Archive for the ‘employees’ Category
Bullying in the Workplace
Most people think of bullying as a problem of the schoolyard. But increasingly that term is being used to describe aggression in all kinds of settings in which power imbalances are common and in which aggression is problematic. Bullying in the workplace, for example, is far from new, but it has been in the spotlight in recent years.
See, for example, this editorial by Theresa Brown, for the NY Times, on bullying in healthcare workplaces: Physician, Heel Thyself
…while most doctors clearly respect their colleagues on the nursing staff, every nurse knows at least one, if not many, who don’t.
Indeed, every nurse has a story like mine, and most of us have several. A nurse I know, attempting to clarify an order, was told, “When you have ‘M.D.’ after your name, then you can talk to me.” A doctor dismissed another’s complaint by simply saying, “I’m important.”
While bullying may be a particularly dangerous in healthcare, where patients’ lives can easily depend on just how well a team of heal professionals functions, bullying, or even subtler forms of interpersonal conflict, can be common in any kind of workplace. And indeed, while the risks of poor team performance in healthcare are especially vivid, it has the potential to have serious negative effects — effects far beyond the people directly involved — in all kinds of businesses that themselves have significant impact on people’s lives or the natural environment. It isn’t difficult to imagine, for example, bullying being part of the root cause of the kind of poor teamwork that might result in an environmental catastrophe like BP’s Deepwater Horizon spill.
Brown’s article rightly points to the significance of ‘tone at the top.’ Basically, if the boss is a bully, such behaviour is liable to trickle down the chain of command. So leaders have a strong obligation neither to engage in, nor to tolerate, bullying. But people much farther down the chain of command also face ethical questions with regard to bullying — including especially how to respond to it and deal with it. Those with the least power within an organization are likely going to be the most vulnerable to bullying. Some of the toughest ethical challenges faced by junior people in an organization may have to do with responding to pressure from above, and with the difficulties inherent in being at the bottom of their organizational hierarchies. Younger employees, or ones simply new to that particular workplace, understandably find it difficult — and a source of moral distress — not just to survive bullying, but sometimes to be involved in courses of action that they see as unethical and yet that they are powerless to do anything about. It’s hard to know what advice to give to people in such situations, because sometimes there really is very little they can do. But one thing they can do is to consider, starting right now, how they should treat those beneath them in the hierarchy, if and when they themselves move up it, and how they are going to make sure not to fall into those same, all-too-common, toxic behaviours.
Wage Negotiations, Transparency, and Justice
Ontario’s public-sector unions are up in arms, over a secret deal granted by the government to one particular union. All of the province’s public-sector unions were to receive just a 2 per cent raise for 2012, part of an austerity plan aimed at taming the province’s multibillion-dollar deficit. But one union, the Ontario Public Service Employees Union, was secretly given a 3 per cent raise, “in exchange for non-wage concessions.”
See the details here: Employers up in arms over Ontario’s ‘secret’ wage deal, by Karen Howlett for the Globe and Mail.
The generosity of the deal is in sharp contrast to the McGuinty government’s pronouncements on the need to rein in spending in the public sector as it grapples with a multibillion-dollar deficit. Its flagship restraint measure consists of a voluntary two-year wage freeze for public sector workers who bargain collectively.
Against this backdrop, revelations that a sweetened deal was reached in December, 2008, for a union that often sets the benchmark has upset many employers in the sector….
For my purposes, the fact that the employer in question here happens to be a government is entirely beside the point. An employer is an employer, and this story could in principle have happened in the private sector.
Now, there’s an interesting side-issue here about whether limits expressed in terms of percentage points ultimately make much sense: we don’t know what “non-wage concessions” the government got from OPSE in return for the extra 1%, but it is entirely possible that it is something better for provincial coffers, in the long run. The non-wage benefits that unionized workers enjoy often amount to a large portion of their total compensation. But as I say, that’s a side issue. Wages per se have a special salience in labour negotiations, both because of their immediate impact on workers’ pocketbooks, and because of their symbolic significance.
