Business Ethics Art Rev I

5

ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE

COMPANY IN TIMES OF CRISIS

José Luis Fernández Fernández, Cristina M. de Haro & Carlos Rubio Nieto

PRELIMINARY NOTE ON THE METHODS USED

This article was drafted in the context of a doctorate program at the Faculty of Economics and Business (ICADE), within Comillas Pontifical University in Madrid, during the second term of the 2013-2014 aca- demic year. The course title was: Ethics and Corporate Social Respon- sibility.

The authors –the professor and the only two students that, due to certain organizational adjustments to the doctorate program implement- ed by the faculty, had to take the subject– agreed that it would not have made much sense to conduct the course in the regular manner given the number of students on this occasion, which is the norm. They realized that lectures, group work and other methods of that sort did not suit this unusual and exceptional circumstance. Hence, they opted to implement a new approach to the course, which was to be alternative and experi- mental in nature, and unknown to all three of them. It consisted of ac- tual research work conducted within the group on an aspect that was related to the course title. In taking such approach, they were looking at meeting two objectives. On the one hand, delving into an issue related to

Ramon Llull Journal_06.indd 81 15/05/15 07:58

82 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

Business Ethics. On the other, conducting a practical research exercise with the aim, at least for the time being, of presenting our work at a specialized academic conference. Subsequently, if appropriate, publishing our research in a peer-reviewed journal.

Having considered several calls for papers, the authors decided to at- tend the Research Conference that EBEN announced would take place in October 2014 in Lisbon. Once they were in agreement about what the research focus would be –Ethics and economic crisis–, they con- ducted a systematic online search of bibliographical references and other complementary sources on various academic databases. Having identified and consulted the reference literature to create an appropriate and com- prehensive picture of the status quaestionis, they were able to specify the research question which they aimed to answer through their research findings: How is it that some companies have survived the crisis while others have not?

They decided that the most immediate approach would necessarily have to be a qualitative analysis. They spent fifteen hours, split into three sessions of five hours each, working together using the hypothetico-de- ductive model. They used a conventional white-board to jot down all the ideas that came up, subsequently using this material to create a Power Point presentation. Moreover, they drafter a conventional communication proposal. For the purposes of future and subsequent lines of research, the empirical verification of the consistency of the hypotheses contributed as part of this seminal work would have to be established. To such end, as indicated at the end of this article, the authors resorted to complemen- tary tools such as quantitative, qualitative and mixed methods that include surveys, case studies, focus groups and in-depth interviews.

This novel approach stems from the fact that the authors became in- volved in a dialogic process, from which they extracted how the study’s general structure and ideas would be constructed. Subsequently, each one made a preliminary draft of a specific part of the work that had been completed so far. The final draft was compared and assessed in a brain- storming session. The authors consider that the methods employed in writing this article add value to the research training process. Therefore, they believed it would be reasonable to expand on the experience’s most intricate details and attempt to disseminate it through a journal dedicated to the methodological aspects of teaching. Nevertheless, they present the final version of the article below.

Ramon Llull Journal_06.indd 82 15/05/15 07:58

83FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

Abstract: This research paper approaches the following question through the hypothetico-deductive model: How is it that some companies have survived the crisis while others have not? Such question is ex- panded on herein: How is it that a company that suffers a cyclical crisis in the broader context of a systemic crisis is able to survive? Looking into the conditions concerning the likelihood of survival in the face of a crisis, it all points to the ethical side of the issue, thus prompting a com- plementary and final question: To what extent can an organizational culture based on strong moral foundations foster the survival of compa- nies in times of crisis?

The first part of this study, covering economic cycles, conducts a taxonomic analysis that recognizes and relates the different types of crisis –entropic vs. dialectic; structural vs. cyclical; system vs. company crisis– and provides an account of some of the reasons that the literature on the subject uses with the aim of explaining the current crisis.

The second part will cover a classification as well as a systematic de- scription of the reasons and causes of the cyclical crises, so as to be able to identify the human factor, which is not only the most common root- cause of organizational crises but also the key to overcoming them.

The third part focuses on the ethical aspects of the matter at hand, and proposes some hypotheses covering the strategic conditions and cultural requirements that would be more likely to foster company survival in environments as hostile as the one we face nowadays. The article ends by offering a series of practical proposals that, in the authors’ view, may be a useful guide for companies to strengthen their defense mechanisms when faced with prospective crises and recessions.

Finally, some potential lines of research for future projects are sug- gested. In employing various tools such as quantitative, qualitative and mixed methods (surveys, case studies, focus groups and in-depth inter- views), we sought to conduct an empiric verification of whether the hypotheses that were part of this qualitative analysis were consistent.

Keywords: ethics and business culture; ethics and economic crisis; condition of possibility for survival.

Ramon Llull Journal_06.indd 83 15/05/15 07:58

84 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

ECONOMIC CYCLES, THE CURRENT CRISIS AND ITS ROOT- CAUSES

Economic cycles have been a recurring phenomenon throughout the history of humankind (Comín Comín, 2011; Clough, 1990). Moreover, economists from all eras –including pre-classical ones such as Petty, Can- tillon or the physiocrats– and coming from various schools of economic thought –classical, Marxist, Austrian, as well as the utterly diverse post- classical ones– have been concerned with and intrigued by these (Ekelund and Hébert, 2008). In the 20th century, scientific study of those cycles became especially widespread with the systematic application of statistical data analysis and econometric times series (Kondratieff, 1944; Mitchell, 1927). The reason is attributed to the fact that economics seems to have developed an interest in understanding and explaining these from their origin and as a whole –expansion, peak, deceleration and recession– with the purposes of being able to forecast cycle dynamics (Tortella and Núñez, 2010) and set the most appropriate political leveraging in motion so as to soften, as much as possible, the periods of recession.

In chapter 22 of his General Theory entitled “Notes on the Trade Cycle” John Maynard Keynes acknowledged that an actual example of cycle would be highly complex and in order to formulate a full explana- tion thereof, one would need to resort to all the elements of macroeco- nomic analysis. Yet, Keynes added “I suggest that the essential character of the Trade Cycle (...) is mainly due to the way in which the marginal efficiency of capital fluctuates” (Keynes, 2004: 325). He was, however, also aware that “There is, however, another characteristic of what we call the Trade Cycle which our explanation must cover if it is to be adequate; namely, the phenomenon of the crisis” (Keynes, 2004: 326). Nowadays we know how to identify a crisis by considering certain macroeconomic indicators such as slowdown in economic growth, weak and contracted demand, increase in unemployment and/or inflation, etc. In addition, although recognizing that a crisis may be at times dif- ficult, if not highly complex (Berg & Patillo, 2000), it is certainly not impossible. This is the case even when there may be political circum- stances distorting the analysis: all that would be required is a systematic monitoring of the analyses of prevailing economic conditions and of the forecasts made by various bodies, some of which are highly reliable (Sharma, 1999). The International Monetary Fund is an example of this (http://www.imf.org).

