The Business Ethics Blog

You may have noticed that this blog is called “The Business Ethics Blog.” So, clearly my interest is in Business Ethics. But a lot of the people reading this blog are probably more used to talking about “Corporate Social Responsibility” or “Sustainability.” And some of you may really be interested in “Corporate Citizenship” or “Values-Based Management” or (oh no!) the so-called “Triple Bottom Line.”

What these terms all have in common is that they’re all ways of talking about doing the right thing in business. But why are there so many different vocabularies for this? Does it matter which one we use? Are some better than others? Why?

Wayne Norman and I recently gave a presentation on this topic, at the International Center for Corporate Accountability’s 2nd International Conference, on Globalization and the Good Corporation (June 26 – 28, 2007). We’re working that presentation into publishable form right now.

In the meantime, here’s a bit of data regarding the diversity of vocabularies. Here’s a webpage I’ve set up showing the range of terms used just within one single industry — the pharmaceutical industry — to talk about what I would call simply “business ethics.”
Diversity of Normative Vocabularies: The Pharmaceutical Industry

From the NY Times: Kellogg to Phase Out Some Food Ads to Children

Froot Loops’ days on Saturday morning television may be numbered.
The Kellogg Company said yesterday that it would phase out advertising its products to children under age 12 unless the foods meet specific nutrition guidelines for calories, sugar, fat and sodium.
Kellogg also announced that it would stop using licensed characters or branded toys to promote foods unless the products meet the nutrition guidelines.

The change is apparently an attempt to fend off lawsuits:

The policy changes come 16 months after Kellogg and Viacom, the parent company of Nickelodeon, were threatened with a lawsuit over their advertising to children by two advocacy groups, the Center for Science in the Public Interest and the Campaign for a Commercial-Free Childhood, and two Massachusetts parents.

Even so, this move puts Kellog out in front of an industry that has generally done too little to self-regulate.

See also this blog entry from last year: Ethics of Advertising Bad Food to Kids.

I’ve never understood why any human being over 8 years old would want to wear these things, though I’ve been willing to concede that if (if!) they have some orthopedic value, then I’ll make an exception for, say, nurses and people with back problems.

Now it turns out that Crocs aren’t just ugly (really, really ugly) but also possibly dangerous:

From Maclean’s: The shocking truth about Crocs: Why some hospitals are moving toward a ban on the colourful foam clog

An increasing number of hospitals and health centres are moving toward banning Crocs and Crocs knock-offs from their facilities for fear the shoes have endangered both patients and staff. The main offenders appear to be the popular Beach and Cayman models, which have holes on top, side vents and a back strap rather than a closed heel. They allegedly have been responsible for infection control hazards because bodily fluids such as blood have spilled into the holes. Staff have reportedly twisted ankles because of the open back. And staff reaction times are said to be compromised because it’s suspected that clogs are more difficult to run in than traditional hospital footwear. The most heinous charge against Crocs and similar shoes is that they act as “isolators,” enabling enough static electricity to be generated to knock out medical equipment — including respirators in maternity wards.

The manufacturers, naturally, deny the static electricity problem. No word yet on whether they’ll plead guilty to the charge of ugly.

From the NY Times: After Sanctions, Doctors Get Drug Company Pay

Summary:
The NYT story is about physicians who, despite having been sanctioned either by professional regulatory groups or by courts, continue to be employed by drug companies.

A decade ago the Minnesota Board of Medical Practice accused Dr. Faruk Abuzzahab of a “reckless, if not willful, disregard” for the welfare of 46 patients, 5 of whom died in his care or shortly afterward. The board suspended his license for seven months and restricted it for two years after that.
But Dr. Abuzzahab, a Minneapolis psychiatrist, is still overseeing the testing of drugs on patients and is being paid by pharmaceutical companies for the work. At least a dozen have paid him for research or marketing since he was disciplined.

Rant:
There is a reason why Medicine is (supposedly) a “profession,” rather than simply an “industry.” And there’s a reason why the pharmaceutical industry is (supposedly) highly-regulated.

It’s because pharmaceuticals, and health care more generally, are the kinds of products it is very, very hard for consumers to evaluate. There’s an enormous information asymmetry between the people buying and the people selling these goods and services. Such goods and services fit very poorly the model of effficient free-market transactions between fully-informed buyers and sellers. Trust is therefore essential. Setting up systems such that trust is warranted is not easy.

With regard to physicians, our solution has been to allow them to form self-regulating, self-licensing associations, groups that devise, adopt, and inculcate shared ethical values and then enforce them. Thus, patients are supposed to be able to trust doctors because doctors are part of a profession with a set of shared values that includes “putting the patient first.”

For drug companies, the solution has been to regulate them. Give the government control over what drugs are safe enough, and effective enough, to put on the market. And then further, entrust physicians with the power to act as trusted gatekeepers for the most potent drugs (i.e., prescription drugs).

I have enormous, enormous personal respect for the many physicians (and other health professionals) who work tirelessly to benefit their patients. I also have enormous respect for the many people working inside pharmaceutical companies who truly want to be part of an industry whose goal is to produce medicines to improve people’s lives. But stories like this one point to a need both for tighter self-regulation by the medical profession, and for tougher (and better funded) regulation of the pharmaceutical industry.
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Thanks to Bryn at Genethics.ca

This blog is starting to look like a pharma-business-ethics blog. I’m not doing this on purpose.

See the AP story at Yahoo.com: NJ Court Allows Whistleblower Suit Against Schering-Plough

Four former employees of drug maker Schering-Plough Corp.’s Argentinean subsidiary can sue over being fired allegedly for complaining about illegal marketing practices, including bribing doctors to boost drug sales, a New Jersey court ruled Friday.
…
The four longtime employees at Laboratorios Essex SA allege they were abruptly terminated after disclosing “widespread unethical and illegal marketing and sales practices.” They claim Schering-Plough engaged in “the pervasive and routine bribing of doctors and public officials” to boost sales of the company’s cancer and infection-fighting drugs in Argentina.

