Ethical Imagination

1Ethical Imagination, Regulatory Innovation & Responsible Management – Laurent Ledoux – 08/12/07

Ethical Imagination,Regulatory Innovation &

Responsible Management

IMBA UCL08/12/07

Laurent Ledoux


Ethical Imagination: when managers must choose between « right » & « right »Ethical Imagination: when managers must choose between « right » & « right »11

Regulatory Innovation: when a multitude of actors interact to enforce CSRRegulatory Innovation: when a multitude of actors interact to enforce CSR22

Contents


4 case studies to help us reflect on ethical dilemmas

Source: Badaracco (1997); adapted by Ledoux

Edouard SakizTo distribute the abortion pill?

Peter AdarioTo dismiss Kathryn McNeil?

Steve LewisTo attend St Louis meeting?

Carlos PintoTo retrieve & fix the cars?

How do you lead the launch of a product youknow will be extremely controversial?

How do you lead the launch of a product youknow will be extremely controversial?

What should you do if a single parent on your staffis falling behind in his or her work?

What should you do if a single parent on your staffis falling behind in his or her work?

How should you respond if you are offered an opportunityat work solely because of your race or gender?

How should you respond if you are offered an opportunityat work solely because of your race or gender?

What should you do if the expected cost of legal claims from apotentially lethal product is less than the cost of retrieving

that product from the market and fix it?

What should you do if the expected cost of legal claims from apotentially lethal product is less than the cost of retrieving

that product from the market and fix it?


Commonalities & divergences between the 4 case studies

“Right”vs.

“Wrong”(moralchoice)

“Right”vs.

“Right”(ethical

dilemma)

Co

mp

lexi

tyC

om

ple

xity

Who is theorganisation?


Whoare we?Who

are we?

Whoam I?Whoam I?

Cas pratiques Decision’simpact

Ethicaldecisions

form, reveal& test

the self(John Dewey)

Ethicaldecisions

form, reveal& test

the self(John Dewey)

Lessons

Do you think you can governinnocently,

without dirtying your hands?

(Jean-Paul Sartre)

Do you think you can governinnocently,

without dirtying your hands?

(Jean-Paul Sartre)

Edouard SakizTo distribute the abortion pill?

Peter AdarioTo dismiss Kathryn McNeil?

Steve LewisTo attend St Louis meeting?

Carlos PintoTo retrieve & fix the cars?



An ethos is the doctrine of a particular art of living the best possible life and

the means to pursue this aim (i.e. to live happily or to search for truth)

(Marcel Conche, philosopher)

An ethos is the doctrine of a particular art of living the best possible life and

the means to pursue this aim (i.e. to live happily or to search for truth)

(Marcel Conche, philosopher)

Variations on the word « Ethics »

« Ethos » in Greek: custom, habit, way of behaving in an environment

« Ethos » in Greek: custom, habit, way of behaving in an environment

The primary meaning of «Ethos» or «Ethics»*has therefore to do with:

making your way,positioning yourself in an environment

The primary meaning of «Ethos» or «Ethics»*has therefore to do with:

making your way,positioning yourself in an environment

Ethics is a human activity. The purpose of ethics is not to

make people ethical; it is to help people make better decisions

(Marvin Brown, author & ethics consultant)

Ethics is a human activity. The purpose of ethics is not to

make people ethical; it is to help people make better decisions

(Marvin Brown, author & ethics consultant)

* Note the varied use of the word in different languages


Possible definition of « Morality »

A morality is a set of duties and imperatives (positive or negatives) that a society or a community

gives to itself and which enjoins its members to conform their behaviour, «freely» & in an «unselfish» way, to

certain values enabling to distinguish right & wrong.

A morality is a set of duties and imperatives (positive or negatives) that a society or a community

gives to itself and which enjoins its members to conform their behaviour, «freely» & in an «unselfish» way, to

certain values enabling to distinguish right & wrong.

