The Business Ethics Blog

A few weeks back I posted a fun little story about monkey waiters in Japan. A couple of commenters found my comments flippant; after all, is it right for animals to be used in this commercial way?

Now comes another story about a Japanese business making unusual use of animals. Apparently there are cafés in Japan where you can rent a pet — or rather, buy a pet’s company for a few minutes or hours. Here’s the story, from the BBC:
Rent-a-friend in Japan

Lola – or Rora – to give her a slightly more Japanese pronunciation – is a beauty and she knows it.
Customers pay by the hour for her company. Usually they just want to stroke her, but as a special treat for favoured clients, she will lie back in a chair, close her eyes and pose for photographs.
Lola is a Persian cat who works at the Ja La La Cafe in Tokyo’s bustling Akihabara district….

The superficial parallel with prostitution (of the brothel or “massage parlour” type) is pretty clear, and the BBC’s story plays that up.

Is this better, or worse, than using monkeys as waiters? Is there some worry that these dogs & cats are being “used?” Are there psychological dangers (to the animals, I mean) from subjecting them to so many, fleeting, relationships with people?

My friend Paul Gorbould took this picture (recently featured on the Freakonomics blog) and it’s worthy of consideration from a business ethics point of view. The picture happens to have been taken at a public building (at the Joggins Fossil Cliffs, in Nova Scotia), but signs much like this one are popping up at business establishments, too.

As the comments at the Freakonomics blog point out, there are plenty of problems, here. What does “alternative” fuel mean? Is diesel an alternative fuel? If not, why not? What about E85, which is basically a mixture of ethyl alcohol and gasoline? Why should a tandem pickup burning (lots and lots of) E85 get parking priority? How about a hybrid SUV? A hybrid SUV burns more fuel, and is worse for the environment, than, say, an “old fashioned” subcompact car burning unleaded gasoline. Why give it special parking privileges?

But there’s another important issue here: even if it were clear what counted as “alternative” (which it’s not) and even if “alternative” SUVs really deserved special parking (which they don’t) there’s still an issue about what sorts of values, in general, we promote through special parking privileges. Note, for example, that every parking space reserved for alt-fuel vehicles is thereby made unavailable for, say, handicapped parking. Or for parking for pregnant women and new mothers. Or for motorcycles and scooters and bicycles. A business can, of course, have special parking spots for all of the above, and still have room for the rest of us — if they’ve got a really big parking lot. But still, someone has to get the spots closest to the door. In making a move to promote a particular value (like environmentalism), organizations need to think not just about what values they’re promoting, but about what other values they’re de-emphasizing at the same time.

Another interesting twist: an environmental certification system may be behind this silliness. One of the people who left a comment on the Freakonomics blog pointed out that under the Leadership in Energy and Environmental Design (LEED) Certification system, builders get points towards certification if they provide parking for alt-fuel vehicles. The Joggins Building is LEED Certified. It’s unfortunate when well-intentioned certification systems encourage poorly-justified moves like this.

Ethics professors like me are fond of what we call “state of nature” thought-experiments. If you want to understand the value of a particular ethical standard (or the value of ethics in general) try to imagine what life would be like “in the state of nature” — that is, try to imagine what life would be like in a world without it. For example, if you want to understand the importance of telling the truth, imagine a world in which no one ever felt required to tell the truth — a world in which no one ever felt any compulsion to be truthful.

Sometimes, of course, our imaginations fail. We’re so used to taking certain ethical standards for granted that it makes it hard to imagine life without them. That’s especially true with regard to business ethics: the standards are often complicated and the role they play in commerce often isn’t obvious. In some cases, though, we don’t need to rely on our imaginations, because we can look to less-developed economies where business ethics in the formal sense is still being developed.

See, for example, this story from the Times of India: Drug cos associations agree to strict enforcement of ethics code

On Tuesday, representatives of drug company associations agreed to the need for the creation of a combined code of ethics and its effective enforcement.

At a meeting with pharmaceutical secretary Ashok Kumar, under the chemicals and fertiliser ministry, the representatives said that most of them followed a code of ethics. They, however, “admitted” that some pharma companies did not have such a code.

They assured Kumar that they will get back to him within a month with a uniform code of ethics that will be followed by all drug companies….

The basic idea, here, is that reliable ethical standards for companies aren’t just good for consumers — they’re good for the companies, too. Pharmaceutical companies in India have realized this, and so they’re doing their best to convince the Indian government that they’re committed to ethics. Why? Three main reasons. First, while you can obviously make a lot of money in the short run by doing business unethically, you can usually make even more money, in the long run, by doing business ethically, and building a reputation as a trustworthy industry.

Secondly (though this isn’t mentioned in the story), Indian pharmaceutical companies need to establish a reputation as ethical because they want to be able to form partnerships with wealthy North American and European companies, and to gain access to the lucrative North American market. India is not a wealthy country. Most of its citizens can’t spend a lot on pharmaceutical products. But an Indian company that can show itself to be trustworthy is more likely to get the chance to sell its products in to relatively affluent North Americans. There is big, big money to be made there.

