Archive for the ‘corporate citizenship’ Category
Pepsi Makes the Best of a Super Bowl-Free Sunday
Filed under: advertising, brands, corporate citizenship, CSR, marketing, sponsorship, sports | Tags: philanthropy
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Talk about making a silk purse out of a sow’s ear. PepsiCo has managed to make a win out of not sponsoring the biggest advertising event of the year.
See the story here, by Jennifer Preston of the NYT: Pepsi Bets on Local Grants, Not the Super Bowl
What’s better than reaching more than 100 million viewers during last year’s Super Bowl? For Pepsi, it could be 6,000 football fans during a high school game on Friday night in central Texas. Or a group of parents who wanted a new playground in their Las Vegas neighborhood.
That is the bet that PepsiCo made when it walked away from spending $20 million on television spots for Pepsi during last year’s Super Bowl and plowed the money into a monthly online contest for people to submit their ideas and compete for votes to win grants….
This is the first time in 23 years that Pepsi isn’t a sponsor of the Super Bowl. How did this happen? Who knows. Maybe the price-tag got too rich for them. Maybe they got outbid. (Though it’s worth noting that PepsiCo won’t be entirely absent from the Super Bowl: the game will feature ads for two of the company’s other brands, Pepsi Max and Doritos.) At any rate, Pepsi says it’s just a new strategy. Interestingly, they say — despite the fact that this new strategy involves giving millions of dollars to good causes — it’s not a philanthropic strategy:
“This was not a corporate philanthropy effort,” said Shiv Singh, head of digital for PepsiCo Beverages America. “This was using brand dollars with the belief that when you use these brand dollars to have consumers share ideas to change the world, the consumers will win, the brand will win, and the community will win.
It’s an interesting move. For one thing, it brings together cause-based marketing and social media on a supersized scale. And to me, whatever the motivation for the move, it’s a true-and-justified instance of corporate social responsibility. It’s not ethically obligatory: I don’t think there’s anything wrong with doing things the old way. It’s not unethical to spend $20 million-plus on commercials for the Super Bowl, like they did last year. And it’s not obligatory to support dozens or hundreds of local causes. So think of it this way: PepsiCo has $20 million to spend on building its brand. It had to choose a strategy, a choice regarding how to spend that money. They could give it to the NFL, or they could give it to a bunch of worthy charities. If they can achieve their objectives (and hence fulfill obligations to shareholders) while at the same time doing some social good, that’s a good example of CSR.
As the company says, though, it’s a gamble. But as gambles go, they’re sure making the best of it. PepsiCo is turning not sponsoring the Super Bowl into a straight-up victory, rather than a defeat. And notice also that, with the right media coverage, Pepsi still gets its name associated with the Super Bowl.
Glock Pistols, Ethics and CSR
Filed under: accountability, corporate citizenship, CSR, ethics, product safety, profits, regulations |
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It’s been a week now since the Tuscon, Arizona killings in which Jared Lee Loughner apparently emptied the high-capacity magazine of his 9 mm pistol.
Plenty has already been written about the awful killing. Inevitably, some of it has focused on the weapon he carried, namely the Glock. According to Wikipedia’s Glock page,
The Glock is a series of semi-automatic pistols designed and produced by Glock Ges.m.b.H., located in Deutsch-Wagram, Austria.
…
Despite initial resistance from the market to accept a “plastic gun” due to concerns about their durability and reliability, Glock pistols have become the company’s most profitable line of products, commanding 65% of the market share of handguns for United States law enforcement agencies[5] as well as supplying numerous national armed forces and security agencies worldwide….
If you want to learn more about the company that made the pistol Loughner used, see this article, by Paul M. Barrett for Bloomberg Businessweek, Glock: America’s Gun
…Headquartered in Deutsch-Wagram, Austria, the company says it now commands 65 percent of the American law enforcement market, including the FBI and Drug Enforcement Administration. It also controls a healthy share of the overall $1 billion U.S. handgun market, according to analysis of production and excise tax data. (Precise figures aren’t available because Glock and several large rivals, including Beretta and Sig Sauer, are privately held.) ….
