Archive for August, 2013|Monthly archive page
Ethics and Online Reputation Management
Filed under: accountability, brands, consumers, social media, trust |
Leave a comment In a recent interview with Reputation.com, I talked about the effect the internet has had on reputation management, and the connection between that and ethics.
The risk, of course, in having an ethics professor like me talk about reputation management is that it’s all too easy to give the impression that the two topics are the same. In fact, I’m pretty sure there are people out there who assume they are the same thing.
And certainly there are those in the field of ethics who contribute to that way of thinking. Sometimes that takes the form of what is often referred to as “the business” case for ethics (or for CSR or for sustainability). “The business case” takes many forms, but all of them boil down to an assertion that acting ethically (or being socially responsible or being sustainable, whatever) is good for your business. The specific mechanisms mentioned are varied. Treating your workers well improves retention. Going green reduces energy costs. And, yes, that being ethical is good for that all-important corporation reputation.
The worry is that businesses exposed to such arguments will come to think of ethics from a purely instrumental point of view: we’ll act ethically only because, and only to the extent, that it’s good for profits. Thinking of ethics that way implies an incredibly low level of commitment. You won’t always in every situation be able to draw a straight line between this bit of ethical behaviour and that bit of profitability. And so the ethics of a company under the sway of “the business case,” it seems, would be liable to have its ethical behaviour ebb and flow on a pretty regular basis.
The key, though, isn’t to avoid talking about the business case for ethics. Because it is simply true that, on the whole, acting ethically is good for business. Sure, you can make a quick buck by being a cheat. But smart managers have known forever that the route to sustainable profits lies in paying your bills on time, treating your employees well, cleaning up your own messes, and dealing honestly with your customers. Having a reputation for doing those things is truly good for business.
Clearly, having a reputation for doing those things isn’t precisely the same thing as actually doing them. In theory, it’s possible to act badly but to keep the facts quiet. Or at least, that was the case once upon a time. Then along came consumer blogs and Twitter and Facebook and Tumblr and so on; now, accusations of bad corporate behaviour has a way of getting out and spreading like wildfire. Today, certainly, it seems like the easiest way to get and keep a reputation for honesty and integrity is actually to behave with honesty and integrity. It’s always better to avoid fires than to have to put them out. That’s why the best reputation management method is to build a good reputation in the first place.
But of course, sometimes even an honest company, trying its best to treat people right, can hit a rough patch. Sometimes something goes wrong, and sometimes — in an era in which all of your customers have access to a 7 billion-person conversation called the Internet — that fact that something went wrong gets aired in a very public way. Hence the need for online reputation management, to control the damage. But even here, the key is to make your participation in those online conversations genuine, or if you prefer “authentic.” You need to be sincere about your commitment to doing the right thing, and to making things right when mistakes are made. This is the irony of the business case for ethics. The best way to reap the benefits of a reputation for being ethical is not to pay much attention to those benefits, but to focus on the importance of doing the right thing — for its own sake.
Regulating Book Prices? Bad Idea.
The Quebec government’s proposal to regulate the price of books is wrong-headed in all sorts of ways. The proposal — or rather the range of proposals, currently being considered by a parliamentary commission — would likely involve fixed prices and/or a limit on big bookstores’ ability to offer steep discounts on best-sellers.
The move would amount to taking sides in the marketplace: not surprisingly, the owners of small bookstores (ones that can’t buy and sell in bulk) are in favour of the proposed regulations, as are their allies in the union of Quebec writers (UNEQ). And while it is sometimes reasonable for governments to take sides in this way, the reasons need to be carefully examined on a case-by-case basis, and clear analysis requires transparency about the fact that sides are in fact being taken, and that there will be winners and losers as a result.
Of course, it matters that this story is about Quebec, a jurisdiction that for years has seen its politics dominated by the perceived need to protect the French language. According to the UNEQ, small bookstores are “guardians of diversity,” which basically means they’re a source of French-language books. But then, I would wager that Amazon sells, or soon will sell, more French-language books than all the wee bookshops in La Belle Province put together.
In fact, it’s a bit weird that reports about this bit of news don’t mention Amazon. I’m no expert on book-selling industry, but it seems to me that the real battle is between Amazon and the big-to-medium-sized bricks-and-mortar stores. There will always be a niche market for cute, idiosyncratic little bookstores. What’s less clear to me is that there’s a future for bigger stores that merely try but fail to replicate in bricks-and-mortar what Amazon does online.
The most general reason why this proposed policy is a bad idea is basic economics: when governments choose sides in the marketplace, they are opting against the type of efficiency at which markets excel, namely the kind that brings consumers things they want at low prices, and that rewards producers for finding effective methods of production and management in pursuit of such consumer satisfaction.
It’s worth considering what the public reaction would be if the product in question were something other than books. What if the government of Quebec proposed keeping the price of children’s clothing high, in order to limit the impact of Walmart and to defend the little boutiques selling hand-made clothing. Would anyone seriously want to promote a policy making kids’ clothes more expensive this way?
