Archive for the ‘quality’ Category

Herbal Remedy Scam

It’s a quality control problem at best, and outright fraud at worst.

A recent study by researchers at the University of Guelph used genetic analysis to study a range of commercial herbal remedies and found a shocking disparity between what was on the label and what’s actually in the bottle.

According to the Vancouver Sun, the researchers looked at 44 herbal products sold by 12 companies, using DNA ‘barcode testing’ to determine what plant species were in the bottle.

The result: some products contained other generally inert species of plants (for example wheat, to which some people are allergic, and rice, to which some people are allergic), without those ingredients being listed on the label. Other products were adulterated with potentially toxic plants like St. John’s wort or senna. Others simply contained none of the active ingredient they were supposed to contain. And yet these products are commercially available at a major pharmacy chain near you.

The study didn’t name names — the study was effectively about quality control within the industry, rather than about naming-and-shaming particular companies. But it’s a damning indictment for the industry quite generally. (Just two companies among the 12 in the study sold products that were just what they said they were.)

Of course, many readers will know that this is not the first reason we’ve had to doubt the integrity of the herbal remedy industry, or the ‘natural’ health product industry more generally. As others have written elsewhere (including pharmacists with the scientific and critical-thinking chops to know the difference), Canada’s regulations regarding natural health products leave much to be desired.

But it’s nothing to laugh about. Unlike homeopathic remedies, which (unless adulterated) generally contain no active ingredients at all, herbal remedies can have actual effects, though those effects may not live up to the claims implied by their labels. Herbal remedies, while under-regulated, can at least have real biological effects. That’s a source of pride for makers of herbals, situated as they are within an alternative-medicine industry that is rife with outright fraud and delusion.

But it also means that the honest bottlers of herbal remedies should be at the front of the line, lobbying government hard for stricter regulations. Perhaps even more crucially they should be doing their best to convince the major chains that there’s a difference between them and the companies whose products failed the Guelph study so miserably. In the end, it’s as much an ethical matter as a matter of self-interest. The public deserves to be better served, and who better than those within the industry itself to make sure that it happens?

Business Ethics & Pride in a Job Well Done

One of my shoe laces gave out today, on the way out the door heading to the airport. Luckily the shoe-shine guy, in addition to giving an excellent shine at a good price, also had reasonably-priced laces which he happily threaded and tied for me.

For some strange reason, it always comes as a shock to me when a shoe lace gives out. The odd thing is that I usually cannot remember how old the disappointing lace actually is. I honestly cannot tell you whether the lace that gave out today is 3 months old or a year old or three years old. Nor do I know what brand it was, or where I bought it. So — setting aside, for a moment, its trivial price — I have no idea who I would complain to if I thought the lace had given out sooner than it ought to have.

Given this lack of accountability, one has to wonder just what it is that motivates makers of shoe laces (or other small, cheap, anonymous products) to rise above the bare minimum in terms of quality. Shoe laces are not, presumably, a highly-regulated industry. So they could presumably get away with using cheap raw materials, keeping costs down and profits high.

One obvious answer is “ethics.” The people who make shoe laces presumably have some pride in their work, and want people to be satisfied with their laces, and feel that it’s their responsibility to produce a decent product.

Another answer might have something to do with supply chains. Maybe I can’t easily hold the maker of my laces accountable, but the store I bought them at can. Maybe the purchasing agents for the store I bought them at asks lots of tough questions and demands access to technical specifications for laces before buying. I hope that’s the case. But that just pushes the question one link higher up the supply chain. Why does the purchasing agent care, given how likely consumers are to express their disappointment, in the event that they are dissatisfied? Again, the likely answer here is “ethics,” a big part of which is the simple motivation to do a good job and treat people fairly.

OK, so this is a trivial little example. But it seems to me that it points to an important lesson. People too often think of the word “business ethics” as implying an attempt to define and achieve saintly behaviour in business. And that’s a mistake. What we’re really talking about are reasonable constraints, and reasonable standards of achievement, in the world of commerce. We’re all out there, trying to make a living, and there are better and worse ways to do that. And whether you’re manufacturing shoe laces or complex financial instruments, the starting point has to be basic pride in a job well, and fairly, done.

Facebook, It’s Not OK to Suck

Facebook users should keep complaining, complaining bitterly, complaining in every possible forum.