The key ethical issues here have to do with transparency, and whether other unions have a right to know the details of one particular kindred union’s negotiations with the employer they share in common. There are reasons for and against transparency. On one hand, a reasonable level of transparency is essential for benchmarking, and knowing how much other groups are earning is a precondition for seeking wage parity. In that sense, transparency serves justice. On the other hand, wanting to know how much someone else makes is not the same as having a right to that information. An argument needs to be made that having such information serves an essential purpose. Also, more generally, such benchmarking can have a tendency to ratchet salaries upwards, sometimes pushing compensation higher than is warranted either by performance or by the law of supply and demand.
Equally interesting is the government’s (i.e., the employer’s) rationale for the secrecy:
“By bargaining hard, the government protected taxpayers,” said Geetika Bhardwaj, a spokeswoman for Government Services Minister Harinder Takhar. “That has one union upset because they wanted more from taxpayers and didn’t get it. We make no apologies for that.”
Two things are worth noting about this rationale:
The first is that, taken seriously, it justifies entirely too much. No behaviour is beyond the pale, so long as it saves taxpayers a few bucks.
The second thing worth noting about this rationale is that it makes plain an important truth: spending a budget is a zero-sum game. Many people treat “a good deal for the working man” as an unqualified good. But in government, as in business, every dollar in an employee’s pocket is a dollar taken out of someone else’s pocket. That’s as true for Walmart or GM as it is for the Government of Ontario.
Buffett, Sokol, and Virtue Ethics
Filed under: character, conflict of interest, employees, ethics, finance, honesty, trust, values, virtue, white collar crime |
Comments (8) 
Warren Buffett (photo by Mark Hirschey)
The world’s most successful investor, Warren Buffett, was recently caught up in a scandal. He himself is not accused of any wrongdoing, though some have accused him of responding to the scandal — one involving a senior employee of his, one David Sokol — in a lackadaisical manner.
For the basics of the story, see here:
Berkshire doesn’t plan big changes after scandal (by Josh Funk, for the AP)
Berkshire Hathaway CEO Warren Buffett says he doesn’t think his reputation has been hurt much by a former top executive’s questionable investment in Lubrizol shortly before Berkshire announced plans to buy the chemical company….
Sokol is accused of a form of insider trading, essentially a kind of betrayal that is unethical at best, and illegal at worst. Now, Sokol himself is, not surprisingly, keeping pretty quiet, and speaking only through his lawyer. I’m more interested, at this point, in Buffett’s response, and what it says about his character. I’m not the first person to suggest that you can learn a lot about a person by the way he or she responds to a crisis. But when the man in the spotlight happens to be one of the world’s most successful businessmen, there’s some reason to think that the lessons learned might just be more interesting than most.
For more about Buffett’s response, see here: Buffett Takes Sharper Tone in Sokol Affair (by Michael J. De La Merced, for the NYT.)
Despite the critics, I think Buffett comes out of this looking pretty good. To begin, Buffett gets points for demonstrating his loyalty to a long-serving employee:
[Buffett] was harsh in his assessment of Mr. Sokol’s trading actions, he pointedly declined to personally attack Mr. Sokol, instead highlighting the executive’s years of service and good performance.
Buffett also has a sense of context and proportion. Not that the wrong of which Sokol is accused is small. But it is wise, and ethically correct I think, for Buffett to resist the urge to pounce on an employee who has, in Buffett’s own experience (up until the present crisis), been a diligent and morally-upstanding employee:
“What I think bothers some people is that there wasn’t some big sense of outrage” in the news release, Mr. Buffett said. “I plead guilty to that. But this fellow had done a lot of good.”
Buffett’s business partner, Charles Munger, likewise gets points for showing restraint:
“I feel like you don’t want to make important decisions in anger,” Mr. Munger said, defending Berkshire’s press release. “You can always tell a man to go to hell tomorrow.”
