Archive for the ‘corporate citizenship’ Category
Food Industry Ethics, Regulatory Reform, and Corporate Citizenship
Filed under: complexity, consumers, corporate citizenship, food, government, markets, regulations |
Comments (1) I blogged yesterday about the importance of sound government and rule of law as a background condition for ethical corporate behaviour. Here in Canada (as in most other developed economies) we grumble about our government and our system of regulation, but we’re actually relatively lucky that way, by world standards. Our economy is thriving (quarter-to-quarter hiccups aside) in large part because businesses here have the luxury of doing what they do against a background of generally-stable government and generally-sane regulations.
But that’s not to say that there isn’t room for improvement. One key area in need of (constant?) improvement is food policy. It’s an incredibly complex area, with an enormous range of interests at stake and a huge range of values at play. Public policy is, as a result, pretty messy. For more details, see this new report by the Conference Board of Canada’s Centre for Food in Canada (CFIC). Here’s a summary, from Better Farming: Canada’s food policy system overloaded: report
Out of date policies, laws and regulations as well as conflicting government involvement stymie innovation and economic growth in the country’s food sector says Conference Board of Canada report…
(You can download the report here.)
Economic growth in the food sector isn’t of direct relevance to consumers (though it is of direct relevance to those employed in the sector). But consumers still have plenty of reason to care about food policy. All questions of food policy have a more or less direct impact on the health and/or pocketbooks of consumers; and hence all questions of food policy raise ethical issues (many of which I’ve blogged about). For example, according to the BF story:
The report reviews the Canadian approach to food regulation based on a study of six issues: food additives, genetically modified foods, health benefit claims, country-of-origin labeling, inspection, and international trade. [hyperlinks added]
Industry, of course, has a role to play in helping to reform regulation in this area. But in doing so, industry must think especially carefully about its ethical obligations. Normally, the slogan “Play by the Rules!” sums up the lion’s share of a company’s obligations. But when the issue at hand involves figuring out what the rules — i.e., regulations — should be, industry needs to consider very carefully the full ethical weight of the notion of “corporate citizenship,” and remember that a citizen is someone who participates in policy debates with an eye not just to their own interests, but to the public good as well.
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Thanks to Prof. Richard Leblanc for bringing the CFIC report to my attention.
Post-Hurricane-Irene Business Ethics Roundup
Filed under: corporate citizenship, CSR, disaster, economics, pricing, profits |
Comments (2) 
Natural disasters put all kinds of pressures on the behaviour of otherwise-civilized people, and they almost always raise business ethics issues. Here are a few little issues that popped up over the weekend, while hurricane Irene was wreaking havoc on the east coast of North America.
First, a bit of price gouging: Brooklyn’s posh Hotel Le Bleu squeezed Irene shelter seekers for $999 per room
A trendy Brooklyn hotel generated a flood of cash from Irene, jacking up the price of a room to $999 a night on Saturday as the powerful storm zeroed in on New York, employees said….
As I’ve written before, raising prices during a disaster isn’t always unethical — sometimes higher prices provide an incentive for others to rush to send resources to disaster-stricken areas, and sometimes higher prices give citizens an incentive to avoid overusing scarce resources. I’m pretty sure neither of those rationales applies here. [Update: see the hotel’s reaction, in the Comments section below.]
The flip-side of the price-gouging story is this one: “Generators, batteries big sellers ahead of Irene”. You can learn a lot about the ethics of pricing by contemplating why hardwares stores generally didn’t jack up their prices. (Yeah, there are anti-price-gouging laws in many jurisdictions, but that’s likely not enough to explain why prices stay stable.) Note that this story mentions that “…an Ace Hardware in Nags Head, N.C., the store sold out of portable generators.” The fact that the store sold out pretty certainly means that some customers went away disappointed. And it’s entirely possible that some of the disappointed needed the generators a lot more than the people who actually got them. Should Ace have found some way of asking customers how badly they needed a generator, or should they have raised the price a bit to make sure that people who bought one really needed one?