« Universalisable »Universal morality

« Universalisable »Universal morality

RelativeCollective moralities

RelativeCollective moralities

Current most common moralsUniversal human rights & duties

Current most common moralsUniversal human rights & duties

PoliticsPolitics

LawLaw

LoveLove

ReligionReligion

?


Potential sources to support ethical decision-making

Corporate credos &Mission statements

Legalduties

Heuristics(«sleep-test» rules)

Moral or ethicalprinciples


Questions to think «individual» dilemmas – Steve Lewis’ case

“Become who you are”(Friedrich Nietzsche)

“How do my feelings and intuitiondefine, for me, the ethical dilemma?”

(To respect oneself or to be loyal – loyal to whom?)

“Which of the values that are in conflictare most deeply rooted in my life

and in my community?”

(To consider the dilemma as his parents’ son)

“Looking to the future,what is my way

(not the way of others)?”

(To become partner in an investment bank)

“What combinationof expediency and shrewdness, coupled withimagination & boldness, will moveme closer to my personal goals?”

(To go to St Louis but to participate to the presentation)

Who am I?



Institutional structureFixity & consistency

Individual processesAdaptability & responsiveness

Results“Doing good”

Principles“Doing right”

VirtueEthics

DevelopmentEthics

DeontologicalEthics

TeleologicalEthics

A framework for ethical theories

Source: Fisher & Lovell (2003); adapted by Ledoux

10

Ethical Imagination, Regulatory Innovation & Responsible Management – Laurent Ledoux – 08/12/07

Ask yourself these questions concerning the decision you wish to take

4. Light-of-day test. Would I feel good or bad if others (friends, family, colleagues) were to know of my decision and action?

5. Virtuous mean test. Does my decision add to, or detract from, the creation of a good life by finding a balance between justice, care and other virtues?

Deontological ethics

6. Veil of ignorance/Golden Rule. If I were to take the place of one of those affected by my decision and plan would I regard the act positively or negatively?

7. Universality test. Would it be a good thing or a bad thing if my decision and plan were to become a universal principle applicable to all in similar situations, even to myself?

Development ethics

8. The communitarian test. Would my action and plan help or hinder individuals and communities to develop ethically?

9. Self-interest test. Do the decision and plan meet or defeat my own best interests and values?

Teleological ethics

11. Utilitarian test. Are the anticipated consequences of my decision and plan positive or negative for the greatest number?

12. The discourse test. Have the debates about my decision and plan been well or badly conducted? Have the appropriate people been involved?

3. Hedonistic or intuitive test. Does my decision correspond with my gut feeling and my values? Does it make me feel good?

Corporate credos & mission statements

Legal duties

2. Organisational test. Is my decision in accordance with my organisation’s rules of conduct or ethics

1. Legalist test. Is my decision in accordance with the law?

Virtue ethics

+/- Veto Trigger

Respect of ethical principles

Heuristics

10. Consequential test. Are the anticipated consequences of my decision and plan positive or negative?

12 tests filter to validate or reject a decision

11


The Texas Instrument Ethics Quick Test (2001)

Is the action legal?

Does it comply with TI values?

If you do it, will you feel bad?

How will it look in the newspaper?

If you know it’s wrong, don’t do it!

If you’re not sure, ask.

Keep asking until you get an answer.

12


Who are we ?

“What are the other strong, persuasive,competing interpretations of the situation or problem that I hope to useas a defining moment for my org.?”

(To understand that, for Walters, the basic ethical issuewas irresponsibility: McNeil’s for not pulling her weight &his for not taking action)

“What is the cash value of this situationand of my ideas for the people

whose support I need?”

(Refine his message and shape it to the psychological &political context in which he was working, in terms

of raising productivity or improving recruiting)

“Have I orchestrated a processthat can make the values

I care about become the truthof my organization?”

(After hiring McNeil, to start quickly to let her & her work knownto his bosses & to campaign for a more family-friendly workplace)

“Am I playing to win?”