Oddly, for all the controversy over Facebook implementing yet another round of changes to its layout and user experience, that controversy has almost been drowned out by arguments over whether it’s appropriate for users to complain about Facebook. Yes, the burning debate among users is over whether there should be a burning debate among users.

Much of the force of the “stop complaining!” camp is rooted in the claim that, hey, after all, it’s a free service and no one’s forcing you to use it anyway. But contrary to what you might have heard, Facebook isn’t optional, and it isn’t free. Let me explain.

First, let’s talk price. Lots of people have already pointed out that while Facebook doesn’t charge users for an account, that doesn’t mean it’s free. The service is supported by advertising, just like TV shows have been since the days of early soap operas. So you are “paying” to use Facebook — you’re paying with your eyeballs. You’re paying with attention, however fleeting, to those ads along the side of the page. And — the more worrying fact — you’re paying with your privacy, as Facebook uses what seems to be increasingly-ornate ways to gather information about you, your preferences, and your web-surfing habits. As the saying goes, there’s no such thing as a free lunch. Facebook isn’t an exception.

Think of it this way: Facebook is like a gas-station bathroom. It might be “free”, but that doesn’t mean that quality doesn’t matter. In both cases, the “free” service being offered is there as an inducement. In the gas station’s case, it’s an inducement to stop there for gas (and increasingly for snacks, magazines, etc.). In Facebook’s case, being able to post stuff for “free” for your friends to see is an inducement to look at those ads, and to share your web-surfing habits with that advertising agency. So they have reason to want you to be satisfied, and you have every right to demand excellence in return for your attention.

Second, is Facebook optional? Whether a product is optional or not matters, ethically, because when a product is truly optional, customers can simply exit the relationship, either buying the product from someone else or not buying it at all. Given the option to exit, the dispute between producer and consumer evaporates as the two simply agree to disagree and go their separate ways. (The classic source on this is Albert O. Hirschman’s book, Exit, Voice, and Loyalty.) But Facebook isn’t optional. Ok, I know. Strictly speaking yes it’s optional. But then, so is email, or having a telephone, or having a car. Optional but, for many of us, functionally essential. In this regard, Facebook is a victim of its own success. It has no real competition, and the service is one that many of us cannot simply walk away from. In essence, Facebook has gained a virtual monopoly on what has become part of our social infrastructure. Complaining about Facebook is no sillier than complaining about the state of your local roads or the consistency of your supply of electricity.

So if you don’t like Facebook’s new layout, or if you don’t like Facebook’s approach to privacy, do not hesitate to complain. You’re well within your rights. And if Facebook listens, you might just help make the on-line world a better place.

Bragging About Not Recycling

No recycling waterRecycling is cool, right? It’s hip to be green, right? Well, apparently that’s not always the case.

I spotted this sign at a carwash here in Toronto yesterday. This carwash (the labour-intensive handwash kind) is proud of the fact that its water is always fresh, never recycled. In 2011, it’s a striking way of bragging.

Two points worth making:

First, any business that brags about using a resource in the least frugal way possible is perhaps, just perhaps, paying too little for it. Now, from what I understand, water usage by businesses in Toronto is metered, though I don’t know just how expensive the water is for businesses. But it’s at least worth contemplating that, for a sometimes-scarce resource (and water counts as one of those, even in Canada) a business can only brag about maximal usage if it’s not paying very much for it in the first place. If we want to encourage people (and businesses) to use less water, the first step is to make sure usage is metered, and the second step is to make sure that prices are sufficient to discourage waste. Water is a public utility, and pricing is often subsidized in ways that encourages waste. Notice there are precisely zero airlines bragging about how much fuel they use.

The second thing worth noting is the basic value conflict here. Why is it that this company is bragging about using only fresh water? Presumably it’s because they or their customers associate fresh water with a better product, i.e., a better wash. Now, that belief might be mistaken. In fact, I strongly suspect it is mistaken. I suspect that recycling and filtering can easily get water clean enough to get your car 100% sparkly clean. But the perception that recycled water is inferior is out there, and it may be difficult to change. In the meantime, this remains an example of what many will experience as a difficult values-based choice: do you want the best product, or the greenest one? Sometimes, the greenest choice is also the best product, and when that’s true it’s either a happy coincidence or the result of really smart product development. But we must not allow clever marketing to convince us that that will automatically be the case, that green = ethical = happy = socially progressive. Life is full of choices, and that truth is one that we cannot afford to water down.