Ramon Llull Journal_06.indd 84 15/05/15 07:58

85FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

In any case, if we focus solely on economic crises from a purely Keynes- ian perspective, we would have to assert that such crisis scenarios are systemic. In other words, the forces behind their creation are an intrinsic part of capitalism. Furthermore, they seem to have common roots, even though each of them has a separate origin (Bilbao Calabuig & Rodríguez Carrasco, 2012) as well as their own features which should be handled in a specific manner (Harvey, 2010). On the one hand, the common roots of crises (Cooper, 2008) are psychological (Akerlof & Shiller, 2009), manifesting themselves through the existence of excessively opti- mistic expectations (Minsky, 1982), which do not tend to correspond to the actual circumstances of a declining economy for which the expected growth is increasingly less certain. On the other hand, along with this imperfect awareness of the economic reality (Frydman & Goldberg, 2007) there is the objective criterion of the capital cycle. In short, to understand a crisis “the key factors are uncertainty, animal spirits and the investment-capital cycle” (Harvey, 2010: 73).

In any case, most crises undoubtedly tend to have negative conse- quences for society and the economy in general, and for companies and individuals in particular, as these generate financial losses, unemployment, strikes and other scenarios linked with social unrest. It is therefore of the utmost importance to understand not only the fundamental nature of crises, but also the key aspects that may enable us to handle them prop- erly in a specific manner (Sohn & Lariscy, 2012) and in each of its phases: the pre-critical phase; the crisis as such –which, in turn, has three phases: shock, negative consequences and effects, and contagion (Harvey, 2010)–; and the post-crisis phase (Alas, 2009; Kumpikaite et al., 2011). In fact, various risk and uncertainty management systems have been proposed, as found within a context of crisis, based on the identification of certain discontinuities in the environment, with a view to forecasting and anticipating potentially dangerous scenarios (Porter, 1985).

“Crisis” is a polysemic term that comes from Greek, which is regu- larly employed in the semantic field of medicine. The Diccionario de la Lengua Española [Dictionary of the Spanish Language] (Real Aca- demia Española [Royal Spanish Academy], 1984) defines it as a “signifi- cant mutation that happens in a disease, which either improves, or worsens the condition of the patient”. And by analogy, it is then applied to multiple contexts, such as economics, as indicated, making reference to a “turning point regarding a serious business and involving significant consequences”.

Ramon Llull Journal_06.indd 85 15/05/15 07:58

86 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

To further our study of ethics as a condition of possibility for the company to overcome times of economic crisis, we need to carry out a simple taxonomic analysis to help us put the question forward in a clear manner. So let us try.

On the one hand, the literature usually refers to different types of crises (Kay, 1993; Dowling, 2002): crises caused by natural disasters, industrial crises, crises resulting from terrorist attacks, human resource crises, reputation crises, information crises, economic crises, financial crises. And within these, we find banking crises –whether circumstantial or systemic–, speculative bubbles and crashes, or international currency crises.

On the other hand, it has also distinguished between the so-called entropic and dialectic crises. The former tend to collapse the system through implosion, without changing it, and tend to occur “when soci- ety loses its way; namely, they literally lose their own direction” (Za- magni, 2012: 276). Clear examples of this would include, according to Zamagni, the fall of the Roman Empire, the transition from feudalism to modernity, the fall of the Berlin Wall and that of the Soviet Empire. Dialectic crises, in turn, stem from conflicts that take shape in the context of a given society. Such social contexts contain the foundations and ele- ments necessary for overcoming the crisis, which then leads to a situation necessarily representing progress over the previous phase. It could be considered a sort of quantum leap. According to the same author, some historical examples include: the American Revolution, the French Revo- lution, and the Russian Revolution of October 1917.

One may otherwise think of a structural or systemic crisis, which, compared to other crises, is shorter or geographically more limited, namely: cyclical crises. Naturally, one may also think of various integra- tions or combinations of aspects of the different crises.

So what do we know about the current crisis? It has been said that when Queen Elizabeth II visited the London

School of Economics in November 2008, feeling puzzled and perplexed (as she had the most brilliant professors and renowned economists before her, and yet a frightening economic situation was looming on a global scale), posed the following question to the illustrious faculty of this dis- tinguished institution: “But where were you?” (Petrini, 2010: 29). Ever since, this question has been featuring in numerous forums of diverse institutional types. Although consensus about this is not easily reached –some tend to blame governments, while others blame out-of-hand mar-

Ramon Llull Journal_06.indd 86 15/05/15 07:58

87FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

kets–, the literature suggests that we are able to capture the same inter- pretative keys as those exposed by Queen Elizabeth’s rather poignant question.

There are numerous publications available to the general public (Abadía, 2009; EFC, 2012; Eagleton, 2011; Ekaizer, 2012; Krugman, 2012; Marx, 2011; Torres López, 2011; Tortella & Núñez, 2010) pro- viding accounts of how we have come to be where we are today, covering the global, European (European Commission, 2009) and Spanish perspec- tives (Ortega y Pascual-Ramsay, 2012).

However, if there is a document that deserves to be highlighted in this respect, it should be none other than the report issued by an ad hoc com- mittee formed in 2010 in the United States at the request of the Fraud Enforcement and Recovery Act, with the particular aim to ponder and attempt to answer this central question: “How did it come to pass that in 2008 our nation was forced to choose between two stark and pain- ful alternatives –either risk the total collapse of our financial system and economy or inject trillions of taxpayer dollars into the financial system and an array of companies, as millions of Americans still lost their jobs, their savings, and their homes?” (Financial Crisis Inquiry Commission, 2011).

After a thorough and systematic inquiry process, the committee made their findings public. These have, since then, become well known, so there is no point insisting on the matter. Suffice it to bear this in mind. Perhaps what triggered the crisis making it so widespread on a global scale may have just been the burst of the so-called housing bubble in the United States.

In any case, something that is certainly worth highlighting is the nine conclusions that the report explicitly sets out, which are paraphrased below:

1. The financial crisis was avoidable. 2. Certain generalized supervisory and regulatory failures proved

devastating to the stability of financial markets. 3. Another cause of the crisis can be attributed to severe shortcomings

in the corporate governance and risk management exercised by major companies.

4. Indebtedness, high-risk divestments and a lack of transparency led the financial system down the path of crisis.

5. The government did not react in an appropriate manner. Moreover,

Ramon Llull Journal_06.indd 87 15/05/15 07:58

88 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

its inconsistent response only made matters worse, increasing lev- els of uncertainty and panic in the markets.

6. Other causes of the crisis included the less stringent criteria for granting mortgage loans, and the subsequent securitization of the loans.

7. The existence of over-the-counter derivatives resulting from de- regulation carried out to this effect in 2000 should also be included as one of the causes of the crisis.

8. Furthermore, rating agencies may also be blamed for the opinions expressed about the quality of certain products as well as certain specific operations.

9. Among the causes of the crisis, they also indicate those related to the lack of ethics and to distorted values, which will have swept away the citizens’ confidence in the accountability –the principle whereby one is accountable in a transparent fashion– of various professionals and institutions.

As far as we can see, the causes of the current crisis are well known and widely documented. Now finding the most appropriate solutions to tackle is a completely different matter altogether. Therefore, as mentioned above, it is important to properly diagnose the type of problem facing the policymakers on the one hand, and the companies and their managers on the other. Consequently, those taxonomic distinctions we saw crop up at the time have now become relevant, since the strategies to exit and overcome the crisis –even temporarily– vary depending on the type of crisis at hand.

Anyhow, our main concern with regard to this paper is not so much finding the solution to exit the current crisis, but something much more specific. To be precise, we refer mainly to the consideration of the ethical side of culture and management as conditions of possibility for survival against future economic crises. Suffice it to assume the existence of two basic types of crisis scenario. On one hand, structural or system crisis –whether it be dialectic, such as the one in 1929; or entropic, under which Zamagni believes the current one falls. And, on the other, the one we will call business or cyclical crisis.