(To take swift actions to counter Walters: While Adario was out of the office, she worked with one of the bosses to swiftly resolve McNeil’s issue)

“Truth happens to an idea.Its verity is in factan event, an idea”

(William James)

Questions to think «internal» dilemmas – Peter Adario’s case


13


Intensity ofproblem felt bythe employee

Organisationalvalues /

Strength of practices

Support ofothers

Personalvalues

Personalautonomy

Societalvalues

Intensity ofproblem felt by the employee Organisational

values / Strength of practices

Support ofothers

Personalvalues

Personalautonomy

Societalvalues

Layer 2

Layer 1

Source: Lovell (2002)

Elements of ethical complexity in organization

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Ethical puzzleActing to resolve the issue on the basis

that they have the corrector best solution (utility).

Ethical problemClarifying how the conflicts between different

values would lead to different actions.Acting upon one’s best judgement

(moral judgement).

Ethical conventionSeeking advice on what is

acceptable & applying norms andConventions (fairness)

Ethical relativismMaintaining discussion about the

issue rather than seeking closure on it (relationships)

Ethical awarenessAsserting & acting upon one’s

values; Expressing surprise thatothers may see things diff. (dignity)

Ethical cynicismWithdrawing from any action or

decision but sniping from thesidelines at others’ action (facadism)

Ethical neutralityIgnoring problem & keeping quiet

(inaction)

Ethical negotiationSeeking out other’ views andsupporting the wishes of the

most powerful (bending rules)

Personal certainty, fixed priorities and values

Personal aporia, shifting priorities and values

Developing principles

Achieving the common good

The obligationof duty

Self-consciousness

Dialectic of ethical purpose

Degree of ethical integrity

Source: Fisher and Rice (1999)

Categorisation of possible kinds of reactions and behaviour to an ethical issue

15


Ethical horizon Loyalty Integrity

Society as a whole Anonymous whistleblowing Public whistleblowing

Civil associations to which I adhere

Maintaining silence/lying

Offering to help management find a way to make things right

orPublic whistleblowing

My organisationMaintaining silence/lying Trying to persuade the organisation to reveal

its wrongdoing and to put things right

Self Protect self by lying/seeking personal advantage or

Refusing to be bought off by the organisation

Keeping silent (inaction is believed not to damage integrity)

orResigning

(when the organisation will not take the right action)

Actions open to an employee, when discovering wrongdoing, according to his ethical horizon

Degree of sacrifice of self for other’s benefit

Degree of sacrifice to show membership and commitment

Degree of sacrifice acting as a scapegoat

Degree of sacrifice to maintain or increase personal benefit or stratus

16


Questions to think «societal» ethical dilemmas – Edouard Sakiz’ case


“Have I done all I can to secure myposition and the strength & stabilityof my organization?”

(To refrain to take decisions that could expose directlyThe organization or to confront the BoA’s president)

“Have I thought creatively & imagina-tively about my organization’s role

in society & its relationshipto its stakeholders?”

(To orchestrate a public debateamong the different stakeholders)

“Should I play the lion or the fox?”

(To organize and support a vote that will triggera massive counter-reaction from other actors)

“Have you done all you can to strike a balance,both morally & practically?”

(To market the new drug without endangering the organization)

“Ethics result from the inescapabletension between Virtue & Virtu”

(Aristote & Machiavel)


17


* Synthesis based on the texts from André Comte-Sponville, Marcel Conche & François Jourde

* Synthesis based on the texts from André Comte-Sponville, Marcel Conche & François Jourde

Economic, technical & scientific orderPossible vs. Impossible

(Natural and rational Law)

Economic, technical & scientific orderPossible vs. Impossible

(Natural and rational Law)

Juridical & political orderLegal vs. Illegal

Juridical & political orderLegal vs. Illegal

Moral orderRight vs. Wrong

(Universal or universalisable duties)