Ethics of Inefficiency

The current way of thinking seems to imply that small-scale production is the way to go. Of course, for much of the 20th century, small-scale production was a sign of affluence: only the wealthy could afford to have a craftsman dedicate hours, perhaps days, to the task of custom-making an item just for them. Today, everyone from yuppies to hippies is clamoring for just that, in their rush to grab for things perceived as local and green and anti-commercial. We don’t want multinationals to get between us and the skilled hands that make our loafers, and we want no agrifood giants mediating our relationship with the farmer who lovingly raised the goats that gave the milk that made the cheese. We want our business small, and indie. We want our consumer goods “bespoke,” and “artisanal.”

And the reason for this seems to be some vague impression that those kinds of businesses, and those kinds of products, are somehow more ethical. And in some cases, along some ethical dimensions, that may be true. But if anyone thinks that products produced by a small, local artisan are likely to be environmentally superior, well excuse me for being just a tiny bit skeptical.

This vague association of the small with the ethical misses the fundamental truth that, when it comes to production methods, size brings efficiency. Mass production tends to be efficient in its use of energy, materials, and labour. There are of course tradeoffs and exceptions: it’s entirely possible for a factory mass-producing something to be highly efficient in the use of labour, but to be highly inefficient in the use of, say, water — especially if water is had at no cost. But generally, mass production is efficient; that’s its raison d’etre. Consider: a local tailor spending an entire day hand-stitching a jacket has to use, to begin with, an entire day’s worth of energy to light and heat his workshop. Alternatively, the same jacket could be made in a garment factory in a matter of minutes, using a few minutes’ worth, rather than an entire day’s worth, of energy.

Now that’s not a blanket endorsement of all mass production. It’s entirely possible for production processes to be set up so that they are highly efficient in their use of whatever resource is particularly costly, and highly inefficient in its use of whatever happens to be cheap, regardless of the ethics of doing so. Note also that mass-produced goods tend to cater to the lowest common denominator. It should also be noted that assembly lines may tend to result in repetitive strain injuries among workers — and, if you believe some critics, in feelings of alienation as the worker whose job is reduced to some trivial aspect of production is effectively cut off from any connection with the product as a whole.

But (generally) efficiency is good. Certainly no one is in favour of inefficiency, with the possible exception of those of us who revel in a well-earned “inefficient” weekend. At any rate, the very reason we engage in mass production is that it is efficient: it produces the most output per unit of input. And that’s a good thing. So while there may be reason to value the small, the local, the artisanal, we ought at least to be aware that such goods are liable, at least in general, to be the product of highly inefficient — and hence environmentally unfriendly — production methods.

Deadly Crashes, “Agency Theory” & the Challenges of Management

Sometimes for a corporation to “do the right thing” requires excellent execution of millions of tasks by thousands of employees. It thus requires not just good intentions, but good management skills, too.

For an example, consider the story of the crash of a Concorde supersonic jet a decade ago. The conditions leading up to the crash were complex, but one factor (according to the court) was negligence on the part of an aircraft mechanic. Whether (or to what extent) that mechanic’s employer is responsible for that negligence, and hence at least partly responsible for the crash, is a difficult matter.

Here’s the story Saskya Vandoorne, for CNN: Continental Airlines and mechanic guilty in deadly Concorde crash

The fiery crash that brought down a Concorde supersonic jet in 2000, killing 113 people, was caused partially by the criminal negligence of Continental Airlines and a mechanic who works for the company, a French court ruled Monday.

Continental Airlines was fined 202,000 euros ($268,400) and ordered to pay 1 million euros to Air France, which operated the doomed flight.

Mechanic John Taylor received a fine of 2,000 euros ($2,656) and a 15-month suspended prison sentence for involuntary manslaughter….

