Germanwings 4U9525: The art of asking the right questions

The crash of the Germanwings flight earlier this week is still dominating much of the (Western) news media. It is not just the fact that it happened with a well known Airline with a good safety record (Germanwings is a part of Lufthansa) right in the middle of Europe – in fact one of us sat on a Lufthansa A320 just a day before the crash. But it is also the absence of any good explanation as to the cause of the crash.

Now that story has evolved over the last hours. First, we learned from the voice recorder of the black box that the co-pilot was alone in the cockpit and did not open the door for the pilot to come back after his toilet break. It was interesting to see how Lufthansa, the prosecutors and most media then jumped to the conclusion that the co-pilot deliberately crashed the plane.

While that is indeed one option, only few reports raised the question why the flight data recorder – the other black box – could not be found. Or why when it was found the hard disk with the data was missing. Because only those data would clearly document which actions the co-pilot actually took while alone in the cockpit. It is still conceivable, that we saw a repeat of an incident on a Lufthansa A321 just five months ago when iced sensors sent the plane on route from Bilbao to Munich on a similar descent and could only be saved by the pilot switching off the autopilot.

And maybe it was not suicidal intent but other forms of incapacitation that made the co-pilot behave that way. After all, as we finally learned today, he had a history of psychological problems and should in fact have been on sick leave rather than flying.

Nearly unanimously, most commentators jumped to the conclusion that his medical condition just proves that the plane was brought down intentionally by a mentally sick individual. And in particular Lufthansa appeared to be relieved to identify a rare singular individual case as the reason for the accident – rather than technical or other reasons which might have put the company in a much trickier position.

Or does it? After all, air crashes have a long history as case material and illustrative incidents in the business ethics debate. Even if we assume that an individual is to blame - more often than not such behavior occurs in a specific organizational context which normally leads to this behavior. One of the most recent examples is certainly the 2009 Crash of the Colgan Air  commuter plane in Buffalo (similar to this week’s case, a supplier of Continental Airways), which initially all looked like pilot error. However, as a brilliant PBS documentary illustrates, this incident revealed a host of unethical practices and infractions not just with the airline but in fact with the wider industry.

So, this is the time to ask the right questions. The first of which would be to get some more insight as to why the co-pilot did conceal his mental illness from his employer. Does Germanwings have a procedure for this? Do they just fire people like him, when such condition is revealed? Do they care?

A next question would be how on earth his depression could have gone unnoticed by his colleagues? After all, pilots spend a lot of time together and observe each other from up-close. How could it be that the pilot was totally comfortable to leave this co-pilot in charge for a couple of minutes? What does this say about the culture at Germanwings? Does anybody care about how his colleagues are doing?

The more important questions would look at the wider context of work in the airline. Germanwings recently had strikes as Lufthansa tries to impose a low wage no frills-system of wages and working conditions on their low cost branch, which competes with the likes of Easyjet or Ryanair. This is an object of fierce dispute and Lufthansa itself is in a middle of a merciless battle with their pilots. Just last week, thousands of flights on Lufthansa were cancelled due to a strike. This climate does not exactly encourage a young aspiring pilot – on the way to live his childhood dream – to expect an empathetic reception when broaching his personal issues.

The problematic working conditions at other low cost carriers are by now common currency. So the question we have to ask is in how far Lufthansa has made its subsidiary Germanwings in nothing but a clone of Ryanair and the others. This raises the question if we are actually talking about an environment where someone with mental health issues would think the last thing to disclose to his employer and to hope for empathy would be his personal troubles and problems?

Overall then, there are a lot of questions to ask to Lufthansa, the investigating bodies, and in fact the media. But there are also larger questions unanswered. European pilots associations now openly challenge why so many facts of an ongoing investigation are leaked to the press. Or why certain questions, most notably about the flight data recorder have not been addressed. One cannot help but having some uncomfortable reminiscences with the disappearance of MH370 in South East Asia about a year ago. As even the CEO of Emirates, Sir Tim Clark (far from being one of the inevitable conspiracy theorists in these incidents), has very vocally set out, the way the public gets (mis-)informed about those disasters raises serious questions. Questions, to which we ultimately need an answer.

