerge again which could derail any kind of univocal industry positioning, which seems to be the aim behind the latest manouevuring. But in the meantime, it looks like the main business action will be in the nonmarket (i.e. political) arena rather than in new market developments, at least until a new climate consensus is reached post-Copenhagen. Be sure to keep up with Levy's blog for all the latest developments.

Sunday, July 26, 2009

So, what then is ‘Socialism’?

Among the things one can’t avoid noticing after living in North America for more than two years is the bizarre use of the ‘S-word’. It recently keeps popping up in the context of health care reform in the US but it also rears its allegedly ugly head in many other contexts.

Since the 1960s, most notably promoted by Ronald Reagan, the term ‘socialized medicine’ has been used as a scarecrow to denunciate any other approaches to healthcare than the private system the US has had in most places. Other systems, such as the Canadian or the British or the French, by being branded ‘socialist’ gave people the impression – as comedian Bill Maher put it recently – that ‘Stalin himself would stop by to use his iron fist for your prostrate exam’… And the campaign proved to be successful.

It is interesting to see how people in North America find it difficult to imagine that any other system of capitalism than theirs is necessarily ‘socialist’ or even ‘communist’. Some in the US even fear that Obama’s approach to saving the banking system or rescuing the car industry is a direct way to socialism.

We won’t get into the details of the differentiations – it’s after all the 101 of political philosophy. It is however a good time to bring this to our attention. After 30 years of what often has been derogatorily been dubbed ‘neo-liberalism’ or the ‘Washington Consensus’ we see now a shift in economic policies. In many countries of the globe governments – some more reluctant than others – have assumed a role which assigns business a wider role and responsibility in society than the one to shareholders only. And more broader yet, the US seems to be leading reforms of social and economic life which point to a more inclusive and socially balanced form of capitalism.

Countries such as Sweden or France – often called ‘socialist’ on this side of the Atlantic – are capitalist countries with all the trimmings: private property of the means of production, markets, and the rule of law. However, they have built in some mechanisms that cater for the whole of society (such as a healthcare system for all) and ways of redistributing some of the income of the top earners in society for the benefit of the more disadvantaged.

These differences are not rocket science. It has been studied by a whole school of academic thought, among them the ‘Varieties of Capitalism’ approach, or the ‘National Business Systems’ school of thought. The more surprising it is that even respected scholars in North America fall in the trap of using this simplistic view on the S-word – as a recent debate about the Canadian health care system on the email listserver of the ‘International Association of Business and Society’ (IABS) shows.

It’s time to get rid of old stereotypes. Let the debate begin!

Wednesday, July 8, 2009

BP and alternative energy

There was a nice feature article in the Financial Times earlier this week on BP's retreat from its alternative energy business. Headlined 'Back to Petroleum' it argued that since the departure of former chief executive Lord Browne, the new BP leadership had brought about a greater attention to core business in oil and gas .... and that this had meant the "BP Alternative Energy" business unit was being scaled back. Noting the early retirement of the quasi-independent unit's chief exec, the closing of its off-site office, and cut backs on funding, the paper remarked that having led the charge towards alternatives, "BP is now leading the retreat".

To be honest, even under Browne, BP had hardly been gung-ho in its commitment to alternatives. Even with year on year increases over the past few years, by 2008 the company was diverting just 1.3 per cent of its 2008 capital expenditure on solar energy, 2.6 per cent on wind, and a full 93 per cent towards oil and gas extraction (see the handy BP presentation on the Greenpeace website). Hardly a signal of a change of direction. It's no surprise that many of questioned whether the iconic 'Beyond Petroleum' rebranding was simply that - a change in advertising and logo that did little to alter the fundamental substance of the company.

Certainly under Browne, though, the momentum towards renewables, however small in relation to the core business of BP, was unmistakable. It wasn't all just empty rhetoric. The company quickly turned itself into a recognized leader among the big oil companies for its attention to sustainability issues - not that it faced much competition. The strategy, a common one in the CSR toolkit, was to stay just enough in front of the competition to be a leader, but not so much as to risk changing the game and threatening the underlying cost and revenue structure.

Under current CEO Tony Haywood, BP is clearly employing a back to basics approach. There's a lot of sense in some of this - not least in the greater attention being focused now on core health and safety issues aroung exploration and refining. The last thing the company needed was another Texas-style 'preventable accident'. But in stalling investment in the renewables business (not to mention new investments in the Albertan oil sands), Haywood is clearly serious about sticking to the core oil and gas business for the time being and waiting and seeing on alternatives until a clearer message (and more subsidies) come from governments.