I don’t know the details of this story well enough to have any sense of whether the mechanic in this case really did act negligently. But what intrigues me, here, is the issue of corporate culpability. Note the difficulty faced by airline executives who (for the sake of argument) want desperately to achieve 100% efficiency and never, ever to risk anyone’s life. In order to achieve those goals, executives have to organize and motivate hundreds or perhaps thousands of employees. They need to design and administer a chain of command and a set of working conditions (including a system of pay) that is as likely as possible to result in all those employees diligently doing their very best, all of the time. That challenge is the subject of an entire body of political & economic theory known as “agency theory.”

Agency theory and the various mechanisms available to motivate employees in the right direction are things that every well-trained business student knows about, because those are central challenges of managing any corporation, or even any small team. What is recognized too seldom, I think, is just how central a role agency problems play in assessing and responding to ethical challenges in particular.

Ethics, BP, & Decision-Making Under Pressure

Over the last couple of months, criticism of BP has become an international pastime. It’s hard not to get the impression that most members of the public believe that senior managers at BP (and quite possibly everyone employed at BP) are bungling fools. And probably lazy too.

But of course, that’s patently absurd. And maybe nobody actually believes it. We all know that the relevant people at BP are smart and highly-trained. They wouldn’t have the jobs they have if they weren’t. True, no one was very happy with the amount of time it took to get the oil well capped. And almost certainly mistakes were made. But the capping of the well was a feat of enormous technical difficulty and complexity, carried out under intense scrutiny. Few of us, if we are honest with ourselves, can imagine performing well under those circumstances.

Here’s a story that speaks to the difficulty of those circumstances, by Clifford Krauss, Henry Fountain and John M. Broder, writing for the NYT: Behind Scenes of Gulf Oil Spill, Acrimony and Stress. Here’s just a sample, though the whole article is well worth reading:

Whether the four-month effort to kill it was a remarkable feat of engineering performed under near-impossible circumstances or a stumbling exercise in trial and error that took longer than it should have will be debated for some time.

But interviews with BP engineers and technicians, contractors and Obama administration officials who, with the eyes of the world upon them, worked to stop the flow of oil, suggest that the process was also far more stressful, hair-raising and acrimonious than the public was aware of….

So, after reading the NYT piece, ask yourself these questions:

1) If, in the middle of the well-capping operation, you (yes you) had been invited to stop playing armchair quarterback and become part of the team working on a solution, would you have? Assume you had some relevant expertise. Would you have agreed to help? I’m not sure I would have. I would have been seriously reluctant to subject myself (and my family!) to that kind of experience.

2) Assuming you accepted the above invitation, how confident are you that you would have performed well?

3) Finally, setting aside your own willingness and ability to help, do you know of any organization that you are confident could have performed well in a) a task of that technical difficulty and complexity, while b) under similar conditions of intense scrutiny?

None of this is intended to be fully exculpatory. It’s quite likely that there were ethical lapses that contributed to the blowout and the oil spill that resulted. But when we’re thinking about BP’s response to the disaster, our assessment of the company’s performance — and specifically the performance of the thousands of individuals who actually did the work — ought to be informed by an appreciation of the nature of the task performed. Ethical decisions are never made in a vacuum. And in some cases, they’re made in the middle of a hurricane.

Tip the Farmer?

In much of the world, patrons of restaurants and bars tip their waiters, waitresses, and bartenders, in recognition of a job well-done (and in recognition that, in some jurisdictions at least, such jobs are exempted from minimum wage requirements). More recently, tip jars have shown up at places featuring counter service only, like coffee shops. But if you’re going to tip your barista, why stop there? Why not show your appreciation to, say, the farmer who grew and harvested the coffee?

That’s precisely the idea behind this interesting project:

“We’re using technology to put a human face on a commodity product that Americans savor every day. Coffee lovers don’t think twice about providing a well-deserved tip to a barista, so why not use your smart phone or computer to tip the actual farmers who grew your coffee,” said Thaleon Tremain, General Manager, Pachamama Coffee Cooperative. “This isn’t charity, but a chance at a more direct and meaningful relationship with your coffee farmer.”

[That’s from this press release.]

Interesting idea. And far be it from me to object to a voluntary transfer of wealth. But I wonder about just why farmers are being chosen as the beneficiaries. The most straightforward answer, of course, is that the project is the brainchild of the coffee growers cooperative. It’s entirely (and not unreasonably) self-serving. But from a consumer’s point of view, why tip farmers, in particular? If you appreciate your coffee, and want to improve the lives of the underprivileged people who made it possible, why single out farmers? Why the farmer, and not the truck driver who brought the coffee beans to the processing plant? Or the longshoreman who loaded the coffee onto or off of the ship that carried it from Guatemala or Ethiopia? Or the shipping clerk who made sure that the paperwork got done? Chances are, none of these people is well paid.