Image copyright Plane13.com, Reproduced under Creative Commons Licence. 

McDonald's comes back out of le closet

The fast food chain McDonald's has recently released an interesting TV ad in France featuring a young gay character talking with his father. It's notable not just because it features a gay character in a big multinational company's commercial, but also because the character is actually hiding his sexuality.  You can see the spot with English subtitles here:



The ad has gained a lot of online attention. The spot itself has been seen by nearly 2m people on YouTube and there are countless sites (including repostings on YouTube) where commentators have made their views known about the ad. These views range from a positive appreciation of McDonald's for acknowledging the gay community to some pretty nasty homophobic vitriol. Somewhere in between there are those who are asking why a fast food company should even be mentioning someone's sexuality, and those that are questioning whether McDonald's is trying to reach out to a new, and potentially prosperous targt market. As we have explored in a recent paper (downloadable at SSRN), corporations have increasingly been involved in identity politcs, and this raises a number of critical debates about the intermingling of business and politics.

To understand the significance of McDonald's 'gay ad' though, we need to put it in context. The ad is one part of a larger campaign launched by the company last year featuring the strapline 'Venez Comme Vous Etre' (Come as You Are). The campaign includes film and print ads, viral videos and other stuff. The basic message of the campaign is everyone's welcome at McDonald's, however you're dressed, whatever your age or race. And whatever your sexual orientation. The official company line is that series "recognizes the diversity of McDonald's customers in France."

It's all part of the cosmopolitan identity that multinationals like McDonald's are increasingly seeking to create. Remember that not that long ago, anti-globalization campaigners in France saw McDonald's as a symbol of American big business and global injustice - and were wrecking their restaurants from time to time to prove the point. So in that context a campaign that presents the company as a broad church that welcomes one and all makes a lot of sense. So much so that in food-loving France, the chain enjoys growing popularity and has become, according to The Times newspaper, the country’s ‘worst-kept dirty secret’. Everyone loves McDonald's (at least that's what the company is telling us). Even gay people. Even closeted gay people. And even clueless Dads.

It might seem odd that the company has chosen to portray a young man who is cute and confident, but at home at least, firmly in the closet. Why not present an out and proud gay character? One answer could be that the company is looking to represent a realistic picture of gay identity, not just a handy stereotype of sugar-coated camp beloved of Hollywood. It's also worth remembering though that back in 2008, McDonald's got itself in a bit of hot water back home in the US over its purported support of the gay community. Following a $20,000 sponsorship donation and the appointment of a McDonald's VP to the board of the National Gay & Lesbian Chamber of Commerce (NGLCC), the American Family Association (AFA) and other groups from the christian right called a boycott. The company had refused "to stay neutral in the cultural war over homosexuality" the AFA claimed, and was "promoting the homosexual agenda, including homosexual marriage."Eventually McDonald's duly pulled out of its support of the NGLCC.

 McDonald's American experience shows just how problematic it can be for companies to get involved in representing different minorities. It can place them in a world of identity politics that they are unprepared and ill suited to deal with. Promoting diversity or targeting the lucrative gay market may make good economic sense, but its also a political act with political implications. Pro- and anti- groups may both use corporations to help them achieve their political goals, just like the NGLCC and the AFA have. McDonald's may claim it is simply about diversity and inclusiveness but others see it as the frontline of identity politics.

So this may help to explain the somewhat ambiguous messaging of McDonald's"gay ad" in France. The company is putting out a welcome whether you're in or out of the closet, or even if, like the father in the ad, you don't recognise or support gay identity. Come as you are, as they put it in the campaign.

That said though, running the ad is quite a risk for a company still smarting from a controversial boycott that riled up a significant chunk of their core customer base in conservative middle America. As several commentators have suggested, the ad is unlikely to run in the US, but even so it's starting to cause waves, as this clip of Bill O'Relly shows. The company can hardly be pro gay in France and neutral in the US. At some stage, like it or not, the embracing of diversity means you just have to take some kind of political position. As much as companies like McDonald's may be more comfortable talking economics, they simply can't afford to ignore the politics.


Photo by Márcio Cabral de Moura. Reproduced under Creative Commons Licence

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

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.

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!