The Business Ethics Blog

The Simpsons & Jon Stewart have so numbed me to irony that I’m not sure I even recognize it any more.
Anyway, this story strikes me as ironic.

A senior Wal-Mart executive, Thomas M. Coughlin, apparently covered up the fact that he was stealing from the company by claiming that the expenditures were for a blatantly unethical (and maybe illegal) anti-union project. Oddly, the anti-union project apparently never existed. So, fake wrong-doing covered for real wrong-doing.

The full story: “Was Wal-Mart’s Anti-Union Image Used as a Shield?”, by Michael Barbaro @ the New York Times.

The union project, according to Mr. Coughlin, was a secret scheme, approved by senior Wal-Mart executives, to pay union members for information about which stores they planned to organize.

A year later, when Mr. Coughlin was accused of misusing more than $500,000 in company funds through fraudulent reimbursements, the union project became the heart of his defense, and it immediately transformed the case into a symbol of anti-unionism on the part of Wal-Mart. Reporters seized on it, labor groups issued a flurry of angry press releases about it and the National Labor Relations Board began an investigation into it.

But Mr. Coughlin’s agreement to plead guilty to federal wire fraud and tax evasion charges, which two people close to the negotiations disclosed on Friday, and the lack of evidence that he used the missing money to spy on unions raise doubts as to whether such a project even existed.

Apparently my posting on Microsoft’s complicity with the repressive Chinese government was not alone in the world of business ethics blogs.
Check out:
“Microsoft Bows to Chinese Censors” over at the Principled Profit blog
“Microsoft Going Red?”, at the Credo Advisors blog

John Boatright, who teaches business ethics at Loyola University, is well-known & respected in the world of business ethics.

In this story, “Bad barrels help grow bad apples” Diane Stafford (of the Kansas City Star) interviews Boatright regarding his thinking on whether the blame for corporate wrongdoing should be placed mostly on individuals, or on organizational structure.

It’s not an in-depth article, but Stafford does a nice job of letting Boatright do what he does so well: make clear & concise statements that say smart things about hard ethical problems.

More of Boatright’s work:

Ethics and the Conduct of Business (4th Edition) (2002)
Ethics in Finance (1999)

[Bias alert: I hate SUV’s. Don’t assume this post, or any post by me on SUV’s, is a balanced, unbiased, academic assessment. It’s just my conclusion based on the available evidence.]

Here are some anti-SUV resources:

noSUV.org, which includes lots ofAnti SUV news
Anti-SUV t-shirts (actually, also some pro-SUV t’s there)
Anti-SUV: Reasons You Should Not Own A Sport Utility Vehicle
Yahoo’s directory of anti-SUV resources

I just found this neat little commentary by William Raspberry called “Corporate Crooks Take Lead in Teaching Executive Ethics.”
The author is commenting on the now-common practice of having corporate criminals and disgraced executives speak on ethics. This practice is generally seen as serving two purposes: one is that it provides an object lesson for business students and the business world more generally, and the other is that it forces the miscreant to recount, publically, the wrong they’ve done.
Raspberry’s skepticism about this practice is well taken. I must admit that I roll my eyes every time I see another flyer for one of these events. But Raspberry’s criticism misses one key point: when key figures from well-known scandals give talks, people are likely to actually show up. Given the choice, who would you rather hear give a talk on corporate ethics…former Enron CEO Jeff Skilling, or some business ethics professor? So, as much as we might doubt the direct educational value of what a corporate criminal has to say, at least there’s a good chance that a public talk by such a person will generate discussion and draw focused attention to serious issues.

Here’s a story from CTV news about students at McGill university protesting a talk given by Paul Coffin, who was convicted for his part in the federal sponsorship scandal.

The first man charged and convicted for his part in the federal sponsorship scandal served part of his sentence Tuesday by speaking to a group of would-be business leaders at McGill University.

Former advertising executive Paul Coffin was a guest speaker at a management class on the Montreal university campus Tuesday. Such public speaking engagements are part of his conditional sentence.
For the small but boisterous group of protesters who gathered outside the classroom however, Coffin’s mere appearance was an affront.

“The guy should be in jail,” one incensed protester told CTV News. “He stole our public funds and got the trust of the Liberal Party to steal our money and the only sentence he gets is getting into the schools and trying to convince people that what he did was wrong?”