Barrett’s article provides a fascinating account of the invention of the Glock pistol and how it came to its current dominant market position through a combination of excellent engineering, good marketing and cagey lobbying.
The sale of semi-automatic pistols with high-capacity magazines is a good example of an issue where the term “corporate social responsibility” provides a useful analytic lens. I’ve argued here before that the term “CSR” is over-used — we shouldn’t try to stuff every single ethical issue into the relatively narrow notion of corporate social responsibility. But like the BP oil spill, the current case raises issues that are genuinely social in nature. As difficult as it may be, set aside for a moment the tragic events of January 8th, and look at the marketing of the Glock pistol (and its accessories) from a social point of view.
Do Americans as individuals have the right to buy certain kinds of weapons? As a matter of constitutional law, yes. And there’s arguably no direct line to be drawn between the sale of an individual gun and a particular wrongful death (because there’s always the complicating factor of the decision made by the individual who bought the gun and then pulled the trigger). So let us take as given (even if just for the sake of argument) that there’s nothing intrinsically wrong with making and selling guns to the public. Let us assume that individual customers have a legitimate interest in owning semi-automatic pistols, and there’s nothing unethical about a company seeking to make money from satisfying the demand for this entirely-legal product.
That still leaves as an open question, I think, the question of social impact. The best rationale for public acceptance of the kind of zealous, profit-seeking behaviour seen in the world of business lies in the social benefits that arise from a vigorous competitive marketplace. This implies that the moral limits on business are also to be found in a business’s net social impact.
There is a raging debate, in the US, over the net social impact of the sale of handguns. And where a product is contentious, you can argue that “the tie goes to the runner,” and that the “runner” in this case is freedom. When in doubt, opt for freedom of sale and choice. So let’s say (again, if only for sake of argument) that there’s nothing wrong with selling handguns to the public. So Glock (the company) is justified in existing and in carrying out its business. That still leaves open the question of the particular ways in which handguns and their accessories are marketed. The social benefits of selling handguns may be fundamentally contentious; in other words, reasonable people can agree to disagree. But I doubt that the same can really be said for marketing moves designed, for example, to foster the sale of high-capacity magazines (ones that hold 33 bullets instead of the usual 17).
I’m not presuming to answer that question here; I’m merely pointing out the significance, and appropriateness, of a specifically social lens.
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(See also Andrew Potter’s characteristically sane piece on the politics of gun control: ‘You can’t outsmart crazy’—or can you?)
Corporate Citizenship, Apple, and WikiLeaks
Filed under: corporate citizenship, decision-making, law, media, NGO, privacy, stakeholders, transparency |
Comments (8) What kinds of political obligations do corporations have? In particular, do they have obligations, like governments do, not to interfere with things like people’s ability to express themselves?
See this short blog entry by Leander Kahney, at Cult of Mac: Apple Pulled Wikileaks App Because It “Violated Dev Guidelines”
Apple has joined the shameful list of companies that have denied support for Wikileaks.
Apple confirmed that it removed a Wikileaks App from the online App Store, as reported earlier, and did so because it “violated our developer guidelines.”
“Apps must comply with all local laws and may not put an individual or group in harm’s way,” Apple spokeswoman Trudy Muller told the New York Times.
However, exactly how or why the app doesn’t comply with the law — or puts individuals or groups in harm’s way, Muler didn’t explain. She also didn’t discuss the First Amendment or the freedom of the press….
(I’ve already blogged on the more general question of whether companies are justified in ceasing to do business with WikiLeaks. See: Should Companies Judge the Ethics of Those With Whom they Do Business?)
But what’s particularly interesting in the bit quoted above is that Kahney mentions the First Amendment, implying that Apple ought to support WikiLeaks because it has a First-Amendment obligation to do so.
