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.
Thursday, April 30, 2009
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.
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.
Sunday, March 29, 2009
Ethics pledges, business schools, and the financial crisis
With all the talk recently of greedy bankers and guilty fraudsters, some people have been looking to business schools as a potential source of some of the problems. The New York Times recently published a stinging criticism highlighting the failure of schools to focus their students' skills and attention on anything more than short term shareholder value. Not surprisingly, it generated a lot of attention, not only in the business school community, but also among the broader readership of the paper.
Obviously schools can not be wholly to blame for sowing the seeds of the financial crisis, but the points made about the inattention to ethics and social responsibility in many MBA programs are well made. Things are changing, but there are still only a few schools (among which we'd count our own) where such critical issues have become deeply and meaningfully embedded in the curriculum. Students meanwhile have demonstrated that they are increasingly attentive to social and environmental issues. Survey evidence, growing course enrollments, and escalating membership of student clubs and competitions around CSR issues are all testament to that. Another way that this has started to surface though is in the emergence of "ethics pledges" - a growing phenomenon, particularly in the USA.
Emanating originally from Bentley University in the USA, the ‘Graduation Pledge of Social and Environmental Responsibility’ is perhaps the best known of these pledges. It is based around a pledge to ‘to explore and take into account the social and environmental consequences of any job’ that signers might consider, and commits signers ‘to try to improve these aspects of any organizations for which [they] work.’ The initiative’s website enables potential organizers to learn about how to organize on-campus campaigns, and to download posters, wallet cards, and other resources. So basically, the pledge is about sticking to your values, regardless of the various pressures or seductions of the workplace. Of course, making career choices can be hard when you want to make a difference in society. What if a potential employer seems to be offering you a great position but you’re not convinced that it shares your values? The ethics pledge aims to help students navigate these tough choices while keeping their commitments to ethics and social responsibility intact.
More than a hundred schools and colleges are using the pledge, but other initiatives have also emerged including the ‘Shanghai Consensus’ pledge organized by the China-Europe International Business School (CEIBS) in Shanghai, and for business leaders, the ‘Business Ethics Pledge’, which begins ‘I pledge allegiance, in my heart and soul, to the concepts of honesty, integrity, and quality in business.’ Unlike the other alternatives, the Business Ethics Pledge even allows you to sign electronically and start advertising your business on-line as a signatory.
As might be expected, such pledges have been particularly popular in North America and, to a lesser extent China and Taiwan, reflecting perhaps the focus in such cultures on individual level agency in business ethics. Those who subscribe to such initiatives clearly believe in the importance of personal integrity and of the power of individuals to make a difference. As the Business Ethics Pledge founder, Shel Horowitz says, ‘This is about changing the world! About creating a climate where businesses are expected to behave ethically, and where executives who try to drag their companies into the unethical swamplands find that nobody's willing to carry out their orders.’
We're not wholly convinced by this - especially since so many of the problems we're seeing today are not so much the result of individual miscreants (well, OK, maybe Bernie Madoff could have done with keeping to a decent pledge), but because of deeper level structural issues in financial markets, governance and remuneration systems, and regulatory problems. But still, when the focus of attention is so much on changing the culture of business, a good old fashioned pledge of allegiance may not be such a bad idea. After all, you've got to start somewhere. And it will certainly show those business schools that've been slow to get their ethics education together that their students mean business. Just not business at any cost.
Obviously schools can not be wholly to blame for sowing the seeds of the financial crisis, but the points made about the inattention to ethics and social responsibility in many MBA programs are well made. Things are changing, but there are still only a few schools (among which we'd count our own) where such critical issues have become deeply and meaningfully embedded in the curriculum. Students meanwhile have demonstrated that they are increasingly attentive to social and environmental issues. Survey evidence, growing course enrollments, and escalating membership of student clubs and competitions around CSR issues are all testament to that. Another way that this has started to surface though is in the emergence of "ethics pledges" - a growing phenomenon, particularly in the USA.
Emanating originally from Bentley University in the USA, the ‘Graduation Pledge of Social and Environmental Responsibility’ is perhaps the best known of these pledges. It is based around a pledge to ‘to explore and take into account the social and environmental consequences of any job’ that signers might consider, and commits signers ‘to try to improve these aspects of any organizations for which [they] work.’ The initiative’s website enables potential organizers to learn about how to organize on-campus campaigns, and to download posters, wallet cards, and other resources. So basically, the pledge is about sticking to your values, regardless of the various pressures or seductions of the workplace. Of course, making career choices can be hard when you want to make a difference in society. What if a potential employer seems to be offering you a great position but you’re not convinced that it shares your values? The ethics pledge aims to help students navigate these tough choices while keeping their commitments to ethics and social responsibility intact.