We're not sure anyone should be too surprised by BP's reversal given some of the clear messaging that Haywood has given since taking over - such as describing the company as having “too many people that were working to save the world”, and a determined commitment to cut costs in the face of falling oil prices. Perhaps also, we're simply looking in the wrong place if we expect oil companies to be the engines of a low carbon economy of the future. As the FT hints, succeeding in the renewables business requires a very different set of organizational capabilities than in the oil and gas business. Old economy thinking is not likely to equate to a new economy mindset. The future of the energy business is more likely to be found in innovative new business start-ups than among the collossal energy giants of today. Although once the young tigers have proved their worth, it'll be the companies rich from oil revenues that'll be looking to buy them up.

Photo by Mancio7B9. Reproduced under Creative Commons license.

Monday, June 29, 2009

A major day in business ethics

June 29, 2009, might go into the annals as a big day in the history of business ethics. Right on top of many US news sites, we learn, first, that Bernie Madoff got his whopping 150 years sentence and, second, the US supreme court ruled in a landmark case in favor of 18 white firefighters who were suing their employer for what is often called ‘reverse discrimination’.

The Madoff case is in some ways your run-of-the-mill textbook case for unethical behavior in business – if it were not on such a biblical scale and in these dire times. And for a change not only hitting poor or middle class people but the wealthy. For us this example of fraud and theft points to the clear limits and boundaries of business ethics: the strong approach to deregulation and self-regulation of the financial industry in the US (and elsewhere) in the past has delegated a lot of ethical issues into the realm of the voluntary.
Funnily, they interviewed Harry Markopolos, a stockbroker, recently on 60 Minutes who as early as in the year 2000 had filed a complaint to the Securities and Exchange Commission (SEC), the self-regulatory body overseeing Wall Street. Four more he filed over the years, mostly because he was mad at Madoff as a competitor who offered these fairy tale returns. Remember, this was the time of Enron etc, where one would have expected the SEC to take complaints about unethical behavior seriously. Based on mathematical modeling Markopolos ("It took me five minutes to know that it was a fraud. It took me another almost four hours of mathematical modeling to prove that it was a fraud.") could prove back then what the SEC never took serious. Madoff was just too respected and too powerful on Wall Street for the SEC to even daring to question his practices. It shows that ethical behavior in business still is very dependent on strong institutions, independent regulators and, no less, skilled and professional oversight. The ‘Case Madoff’ in that sense is in fact a ‘Case SEC’.

The second incident is equally important and will have massive consequences. The case is about the fire department of New Haven (a small town north of New York City) which had made their firefighters pass a test as the basis of promotion. None of the black firefighters passed the test. Out of fear to appear racist, the City of New Haven then refrained from promoting all the (white) guys who did pass. These 18 white guys (one of them Hispanic) went to court and now finally won fighting their case through all the levels.
For a long time, the business ethics literature has actually addressed these issues of retributive justice in rather favorable terms. Because of past injustices against a particular group, that group should now receive preferred treatment. The black guys, so the argument goes, did not fail the test for reasons in their control, but because they belong to an ethnic group, which in the US still struggles in education, family stability and other factors which make people successful. The problem here is though that in doing so, you discriminate against other groups in a similar way. The fact that a court now rules against this in some ways is a sea change in the way we will deal with affirmative action in years to come. The ruling will have massive implication for business too, as it is based on laws that apply not only to the public sector. It will surely lead to many complex discussions and tricky decisions in business.

Friday, June 19, 2009

Ethics in the fashion industry

Most of the stuff that gets written about ethics in the fashion industry tends to focus either on fur, or on its effects on consumers, and especially the damage it can do to the self-esteem and body image of young girls. Those who work in the industry tend to get pretty ignored by the ethics community. Outside of the well-publicised supermodel tantrum, or the occasional rumour of drug taking, the working lives of models are essentially off-stage and out of sight. Most of us probably assume that the fantastic clothes, the famous faces, the glamorous locations, and the stratospheric salaries make modelling one of the best jobs in the world.