But beyond basic arguments about economic efficiency, it has to matter here that the products in question are books. Isn’t literacy and reading more generally a good thing, socially? So isn’t it a good thing when books are cheap? The complaint of the small bookstores is that big stores making books too cheap. But any attempt to keep prices high is necessarily an attempt to keep some people from buying books. There will always be ‘marginal’ readers who will buy a given book at a reduced, big-box price, but not at list price. Of course, we can’t (alas) ensure that everyone has access to everything they want, but do we really want to exclude such people from buying those books, as a matter of government policy?
The Ethics of Shrinking Newspaper Distribution
The Globe and Mail, Canada’s highest-distribution national newspaper and often regarded as the country’s “newspaper of record,” has announced that it will cease daily delivery to the entire province of Newfoundland and Labrador, as well as to a handful of isolated towns in British Columbia. Shipping costs have apparently meant that the paper has been losing money for years on its distribution to those places, and so the publisher has finally decided that enough is enough.
This is, of course, a bad thing for the small number of dedicated readers that the G&M has in Newfoundland and Labrador. And questions will surely arise about whether the paper is being fair to them. Shouldn’t the “paper of record” be available to all Canadians, “from sea to shining sea?”
On the other hand, it’s not like those parts of the country are being abandoned entirely. The Globe and Mail website is of course still available to anyone, anywhere, with an internet connection. And, the paper suggests, more and more people are enjoying their content on iPads and other tablets anyway. Of course, that’s great for people who can afford tablets and reliable internet connections. Pointing to electronic options still has a classist ring to it. A huge majority of Canadians do have home internet, but not everyone. We are still subject to that notorious ‘digital divide.’ But then again, it’s not like Newfoundland and Labrador is being cut off from communications — or even just print media — entirely; there will still be other sources of news.
Still, it’s hard not to feel a loss, here. Citizens of Newfoundland and Labrador may have access to other sources of news, but in a world of concentrated media, having access to a range of options is no small matter. And the Globe and Mail is a high-quality publication that offers a particular editorial voice, a voice that — whatever your political views — we ought not to dismiss lightly.
So this shrinkage in the G&M’s distribution is a sad thing; but is there anything blameworthy in it?
In the end, access to news, and to a diversity of editorial views, is a social matter, a question of the public good. Indeed, it is a question of access more important than, say, the question of access to a diversity of coffee shop options or footwear options. But do companies like The Globe and Mail Inc. (the private, for-profit company that owns the paper) have any obligation to contribute to solving such problems?
While we want private, for-profit firms to be “good corporate citizens,” it’s not clear that they have an obligation to lose money in pursuit of social aims. Newspapers are often thought of as being in a special category, here, as many of them have aims — missions, if you will — other than profit seeking. But even newspapers with a commitment to the public interest have to keep an eye on the bottom line.
Business, the Sochi Olympics, and gay rights
In light of Russia’s appalling stance on gay rights, the Sochi Olympics represent a true ethical dilemma for the organizations involved.
On one hand, Russia’s recent anti-gay law is truly ethically abhorrent, and should be denounced in the strongest possible terms. If Vladimir Putin’s government is willing to jail people, or worse, simply for expressing a desire to be treated equally, it certainly doesn’t deserve the warm fuzzy spotlight of the quadrennial Olympic love-in.
On the other hand, liberal democratic ideals don’t spread through a policy of isolation. Boycotting (or moving) the Olympics might teach the Russians a quick lesson about what is and is not acceptable to the international community, but it will be a rather terse and ineloquent lesson. The kind of interaction that the Olympics make possible, indeed inevitable, opens up a lot more space for dialogue.
It’s worth noting that the dilemma faced by the International Olympic Committee (IOC) and Olympic sponsors is in some ways similar to the dilemma faced by many Western multinational corporations when doing business in places that do not live up to the kinds of standards Westerners are used to. Doing business in a developing nation can mean being subject, for example, to very different workplace health and safety standards and significantly lower—or even absent—environmental regulations. And even if companies were to decide to adhere voluntarily to higher standards, they have to realize that their local suppliers and indeed local governments are liable to act in ways that would be considered unacceptable “back home.” Such companies have to decide: should we do business here or not?
Some will argue that, with regard to such dilemmas of international commerce, human rights violations represent a line in the sand. It’s one thing to have workers work slightly longer hours than would be permissible in Canada or the U.S., but it’s another thing entirely to make use of forced labour, or to engage in discrimination based on race or sex. But then, even with regard to human rights, a distinction can be made between engaging in human rights violations, on one hand, and merely doing business in a place where others do so on the other. It’s not necessarily wrong to do business in a place where human rights violations occur, especially if a company does what it can, whenever it can, to make things better.
