The Business Ethics Blog

Should individuals or groups stay away from hotels (or other businesses) in the midst of labour disputes?

The Pacific Division of the American Philosophical Association is currently struggling with that issue — not as an abstract ethical question, but as a practical one. Basically, the hotel at which they were planning to hold their annual meeting this year (the Westin St. Francis, in San Francisco) is currently subject to a boycott being promoted by Local 2 of the union Unite Here. The union is not on strike, though they’re in the middle of negotiations that apparently are not going well. (See details, including the Association’s compromise decision, here: Statement on the Labor Dispute at the 2010 Conference Hotel.)

The situation faced by the APA raises the more general question: should associations like the APA, or consumers more generally, comply with this kind of union-organized boycott, either of a hotel or of another kind of business? Here are a few points to consider:

1. The first thing to note is that, in going along with the boycott, the APA would effectively be choosing sides in this labour dispute. And to take a side means determining (or assuming) that one side is in the right, and the other is in the wrong. But in a labour dispute, the most natural assumption for an outsider is to assume that the two sides simply want different things, and are engaged in what is (roughly) a zero-sum game: the union wants more (more money, better benefits, and/or more job security) while management wants either the status quo or to provide less of one or more of those things.

2. It’s worth being clear about what the role of unions is. Unions are a mechanism of collective action. They are a way for labour to band together for more efficient and effective bargaining in the sale of their labour; this is in parallel to the way that equity investors (i.e., shareholders) band together to hire managers to (among other things) buy labour on their behalf. So a union is a way to further the interests of its members. (I’ve benefited substantially, for instance, from my membership in my university’s Faculty Association.)

3. The APA faces this issue because at least some of its members take it as obvious that the Association should respect the boycott. The impulse to side with the union, here, might be grounded in a presumption that the union is in the right — perhaps that unions always or typically are in the right. Part of that might be rooted in particular philosophical points of view about economic justice. But certainly it’s a point of view that accords nicely with a significant theme in popular culture. The general impression given in popular culture is that workers are powerless and corporations are powerful. They make movies about workers bravely uniting against a common, heartless enemy. They don’t make movies about shareholders banding together to fight Big Labour.

4. It matters that the decision maker in this case, the APA, is an association, rather than an individual. Being an association complicates things in two ways. First, associations often have rules and policies, including sometimes foundational documents (a constitution or a set of by-laws), that to a certain extent guide (and sometimes determine) their behaviour. (The APA, for example, has a policy of only meeting at unionized hotels, though whether that policy applies to the current situation is a matter of interpretation.) Secondly, an association has members, who in many cases need to be consulted and asked for input. Ethical decision making for associations, then, takes on some of the trappings of political decision making (broadly understood).

5. For some people, the decision to support a union in its boycott will be easy, because their own preferences make it so. If you are an ardent supporter of labour movements, generally — if you take the successes of a union as your own successes, the way you might the successes of a friend or family member — then supporting such a boycott might seem a no-brainer. It doesn’t necessarily require any restraint on your part. If, on the other hand, you are neutral or even antagonistic to unions generally, then the boycott presents you with an ethical dilemma. Assuming (as is the case for the APA) that you already have plans in place that involve using the hotel in question, then changing those plans means accepting some inconvenience, and maybe even significant expense. Normally, in the marketplace, we look to buy those things (and only those things) that meet our needs, and satisfy our preferences. Complying with a boycott may imply accepting a limitation on the pursuit of what’s in your best interest. That, in a sense, is the hallmark of ethically-significant issues: they put constraints on the pursuit of what is most obviously in our best interest (narrowly construed).

6. Assuming that you neither a) assume that unions are always right, nor b) have a natural passion for unions and their causes (either of which might make the decision trivial for you) you need to make a decision about whether the union’s case is morally compelling. The problem, of course, is that the relevant information is going to be hard to acquire. Accurate information is particularly hard to come by in the context of labour conflicts, which are characterized by dissimulation, exaggeration, and bluffing. Individual consumers, limited as they inevitably are in their information-gathering capacities, are going to find it incredibly difficult to sort through the labour equivalent of a “he said, she said” dispute. It may well be that this is among the more difficult domains in which consumers can attempt to engage in ethical consumerism.

—-
Thanks to Matt for alerting me to this story.

I was on CBC Radio’s “The Current,” this morning, talking (still!) about the issue of cruise ships visiting Haiti. Here’s the link to today’s show (scroll down to the third segment, called “Haiti Cruises”) or you can find the podcast here: Haiti Cruises.