On the face of it, from a legal point of view, that’s surely false. The First Amendment says:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances
Now, on the face of it, that’s a restriction on what the US Congress may do; it implies nothing at all about what private organizations (including corporations like Apple) may or may not do. (If there are experts on US Constitutional Law out there, please feel free to correct me!) But it may well be that the precepts enunciated in the US Constitution and Bill of Rights (or in other nations’ constitutional documents) should be thought of as having not just legal force, but also moral force, and that that moral force should be thought of as extending to all kinds of institutions, not just government. If that’s the case, then you could argue that, even though corporations are not legally bound by such principles, they ought ethically to be guided by them.
The whole issue of whether corporations have specifically political obligations to citizens (and not just more general ethical obligations to consumers) is a difficult one. Are we gaining something, or losing something, by thinking of corporations that way? Does thinking about corporations as playing a quasi-governmental role illuminate their moral obligations, or obscure them? In this regard, if you’re academically inclined it’s worth taking a look at this masterful article by my friend Pierre-Yves Néron: “Business and the Polis: What Does it Mean to See Corporations as Political Actors?”
Wikileaks & Mastercard: Should Companies Do Government’s Bidding?
Filed under: accountability, corporate citizenship, corporations, CSR, environment, government, law, politics, values |
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The controversy over Wikileaks has raised the question of whether companies should do government’s bidding. One popular suspicion is that Mastercard, Visa, and PayPal stopped acting as conduits for donations to Wikileaks not on principled grounds, but rather due to government pressure. If that’s true, is it ethically acceptable for business to act that way, as a tool of government? I’m not talking about government contractors, including military contractors like Blackwater, though I suppose the comparison is not entirely ridiculous. I’m thinking broadly of companies (ones not in the employ of government) helping to enact public policy or to implement the will of government more generally.
From a moral point of view, the question has to hinge in part on the moral quality of the particular thing business is being asked to do, and that may in turn hinge in part on the moral character of the particular government involved. Think, for example, of the controversy over Google participating in censorship in China. Many people thought it was wrong for Google to implement government policy in that case because they believe the Chinese government’s censoring of its citizens’ internet access to be morally problematic.
It’s worth pointing out that there are times and places where participating in implementing government objectives has been seen as unobjectionable, even patriotic. During both World Wars, companies were expected to participate in the ‘war effort’ by ramping up production, by shifting production to products needed for the war, and by conserving key raw materials. And that sort of active, corporate civic responsibility isn’t limited to times of war. Note that the US Department of Homeland Security expanded its “If You See Something, Say Something” to…
…hundreds of Walmart stores across the country – launching a new partnership between DHS and Walmart to help the American public play an active role in ensuring the safety and security of our nation.
I think it’s also instructive here to consider the relationship between “the state” (roughly, the government) and society. Many people are happy to think of corporations as instruments of society — that’s what motivates much of the CSR movement. We think it right for businesses to be environmentally responsible because we, as a society, value the environment. We want to conserve our resources, and we expect business to do its part. But the democratic state, like it or not, is a legitimate instrument of society. Now, government (including democratic government) is notoriously imperfect. As Churchill said, democracy is the worst system in the world, except for all the rest. But it’s hard to see how you can approve of (or insist upon) corporate implementation of social objectives and at the same time object entirely to corporate implementation of government objectives when those objectives are the reasonable objectives of a relatively-legitimate government.
In the end, it seems to me that if the behaviour in question is not intrinsically unethical (as Microsoft and Yahoo helping China’s government spy on dissidents arguably was) and if the behaviour doesn’t violate the firm’s fiduciary obligations to its shareholders, then it is at least permissible (though not necessarily obligatory) for a business to help implement public policy.
Should Companies Judge the Ethics of Those With Whom they Do Business?
Filed under: accountability, corporate citizenship, decision-making, government, NGO, protest, stakeholders |
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The Wikleaks backlash continues. I suggested here two days ago that Mastercard was probably justified in ceasing to act as a conduit for donations to Wikileaks. I said that, at very least, it’s not surprising that a company whose business depends on its reputation as a trustworthy keeper of secrets would find it hard to endorse the behaviour of an organization that exists entirely for the purpose of exposing secrets.
