The Business Ethics Blog

(Further to yesterday’s posting on SUV’s & safety…)

Apparently, even if people aren’t deterred from buying SUV’s by the big vehicles’ manifestly anti-social qualities, nor by safety considerations, nor by environmental considerations, we can still count on people to respond to basic economic incentives like a few cents’ difference in the price of gas.
See this story in today’s New York Times: A Comeback for the Car Species

Last year will go down as the one when cars made a comeback and sport utilities stumbled.

For cars, long overshadowed by hefty pickups and powerful S.U.V.’s, the share of the American market climbed for the first time since 1992, according to figures from the automobile companies. Cars picked up about one percentage point, giving them 45.1 percent of the market, their largest share in two years.

“Cheap fuel in America is a thing of the past,” said James Press, president for sales operations for Toyota in the United States. “There’s a lot more awareness of the impact of a gallon of gasoline.”

For those of you who didn’t know already, there’s growing evidence against the safety of SUV’s.

The latest is the result of a study by Partners for Child Passenger Safety, a research project sponsored by Children’s Hospital of Philadelphia and State Farm Insurance Co.
Here are a couple of media stories reporting on it:
SUVs less safe than passenger cars: study from CTV news
SUV, child safety myth dispelled in latest review (Kansas City Star)
Children’s risk triple in SUV rollovers
Some snippets from the CTV story:

The research was completed by The Children’s Hospital of Philadelphia and found that SUVs have a higher risk of rolling-over during a crash, which supercedes any safety benefits that come from the fact the vehicles are larger and heavier than regular cars.

“SUVs are becoming more popular as family vehicles because they can accommodate multiple child safety seats and their larger size may lead parents to believe SUVs are safer than passenger cars,” said Dennis Durbin, a physician at The Children’s Hospital, and co-author on the study, in a release.
“However, people who use an SUV as their family vehicle should know that SUVs do not provide superior protection for child occupants.”
Durbin said proper restraints that suit a child’s size and age are critically important in SUVs, because of the increased risk of rolling over during a crash.

Here’s an entire website I found, questioning SUV safety.
Here’s a related report from Road & Travel Magazine.

Suggested reading: High and Mighty: SUVs–The World’s Most Dangerous Vehicles and How They Got That Way.

[This is a follow-up to my previous posting.]
One of the top scholars in business ethics, Lynn Sharp Paine, has in fact commented on the ethics of video game marketing. In her generally excellent book, Value Shift, Paine is pretty critical of “point-and-shoot” games, citing them as an example of “the financial rewards of moral indifference”. (p. 58) Here’s an excerpt from p. 59:

According to one expert in this field, these games…erode resistance to killing. In the process, they also increase players’ comfort with lethal weapons, desensitize them to the weapons’ deadly effects, and develop their marksmanship skills.

If this expert is only partially correct, the widespread and indiscriminate use of point-and-shoot games should be a matter of serious moral concern. Restraint in the use of force against the innocent…is a fundamental tenet of civilized society, and activities that undermine this restraint should be undertaken with caution. Even if these games had never been associated with any school killings, however, their widespread use would still be troubling. Whatever entertainment value they might provide appears to be more than offset by the risks of dulling their young players’ moral sensibilities and desensitizing them to the power of lethal weapons. At a minimum, moderation should be advised.

Now, the available evidence suggests that video games do not generally produce serious anti-social behaviour. Of course, the existing data are also consistent with the reasonable hypothesis that while a) most kids won’t be turned into gun-toting maniacs by point-and-shoot video games, b) an unstable minority of them may well be. That poses a serious ethical challenge. Are producers of these games responsible for their effect on a small minority of users? Of course, many products have unusual (but statistically predictable) negative effects on a minority of users. Just about all pharmaceuticals, for example, had nasty side-effects for at least some users. The difference, of course, is that many pharmaceuticals have significant benefits, and it’s socially and individually rational to accept some risk in return for anticipated benefits. Point-and-shoot video games are unlikely to be able to claim a similar cost-benefit ratio.

So, it’s unlikely that we’ll be able to defend video games against the claim that they’re harmful to a vulnerable few based on arguments about net benefits. So, what about appealing to a different ethical value, like autonomy (freedom of choice)? The argument here would be that it’s wrong to restrict the range of entertainment options open to the entire population of gamers in order to prevent the (possible) negative impact on a vulnerable few. My guess is that this argument is going to carry the day, at least until someone produces more concrete evidence of a direct causal link between point-and-shoot video games and ANY anti-social behaviour (even if only among a troubled few players).

(Thanks to Wayne Norman for reminding me of this passage in LSP’s book.)