“He should be in jail, not at McGill.”

Here’s a story from today’s New York Times, about Microsoft having taken action, at the request of the Chinese government, to censor a blogger using one of their services. Here are a few key paragraphs:

BEIJING, Jan. 5 – Microsoft has shut the blog site of a well-known Chinese blogger who uses its MSN online service in China after he discussed a high-profile newspaper strike that broke out here one week ago.

The decision is the latest in a series of measures in which some of America’s biggest technology companies have cooperated with the Chinese authorities to censor Web sites and curb dissent or free speech online as they seek access to China’s booming Internet marketplace.

The shutdown of Mr. Zhao’s site drew attention and condemnation this week elsewhere online. Rebecca MacKinnon, a fellow at the Berkman Center for Internet and Society at Harvard Law School, wrote on her blog, referring to Microsoft and other technology companies: “Can we be sure they won’t do the same thing in response to potentially illegal demands by an overzealous government agency in our own country?”

Robert Scoble, a blogger and official “technology evangelist” for Microsoft, took a public stand against the company’s action. “This one is depressing to me,” he wrote on Tuesday. “It’s one thing to pull a list of words out of blogs using an algorithm. It’s another thing to become an agent of a government and censor an entire blogger’s work.”

Another American online service operating in China, Yahoo, was widely criticized in the fall after it was revealed that the company had provided Chinese authorities with information that led to the imprisonment of a Chinese journalist who kept a personal e-mail account with Yahoo. Yahoo also defended its action by saying it was forced to comply with local law.

It is generally true that, when conducting business overseas, companies have an ethical obligation to comply with local law. But there are exceptions. There are cases when following the law — at home or abroad — is the wrong thing to do.

Thomas Donaldson has a very nice perspective on the issue of when/whether to follow local laws (or more generally, local standards) when conducting business abroad. Donaldson has a book on this topic, The Ethics of International Business (OUP, 1991). But I’m more familiar with his article “Multinational Decision-Making: Reconciling International Norms.” Roughly, Donaldson’s heuristic for dealing with conflicts between home-country standards and host-country standards goes like this. We can roughly divide such conflicts into two types: 1) those that are rooted in economics (e.g., some countries can’t afford to implement & enforce the sorts of environmental standards that Westerners take for granted), and 2) those that are rooted in basic cultural differences (e.g., Japan’s resistence to putting women into senior management positions.) Donaldson says these two types of situations should be handled differently.
For Type 1 situations, Donaldson advises managers to ask themselves this question: would the “folks back home” accept the host-country’s lower standards if they themselves faced a similar economic economic situation. If they would, then it may be permissible for the company to follow the lower, local standard in the present situation.
For Type 2 situations, Donaldson advises managers to ask themselves these two questions, in THIS order. First, is it necessary to engage in this questionable practice, in order to do business in this country? If not, don’t do it. If it does seem necessary, proceed to the next question. Second question: does engaging in this practice violate fundamental human rights? If not, it may be permissible to follow local standards. But if doing so would violate human rights, then don’t do it. Ethically, you ought to cease operations & get out of the country.

This is where the rubber hits the road, as far as ethics is concerned. Companies like Microsoft and Yahoo should do the right thing, or get out.

(Further to yesterday’s posting on SUV’s & safety…)

Apparently, even if people aren’t deterred from buying SUV’s by the big vehicles’ manifestly anti-social qualities, nor by safety considerations, nor by environmental considerations, we can still count on people to respond to basic economic incentives like a few cents’ difference in the price of gas.
See this story in today’s New York Times: A Comeback for the Car Species

Last year will go down as the one when cars made a comeback and sport utilities stumbled.

For cars, long overshadowed by hefty pickups and powerful S.U.V.’s, the share of the American market climbed for the first time since 1992, according to figures from the automobile companies. Cars picked up about one percentage point, giving them 45.1 percent of the market, their largest share in two years.

“Cheap fuel in America is a thing of the past,” said James Press, president for sales operations for Toyota in the United States. “There’s a lot more awareness of the impact of a gallon of gasoline.”

For those of you who didn’t know already, there’s growing evidence against the safety of SUV’s.