The third reason is suggested here:

[The drug companies] requested the government to refrain from any legal intervention in the matter and leave the matter to be sorted out by the pharma corporate bodies.

Government in general has an obligation to protect consumers. But when your company or industry is perceived as ethical, you can make a much better argument in favour of government taking a hands-off approach and allowing industry a significant degree of self-regulation. Of course, industries don’t always do a good job of making and enforcing their own rules; only time will tell how well the Indian pharmaceutical industry does in this regard. But in this story we see a nice example of the very genesis of a set of ethical rules within an industry, and an illustration of the idea that business ethics isn’t just about putting external constraints on businesses but also very often about the kinds of rules to which businesses have good reason to commit themselves.

I spotted this sign at a large retail store on the outskirts of Ottawa a couple of days ago:

More specifically, the sign was taped to the checkout counter.

Now, a couple of things strike me.

1) The sign is at least borderline rude to customers. Obviously, it’s aimed at the obnoxious few who have the poor judgment to take out their Christmas shopping frustrations on sales clerks. But the sign is addressed to everyone. I’ve never been rude to a checkout clerk in my life. Why are they reminding me to be nice?

2) On the other hand, the sign also represents a laudable effort by management to make good on their obligations to their employees. Employees deserve to be treated with respect, and that includes by customers. It may be true that “the customer is always right,” but employees shouldn’t have to be subject to rudeness and abuse. Managers who stick up for their employees should be congratulated.

3) Finally, I can’t help thinking that a sign of this sort is a relatively bad way to pursue this particular goal. I mean, at least it’s printed professionally and not hand-written. But still. Is this the best social engineering we can do? Isn’t there a more effective method of reminding people of their manners? I think in general when you see signs taped to things (think how many times you’ve seen a hand-scribbled sign that says “Please use other door”) it’s an indicator of a failure of design, either physical or organizational.

Some companies start out on shaky ground, and their basic business model just makes it harder for them defend themselves when trouble comes along.

Case in point: this all-around depressing story from the Des Moines Register, Benefits awarded to beaten Hooters waitress

A waitress was barred from working at the Hooters restaurant in Davenport after a violent physical attack left her bruised and unable to meet company standards for maintaining a “glamorous appearance.”

The waitress alleges she was fired after taking time off to recover from the assault. Hooters officials say the waitress abandoned her job, but also say that the woman’s bruised body made her temporarily ineligible to work as a “Hooters Girl.”

An administrative law judge who presided over a recent public hearing dealing with 27-year-old Sara Dye’s request for unemployment benefits ruled against the company and awarded benefits to Dye. Judge Teresa Hillary found that Dye’s “inability to work due to bruises” did not amount to workplace misconduct.

I’ll limit myself to two observations, here:

1) Hooters must be far from the only employer that insists that employees maintain a “glamorous appearance.” I suspect a serious beating would be just as likely to get you deemed unfit for work on Broadway, or as an actor or actress in just about any setting. And probably in lots of service industry jobs. So it’s not merely because of Hooters’ objectification-of-women business model that they ended up in this situation. Much more palatable businesses could face the same problem.

2) I suspect most people would be more sympathetic to Hooters, in this case, if there were evidence that the company — aside from its assertion that the bruised employee was unfit to work — had gone out of its way to be (or even been minimally) supportive, or had helped its employee get medical help, police help, and/or counselling. Firing the woman looks much worse when it seems to have been the company’s only reaction.

I blogged back in November about the legal status of kidney sales. In most places, it’s illegal to sell kidneys (and other organs). But it’s permissible — indeed, encouraged — to give them away, i.e., to donate them.

But the line between gift giving and commerce is not entirely clear. There have always been concerns that some people might “donate” organs and then expect (or simply receive) lavish “gifts” (perhaps even in the form of cash) from grateful recipients. Here’s a different kind of case that appears to put pressure on that distinction. What, exactly, should the returns policy be for a gift?

The newswires & the blogosphere are a-buzzin’ with this story:
Husband who donated kidney to wife wants it back now that they’re divorcing

When his wife needed a kidney transplant, Richard Batista — a doctor — gave her one of his, attorney Dominic Barbara said.

Now that Dawnell Batista has filed for a divorce, Richard Batista wants his kidney back as part of his settlement demand.

Or, Barbara said Wednesday, his client wants the value of that kidney: An estimated $1.5 million.

The case is being handled in Supreme Court in Mineola, N.Y.

As the ethicists (Caplan and Veatch) quoted in the story rightly point out, the request is ridiculous. A gift is a gift, and there’s neither legal nor moral grounds for Dr. Batista to ask for the kidney back. Now, Batista has said that, in lieu of the kidney, he’d be happy to have the cash value, instead, which he’s pegged at $1.5 million. But that makes no sense, either: a kidney has no cash value, at least not in North America (and the value in places where kidneys can legally be bought is much lower than that). And a calculation of the value of this particular kidney would have to take into account that it’s already been transplanted once, and I’m guessing re-transplanting it back into its original owner would not have a terrific likelihood of long-term success. So its value would be lower. Anyway, the whole story is pretty ridiculous. I guess some people just love publicity.