In order to develop our reflections in the remainder of the article, we hypothesize that this type of cyclical or business crisis originates primar- ily from two main sources: one is lack of demand, often associated with a lack of foresight, or with laziness, complacency or professional negligence

Ramon Llull Journal_06.indd 88 15/05/15 07:58

89FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

on the part of officers and members of boards of directors (Rodríguez López Iturriaga & Morros, 2012; Ferris, Jagannathan, & Pritchard, 2003; Fich & Shivdasani, 2006); and the other is bad management practice (Masulis & Mobbs, 2011), often caused as a result of a lack of profes- sionalism (Poze, 2010) and, at the bottom of it all, by a lack of ethical behavior, which we have, unfortunately, seen many a time across multi- ple financial and other corruption scandals taking various shapes and forms.

It is reasonable to think that the crises caused by a lack of demand for products or services that a company supplies to the market may well be due to the supply not being able to adequately meet the expectations of the customer or the product being unappealing or inferior to competitor products; it may also be a case of the customers lacking disposable income to be able to buy them. The latter circumstance is, of course, made worse when the cycle is in the recessive phase and even more so when undergo- ing a systemic crisis. Overcoming an economic crisis that is due to such causes will involve rethinking the business model (Magretta, 2002); some even say it should be “reinvented” altogether (Johnson, Christensen, & Kagermann, 2008). In any case, it is a question of redefining processes, rebuilding the organizational fabric and recovering lost customers through strategies and policies to help regain market direction –divestment in non-strategic assets, restructuring costs, internationalization–, and so on. Above all, it is about rendering the structure and strategy to re-position themselves in the market more flexibly (Bilbao Calabuig Rodriguez & Carrasco, 2012; Skordoulis, 2004).

So what about the crises arising from bad practice or poor decision- making based on unethical behavior?

In the remainder, we will attempt to specify the above causes, expressed as explanations of economic crises, in a more systematic manner. Apply- ing a deductive approach, we will propose business strategies that might serve as guidance to implement responsible actions, based on moral principles and the ethical side of management. Special emphasis will be placed on the human factor, the personal quality of those that make up the organization –ethics in business–, and also, and by no means to a lesser extent, we emphasize the need to manage the moral-ethical side to the organizational culture of the company.

Ramon Llull Journal_06.indd 89 15/05/15 07:58

90 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

FURTHER TAXONOMIC NOTES ON THE ETIOLOGY OF ECONOMIC CRISES

The study of economic crises primarily contemplates the causes that can lead to them as well as the effects they have on organizations. In view of this, the literature also seeks to propose measures and organizational behavior patterns that enable the survival of the company and its success- ful relaunch into the market (Bilbao Calabuig Rodriguez & Carrasco, 2012; Mitroff, Shrivastava & Udwadia, 1987).

Beginning with the issue of the causes, we can say that the economic crises caused by a drop in demand for the goods or services that the com- pany supplies to the market are usually due to a lack of foresight or even a case of marketing myopia. It can often be said that if the growth of an industry is under threat, slowed down or halted, this is not due to market saturation but rather to the failure of its managers (Levitt, 1960). Accord- ing to this author, what makes an industry go into crisis is not that the industry itself has no future, but rather that the decision-makers do not offer an accurate view of the business direction. In fact, organizational crises can sometimes be caused by factors that could have actually been prevented, such as false assumptions, inadequate communication, or misguided optimism (Nystrom & Starbuck, 1984).

These decisions rarely take action in the face of the signs that, as we indicated above, crop up just before crises occur. The lack of a timely response means companies go down a route of which it is hard to come out. Thus, when demand changes, either because society itself changes, because the economic environment changes, or because technology evolves, the managers of these companies are not able to direct them toward this new demand. As indicated in the previous section, there are studies that link the corporate governance model prior to a crisis with the intensity of the negative effects of the stagnation phase in the com- pany. Along these lines, a study of 375 companies in Malaysia has shown that corporate governance mechanisms that have been weakened by high risk-concentration and dispersion of the company’s assets are associated with the more negative, severe and long-lasting effects of crises (Suto, 2003).

Several authors have studied the different types of business crisis. One of the studies (Hammerich & Lewis, 2013) classified corporate crises according to the key element that seemed to explain them, which essen- tially boils down to the following:

Ramon Llull Journal_06.indd 90 15/05/15 07:58

91FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

– Poor strategy in dealing with competitors – Inadequate performance in terms of efficiency, time, quality and

accuracy – Disruption, in the sense of sudden emergence of new technologies – Mishandling of the state of success – Poor decision-making in terms of direction over time – Unsuitable change of leadership – Mismanagement of the impact of changes in the company environ-

ment

We can also speak of corporate crises caused by people, organiza- tional structures, the economy and/or technology that have caused harm to human lives or social or natural environments (Mitroff, Shrivastava & Udwadia, 1987).

The field of Industrial Economics has studied how an industry evolves over time in relation to the number of companies present in the market. They tend to identify patterns that begin with the appearance of the first companies, followed by an increase in the number of operators, coincid- ing with opportunities created by means of increased demand. However, a point comes when the number of new companies is offset by the num- ber of companies that cannot continue to keep themselves afloat, followed by a period in which all that happens is that companies go out of business (Gort & Klepper, 1982). The research conducted in the field analyzes the relationships between supply structure, product quality, level of in- novation, advertising expenses, and other variables that cause some com- panies to stay afloat while others do not. However, we must consider the organizational and human components that lie beneath these variables, as these are to become key to corporate success or failure.

In this regard, in business we often speak of leadership crisis as the cause of an economic crisis. However, one should also take into account some thoughts on how to address this problem. The traditional interpre- tation of leadership crisis can be compared to others where the leader is not thought of as the sole party responsible for the crisis. In the latter, it is worth exploring the Levinasian approach in which every member of the organization can analyze their own responsibility vis-à-vis the Others (Blis – Wray, 2013).

Another kind of organizational crisis that has been studied is one in which the set of socially accepted rules and standards for the operation of a company is breached to some extent (Yu, Sengul, & Lester, 2008).

Ramon Llull Journal_06.indd 91 15/05/15 07:58

92 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

The point here, as we shall see below, is not rectifying a specific dysfunc- tion but gradually repairing the damage caused by a loss of confidence within and surrounding the company.

Now let us see the effect that crises can have on organizations. Let us remember that one of the elements that characterizes a crisis, whether systemic or cyclical, is uncertainty. The events causing instability are often unexpected and unusual. Therefore, at first it is difficult to find equivalent benchmarks fast enough to enable us to exit the period of dif- ficulty (Louppe & Hermel, 2002). Despite all the time and effort put in by company directors and key employees to identify and assess risks, any crisis situation brings the element of surprise with it, the first reaction usually being asking ourselves why it has happened (Veil, 2011). Other elements include risk, in the sense that it jeopardizes the future of the company and that of the people that form part of it, and the level of complexity of the situation (Louppe & Hermel, 2002).

Companies need to restore an environment of confidence in the or- ganization. Here, the cultural aspects and the ethical side of management become indisputably relevant. In most circumstances, negative spells in companies tend to create an atmosphere of stress and negativity, which can result in both physical and mental chaos and disorder. We also know that crises negatively affect the way people relate to each other within an organization, and that these repercussions can linger even after the crisis has ended (Kahn, Barton & Fellows, 2013).