(Universal or universalisable duties)

limits

limits

limitscompletes

Ascending hierarchy forindividuals

Ascending hierarchy forindividuals

Ethical orderGood vs. Bad

(Self, subjective or relative Will)

The 4 orders & the tensions between the individual and the group

Descending hierarchyfor groups

Descending hierarchyfor groups

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Compensationduty

Responsible for the effects

Compensationduty

Responsible for the effects

Dilemma

Limited juridical responsibility

Limited juridical responsibility

Irreversibility,unpredictability

& anonymityResponsible for

others

Irreversibility,unpredictability

& anonymityResponsible for

others

Unlimited moral

responsibility

Unlimited moral

responsibility

Promise, guarantee & arbitrage

Responsible for the «future»

Promise, guarantee & arbitrage

Responsible for the «future»

«Balanced» ethical

responsibility

«Balanced» ethical

responsibility

Circumstantial judgement (Phronesis)

Rat

ion

alit

yR

atio

nal

ity

+ R

esp

ect

The 4 orders & types of responsibility

Political & juridical orderLegal vs. Illegal


Eco., technical & scientific orderPossible vs. Impossible(Natural and rational Laws)


limits





limits

limitscompletes

11

22

33

44

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A sequence of questions for guiding ethical judgement

Dialogue• Stakeholders’ views & prioritary needs?

• Issues between stakeh. to be solved?

• My/our position’s stabibility & strength?

Dialogue• Stakeholders’ views & prioritary needs?

• Issues between stakeh. to be solved?

• My/our position’s stabibility & strength?

Casuistry• Dist. facts from value judg. & beliefs?

• Case’s particularities?

• Diff. betw. particular & general case?

Casuistry• Dist. facts from value judg. & beliefs?

• Case’s particularities?

• Diff. betw. particular & general case?

Imagination• How did I/we get there (history)?

• Other ways to look at it?

• Which ways are (not) ethically helpful?

Imagination• How did I/we get there (history)?

• Other ways to look at it?

• Which ways are (not) ethically helpful?

Clarifying the situation

«What is the ethical issue to be considered»

Clarifying the situation

«What is the ethical issue to be considered»

Articulating intention

& process

Articulating intention

& process

Testing the decision

Testing the decision

Intention• Loyalty to whom first?

• Prioritary objective/intention?

• In line with probable results?

Intention• Loyalty to whom first?

• Prioritary objective/intention?

• In line with probable results?

Process• Process to let my/our value emerge?

• Strategy to let my/our vision of reality prevail?

• Creative vision of my/our role? Lion or fox?

Process• Process to let my/our value emerge?

• Strategy to let my/our vision of reality prevail?

• Creative vision of my/our role? Lion or fox?

Critical self-evaluation• Proposed decision pass 12 filter tests?

• Confidence of decision’s LT strength & validity?

• Acceptable exceptions/modification to my/our decision?

• Risks & consequences of misunderstandings reg. the decision?

Critical self-evaluation• Proposed decision pass 12 filter tests?

• Confidence of decision’s LT strength & validity?

• Acceptable exceptions/modification to my/our decision?

• Risks & consequences of misunderstandings reg. the decision?

20


Break

21


Ethical Imagination: when managers must choose between « right » & « right » Ethical Imagination: when managers must choose between « right » & « right »11

Regulatory Innovation: when a multitude of actors interact to enforce CSRRegulatory Innovation: when a multitude of actors interact to enforce CSR22

Contents

22


CSRBusiness Ethics Sustainable development

Corporate citizenship

Code of ethics

Authentifications

Labels Societal performance

DeontologiesCompany philosophies

Company codes

Citizenship actions

CSR – Abundance of concepts

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CSR – Static definitions

Economic ethics“Part of ethics which deals with behaviours and institutions of this sphere, i. e., of the entirety of

exchange activities of goods and services and of production related to this exchange.” (French Penal Code – 1994)

Economic ethics“Part of ethics which deals with behaviours and institutions of this sphere, i. e., of the entirety of

exchange activities of goods and services and of production related to this exchange.” (French Penal Code – 1994)