But quite a few people have suggested that Mastercard (and Visa and PayPal and perhaps others) have been inconsistent, and perhaps even hypocritical, in deciding to cut off Wikileaks. As an editorialist for the Guardian pointed out…
while MasterCard and Visa have cut WikiLeaks off you can still use those cards to donate to overtly racist organisations such as the Knights Party, which is supported by the Ku Klux Klan.
For that matter, you can use Mastercard or Visa to donate to any number of controversial charities and political causes, from PETA to the NRA to Planned Parenthood — all of which are organizations about which at least some people have serious moral reservations. Similarly, you can use either card to buy cigarettes, to buy guns, to buy drug paraphernalia, to reserve the services of a call girl, or to pay for hardcore pornography online. So, really, just how careful are Visa and Mastercard with regard to the companies they deal with?
And if Visa & Mastercard are on thin ice with regard to judging Wikileaks morally, that reduces the force of their ostensible reason for cutting off the organization, and lends credibility to the claim that all they’re doing is caving to government pressure.
Trying to divine the actual motives of the credit card companies here is probably nearly impossible. But this also raises the very general question of whether companies should pass moral judgment on their customers and business associates. Is it OK for a company to refuse to do business with someone — whether that someone is an individual or another company — because they have ethical objections to their behaviour?
(I touched on this topic a couple of years ago, in discussing the right of a bakery not to decorate a cake with the name “Adolf Hitler” on it. And more recently I blogged about corporate participation in the death penalty.)
Now in some cases, of course, moralistic discrimination is simply impossible, because the grounds upon which a company might choose to discriminate are invisible to them. In many markets, companies simply don’t know enough about their customers to pass judgment. The store I buy my groceries from has no idea how I live my life, what my values are, etc. Maybe if they knew more about me they would refuse to sell to me. But they don’t, so they can’t, and they aren’t likely to start going to the trouble of finding out more.
And in many (most?) cases, discrimination on moral grounds is off the agenda simply because it reduces profits. Maybe you have moral qualms with the behaviour or character of 25% of the population (or maybe even with the 50% who don’t vote the way you do), but are you really going to refuse to do business with them, and accept the resulting huge reduction in income?
And clearly, generally, this paucity of moralistic discrimination is a good thing. A lack of discrimination likely leads to greater economic efficiency (good for the community as a whole). And the fact that businesses are generally (though unfortunately not always) unable to discriminate based on, e.g., what they see as moral objections to someone’s sexual orientation, is a good thing for gays, lesbians, the transgendered, etc.
On the other hand, there are some clear cases in which it is widely accepted that companies will and should discriminate based on the character and behaviour of their customers. Think of banks, which are obligated (often legally required) to “discriminate” against criminal organizations by, for example, reporting large financial transactions to the government.
Note also that many people believe that companies should judge other companies they do business with, for example with regard to their environmental record and labour standards. In fact, lots of companies have faced serious criticism for failing to do so. Companies today are supposed to care about the ethical standards of their suppliers.
So, is it OK (or even good) for companies like Visa and Mastercard and PayPal to judge the morality of Wikileaks? Your initial answer to that is likely to depend on your opinion of Wikileaks more generally. I’d be curious to know if there’s anyone out there who says either:
- “Wikileaks is evil, but Mastercard, Visa, and PayPal should stay neutral and continue funneling funds to them,” or
- “Wikileaks is great, but Mastercard, Visa, and PayPal are fully justified in cutting them off.”
