Archive for September, 2010|Monthly archive page
Back to Playboy…errrr School
Marketing to kids is always a touchy subject. But even worse is when a company accidentally markets to kids. And when you accidentally market to kids something that is seriously adult-oriented…watch out!
Check out this story, from the Globe & Mail‘s Business section: Firm regrets back-to-school ad for Playboy thongs, bras
Giant Tiger, a discount retailer with outlets across Canada, says it made a big mistake when it marketed Playboy-branded underwear in a back-to-school flyer. Many parents complained to the retailer over the ads for bras, thongs and other items with Playboy’s logo.
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Giant Tiger has apologized to the parents, and Playboy, according to the news agency, is working with the retailer to ensure that such items are aimed at women over 18. Playboy, the spokeswoman said, has strict rules that prohibit marketing to minors….
Now, the actual offense here is pretty modest (no pun intended). And there’s every reason to believe both companies when they say it was all a mistake.
I wonder if this is another, quite different, kind of example of the little ethical lapses (or lapses in quality more generally) that can occur when things are done cheaply. (For those of you not familiar with the chain, Giant Tiger stores are a couple of notches down-scale from Walmart, in most regards. Discount products, cheaply displayed.) Without casting aspersions on the skill or judgment of the workers who put together Giant Tiger’s flyers, I have to wonder whether slips of this kind aren’t more likely at bargain-basement retailers. If you shop at GT, you’re either shopping there because you can’t afford to shop somewhere more fancy, or you’re choosing to in order to save money to spend on other things. And, at risk of overgeneralizing, if you want stuff cheap, you’re going to get things done cheaply. Sweatshop labour may be the most high-profile result, but you’re also going to get things like shoddy marketing. On the other hand, I wonder if this could have happened at that most famous of discount retailers, Walmart? They’re famous for cutting costs, but they’re also famous for efficiency.
Corporations, Persons, and Human Dignity
The U.S. Supreme Court is once again diving into the waters of corporate personhood.
See this story, by Adam Liptak, for the NYT: Supreme Court Takes Cases on Rights of Corporations.
The Supreme Court added 14 cases to its docket on Tuesday, including three concerning the rights of corporations in unusual settings….
The story notes that two of the cases have to do with the use of the ‘state secrete privilege’ — the legal mechanism that allows the government not to submit evidence that would jeopardize national security. Both are cases to which both a corporation and the federal government are parties, and there is question about whether the state secret privilege can be used in ways that either hurt, or benefit, the corporation.
The other case is about privacy:
The privacy case, Federal Communications Commission v. AT&T Inc., No. 09-1279, will consider whether a provision of the Freedom of Information Act concerning “personal privacy” applies to corporations.
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AT&T seeks to block the release of documents it provided to the F.C.C., which conducted an investigation into claims of overcharges by the company in a program to provide equipment and services to schools. The documents were sought under the freedom of information law by a trade association representing some of AT&T’s competitors.AT&T relied on an exemption to the law for law enforcement records that could “constitute an unwarranted invasion of personal privacy.”
Personal privacy?
Yes, you read that right. In a previous ruling:
The United States Court of Appeals for the Third Circuit, in Philadelphia, ruled for the company, relying in part on a definition of “person” in the law that included corporations.
“Corporations, like human beings, face public embarrassment, harassment and stigma” because of their involvement in law enforcement investigations, Judge Michael A. Chagares wrote for a unanimous three-judge panel.
I’ve blogged before about why it is (sometimes) essential to think of corporations as persons, at least for legal purposes. But (as I’ve also argued) personhood is a complex notion, and deciding to think about corporations as persons doesn’t immediately imply attributing to them every characteristic of human persons.
