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Friday, January 4, 2019

Corporate Ethics Codes: A Waste of Time?

Ethics codes are not enough; that is to say, making applications of ethical principles explicit is not sufficient, even where they are grilled into employees in recurrent training sessions. Indeed, individuals or a dominant coalition can use a code’s existence as window-dressing. For example, in his letter on July 1, 2000 announcing Enron’s new and improved 65 page Code of Ethics, Ken Lay wrote, “Relations with the Company’s many publics . . . will be conducted in honesty, candor, and fairness.” If Ken Lay could get away with trumpeting a code of ethics, who’s to say who is out there now acting unethically in business under the cover of an effervescent code?

The full essay is at "Corporate Ethics Codes: Oxymorons?"

A Gay Judge on California's Anti-Marriage Proposition in 2010: A Judicial Conflict of Interest?

In 2010, Chief Federal District Judge Vaughn Walker issued a ruling that declared Proposition 8 (against gay marriage) an unconstitutional violation of gay Californians’ civil rights. After retiring in February of the next year, the judge revealed that he was in a 10-year-old relationship with a same-sex partner. The question is whether a reasonable belief that the judge would stand to benefit from the ruling means that there was a personal conflict of interest sufficient to have the judge’s ruling vacated. Amid the emotions swirling around issues such as gay marriage that involve the uneasy mix of personal matters and public scrutiny, an urgent need exists for ethicists and jurispruds to isolate the pernicious problems inherent in the conflict of interest phenomenon so we all can have faith that such issues are decided impartially in substance as well as appearance.

The full essay is at "Are Judges above Personal Conflicts of Interest?"

Thursday, January 3, 2019

On the Value of Creating a Hybrid Industry by Appropriating High Tech: The Case of Borders and Amazon

From the ten-year chart of Amazon.com's stock, a clear upward trajectory can be discerned from the days of financial panic in the last quarter of 2008 even in spite of the plateau in mid-2010. On May 10, 2011, AMZN was trading at around $204 a share. At the time, Amazon's new "cloud music" service was said to be behind the surge. In general, the general uplift since late 2008 can be ascribed to the company being on the right side of the computer technology changes that were transforming not only industries, but modern society itself. As Amazon.com was benefiting from its move into music, Microsoft was buying Skype for $8.4 billion in order to get into communications. The hefty price tag can itself be taken as a confidence vote in the continuance of the technological shift as well as the value in moving to a new, hybrid industry model rather than limiting the company to its existent industry model. In other words, even in companies facing a serious technological threat in the business-environment, even top managers can fail to adopt a broader perspective within which the threat can be seen as an opportunity to change the company and even its own "micro-climate," or immediate industry. Hence by 2019, Borders no longer existed whereas Amazon was still profiting. Even the dinosaur McDonalds had tried to shift into a hybrid coffee-shop/restaurant industry model. 

10 year Amazon.com stock chart from Investorguide.com

The full essay is at "Borders: A Hybrid Industry?"

Wednesday, January 2, 2019

The U.S. Government Spying on Americans: Was It Ethical?

In early June, 2013, while Barak Obama was still the U.S. president, Americans learned of the U.S. Government’s domestic surveillance program, under which the Verizon Business Network Services subsidiary had been turning over call logs “on an ongoing daily basis” to the National Security Agency[1] The order, signed by a judge on the Foreign Intelligence Surveillance Court in April of that year, was "lawful,” U.S. Senator Dianne Feinstein contended.[2] The program analyzed time and number logs that did not include the calls’ content. According to U.S. Senator Chambliss, “All of these numbers are basically ferreted out by a computer, but if there’s a number that matches a [suspicious] number that has been dialed . . . , then that may be flagged. And they may or may not seek a court order to go further on that particular instance. But that’s the only time that this information is ever used in any kind of substantive way.”[3] Harry Reid, Majority Leader in the U.S. Senate at the time, added that the phone-data program had “worked to prevent” terrorist attacks.[4] Does it make any difference. ethically speaking, that the program had helped stop a domestic attack? Shortly after The Guardian broke the story on Verizon’s subsidiary serving corporate customers, The Wall Street Journal reported, “[T]he initiative also encompasses phone-call data” from AT&T and Sprint, as well as from Verizon itself (i.e., beyond its business subsidiary).[5] Does this revelation on the vast scale of the program make any difference ethically? Moreover, does a positive collective consequence--or the lack of a negative harm to the public good--justify forays into the privacy of a vast number of individuals? 
Not surprisingly, privacy advocates were alarmed at the sheer scope of the program. Kate Martin of the Center for National Security Studies, a civil liberties advocacy group, said that “absent some explanation I haven’t thought of, this looks like the largest assault on privacy since the N.S.A. wiretapped Americans in clear violation of the law” under the Bush administration.[6] Her statement raises the question of whether the fact that the Obama administration had confined itself to court orders makes the program ethical.
Whereas the content of the phone conversations, including the parties’ names, were said to be not included in the trove of data turned over to the government, internet companies had been providing the contents of emails, online chats, Facebook accounts, Skype video calls, and web searches to the government as per court orders (i.e., not through direct access).[7] Does the inclusion of content make any difference, ethically speaking? Applying a few ethical theories may get us closer to some answers.