But we can extrapolate from the silly story to raise some interesting questions about what an actual, regulated market in kidneys would or should look like. (cf. James Stacey Taylor’s 2005 book, Stakes And Kidneys: Why Markets In Human Body Parts Are Morally Imperative) What would the returns policy be, in such a market? Would different vendors have different policies, and compete on that basis? What happens when the cheque bounces? Would the buyer be able to get a refund (a partial refund?) if she found out later that the kidney had not been well cared-for prior to transplantation, and was hence less healthy than originally thought? I suppose in some ways, a market in organs would be like a market in implantable medical devices (like pacemakers and steel pins to hold shattered bones together). Then again, a kidney, or a heart, isn’t a manufactured, mechanical device in the usual sense. Human body parts are hard to disentangle from human emotions, and that might well affect the terms on which we allow them to be traded.

For students and observers of business ethics, it’s a good exercise to imagine a market that does not yet exist, and imagine what ground-rules would, or should, govern that market.

When going “green” becomes the latest in corporate fashion, who better to jump on the bandwagon than, well, the fashion industry?
Check out this website, from the Fur Council of Canada, which claims that if you really love the environment, you’ll show it by wearing fur: Furisgreen.com

A new vision of fur, for an Eco-Conscious World!

Fur is warmth, comfort and beauty. For many, fur is the ultimate luxury. But using fur also makes sense if we want to protect nature while supporting people and cultures.

The reference to “people and cultures” is a reference to the fact that for some people in rural regions (and especially native populations in the far north), fur-trapping is a major source of income and a way of life. But how is fur “green?”

The website admits that “few products can be 100% “green” (if only because fossil fuels are used to bring them to the market),” but “environmentally friendly apparel and accessories should be made from natural materials” that have certain characteristics, characteristics that animal furs have. Namely, according to the website…

• Fur is Renewable
• Fur is Durable, long-lasting
• Fur is Reusable, recyclable
• Fur is Biodegradable
• Fur is Energy & Resource efficient

(The site has pages of information about each of those claims. Plenty of fodder for fact-checking by skeptics.)

The reason this “fur is green” campaign will be jarring to some is that there tends to be considerable overlap between a) being an avowed environmentalist and b) being against the fur trade. It may strike some as a form of “greenwashing” — but that would be unfair, if the environmental claims made on behalf of fur are sound.

But evaluating the fur business, from an ethical point of view, is more complicated than that. There are really 3 key issues: environmental impact, support for indigenous cultures, and animal cruelty. I suspect (but it’s just a guess) that the Fur Council can make a pretty good case in two out of three of those areas. Can we find agreement on which two, and on which two matter the most?

We hear a lot of talk about “free” markets. Some people tout the virtues of free markets; others lament our reliance on free markets in areas where government intervention might work better. But of course very few (if any) markets are truly “free”, in the sense of being utterly unregulated by any outside authority. Most economies are what economists refer to as “mixed” economies, characterized by a mixture of private and public ownership of the means of producing various kinds of goods. In Canada and the U.S., for example, most consumer goods are produced by private companies, but mail delivery, national defense, and some kinds of insurance are provided by government.

Here’s an interesting article (from the NY Times) about just why it is that you don’t want markets to be too free.
For Afghans, a Price for Everything, and Anything for a Price

KABUL — When it comes to governing this violent, fractious land, everything, it seems, has its price.

Want to be a provincial police chief? It will cost you $100,000.

Want to drive a convoy of trucks loaded with fuel across the country? Be prepared to pay $6,000 per truck, so the police will not tip off the Taliban.

Need to settle a lawsuit over the ownership of your house? About $25,000, depending on the judge.

“It is very shameful, but probably I will pay the bribe,” Mohammed Naim, a young English teacher, said as he stood in front of the Secondary Courthouse in Kabul. His brother had been arrested a week before, and the police were demanding $4,000 for his release. “Everything is possible in this country now. Everything.”

The result?

The corruption, publicly acknowledged by President Karzai, is contributing to the collapse of public confidence in his government and to the dramatic resurgence of the Taliban…

Not only that, but it means that Afghanistan is the kind of place where it’s likely terribly difficult to set up and maintain a profitable business — the kind that’s beneficial, in the long run, to a wide range of stakeholders. And it’s positively not the kind of place that’s likely to attract crucial foreign investment. Not only does bad money drive out good; it seems bad markets are likely to drive out good ones, too.

I noted yesterday that I’d been recognized as one of the “100 Most Influential People in Business Ethics 2008,” by Ethisphere Magazine. It’s an honour, of course, and gratifying to know, after 3 years of blogging, that there are people out there who appreciate what I do and believe it has some impact.

But one of the things I do on this blog is ask critical questions about ethics awards and commendations. (See here, here, and here for example.) So, it behooves me to ask a few critical questions and make a few critical comments about this ranking, too.

For my work on this blog, I’ve just been named one of the “100 Most Influential People in Business Ethics 2008” by Ethisphere Magazine. I’m #81.