Next, from Katy Burne, blogging for the WSJ (just before the storm), “Hurricane Irene Whips Up Trading In ‘Catastrophe Bonds’”. Here’s the technical bit:
Catastrophe bonds, known in the insurance industry as “cat” bonds, are structured securities that allow reinsurers to transfer their own risks to capital-market investors. Investors in cat bonds earn regular payments in exchange for providing coverage on a predetermined range of natural disasters for a set period of time.
Note the similarity here to the controversial practice of short-selling stocks. In shorting stocks in a particular company, a trader is betting that the value of that stock is going to go down — that is, betting that the company will do poorly. Many people find that distasteful. Some have even called it unpatriotic. In buying (or in shorting) ‘cat bonds,’ an investor is wagering on human misery. But note that that’s what insurance companies do, too, and none of us wants to be without those.
Next, there have been a few stories about companies helping out by either donating goods or by fundraising for disaster relief (see here and here, for small examples). Many more such stories have no doubt gone unreported. It’s also been noted that some companies are going to benefit from the storm, especially if (like Home Depot) they sell goods that will be needed for reconstruction. Is there anything wrong with that? (See here for a previous blog entry on profiting from disaster relief.)
Finally, the key business-ethics stories to watch, over the next few days, are about insurance claims. Insurance firms are happy that losses look to be lower than expected. But stories will inevitably pop up about consumers having difficulty getting insurers to pay up. This will, again inevitably, be portrayed as heartless. And in some cases it may well be heartless. In other cases, we’ll simply see that people generally fail to understand the economics — and the ethics — of insurance.
Pipeline Leaks and Stakeholder Theory
Filed under: accountability, corporate citizenship, corporations, CSR, management, pollution, shareholders, stakeholders |
Comments (2) When oil spills in a forest, does everybody matter? That’s the question posed by the events recounted in this recent CBC story: Wrigley residents voice pipeline spill concerns.
The story is about an Enbridge pipeline that sprung a leak in a tiny, remote town in Canada’s Northwest Territories. Not surprisingly, residents of tiny Wrigley are unhappy about the spill, and so Enbridge has to figure out not just what to do about the spill (i.e., how to clean it up) but what to do about the people of Wrigley. More generally, managers at Enbridge have got to figure out, on an ongoing basis, what their obligations are, and to whom those obligations are owed.
There’s an older school of thought (or more likely a caricature of an older school of thought) according to which shareholders are the only ones whose interests really need to be taken seriously. According to this view, an oil company’s managers’ only real obligations are owed to shareholders. After all, says this view, shareholders own the company, and they’re the ones who (indirectly) hired these managers to make money on their behalf. If anyone else matters, they matter in a strictly instrumental way. Don’t treat your customers badly, for example, because they’re the key to making a profit. Or, in the present case, don’t irritate the people of Wrigley, because if you do they might do something inconvenient, like protesting.
A leading modern alternative to the only-shareholders-matter view is sometimes called the “stakeholder” view (or sometimes, in academic circles, “stakeholder theory.”) The core of the stakeholder view is the idea that the real ethical task of corporate managers is to balance the interests of various stakeholders — various individuals and groups whose interests intersect with those of the corporation. After all, many people contribute to the success of a firm, from customers to suppliers to members of local communities. And if they all contribute, they all have the right to ask for something in return. (You can read a summary of my review of a recent book on the topic, here: Managing for Stakeholders.)
The pipeline story is an excellent example of both the strengths and the limits of the stakeholder perspective. It’s surely useful for executives at Enbridge (or any other company, in the midst of an environmental crisis) to survey the situation and ask, “Who do we need to talk to? Who has a stake in this?” So, are the people of Wrigley stakeholders in Enbridge? Pretty clearly, yes. But after that, things get complicated. Does the environment itself automatically count as a stakeholder of some sort, or does it only count if the well-being of the people of Wrigley is jeopardized? What about the residents of Zama, Alberta? That’s the little town, 850 km away from Wrigley, to which Enbridge is planning to ship the contaminated soil. What about me? Like most people, I’m a consumer of oil. I clearly have a stake, here, don’t I? Pretty clearly, there are stakeholders and then there are stakeholders.