Now, I don’t know precisely what Judge Chagares (quoted above) meant when he refers to the possibility of corporations facing “embarrassment, harassment and stigma.” But what he ought to have meant, I think, is that corporations (created by humans for human purposes) can suffer attacks on their reputation that can have a serious negative impact on the legitimate interests of their human creators. Roughly: if you (let’s say) unfairly impugn the behaviour or intentions of a corporation (or a non-profit for that matter) you wrongly harm the interests of the people who rely on it. What Judge Chagares needn’t have meant is that corporations possess the kind of dignity, or intrinsic worth, that we attribute to human persons, and that is the basis not just of the instrumental rights of legal personhood, but of human rights.
Symantec Directors: $250,000/Year Not Enough to Log in to Annual Meeting
Filed under: accountability, boards, corporations, governance, profits, shareholders |
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The shareholders of a public company are sometimes said to own the company. That’s not literally true, for lots of reasons. (See: Do Toyota’s Shareholders Own the Company?) What shareholders really own is the right to part of a company’s profits (if any) after all of its other expenses are paid. At any rate, the fact remains that shareholders are crucially important, and they are in many ways vulnerable. The legal rights of shareholders are relatively few, and relatively weak. That’s what makes corporate governance so important. Shareholders elect the Board of Directors, and the Board of Directors is responsible for hiring the CEO and helping set the overall strategic directo of the firm. For most shareholders, there are precious few ways to interact with, let alone influence, the Board of Directors. The Annual Shareholder Meeting is critical, in that regard.
That’s what makes it so striking when any company degrades its Annual Shareholder Meeting in the way Symantic did this year by switching to an all-virtual, audio-only meeting. See this opinion piece, by Gretchen Morgenson, for the NYT: Questions, and Directors, Lost in the Ether. Check out this juicy bit:
…because the Webcast provided no video, shareholders may not have realized that several directors had not bothered to attend the meeting, even virtually. When asked about directors’ attendance, [Symantec spokeswoman] Ms. Haldeman said 8 of the 11 showed up.
Attending annual meetings seems a pretty basic requirement of a director, don’t you think? Sure, such gatherings may seem a corporate equivalent of root-canal therapy, but a duty is a duty. Directors are paid for their service, after all, sometimes very handsomely. According to Symantec’s most recent proxy materials, directors get around $250,000 a year in cash and stock.
So which directors had neither the time nor the inclination to log on to their computers last Monday to hear from the shareholders they have an obligation to represent? Ms. Haldeman refused to identify those who were AWOL.
Now, it’s worth pointing out that the 3 directors who didn’t “show up” could well have had very good reasons. But if that’s true, Symantic’s shareholders deserve to know it. The little power shareholders have can only be exercised effectively if boards of directors take their duty of accountability seriously.
Tools for Corporate Funding of Elections
Filed under: accountability, corporations, personhood, politics, stakeholders |
Comments (5) 
What sorts of things are corporations — and charities and associations and churches and unions and so on? Should we think of such organizations as things that are themselves capable of taking action, or should we think of them as tools that people use when they want to take action?
Case in point: the controversial organizations discussed in this recent NYT editorial, The Secret Election:
…the most disturbing story of this year’s election is embodied in an odd combination of numbers and letters: 501(c)(4). That is the legal designation for the advocacy committees that are sucking in many millions of anonymous corporate dollars, making this the most secretive election cycle since the Watergate years….
Now, recall that, in the wake of the U.S. Supreme Court’s Citizens United decision, all the talk was about the notion of corporate personhood — despite the fact that the majority decision made only passing reference to the concept. (See my blog entry here.) But notice that there’s no reference to corporate or organizational personhood in the NYT editorial. It’s simply not at issue. What’s at issue is the use of organizations as a certain kind mechanism, or tool. Note that, according to the NYT, interested corporations are using 501(c)(4) organizations as a conduit, with a court-sanctioned secrecy shield. The question here isn’t so much what the 501(c)(4)’s are doing, but what they are being used for.
I think that difference in perspective — between thinking of organizations as agents and thinking of organizations as tools — is worth taking seriously. Now, to be clear, I don’t think it makes sense to say that one or the other of those perspectives is the right one, for all cases. I strongly suspect there are cases where each makes sense. Clearly there are differences, and each will highlight certain aspects of a situation at the expense of others.