The show included some useful comments from two other professors, (Rebecca Tiessen from Royal Military College who specializes in global development, and Brian White who is Director of the School of Tourism and Hospitality Management at Royal Roads University), both of whom had interesting perspectives on tourism and its contribution (or lack thereof) to developing nations in general.

Host Brent Bambury was full of great questions for me. My favourite was about the motives of companies doing business with Haiti. It’s at the very end of the interview. Here’s how the conversation went:

BB: Are you comfortable when you hear the CEO of Royal Caribbean, Mr. Goldstein, talking about his economic rationalizations for continuing to do business there — or do you hear, there, self-interest or a self-serving economic argument, at a time when really there’s this whole other moral question?”

CM: I hope I hear his self-interested argument coming through. Because, you know, there are organizations in the world that do things because they have, you know, good intentions towards others. But an awful lot of productive work in the world goes on because people find a way to make a living for themselves, right? So I think what Haiti desperately needs, you know, is a bunch of companies that find ways to make money in Haiti, in ways that are going to also be beneficial to Haitians. That kind of profit-making opportunities are what’s going to bring in companies that are going to provide jobs, provide export opportunities, things like that and I think that’s what Haiti’s going to need.

BB: It’s the second part of the argument, though, ‘In a way that will make benefits for Haitians,’ that’s the tricky part of the argument, because historically that hasn’t been there.

CM: Yeah, historically that hasn’t been there. There’s been — I’m not an expert on the history — but from what, you know, most people know, it’s a place that has had trouble in the past with achieving something like stable government and responsible government and those kinds of decisions haven’t always been good. So what we need to be looking for then, is transactions that Haitians see as being in their own best interests, to the best we can tell that, right? So I’m at least somewhat comforted with regard to the cruise ships when I hear reported by reputable…you know, by objective third parties, journalists and so on, that by and large Haitians are saying, ‘Yes, please, keep bringing the cruise ships — we see that as beneficial to us.’

The issue of cruise ships visiting Haiti really struck a nerve last week…even made it to CNN. They interviewed me & quoted me in this story: Haiti cruise stops draw ire, support.

Those of you who recall my blog entry know that I think there was (and is) nothing unethical about cruise ships bringing tourists to the northern, non-disaster-stricken, parts of Haiti. The editors of the Globe & Mail agreed with me: Let the Cruise Ships Dock.

(And here’s another good story on the issue, from New York Times: Haiti Cruise Stops: ‘Without This, We Don’t Eat’.)

Finally, here’s an expanded version of my argument, published in The Mark: Disaster Tourism. (In this article, I also include some thoughts about the role of moral intuitions, and argue that some critics, at least, may in part be ‘projecting’ their own feelings of guilt onto the cruise-goers and cruise lines.)

A couple of weeks ago, I posted this picture, taken by a friend of mine at a Starbucks in Busan, South Korea.

The picture struck me as odd: why does a banana need a plastic wrapper? Seems unnecessary. But, as I pointed out at the time, Starbucks is a pretty smart company — they don’t do much that isn’t well thought out.

So I contacted Jim Hanna, Director of Environmental Affairs at Starbucks. He offered to find out the answer for me. And the answer: cultural norms. Apparently, according to Starbucks Korea (via Hanna) cultural norms in Korea dictate that “premium” produce be individually packaged.

Now, it’s easy enough to understand a company wanting — both for ethical and for sheer marketing reasons — wanting to be sensitive to local norms. We don’t want multinationals barging into countries and simply assuming that everything will be the same as “back home.”

But surely “cultural norms” aren’t always going to trump. After all, for years it was a cultural norm in North America to drive a big, big car and not to care about gas mileage. For years, it was a cultural norm to toss tin cans into the garbage, rather than recycling them. Those aren’t the kind of norms that deserve respect; there are good arguments against those norms, arguments that have by and large been persuasive.

Norms can and do change. Sometimes what it takes is a company that’s big enough to nudge cultural practices in a better direction, and to lead by example.

Business ethics is mostly about the extra-legal rules that apply in the world of business. Though the study of business ethics often involves thinking also about what sorts of laws and regulations ought to apply to commerce, for the most part business ethics takes for granted a more-or-less-stable set of laws, a background against we ask questions like, “Yes, that’s legal…but is it ethical?”