All of this is set against a background of Buffett insisting on the importance of having a reputation for integrity in business. Buffett is no slacker when it comes to ethical standards. The NYT piece quotes Buffett from 20 years ago, on the topic of the significance of reputation in business:
“Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”
Finally, it’s worth pointing out that this focus on Buffett’s character, and on the example he sets, represents an importantly different approach to business ethics. The approach here is akin to what philosophers call “virtue ethics,” a stream of thought that goes back to Aristotle. The idea here is that, rather than focusing on principles (or, more cautiously, in addition to focusing on principles), what we really ought to do when thinking about ethics is to focus on character. Rather than asking, “what rules apply to this situation?” this way of thinking asks, “what would a good person do in a situation like this?” And in between crisis points, we should be asking, “when a crisis comes, what kind of person do I want to pattern my behaviour after?” I don’t know nearly enough about Mr Buffett to hold him up as a moral exemplar, but I think that the kind of character he has displayed in the Sokol affair is worthy of emulation.
Insider Trading at the FDA
Filed under: conflict of interest, employees, ethics, finance, intellectual property, investing, law, science, trust, white collar crime |
Comments (3) A scientist employed by the US Food and Drug Administration has been arrested and charged with insider trading.
Here’s the story, from Diana B. Henriques at the New York Times: U.S. Chemist Is Charged With Insider Stock Trades
A 15-year veteran of the federal Food and Drug Administration and his 25-year-old son were arrested on Tuesday and charged with systematically using confidential information about pending drug applications to reap millions in illegal trading profits since 2007.
As part of its drug-approval process, the FDA is given sensitive information by companies seeking such approval. And the status of a company’s application within the FDA’s own decision-making is itself sensitive information. Since FDA approval is essential to getting a drug to market, the announcement that a company’s drug has been granted, or denied, approval by the FDA can have a huge impact on the value of a company’s stock. And what FDA chemist Cheng Yi Liang did is to use information available only to FDA insiders to make profitable trades on the stock of companies then seeking FDA approval.
Just what was so wrong with what went on here?
In a statement announcing the case, Lanny A. Breuer, the assistant attorney general for the criminal division, said: “Cheng Yi Liang was entrusted with privileged information to perform his job of ensuring the health and safety of his fellow citizens. According to the complaint, he and his son repeatedly violated that trust to line their own pockets.”
Now Mr Breuer is clearly engaging in a bit of prosecutorial rhetoric. He’s right of course that Cheng Yi Liang was entrusted with privileged information, but there’s no obvious reason to think that his use of that information for personal gain jeopardized anyone’s health or safety. But fair enough: Mr Breuer is playing his role in an adversarial system, and that licenses a certain amount of hyperbole.
But what really is wrong with the kind of insider trading that Cheng Yi Liang engaged in? The precise worry about insider trading is the subject of some debate, and I’ve blogged about that before. (See: Ethics of Insider Trading.)
There are several ways we could get at just what was unethical about what Cheng Yi Liang did. One worry is that he profited unjustly, gaining money that he didn’t earn and had no right to. Also, in engaging in insider trading, he traded on information not accessible to others. That means that the people he traded with were at an unfair advantage, and likely lost money as a result. It also means that, subject as it was to significant information asymmetries, the market in which he traded was rendered slightly less efficient, as a whole.
There is of course another ethical worry: if chemists working for the FDA take a personal financial interest in the fate of various approvals, that could quite easily corrupt the work they do. In other words, it puts such a chemist into a conflict of interest. In a conflict of interest, what is fundamentally at stake is our trust in an individual’s judgment. If FDA scientists have a personal stake in their scientific work, then we have reason to doubt their judgment. And, worse, if the judgment of FDA scientists becomes subject to doubt, then the public ends up having a reason (though perhaps not a sufficient reason) to doubt the work of the FDA as a whole.
Ethics of Shoe-Shine Pricing
Filed under: decision-making, employees, marketing, pay, pricing, profits, wages |
Comments (6) 
A few days ago at the airport I stopped to have my shoes shined professionally, something I rarely do. The service was excellent. The guy doing the work was pleasant and knowledgeable, and the results were beautiful. The price, revealed at the end of the process: $6.75. I gave the guy a ten, and told him to keep the change. Now, that’s not exactly enough to make me think I’m a big spender, but it’s pretty good, percentage-wise (nearly a 50% tip). The guy sitting next to me did the same thing, by the way, and I’m betting that’s actually a pretty common pattern.