The crises that are caused by a breach of the prevailing code of social conduct in a company can create a state of uncertainty among the stake- holders of the company, who lose their confidence in it. Thus, the com- pany suffers a reputation crisis in every sense of the word even when the breach in question occurs only in a particular section or at a point in time. Negative impact leads to increased costs or reduced income, or even both at the same time. Rising costs usually comes as a result of the increased financial costs required by a financial institution that is aware of the dam- aged reputation of the company. Moreover, the drop in revenues stems from the need to reduce prices in order to compensate for the low level of confidence that customers have in the company. As a result, expecta- tions for the organization become worse, plunging it into a downward spiral in which demand decreases, employees try to provide their ser- vices to more reliable companies and investors withdraw their investments from an asset in which they no longer believe (Yu, Sengul & Lester, 2008).

Ramon Llull Journal_06.indd 92 15/05/15 07:58

93FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

If we look at the survival of a company in crisis, it can be said that once the crisis has become part of the everyday life of the business, it is necessary to act effectively in order to restore sustainability. It is true that there are no recipes to ensure success when refloating a business in crisis, and those decisions may or may not be successful depending on factors such as company size or the sector in which it operates (Bilbao Calabuig & Rodríguez Carrasco, 2012). However, there are general measures that can help it come out of an economic crisis.

As part of the keys to survival that will be covered in further detail below, it is clear that some companies display a different management style and can deal with crises successfully. When faced with marketing myopia, can we refer to crisis prevention marketing (Louppe & Hermel, 2002). This attitude prioritizes proper forecasting and aims to reduce the vulnerability factor of the company by identifying aspects that carry special risk. To detect these areas, the company must analyze the vitality and the state of its relations with its key stakeholders: suppliers, custom- ers, employees, and any other interest group within its scope.

Regardless of the type of crisis and the effects sustained, the company directors should be aware of the factors affecting the business and adopt a new course of action that enables the company to stay afloat. This generally requires strategic shifts and redefining processes, especially en- hancing the human factor that is specific to a business activity at different levels: technical, professional, personal.

The crises triggered by persons or factors that cause harm to people, society and nature must be handled using a basic model of crisis manage- ment consisting of an action plan cycle that can be initiated when the problem is detected (Mitroff, Shrivastava & Udwadia, 1987). This model includes a phase aimed at preventing the crisis. Our interest in this work is, however, geared more to situations in which the crisis has settled in, is taking place, and the aim is to overcome and exit it. An important point in this discussion is the fact that the technical and economic factors that cause crises are associated with human, social and organizational fac- tors. Therefore, if we consider only the first type of causative element, much of the valuable information and key lessons that help us to prepare and correct the organizational system are lost.

In any case, as discussed above, it seems reasonable to suggest that survival comes down to devising a flexible business strategy or possibly re-defining it in its entirety. Thus, while devising its strategy, the com- pany should take into account the macro-environment within which it

Ramon Llull Journal_06.indd 93 15/05/15 07:58

94 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

finds itself. Therefore, an external analysis is essential to become aware of the environment in which the activity takes place. It is important to constrain the analytical framework and examine its competitive position- ing, which involves analyzing the extent to which the company meets customer preferences compared to other companies with the same goal and in the same market. Based on this analysis, the company can determine its strategic options, which can be summarized in the choice of a future goal for the company and the way to achieve it. These options should be implemented and fed back for the purposes of experience, lessons and monitoring.

If this is the context of survival of a company, it is sensible to think that in a crisis situation it will be even more important to perform these steps efficiently and accurately. When customers are less willing to pay, for any of the reasons already mentioned herein, part of the value created by the company that can be generated by it also decreases. Sometimes they even set prices below cost so as to continue to maintain an actual demand. Clearly, this is not sustainable over time, so it is necessary that the redefined strategy is implemented to begin restructuring the organiza- tion. The aim is thus to supply something different or to do so employing a production structure whereby the value generated may return to an acceptable level.

When looking at this type of strategic restructuring, one must wonder whether strategic operational optimization and ethics are either opposed categories, or two different planes of the same reality (Bove & Empson, 2013). We will attempt to shed some more light on this matter further on.

Managing a company in crisis has two basic objectives: eliminating the adverse trends driving the crisis –survival– and reaching a turning point while laying the groundwork for renewed development –redirectioning– (Dubrovsky, 2004). However, before reaching these phases, companies generally go through others that are closely linked with emotions and human behavior: denial of what is happening and depression (Mitroff, Shrivastava & Udwadia, 1987). Then comes the acceptance phase, and only when anxiety levels have decreased, the company can start thinking of ways to approach these objectives. One way to achieve this is to imple- ment post-crisis marketing (Louppe & Hermel, 2002).

This consists of a set of actions aimed at rebuilding customer confidence, which cannot be achieved without a genuine concern for them and real active listening to find out what their true needs are, what they really

Ramon Llull Journal_06.indd 94 15/05/15 07:58

95FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

need from the company and what the company should provide to them. In short, if the company treats the customer with the respect they deserve –namely with dignity–, then it is halfway there. The next step is to achieve a high level of innovation and loyalty by systematically adding value.

If we change perspective and look at the internal keys for survival related to strengths and weaknesses of the organization, it seems clear that the people in the group need specific diagnoses. Therefore, it would be necessary to devise a common goal that clearly evokes recovery as a key objective to serve as a guide to leave the chaos behind and take a path of motivation and positive attitude. In these cases, the example set by the leaders of the organization is often key to the rest of the group so that they may once again feel dignified in their work and be convinced that there is true value in what they do alongside their colleagues day in day out. Therefore, the employees should be able to see that their leaders are the first to be concerned with maintaining morale high. The leaders should conscientiously and effectively work toward improving the atmosphere within the organization, eliminating any traces of laziness, ‘defeatism’ and insouciance.

Workers need enthusiasm; yet in the absence of it, at least they should be able to be optimistic about the future. Therefore, they should be able to sense, based on the actions and messages of their managers, that the latter have clear ideas and credible plans to get the company back on track and onto the road to success. At the same time, –and this is an indisput- able condition of possibility– they must feel that they are being kept abreast in a transparent manner and told the truth about what is happen- ing. Based on this, managers must make their employees feel they are part of the solution and, in fact, they are essential for such solution to be ef- fective (Oroviogoicoechea, 2014).

The following figure seeks to summarize the key ideas we have pre- sented in the preceding paragraphs (Fig 1).

So far it follows that the human factor is essential in order to explain business crises –crises caused by people, since these can be potentially far worse than those caused by natural disasters (Pearson & Mitroff, 1993)– and to try to come up with guidelines to help the companies exit them and stay afloat in the market. Therefore, as we have said all along, it will be essential to ensure that the human factor is the basis of any strategic action aimed at preventing and overcoming crises. Let us not forget that behind every functional area of the company there are always people whose in- volvement and effort constitute the cornerstone of the company’s success.

Ramon Llull Journal_06.indd 95 15/05/15 07:58

96 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

It is worth reiterating that the human factor and the role of ethics in adequately training groups of people so that they may be capable of reviv- ing a company in crisis are of vital importance. It is therefore paramount to advocate ethical values, as this positively affects the creation and im- plementation of an appropriate business vision as well as providing, in our view, the tools to overcome crises and recessions. However, it is also worth noting that the importance given to the human factor must be understood on a two-fold level: micro-level, i.e. the individual level point- ing toward the empowerment and development of the individual aspect of all the persons that make up the organization; and meso-level, relating to the whole organization, its policies and practices, which, in any case, require a systematic and proper management of the ethical moment. This is a more or less sophisticated, yet always explicit way to manage Business Ethics. The following section discusses this subject in greater detail and includes some specific proposals.