But anyway, once you’ve figured out who the stakeholders are, then what? Let’s take the easy one, a group that’s directly affected, namely the people of Wrigley. What are they owed? Are they owed the cleanup? Are they owed a speedy one? At what cost? Do they have a right to participate in the decision-making, or just to be kept informed? Or are they owed, as one resident of Enbridge suggested, a “swimming pool or a hockey arena or something for the kids”?
As you can see, one problem with the stakeholder view is that the word “stakeholder”, itself, doesn’t actually clarify much. Yet some people tend to sprinkle it on like fairy dust, as if simply anointing someone a Stakeholder™ clarifies what is owed to them, ethically. Life in the little town of Wrigley should be so simple.
Academic Business Ethics and the Corporation as Political Actor
Filed under: corporate citizenship, corporations, CSR, ethics, governance, government, law, personhood, politics, regulations, rights |
Comments (1) I’m returning home today after spending the weekend at the Annual Meeting of the Society for Business Ethics, the world’s foremost association for academics engaged in the study and teaching of issues related to business ethics, corporate social responsibility, and so on. (It was a fantastic meeting and anyone with a professional interest in these issues should consider joining SBE.)
One of the dominant themes of this year’s meeting was the role of the corporation in the political realm. It’s an old topic, one revitalized by the US Supreme Court’s decision last year in the Citizens United case. Corporate involvement in the political sphere takes many forms (from lobbying to campaign donations to participation in collaborative approaches to regulation). Such involvement is probably inevitable, but definitely controversial, and so there’s lots to sort out regarding how we should understand corporations in the political realm, and what rights and responsibilities they should have in that world. Among several dozen scholars presenting their research at the SBE meeting, a striking proportion of them presented work related to this set of topics.
David Ronnegard and Craig Smith, for example, presented work that elucidated the connection between competing theories of business ethics, on one hand, and competing theories from political philosophy, on the other.
Anselm Schneider and Andreas Scherer presented their work on the changes in corporate governance necessitated by (what I would call) the quasi-governmental responsibilities that corporations sometimes take on in the international sphere.
Pierre-Yves Néron presented work arguing that the way we think of corporations in the public sphere ought to be strongly influenced by thinking about the kinds of corporate behaviours (including regulatory lobbying, for example) that can either improve or frustrate market efficiency.
Waheed Hussain presented his work on what it might look like to “civilize” the corporation to make its participation in the political realm less worrisome — essentially, by fostering among corporations a “public interest” ethos, and insisting that lobbying etc be framed in terms of the public good.
Wayne Norman encouraged his fellow business ethicists to pay more attention to regulation, rather than focusing (as the typically do) on the corporate ethical obligations that go “beyond mere compliance”.
I myself presented some of my current thinking on the various ways we might think of corporations in their interactions with government. In particular, I argued that while, in some cases, it makes sense to conceptualize the corporation as an agent in its own right, there are other cases (perhaps many more cases) in which it makes sense to think of the corporation as a tool or technology used by citizens to advance their goals. (This is something I’ve touched on before, informally, in a blog entry.)
Although I don’t want to speak for my colleagues, it seems safe to say that the scholars whose work is noted above share an interest in better understanding what it means, and what it should mean, for corporations to be political agents. They are part of a trend — I don’t yet want to say movement — that sees scholars attempting to take seriously the complexity of the practical and philosophical problems raised by having limited-liability, joint-stock corporations participate in a realm that is generally thought of as being rightfully the place of flesh-and-blood citizens.
Deaf Nudists, Rights, and the Responsibilities of Business
Filed under: corporate citizenship, discrimination, law, rights, values |
Leave a comment Here’s another “tempest in a teapot” story with much larger implications.