Business ethicsBusiness ethics

Corporate ethics“Presents itself as responsibility ethics (not only of conviction), organised as a

doctrine which guides activities and behaviour at work” (Fabienne Cardot)

Corporate ethics“Presents itself as responsibility ethics (not only of conviction), organised as a

doctrine which guides activities and behaviour at work” (Fabienne Cardot)

Pragmatic & little theorised

Contextual &in action

Responsive & fragmented

Strategic manifestation:

CSR

Dialog & questioning

3 levels of commitment

3. Values ethics

1. Governance ethics1. Governance ethics

2. Deontological ethics2. Deontological ethics

24


CSR – Static definitions

Corporate Social ResponsibilityThe entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero)

Corporate Social ResponsibilityThe entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero)

Economic

Environmental

Social

The three dimensions of CSR • Multiple expectations:

« societal »

• Assimilation to sustainable development

• Embryonic evaluations

• Global performance = addition of the 3 results

• Ambiguity of the 3P: Profit or Prosperity?

• Confusion: sustainabie development of the society or of the company?

• Multiple expectations: « societal »

• Assimilation to sustainable development

• Embryonic evaluations

• Global performance = addition of the 3 results

• Ambiguity of the 3P: Profit or Prosperity?

• Confusion: sustainabie development of the society or of the company?

Fair

Viable

Sustainable

Livable

25


Key questions about CSR

MotivationIn whose interest & why?

• For Share- or Stakeholders?• Marketing opportunism or moral duty?

Power locusWho drives CSR?

• Internally: managers or «corporates»?• Externally: Govs, NGOs or corporates?

DynamicHow did/does CSR evolve?

• Concept’s evolution so far?• Today’s logic in a globalized economy?

You can’t properly

think about

«Motivation» &

«Power locus»

without

understanding the

CSR «Dynamic»

You can’t properly

think about

«Motivation» &

«Power locus»

without

understanding the

CSR «Dynamic»

26


Time

Content richness of

the CSR concept

Source : Jean Pasquero (2005), adapted by LedouxSource : Jean Pasquero (2005), adapted by Ledoux

PhilanthropyGrants & corporate patronage

SollicitudeEmployees’ needs

Environmental nuisance limitPriority given to the environment

Classical eco.

(18th century)

Traditional eco.

(19th c.)Beg. of 20th c.

1960’s

Social responsiveness« Societal management » system

Ethical rectitudeCodes of conduct

Performance reportingTriple balance sheet

Citizen participationProactive «engagement»

1970’s 1990’s Beg. of 21th c.

Dynamic – How has the CSR concept evolved so far?

Efficient management(Technical skills)

8 components of CSR

nowadaysEvolution so far?

27


Dynamic – How CSR is evolving in today’s globalized economy?

2001

GlobalCompact

corporatesbecome world citizens

Time

“Coherency”of the

coregulation system

Corporates’emancipationfrom states

Politizationof comsumption

Voluntaryadoption of codes

of conducts

Growthof surveillance

& social controls’web

Empowermentof 3rd parties byStates & Judges

Proliferationthrough reputation

& transparency

Transfer of States’ duties to

corporates

Regulatory innovatio

n process

Highly stylised process*:

in reality these trends

overlap each otherHighly stylised process*:

in reality these trends

overlap each other

«Formally»

but self-fulfillin

g

prophecy«Formally»

but self-fulfillin

g

prophecy

EffectivelyEffectively

* Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

2003

Nikevs. KaskyConsumers’

CSR concernslegally recognized

SoftSoft

HardHard

Evolution today?

28


Dynamic – Proliferation through reputation & transparency

Reputation – Law: differences in action mode & “regulatory” effects?

