You have probably heard the term “corporate social responsibility” and have a general idea of what it means. Another term that is beginning to be used instead of “corporate social responsibility” is “corporate citizenship”, which kind of takes the ethical component of CSR out, and then “business citizenship”, which puts it back in. So you are to read “Business Citizenship: from Individuals to Organizations”, by Wood and Logsdon. You should be able to find it in Proquest in the Marist online library.
You also need to read “What Stakeholder Theory Is Not,” by Robert Phillips, R. Edward Freeman, and Andrew C. Wicks. It’s in Business Ethics Quarterly, Vol. 13(4), pp. 479-502 (Oct. 2003). You can find it in our online library by going to ABI Inform or Business Premier or any of the big scholarly journal databases. You need to pay particular attention to the definitions of normative stakeholders, derivative stakeholders, primary stakeholders, and secondary stakeholders. You also need to get a firm grip on the idea that stakeholder management doesn’t mean managing the stakeholders…..it means managing the corporation in a way that distributes the benefits and detriments of the corporation’s activities in an ethically acceptable manner, both for the good of society, the protection of stakeholders who deserve protection, and the preservation of the social legitimacy of the corporation in the eyes of its customers and the public in general.
But then there is the issue of how YOU, as an individual decisionmaker, might approach an ethical problem. An ethical problem is one which involves conflict: either because two opposite courses of action both seem like the right one, but you can’t do both; or because a contemplated course of action provides significant short term good for you, but significant harm for others; or because a course of action which you know to be the just or moral one will subject you to significant disadvantage or harm; or because to YOU one course of action seems clearly right and ethical, whereas to another involved person, a different course of action seems like the right and ethical, or at least not unethical.
So the question is: how can such conflicts be resolved?
Here are three possibilities:
ONE: The Full Harm Picture
First, I think that the stakeholder approach (which we haven’t gotten to yet, but many of you probably know what it is, and if you don’t, use the online library to find out!!!) IS very useful in this area because it prods us to list all the people/entities who have a STAKE in what the corporation does: who either stand to BENEFIT from what the corporation does, or who stand to be HARMED by what the corporation does.
And in many cases, flawed ethical decisionmaking comes from failing to first sit down and make a VERY COMPLETE list of all the people and/or entities who will be harmed by a given corporate decision and resultant action or inaction.
The list should include DIRECT harms and INDIRECT harms.
It should include IMMEDIATE harms, MIDDLE-TERM harms, and LONG-TERM harms.
It should include harms that are CERTAIN to occur, harms that PROBABLY will occur, and harms that MAY VERY WELL occur.
It should include FINANCIAL harms and NON-FINANCIAL harms.
It should include QUANTIFIABLE harms and NON-QUANTIFIABLE harms.
It should IDENTIFY as well as possible the persons and/or entities who will or who probably will or who may very well SUFFER those harms.
Then you need to think about all those harms, and all the people/entities possibly harmed, and evaluate them. Some, of course, we specifically say, in our system, that we will tolerate. If I decide to go into business to make a kind of tomato sauce that is much better than the one your company makes, your business will be harmed….but we say….that’s OKAY. Fair competition and the business harms that come from it are OKAY. Of course, we have to decide what we mean by fair…..
But if I am going to embark upon a business process which is going to make a very attractive consumer good, but it is going to generate chemical waste which is not yet illegal but which my scientists tell me is probably pretty toxic to various parts of the marine ecosystem into which I will be discharging the waste…..now I know there is a high probability of harm to an important stakeholder – the natural environment – and a reasonable possibility of future, not-presently-quantifiable harm to people’s health and to the health of foodstocks.
When you look at “the full harm picture” and not just at what is legal, and what is quantifiable, a much better basis for ethical decisionmaking emerges.
TWO: Circle of Values Analysis
Particularly in the international arena, but by no means only there, situations come up where two or more of your OWN values are in conflict with each other, and/or your values are in conflict with the cultural values of people you are supposed to work with.
The Circle of Values Analysis gives you a way to walk yourself through the conflict and come out the other side with a plan of action.
Make a Diagram:
Three concentric circles: outer one = peripheral values next one in = strong values center circle = core values
Then:
You have to figure out what your values are in a given situation, and then categorize them as above....generally, you can and should compromise peripheral values to arrive at common ground; you MIGHT compromise a bit on a strong cultural value if the other side did the same; you probably ought to walk away if you're asked to compromise a truly core value.......except.....sometimes people find that if they tolerate behavior for a WHILE that violates one of their core values BECAUSE they think that with a bit of time they can get the other person/institution to change its behavior, things can work out.
Here is a simple example of a manager doing a Circle of Values Analysis.....
Jane Goodkind has been sent from New York to Bangkok to manage the setting up and opening of the restaurant chain's first restaurant in Thailand. One of the things she has to do is to hire, train, and supervise all the staff. The landlord of the property has met with Jane and, after dealing with landlord-tenant relationship issues, has introduced her to an acquaintance of his who, he says, will do an excellent job of finding people for Jane to interview for various positions in the restaurant. Jane thanks the landlord and agrees to interview people that the man finds during the following week. They agree that if she hires any, she will pay a recruiter's fee of 15% of the first month's wage. She strongly suspects that the landlord will be getting part of that.
The next week she interviews seven people that the man brings to her, and hires three of them. The recruiter is very pleased, and offers to bring more the next week, to which proposal Jane agrees.