Are video games dangerous? More to the point (for purposes of this blog), is there enough evidence that video games are dangerous to make the marketing of them to kids an ethically questionable business practice?

Here’s a good, brief look at the available evidence: Reality Bytes: Eight Myths About Video Games Debunked, by MIT prof Henry Jenkins.

Then again, who needs actual “evidence.” See these comments by a Senator Hansen Clarke at an inquiry in Michigan. Here’s a wee taste:

Regarding the evidence, we don’t need 1,000 studies to demonstrate that violent video games are not good for our children. The evidence is mounting every day, and I believe that we will have the proof.

(I don’t actually know who reads my blog, so it’s hard to target an audience. So I try to make sure some of the postings are “educational”, for the benefit of readers who don’t know much about academic business ethics, and other postings merely informative in a here’s-something-neat kind of way. Today’s posting is of the former variety. I hope.)

This posting is actually in response to an e-mailed enquiry I received from a student doing an Executive MBA, in Austria no less. She wanted to know the difference between “business ethics” and “CSR” (Corporate Social Responsibility). Here’s roughly what I told her:

Unfortunately, there are no clear, widely-accepted definitions available for these terms. “CSR,” in particular, is used MANY different ways by different groups.

The way I explain the difference to my own students is this: Business Ethics is the VERY broad field of study concerning good ethical decision-making in commercial contexts. CSR is more narrowly about a company’s SOCIAL obligations…that is, a company’s obligations to society in general. So, business ethics is concerned with not just social obligations, but also obligations to employees, customers, suppliers and competitors. CSR is about the extent to which companies owe something to “society at large” (i.e., those who do not have a direct involvement with the business).

Here’s a neat example of a non-bioethics ethics issue faced by a drug co (and yet another example of why scholars in business ethics should be interested in pharma and biotech companies).

This story from Boston’s WBZ News Radio is about Massachussets Governor Mitt Romney having travelled on a corporate jet owned by pharmaceutical giant Pfizer.

Stories like this — stories about politicians receiving gifts, benefits, questionable donations from corporations — are of course common. Interestingly, these stories are almost always spun as stories about “ethics in politics.” Less often is it spun as a question of corporate ethics. But surely if there’s a problem in a politician accepting a benefit, then there’s a problem in a corporation offering it.

The key concept here is “conflict of interest,” a concept that is relatively poorly understood even by people whose jobs make such conflicts likely. A conflict of interest is “a situation in which a person has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties as, say, a public official, an employee, or a professional.” (MacDonald C, McDonald M, Norman W. “Charitable Conflicts of Interest.” Journal of Business Ethics 39:1-2, 67-74, August 2002.) Most people recognize that, when one is in a position of trust, one ought to avoid even the appearance of conflict of interest, lest one jeopardize the trust of those to whom one owes obligations. Thus, politicians ought to avoid receiving corporate gifts or benefits that could give reasonable voters cause to worry about the effect of such gifts or benefits on their decision-making.

But clearly, if public trust in politicians is important (and it surely is), then corporations could reasonably be seen as having an obligation not to offer politicians gifts that would put that trust at risk. Is there a literature on this? I hope so. If you know of any, let me know.

Here’s a story that would make a great case-study, or a challenging student research project.

It involves corporate participation in activites that are, on the one hand, arguably a patriotic contribution to national security, and on the other hand, ethically and legally questionable.

The issue is the role played by telecommunications companies in facilitating the U.S. National Security Agency’s warrantless monitoring of telephone and internet communications. This story from the NY Times is just a starting point.

Here are some snippets from the NY Times, on the role of companies in this story:

A former technology manager at a major telecommunications company said that since the Sept. 11 attacks, the leading companies in the industry have been storing information on calling patterns and giving it to the federal government to aid in tracking possible terrorists.

Several officials said that after President Bush’s order authorizing the N.S.A. program, senior government officials arranged with officials of some of the nation’s largest telecommunications companies to gain access to switches that act as gateways at the borders between the United States’ communications networks and international networks. The identities of the corporations involved could not be determined.

One outside expert on communications privacy who previously worked at the N.S.A. said that to exploit its technological capabilities, the American government had in the last few years been quietly encouraging the telecommunications industry to increase the amount of international traffic that is routed through American-based switches.

Historically, the American intelligence community has had close relationships with many communications and computer firms and related technical industries. But the N.S.A.’s backdoor access to major telecommunications switches on American soil with the cooperation of major corporations represents a significant expansion of the agency’s operational capability, according to current and former government officials.