However, the release of the documentary Picture Me, which is just hitting the festival circuit now, looks set to lift the lid on the darker side of the modelling world. Made by Sarah Ziff, a model turned documentary maker, and co-director Ole Schell, the film chronicles the high pressure, exploitative, and sometimes abusive environment faced by professional models. It also, perhaps more controversially, provides us with a glimpse into the highly sexualized, predatory pressures that models experience, even as young teenagers. The film is already getting noticed, probably because its maker is already a familiar face in the fashion industry. The UK's Observer newspaper ran a feature on it a couple of weeks ago which ended up on the cover of their magazine. The doc also won best film and best fashion film at the Milan International Film festival recently.

Ziff is clearly a true industry insider, having been discovered on the street by a photographer when she was 14, and then going on to become the face of numerous global brands such as Calvin Klein, Tommy Hilfiger, Dolce & Gabbana and Gap. In her time, she has worked for all the top designers including Marc Jacobs, Stella McCartney, Louis Vuitton, Gucci, and Chanel. Along the way, she obviously made a huge amount of money. But these experiences also provided her with extraordinary access to life behind the scenes of the fashion industry.... and an opportunity to tell the story of what goes on backstage in all its warts and all glory. By putting cameras in the hands of the models themselves, she was also able to give voice to those who, as the film’s myspace page puts it, ‘are often seen, but rarely heard’. As such, the film presents a sincere and engaging look inside the working life of models, documenting both the rewards and sacrifices that young women have to make.

In addition to Ziff and her fellow models, the film also features appearances and in-depth interviews with noted photographers and designers. By stitching these various accounts together Ziff and Schell create a frank account of various ethical issues confronting the industry such as age, anorexia, working conditions … and of course the exorbitant salaries earned by top models. It also brings to light the surprising lack of regulation and protection governing the industry.

In fact, the film itself is part of a nascent attempt by some models to bring greater visibility and protection into modelling. As the Observer article mentions, a handful have started writing behind-the-scene blogs chronicling their daily lives in intimate detail. A successful 2007 campaign by two models, Victoria Keon-Cohen and Dunja Knezevic, also led to the opening up of the actor’s union Equity to catwalk and photographic models for the first time.

We're hoping the film makes it and gets a wider release - it certainly should do given some of the star power behind it, even if it was made on a shoestring budget. It's not so much that no one knew there was all kinds of dodgy stuff going on in the modelling industry. But by putting it up there on the screen in such an honest and intimate way, Ziff looks to be making a valuable contribution to the debate.

Tuesday, June 2, 2009

Ethics pledges: If it's good enough for Harvard....

A few weeks ago we wrote about the growing phenomenon of ethics pledges at business schools, and its likely impact on avoiding the kinds of ethical problems involved in the current financial crisis. Several people have now been pointing us to a recent article in the New York Times on an Ethics Oath instigated at Harvard Business School. As a voluntary, student-led initiative, this is pretty much in line with the vogue for pledges in the US that we discussed in the earlier posting. That it has happened at Harvard, however, appears to be news to the NYT, presumably because this is about as deep into the mainstream MBA establishment as you can get. The logic here being: if it's good enough for Harvard, it'll probably be good enough for any self-respecting business school.

Certainly the current financial problems have focused a few more minds on issues of ethics and responsibility. And as the NYT suggests, the new generation of MBA students tends to be interested in making a difference just as much as making a buck .... or at least some of them do. It is notable that despite the hoohaw about the Harvard Oath, less than a quarter of the graduating class actually signed it this year, so we are not exactly talking about a majority of students. Still, a sizeable minority represents something of a shift from a decade or so ago when these kinds of commitments would have been laughed out of the class at most big MBA schools. Ethics pledges like these may not be for everyone, ut they do signify how far things are changing ... and how far they still have to go before a serious commitment to management integrity goes mainstream.

Friday, May 22, 2009

Ethics and MP's expenses: storm in a (claimable) teacup?

Crane and Matten have been in the UK this week, and the big issue absolutely dominating the media has been that of the expense claims of the country's Members of Parliament (MPs). The press and TV have been all over this one like a bad rash, and don't look ready to letup soon. Now no one likes to see elected politicians misappropriating the public's hard earned money - and Britain has already seen itself slipping down the greasy poll of the corruption perception rankings as we mentioned last autumn. But over the course of the past few weeks the media storm has relentlessly criticised politicians from across the political spectrum for abusing the public's trust to such a degree that we've already seen one senior figure resign (the Speaker of the House of Commons), various politicians have had their knuckles rapped and have promised to repay their overenthusiastic claims, and party leaders have been scrabbling for the moral high ground in trying to instigate new systems of control.