ReputationReputationLawLaw

1. Immediate & discontinued 1. Slow & constant (omnipresent)

2. Externally defined 2. Interiorized & reflexive

3. Black or white 3. Grey (richer modulation)

4. Concern for single, egal, actors 4. Concern for global tendencies

Current normativity results of a

hybrid of law & reputation,

of regulation & auto-regulation,

in constant evolution

Current normativity results of a

hybrid of law & reputation,

of regulation & auto-regulation,

in constant evolution

New is that this hybrid is considered to be able to develop itself asautonomous & self-sufficient

New is that this hybrid is considered to be able to develop itself asautonomous & self-sufficient

Evolutionary

character of

transparency

Evolutionary

character of

transparency

29


Dynamic – Logical process

Integrating CSR «instruments» in 4 logical process steps?

1. Norms definition & adoption• Definition

• Global Compact ; OCDE’s principles; ILO’s trilateral declaration; Global Sullivan Principles; Caux Round table; AI’s principles on Human Rights for businesses; Ethical Trading initiative’s Code of conduct

• Adoption

• Codes (individual, sectorial,…)

• Contracts between businesses

• Public tenders & subsidies (laws & contracts)

• Corporate Governance principles

• Legal & administrative rules

• Social dialogue

1. Norms definition & adoption• Definition

• Global Compact ; OCDE’s principles; ILO’s trilateral declaration; Global Sullivan Principles; Caux Round table; AI’s principles on Human Rights for businesses; Ethical Trading initiative’s Code of conduct

• Adoption

• Codes (individual, sectorial,…)

• Contracts between businesses

• Public tenders & subsidies (laws & contracts)

• Corporate Governance principles

• Legal & administrative rules

• Social dialogue

2. Implementation• Generic mecanisms for SRM

• SA 8000 & ISO Norms; OHSAS 18001; ILO-OSH 2001 (security & health at work); EMAS

• Specific mecanisms for SRM

2. Implementation• Generic mecanisms for SRM

• SA 8000 & ISO Norms; OHSAS 18001; ILO-OSH 2001 (security & health at work); EMAS

• Specific mecanisms for SRM

3. Communication (transparency)• Audit

• AA 1000 Insurance Standard; ISAE 3000

• Non Financial Report

• Political auditions & public debates

3. Communication (transparency)• Audit

• AA 1000 Insurance Standard; ISAE 3000

• Non Financial Report

• Political auditions & public debates

4. Controls & sanctions• Unfair practices & publicity

• Contractual responsibility

• Labels (public & private) & boycotts

• Investment policies & financial institutions

• Ethical funds; Stock indexes; Equator Principles

4. Controls & sanctions• Unfair practices & publicity

• Contractual responsibility

• Labels (public & private) & boycotts

• Investment policies & financial institutions

• Ethical funds; Stock indexes; Equator Principles

Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

30


Motivation – In whose interest do managers go CSR?

To whom are executive managers accountable?

«Contractual» vision

«Symbolic» vision

Shareholders

«Economic» responsibility

«Economic» responsibility

Stakeholders

«Social» responsability

«Social» responsability

Society

«Societal» responsability

(Towards institutionalisation)

«Societal» responsability

(Towards institutionalisation)

Is this the right distinction?

Is the distinction between

private & public interests so clear?Is this the right distinction?

Is the distinction between

private & public interests so clear?

31


Motivation – In whose interest do managers go CSR? Friedman’s model

Are Sternberg’s friedmanian «Just Business»’ principles just?

Ordinarydecency

Distributivejustice

Manager’s sole objective

“To maximize long termowner value*”

Minimal necessary values to ensure the organization’s LT survival:• Honesty• Fairness• No coercion or phys. violence• Respect of laws

Minimal necessary values to ensure the organization’s LT survival:• Honesty• Fairness• No coercion or phys. violence• Respect of laws

Rewards should be accorded in proportion to

the value of agents’ contribution to furthering

the organization’s objectives

Rewards should be accorded in proportion to

the value of agents’ contribution to furthering

the organization’s objectives

* Sum of discounted cash-flows* Sum of discounted cash-flows

32


Motivation – In whose interest do managers go CSR? Berns’ analysis

Is the stark distinction between politics and economy founded?