For example: focusing on the organization’s capacities as an agent (or quasi-agent, if you like) allows us to consider the possibility that the organization, as a whole, is deserving of punishment for wrongs that result from its actions; but it can obscure the interests and motives of the people behind the organization. (In the present case, if we focus on the personhood and/or rights of the 501(c)(4)’s, we might be distracted from crucial questions about the political motives of the people making use of them. On the other hand, focusing on the organization’s instrumental nature can obscure the complicated ways in which organizations transform and sometimes mistranslate the intentions of the individuals behind them. But it can also facilitate an engineering perspective on organizations, one that allows us to think about how the organization — as a complex mechanism — can be taken apart, re-engineered, and put back together again. So, in the present case, thinking about the 501(c)(4)’s as mechanisms allows us more readily to consider which of the legally-constituted features of 501(c)(4)’s are serving useful functions, and which (if any) ought to be re-engineered.
Now, I’ve argued before that there are certain purposes for which we simply must regard corporations as persons — as particular kinds of agents (“must” because important goals that we all endorse would be impossible to achieve otherwise). But when it comes to particular instances of ethical assessment of a corporation or other kind of organization, we should ask ourselves: is this one of the cases where it’s useful to think of the corporation as an agent, or is this one of the cases where it’s useful to think of the corporation as an instrument? Or are there other ways of framing the issues that serve us better still?
Directors of Failed Companies
Filed under: accountability, boards, corporations, governance |
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Question: What does one do after losing a position on the Board of Directors of a failed company?
Answer: Why, join another Board of Directors, of course!
At least, that’s the case for a number of former Directors of companies like A.I.G., Bear Stearns and Lehman Brothers — companies at the heart of the financial crisis. See this story from the NYT: Companies May Fail, but Directors Are in Demand.
Does this make any sense?
The first issue to consider is whether it’s prudent for other companies to recruit directors from failed companies. After all, they were members of the teams that were supposed to be steering those ships juuuust before they hit those icebergs. But failure doesn’t imply that every member of the team was a dud, and any director who has been through a company’s collapse has arguably learned from the experience. At least one expert quoted in the NYT thinks that’s plausible:
“Directors of these financial institutions may or may not have been asleep at the switch, and if they were, they had a lot of company,” said Michael Klausner, a corporate law professor at Stanford. “Leaving that question aside, they may well have gained valuable experience that will make them good directors today.”
It’s also worth pointing out that there’s no clearly-established, strong connection between board effectiveness and corporate success. (Consider: even a well-governed company will die if its products suck or if the market for its product turns sour.) So it’s plausible that a failed company can have a good board. But in the cases we’re concerned with here, there seems to be consensus that boards didn’t do terribly well. But still, a board might be made up of a dozen directors, and there’s only so much one great director can do if surrounded by turkeys. So it’s certainly plausible, at least, that there may have been individual gems on even the worst boards among those governing failed companies. In terms of talent, each deserves to be considered on his or her own merits.
What about ethically? Is there any ethical reason not to draft the former directors of the likes of A.I.G., Bear Stearns and Lehman? Well, to start, see above. Quality governance is itself an ethical issue. (See also my recent blog entry on board competence.) So a board’s Nominating Committee has an ethical duty to recruit talented people. Is there any ethical reason not to recruit those talented people? Although I suspect many people’s intuitions will say there is a problem, there, I’m not so sure. Blacklisting even the talented directors of failed companies could only be punitive in intent — and punishment needs to be case-by-case. The onus then is on Nominating Committees to do their due diligence, and to satisfy themselves — and their shareholders — that this particular former director of a failed company behaved neither incompetently nor immorally. How many of the directors named in the NYT story could pass that test? I could not begin to guess.