When all is said and done, there is little evidence in all this that any of the politicians involved have actually broken any rules; in fact, it would appear that in many instances, their claims were not only approved, but actively encouraged by administrators. This has all been going on for years without anyone getting in much of a commotion about it. Besides, the padding of expenses is a problem that is hardly unique to poilitical circles - the private sector has just as many problems to deal with, and the media industry itself is hardly whiter than white. So is this all a fuss about nothing? Not exactly. There are some real issues here, especially around how to maintain public trust. There are also many lessons to be learnt about business ethics too - particuarly in terms of the limits to compliance systems in managing ethics, and the importance of getting to the deeper problems of how institutions are governed. Some of these points are dissected nicely in some recent posts on the Added Values blog by the folks in the Professional Ethics Network at the University of Leeds. They also link to a nice little interview clip from everyone's favourite Twitter-er Stephen Fry.

Another way of looking at this is to try and understand why such problems have gone on for so long, and how such a culture of corruption ever managed to get cemented into the heart of government in the UK. One of our favourite concepts in exploring institutionalised bad behaviour is "rationalization tactics", as described by Anand et al in the Academy of Management Perspectives. It doesn't take much effort to see in the case of MP's expenses some clear examples of how processes such as incrementalism, socialization, and cooptation have successively socialized MPs into unethical behaviour ... and how rationalizations such as appealing to higher loyalties and balancing the ledger have given them the kinds of excuses that deny wrongdoing and keep everyone in a state of denial. Of course, if we follw this path, the obvious solution that comes to mind therefore, is a fundamental culture change, a new broom in the dusty cupboards of Parliament. But for that, it's going to take a whole lot more than the rhetoric we've heard so far.

Friday, May 15, 2009

Are we living in The Age of Stupid?

Here is another guest-blog from our friend and colleague Laura. Exciting news about new releases from the world of Celluloid. Timely to accompany the Cannes Festival right now. Enjoy!

I, like Crane & Matten, like to use film and literature to explore our subject in alternative ways which sometimes capture the imagination more profoundly than the average media report or academic case study. Business Ethics films seem to me to fall into two simple categories, the documentary-type film on the one hand and on the other the dramatisation of either a real or realistic example of ethically dubious business-related behaviour. In the documentary form I would include Al Gore’s Inconvenient Truth, Leonardo di Caprio’s The 11th Hour, Supersize Me, The Corporation, WalMart: The High Cost of Low Price, Orgasm Inc. and the ENRON documentary, The Smartest Guys in the Room. The contrasting dramatised approach includes Erin Brockovich, Blood Diamond, The Insider, Rogue Trader, There will be Blood, Michael Clayton and Fast Food Nation.

Each of these two approaches has their advantages and limitations of course. The documentary perspective can comfortably contain more factual information but can err on the preachy side – maybe that’s why the celebrity association seems to pep things up a little and hold interest. And even if you are basically in agreement with the premise, you can’t escape the certain knowledge that the version of events you are getting is clearly aiming to get one side of the story firmly across. This doesn’t move the arguments tremendously far forward but can focus the mind and provide ammunition for debate. The dramatisation approach to Business Ethics films are easier-going to watch in a sense, though of course the credibility of the message can get subsumed in the dramatic action.

A hybrid approach, with the detail and credibility of a documentary but the entertainment factor of a dramatisation, has potential to profit from the best of both worlds. In March a new film released in the UK managed to do just that and combine the documentary and the dramatic styles with considerable success to bring home the runaway catastrophe of climate change with a punch, and miraculously without making you feel like you have been lectured at.

The Age of Stupid is directed by Franny Armstrong and truly is a film which reaches parts you had forgotten you had. It stars Pete Postlethwaite (seems every film needs a celebrity, but then he is a brilliant actor) as an archivist living alone in 2055 in a world decimated by climate change. As he mutters to himself and his computer screen he reviews footage from 2008 and ponders why, when we had the chance, we didn’t do anything about the environmental damage we were causing.

The documentary aspect comes through as the archivist follows several real stories from around the world: an octogenarian French mountain guide who has watched his beloved landscape change; an ambitious entrepreneur starting a low-cost airline in India and seeking the advantages there which the developed world has long enjoyed; a Shell oilman from New Orleans who sees no real contradiction between a life spent in the oil industry and the horrendous damage caused by Hurricane Katrina, in which he helped to save over 100 people’s lives; a young Nigerian woman who is doing all she can to earn money to put herself through medical school and become a doctor (including fishing in the oil-polluted waters and washing fish with ‘Omo’ to make them ‘edible’); two Iraqi refugee children looking for their brother; and an English wind farm developer trying to overcome opposition in the form of formidable middle aged, middle class locals (he loses).