Business owners in Haiti, right now, don’t get to think about things that way. From what I understand, for all intents and purposes, there is no stable, generally-enforced body of law in Haiti right now. There may be a nominal government, but the importance of that is more symbolic than practical. And Haitian law-enforcement agencies leave much to be desired on a good day; post-disaster, they’ve got their hands much more than full maintaining even small pockets of law and order. The enforcement of laws governing commerce is presumably not a terribly high priority.

This opens up a whole range of interesting questions about what ethical rules apply to business in the absence of law and order.

For an interesting glimpse at the world of retail as found in Haiti this week, see this story from The Ottawa Citizen: Decadence amid devastation. One interesting bit of the story raises a clear business ethics issue, namely price gouging:

About 30 per cent of gas stations in Port-au-Prince have opened, and officials say there is no longer a fuel shortage. But prices have tripled from pre-earthquake levels.

Now, huge increases in the prices you charge to desperate people during an emergency may seem like an ethical no-brainer (and in most places in North America, for example, it’s against the law). But ethically it’s actually not so straightforward. My friend Matt Zwolinski has argued, for example, (in “The Ethics of Price Gouging” Business Ethics Quarterly, Volume 18, Issue 3) that many instances of price gouging should not, in fact, be thought of as unethical. I won’t rehearse Matt’s entire, carefully-laid-out argument here. But basically he argues that price gouging isn’t always coercive or exploitative (though it sometimes is) and that to forbid price gouging may a) be unfair and b) have very bad consequences. It may be unfair in that it puts a heavy burden on merchants, who in time of crisis may face exceptional challenges and additional expense in obtaining anything to sell in the first place. (And note that many merchants, especially in a place like Haiti, may be far from wealthy themselves). And forbidding price gouging may have bad consequences for all concerned if it leaves merchants with little choice but to close their doors and stop providing goods to consumers in a time of need. Now, that’s an abstract argument about price gouging in general, not a defence of any particular instance of price gouging. But it’s thought-provoking, and serves to remind us that many ethical issues — particularly ones related to people’s behaviour in an emergency — are more complex than they appear at first glance.

One last thought about perceptions and appearances and moral judgment.

Take a look at the opening paragraphs of the story quoted above:

While tens of thousands of Haitians struggle in horrific conditions, it’s business-almost-as-usual at one store in the Port-au-Prince suburb of Petionville, where fresh vegetables, meat, cheese and wine are available to those with money to spend….

At the Big Star Market in Petionville, a relatively affluent Port-au-Prince suburb, Jean Robert Lebrun emerges from his first grocery trip in 11 days with half a dozen baguettes under one arm and bags of rice and cooking oil under the other….

That bit alone makes Mr. Lebrun sound downright spoiled. Baguettes? Bags of rice? Wine and cheese? This is Haiti we’re talking about, right? The place where people are bleeding and starving? How (one might jump to ask) can anyone eat so lavishly while their neighbours are starving?

The answer: that’s not what’s going on here. But you have to read to the end of the story to find that out:

Lebrun’s home was “completely destroyed” by the earthquake, and his street was so choked with rubble that he could not drive out until Friday. There are 25 neighbours living in his tree-covered garden. They have no shelter. But they have a charcoal stove and, now, a few items of relative luxury.

“So far, no one has come to help. We need tents, and so far we can’t find them,” says Lebrun, who had planned to return to Big Star later Friday with more cash. “Before the tremors, my wife had made provisions for a month. So that is why we have been able to help the people.”

This is not a story of greed or insensitivity. It’s a story of generosity and compassion. The lesson: it’s dangerous to reach conclusions based on incomplete understanding of the facts. Sometimes, we need to reach conclusions quickly because the need to act is pressing. But when it comes to judging the actions of people in the middle of a crisis, from the comfort of our armchairs, we are obligated, I think, to exercise caution.

Cruiselines have been taking heat for continuing to bring tourists to Haiti. Critics have thought it unseemly for wealthy vacationers to be enjoying sun and sand on an island currently in a state of deep crisis.

See this article by Robert Booth, writing for The Guardian: Cruise ships still find a Haitian berth

Sixty miles from Haiti’s devastated earthquake zone, luxury liners dock at private beaches where passengers enjoy jetski rides, parasailing and rum cocktails delivered to their hammocks.

The 4,370-berth Independence of the Seas, owned by Royal Caribbean International, disembarked at the heavily guarded resort of Labadee on the north coast on Friday; a second cruise ship, the 3,100-passenger Navigator of the Seas is due to dock.