By Daniel Wiessner, for Reuters: Deaf man complains nudists would not provide interpreter
A deaf man has accused a nudist park in upstate New York of violating federal law by refusing to provide him with a sign-language interpreter at an annual festival.
Tom Willard, 53, of Rochester, filed a complaint with the U.S. Justice Department claiming Empire Haven Nudist Park violated the Americans with Disabilities Act (ADA) by refusing his requests for an interpreter.
“I am fed up with being turned away every time I try to do something, by idiots who somehow feel the ADA does not apply to them,” Willard wrote in the complaint….
Now it’s true that the ADA‘s “Public Accommodations” does require businesses and nonprofits to take reasonable steps to reduce barriers for the disabled. But according to this page explaining the application of the ADA, Willard is probably out of luck, legally speaking:
Q. Will a bookstore be required to maintain a sign language interpreter on its staff in order to communicate with deaf customers?
A. No, not if employees communicate by pen and notepad when necessary.
In other words, a business doesn’t have to provide a customer’s chosen accommodation, as long as they do something to achieve a fair outcome. (If someone reading this understands the application of the ADA better, please comment!) At a bookstore, you don’t need a translator as long as you’ve got a pen and paper. The same would pretty clearly apply at a nudist park.
Now all that is about the law, not about ethics per se. Ethics and the law are two different things, and that goes for the legal and ethical responsibilities of business, too. But that doesn’t mean that legal issues are “merely” legal issues. The legislation with regard to how businesses need to accomodate disabilities is right there, in black and white. But such legislation is must be interpreted, and interpretation inevitably involves the application of ethical principles, and the relevant ethical principles here include not just the principle that we ought to do more to lower barriers, but also a principle of reasonableness that says that the needs of the disabled have to be balanced against the legitimate interests of businesses and other organizations (and of their other stakeholders). Judges and juries end up having to apply such principles, among others, when discrimination cases reach court. In the 99.999% of cases that never end up near a courtroom, it’s up to businesses — and the people who work for them — to do their best to apply those principles too.
The “BlackBerry Riots” — What Should RIM Do?
Filed under: activism, corporate citizenship, CSR, privacy, protest, technology |
Comments (3) The intersection of social media with social unrest is a massive topic these days. Twitter has been credited with playing an important role in coordinating the pro-democracy protests in Egypt, and Facebook played a role in helping police track down culprits after the Vancouver hockey riots.
But the mostly-unstated truth behind these “technologies of the people” is that they are corporate technologies, ones developed, fostered, and controlled by companies. That means power for those companies. And, as the saying goes, with great power comes great responsibility.
Fast-forward to early August 2011. London is burning, and the riots have spread to a couple other major UK cities. The British government has called in a few thousand extra cops. And again, social media is playing a role. But this time the focus is specifically on Research in Motion’s (RIM’s) BlackBerry, and its use as a social networking tool. There have been all kinds of reports that the BlackBerry’s “BBM” messaging has been the tool of choice for coordination among London’s rioters. RIM is probably asking itself right now whether it’s really true that ‘there’s no such thing as bad publicity.’
Distancing itself from its role in the “BlackBerry Riots,” RIM issued (via Twitter) the following:
We feel for those impacted by the riots in London. We have engaged with the authorities to assist in any way we can.
The “in any way we can” part is intriguing. So, what can, and what should, RIM do? One thing they can do is to help authorities identify those inciting violence by breaking through the security of the BBM messages. But as reported here, “RIM refused to say exactly how much information it would be sharing with police.” The other, much more dramatic, thing that RIM could do would be to temporarily shut down all or part of its network. Whether that would be at all useful is open to question. It would certainly make a lot of people angry, including millions of people who are not involved in the riots, or who are relying on their BlackBerries to keep in touch with loved ones during this crisis. But I point out this option just to illustrate the breadth of options open to RIM.