The latest is the result of a study by Partners for Child Passenger Safety, a research project sponsored by Children’s Hospital of Philadelphia and State Farm Insurance Co.
Here are a couple of media stories reporting on it:
SUVs less safe than passenger cars: study from CTV news
SUV, child safety myth dispelled in latest review (Kansas City Star)
Children’s risk triple in SUV rollovers
Some snippets from the CTV story:

The research was completed by The Children’s Hospital of Philadelphia and found that SUVs have a higher risk of rolling-over during a crash, which supercedes any safety benefits that come from the fact the vehicles are larger and heavier than regular cars.

“SUVs are becoming more popular as family vehicles because they can accommodate multiple child safety seats and their larger size may lead parents to believe SUVs are safer than passenger cars,” said Dennis Durbin, a physician at The Children’s Hospital, and co-author on the study, in a release.
“However, people who use an SUV as their family vehicle should know that SUVs do not provide superior protection for child occupants.”
Durbin said proper restraints that suit a child’s size and age are critically important in SUVs, because of the increased risk of rolling over during a crash.

Here’s an entire website I found, questioning SUV safety.
Here’s a related report from Road & Travel Magazine.

Suggested reading: High and Mighty: SUVs–The World’s Most Dangerous Vehicles and How They Got That Way.

[This is a follow-up to my previous posting.]
One of the top scholars in business ethics, Lynn Sharp Paine, has in fact commented on the ethics of video game marketing. In her generally excellent book, Value Shift, Paine is pretty critical of “point-and-shoot” games, citing them as an example of “the financial rewards of moral indifference”. (p. 58) Here’s an excerpt from p. 59:

According to one expert in this field, these games…erode resistance to killing. In the process, they also increase players’ comfort with lethal weapons, desensitize them to the weapons’ deadly effects, and develop their marksmanship skills.

If this expert is only partially correct, the widespread and indiscriminate use of point-and-shoot games should be a matter of serious moral concern. Restraint in the use of force against the innocent…is a fundamental tenet of civilized society, and activities that undermine this restraint should be undertaken with caution. Even if these games had never been associated with any school killings, however, their widespread use would still be troubling. Whatever entertainment value they might provide appears to be more than offset by the risks of dulling their young players’ moral sensibilities and desensitizing them to the power of lethal weapons. At a minimum, moderation should be advised.

Now, the available evidence suggests that video games do not generally produce serious anti-social behaviour. Of course, the existing data are also consistent with the reasonable hypothesis that while a) most kids won’t be turned into gun-toting maniacs by point-and-shoot video games, b) an unstable minority of them may well be. That poses a serious ethical challenge. Are producers of these games responsible for their effect on a small minority of users? Of course, many products have unusual (but statistically predictable) negative effects on a minority of users. Just about all pharmaceuticals, for example, had nasty side-effects for at least some users. The difference, of course, is that many pharmaceuticals have significant benefits, and it’s socially and individually rational to accept some risk in return for anticipated benefits. Point-and-shoot video games are unlikely to be able to claim a similar cost-benefit ratio.

So, it’s unlikely that we’ll be able to defend video games against the claim that they’re harmful to a vulnerable few based on arguments about net benefits. So, what about appealing to a different ethical value, like autonomy (freedom of choice)? The argument here would be that it’s wrong to restrict the range of entertainment options open to the entire population of gamers in order to prevent the (possible) negative impact on a vulnerable few. My guess is that this argument is going to carry the day, at least until someone produces more concrete evidence of a direct causal link between point-and-shoot video games and ANY anti-social behaviour (even if only among a troubled few players).

(Thanks to Wayne Norman for reminding me of this passage in LSP’s book.)

Are video games dangerous? More to the point (for purposes of this blog), is there enough evidence that video games are dangerous to make the marketing of them to kids an ethically questionable business practice?

Here’s a good, brief look at the available evidence: Reality Bytes: Eight Myths About Video Games Debunked, by MIT prof Henry Jenkins.

Then again, who needs actual “evidence.” See these comments by a Senator Hansen Clarke at an inquiry in Michigan. Here’s a wee taste:

Regarding the evidence, we don’t need 1,000 studies to demonstrate that violent video games are not good for our children. The evidence is mounting every day, and I believe that we will have the proof.