The Florida cruise company leases a picturesque wooded peninsula and its five pristine beaches from the government for passengers to “cut loose” with watersports, barbecues, and shopping for trinkets at a craft market before returning on board before dusk. Safety is guaranteed by armed guards at the gate.

The decision to go ahead with the visit has divided passengers. The ships carry some food aid, and the cruise line has pledged to donate all proceeds from the visit to help stricken Haitians. But many passengers will stay aboard when they dock; one said he was “sickened”….

Is there anything wrong with cruise lines continuing to do business with Haiti? I have to admit that, at a visceral level, I have some of the same reaction critics have had. There’s something a bit ‘off’ about having fun in the sun while others are suffering so near-by. It’s a bit like having a picnic adjacent to a funeral. It seems tacky. But is there anything wrong with it?

First, it’s important to note that Royal Caribbean is donating $1 million to the relief effort. When its ship docked in Haiti for passengers to enjoy the beach, it also dropped off “Forty pallets of rice, beans, powdered milk, water, and canned foods … and a further 80 are due and 16 on two subsequent ships.” So, the cruise company is doing a lot of good, both by contributing to the Haitian economy (by bringing tourists who spend money, for example) and by making philanthropic contributions. Now, that in itself doesn’t automatically make it OK to continue bringing tourists to Haiti during the crisis. Maybe the contrast between wealthy vacationers and desperate Haitians is just too repugnant to be overcome by mere money. Maybe it’s too much like waving a hundred-dollar bill in a poor man’s face and then giving him a dollar. Maybe.

But is it really plausible to say it’s wrong to have fun (or make money by taking people to have fun) “too close” to poverty and desperation? It’s hard to imagine making that a general rule. Should poor countries be scratched off our list of places to spend our vacation dollars? That’s hard to imagine, and it’s hard to imagine a principle that would let you distinguish between Haiti this week and, say, Brazil or Mexico or Trinidad & Tobago. And it’s worth keeping in mind that Haiti itself is a terribly poor and deeply troubled place at the best of times. It’s the poorest country in the Western hemisphere. It’s per-person GDP is about 1/36th that of the U.S. It’s #14 on the Fund for Peace’s 2009 Failed States Index. So, if it’s unethical for cruise ships to patronize Haiti’s ports this week, what about next week? Next month? Next year? When will Haiti be sufficiently stable that wealthy vacationers can feel OK about visiting (and about thereby contributing to the Haitian economy)?

I think it’s important for the world to know that Haiti is, in at least some small way, still open for business. And I think it’s worth a bit of awkwardness to send that signal.

—–
Once again: here are a couple of great links for helping the situation in Haiti right now (without having to book a cruise)…
World Food Programme and
Médecins Sans Frontières (Doctors Without Borders)
(If you choose to give to another organization, make sure you find a reputable one. But please do give.)

Are credit card companies morally obligated to waive their fees when people use their credit cards to donate to disaster relief, or is doing so itself a charitable act, something above and beyond the call of duty?

I think it’s great that the major credit card companies have all decided to waive their fees — but I think it’s important to acknowledge that as an act of charity. It’s an act of corporate philanthropy, not something they’re obligated to do. (The move to waive their fees came, unfortunately, after the firms were criticized for making money off the current crisis.)

Here are a couple of quick points to consider, if you’re tempted to think that these companies are ethically obligated to waive their fees, rather than profiting from this terrible situation.

1. Shouldn’t companies that find excellent ways to help in disasters be rewarded, at least by being allowed to charge their normal fees for their services? The credit card companies are of enormous importance to the people of Haiti at this point: the very existence of these companies means that millions of people like you and me can help financially with a few clicks of a mouse. Indeed, the services these companies provide (even were they to charge their standard fees) are probably more important to Haitians at this point than any single charitable organizations is. And as far as profiting from a bad situation goes, well, that’s not exactly uncommon. Lots of companies profit from human misery, and I’m glad they do. They profit because (with some notable exceptions) they’re providing a genuine service. Drug companies make lots of money because people get sick. Insurance companies make money because people fear fire and theft and disability. And so on. Credit card companies are far from unique in this regard. They provide a huge service in times of hardship, and deserve to profit from doing so. So, forgoing such profits is an act of charity, not an obligation.