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Thanks to Pharmalot.

The current issue of The Economist has an interesting short commentary on a new move to include additional information — about products’ “carbon footprints” — on product labels: Food’s carbon footprint [Subscription required] (or see p. 84 of the print edition)

WOULD you like a footprint on your food? Labels already show fat, salt and sugar content, among other things. But now several British food companies and retailers plan to add carbon footprint labels showing the quantity (in grams) of carbon-dioxide emissions associated with making and transporting foods and other goods.…

Regular readers will know I’ve expressed a dim view of labeling as a way of dealing with controversy over GM foods. The Economist story reminds us that there are a whole lot of things consumers might wish to know (for all kinds of reasons, ethical and otherwise) about the goods they buy. But the article also points out that, even where companies see the value in labeling, there are serious methodological and logistical problems. Not that carbon-footprint labeling isn’t kind of a neat idea, but we should think about whether such efforts are generalizable.

So, let’s imagine, hypothetically, that you want to buy coffee beans that are:

• shade grown
• traded fairly
• organic
• non-GM
• low-carbon footprint

You might be able to get just what you want by buying your coffee at just the right coffee shop. But what if you have similarly exacting standards when it comes to buying apples, bread, olive oil, electronics, and jeans? How many companies have the supply-chain management systems adequate to provide (in priciple) detailed information about a whole range of products to large numbers of consumers? There’s only one that I can think of. Uh-oh.

From Business Week: The Rush To Test Drugs In China

The story is about the pros & cons, for pharmaceutical companies, of doing business in China.

…working inside China’s sprawling, often under-supervised health-care system may raise complex ethical questions. In the past, Chinese medical authorities have greenlighted risky experiments, including stem cell injections and treatments that involve altering the patient’s genes. Moreover, people recruited into trials don’t always understand what they have signed up for, but they rush to join because it may be their only chance to see a doctor.

This is a minefield for companies: as the story notes, many companies “choose to keep their distance.”

It’s entirely possible that Western companies just can’t do business in China while adhering to the ethical expectations of folks back home. But then, entrepreneurs thrive on being told something just can’t be done. So, the challenge: a billion customers for the company that figures out how to navigate this ethics minefield.

(Yes, yes, I realize some companies will just make a mad dash for the short-term cash, ethics be damned. But that’s a lame business plan.)

Here’s something to brighten your morning, from the Op-Ed pages of the Boston Globe: Does a drug firm’s free lunch influence doctors?

JUST WHAT is the best and most appropriate way for a company that researches and manufactures a prescription medicine to educate physicians about the products it develops? It’s a question that is increasingly being discussed in academic and political circles, yet too often those leading the discussions know little about the pharmaceutical industry’s commitment to patient education

The author — who happens to be a lawyer for the Pharmaceutical Research and Manufacturers of America — goes on to assure us that all the attention lavished on physicians by the industry is 100% useful, 100% safe. Besides, he chides, to think that physicians might be influenced is just insulting. (Nevermind whether there’s evidence that it happens, which there is.)

Indeed, the errors of reasoning in this piece are legion. I won’t speculate as to whether the author knows it.

Art Caplan at the AJOB Blog gets it right: “Look, I am willing to concede that worries about conflicts of interest have in many ways gotten a bit out of hand but, touting big Pharma as an objective source of information on drug use for docs strains credulity well beyond the breaking point. This op ed made me laugh….”

For better or for worse, the Nottingham University Business School is now offering an MBA in Corporate Social Responsibility

According to the programme’s website:

The MBA in CSR is a unique programme combining advanced teaching and learning in management with state of the art thinking in corporate social responsibility. This combination allows progressive learning at the leading edge of knowledge in the general discipline of management studies and socially responsible business.

Most people will see this as unremarkable, the natural consequence of the whole “ethics thing” coming of age.

The problem: While it’s true that, for some people, “CSR” is simply a synonym for “business ethics,” (i.e., the study of right & wrong decision-making in business), it’s more often used to describe a particular thesis about what responsibilities business actually has. From that point of view, CSR is the thesis that firms have obligations to return benefits to “society” beyond the benefits they typically provide (namely providing goods & services, providing employment, building wealth, and paying taxes).

It’s perhaps an unfortunate accident of vocabulary that the term “Corporate Social Responsibility” came to mean a particular view about the social responsibilities of corporations, rather than simply meaning the study of what social responsibilities corporations may have. None the less, it does have that meaning. And it’s a worrisome thing, I think, to have an MBA programme apparently dedicated to a particular, not-uncontroversial, normative thesis.

[Thanks to Andrew Potter.]

In a world of bad customer service, how bad does your service have to be in order to get the government to sue you over it? One word: “Dell.” Here’s the story from ABC News:
Dell Hell: Computer Giant Faces Consumer Lawsuit (Consumers Allege They Didn’t Get the Tech Support They Paid For)

Dell is the No. 2 computer seller in the United States, but now some say the technology giant is ripping off its customers.
New York state Attorney General Andrew Cuomo has filed a lawsuit against Dell, accusing the company of deceptive, fraudulent and illegal business practices.
…
Part of the suit claims that though Dell gave the impression of an “award-winning service” available to consumers “24 hours a day, seven days a week,” consumers faced “nightmarish obstacles” to get help and technical service for their computers.

I’ve blogged about Dell customer service before, and about why this IS a business ethics issue:
Business Ethics & Dell Customer Service

Dell Ethics