Politics Economy

Should externalities still be viewed as «external» factors?

More than ever, value creation of companies is growingly dependent on the captation of positive

externalities (university’s proximity, development of new communication channels,…) and avoidance of negative

externalities (pollution, violence,…)

Should externalities still be viewed as «external» factors?

More than ever, value creation of companies is growingly dependent on the captation of positive

externalities (university’s proximity, development of new communication channels,…) and avoidance of negative

externalities (pollution, violence,…)

Is CSR anything else that the growing realization that we need to develop a

new relationship with our environment, made of restraint & moderation?

Is CSR anything else that the growing realization that we need to develop a

new relationship with our environment, made of restraint & moderation?

Are we rediscovering the old idea that «interest» could act as an effiicient

substitute to ext. constraint?

See Montesquieu or Smith.Through the ages, we have gone back and forth on this

relationship (eg. autonomy of politics in the Aristotelian model)

Are we rediscovering the old idea that «interest» could act as an effiicient

substitute to ext. constraint?

See Montesquieu or Smith.Through the ages, we have gone back and forth on this

relationship (eg. autonomy of politics in the Aristotelian model)

Risk

this new relationship takes

the form of an absorption of

the social in the economic

Risk

this new relationship takes

the form of an absorption of

the social in the economic

?Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

33


Source: Webley and More, 2003

Does Ethics pay?

15

20

25

30

35

1997 1998 1999 2000 2001

% R

OC

E

Average MVA/Year (with Code of conduct) Average MVA/Year (all)

Average MVA/Year (no Code of conduct)

Motivation – Marketing opportunism or moral obligation?

ROCE by year for 42 major UK quoted companies

Is ROCE a

pertinent KPI?

In the new system

of coregulation,

risk mitigation

is the biggest driver

Is ROCE a

pertinent KPI?

In the new system

of coregulation,

risk mitigation

is the biggest driver

34


Through legal obligation?

Through legal obligation?

Through marketing opportunism?

Through marketing opportunism?

Through moral obligation?

Through moral obligation?

Through own Will?

Through own Will?





limits





limits

limitscompletes

11

22

33

44

Motivation – Marketing opportunism or moral obligation? Ethique ou «Etiquettes»?

Through the new system

of «coregulation»?

A growing «soft law»

enforced in a «control»

society by a multitude of

actors in a continuous,

innovative power

struggle…

Through the new system

of «coregulation»?

A growing «soft law»

enforced in a «control»

society by a multitude of

actors in a continuous,

innovative power

struggle…

Or rather

«One can rarely be moral alone»

«One can rarely be moral alone»

What is the trigger/driver?

35


Power locus – Internally, who is responsible?

Companies or individuals?

Business ethics

Companies Individuals

CSR

The coregulation system redefines, volens nolens,

the definition of what companies are,

through the rights & responsibilities that are gradually attributed to them &

without necessarily recognizing that they have a soul or moral intentionsThe coregulation system redefines, volens nolens,

the definition of what companies are,

through the rights & responsibilities that are gradually attributed to them &

without necessarily recognizing that they have a soul or moral intentions

36


Power locus – Externally, where should the common interest be defined?

Privatisation of common interest?

Lower risk acceptance & corporate legitimacy

Companies

Govs & Civil Society

Globalisation &deregulation



limits

Economic, technical and scientific orderPossible vs. Impossible

(Natural and rational Laws)

Economic, technical and scientific orderPossible vs. Impossible

(Natural and rational Laws)

11

22 This dichotomy

doesn’t help to

realize the

growing porosity

between

politics & economy

(see Berns)

This dichotomy

doesn’t help to

realize the

growing porosity

between

politics & economy

(see Berns)

37


Final thoughts – Main facets of the coregulation system

CoregulationSystem

Evolving hybrid ofregulation & autoregulation,

of Law & reputation

“Intellectual bricolage”From voluntary social responsibilityto legally binding responsibility?