One of the people hired is a woman in her late twenties or early thirties, who is to be an ingredient prep person. Jane introduces her to the chef, who came from Italy via the restaurant chain's flagship restaurant in New York City.
Two days later, when Jane goes out to the kitchen to see how everyone is getting along, she finds that there are two young children in the kitchen. One is chopping nuts, the other is washing and drying greens. When she asks the chef who they are, and what they are doing there, he points to the ingredients prep lady.
Jane asks the ingredients prep lady what is going on, and is told that the two children are HER children. She brought them to work to help her be the best ingredient prep person the chef could hope to have.....three pairs of hands, even if two are small, are better than one. She hopes that Jane will pay her just a little bit extra, since having the children there will be less bother than having another adult worker, and less expensive even if Jane DOES pay her a little bit extra.
Jane is upset, but tries not to show it. She asks the woman how old her children are, and is told that they are nine and seven. She tells the lady that they are very sweet and most industrious, and that she will consider the request.
She then hotfoots it to her office and calls the recruiter. She explains that in the United States it is highly illegal to employ children -- they can only be part-time at sixteen, and not full time until eighteen.....and that whether or not it is illegal in Thailand, it is also, to her, unethical. Children need to be at school, and outdoors playing..... not being exploited in a restaurant kitchen.
The recruiter counters that a very high percentage of children work instead of going to school, and that if they didn't, the family wouldn't have enough money to feed, clothe, and shelter its members. If Jane insists on rejecting the children, they may have to do even worse work, perhaps even be beggars or sold into the sex trade. Also, the woman will probably quit, because she will lose face if her children are not allowed to work in the kitchen of the restaurant -- she will feel that they have been found not good enough.
Jane is between a rock and a hard place. She sits down to do a Circle of Values analysis.
Refraining from profiting from the exploitation of children is, she feels, a Core value of hers.
On the other hand, refraining from doing something which will probably result in even worse exploitation, not to mention real physical and psychic danger, even if she doesn't profit from the exploitation, is ALSO a Core value of hers.
The ingredient prep lady's Core value is to have enough money coming in to the family so that they can all eat, have clothes, and have shelter.
A Strong value is to work, and have her children work, at the highest-prestige job possible.
Another Strong value is not to lose Face (be dissed), and to distance herself from people and situations in which she is made to lose face.
We could do this in more detail, but to make a long story short, Jane is going to have to compromise one of her two Core values because in this situation they cannot both be upheld, AND Jane is going to have to persuade the ingredient prep lady to compromise both of her Strong values somewhat.....
Without going into how to bring it about (which YOU could do because of our reading and discussion on resolving conflicts), the end result COULD be that the children are allowed to work there for four hours in the afternoon IF they go to school for three hours in the morning and then have an hour outside in the middle. Jane agrees to pay the same "extra" that she would have paid if the children had worked the same hours as their mother, AND to pay for the tutor; and the mother agrees to use part of the "extra" to pay for books and supplies. She also agrees to tell everyone that she has GAINED face, not lost it, because her children are getting education that may help them rise in status later.
Jane has to tolerate the fact that those young children ARE working hard in the kitchen, which she truly, truly thinks is wrong....but it's a clean, safe kitchen, and their mother is there.....in order to avoid feeling as though she sent those two children into certain degradation. She gets some solace from knowing that she is forcing their mother to spend at least a little bit of money on the children's education. She has to sell her bosses on the expense of the tutor.
THREE: Ethical Quick-Tests
Sometimes you have no TIME to sit down and think through what your decision in a challenging ethical situation should be.
In those cases, you can still run through the following:
1) How would I feel if my participation in this decision/action were described in detail on the front page of a respected national newspaper? (If the thought makes you cringe, don’t participate.)
2) How would I feel if my participation in this decision/action were described in detail to my family and friends? (If you would be embarrassed, or ashamed, don’t participate.)
3) Would I feel it was acceptable for another person to do to me what I am about to do to him or her, or for another company to do what my company is asking me to participate in doing? (If not, do not participate.)
4) Does this decision or action “smell fishy” to me? (If so, trust your instinct and don’t participate.)
Try to run several of those Quick Tests in your head….really fast. If most or all of them are pointing in the same direction, go with that direction.
It may require evasive action. Think of the Arthur Anderson employees in Texas who were told one afternoon to get upstairs to the copy room and shred boxes of corporate (Enron) documents. Most of those employees probably could not tell whether the action they were being asked to take was legal or illegal, ethical or unethical, but…..it didn’t pass the Smells Fishy test: shredding documents outside the normal course of one’s job description is inherently suspect, and having a group of people be summoned to do that in haste is even fishier.
A resourceful person would get upstairs, see what was happening, and suddenly develop signs of being about to vomit; have to run to the bathroom, make all the appropriate noises in case anyone followed, then drag limply back to one’s desk, gather one’s things and go home sick.
Once home, one would call a relative OUT OF STATE who might have a decent lawyer, and one would explain that one was going to need a consultation right away. When a corporation is about to do something that you think might be really bad, you do NOT want to let them know you know, because you don’t want them blackballing you, firing you before you resign, or even arranging for you to have an accident. So you need to take a quick trip to someplace out of state to see an attorney to figure out how to move forward.
These are just a few tools among many possible ones, but they have proven useful to real people. Which ones you use depends on the context at the time!
© Caroline V. Rider 2011, 2014
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