THE ETHICAL CONNECTION: INDIVIDUAL OBJECTIVES AND ORGANIZATIONAL MANAGEMENT

In the third part, we look to make some suggestions that may be of use and provide guidance, from the point of view of business ethics, to help companies strengthen their cultural defense mechanisms against the in-

H U M A N

F A C T O R

Group Team

Company Identity

What do we have to do for this to happen?

➣ Boost/Motivate ➣ Solidarity/Assistance provided ➣ Cooperation/Collaboration

• Versatility • Flexibility/Proactivity • Multipurpose

➣ Stimulate

➣ Structure the group

➣ Maintaining the group/environment/culture

Involvement

SENSE OF BELONGING/

PROUD TO BELONG

Leadership

Motivation • Economy • Recognition • Personal/professional development • “Selling” the company • Recruiting/Selection • Training

Professional Pro�le

+ Pesonal

Characteristics

Figure 1. Prepared by the author.

Ramon Llull Journal_06.indd 96 15/05/15 07:58

97FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

evitable economic crises. In this regard, we are hoping to set out our hy- pothesis in the following statement: A strategy geared toward sustain- ability in the long term; a structure well aligned with strategic direction and based on robust and well-implemented values and leadership styles, supported by personal qualities, respect for the individual and the com- mon good of the organization. This could be a powerful antidote to the crisis and an explanatory key to overcoming critical circumstances.

What follows is, naturally, a hypothetico-deductive exercise of ana- lytical and experimental nature. Therefore, from now on, we will no longer refer to any specific literature, beyond some classical notes. We will simply provide an account of the findings, which we obtained through reasoning and discussions between us while working on this article –to which we referred in the introductory note to these reflections. Much of what we say from now on has already been covered in some way in the previous section, although at this time the tone of the discussion will be more assertive. In any case, we would like to explain the tone of the discussion that is to follow in a schematic manner; hence, the figure below is provided to such end:

Overall, we believe that the practical initiatives that can be put into effect as part of a management model that is mindful of the ethical side of culture can be classified into two basic groups, depending on whether they pertain mainly to the individual (I) or, on the contrary, to the or- ganization (O) and its policies, practices and operational plans. As per the above figure, we have identified two types of measure, as well as the

The ethical connection

* COMMON GOOD vs. SELFISHNESS

* SUSTAINABILITY (LT) vs. IMMEDIATE, SHORT-TERM MENTALITY

* AUTONOMY, EXERCISING FREEDOM AND SELF- DETERMINATION/ LEADERSHIP SKILLS

vs. “GROUPTHINK”

* CONSTRUCTIVECRITICISM OF THE CULTURE, PROCESSES AND POLICIES

vs. PASSIVE, INDIFFERENT ATTITUDE

* PERSONAL MATURITY AND HUMILITY

vs. SUSCEPTIBILITY TO DISAPPOINTMENT

* RESPECT FOR THE DIGNITY OF OTHERS

vs. CONTEMPT

[O]

[I]

[O/I]

[I]

[O]

STRATEGIC THINKING

EMPOWERMENT

BUILDING CONFIDENCE

TRANSPARENCE

AND TOLERANCE

HORIZONTAL STRUCTURE

EXAMPLE TRAINING

SUPERVISION

MI SSI ON VI SI ON

VALUES

ETHICAL MANAGEMENT

Figure 2. Prepared by the author.

Ramon Llull Journal_06.indd 97 15/05/15 07:58

98 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

need for a third type that is able to integrate and implement them, and relate to one another.

Those more directly related to the individual aspect are, on the one hand, (I-1) autonomy, the exercise of freedom and self-determination and leadership skills. And on the other, (I-2) personal maturity and humility.

From a point of view that is more explicitly concerned with the or- ganizational aspects, we identified, on the one hand, (O-1) the search for sustainability of processes and long-term strategic direction. And on the other, (O-2) the uncompromising commitment to the highest level of respect for the dignity of stakeholders; i.e. all those who are related to the company in any way, whether ad intra, or ad extra.

In between, as part of the two-fold element covering both the indi- vidual –micro-level– and the organizational aspect –meso-level–, we have identified (I/O) transparency, stimulated possibility –not only tolerated but expressly sought– to exercise constructive criticism of the culture, strategy, policies and practices.

Above all, we think there is a more comprehensive and decisive aspect, which is why we make reference to the Common Good of the company as a whole. We understand such a category to be the set of conditions that favor the development of persons –in this case, of the organization– and that enable them to achieve both their personal and institutional objectives (Pope Benedict XVI, 2009) as much as possible. Therefore, we believe that a firm and persevering determination to commit oneself to the Common Good is not only the best way to exercise the virtue of organizational solidarity, but also a sort of goal-condition of possibility for the survival of the company in situations of risk and crisis. We believe that this is where the two-fold perspective of ethics arises: on the one hand, the so-called ethical connection of management and, on the other, what we group under the management of organizational ethics heading.

We have also indicated the aspects that –by default– contradict those ethical elements: (ØI-1) the uniformity of “groupthink” on the one hand; and (ØI-2) (I-2) “susceptibility to disappointment” on the other. This is, in relation to the subjective, personal factor, the micro aspect. And con- cerning the meso-organizational aspect, we would include: (ØO-1) “im- mediate, short-term mentality” on the one hand, and (ØO-2) what we refer to as “contempt” on the other. In contrast and parallel to the hybrid element that we noted as a positive under “constructive criticism”, we now place (ØI/O) under “passive, indifferent attitude”. We thereby hope to be able to convey to the reader the key aspects that we deem necessary

Ramon Llull Journal_06.indd 98 15/05/15 07:58

99FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

to reinforce an organizational culture that, from the ethical side of a management style based on solid values, can help overcome the crisis, favor survival and, where appropriate, serve as an incentive for expansion and the quest for excellence.

We will not delve any further into what we have just mentioned, placing the focus on other aspects that complement the above.

The first of the proposals affecting the organization is one that provides for the sustainability of the company. The business strategy can be ori- ented in a variety of ways depending on the objectives to be achieved. In the present case –the ethics of business management–, we believe that the direction is defined mainly by the timeline of those objectives. The com- pany may opt for a strategy that seeks to achieve either economic returns in the short term or long-term sustainability. This duality in business decisions clearly involves two strategic approaches with different ethical implications. In the first case –obtaining an economic return in the short term–, the business strategy is conditioned by the need to meet the target in the shortest time possible. Consequently, the company mission and vision are directly aimed at satisfying an urgent material need, seriously neglecting other aspects of management.

This business option, which usually almost exclusively emphasizes economic aspects and maximizes the financial bottom line, evidently has some major ethical consequences. In this situation, it is not unusual for the worker –the person who collaborates in the company’s business, the one who truly is an end in themselves, without whose sincere involve- ment the organization could not succeed in the market– to be not only undermined, but also openly deprived from the due respect to their dignity they deserve. Naturally, such behavior, which is, by default, ig- norant of the requirements of the triple bottom line, is unsustainable in the medium term, eventually resulting in the organization having to abandon trade.