The question is complicated by questions of precedence. Tech companies have come under fire for assisting governments in, for example, China, to crack down on dissidents. Of course, the UK government isn’t anything like China’s repressive regime. But at least some people are pointing to underlying social unrest, unemployment etc., in the UK as part of the reason — if not justification — for the riots. And besides, even if it’s clear that the UK riots are unjustifiable and that the UK government is a decent one, companies like RIM are global companies, engaged in a whole spectrum of social and political settings, ones that will stubbornly refuse to be categorized. Should a tech company help a repressive regime stifle peaceful protest? No. Should a tech company help a good and just government fight crime? Yes. But with regard to governments, as with regard to social unrest, there’s much more grey in the world than black and white.
Are they Competing, or Just Trying to Sell You Something?
Filed under: competition, complexity, corporate citizenship, CSR, definitions, sustainability, values |
Comments (2) Peaceful coexistence isn’t always a good thing. In the marketplace, competition is what drives different producers of a good to improve their wares, and having one producer explain the superiority of his or her product is — embellishment and puffery aside — how consumers learn to differentiate among products. When different suppliers fail to engage in competition, the consumer is left in the dark. Let me give you two examples.
Here’s the first example. One of the problems — or rather, one of the warning signs — about so-called “alternative” medicine is that there are dozens of different kinds of alt-med, all making different and presumably conflicting assumptions about how the human body works, and yet they all get along cozily together. Nowhere do you find homeopaths, for example, explaining why their methods are superior to those of acupuncturists. Nor do you find Reiki therapists dissing Ayurveda. Crystal therapy gurus are unlikely to tell you about the problems with Traditional Chinese Medicine. And so on. As Robert Park wrote with reference to alt-med, in his book, Voodoo Science (p. 65), “there is no internal dissent in a community that feels itself besieged from the outside.” Of course, the existence of different alt-med treatments isn’t in itself surprising or problematic. Mainstream medicine too uses different treatments for different illnesses. But the different treatments offered by mainstream medicine are all, without exception, underpinned by a single coherent body of theory: the heart circulates blood, germs cause infection, physiological effect varies according to drug dosage, and so on.
So the fact that various systems of alternative therapy, underpinned by very different understandings of the human body (and indeed of metaphysics), can get along so chummily is a huge red flag. It suggests that purveyors of alt-med either a) aren’t thinking critically, or b) are more interested in sales than in healing.
Roughly the same concern arises with regard to different perspectives on how businesses should behave. Some will tell you that the obligations of business are all rooted in the notion of sustainability, with its indelible environmental overtones. Others will say no, it’s a matter of CSR — Corporate Social Responsibility. Still others say it’s all about values. Or leadership. Or citizenship. Or the (ug!) Triple Bottom Line. And each of those seems, at least, to be underpinned by a different understanding of the nature of the firm, its role in society, and what it is that makes an action right or wrong. And yet all kinds of folks seem to want to cleave to all of the above, or to glom onto one of them seemingly at random, as if it doesn’t matter which one you choose.
Again, this should be a big red flag.
I’m sure I’m going to be told that these different schools of thought don’t need to compete with each other — what’s really important, they’ll say, is that, you know, we focus on fixing the way business is done. But again, as with the case of alternative medicines, if someone tries to sell you some and isn’t willing to even try to explain why theirs is better than the other stuff, you should at least wonder whether they aren’t thinking critically, or are merely trying to sell you something.
Should Twitter Censor?
Filed under: accountability, corporate citizenship, CSR, internet, protest, standards, technology, values |
Comments (2) Last weekend, a despicable “hashtag” trended* on Twitter, one promoting the idea that violence against women is OK. By Sunday morning, tweets using that hashtag were mostly critical ones, expressing outrage at any non-critical use of the hashtag. One prominent twitterer, Peter Daou, (@peterdaou) asked why Twitter wasn’t preventing that hashtag from trending. He tweeted:
“Unbelievable: Is Twitter REALLY allowing #reasonstobeatyourgirlfriend to be a trending topic??!”