These real lives show intriguing, sometimes heart breaking perspectives on the fallout of climate change, almost all of which have some connection to corporations (Shell in particular come under the spotlight) and their activities, so useful business ethics material as well as a straight education on the complexity we cause by messing with the environment. For me what it did spectacularly well was bring home the point that climate change is not something for the younger (or future) generation to worry about – it is us, now, of all ages who need to get a grip. In fact, probably, the older we are, the more culpable, with our high cost, high energy consuming lifestyles and endless rooms of stuff we could easily live without. It is the oil man who points out that people looking back on our era will be bound to call it the Age of Stupid, for our failure to act on the damage we are causing.

The film is timed explicitly to galvanise action prior to the United Nations Climate Change Conference in December 2009 in Copenhagen. This is the follow-up to the Kyoto Protocol and the Bali Roadmap. Director Franny Armstrong puts it quite plainly herself “Copenhagen is our last chance”. Certainly, it will be an incredibly important political, social, environmental and economic event, and one in which we will see quite clearly the metal of our respective politicians. Legislation is at last being looked to as part of the solution, as we have seen in the Climate Change Act 2008 in the UK and may yet witness from the Climate Change Bill currently being debated in the House of Representatives in the US. This Bill, going under the official title of the American Clean Energy and Security Act of 2009 , should be considered by the Energy and Commerce Committee by the end of May 2009. The time for tackling climate change could hardly be any more ‘now’.

I –seriously – spent the next few evenings after seeing The Age of Stupid sitting in an unheated, darkened house desperately trying to save energy. The film is that moving and effective at waking you up to the situation we are in. Happily spring is here in the UK so I no longer need to take quite such chilling steps to do my bit. But at the risk of sounding evangelical (as if I haven’t already!), I would say – go and see the film, or better still arrange for it to be shown at your workplace/university/school/arts centre or wherever. If we are quick, we may just manage to be not as stupid as we look.

Laura J. Spence, Director, Centre for Research into Sustainability, Royal Holloway, University of London, UK.

Friday, May 8, 2009

Keeping it in the Family? Family Firms, Business Ethics and Social Responsibility

In what we hope will be the first of many guest blogs from our extended family of co-authors and colleagues, here's a post from Laura Spence, the co-author of our CSR textbook, about her recent foray into the ethics of (aptly enough) family firms...


When I mentioned to a friend that I was going to a conference on Business Ethics and Family Business, he looked askance and said “you’ve seen Dallas, that’s all you need to know, isn’t it?” I had been invited to attend the Family Enterprise Research Conference in Winnipeg, Manitoba in Canada (24-25 April, 2009) because of my involvement in a potential journal special issue on this topic, and rather hoped that there was somewhat more to it than the ruthless pursuit of profit and filial jealousy. Happily this turns out to be the case.

I have long lobbied Crane and Matten - not to mention most of the rest of the business ethics /CSR community - about the need to incorporate small and medium sized enterprises (SMEs) in our research. Finally, I think, we are getting somewhere in that respect, but family business, to date, has remained firmly under the radar. As with SMEs, if it were just about the numbers this wouldn’t be the case. SMEs generally comprise over 90% of an economy’s private enterprises (and that includes both developed and developing countries). Family firms, I have learned, are just as important, and of course include large Multinational Enterprises as well as small businesses. The study of family firms is far from being just about the little guys - globally familiar names that are family firms include Kikkoman Soy Sauce, SC Johnson, Ford, Lego, Aldi, Levi Strauss, Estee Lauder, Marriott and Wal-Mart. This list of example organisations alone has a wide range of reputations as far as ethics goes, so there is no intuitive indication of the influence of being a family firm on business ethics. However, these large firms are light years from the common small family business in many respects – maybe it isn’t fair to bundle them all together when the institutional arrangements are potentially so different, if only in terms of the proportion of employees who are family members.

This brings us to one of the basic starting points when understanding what we mean by a ‘family firm’; definition of the key characteristics has been an important aspect of the literature since the field took off in earnest in the 1980s (at least that is when the first dedicated journal on the subject was launched; Family Business Review). A review of definitions has been offered by Chua, Chrisman and Sharma (1999. Previous definitions, they argue, revolve around combinations of family ownership and family management, with ownership being seen as the most important aspect to being defined as a family business. The authors propose that: “The family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.” (p.25).

