The Business Ethics Blog

This one’s not about business ethics per se, but about ethics in institutions more generally:
At Ethics Camp, Not-So-Tall Tales From the Dark Side

It’s a story about an

…Ethics Camp, for politicians and public officials here at Santa Clara University.

The two-day camp, at which counselors wore “moral compasses” slung around their necks, was perhaps the most novel effort to create “a culture of ethics and accountability,” said Judy Nadler, a former mayor of Santa Clara and a senior fellow at the university’s Markkula Center for Applied Ethics, the host and sponsor.
…
The camp, which the university plans as an annual event, reflects a growing municipal ethics movement. Over the past five years, for instance, those who serve as “city ethics officers” — there are about 15 now — have joined state and city ethics commissions, federal prosecutors, whistle-blower hot lines and inspectors general in an effort to prevent municipal ethical lapses before they start.

Among items at the camp’s show-and-tell was an Enron ethics T-shirt, bought on eBay, emblazoned with the words “respect” and “integrity.” And instead of synchronized swimming and lanyards, there was talk about creating time for moral reflection and exercises on “taking ethics to the next level.”

Once you get past the idea that “ethics camp” is kind of a corny idea (which it definitely is) this is actually a pretty thought-provoking story. Stuffy ethics professors (like me & most of my friends) are likely to find the camp idea at least mildly cringe-worthy. It lends itself too easily to mental images of happy campers holding hands around the campfire, singing “Kumbayah” and reminding themselves just how, you know, important ethics is. But get over it. Organizations of all kinds — corporations, health care institutions, governments — are desperately searching for ways to build “cultures of ethics.” And in many cases it’s a pressing need. If ethics camp is a way to bring people together to talk about common challenges in a comfortable atmosphere, terrific. Who says all ethics education needs to go on in philosophy classrooms? If attention to ethics is important, then we should be encouraging a lot more open-minded experimentation of this sort.

(p.s. Is it just me, or did anyone else have this initial reaction to that headline: what exactly is “ethics camp,” and how is it related to “ethics kitsch?” I’m pretty sure I’ve seen talks at ethics conferences that would count as “ethics camp.” At least they seemed campy to me.)

Relevant Books:
Ethics and Politics: Cases and Comments
Political Ethics and Public Office
The Ethics Challenge in Public Service : A Problem-Solving Guide
Letters from Camp

Here’s a nice story — aimed at business readers — about the business end of going green: Do You Need To Be Green? (from BusinessWeek Online)

Here’s a taste:

Historically, sporting the green label has helped some small companies gain traction in a crowded market. It has allowed them to charge a premium for their products, often one as high as 20% to 30%. Those hefty markups are one reason many green companies have been profitable: A 2003 report by McKinsey & Co. found a portfolio of green and socially responsible companies returned between 5% and 14% annually in a 10-year period.

That’s likely to change as more big players enter the market, bringing competitors to sectors that haven’t encountered them. The enviable markups that have allowed small companies to become both green and profitable may become as endangered as the spotted owl. The onslaught has already started. France’s Group Danone took majority control of organic yogurt pioneer Stonyfield Farms in 2003, and Colgate-Palmolive purchased Tom’s of Maine in March of this year. Also in March, mega-retailer Wal-Mart Stores said it plans to double the number of organic foods it carries, to 400, and to “democratize” organic food by selling it at lower prices than are now readily available. “Larger producers will aim for volume, pushing organic to the mainstream. That means pricing pressure and prices coming down,” says John Stayton, co-founder and director of the Green MBA program at San Francisco’s New College of California. “There will be winners and losers, the losers being those smaller companies that can’t compete with larger producers.”

This story highlights the fact that going green isn’t just a social movement or a personal decision: it’s also a business decision, and a potential marketing opportunity. We can also see signs in this article of what Joseph Heath and Andrew Potter call The Rebel Sell. That is, it’s important and interesting to keep in mind that some people out there are making a lot of money out of selling groovy, organic, 100% post-consumer eco-friendly low-emission whatevers. To a certain extent, “green” is a brand-name like any other. Environmentally-oriented consumers have to remember that, like any other consumers, they are being marketed to.

Now this is not to downplay the importance of environmentally friendly products and services. Nor is it necessarily to devalue the work done by “green” businesses. If your business niche (your way of making money) is to market eco-friendly products to cash in on the eco-friendliness trend, I think that’s a world away from making your money marketing world-conquering SUV’s to cash in on the competitiveness of egocentric car-buyers. But given that business is becoming more green-savvy, and given that bigger businesses, at least, are turning their considerable marketing power to the promotion of the products they say are green, the coming years will demand a lot of consumers who want to make sure their purchases really are doing good, rather than just boarding the train.

Relevant reading:
Natural Capitalism: Creating the Next Industrial Revolution
Cradle to Cradle: Remaking the Way We Make Things
Green Living: The E Magazine Handbook for Living Lightly on the Earth
Nation of Rebels : Why Counterculture Became Consumer Culture

It’s Friday, so how about something fun:

Officials faulted for not singing karaoke (from Reuters) [Dead link deleted Nov. ’08]

In Vietnam, where karaoke is not only recreational but also business etiquette, failing to show your talent can cost you dearly.