The outrage expressed by Daou and others is entirely appropriate. The hashtag in question is utterly contemptible. But the question of whether Twitter should censor it and prevent it from trending is another question altogether.
The central argument in favour of censorship is that the idea being broadcast is an evil one, and decision-makers at Twitter are in a clear position to stifle the spread of that evil idea, or instead to allow its proliferation. With great power comes great responsibility.
The most obvious reason against censorship is freedom of speech, combined with the slippery slope argument: if Twitter is going to start censoring ideas, where will it end? Freedom of speech is an important right, and that right includes the right to speak immoral ideas. Limits should only be imposed with great caution.
Now, it’s worth noting that the hashtag trending isn’t actually anyone’s speech: it’s the aggregate result of thousands of individual decisions to tweet using that hashtag. So if Twitter were, hypothetically, to censor the results of their trending-detection algorithm, they wouldn’t actually be censoring anyone, just preventing the automated publicizing of a statistic. But perhaps that’s a philosophical nicety, one obscuring the basic point that there is danger anytime the powerful act to prevent a message from being heard.
More importantly, perhaps, Twitter isn’t a government, it’s a company, and it doesn’t owe anyone the use of its technology to broadcast stupid ideas (or any other ideas, for that matter). We insist that governments carefully avoid censorship because governments are powerful and because for all intents and purposes we cannot opt out of their services as a whole. If a company doesn’t want to broadcast your idea, it’s not morally required to. Your local paper, for instance, isn’t obligated to publish your Letter to the Editor. The right to free speech isn’t the right to be handed a megaphone.
But then the challenging question arises: is Twitter a tool or a social institution? Just how much like a government is Twitter, in the relevant sense? It is, after all, in control of what many of us regard as a kind of critical infrastructure. This is a challenge faced by many ubiquitous info-tech companies, including Twitter, Facebook and Google. While their services are, in principle, strictly optional — no one is forced to use them — for many of us going without them is very nearly unthinkable. We are not just users of Twitter, but citizens. That perspective doesn’t tell us whether it’s OK for Twitter to engage in censorship, but it does put a different spin on the question.
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*The fact that it was “trending” on Twitter means that Twitter’s algorithm had identified it as, roughly, a “novel and popular” topic in recent tweets. Trending topics are featured prominently on Twitter’s main page.
Values-Based Consumerism as Double-Edged Sword
Filed under: consumers, corporate citizenship, CSR, discrimination, transparency, values |
Comments (2) It’s a game of connect-the-dots. Do you, as a consumer, feel any responsibility for the purposes to which the companies you patronize put their profits? Do you care about a company’s values, beyond the effect those values have on how the company conducts business? What about its CEO’s values, or the values of its biggest shareholder? Do those factors enter into your purchasing decisions? Should it?
To make the question more concrete, consider the following:
- If you’re politically left-leaning, do you want to patronize a store owned by someone on the right?
- If you are a Christian, would you buy a car from an atheist?
- If you’re pro-choice, would you buy groceries from a chain of stores owned by a staunch pro-life advocate?
- If you’re in favour of strict gun control, do you want to boost the profits of a company that donates to the National Rifle Association?
For a less-hypothetical example, see this story (in which I’m quoted) by Nicole Neroulias in the Albany Times Union: “Corporate giving is questioned”. The focus of Neroulias’s story is a recent controversy regarding TOMS shoes. The short version goes like this: Blake Mycoskie, head of TOMS, agreed to be interviewed by Jim Daly, president of the right-wing Christian group Focus on the Family. Feminists and defenders of gay rights protested, and Mycoskie issued an apology. On his blog, he wrote: “TOMS, and I as the founder, are passionate believers in equal human and civil rights for all.” Without questioning his sincerity here, it’s clear that Mycoskie had become aware that his flirtation with FOTF had riled his company’s socially-progressive customer base. Why would someone socially progressive continue to support a company perceived to be in cahoots with the Christian right?