Competence, Ethics & HP’s Board
Filed under: accountability, boards, corporations, governance, management, shareholders |
Comments (5) 
A corporation’s Board of Directors has a fiduciary duty to represent the interests of the company’s shareholders. In particular, the Board does that by selecting a CEO (and sometimes by participating in selection of other members of the management team) and by helping set the company’s strategic course. The work they do is of crucial economic importance — both to investors (to whom they are directly accountable) and to the functioning of the economy more generally. But (or maybe precisely for that reason) good governance and board effectiveness are also ethical issues.
By way of illustration, take a look at the recent controversy over the departure of Mark Hurd as CEO of Hewlett-Packard.
The short version: HP’s (now former) CEO, Mark Hurd, got caught fudging his expense reports. Sexual improprieties were also implied. So, the Board fired Hurd, and payed him a huge severance package. Then just a month later he joined HP’s rival, Oracle, which was very bad news for HP. Now HP’s Board is suing Hurd. It’s a huge mess, and much of it reflects badly on HP’s Board. See, for example, Joe Nocera’s recent piece in the NYT: H.P.’s Blundering Board
The Hewlett-Packard board is back to doing what it does best: shooting itself in the foot. By filing an embarrassing lawsuit against the company’s former chief executive, Mark V. Hurd, this week — a suit that unwittingly highlights the mistakes it made in the way it let Mr. Hurd go — the H.P. board can now lay claim, officially, to the title of the Most Inept Board in America….
I’m not qualified to judge HP’s Board from a strict governance point of view. But the governance experts quoted by Nocera seem convinced that the Board is, shall we say, not exactly doing a bang-up job. What should we say about that from the point of view of ethics?
To begin, we should note that ineptness itself is not generally considered unethical. We generally are not to blame for our own weaknesses. If you’re physically clumsy, then it’s not your fault that you’re not good at juggling. If you have no mind for numbers, then it’s not your fault that you don’t excel in math.
But there are exceptions to that general rule.
In fact, there are at least two factors that can allow us to hold an individual or group responsible for ineptness. One of those is the fact of having voluntarily taken on a job that you knew would require certain talents and aptitudes. If you know you’re prone to clumsiness, you shouldn’t take a job requiring dextrous manipulation of, say, dangerous chemicals. Likewise, you shouldn’t take a position on the Board of Directors of a major corporation if you don’t have the wisdom and strategic skills such a position demands. Unfortunately, with things like wisdom there’s a difficult catch-22: some people aren’t clever enough to realize that they’re not clever enough to be on a corporate Board. (Note that I’m not accusing anyone on HP’s Board of lacking the requisite talent; I’m merely outlining the ways in which one can be held responsible for incompetence.)
A second factor that can justify holding someone responsible for their own level of competence is the availability of relevant training. If they have reason to think their skills are not what they could be, and if relevant training is available, and if they have not availed themselves of it, then they are culpable for the resulting deficits. Now, being on a modern corporate Board is no trivial task. Corporate Boards are no longer the window dressing they once were. Business today is increasingly complex, and so being on a Board today requires a lot of knowledge (about business and law and regulations and so on and so on). So, there are organizations out there that are set up to provide training. (In Canada, we have this and this, for example.) Now, it’s not clear that Board training would have helped HP’s Board avoid the errors it apparently made in dealing with Hurd. Again, I’m merely trying to outline the conditions under which a lack of skill (something others have accused them of) becomes something ethically problematic.
In the end, the point is this. Modern Boards face enormous challenges. And while we most often think of corporate governance as a legal matter and as a matter of interest to shareholders, in the end it is really about making sure that the right decisions get made by the right people for the right reasons. Add to that the fact that executive decisions have the potential to have enormous impact — financial and otherwise — on people both inside and outside the corporation, and it becomes easy to see why governance must be considered an ethical issue as well.
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Note: edited on Sept 17, 2010 to correct 2 places where I had accidentally typed “BP” instead of “HP”.