So where does this leave our expectations of the ethics of the family firm? At the conference, the prevailing assumption was that the family firm, because of a presumed long-term perspective, embedded community orientation and shared vision, would be more ethical and socially responsible than the non-family firm. This sounds great but a little idealistic. As things stand, the fact is we simply don’t know whether there is a clear causal relationship since there has been such very, very little relevant research either theoretical or empirical. Hopefully, the proposed special issue on family business, ethics, stakeholders and sustainability in Business Ethics Quarterly will go some way to revealing whether the ethically challenged oil-rich Ewing family from Dallas - or the virtuous lumber mill owning Waltons of Virginia - provide a good model to reflect on in this barely investigated aspect of business ethics and CSR.

Laura J. Spence, Director, Centre for Research into Sustainability, Royal Holloway, University of London, UK.

Tuesday, May 5, 2009

Orgasm Inc.

Now you can accuse Dirk of having a somewhat predictable taste in film titles. After all he got introduced to this media somewhat later in life… But he honestly swears that he went to see this film at the current Hot Docs Film Festival in Toronto for the purest of professional reasons. It is a brilliantly shot, researched and told story about how the pharmaceutical industry identifies and defines new ‘diseases’ which can be a market for newly developed products.

It’s a remarkable film for many reasons. First, we think it really shows the reach of the corporate world up into to most private and personal spheres of human beings. After the tremendous success (commercial that is) of Viagra a lot of pharmaceutical companies have tried to see if similar products could be developed for women. The problem though is that while problems in bed with many men are clearly, say, a ‘mechanical’ dysfunction, the alleged absence of sexual satisfaction with women is a much more complex phenomenon. By carefully funding research, paying celebrity sex columnists and TV presenters and a whole host of players the pharmaceutical industry has – so the film – virtually created the diagnosis for a new disease: ‘Female Sexual Dysfunction’ (FSD).

Once that had been achieved, the next step is obvious: create a pill, a patch, a lotion, an implant – in short: a profitable product – to ‘cure’ women of FSD. Now there are two problems here: all products so far have severe risks and side effects and none of them really work. And that leads to the second problem: FSD - as many of the experts consulted in the film lay out – is not even a proper disease which can be cured by popping a pill. Rather, difficulties to experience a pleasurable and satisfying sex life for women depends by far the least on physical factors, but a whole host of social, psychological, economic and relational conditions. The film shows to which efforts the industry has gone to make female sexuality into just another commodity, which can be made of source of profit; in other words, ‘Orgasm Inc.’

The film is also great learning stuff for other reasons. Institutional scholars have shown the importance of the ‘organizational field’ for business to be successful. Orgasm Inc. shows how companies actively shape this environment: doctors, academics, columnists, TV show hosts, sex helplines, governmental agencies. They all are crucial for corporate success and companies have for long actively shaped, manipulated and used these actors for their interest. By choosing such a rather personal and intimate backdrop, the film just exhibits to which ends companies are ready to go to achieve their goals. Indeed, nothing is sacred any more.

But whatever the somewhat somber story line – it’s an incredibly funny documentary, very watchable. Liz Canner, the director, initially got drawn into this topic through an assignment to put together film material for sexually stimulating women for clinical trials for a pharmaceutical company. The film never lectures, but just by letting people talk, digging behind the surface of sleek corporate executives and mixing material it just achieves its goal in a still rather lighthearted fashion. Highly recommended.

Thursday, April 30, 2009

Obamamania – the second round.

You know how are academics can be. Always quibbling. Always critical, oh yes, so crrrrrritttttical. Dissecting. Questioning. Skeptical. – Fine, occupational hazard you might call it. Or more to the point, a pain in the a**.

So lets put the cards on the table. We like Obama. Period. This new American president is in a class of its own. A cut above. The skeptics would say he is just another politician. True. Many of his statements are broad, emotional, inconcrete. But it’s hard to say that one can’t enjoy listening in to his press conferences and, by and large, observing how is doing the job.

Today it was Chrysler. Impressive is the language. Obama knows of the ‘stakeholder theory of the firm’. He is such a smart guy. When he was asked in London after the G20 summit about the end of the ‘Washington Consensus’ – he so smartly turned the question into the one he really wanted to answer. We also liked his statement about where ‘he stands’: not on the side of the hedge funds and investors who refused to give Chrysler more help, but on the side of the other ‘stakeholders’ (yes), who depend on the company.

