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The future of business ethics research


This weekend offered an interesting opportunityto discuss, dissect and reflect on the state of the art of business ethics research and some of its future trajectories. At the Wharton School of the University of Pennsylvania a small group of business ethics scholars gathered from all around the globe to celebrate and honor the work of one of the faculty members, Professor Thomas Donaldson. Donaldson, a philosopher by training, can be considered one of the pioneers of the business ethics field and one of its most longstanding and certainly most influential voices over the last four decades.

Some of the speeches at the event focused on appraising and celebrating Donaldson’s impressive body of work, including many humorous interjections on Donaldson as a person by some of his contemporaries such as Norman Bowie, George Brenkert, Ed Freeman, or Pat Werhane. Most of the day though was dedicated to work by scholars who build on, extend, refine, and continue some of Donaldson’s work, including also entering a critical dialogue with his ideas.

Donaldson’s work is not easy to summarize as it covers a number of areas, incl. ‘hard core’ philosophical topics. Without downplaying any of those, one could argue that his work (mostly manifest in books and seminal articles) on corporations and morality, ethics and international business, and Integrative Social Contract Theory (ISCT, together with Thomas Dunfee) count among the most influential ones for the business ethics field. Much of the day was dedicated to develop those ideas further, and in particular ISCT seems to still have a long life ahead.

Thomas Donaldson
Taking a step back after reflecting on Donaldson’s work for 1½ days, it strikes that next to his solid contributions it is both his approach and his choice of topics decades ago which have maybe the strongest potential to inform work in business ethics for decades to come. Donaldson deserves credit for breaking out of the extant consensus in both, the narrower business ethics field as well as the general gist in management studies with an innovative take on at least three core research topics.

What is the unit of analysis in business ethics? 

For most of its short history, certainly until the mid 1990ties scholarly work in business ethics was mostly looking at the organizational level, or even below that, at the level of individual decision-making. What is to admire about Donaldson as a scholar is that he broke out of that consensus, most remarkably when publishing his book and papers around ISCT. The basic tenet of ISCT is that whatever happens in terms of ethical or unethical behavior in businesses is intricately linked to the outside world of business, to institutions that govern business, to wider socio political processes that incentivize or constrain whatever businesses – let alone individuals within them – are doing.

There are solid grounds to argue that this approach to researching ethical issues in business is still of highest relevance today.  On the opening panel of the conference Professor Margaret Blair gave a somewhat sobering account of recent court decisions in US corporate law. Blair, a longstanding authority and critic of the current shareholder dominated view of the firm, gave a short tour d’horizon of court rulings reflecting shareholder dominance as being stronger as never before (Ebay vs Newmark, Trado, CitizensUnited, Hobby Lobby). When the strongest institutions (in this case the law) governing business advocate a model of the firm which flies in the face of much of the basic tenets of the field of business ethics it appears that the odds are very much stacked against any of the aspirations of the field ever coming to fruition in the real world. 

The inspiration then from Donaldson’s work for business ethics scholars may be to further and refine some of the ‘Donaldsonian Themes’ (so the title of the conference); but it is fair to argue that the vision, courage and intellectual entrepreneurship to come up with new approaches of conceptualizing business in its wider societal context is maybe the biggest example and benchmark Donaldson has left for a next generation of business ethics scholars. Be it the relation of business and politics, be it the role of business in economic inequality, or be it the role of business in new technologies and big data – these are all new ethical challenges which ask for a wider and deeper conceptualizations of the role of business and its embeddedness in wider society.

Business ethics is not an epiphenomenon

For most of its history, and to some degree still today, business ethics has been considered as a subfield of management that deals with side-effects of business, with fringe occurrences, with phenomena, that maybe are of interest to the odd practitioner here and there. Certainly many scholars in the core disciplines of management, such as strategy or finance would echo such a view.