The analysis of the ethical theories is at "The U.S. Government Spying on Americans."

1. Charlie Savage and Edward Wyatt, “U.S. Is Secretly Collecting Records of Verizon Calls,” The New York Times, June 5, 2013.
2. Charlie Savage and Edward Wyatt, “U.S. Maintains Vast Database of Phone Calls, Lawmakers Say,” The New York Times, June 5, 2013.
3. Ibid.
4. Siobhan Gorman, Evan Perez, and Janet Hook, “U.S. Collects Vast Data Trove,” The Wall Street Journal, June 7, 2013.
5. Ibid.
6. Charlie Savage and Edward Wyatt, “U.S. Is Secretly Collecting Records of Verizon Calls,” The New York Times, June 5, 2013.
7. Siobhan Gorman, Evan Perez, and Janet Hook, “U.S. Collects Vast Data Trove,” The Wall Street Journal, June 7, 2013.

Monday, December 31, 2018

Enabling Non-Empathetic Leaders: The Case of Paterno at Penn State University

In January 2011, the illustrious football coach at Penn State University, Joe Paterno, learned that prosecutors were investigating his longstanding assistant coach, Jerry Sandusky, for sexually assaulting young boys in the football team’s locker room. Paterno even testified before a grand jury on the matter that month. He had been informed of the rapes back in 1998, yet he had kept the pedophile on even though additional boys would be at risk in doing so. 
That same month—January 2011—Paterno also began negotiating to amend his contract that would not expire until the end of 2012. By August 2011, Paterno and the president of Penn State reached an agreement in spite of the fact that both were by then embroiled in the Sandusky investigation. “Paterno was to be paid $3 million at the end of the 2011 season if he agreed it would be his last. Interest-free loans totaling $350,000 that the university had made to Mr. Paterno over the years would be forgiven as part of the retirement package. He would also have the use of the university’s private plane and a luxury box at Beaver Stadium for him and his family to use over the next 25 years.” 
The university’s board was kept in the dark. Directors who raised questions were “quickly shut down.” In the end, the board gave the family virtually everything it wanted. The board even threw in free use of specialized hydrotherapy message equipment at the university for Paterno’s wife. In other words, Paterno (and his surviving family, following his death in January 2012) got an even better deal as the scandal came to include Paterno himself.

 Joe Paterno, head football coach at Penn State, viewed by a student as "Pa" in PA        Matt Rourke/AP

The full essay is at "Enabling Non-Empathetic Leaders."

Nissan's CEO Caught in the Crosshairs of Business and Society in Japan

Ordinarily, courses that include business & society (with business & government, and business ethics material also included as if the three fields were somehow one) have been relegated to the periphery in American business schools. Perhaps the business sector and its sycophantic deans have simply assumed that little actual cost comes from business managements deviating from societal norms and values. Admittedly, such a schism decreases reputational capital, a long-term intangible asset. Even so, the long-term-oriented and intangible can manifest as immediate jolts to such capital, with actual, measurable financial costs kicking in. They are triggered by news-worthy incidents in which a company or even one high-level manager, such as a CEO, are perceived societally as being in the wrong. The general perception of wrongness in turn depends on how far a company or manager have deviated from societal norms and values. Crucially but typically ignored, even though societal norms and values can absorb certain ethical principles or theories, business ethics is a distinct field because reasoning from or to ethical principles or theories lies at the core there. That is, no philosophical reasoning is involved in business & society; rather, the norms/values of a business sector, industry, or company are compared or contrasted with relevant societal norms and values. In this essay, I analyze the case of Carlos Ghosn, who was CEO of Nissan, Renault, and Mitsubishi on November 19, 2018 when he was arrested “on allegations that for years he had withheld millions of dollars in income from Nissan’s financial filings.”[1]

The full essay is at "Nissan's CEO in Japan."

1. Amy Chozick and Motoko Rich, “The Rise and Fall of Carlos Ghosn,” The New York Times, December 30, 2018.