Three quick points:
1) On one hand, it seems to me that, yes, at least in principle, consumers must take an interest in the causes supported by the companies they patronize. We are responsible for the causes we support, even indirectly. Of course, most of us contribute far too little to the coffers of even our favourite companies to make any appreciable difference at all. If a company has a 1% profit margin, and gives 1% of that to some cause, that means that one penny out of every hundred dollars you spend goes to that cause. But then, even merely symbolic contributions matter.
2) People who want corporations to adopt social causes should be careful what they wish for. It’s all well and good to say that companies should do something to “give back” to the community. But when they agree to do so, what’s to say that they’re going to give to a cause that you believe in, rather than one you find abhorrent? Would you rather your favourite software company contributed to your least-favourite charity, or just stopped contributing to charities at all?
3) One of the most interesting things about all this is that what we’re seeing here is the undoing of the competitive market’s tendency to prevent people from acting out their biases. One of the best things about modern markets is that they punish prejudice, and make it more difficult. It’s easy to discriminate against the minority cobbler down the street by traveling a few extra blocks to buy from “your own kind”; it’s much harder to act out your racist biases when buying shoes at a big department store because, well, you have no idea what colour or sex or sexual orientation of the person who made those shoes is. Market transactions today are effectively anonymous and depersonalized, in a way that makes biases of various kinds effectively impotent. The push for certain kinds of corporate social responsibility, accelerated by moves toward corporate transparency and social media, is effectively undoing this.
In the end, it’s not at all clear whether it is a good thing that the market is becoming another avenue for acting out our ideological disagreements.
The Ethics of Closing Up Shop
Filed under: accountability, corporate citizenship, decision-making, employees, ethics, management, values |
Comments (1) 
At what point are a company’s misdeeds sufficiently grave that the right thing to do is simply to shut the doors, permanently?
As was widely reported yesterday, the printing presses at News of the World (part of Rupert Murdoch’s News Corp.) will be grinding to a stop after this Sunday’s edition. The paper’s shameful history of phone-hacking and other scuzzy “journalistic” practices has finally caught up with it.
Under what conditions is such a move the right one? When is a company obligated to commit the corporate equivalent of the ancient Japanese tradition of seppuku (a.k.a. harakiri), or even just to sacrifice a corporate “limb”?
Some people might say, “when doing so best serves the interests of your shareholders.” Others might say, “when doing so best serves the interests of the full range of stakeholders.” Still others might say that it has nothing to do with anybody’s interests, but rather with what’s in the the interest of justice. “Let justice be done,” as the ancient legal saying goes, “though the heavens fall.” So it may be thought that the organization, as a whole, needs to pay a penalty for its wrongdoing.
But there are of course counter-arguments that could apply, even where the corporate wrong is significant. For one, in shutting down an entire corporation for the wrongdoing of a few, you are effectively punishing a large number of innocent employees. And in some cases, that might be justified. Sometimes there is collateral damage along the road to justice. But surely that damage is not irrelevant.
In other cases, shutting a company down may amount to a cynical attempt to insulate sister companies or a parent company from fallout. Or to protect a favoured employee. In such cases, shutting the company is likely blameworthy, rather than worthy of praise. In such cases, surely the honourable thing to do is not to perform seppuku, but rather to stand to face the music. Accept the scrutiny, pay the price, and then rebuild under new management.
But all such considerations presume that the initial crime is sufficiently grave to make such an extreme solution plausible in the first place. In the News of the World case, the offence is serious and multi-faceted. Individual rights were violated; law enforcement officials were bribed; and the journalistic profession was arguably sullied. And all of that was perpetrated in pursuit of an utterly trivial objective, namely the production of yet more trashy tabloid “news.” Compare: there were few serious calls for BP to be dismantled after the Deepwater Horizon spill, despite that spill’s very serious human and environmental impact. But then, unlike News of the World, BP actually produces a socially valuable product.
The Business Ethics Blog 