Tien Phong (Pioneer) newspaper reported Wednesday that state oil monopoly Petrovietnam’s financial arm PVFC ordered 21 officials to make “self-criticism” reports for not singing karaoke at a contract-signing ceremony near Hanoi Saturday.

Just how stringent is the ethical requirement to be a “team player?” The Reuters story talks about etiquette, not ethics. But clearly there’s a link. Etiquette (or manners) is in fact closely related to ethics. According to Sarah Buss, manners are a crucial way of signaling that we see others as having value, and as objects of moral concern. “When we treat one another politely,” writes Buss, “we are directly expressing respect for one another….” (“Appearing Respectful: The Moral Significance of Manners.” Ethics 109, July 1999. 795-826.) So etiquette in business — where the trust generated by shows of mutual concern is crucial — is no small matter.

Of course, one of the great things about most bits of etiquette is that they take so little effort. Greeting someone using the correct term of address, or dressing appropriately for business typically implies little burden, and so the benefits clearly outweigh the costs. But that’s not always the case. In the case of the story cited above, proper etiquette apparently required employees (managers, in this case) to spend considerable additional time away from family (i.e., to bear a significand hardship). Whether this is reasonable or not will clearly depend largely upon the terms of the contract — formal or informal — between employer and employee, something about which this news story tells us nothing.

Relevant Books:
Customs & Etiquette of Vietnam
Business Etiquette for Dummies
Karaoke Nights : An Ethnographic Rhapsody
Karaoke, Karaoke, Karaoke!

Here’s an AP story, reported in the Boston Globe: Mine deaths rise with coal price: Worker fatigue from overtime cited as factor

With coal prices at record highs, mining companies have been pushing to increase production, adding overnight and weekend shifts and generating more overtime hours for miners who have some of the most physically grueling jobs in the country.

Industry groups and mine regulatory agencies are wondering if fatigue might be a factor in the sharp increase in coal-mining deaths this year. So far this year, 33 coal miners have been killed on the job in the United States, including 12 in January at the Sago mine in West Virginia and five on May 20 at Kentucky Darby No. 1. That was an increase from 22 coal miners killed for all of 2005, according the federal Mine Safety and Health Administration.

This is interesting enough, on its own, and would make a great workplace health & safety case-study for use in a business ethics class. But wait, it gets better. Next comes a bit about the problems posed by having to balance multiple, competing objectives:

Coal-mine operators have been pressing miners to keep up the pace. In a memo to employees last fall, Massey Energy’s chief executive officer, Don Blankenship, raised controversy by saying production is the top priority.

“If any of you have been asked by your group presidents, your supervisors, engineers, or anyone else to do anything other than run coal…you need to ignore them and run coal. This memo is necessary only because we seem not to understand that the coal pays the bills,” Blankenship wrote.

A week later, Blankenship sent employees another memo, saying safety is the top priority.

From Bloomberg.com: FDA Whistleblower Says Agency Smeared Him Over His Vioxx Views

A U.S. Food and Drug Administration whistleblower who claimed Merck & Co.’s Vioxx painkiller caused 140,000 heart attacks and strokes testified that co-workers at his agency tried to damage his reputation.

“I experienced threats, intimidation and actually what, in my view, appears to have been a very organized and orchestrated campaign to smear and discredit me,” Dr. David Graham said in a May 9 videotaped testimony taken for Vioxx litigation. FDA officials worked “hand in glove” with Merck to tarnish him, Graham said according to a sealed transcript of his remarks obtained by Bloomberg News.

Without prejudging the outcome of this case, it seems like another in the long list of stories about publically-minded whistleblowers who suffer a range of dangers and indignities as thanks.

This story is mostly about accusations of mistreatment of Dr. Graham by the FDA itself, but there seems to be little chance Merck will come out of this with its hands clean. All the charitable donations and other corporate social responsibility endeavours in the world won’t improve drug company reputations if they keep behaving disreputably in their core business practices.

So, here’s one to watch: Hwang Woo-suk, the stem-cell scientist at the heart of a recent research ethics & fraud scandal is looking to get back into the research biz: Hwang Woo-suk Wants to Resume Stem Cell Research

South Korea’s disgraced stem cell researcher Hwang Woo-suk has expressed hope in resuming his research, Hwang’s lawyer said.
“Hwang expressed the hope when he visited a ceremony marking the opening of a law firm Friday,” his lawyer Lee Geon-haeng said. Questioned about the scientist’s detailed plans for research, he briefly answered, “I cannot say because there is nothing specific.”

Once dubbed the “pride of Korea” for his landmark papers on stem cell technology, Hwang was dismissed from Seoul National University after experts and prosecutors confirmed the papers were based on manipulated data.