When Companies “Play Games” With Prices
Filed under: advertising, consumers, food, pricing, profits, retail |
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Is it ethical for companies — without deception — to make use of well-documented human tendencies and weaknesses in order to get us to buy more? Social scientists have long been aware that humans are subject to a range of cognitive biases that affect the way they think in fairly predictable ways. And, apparently, smart marketers know it, too.
For instance, check out this critique of Apple’s pricing, by Ben Kunz: “How Apple plays the pricing game”
Economist Dan Ariely, author of Predictably Irrational, gives the classic example of a Realtor who shows you a home that needs a new roof, right before taking you to a higher-priced house she really wants to sell. It’s hard to tell if a $400,000 colonial is a good deal – but compared with a $380,000 home that needs work, it looks quite good. Now consider, $499 for an iPad? Well, compared with a smaller one with fewer features, it suddenly looks great.
Decoys explain why Apple often sells each gadget in a pricing series, such as the new iPod Touch’s $229, $299, and $399 price points for different storage capacities. You may gladly spend $229 to get a hot media player, thinking it’s a deal compared with the highest-priced version and not blink that you could instead buy an iPhone 4 at the lower price of $199 with more features.
(Don’t put too much stock in the details of the prices quoted — as one of the comments under the article points out, Kunz may be comparing apples & oranges by comparing retail prices for iPod Touch to the discounted iPhone price that you get when you sign a 3-year contract with a phone company.)
At any rate, practices like the ones Kunz describes are by no means unique to Apple. Many restaurants, for example, will include one or two high-priced entrees. I’ve heard it said that those, too, are “decoys.” The restaurant doesn’t expect to sell much of the $35 Surf’n’Turf, but the fact that there is a $35 entree makes the $25 entrees look very reasonably-priced. Now notice that there’s no actual deception, here…just a reliance on the fact that most people will have their choices swayed by such pricing.
Here’s the short version of the case for such practices: Look, there’s no deception here. And consumers still have free will. And there’s no clear difference between using this kind of so-called “trick” and the “trick”, known by salesmen since time immemorial, that people will buy more stuff if you smile and are polite to them. The relationship between buyer and seller is an adversarial one, so buyer beware. (Notice also that a company can accidentally, unintentionally engage in such pricing. Maybe the restaurant really thought the #35 Surf’n’Turf would sell well. But it didn’t, and so the net effect is that the dish ends up acting as a decoy, but it’s hardly something you can blame the restaurant for.)
Here’s the short version of the case against such practices: The cognitive biases that such pricing preys upon are so strong that they effectively limit consumer autonomy. Preying upon them is therefore wrong. We put limits on marketing to young children, because we realize that young children aren’t fully capable of filtering messages, evaluating options, and choosing rationally. But the (sad) news from the psychological literature is that adults are likewise limited. We just aren’t as rational or autonomous as we think we are. Selling crack to a crack addict is unethical in part because the addict has no choice but to buy. She doesn’t rationally choose to buy the crack: her addiction ensures the sale. Now, cognitive biases of the kind describe above aren’t quite like addictions. But if a given cognitive bias is only effective “most” of the time (as opposed to an addiction’s near certainty) doesn’t the fact remain that the person doing the selling is relying on a kind of human compulsion, rather than on a rational choice that is likely to satisfy the consumer’s needs?
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If you’re interested in this stuff, I highly recommend Dan Ariely’s book, Predictably Irrational. See also Judgment under Uncertainty: Heuristics and Biases, by they guys who basically invented the field, Daniel Kahneman, Paul Slovic, and Amos Tversky.)
Ethics of Hiring Illegal Immigrants
Should restaurants (and other companies) stop hiring illegal immigrants? What would happen if they did?
The question is posed here, on the NYT‘s “Diner’s Journal” blog: What If Restaurants Stopped Hiring Illegal Immigrants?