All strategic management is underpinned by three pillars: mission, vision and values. This type of management has a clear definition of what the mission, or aim, of the company is: financial gain as soon as possible. However, the vision and the way in which they are to achieve the objec- tive are often neglected. It seems that what matters is not the way the objectives are achieved, but rather, the fact that they are achieved, what- ever the cost.

This type of management undoubtedly constitutes a true case of tel- eopathy, a genuine institutional absurdity: first, it proposes that the end

Ramon Llull Journal_06.indd 99 15/05/15 07:58

100 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

should be the greatest possible profit in the short term, which strictly speaking is nothing more than an indicator –profit– derived from the strategic success of the company in achieving its true mission; namely, meeting certain needs. However, we still incur error every time such economic end appears to justify not only the use of any means, but also –and this is more serious– the fact that people –true ends in themselves– are turned into mere means to meet a second-rate objective that, due to some error of judgment, has been placed at the top of the organizational priority list (Kant, 1975). As we can see, this type of organizational thinking neglects the factors through which the mission is carried out, i.e., it neglects its workers. The person comes to be used purely as a busi- ness tool, as a necessary step for economic returns. Naturally, such extreme commodification dehumanizes the person and is hardly conducive to long-term business success.

Moreover, failure to correctly understand the first two pillars under- pinning strategic thinking –mission and vision– results in the third pillar –values– being disregarded. Values in business management serve as the link between the mission and vision. If, as we have noted, these companies appear not to have a vision to the extent that they should, the possible link between mission –teleopathic and distorted, in itself– and values seems to lack any real viability. This style of business management, based on anxiety and short-term goals, uses the term values without a corre- sponding objective reality –merely as jargon typically employed by strategists and managers–, and yet, properly speaking, it lacks moral values, i.e. its organizational culture lacks ethical substance.

As we have noted, this business strategy seems to dismiss any elements that are not purely economic. We could even say that from such a per- spective, one could understand that true ethical values are nothing but obstacles or hindrances that must be removed in the search for returns on investment. It is, therefore, not surprising that these approaches not only neglect the true care that should be afforded to individual workers, but also that they dismiss all other ethical relationships that are needed in order to establish themselves within the market, when the whole point is to contribute to true human, business and social development. This strategy should ultimately be avoided if we intend for the company to be viable in the market in the long run. And this not only based on consid- erations arising from an ethical point of view, but also from the point of view of the minimal precautions required by law. Short-termism, imper- vious to axiological elements, is generally unreliable in the fulfillment of

Ramon Llull Journal_06.indd 100 15/05/15 07:58

101FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

agreements. It often tends to favor non-compliance with commercial and trade regulations the moment these are deemed to be limiting in any way the achievement of their obsessive goal: maximizing short-term profit by any means.

By contrast, the second type of strategy that focuses on the long term has minor inconveniences and enjoys numerous advantages. Long-term strategy is underpinned by the three pillars of fully developed business thinking. On this basis, it is able to implement a free and healthy or- ganizational structure. Initially, the approach cannot differ too much from the short-term strategy: both could give the impression of being centered on maximizing economic return. In fact, it frequently happens this way, at least at first glance. However, the main difference lies in the element of self-awareness, the lucidity applied to self-understanding, the presence of mind at the strategic moment when it identifies not only their deep purpose and raison-d’être in the market, but also in the way they forecast the future and design the corporate vision. In this case, the man- agement style is usually aimed at achieving long-term growth of the company in a sustainable way. It is not about making immediate returns –however attractive these may be– that end up jeopardizing their medium- term existence in the future. It is, in fact, a question of maintaining the preferred modus operandi that makes use of the resources available re- sponsibly and sustainably. If, as we have noted repeatedly, one of the key resources of the company –probably the most important one– is the employees, it makes sense that –in line with the approach we have been using in the last few paragraphs– they should then be considered to be the backbone necessary to achieve the objectives, yet as decent people who deserve respect and conditions that enable them develop as human beings in the workplace environment.

Therefore, with long-term management having the first two pillars of strategic thinking strongly grounded, the existence of the third pillar comes as a natural consequence. Considering the long term and the care afforded to the proper future development of the company promote and strengthen the ethical values that link the vision and strategic mission. The shift towards sustainable management gives the employees the im- portance they deserve and respects the behavior of their competitors in the market. This strategy is not only right from an ethical point of view, but it is also more likely to lead to greater business success. Therefore, greater importance should be given to the long term as the key to support good business performance. Ethics advocate a management style geared

Ramon Llull Journal_06.indd 101 15/05/15 07:58

102 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

to achieving objectives both considering the present and the future so as to foster the dignity of both the workers and the company.

Our second practical organizational proposal highlights the importance of upholding the dignity of the individual. We have already mentioned in this article that corporate management success lies in the human team that forms part of the organization. Therefore, business thinking should make sure there is a good workplace environment for employees where their personal dignity is respected. The employee is first and foremost a person. Now, in the company, the individual must coexist with the group of employees to which they belong. It is not a case of two strategic ap- proaches, but rather of one dual management approach. As we said, the business strategy must ensure respect for the dignity of each of their work- ers, ensuring they are treated as ends in themselves as well and not merely as means to achieve something. Managing people in the organiza- tional framework requires managers to ensure personal dignity is re- spected within the group of workers. Individuals should be able to be seen as active participants in a larger group, and feel welcomed and protected by such. However, sometimes the negative behavior of some individuals or the existence of subgroups within the group renders this difficult. To avoid such situations, the management should implement prevention and intervention policies against possible unethical situations. Hence, the company needs to have a robust management policy that is committed to protecting the persons and clearly advocates personal dignity on the basis of an uncompromising commitment to the ethical treatment of all em- ployees. In addition, as an essential complementary element, it would be necessary to have supervisory policies in place to ensure workers are treated properly and so that a good working environment is secured. Specifically, we should actively regulate and, in any case, punish any ac- tivities and practices that may be detrimental to personal dignity; otherwise, these could create situations of emotional stress among workers.

Moreover, these ethical requirements also contribute to good corporate results, since the company’s viability will not be fully assured while its economic objectives are not in sync with the teams’ management objec- tives. A workforce where everyone feels valued for their professionalism, respected as a person and accepted for their idiosyncrasies, their charac- teristics and personality traits, certainly contributes to a positive interac- tion among the whole workforce of the company. This is so, since the emotional involvement with the business objective is greater and the likelihood of a better performance also increases. Consequently, the

Ramon Llull Journal_06.indd 102 15/05/15 07:58

103FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

impact on the company is direct and measurable: it increases business profit.

This has led some to state that ethics is profitable, which should be borne in mind by those business planning systems that hesitate to incor- porate ethical management to their management of Human Resources. It might be possible to rethink how priority objectives can be achieved so that workers feel that their right to be treated in a dignified manner in the workplace environment is respected.

Having discussed the two main organizational proposals, let us now discuss some business management initiatives geared towards the indi- vidual. The first, as noted at the beginning of this section, is based on the recognition of individual personal autonomy. An ethical business manage- ment style should boost the workers’ self-esteem and skills. As noted already, the strategic approach should give the employee the freedom to develop individually, allowing the performance of their profession to help them grow both in the workplace and personally. The company should convey to their employees the fact that it has confidence in them to make autonomous decisions, which materialize in the form of true measures of leadership. Maybe in this way they will not only feel part of the team by working in the company, but they will also feel valued individually as people who boast specific skills and abilities and contribute to the Com- mon Good through their work (Zamagni, 2012).