I began this blog thing a couple months back when I “realized” there were no active business ethics blogs out there. Turns out, I hadn’t looked carefully enough. In fact, there are a few other blogs out there related to business ethics, socially responsible business etc.

I’ll list a few of the ones I’ve found here. No endorsement is implied. Maybe someday I’ll get around to reviewing them…

Principled Profit: The Good Business Blog

Business Ethics Forum

Credo Advisors

Power of Ethics – Daily Quotes

Then there are some more narrowly focused ones:

CSR in China
CWACblog – Companies with a Conscience
Anita Roddick (founder of the Body Shop)
Corporate Social Responsibility in Asia
SRI Notes – Socially Responsible Investing
Conglomerate: Business Law Economics Society
Corporate Fraud Blog

If anyone knows of a really good business ethics blog, please let me know.

A recent op-ed piece in the New York times called “Drugs, Devices and Doctors” points out that conflicts of interest are the norm, rather than the exception, in the medical devices and pharmaceutical industries. In the piece, editorialist Paul Krugman argues that “growing conflicts of interest may be distorting both medical research and health care in general.”

(You have to have a subscription to see the full op-ed piece.)

Krugman goes into some detail regarding a questionable relationship between The Cleveland Clinic, some of its doctors and administrators, and pharmaceutical giant Merck. The story sounds complex, but in essence it all boils down to the fact that “crucial scientific research and crucial medical decisions have to be considered suspect because of financial ties among medical companies, medical researchers and health care providers.”

That should come as no surprise. The past quarter-century has seen the emergence of a vast medical-industrial complex, in which doctors, hospitals and research institutions have deep financial links with drug companies and equipment makers. Conflicts of interest aren’t the exception – they’re the norm.

The economic logic of the medical-industrial complex is straightforward. Prescription drugs and high-technology medical devices account for a growing share of medical spending. Both are products that are expensive to develop but relatively cheap to make. So the profit from each additional unit sold is large, giving their makers a strong incentive to do whatever it takes to persuade doctors and hospitals to choose their products.

What should come as a surprise is that almost all of the attention paid to ethical issues like this in the pharmaceutical industry has been paid by bioethicists and physicians. So far (and correct me if I’m wrong) the pharma industry has garnered relatively little attention from scholars in business ethics or corporate ethics activists. This is a shame. The problems outlined by Krugman in the NYT have precious little to do with the fact that the pharma industry is part of the larger world of health care, so there’s no particular reason bioethicists should be able to corner the market on criticizing an industry that behaves, on the whole, quite badly. Krugman points out rampant conflicts of interest, yet (no offence intended) I doubt most bioethicists could definte “conflict of interest.” It’s just not part of the standard range of problems in that field. But conflict of interest IS a standard problem in business, and so there’s a large lots written about it in both the business ethics and professional ethics literatures. It would be great (hint hint) to see scholars from those fields tackling the problems in pharma.

A story in today’s NY Times, “Under Pressure, Food Producers Shift to Healthier Products.” Of course, the headline isn’t fully accurate, because the article is really about:

• How some food producers are shifting to healthier products.
• How other food producers are reducing the extent to which their advertising of unhealthy products is aimed at kids.
• How still other food producers are burying their heads in the sand.

The NYT story is based in part on the U.S. Institute of Medicine’s report, “Food Marketing to Children and Youth: Threat or Opportunity?” (we’ll ignore the fact that the title seems to present us with a false dilemma). That report costs about $35 to buy, but you can get the main ideas from the IOM’s press release on the topic.

Why is this an issue? From the press release:

Concern has focused on food and beverage marketing practices because of the increase in new products targeted specifically to children and youth over the past decade and the media’s increasing role in socializing young people. Companies spent an estimated $10 billion to market foods, beverages, and meals to U.S. children and youth in 2004, and four of the top 10 items that children ages 8 to 12 say they can buy without parental permission are either foods or beverages.

The IOM’s committee (which, in addition to experts on nutrition and psychology, included business profs and a philosopher), recommends that the industry adopt a self-regulatory approach:

Some companies and restaurants have recently taken steps to develop and promote healthier offerings, but overall the food, beverage, and restaurant industries spend the majority of their resources on products that contain high amounts of added sugar, fat, and salt and that lack essential nutrients, the report says. These industries should shift their creativity and resources to develop a wider array of products that are nutritious, appealing, and affordable.

(For a look at one of the industry’s self-regulatory initiatives, see the website of Children’s Advertising Review Unit.)
But the Committe also says that “A long-term, multifaceted national campaign should be initiated by the government…”

See also Andrew Potter’s useful comments on this story.