Wikileaks, Credit-Card Companies, and Complicity
Filed under: activism, banking, corporate citizenship, ethics, finance, government, NGO, transparency |
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I was interviewed last night on CBC TV’s “The Lang & O’Leary Exchange” about Mastercard and Visa’s decision to stop acting as a conduit for donations to the controversial secret-busting website Wikileaks. [Here’s the show. I’m at about 15:45.] (For those of you who don’t already know the story, here’s The Guardian‘s version, which focuses on retaliation against Mastercard by some of Wikileaks’ fans: Operation Payback cripples MasterCard site in revenge for WikiLeaks ban. )
Basically, the show’s hosts wanted to talk about whether a company like Mastercard or Visa is justified in cutting off Wikileaks, and essentially taking a stand on an ethical issue like this.
Here’s my take on the issue, parts of which I tried to express on L&O. Now just to be clear, what follows is not intended to convince you whether you should be pro- or anti-Wikileaks. The question is specifically whether Mastercard and Visa, knowing what they know and valuing what they value, should support Wikileaks’s activities.
I think that, yes, Mastercard & Visa are justified in cutting off Wikileaks. And I don’t think that conclusion depends on arriving at a final conclusion about the ethics of Wikileaks itself. The jury is still out on whether the net effect of Wikileaks’ leaks will be positive or negative. Likewise it is still unclear whether Wikileaks’ activities are legal or not. And who knows? History may be kind to Wikileaks and its front-man, Julian Assange. The question is whether, knowing what we know now, it is reasonable for Mastercard & Visa to choose to dissociate themselves. I think the answer is clearly “yes.” The key here is entitlement: the secrets that Wikileaks is disclosing are not theirs to disclose. They don’t have any clear legal or moral authority to do so, and so Mastercard & Visa are very well-justified in declaring themselves unwilling to aid in the endeavour.
One question that came up in last night’s interview had to do with complicity. Is a company like Mastercard or Visa complicit in the activities of Wikileaks? The answer to that question is essential to answering the question of whether the credit card companies might have been justified in simply claiming to be neutral, neither endorsing nor condemning Wikileaks but merely acting as a financial conduit. I think the answer to that question depends on at least 3 factors.
- 1. To what extent does Mastercard or Visa actually endorse Wikileaks’ activities?
- 2. To what extent does Mastercard or Visa know about those activities? and
- 3. To what extent does Mastercard or Visa actually make Wikileaks’ activities possible? That is, what is the extent of their causal contribution? Do they play an essential role, or are they a bit player?
In terms of question #1, it’s worth noting the significance of the particular values at stake, here. Wikileaks stands for transparency and for publicizing confidential information. Visa and Mastercard stand for pretty much the exact opposite. Visa and Mastercard, like other financial institutions, are able to do business because so many people trust them with their financial and other personal information. And so the credit card companies are, of all the companies you can think of, pretty clearly among the least likely to be able to endorse Wikileaks’ tactics, whatever they think of the organization’s objectives.
It’s also worth noting the significance of the notion of “corporate citizenship,” here. That term is widely abused — sometimes it’s used to refer to any and all social responsibilities, broadly understood. But if we take the “citizenship” part of “corporate citizenship” seriously, then companies need to think seriously about what obligations they have as corporate citizens, which has to have something to do with their obligations vis-a-vis government. Regardless of how this mess all turns out, the charges currently being bandied about include things like “treason” and “espionage” and “threat to national security.” These are things that no good corporate citizen can take lightly.
Ethics of Hiring Illegal Immigrants
Should restaurants (and other companies) stop hiring illegal immigrants? What would happen if they did?
The question is posed here, on the NYT‘s “Diner’s Journal” blog: What If Restaurants Stopped Hiring Illegal Immigrants?
What if the restaurant industry — one of the largest employers of immigrants, a good number of whom, it is no secret, are undocumented — had to do it all above board? (According to 2008 estimates from the Pew Hispanic Center, illegal immigrants make up about 20 percent of the nation’s chefs, head cooks and cooks, and about 28 percent of its dishwashers.) That’s the intention, at least, of the Obama Administration’s intensified crackdown on employers that hire illegal immigrants, with businesses including restaurants now facing more scrutiny than they have in decades.
Some restaurateurs say that the cost of a meal would shoot up if they were forced to comply with immigration and labor laws….