What if the restaurant industry — one of the largest employers of immigrants, a good number of whom, it is no secret, are undocumented — had to do it all above board? (According to 2008 estimates from the Pew Hispanic Center, illegal immigrants make up about 20 percent of the nation’s chefs, head cooks and cooks, and about 28 percent of its dishwashers.) That’s the intention, at least, of the Obama Administration’s intensified crackdown on employers that hire illegal immigrants, with businesses including restaurants now facing more scrutiny than they have in decades.
Some restaurateurs say that the cost of a meal would shoot up if they were forced to comply with immigration and labor laws….
So, let’s think through some of the ethically-relevant factors.
First, refusing to hire (or choosing to fire) illegal immigrants would drive up the cost of a restaurant meal. That would be bad for restaurant customers. Now, most people think of restaurant meals as a luxury, so a slight increase in price isn’t exactly ethically abhorrent. But when we think of an increase in the price of restaurant meals, we shouldn’t only think of fine dining: such increases would presumably also affect greasy spoons and other non-glamourous eateries, and hence hit many middle- and working-class families in the pocketbook. But still, restaurant meals are generally not a necessity, and anyone who wants one arguably has an obligation to pay the full price of legally obtaining the factors that go into producing it.
Second, it’s worth pointing out that, ethically, there is a general and strong presumption in favour of following the law. And if the term “corporate citizenship” means anything at all, it ought to include a citizen-like duty to act in a law-abiding way.
Third, if restaurants stopped hiring illegal immigrants, it would obviously be bad for those illegal immigrants; and it would be good for whomever got those jobs instead. In terms of total numbers, this is very nearly a zero-sum game, except for the possibility that fewer people over all would be hired at the higher, legal wage. But illegals are arguably in greater need of the jobs (since fewer kinds of jobs are even possible for them, and because they don’t have the same access to the social security safety net that citizens have access to). So, thinking purely in terms of the duty to help people when you can do so, it might even be argued that restaurants have an obligation to hire illegals.
It seems to me this is an interesting case where a company’s citizenship obligations might well conflict with its more general ethical obligations. And so it’s a nice illustration of why it’s wrong-headed to use the term “corporate citizenship” to cover the various kinds of moral responsibilities that a company may have.
Contest: Critical Thinking and Business Ethics
Critical thinking is essential to the study of business ethics. In its simplest form, critical thinking just means subjecting our own beliefs, and other people’s beliefs, to critical scrutiny, to figure out which beliefs are well-founded and which are not, in order to try to establish which beliefs are worth retaining and which aren’t. It’s about making sure that our beliefs are grounded not just in knee-jerk reactions and prejudices, but in solid arguments. That, basically, is the kind of thinking that I aim to apply to ethical issues in commerce, in this blog.
So, I’m hereby announcing a new contest. All you have to do to win is to author one of the 3 best comments posted on this blog during the month of September (starting today, September 8). The comments should be insightful, on-topic, and of course original. Only comments posted on blog entries that were themselves originally posted during September 2010 will be eligible (i.e., no comments on items I posted in months past).
The prizes: authors of the 3 best comments will each receive a copy of my textbook, “The Power of Critical Thinking.”
I’ll be the sole judge, and my decision shall be final. Should the winner(s) wish to decline the prize, I will donate a copy of the book, in their name, to a library or coffee-shop bookshelf.
The book prizes are courtesy of Oxford University Press Canada.
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Addendum: it should go without saying, but a comment doesn’t have to agree with my own point of view in order to count as a good comment in my eyes. Comments that get me to change my mind about something are best of all!
The Oil Sands, and the Battle of the Boycotts
Filed under: accountability, boycott, consumers, CSR, environment, protest |
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The Athabasca oil sands (in Alberta, Canada) are not pretty. But they are vast, constituting one of the largest deposits of oil in the world — something in the range of 150 billion barrels, enough to help make Canada a net exporter of oil.