Started outside the laws, caught back by “soft” laws now; To understand it, one needs to get rid of old concepts ofstate sovereignty, legal order and norms pyramid;Porosity of Politics & economybased on a self-limitation of governments

Open, normative power gameAll shots allowed?

Hard & soft laws become instruments towardsthe realization of the objectives of a multitude of players

but need inevitably to agree on certain rulesand to allow a third party to «institutionalize» the game

(hence the quasi-legal appeal of Global Compact)

Not ethically,nor democratically elaborated

Legitimate?

CSR growth does not require corp. to have a soul or moral

intentions; Habermas: sous-institutionalization of global laws;Decoupling between law and political institutions

Less ambitiousbut more tangible?

Do not replace int’l conventions or formal concertationbut ensure effective application on the field; Pragmatic actors more used to action than diplomacyHypocrisy or alternative to bottlenecks of int’l society?

Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

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Are ethics or corporates instrumentalized?

Protestantethos

Protestantethos

Birth of

modernCapitalism

Birth of

modernCapitalism

Progressistethos

Progressistethos

Expansion of

industrial Capitalism

Expansion of

industrial Capitalism

Time

Consumeristcapitalism*

Consumeristcapitalism*

Promotion of

infantilist*ethos

Promotion of

infantilist*ethos

According to Benjamin Barber in «Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; See also Anne Salmon’s analysis in « Ethique et ordre économique : une entreprise de séduction », 2002

Final thoughts – Where do we go?

Probably both…

• CSR is not Ethics: does it «mask» bigger issues?

• But corporates do not control the CSR dynamic

(corporates are also «instrumentalized»)

Probably both…

• CSR is not Ethics: does it «mask» bigger issues?

• But corporates do not control the CSR dynamic

(corporates are also «instrumentalized»)

?

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Bibliographie

Defining moments, Joseph L. Badaracco, jr, Harvard Business School Press, 1997

La responsabilité sociale de l’entreprise comme objet des sciences de gestion, Jean Pasquero dans Responsabilité sociale et environnementale de l’entreprise, sous la dir. de Marie-France B.-Turcotte et Anne Salmon, Presses de l’Université du Québec, 2005

La société malade la gestion, Vincent de Gauléjac, Seuil, 2005

Le capitalisme est-il moral, André Comte-Sponville, Albin Michel, 2004

Ethique et ordre économique: une entreprise de séduction, CNRS Editions, 2002

Le fondement de la morale, Marcel Conche, PUF, 1993

Rethinking business ethics – A pragmatic approach, Sandra Rosenthal & Rogene Buchholz, Oxford Press, 2000

Introduction aux “Pensées” de Marc Auréle, Pierre Hadot, Le livre de Poche, 1997

Respect in a world of inequality, Richard Sennett, Norton Press, 2004

Business Ethics & Values, Colin Fischer & Alan Lovell, FT Prentice Hall, 2003

Working ethics, Marvin Brown, Jossey-Bass, 1990

Responsabilité sociale de l’entreprise : Faut-il enchaîner Prométhée ?, Philippe de Woot, Economica, 2005

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Bibliographie

What’s a business for?, Charles Handy, HBR, december 2002

Can a corporation have a conscience?; Kenneth Goodpaster & John Mathews, January 1982

Does business ethics pay?, S. Webley & E. More, London IBE, 2003

Managing messy moral matters, C.M. Fischer & C. Rice, in Strategic Human Resources, J. Leopold, L. Harris & T.J. Watson, 1999

The vulnerability of autonomy that denies the exercise of moral agency, Alan Lovell, in Business Ethics: a European review, 2002

Responsabilité sociale des entreprises et co-régulation, T. Berns, P.F. Docquir, B. Frydman, L. Hennebel & G. Lewkowicz, Bruylant 2007

Ethical Imagination

Business

Transcript of Ethical Imagination