I doubt any sane public institution will have Hwang, despite his former superstar status. So that leaves industry as his only choice. So, will some daring/desperate venture capitalist jump at the chance? Is there a market for investment in the work of disgraced scientists? Who would trust him with a research budget? Who would risk being associated with the next scandal? Maybe Hwang would be better off making an appearance on Oprah, apologizing to the world, and then going on the speaker’s circuit, lecturing college students on the importance of ethics…

From today’s Washington Post comes a story about a company’s advertising of it’s place in a “corporate citizenship” ranking: Freddie Mac, Becoming a Model Corporate Citizen?

You’d think that being ranked the 38th best corporate citizen in the country wouldn’t be all that much to brag about.

But it is if you’re Freddie Mac, the McLean-based mortgage finance company that is struggling to clean up its books from a $5 billion accounting scandal.

In a news release last week, Freddie Mac crowed that it ranked higher than any other Washington area company that made Business Ethics Magazine’s list of “100 Best Corporate Citizens…”
…
Freddie’s news release didn’t mention its larger cousin across the Potomac, but it was issued a day after Fannie Mae said it would pay $400 million to settle charges by federal regulators stemming from its $10.6 billion accounting scandal.

Here’s the list. [Link updated Nov. ’08] What exactly is the value of such lists, you ask? Good question. One answer is that they give credit where credit is due: some companies manage to earn a hefty profit while at the same time treating people & the environment well, and they deserve to be recognized for doing so. Also, a move up or down the list from year to year can provide either a carrot or a stick to motivate better corporate behaviour. Of course, the methods used for arriving at such rankings is a difficult and controversial issue.
Two rules of thumb:
1) Always read the footnotes.
2) Look for patterns. The fact that company that ranks high on ONE list might be a very good thing, or it might be a fluke of the evaluation method. Companies that consistently rank high on lists employing different evaluative methods deserve serious praise.

Here’s a fascinating resource: Corporate Crime Reporter’s Top 100 Corporate Criminals of the 1990’s

Despite the fact that the 90’s were over more than 6 years ago, the report is still a pretty interesting read:

The point of the list contained in this report, The Top 100 Corporate Criminals of the Decade — is to focus public attention on a wave of corporate criminality that has swamped prosecutors offices around the country.

This is the dark underside of the marketplace that is given little sustained attention and analysis by politicians and news outlets.

To compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow and conservative of definitions — corporations that have pled guilty or no contest to crimes and have been criminally fined.

The 5 firms topping the list (apparently ranked in terms of the size of financial penalties)…
1) F. Hoffmann-La Roche Ltd.
2) Daiwa Bank Ltd.
3) BASF Aktiengesellschaft
4) SGL Carbon Aktiengesellschaft (SGL AG)
5) Exxon Corporation and Exxon Shipping

Actually, what’s most surprising to me about the list is the number of firms I’ve never heard of (or only vaguely recall hearing of). And don’t bother looking for Wal-Mart: it’s not listed. Nor is Enron, of course (since its troubles started after the 90’s). In fact, here’s a fun classroom activity for you business (or business ethics) profs out there: get your class to name 10 “corporate criminals” from the 90’s, and then see how few of them are listed in this report. Then get the class to figure out why.

Some relevant reading:
Corporate Crime Reporter (Magazine)
Corporate Crime (Law and Society Series)
Encyclopedia of White-Collar & Corporate Crime

[Thanks to Joe Heath for bringing the CCR & its report to my attention]

A couple of days ago, from Reuters: Merck cancer vaccine faces Christian-right scrutiny

Merck’s vaccine to prevent the world’s most prevalent sexually transmitted infection sailed through a panel of U.S. health experts, despite early fears of opposition from the Christian Right that it might lead to promiscuity and a false sense of security.

The drugmaker’s efforts to educate Christian groups while touting the vaccine’s top selling point — prevention of cervical cancer — helped win them over.

But Merck may ultimately find itself at loggerheads with those same groups as it seeks to make the vaccine mandatory for school admission, a step considered key for widespread acceptance and one that many of the groups oppose.

Quick list of ethically interesting features of this story:

• The school-vaccination connection. Apparently (and here I’m just repeating what I read on the Women’s Bioethics Project Blog) “the vaccine is more effective when it’s given between the ages of 10 to 15.” Talk about an ethically touchy product to market: one that helps prevent sexually transmitted disease, but which is aimed at kids. Wouldn’t want that job!
• Wow, does the religious right ever have a lot of power in the U.S.! I live in Canada, and find it hard to imaging this story even being an issue, here. Wow. I don’t think Canadian-based companies (often?) have this particular issue to deal with.
• The whole idea of expanding the market for your product by getting it onto lists of state-required vaccinations raises interesting issues. State-enforced vaccination of any kind is not universally popular. And cervical cancer is not exactly the kind of disease for which vaccinating school-kids makes obvious sense on public health grounds.
• Maybe I read too quickly, but I didn’t see any mention of any risks associated with this vaccine. Surely there must be some? And if so, that adds another dimension to the state-enforced vaccination issue. (If you can help me on that question, let me know.)