During the conference many colleagues highlighted that Donaldson throughout his career has worked in overcoming this categorization of business ethics work. That includes a lot of his writings but also his service to the academic community of management scholars. He was actively leading the subgroup ‘Social Issues inManagement’ of the Academy of Management but also engaged in a number of ‘field constituting’ ventures. Most notably his time as Associate Editor of Academy ofManagement Review (the top journal  for management theory) in the mid 2000s has led to a spate of work originating from scholars in the business ethics field, which was developed under his editorship into papers that speak to the core of the management discipline.

The purpose of the firm, the effect of business on the ecology, the role of business in development or peace – just to name a few examples of business ethics topics – are no longer side-shows. Many of these questions - certainly post financial crisis – are topics that touch the core of the management discipline. Donaldson has left a great example that business ethics scholars have to raise their voice louder and speak to a wider community. Business ethics has something to bring to the party, and Donaldson in is writing and service, has shown how to do this really well.

Management research is an multi-disciplinary venture

One of the things that stands out when looking at Donaldson’s work over four decades is that research in management as an applied discipline is best when it is phenomenon driven. That partly explains the enormous variety of issues he has taken on. The intellectual rigour, theoretical precision and an impressive skill at interesting and accessible writing is what has set a benchmark for ongoing scholarly work. What strikes most is his success – together with other colleagues – to establish philosophy as a legitimate core discipline in management research.

Many management scholars still consider economics to be the main theoretical foundation of management studies – a view maybe still strongest reflected in some of the management studies communities in Europe. In the 1960s, certainly with the rise and growth of marketing and parts of organizational behavior research, we can now consider psychology as a legitimate member of the canonized disciplines of management inquiry.

But this project of widening the theoretical and disciplinary avenues to management research is not over yet. In his writing Donaldson has certainly elevated philosophy as a strong candidate; in his editorial work at AMR he has contributed to make approaches from political science, sociology and others more familiar to the core community of management researchers. We can argue that continuing to widen the disciplinary focus of research in management is truly a ‘Donaldsonian Theme’ and a task for current and future generations of business ethics scholars.

Just as an afterthought - at the end of the conference there was arguably one topic conspicuously absent during the discussion: namely the phenomenon of power (corporate or political, alike). Looking at contemporary debates on, for instance, income inequality or on the roots and fallout of the financial crisis, this seems a somewhat conspicuous omission.  One explanation though could be that – as Richard DeGeorge, chair of the philosophy department during Donaldson’s PhD studies, pointed out at the conference – Donaldson as a student did not take too much liking in Karl Marx’ writings…

The good news then is that this weekend’s conference was not a celebration of Donaldson’s retirement. He will continue as Wharton faculty to be an active scholar and thus surprise, challenge and inspire us hopefully for many more years to come.

Top photo by frankrizzo805, reproduced under the Creative Commons License.
    
 


The future of business ethics research

This weekend offered an interesting opportunityto discuss, dissect and reflect on the state of the art of business ethics research and some of its future trajectories. At the Wharton School of the University of Pennsylvania a small group of business ethics scholars gathered from all around the globe to celebrate and honor the work of one of the faculty members, Professor Thomas Donaldson. Donaldson, a philosopher by training, can be considered one of the pioneers of the business ethics field and one of its most longstanding and certainly most influential voices over the last four decades.

Some of the speeches at the event focused on appraising and celebrating Donaldson’s impressive body of work, including many humorous interjections on Donaldson as a person by some of his contemporaries such as Norman Bowie, George Brenkert, Ed Freeman, or Pat Werhane. Most of the day though was dedicated to work by scholars who build on, extend, refine, and continue some of Donaldson’s work, including also entering a critical dialogue with his ideas.

Donaldson’s work is not easy to summarize as it covers a number of areas, incl. ‘hard core’ philosophical topics. Without downplaying any of those, one could argue that his work (mostly manifest in books and seminal articles) on corporations and morality, ethics and international business, and Integrative Social Contract Theory (ISCT, together with Thomas Dunfee) count among the most influential ones for the business ethics field. Much of the day was dedicated to develop those ideas further, and in particular ISCT seems to still have a long life ahead.