So, let’s think through some of the ethically-relevant factors.
First, refusing to hire (or choosing to fire) illegal immigrants would drive up the cost of a restaurant meal. That would be bad for restaurant customers. Now, most people think of restaurant meals as a luxury, so a slight increase in price isn’t exactly ethically abhorrent. But when we think of an increase in the price of restaurant meals, we shouldn’t only think of fine dining: such increases would presumably also affect greasy spoons and other non-glamourous eateries, and hence hit many middle- and working-class families in the pocketbook. But still, restaurant meals are generally not a necessity, and anyone who wants one arguably has an obligation to pay the full price of legally obtaining the factors that go into producing it.
Second, it’s worth pointing out that, ethically, there is a general and strong presumption in favour of following the law. And if the term “corporate citizenship” means anything at all, it ought to include a citizen-like duty to act in a law-abiding way.
Third, if restaurants stopped hiring illegal immigrants, it would obviously be bad for those illegal immigrants; and it would be good for whomever got those jobs instead. In terms of total numbers, this is very nearly a zero-sum game, except for the possibility that fewer people over all would be hired at the higher, legal wage. But illegals are arguably in greater need of the jobs (since fewer kinds of jobs are even possible for them, and because they don’t have the same access to the social security safety net that citizens have access to). So, thinking purely in terms of the duty to help people when you can do so, it might even be argued that restaurants have an obligation to hire illegals.
It seems to me this is an interesting case where a company’s citizenship obligations might well conflict with its more general ethical obligations. And so it’s a nice illustration of why it’s wrong-headed to use the term “corporate citizenship” to cover the various kinds of moral responsibilities that a company may have.
Ethics: Definition
Filed under: corporate citizenship, CSR, definitions, ethics, sustainability |
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“Ethics” can be defined as the critical, structured examination of how we should behave — in particular, how we should constrain the pursuit of self-interest when our actions affect others.
“Business Ethics” can be defined as the critical, structured examination of how people & institutions should behave in the world of commerce. In particular, it involves examining appropriate constraints on the pursuit of self-interest, or (for firms) profits, when the actions of individuals or firms affects others.
The “critical” and the “structured” parts of those definitions are both important:
- Ethics is critical in the sense of having to do with examining and critiquing various moral beliefs and practices. (In other words, it’s not just about describing people’s values or behaviour, though that can be a useful starting point.) Ethics involves looking at particular norms and values and behaviours and judging them, asking whether various norms and values are mutually contradictory, and asking which ones matter more in what sorts of situations.
- Ethics is structured in the sense that it’s not just about having an opinion about how people should behave. Everyone has opinions. Ethics involves attempting, at least, to find higher-order principles and theories in an attempt to rationalize and unify our diverse moral beliefs.
For practical purposes, ethics means providing reasoned justification for our choices & behaviour when it affects others, and reasoned justification for our praise or criticism of other people’s behaviour.
Now, nothing above constitutes an argument. I’m just explaining roughly the proper use of the term “ethics.” There are, of course, other uses of that term — some of them arguably regrettable. (Some people in business and government, for example, take the word “ethics” to refer exclusively to the rules set out in various “ethics laws” that govern the behaviour of individuals in positions of responsibility, rules about conflict of interest, bribery, and so on.)
So, here comes the contentious part. I’m not sure it really is or should be contentious, but some people are bound to disagree with it.
The breadth of the topic “business ethics,” as defined above, means that other, related ideas like Corporate Social Responsibility (CSR) and corporate citizenship and sustainability are in fact sub-topics within the broader topic of business ethics. That’s not to diminish the importance of those sub-topics. But it’s worth keeping in mind, because it means that a focus on any one of those topics means setting aside potentially-important issues that fall under a different heading. This is especially true when companies (and consultants) focus on just one term. When they do that, it’s worth wondering, and maybe asking pointedly, about the stuff they’re leaving out.
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Edited for clarity in October, 2011.
The Business Ethics Blog 