The oil sands (also known, colloquially and sometimes pejoratively, as the “tar sands”) are also environmentally controversial. The process of extracting oil from oil sands is not a clean one; it has a significant impact on land, air, and water. In fact, the process is so messy that it is only worth doing when the price of oil is relatively high, as it is right now. For environmental groups and other critics, the oil sands are just not worth it.
It’s worth noting that the oil sands do have their defenders. Matt Ridley, for example, in his recent book, The Rational Optimist, argues that the oil sands are a much more sane solution to current energy needs than things like wind (too unreliable and too little output) and biofuels (wasteful use of land).
Back in July, two US-based groups (Forest Ethics and Corporate Ethics International) called for a boycott of Alberta as a tourism destination. (See the Financial Post story, here.) More recently, though, the boycott has expanded to include a number of American retailers who have promised to refuse to use any petroleum products from the oil sands. See the Scientific American story, by Tina Casey, Boycott of Petroleum Products from Alberta Tar Sands Gathers Steam:
In a sign of things to come for corporate activism, The Gap, Timberland, Levi Strauss and Walgreens have just joined Whole Foods and Bed, Bath and Beyond in a boycott of petroleum products sourced from the notorious Alberta Tar Sands. As reported by Bob Weber of The Canadian Press, Federal Express has also adopted a policy that appears to lead toward joining the boycott….
(A more recent story suggests that Levi Strauss is not, in fact, participating in the boycott.)
A few points:
First, I’m generally skeptical about boycotting an entire jurisdiction (as the original boycott of Alberta tourism seemed to intend) on the grounds that you don’t like one particular business there. It’s entirely unclear how boycotting Alberta tourism was supposed to convince the government of the province to shut down the oil sands. (Note that while tourism is not exactly trivial in the Albertan economy, neither is it crucial. And besides, international visitors to Alberta account for just 7% of the province’s tourism.) Note also that the principle supposedly at play here doesn’t generalize very well. If you don’t like Walmart, do you boycott Arkansas, where Walmart is headquartered? Is anyone calling for a boycott of the U.K.? After all that’s where BP is based.
But I’m even more interested in the corporate boycott by Whole Foods etc.
As this opinion piece points out, anyone thinking of boycotting oil from the oil sands needs to think about what they’re choosing instead:
Where are they going to buy their gas from, if not Canada?
Saudi Arabia? Could there be a more unethical barrel of oil than one from that racist, misogynistic, terror-sponsoring dictatorship? Venezuela, to enrich strongman Hugo Chavez? Iran, with its nuclear plans?
In other words, if you’re really going to get picky about where your oil comes from, you’d better just stop using it at all.
The same opinion piece (by Ezra Levant) pointed out that many of the companies participating in the boycott are not exactly angels themselves. Walgreens (a pharmacy chain) was fined $35 million for defrauding Medicaid. And pretty much everyone knows that The Gap has been the target of its fair share of criticism over the labour practices at the third-world factories that produce the clothes it sells. Now, being hypocritical doesn’t mean being wrong, but it might well lessen these companies’ moral authority somewhat. (And notice that Levant suggests a tit-for-tat boycott of The Gap, etc., by Albertans.)
Next, an economic point. I’m no economist, but my guess is that if the corporate boycott has any impact at all, it will be roughly as follows. The reduction in demand for oil-sands oil will reduce the price it can command. And when you lower the price of something? Yup, you make it easier for other people to buy it. So, more — not less — will end up being used.
Finally, the points above leave us with the conclusion that the corporate boycott of oil from the oil sands is largely symbolic. Well, that’s not necessarily a bad thing, is it? I guess that depends on who is sending, and who is receiving, that symbolic message. And in this case, the message certainly isn’t going to have — indeed, can’t possibly be intended to have — any effect on decision-makers in Alberta. So the only real possibility is that Whole Foods, The Gap, etc., are sending a message to consumers. What message? “We’re green,” I guess, or “We care.” But the message being heard by anyone looking at this carefully is, “We haven’t thought this through.”
[Thanks to MW for suggesting I blog on this.]
The Business Ethics Blog 