My guess is that our continuing romanticization of farming makes it easier to be sympathetic to the plight of a (poor) farmer than it is to be sympathetic to the plight of a (poor) shipping clerk. But from an ethical point of view, the choice seems entirely arbitrary.

(For a recent blog entry about a project with similar intentions, see “Progressive Garment Factory, or Charity?”).

Soccer Ball Ethics

Amidst all the excitement over the start of the FIFA World Cup, one of the oddest bits of excitement has surrounded the innovative ball being used in the tournament, namely Adidas’ new “Jabulani.” Although the ball was designed to have superior aerodynamic properties, critics have attacked the ball for the particular way it flies though the air. Here, for example, cites Brazilian goalkeeper Julio Cesar as saying “It’s terrible, horrible. It’s like one of those balls you buy in the supermarket.”

Two things are interesting about this controversy.

One has to do with fairness. The controversy over the Jabulani — the ball that all teams will play with during the tournament — reminds us that the “level playing-field” metaphor so often appealed to in business is a sporting metaphor. It’s a reference to the fact that we think it desirable, generally, to make sure that no team has an unfair advantage. We want a level playing-field because if we play on a hill, one team is seriously disadvantaged by having to attempt to advance the ball up-hill, which requires considerably more effort. The point generalizes to any factors (including changes in the game) that give one side an unfair (dis)advantage. A change in the game is one thing, but a change that creates a differential advantage is quite another. And with regard to the Jabulani, even some critics have admitted that the fact that this change affects everyone equally mitigates the criticism. As English goalkeeper David James put it, “It’s horrible, but it’s horrible for everyone.”

But it’s worth noting the limits of this level-playingfield argument. While it’s true that all teams are subject to the same change, it’s not true that everyone is affected equally. First, it seems to be goalkeepers that are complaining most, suggesting that there’s a differential impact on them compared to other players — and that matters, at very least in terms of the ego of goalkeepers vs the egos of those scoring the goals. (In fact some suspect that this is an intentional outcome of the change in the ball: it will result in more goals, and hence more excitement, hence making it a better TV sport for North American viewers in particular.) Second, it’s not clear that all teams will be affected equally. Particular ball characteristics are liable to suit some teams’ strengths and strategies better than others. So why the “field” may be “level” at a superficial level, we may need to look deeper if we’re really interested in deciding whether this particular change is, in fact, a fair one.

The second interesting thing about the controversy has been the response from Adidas, the company that designed the ball. The response from Adidas has mainly focused on the science, and on pointing out that change is always difficult at first. But Adidas also had a more interesting defence, namely accusing (some) critics of conflict of interest. (See this definition of ‘conflict of interest’.) In particular, the claim is that most of the critics are subject to a possible financial bias. According to this story,

[Adidas spokesman Brueggen] pointed out that if you look closely at the players and goalies making these accusations you’ll notice one common thread among them: the all have contracts with Adidas’ competitors.

Now certainly not all critics have been affiliated with Adidas’ competitors. The soccer-gear website ‘Soccer Cleats 101,’ for example, reviewed the Jabulani back in January, and expressed some of the same concerns. Still, it’s an interesting accusation. And as always with such accusations, interesting questions arise. First, can Adidas’ claim be backed up empirically? If we actually count up the critics and look at what companies they’re sponsored by, will we see the pattern that Adidas claims? If Adidas hasn’t done such a tally (but is simply working from a rough impression) is it fair to make the accusation? Is the suspicion enough? And if we do confirm such a pattern of bias, what’s the specific explanation for it? Is it a matter of players consciously promoting the interests of companies they’re affiliated with, or is it more likely to be a more subtle, subconscious bias? And, finally — setting aside the fact that professional sport is, itself, a big business — what lessons can we learn from this sports story, and apply to the world of business more generally?

(p.s. Those of you with an interest in ethical dimensions of sports should be sure to check out Wayne Norman’s blog, This Sporting Life.)

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