2. What makes this event unique? Don’t get me wrong: it’s a horrific crisis, and anyone who can help should do so. But if credit card companies are obligated to waive fees for charitable donations to Haiti right now…what about donations to Haiti last year, or next year? It is, after all, the poorest country in the Western hemisphere, in constant need of help. Should facilitating donations (without charging fees) always be considered the minimally decent thing for credit card companies to do, instead of generous and morally praiseworthy? Should all charitable donations (to all charities? in support of all causes?) be underwritten that way? Some people do apparently think that companies should never profit from charitable donations. But again, that seems to undercut the huge amount of good that credit card companies do by facilitating charitable donations. (I for one know that I donate more often, to more charities, than I otherwise would, just because Visa lets me do it so easily online.)

So: a big “yay!” for Visa, Mastercard, American Express, and Discover for waiving their fees and thereby helping the people of Haiti. But that’s “Yay, good corporate philanthropy,” not “Yay, they’re foregoing evil profits.”

—–
While I’ve got your attention: here are a couple of great links for helping the situation in Haiti right now…
World Food Programme and
Médecins Sans Frontières (Doctors Without Borders)
(But of course the most important thing really is not that you choose one of those, but that you find a reputable organization and give.)

A friend of mine took this picture recently at a Starbucks in Busan, South Korea.

My first reaction when I saw it was, “What the….?!” Why does a banana need a plastic package? Isn’t the banana already our most perfectly-packaged fruit? After all, a banana peel is relatively tough (certainly tougher than thin plastic wrap) and easy to open. It’s water-proof, and easily keeps dirt of the delicate fruit inside. What’s with the wrapper? Wouldn’t a Starbucks-logo sticker and a best-before date sticker be enough?

On the other hand, Starbucks isn’t stupid. Packaging costs money, and if there weren’t a good reason (at least from their point of view) to stuff a banana into a plastic wrapper, they wouldn’t do it. And they’re a relatively environmentally-conscious company: they are at least alive to environmental issues, and they know that big companies like themselves are liable to be prime targets when they make poorly-thought-through decisions.

Does anyone know the actual reason for this packaging? Is the reason, whatever it is, a good justification, in an environmentally-conscious age?

—–
(Thanks, Zack!)

Should companies ever tolerate unethical behaviour in the workplace? Never? What about really small stuff? What about really important employees? How strictly should they monitor employees? Won’t intense scrutiny hurt morale?

Here’s an excellent piece on just those questions, by Vadim Liberman, in the Conference Board Review: Workers Behaving Badly

This article is written for workplace miscreants who steal from, lie to, bribe on behalf of, and deceive their bosses and businesses. Not you, of course. Not only is the angel on your left shoulder restraining Satan on the other side—page thirty-four in the company manual forbids such hijinks.

But ask yourself: Have you ever slipped a pencil from your desk into your purse? Ever surfed the Internet in the office to check the score of this afternoon’s game? Dropped a holiday package in the mailroom outbox? If you answered no to all the above, congratulations! You’d be the ideal ethically pure executive—that is, if your no weren’t an outright lie.

Oh, come on, you might be thinking—it’s just a pencil….

The article cites a number of relevant considerations (including a few in quotations from me). The one I think particularly worth highlighting is the distinction between ethical infractions that only affect the company (e.g., petty pilfering from the supply cabinet) and those that affect outsiders (e.g., exaggerating expenses that are then billed to clients). It seems to me that companies (and hence managers) are within their rights to be more or less as strict or as lax as they want, when only the interests of the company are affected. That’s not to say they couldn’t make more- or less-wise ethical decisions in that regard; it’s just to say that, well, it’s their business, and that gives them the right to some latitude. But when employees do unethical (or illegal) things that affect those outside the company, if the company allows the behaviour (explicitly or implicitly condoning it) then it essentially becomes an action of or by the company. And in that case, the company itself is acting unethically.

(By the way, this is one of the finest piece of ethics journalism I’ve seen in a long time, and not just because it quotes me. It’s thoughtful and well-researched. The whole thing is well worth reading.)

Most of you will have heard of Dr. Jeffrey Wigand, or will at least have heard of the movie, The Insider, that chronicled Wigand’s harrowing experiences as a tobacco-industry whistleblower.

Most of you will not know, that Wigand is still involved in the fight against Big Tobacco. More specifically, he’s the head of a nonprofit foundation called Smoke-Free Kids.

You also may want to know that Wigand will be appearing this Tuesday (January 12th) on the internet radio show Ethics Talk. The title for that show will be: From Knowledge to Action: An Interview With Jeffrey Wigand.

It’s good to know that one of the few true celebrities of business ethics is still involved in trying to make the world a better place.
—–
(You can follow Wigand on Twitter, here: @jeffrey_Wigand.)
—–