This got me thinking about the relationship between pricing, tipping, and currency denominations. If the price of the shoe-shine were $8.00, most people likely would still give the guy the same $10, resulting in a substantially smaller tip. But if the price were closer to $5, I bet most people would pull out a $5 bill and then looked for some change to add as a tip. So whoever sets the basic price for the shoe-shine has enormous power to influence the size of tips.
Now, the guy who shined my shoes was wearing a shirt bearing the logo of a chain of shoe care-and-repair stores, so I’m guessing he wasn’t setting his own prices. This implies that the company he works for, in addition to making a decision about his base pay, is also, through its pricing policies, making a decision that likely has an even bigger impact on his income. Of course, that decision is not entirely unrestricted. The company in question has to cover its costs. But presumably it has different pricing strategies open to it. Crudely, it can set prices high, which will likely keep demand down but will result in a big per-sale profit margin; or the company can set its prices low, and rely on volume. Either strategy might make economic sense. If (and that might be a big “if”) both strategies have the potential to work out equally well for the company, that means the choice is open, and the potential is there to base pricing on whichever strategy will do the most for employees in terms of providing customers an incentive for large tips.
(Another example: any bar manager that sets the price of a beer at $4.50 is pretty much ensuring that wait-staff are going to get lousy tips — the temptation for many people is going to be to plunk $5 onto the bar, resulting in a tip of 50 cents or 11%.)
But the factual foundation of this question, beyond my own anecdote, is all speculation on my part. I’ve never had a job where I relied on tips. Can anyone shed any light on the relevant facts, here? And does anyone know whether incentivizing tipping is something companies ever take into consideration in their pricing decisions?
Corporate Motives and Discrimination
Filed under: corporations, culture, decision-making, discrimination, employees, management, values |
Comments (1) Motives, especially corporate ones, are hard to figure. Some people, of course, are skeptical about the notion that an abstract entity like a corporation can have motives (or intentions or beliefs of attitudes or any of those sorts of things), even though we all have a tendency to talk about corporations as if they are capable of having them. It’s pretty common to talk about a company “expecting” profits to rise next year, or “wanting” to increase its market share, and so on. But even if we’re not so skeptical about attributing motives (etc.) to companies, their motives can be pretty elusive. We may not be ready to believe corporate spokespersons when they tell us what their company’s motives are, and besides, even if everyone within a company agrees that a certain course of action is the right one to take, it’s entirely possible that different parties within the company all have different motives for doing so.
But sometimes it’s good to at least try to understand what motivates companies, particularly when we want to diagnose a widespread and/or persistent problem, in order to suggest changes.
This question of determining motives came to mind when I read a story about an age discrimination case at 3M: “3M settles age-discrimination suit for up to $12M”.
3M Co. has agreed to pay up to $12 million to settle an age-discrimination lawsuit with as many as 7,000 current and former employees.
The 2004 lawsuit targeted the company’s performance-review system, alleging that older workers were disproportionately downgraded. It also accused the company of favoring younger employees for certain training opportunities that could fast-track them for promotions….
If we accept for the sake of argument that some sort of systemic discrimination took place at 3M, what on earth might have motivated such behaviour?
Here are a few possibilities:
- Profits. Maybe the discriminatory practices and policies were an attempt to increase efficiency in order to boost profits. This of course is the go-to assumption for most corporate critics.
- Energy. Maybe those who engaged in age discrimination weren’t thinking specifically about the end goal of profits, but merely had a certain vision in mind of the kind of company they ought to have, and the kind of youthful energy that makes a company vibrant.
- Recruitment. Maybe 3M wanted to give younger employees lots of opportunities so that they could brag about opportunities for young employees when recruiting new talent. Most recruits, after all, are likely to be young, and ambitious young people are likely to be drawn to a company that holds the promise of great opportunities.
- Bias. It could be that various key decision-makers inside 3M were simply personally biased, as many (most? all?) of us are, against older employees.
- Justice It’s at least possible that key decision-makers within 3M actually thought that giving preferential treatment to younger employees was the morally-right thing to do. Quick, ask yourself this: if 2 patients each need a heart transplant, and you’ve got just one donor heart, and one patient is 15 and the other is 55, who would you give the heart to? Surely all of us are tempted, from time to time, to think that the young are particularly deserving of opportunities. Note that I’m not defending such a view, here.