Now whether FIAT taking over is really the solution – we have to wait. Fiat to the world of cars is not what the pizza is to the world of food, as Europeans will know. We don’t know if things will turn to the better for Chrysler now. By the way, their cars are crapp. But it’s fascinating to see how Obama is navigating his way through this. It’s such a relief after 8 years of Bush to see someone at a press conference of the most influential nation in the world – who is actually a smart guy.

So where does this leave us? I think the lesson is ‘Leadership’. This is where Obama is really stellar. He is a young guy, all things considered. And being black, in America, puts him not in the natural circles in Washington. But he has clear ideas, and uncompromised or untainted thinking. He will get immersed in the dirty rationalities of the political game. But nonetheless let’s hope he will stay the course. The only fear here is that he might face the Kennedy fate. A bullet from the people who are paid to protect him (if we can believe Oliver Stone for a second). Mhhh.

Wednesday, April 29, 2009

‘Schwein gehabt?’ – The new scare of the Swine Flu Pandemic

As you know, one half of the Crane&Matten team saw its early years in Germany. ‘Schwein gehabt', to ‘having had swine’ (literally translated) in German just means ‘having been lucky’. So, how lucky are we then with this new outburst of Swine Flu?

Well, as long as we are living far enough away from Mexico, do not travel, or spend time at airports – indeed, ‘Schwein gehabt’! But it’s quite remarkable to see the social and political implications of what is going on. Loads of things spring to mind.

First, the pandemic shows the nature of globalization. It transcends borders; it defies economic, social and political boundaries; and it is a threat – in theory – to the world in general. British tourists returning from holidays in Cancun, French businesspeople coming home from Mexico City, migrant workers at the US/Mexican border – they all are potential disasters in waiting. What can national governments or health authorities do? Not too much. President Obama hinted at this in his 100-days-in-office speech. But unless he closes the border to Mexico and shuts down flights from there – there is precious little local authorities can really do. Other than monitoring the disaster.

Second, with the threat of loosing lives, the pandemic immediately raises ethical issues. Yesterday, on the Canadian Radio CBS, the representative of the farm worker’s union was interviewed. Without Mexican labor, Canadian agriculture would come to a grinding hold. So letting these workers in is an economic imperative. At the same time, Toronto still remembers vividly the SARS pandemic, and the effect it had on the city (Toronto being one of the first and worst hit places by SARS back then – due to its significant Chinese population). So how do we deal with Mexicans coming here? Should they not come? What is their responsibility in containing the virus? These questions gave the union representative some headaches. First signs of discrimination and incrimination of Mexican workers are already emerging in Canada, according to the radio program.

Finally, what can governments really do? Crane&Matten have worked and written (not at least in the Business Ethics textbook) about the ‘Risk Society’ thesis by the sociologist Ulrich Beck. The key solution here seems to be a vaccine. Created by who? Yes, pharmaceutical companies. But even they need at least six months to develop a vaccine. So it all depends on business here to provide the solution. Pharmaceutical multinationals have the research and knowledge base to address this pandemic. But they would only really do so if they can make a profit on the drug. So here is the dilemma: yes, business can produce a great benefit for society. Pharmaceutical products have changed our lives for the better and, in fact, saved millions of lives. But are there the right incentives for these companies? We all remember how the pharmaceutical company Bayer was forced to sell its anti-Anthrax medicine for basically nothing to the US government, when the Anthrax scare hit the country in the early 2000s. Why would any company be motivated to invest millions of dollars developing a medicine, which they would not be allowed to sell profitably once it’s on the market and able to address a social need at this magnitude? So much to what Beck calls the 'organized irresponsibility'...

Don’t get us wrong. We are not defending the pharmaceutical industry. We just want to point the spotlight to the fact that the solution to this, yet another, pandemic lies in the private sector. And to make the private sector live up to its potential and its responsibilities towards the greater good of society is still an unresolved issue. This crisis shows yet again: to have corporations working just to enhance shareholder value is indeed a ‘dumb idea’ – as even the late Jack Welch (former CEO of General Electric and poster boy of the shareholder value ideology) admitted. For the time being then, let’s hope we stay lucky. Not getting swine flu. As we said, ‘Schwein gehabt’ is the motto of the day.