More than a hundred schools and colleges are using the pledge, but other initiatives have also emerged including the ‘Shanghai Consensus’ pledge organized by the China-Europe International Business School (CEIBS) in Shanghai, and for business leaders, the ‘Business Ethics Pledge’, which begins ‘I pledge allegiance, in my heart and soul, to the concepts of honesty, integrity, and quality in business.’ Unlike the other alternatives, the Business Ethics Pledge even allows you to sign electronically and start advertising your business on-line as a signatory.
As might be expected, such pledges have been particularly popular in North America and, to a lesser extent China and Taiwan, reflecting perhaps the focus in such cultures on individual level agency in business ethics. Those who subscribe to such initiatives clearly believe in the importance of personal integrity and of the power of individuals to make a difference. As the Business Ethics Pledge founder, Shel Horowitz says, ‘This is about changing the world! About creating a climate where businesses are expected to behave ethically, and where executives who try to drag their companies into the unethical swamplands find that nobody's willing to carry out their orders.’
We're not wholly convinced by this - especially since so many of the problems we're seeing today are not so much the result of individual miscreants (well, OK, maybe Bernie Madoff could have done with keeping to a decent pledge), but because of deeper level structural issues in financial markets, governance and remuneration systems, and regulatory problems. But still, when the focus of attention is so much on changing the culture of business, a good old fashioned pledge of allegiance may not be such a bad idea. After all, you've got to start somewhere. And it will certainly show those business schools that've been slow to get their ethics education together that their students mean business. Just not business at any cost.
Sunday, March 22, 2009
Toronto’s 6th Timeraiser – The unlikely marriage of glamour and charity
So, what scene do we imagine when we hear the word ‘art auction’? Well, lots of money for sure, champagne, posh people, sophisticated conversations, a fair share of vanity – you get the picture. Now think of ‘charity work’: mmhh, not quite the same I guess. More like hard selfless toiling away facing tasks normally shun by many people, such as feeding the homeless, attending the sick, helping the unemployed etc.
Yesterday in Toronto one could see the unlikely union of both worlds. It was Toronto’s 6th Timeraiser Event which displayed once again what a creative, vibrant space can be created by imaginative civil society activists. The core idea is as brilliant as it is simple: The auction features some 30 works of local artists and the interested art collectors make their bid in form of committing time to volunteer for selected charities – rather than bidding money. For most pieces of art people were happy to bid up to 125 hours of their time! This is a heck of a lot of time if – like most folks at the event – you are in a full-on career in business.
So here we are: a great art gallery space in Toronto’s distillery district, nice drinks, great hors d’oeuvres, beautiful people, and of course, pretty cool artwork. While checking out which piece takes your fancy you also have a chance to talk to 40ish agencies which offered various volunteering opportunities to the potential bidders. In the end, it was not only a lot of fun to see who bids where and who gets outbid for which item but it was also an incredibly successful raising of time for charity: last year’s event raised more than 11,500 hours of volunteer time from the guests of the event.
What is great about the event is that it does not confine the ability to be charitable to the Trumps, Buffets or Gates’s of this world who can do so by virtue of their checkbooks. This is based on the one resource where all people are more or less equal: the 24 hours we have per day.
The other aspect from our perspective is of course this one: the entire event was made possible financially through the support of 10 Toronto based companies. As such, this represents a clever form of CSR. Having just published some research on how volunteering creates social capital, this event was a great ‘laboratory’ to observe from the point of view of a researcher.
‘Social Capital’ consists of three things: networks, trust and norms. Such an event creates new networks between the business-, arts- and charity-community which are beneficial for all parties involved. By showing that people working in business are willing to commit substantial chunks of their time to community work it also helps to address the trust issue. The latter being particularly valuable in a time where business has gambled away quite a bit of that trust recently… But it also helps to instill new norms and values into all actors involved. From our perspective this is particular crucial for business folks: having real time exposure to many of the pressing social needs and problems in our view has the potential to challenge a mindset which is all too often confined to just financial results and career advancement.
But most of all, it's a lot of fun! Or as one journalist put it: 'Good is getting really sexy!'
Yesterday in Toronto one could see the unlikely union of both worlds. It was Toronto’s 6th Timeraiser Event which displayed once again what a creative, vibrant space can be created by imaginative civil society activists. The core idea is as brilliant as it is simple: The auction features some 30 works of local artists and the interested art collectors make their bid in form of committing time to volunteer for selected charities – rather than bidding money. For most pieces of art people were happy to bid up to 125 hours of their time! This is a heck of a lot of time if – like most folks at the event – you are in a full-on career in business.
So here we are: a great art gallery space in Toronto’s distillery district, nice drinks, great hors d’oeuvres, beautiful people, and of course, pretty cool artwork. While checking out which piece takes your fancy you also have a chance to talk to 40ish agencies which offered various volunteering opportunities to the potential bidders. In the end, it was not only a lot of fun to see who bids where and who gets outbid for which item but it was also an incredibly successful raising of time for charity: last year’s event raised more than 11,500 hours of volunteer time from the guests of the event.