What do you think? Note that the point here is not about the 3M case, but about what could motivate a company, any company, to engage in discriminatory behaviour. And again, I think it’s worth contemplating the possibility that there simply was no corporate motive (nor maybe even a truly corporate “cause”).
The Importance of “Tone at the Middle”
Filed under: corporations, culture, employees, ethics, governance, leadership |
Comments (2) 
In yesterday’s blog entry, I mentioned that I was attending the Global Ethics Summit in New York. I was there in part because I had been asked to moderate a panel, the topic of which was “Tone from the Middle: Who, Why and How?” It’s a great topic. I’ve long said that there are two competing truisms with regard to creating an ethical culture within any company. One has to do with leadership, and the idea that ethics has to come from the very top of an organization. The other truism has to do with buy-in, and the fact that ethics cannot be imposed from the top down — you have to get buy-in from the folks on the front lines. But too seldom do we talk about the crucial middle layer, the layer of managers that takes orders, and other more subtle signals, from the C-suite, and passes them along. And whether they pass along a clear, urgent signal about ethics or a distorted or weak signal is a huge variable. That middle layer is a crucial conduit, but it is also a crucial source of ethical momentum if and when leadership from the top is lacking.
It’s worth noting that the audience at this event consisted mostly of corporate lawyers working in ethics-and-compliance. The questions I posed to the panel were designed with that audience in mind, but hopefully they are of broader interest. Here are a few of the questions I posed. I welcome your own answers and suggestions in the Comments section.
- Many companies, especially large ones, use web-based tools as an efficient means of conducting ethics training. But such tools may not be ideal for conveying and ensuring the right “tone,” which seems to be something intangible. What concrete steps can a company with thousands of employees take to reach that crucial “middle” layer of the company and make sure that the tone there is right?
- Why have so many firms struggled to reach the “middle”? Is it a lack of appreciation of the importance of the middle? A lack of understanding of how to influence that middle layer, or something else?
- Assuming we can figure out how to influence the “tone at the middle,” the further challenge is to figure out what that tone should be. The short answer, of course, is “an ethical tone.” But what does that mean, more specifically, in practice? What kind of tone should we be looking to establish?
- Having the right “tone at the middle” arguably involves two challenges: one is avoiding a negative tone — a culture of fear, a culture that is afraid to talk about ethics — and the other is promoting a positive tone — a culture in which ethics is talked about openly. Those are perhaps 2 sides of the same coin, and maybe the one has to be avoided before the other can be promoted. Which part of that is likely to be more challenging?
- One of the problems with relying on tone at the top is that the top can be pretty unstable. The average tenure of a CEO these days is something like 3 or 4 years. Is the relative stability at the middle of an organization part of what makes the tone at the middle so important?
- In my own blogging, teaching, and consulting, I sometimes meet resistance to the use of the word “ethics” (as opposed to “corporate citizenship” or “CSR” or “integrity,” for example) because for some people the word “ethics” immediately makes people think of wrongdoing. Is finding the right language to talk about “doing the right thing” a challenge?
Ethics and the Challenges of Scale
Filed under: accountability, complexity, corporations, employees, management |
Comments (2) I’m currently attending the Global Ethics Summit in New York. In reality, despite its name, the GES is not just about ethics per se, but about ethics and legal compliance. Those of us who spend time thinking about corporate behaviour in terms of ethics are sometimes tempted to downplay the significance of legal compliance. After all, “compliance” just means “following the law,” and it’s tempting to think that following the law is a pretty low aspiration. After all, shouldn’t we be able to take for granted that companies will follow the law? Shouldn’t the real discussion be about the subtler ethical issues that pop up in areas not covered by law? The answer is not so clear, especially when we think about really big companies.
The first session I attended here yesterday got me thinking about the challenges of compliance, and the challenges faced by big companies precisely because of their scale. The panel was called “Compliance 2011: What’s Next?” and its members included representatives from three truly enormous companies: Kathleen Edmond, the Chief Ethics Officer for Best Buy; Odell Guyton, Director of Compliance for Microsoft; and Haydee Olinger, who is Vice President & Chief Compliance Officer for McDonald’s.