So the IOC and Olympic sponsors might similarly argue that, yes, Russia’s treatment of homosexuals is a human rights violation and ethically unacceptable, but as long as such violations don’t happen at the Olympics, they themselves are doing no wrong.
But one issue that none of the organizations involved can easily shrug off is the safety of the athletes. There is at least some risk that Russian authorities will detain or deport any Olympic athlete who violates the legal prohibition on “homosexual propaganda.” Deportation would merely be an embarrassing hassle. But detention could be truly dangerous. If some brave athlete should speak out, be taken into custody, and—it’s not unimaginable—something bad happen to that athlete, then the organizations that made such a chain of events possible would bear at least some of the blame.
But things are complicated somewhat by the fact that at least some Russian gay-advocacy groups have asked the international community not to boycott Sochi. A boycott, they point out, would leave them to struggle in the dark. They prefer the light, however muted, that the Sochi Olympics promises to shed on their plight. And while such groups don’t hold a moral trump card, their voices certainly deserve considerable attention.
So maybe the IOC and other organizations involved truly are in a no-win situation. Or, at least, a situation in which all of the options on the table are fraught with ethical peril. In such situations, the meaningful ethical discussions must happen around the edges. Has the IOC gone far enough to denounce Russia’s anti-gay stance? Can and should it go farther? Will broadcasters and sponsors do anything (perhaps something not directly tied to the Olympics) to advance the cause of equality? What can governments in Canada, the U.S. and Western Europe do to lobby Moscow for meaningful change, and what in turn should Western companies do to encourage their governments to put such pressure on Moscow? In the end, the IOC and the other organizations involved should perhaps be judged not by what they choose to do, but by how they choose to do it.
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Related reading:
Canada’s Big 3 Telecoms’ Opposition to Verizon? Unseemly!
The Big 3’s opposition to Verizon’s entry into the Canadian market is unseemly, like a baseball manager kicking dirt at an umpire. It may not literally be against the rules of the game, but it undermines that game’s implicit values.
Canada’s telecom giants are actively opposing the entry of American communications giant Verizon into the Canadian market. In a series of interviews and full-page ads, Bell, Rogers, and Telus have been arguing that regulators should move to prevent Verizon’s entry into the Canadian market, a move the company aims to make via its acquisition of Canadian upstart Wind Mobile. The move will give Verizon access to Canadian spectrum at preferential rates that were established to encourage small companies to enter the field. And the Big 3 don’t like it one bit.
(Interesting timing: coincidental with the announcement that Verizon, an American firm, was seeking to entry to Canada, HBC, a Canadian firm, announced that it had bought American retail icon Saks and thereby gain a foothold in the US retail market. I’m not sure Americans even noticed, let alone did they complain.)
Such opposition is, of course, understandable. Managers at Bell, Rogers, and Telus have turf to protect, and they understand their role as being to maximize return for their respective shareholders. And to be sure, advocacy — including lobbying — is a proper part of that role. But there are limits. Even those of us who understand the essential role of the profit motive in making our markets work will recognize the need to put limits on profit-seeking behaviours. Less obvious is just where to draw the line, ethically.
One important strain of thought on the topic, grounded in the work of University of Toronto philosopher Joseph Heath and others, says that managers should use as their ethical touchstone their implicit commitment to the values that underpin market efficiency. Key among those values is a commitment to encouraging competition. A true capitalist, this line of reasoning goes, wants to make a profit by beating the competition — by providing better service at a better price — rather than by reducing competition.
It’s worth pointing out that the debate here is already being framed in terms of ethics: the Big 3 claim it is unfair to allow Verizon in on what it considers favoured terms. Their critics, of course, will say that the preferential treatment that Verizon will gain at an upcoming auction of spectrum, through its acquisition of Wind, is being offered precisely on fairness grounds: barriers to entry are huge in mobile telecom, and making spectrum more affordable helps level the playing field. There are decent arguments on both sides, both rooted in an appeal to the ethical value of fairness.
The ‘market values’ argument cuts through the apparent ethical impasse, here. Managers at Bell, Rogers, and Telus are not just anyone: they are participants in a socially-important game called “the market.” In the market, we allow a certain amount of rough play, including behaviours what would generally be thought improper in polite society. Corporate managers can (indeed, should) fire under-performing employees, even if that dashes employees’ dreams. And they should innovate and strive for efficiency, even if that puts competitors out of business. But one of the things they can’t do, ethically, is seek to limit market competition.
To be sure, it’s a rule that is more honoured in the breach than in the observance. Much of modern management practice is aimed at finding niches where companies can operate with minimal competition. So it’s not surprising that managers at the Big 3 are desperate to keep Verizon out of the pool. But they need to recognize that, in doing so, they don’t have an ethical leg to stand on.
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Related reading:
- “Moving Beyond Market Failure: When the Failure is Government’s” by Peter Jaworski
- “Market Failure or Government Failure? A Response to Jaworski” by Joseph Heath
The Business Ethics Blog 