That being said, this does not mean that groupthink should be so easily dismissed. Instead, it is necessary that the culture of the company is solid and serves as a meeting point among the workers. What we wish to high- light is the importance of the management granting individual powers to each employee –empowerment– so that each can be recognized as a com- plete entity; and can generate enough confidence to act freely and with self-determination in their work environment. This would strengthen the element of respect for personal dignity in a collaborative environment where active listening is encouraged, thus promoting processes for the worker to develop as a person and not just professionally within the com- pany. To do this, the company should promote a stable, ethical and fair environment that could provide support to all who are part of the or- ganization. In this regard, it is often helpful to have horizontal hierarchical structures that can strengthen the networks of belonging and where super- visory practices ensure the principles of ethics so that if situations of disap- pointment arise, they could reconnect with the pillars of thought. In short, if a company has mature, motivated and free workers, this will be a great

Ramon Llull Journal_06.indd 103 15/05/15 07:58

104 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

advantage when seeking to meet the objectives proposed. And the best way to achieve this is to consider the ethical implications of business strategy at all levels. If companies choose this option, we believe it will be easier for them to overcome recessionary cycles and survive economic crises.

CONCLUSIONS AND FUTURE LINES OF RESEARCH

The analytical research presented above, as we have repeatedly indi- cated, is a preliminary theoretical study that we have completed based on hypothetico-deductive and heuristic-dialogic methodologies. We sought to test a perspective focused on the focus of research that involves the ethical element of economic crises, by attempting to respond to the fol- lowing research questions: How is it that some companies have survived the crisis while others have not? How is it that a company that suffers a cyclical crisis in the broader context of a systemic crisis is able to survive? To what extent can an organizational culture based on strong moral foundations foster the survival of companies in times of crisis?

A series of daring statements have appeared, especially in the last sec- tion, if not with a normative-prescriptive tone, at least with a clear, asser- tive linguistic register, inviting the reader to assume certain management requirements: Long-term strategy; the search for sustainability; account- able management; emphasis on respect for people; generating a stimulat- ing and critical workplace environment within the organization; involve- ment and deployment of personal skills; concern for the Common Good...

However, our research is not complete until we check the in re grounds of our proposals or somehow manage to fault the recommendations made in a hypothetical manner. Hence, this seminal and analytical paper needs to be extended in the future by applying other methodological approach- es implemented on the basis of empirical research techniques that may enable us to examine the extent to which what we have completed and proposed in part three herein is or not fulfilled in the reality of the com- pany and management.

Among the various methodological possibilities available to us – qualitative, quantitative and mixed (Bryman, 2006)– the following four must be noted: case studies; in-depth interviews; focus groups; and the use of surveys (Creswell, 2009).

Firstly, we should probably consider working on a research case study (Stake, 1995, Yin, 2003; Swanborn, 2010) on companies that have over-

Ramon Llull Journal_06.indd 104 15/05/15 07:58

105FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

come the crisis from the basis of a strong organizational culture. By employing this qualitative technique, we believe that we could develop a detailed analysis of some specific ethical measures implemented by the companies at hand.

Secondly, it would be possible to use another qualitative technique, i.e. in-depth interviews of members of senior management, especially for large companies that have been able to successfully overcome the crisis. This would allow us to identify the particular ethical proposals carried out by these organizations.

Thirdly, we could organize focus group sessions with directors or executive members of HR departments. This qualitative procedure would allow us not only to learn of the ethical management strategies but it would aim to unravel the process of decision-making in implementing these techniques. In this case, two distinct groups could be put together depending on the individuals’ background. i.e. whether they come from large companies or SMEs.

Finally, the quantitative technique of using a survey could also be employed (Flower, 2002) to verify the findings obtained through the above techniques. In such case, a well-thought-out survey could be cre- ated (Salant & Dillman, 1994), with questions (Babbie, 1990) in line with each of the proposals that were presented in the third part of our article. This would, if appropriate, allow us to draw well-founded conclu- sions from the findings that our method has led us to reach.

BIBLIOGRAPHY

Abadía, L. (2009). La crisis Ninja y otros misterios de la economía ac- tual. Madrid: Espasa.

Akerlof, G. A. & Shiller, R. J. (2009). Animal spirits. How human psychology drives the economy and why it matters for global capital- ism. Princeton: Princeton University Press.

Babbie, E. (1990). Survey research methods. Belmont, CA: Wadsworth. Pope Benedict XVI (29 June 2009). http://www.vatican.va/holy_fa-

ther/benedict-xvi. Last consulted on 3 May 2014, from the encyclical Caritas in Veritate: http://www.vatican.va/holy_father/benedict-xvi

Berg, A. & Patillo, C. (2000). Dificultades para la predicción de crisis económicas. International Monetary Fund. Temas de Economía, nº 22, 1-19.

Ramon Llull Journal_06.indd 105 15/05/15 07:58

106 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

Bilbao Calabuig, P. & Rodríguez Carrasco, J. M. (2012). Crisis económi- ca, flexibilidad empresarial y nuevos modelos de negocio. Boletín de Estudios Económicos, Vol. LXVII, nº 207, 443-462.

Bove, A. & Empson, E. M. (2013). An irreconcilable crisis? The paradoxes of operational optimisation crisis and the antinomies of counter-crisis ethics. Business Ethics: A European Review, 22 (1), 68-86.

Bryman, A. (2006). Mixed methods: A four-volume set. London: Sage. Clough, S. B. (1990). Historia económica de Europa. El desarrollo

económico de la civilización occidental. Barcelona: Omega. Comín Comín, F. (2011). Historia económica mundial. De los orígenes

a la actualidad. Madrid: Alianza Editorial. Cooper, G. (2008). The origen of financial crisis. New York: Vintage

Books. Creswell, J. W. (2009). Research Desing. Qualitative, Quantitative, and

Mixed Methods Approaches. London: Sage. Dowling, G. (2002). Creating Corporate, Reputations, Identity, Image

and Performance. Oxford: Oxford University Press. Dubrovski, D. (2004). Peculiarities of managing a company in crisis.

Total Quality Management and Business Excellence , 15 (9-10), 1199-1207.

Eagleton, T. (2011). Por qué Marx tenía razón. Barcelona: Península. EFC, E. f. (2012). No es economía, es ideología. Barcelona: Deusto. Ekaizer, E. (2012). Crónica de un atraco perfecto. Madrid: Espasa. Ekelund, J. R. (2008). Historia de la teoría económica y de su método.

Mexico: McGraw-Hill. European Commission, D.-G. f. (2009). Economic Crisis in Europe:

Causes, Consequences and Responses. Luxembourg: European Economy 7.

Ferris, S., Jagannathan, M. & Pritchard, A. C. (2003). Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appoint- ment. The Journal of Finance, vol 58, nº 3 , 1087-1111.

Fich, E. M. & Shivdasani, A. (2006). Are Busy Boards Effective Moni- tors? The Journal of Finance, vol. 71, nº 2 , 689-724.

Financial Crisis Inquiry Commission;. (January 2011). Conclusions of The Financial Crisis Inquiry Report. Last consulted on 28 November 2013, on http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/ fcic_final_report_full.pdf: http://fcic-static.law.stanford.edu/cdn_me- dia/fcic-reports/fcic_final_report_full.pdf

Ramon Llull Journal_06.indd 106 15/05/15 07:58

107FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

Flower, F. J. (2002). Survey research methods. Thousand Oaks, CA: Sage.