My thinking about scale was stimulated by two comments by panelists. First, Best Buy’s Kathleen Edmond mentioned that her company has over 170,000 employees. Just imagine the challenges that number implies for the people who are going to be held accountable for the company’s behaviour. Imagine being the mayor of a city with 170,000 citizens, and your job is to ensure that all of those citizens know about all the laws that apply to your city and its residents, and that none of those citizens ever breaks any of those laws. And add onto that the likelihood that you as mayor and your city as a whole will be held responsible for the bad behaviour of any of those citizens. Finally, imagine that the citizenry of your city has a yearly turnover rate of, say, 75% (Edmond said that Best Buy’s employee turnover rate is something between 60 and 70%, which she said is well below the retail industry’s average). That implies a tremendous challenge for education and enforcement.
The second comment of interest was from Haydee Olinger of McDonald’s. She pointed out that McDonald’s has “hundreds of thousands” of suppliers. And each of those suppliers is likely to have hundreds or maybe thousands of employees. That means that the quality and safety of McDonald’s product depends on the good behaviour of a lot of people. The same goes for keeping the fast-food giant out of legal trouble, because there are lots of ways in which McDonald’s could end up on the hook, legally, for problems the root causes of which lie with a supplier’s behaviour. The result is that an enormous amount of energy has to go into selecting those suppliers, teaching them about McDonald’s standards, and then enforcing those standards.
Now, we shouldn’t be fooled though into thinking that the problems unique to giant corporations amount to a criticism of such companies. Because the problem really lies with the amount of commerce done, rather than with the size of the organization that does it. If Best Buy’s 170,000 employees were instead employed by 170 companies, each with 1000 employees, there would still be a total of 170,000 potential wrongdoers. The only thing that would really change is that instead of one giant employer with a unified system for training those employees and monitoring them, you’d have 170 small businesses, each of which would likely struggle with figuring out the best way to do so. Likewise, consider the millions of burgers McDonald’s sells each year. If they were instead sold by a few thousand small burger joints, all those ingredients would still have to be bought from a massive number of suppliers. The difference would be that none of those small restaurants would be likely to have the resources required to screen, select, educate, and monitor those suppliers in any rigorous way. They’d probably just, you know, buy stuff from from them, and hope for the best.
So in terms of compliance, while size brings challenges, it also clearly brings advantages.
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By the way, Best Buy’s Kathleen Edmond writes her own blog, which is well worth a look.
Regulating Wall Street Bonuses
Filed under: accountability, competition, decision-making, employees, finance, government, pay, regulations, wages, white collar crime |
Comments (5) The U.S. Securities and Exchange Commission has just announced its intention to exercise oversight over levels of pay on Wall Street. Is this an example of overreaching regulation, or of justified intervention in the public interest?
Here are the details, from Ben Protess and Susanne Craig, on the NYT‘s DealBook blog: S.E.C. Proposes Crackdown on Wall Street Bonuses:
Lavish Wall Street bonuses, long the scorn of lawmakers and shareholders, have met a new foe: the Securities and Exchange Commission.
The agency on Wednesday proposed a crackdown on hefty compensation awarded at big banks, brokerage firms and hedge funds — a move intended to rein in pay packages that encouraged excessive risk-taking before the financial crisis.
The proposal would for the first time require Wall Street firms to file detailed accounts of their bonuses with the S.E.C., which could then ban any awards it deemed excessive. The rules would be aimed at top executives and hundreds of rank-and-file employees who receive incentive-based pay….
In general, we should probably have as our starting point a healthy skepticism about government attempts to regulate pay in particular industries. Remuneration for high-level jobs is typically based on some combination of rewarding past performance and incentivizing future performance, in addition to sensitivity to things like skill, experience, and the scarcity of the particular talents the job requires. And it’s highly unlikely, again speaking in generalities, that government agencies are going to have the right information and motives to allow them to determine with any degree of precision and efficiency just what a private company’s pay structure should be. Now of course governments aren’t the only ones who could err in setting up compensation schemes; private companies are perfectly capable of screwing that up pretty badly themselves. But for the most part, if private companies screw up in that regard, it’s their shareholders that should hold them accountable, just as it is shareholders who ought to hold them accountable for any other foolish spending.
