Archive for the ‘virtue’ Category

Most Hated American Companies Of 2010

The corporate world is certainly subject to plenty of criticism, and even hatred. But which companies are hated most?

Here’s one look at that question, from 24/7 Wall St.: The Fifteen Most Hated American Companies Of 2010

Customers, employees, shareholders and taxpayers hate large corporations for many reasons. 24/7 Wall St. reviewed many of these to choose the 15 most hated companies in America.

We examined each company based on six criteria….

(Note that the title “Most Hated” actually understates the sophistication of the ranking method used here, which includes measures of employee satisfaction, media coverage, total return to shareholders, and more.)

Interestingly, several of the companies on this “most hated” list have appeared on the Business Ethics Blog before.

As you read through the whole list, it’s worth noting more generally the role that unethical (or at least ethically controversial) behaviour plays in generating hatred.

Ethics and Stupidity

Dumb and DumberWhy do people do bad things? It’s an ancient question. Certainly, some people do bad things simply because they are bad people. Psychopaths and sociopaths exist, though thankfully they are very few. Whether those few should be classified as “evil,” or as “mentally ill,” or both, is not clear to me. Either way, they certainly have the capacity to do evil. But sometimes, surely — maybe quite often — people do bad things stupidly, rather than out of evil intent. Sometimes, as I’ve blogged before, people do bad things because they allow themselves to use invalid excuses. It’s likely that some people know (in their heart of hearts) that they’re using lame excuses. But probably some people sincerely believe those excuses, and simply don’t understand that their reasoning is flawed.

“Hanlon’s Razor” is the name for an adage attributed to one Robert J. Hanlon. It says the following:

Never attribute to malice that which is adequately explained by stupidity.

It’s a good rule of thumb, not least because it is so often true that bad outcomes owe more to poor decision-making than they do to evil intent.

Of course, if what we’re really interested in is why bad things happen, attributing it to stupidity rather than malice just pushes the question down one level. If so many people act stupidly, why?

There are at least 3 kinds of situations in which dumb things happen:

  • Some dumb moves are made by people who, well, are not that bright. The truth is that people have different levels of ability. We don’t all have equally-good judgment, and we’re not all equally good at foreseeing the consequences of our actions. In a corporate context, good hiring practices are supposed to weed out the untalented. But talent pools are always limited. And remember: screwups can in principle occur anywhere within a corporate hierarchy, so there’s no position so unimportant that a company can simply afford to fill it poorly.
  • Some dumb moves are made by people — maybe even smart people — who lack the relevant skills. In some cases, that may mean they lack the relevant technical skills. If you’re not an accountant, for example, you simply may not understand the consequences of certain kinds of bookkeeping decisions. But people can also lack the skills to assess, for example, the quality of their own arguments and thought processes. I teach a course on Critical Thinking, and believe me, people are not all equally good at spotting fallacious arguments or flawed patterns of thought. But it’s a skill-set that can be taught, and learned.
  • Some “dumb” decisions get made as a result of one or another of a bunch of well-studied cognitive biases. Those biases — the subject of an enormous body of psychological literature — go by names like “anchoring,” and “confirmation bias” and “the framing effect,”. (Confirmation bias, for example, essentially means that we have a tendency to accept new evidence when it confirms what we already believe, and to reject new data that challenges our beliefs. It’s dangerous, and we all do it.) Basically, cognitive biases are a bunch of persistent, and generally faulty, trends in the way humans think. They are ways in which we are pretty consistently subject to patterns of error in our thinking. Alarmingly, these cognitive biases tend to apply to smart people, too, as well as to people with the kind of technical training that you might hope would help them avoid such biases.

(For a bit more on why individuals do dumb things, see this Wired piece on Why Do Smart People Do Stupid Things?)

So, there are lots of reasons why people — even smart people — end up doing dumb things. And sometimes those dumb things will have evil (or just bad) consequences. It’s worth understanding the difference between bad things that happen because someone did something bad, and bad things that happen because someone did something dumb, though in some cases the line will be pretty fuzzy.

And I suspect Hanlon’s Razor holds true of organizations just as it does for individuals, and maybe more so. So really, we need to distinguish between why individuals act stupidly, and why organizations do. That’s a topic for another day.

Modern Ethics: More Than Personal Integrity

I blogged two weeks ago about Obama & Business Ethics.

Today, Wayne Norman (of Duke University’s Kenan Institute for Ethics), has this very good opinion piece in the Durham, NC News & Observer: “Honor and conflicts in the new age of ethics”.

Here are the first few paragraphs:

On his first full day in office, President Obama chose to shine the spotlight on “Ethics Commitments by Executive Branch Personnel.”
The executive order issued Jan. 21 requires all those appointed during Obama’s presidency to an executive agency to sign a pledge contractually committing them not to accept gifts from registered lobbyists or lobbying organizations, among other similar restrictions.
These reforms are primarily concerned with avoiding conflicts of interest and restoring public trust in Washington. They do not in any way lie along a traditional right-left continuum, but they do represent a paradigm shift in values, one that might best be described as “generational.”
Older generations of politicians cling to the belief that they can ensure government integrity merely by appointing honorable people to sensitive offices, even if these people have outside interests (say, had just worked or lobbied for a firm they are now supposed to regulate).
Obama and much of his team have come of age in an era which recognizes that organizational and professional ethics cannot be expected to piggyback entirely on the virtues and character traits of good individuals. In other words, designing and running an ethical organization now requires concepts and categories of values that nobody learned at their mother’s knee.

Wayne’s overall point is obviously not just about the Obama administration. It’s about the right approach to ethics in any complex institutional setting. Once upon a time, the best advice we could give to leaders and administrators was, “Do your best. Be honest. Don’t give in to temptation.” And that’s still good advice. But increasingly, good ethics has to be not just about the integrity of individuals, but about how to structure institutions so that they work as well as possible, in spite of the foibles and frailties of the best among us, and the machinations of the worst.

(Note: Wayne & I co-authored a chapter on Conflict of Interest for the forthcoming Oxford Handbook of Business Ethics. Wayne is also the author of Negotiating Nationalism: Nation-Building, Federalism, and Secession in the Multinational State.)

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