International Monetary Fund; (undated). http://www.imf.org. Frydman, R. & Goldberg, M. (2007). Imperfect knowledge economics.

Princeton: Princeton University Press. Gort, M. & Klepper, S. (1982). Time paths in the difussion of product

innovation. Economic Journal , 92, 630-653. Hammerich, K. & Lewis, R. D. (2013). 8 Types of corporate crises: The

impact on national culture. Mworld , 12 (3), 40-43. Harvey, J. T. (2010). Modeling financial crises: a schematic approach.

Journal of Post Keynesian Economics (Vol. 33, Nº 1) , 61-81. Johnson, M. W., Christensen, C. M. & Kagermann, H. (2008). Rein-

venting Your Business Model. Harvard Business Review, vol. 86, nº 12 , 50-59.

Kahn, W. A., Barton, M. A. & Fellows, S. (2013). Organizational crises and the disturbance of relational systems. Academy of Management Review , 38 (3), 377-396.

Kant. (1975). Crítica de la razón práctica. Madrid: Espasa-Calpe. Kay, J. (1993). Foundations of Corporate Success: How Business

Strategies Add Value. Oxford: Oxford University Press. Keynes, J. M. (2004). Teoría general de la ocupación, el interés y el

dinero. Barcelona: RBA. Kondratieff, N. D. (1944). Los grandes ciclos de la vida económica. In

V. L. Urquidi, Ensayos sobre el ciclo económico (pages 35-56). Mexico: Fondo de Cultura Económica.

Krugman, P. (2012). ¡Acabad ya con esta crisis! Barcelona: Crítica. Kumpikaite, V. A. (2011 (16)). Companies’ management during eco-

nomic crisis. Ekonomika Ir Vadyba – Economics and Management , 789-795.

Levitt, T. (1960). Marketing myopia. Harvard Business Review , 38 (4), 24-47.

López Iturriaga, F. & Morrós Rodríguez, I. (2012). Consejo de Admin- istración y Performance de la Empresa: Efecto de la Pertenencia a Múltiples Consejos. Last consulted on 1 May 2014, on http://www. academia.edu/4559258/Consejos_de_administracion_y_perfor- mance_de_la_empresa_efecto_de_la_pertenencia_a_multiples_conse- jos: http://www.academia.edu/4559258/Consejos_de_ administracion_y_performance_de_la_empresa_efecto_de_la_ pertenencia_a_multiples_consejos

Ramon Llull Journal_06.indd 107 15/05/15 07:58

108 RAMON LLULL JOURNAL OF APPLIED ETHICS 2015. ISSUE 6 PP. 81-109

Louppe, A. & Hermel, L. (2002). Marketing et situation de crise. Revue Française du Marketing (186), 5-21.

Magretta, J. (2002). Why Business Models Matter? Harvard Business Review, vol. 80, nº 5 , 86-92.

Marx, R. (2011). El capital. Un alegato a favor de la Humanidad. Bar- celona: Planeta.

Masulis, R. W. & Mobbs, S. (2011). Are All Inside Directors the Same? The Journal of Finance, vol. 66, nº 3 , 823-872.

Minsky, H. P. (1982). Can “It” Happen Again? Armonk, N.Y.: Sharpe. Mitchell, W. C. (1927). Business Cycles: The Problem and its Setting.

New York: National Bureau of Economic Research. Mitroff, I. I., Shrivastava, P. & Udwadia, F. E. (1987). Effective crisis

management. The Academy of Management Executive , 1 (4), 283-292. Nystrom, P. C. & Starbuck, W. (1984). To avoid organizational crises,

unlearn. Organizational Dynamics , 12 (4), 53-65. Oroviogoicoechea, J. (2014). La Ética después de la Crisis. La Ética

después de la Crisis (page 1). Madrid: IESE. Ortega, A. y.-R. (2012). ¿Qué nos ha pasado? El fallo de un país.

Barcelona: Galaxia Gutenberg-Círculo de lectores. Pearson, C. M. & Mitroff, I. I. (1993). From crisis prone to crisis pre-

pared: A framework for crisis management. The Academy of Man- agement Executive , 7 (1), 48-59.

Petrini, R. (2010). Proceso a los economistas. Madrid: Alianza. Porter, M. (1985). Competitive Advantage: Creating and Sustaining

Superior Performance. New York: The Free Press. Poze, R. C. (2010). The Case for Professional Boards. Harvard Business

Review, vol. 88, nº 12 , 50-58. Real Academia Española; (1984). Diccionario de la lengua española.

Madrid: Espasa-Calpe. Salant, P. & Dillman, D. A. (1994). How to conduct your own survey.

New York: John Wiley. Sharma, S. (1999). The Challenge of Predicting Economic Crisis. Finance

& Development, vol. June , 40-42. Skordoulis, R. T. (2004). Strategic flexibility and change: an aid to stra-

tegic thinking or another managerial abstraction? Strategic Change, vol. 13, August , 253-258.

Sohn, Y. J. & Lariscy, R. (2012). Resource-Based Crisis Management: The Important Role of the CEO’s Reputation. Journal of Public Relations Research, 24 , 318-337.

Ramon Llull Journal_06.indd 108 15/05/15 07:58

109FERNáNDEZ ETHICS AS A KEY ASPECT TO THE SURVIVAL OF THE COMPANY IN TIMES OF CRISIS

Stake, R. E. (1995). The art of case study research. Thousand Oaks, CA: Sage.

Suto, M. (2003). Capital structure and investment behaviour of Malaysian firms in the 1990s: A study of corporate governance before the crisis. Corporate Governance: An International Review , 11 (1), 25-39.

Swanborn, P. G. (2010). Case Study Research. What, Why and How? London: Sage.

Torres López, J. (2011). Contra la crisis, otra economía y otro modo de vivir. Madrid: HOAC.

Tortella, G. and E. Núñez (2010). Para comprender la crisis. Madrid: Gadir Editorial.

Veil, S. R. (2011). Mindful learning in crisis management. Journal of Business Communication, 48 (2), 116-147.

Wray-Blis, E. (2013). A crisis of leadership: towards anti-sovereign ethics of organisation. Business Ethics: a European Review, 22 (1), 86-102.

Yin, R. K. (2003). Case study research: design and methods. London: Sage.

Yu, T., Sengul, M. & Lester, R. H. (2008). Misery loves company: The spread of negative impacts resulting from an organizational crisis. Academy of Management Review, 33 (2), 452-472.

Zamagni, S. (2012). Humanizar la economía. Elementos contra la resig- nación y la utopía. En S. Zamagni, Por una economía del bien común (pages 23-48). Madrid: Editorial Ciudad Nueva.

Zamagni, S. (2012). La clave de lectura de la crisi y el camino para salir de ella en la Caritas in Veritate. En S. Zamagni, Por una economía del bien común (pages 273-300). Madrid: Ciudad Nueva.

José Luis Fernández Fernández Cristina M. de Haro Carlos Rubio Nieto

Comillas Pontifical University, Madrid [email protected]

[email protected] [email protected]

This paper was received on October 15th, 2014, and was approved on January 15th, 2015.

Ramon Llull Journal_06.indd 109 15/05/15 07:58

Copyright of Ramon Llull Journal of Applied Ethics is the property of Herder Editorial S.L. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.