But there are likely to be justified exceptions to the general presumption in favour of the government taking hands-off approach to compensation. If it is the case — and this seems to be the S.E.C.’s conclusion, here — that compensation schemes in a particular industry are seriously and chronically causing harm beyond the walls of the organization, that seems to be a pretty good argument in favour of government action. This is especially true when the damage being done is not “merely” damage to particular individuals or groups, but to the stability of the economy as a whole. And as Protess and Craig point out, “The move by regulators to have more say on Wall Street pay highlights the huge role financial institutions play in the economy.” That is what arguably makes the harm done by Wall Street compensation not just a matter of private wrongs, but of public ones.
But of course, this argument doesn’t mean the S.E.C. should rush in like a bull in a china shop. All of the concerns mentioned above still apply — there are reasons why Wall Street firms have the compensation policies they have, and it’s pretty likely that at least some of those reasons are pretty good ones related to the necessities of the industry. Indeed, the S.E.C.’s chairwoman, Mary L. Schapiro, says that “This is an area where we want to be very attuned to unintended consequences.” The S.E.C.’s objectives here, seem to be good ones; the question will be whether the quality of the agency’s methods live up to the nobility of its goals.
Charlie Sheen as Toxic Asset
Filed under: employees, entertainment, media, professionalism, risk, values |
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While actor Charlie Sheen may not be a ‘toxic asset’ in the technical sense, he’s clearly become too much of a liability for the companies who have thus far been profiting richly from his services.
In case you don’t already know all the gory details, here’s one version of the story, by Bill Carter, writing in the Business section the NY Times: Sheen Tantrum Likely to Cost in the Millions
Charlie Sheen’s latest antics may leave CBS and Warner Brothers with a quarter-billion-dollar headache.
The two companies decided on Thursday to halt production of the hit CBS comedy “Two and a Half Men” after Mr. Sheen, the star of the show, unleashed a barrage of vituperative comments about the sitcom’s creator, Chuck Lorre.
The loss of next season’s episodes would mean forgoing about $250 million in revenue between Warner Brothers, which produces the show, and CBS….
Sheen, of course, was already a famously problematic ‘talent’ long before his decision to publicly and viciously bite the hand that feeds him. Sheen has a long history of handing the tabloids easy headlines through his penchant for drugs and booze and prostitutes and property damage and domestic violence.
Several writers have already suggested that all of that should have been enough to make Sheen persona non grata, but it wasn’t. As the LA Times’ Mary McNamara put it,
If you are the star of a hit comedy on CBS, you can keep your job in spite of accusations of: threatening your pregnant second wife; holding a knife to your third wife’s throat on Christmas Day; and indulging in cocaine-fueled weekends during which your bizarre behavior causes your female companion to fear for her life.
I think from a Business Ethics point of view, we can look at this in two ways.
1) Employment. From an employment point of view, this is a question of CBS and Warner Brothers having an employee with serious behavioural problems, most of which have been after-hours problems rather than on-the-job problems. As McNamara reports, Sheen’s bosses referred to his domestic abuse troubles as “very personal and very private.” Of course, any employer needs to recognize that it will always be the case that at least some of their employees will have personal troubles, and it’s not entirely clear that such problems are grounds for dismissal. But what employers cannot ignore is insubordination, and that’s basically what Sheen’s recent outburst amounts to.
2) Production methods. In an age of conscious consumerism, people are paying a lot more attention to the way in which the products they enjoy are produced. The average consumer is more likely than ever to want to know whether their clothes were made in third-world sweatshops or whether coffee was made with beans that were traded fairly. For the bizarrely popular product that is “Two and a Half Men”, Charlie Sheen is a major part of the means of production. And all available evidence suggests that consumers of that product just don’t care that, in order to produce it, CBS and Warner Brothers had to turn a blind eye to behaviour that was by turns childish, unethical, and criminal.
The Business Ethics Blog 