What is great about the event is that it does not confine the ability to be charitable to the Trumps, Buffets or Gates’s of this world who can do so by virtue of their checkbooks. This is based on the one resource where all people are more or less equal: the 24 hours we have per day.
The other aspect from our perspective is of course this one: the entire event was made possible financially through the support of 10 Toronto based companies. As such, this represents a clever form of CSR. Having just published some research on how volunteering creates social capital, this event was a great ‘laboratory’ to observe from the point of view of a researcher.
‘Social Capital’ consists of three things: networks, trust and norms. Such an event creates new networks between the business-, arts- and charity-community which are beneficial for all parties involved. By showing that people working in business are willing to commit substantial chunks of their time to community work it also helps to address the trust issue. The latter being particularly valuable in a time where business has gambled away quite a bit of that trust recently… But it also helps to instill new norms and values into all actors involved. From our perspective this is particular crucial for business folks: having real time exposure to many of the pressing social needs and problems in our view has the potential to challenge a mindset which is all too often confined to just financial results and career advancement.
But most of all, it's a lot of fun! Or as one journalist put it: 'Good is getting really sexy!'
Monday, February 23, 2009
Economic crisis (again) – how do we get out of the mess?
Finally he is back. Bill Maher’s new season of ‘Real Time’ started again last Friday. He is one of the funniest guys on TV in North America right now, and certainly one of the smartest. The first show this season was all about – yes – the economy. Could you have imagined that in normal times? ‘The economy? On a comedy program??’ But here we are.
The show started off with reminding us that the crisis on Wall Street is just about to unravel, we have just seen the beginning. ‘Skank of America’ or ‘Shittybank’ (BM) are still close to the abyss, despite the earlier $700bn bailout. The central contention of the show was this: should the government be involved with another bailout, or should we just allow the system to collapse. After all, this is America, the home of the free market and individual liberty. Let the market sort it out, so Ron Paul on the show.
That didn’t go down well with the other guests. Crystia Freeland, North America Editor of the Financial Times, wasn’t having any of it. Her best comment was that since the bankers of the private sector had failed on such a megalomaniac scale, putting government bureaucrats in charge could certainly not make things worse, hopefully even better. Could you have imagined such a benevolent statement about government involvement in the economy from a Financial Times editor a year ago?
It was fascinating to see how ethical issues dominated the entire program. Congresswomen Maxine Waters, another guest, made an interesting suggestion: there should be the ‘Nuremberg trial for bankers’! That, however, was at least more realistic than Bill Maher’s very funny black humored piece on just ‘hanging’ two bankers, you know, symbolically. As they did in China with the managers who caused the milk scandal some months ago. That might teach these Wall Street guys a lesson…
It is a time of deep navel gazing in America and beyond. Bill Maher’s suggestion was that the last years have given rise not to the ‘American dream’ but rather to the ‘American fantasy’. What happened was not the pursuit of happiness through hard work which makes dreams come true but luring people into the illusion to raise their standard of living based on money that didn’t exist. And he concluded: ‘There is a difference between a fantasy and a dream. Boy do I know!'…
The show started off with reminding us that the crisis on Wall Street is just about to unravel, we have just seen the beginning. ‘Skank of America’ or ‘Shittybank’ (BM) are still close to the abyss, despite the earlier $700bn bailout. The central contention of the show was this: should the government be involved with another bailout, or should we just allow the system to collapse. After all, this is America, the home of the free market and individual liberty. Let the market sort it out, so Ron Paul on the show.
That didn’t go down well with the other guests. Crystia Freeland, North America Editor of the Financial Times, wasn’t having any of it. Her best comment was that since the bankers of the private sector had failed on such a megalomaniac scale, putting government bureaucrats in charge could certainly not make things worse, hopefully even better. Could you have imagined such a benevolent statement about government involvement in the economy from a Financial Times editor a year ago?
It was fascinating to see how ethical issues dominated the entire program. Congresswomen Maxine Waters, another guest, made an interesting suggestion: there should be the ‘Nuremberg trial for bankers’! That, however, was at least more realistic than Bill Maher’s very funny black humored piece on just ‘hanging’ two bankers, you know, symbolically. As they did in China with the managers who caused the milk scandal some months ago. That might teach these Wall Street guys a lesson…
It is a time of deep navel gazing in America and beyond. Bill Maher’s suggestion was that the last years have given rise not to the ‘American dream’ but rather to the ‘American fantasy’. What happened was not the pursuit of happiness through hard work which makes dreams come true but luring people into the illusion to raise their standard of living based on money that didn’t exist. And he concluded: ‘There is a difference between a fantasy and a dream. Boy do I know!'…
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