Thomas Donaldson
Taking a step back after reflecting on Donaldson’s work for 1½ days, it strikes that next to his solid contributions it is both his approach and his choice of topics decades ago which have maybe the strongest potential to inform work in business ethics for decades to come. Donaldson deserves credit for breaking out of the extant consensus in both, the narrower business ethics field as well as the general gist in management studies with an innovative take on at least three core research topics.

What is the unit of analysis in business ethics? 

For most of its short history, certainly until the mid 1990ties scholarly work in business ethics was mostly looking at the organizational level, or even below that, at the level of individual decision-making. What is to admire about Donaldson as a scholar is that he broke out of that consensus, most remarkably when publishing his book and papers around ISCT. The basic tenet of ISCT is that whatever happens in terms of ethical or unethical behavior in businesses is intricately linked to the outside world of business, to institutions that govern business, to wider socio political processes that incentivize or constrain whatever businesses – let alone individuals within them – are doing.

There are solid grounds to argue that this approach to researching ethical issues in business is still of highest relevance today.  On the opening panel of the conference Professor Margaret Blair gave a somewhat sobering account of recent court decisions in US corporate law. Blair, a longstanding authority and critic of the current shareholder dominated view of the firm, gave a short tour d’horizon of court rulings reflecting shareholder dominance as being stronger as never before (Ebay vs Newmark, Trado, CitizensUnited, Hobby Lobby). When the strongest institutions (in this case the law) governing business advocate a model of the firm which flies in the face of much of the basic tenets of the field of business ethics it appears that the odds are very much stacked against any of the aspirations of the field ever coming to fruition in the real world. 

The inspiration then from Donaldson’s work for business ethics scholars may be to further and refine some of the ‘Donaldsonian Themes’ (so the title of the conference); but it is fair to argue that the vision, courage and intellectual entrepreneurship to come up with new approaches of conceptualizing business in its wider societal context is maybe the biggest example and benchmark Donaldson has left for a next generation of business ethics scholars. Be it the relation of business and politics, be it the role of business in economic inequality, or be it the role of business in new technologies and big data – these are all new ethical challenges which ask for a wider and deeper conceptualizations of the role of business and its embeddedness in wider society.

Business ethics is not an epiphenomenon

For most of its history, and to some degree still today, business ethics has been considered as a subfield of management that deals with side-effects of business, with fringe occurrences, with phenomena, that maybe are of interest to the odd practitioner here and there. Certainly many scholars in the core disciplines of management, such as strategy or finance would echo such a view.

During the conference many colleagues highlighted that Donaldson throughout his career has worked in overcoming this categorization of business ethics work. That includes a lot of his writings but also his service to the academic community of management scholars. He was actively leading the subgroup ‘Social Issues inManagement’ of the Academy of Management but also engaged in a number of ‘field constituting’ ventures. Most notably his time as Associate Editor of Academy ofManagement Review (the top journal  for management theory) in the mid 2000s has led to a spate of work originating from scholars in the business ethics field, which was developed under his editorship into papers that speak to the core of the management discipline.

The purpose of the firm, the effect of business on the ecology, the role of business in development or peace – just to name a few examples of business ethics topics – are no longer side-shows. Many of these questions - certainly post financial crisis – are topics that touch the core of the management discipline. Donaldson has left a great example that business ethics scholars have to raise their voice louder and speak to a wider community. Business ethics has something to bring to the party, and Donaldson in is writing and service, has shown how to do this really well.

Management research is an multi-disciplinary venture

One of the things that stands out when looking at Donaldson’s work over four decades is that research in management as an applied discipline is best when it is phenomenon driven. That partly explains the enormous variety of issues he has taken on. The intellectual rigour, theoretical precision and an impressive skill at interesting and accessible writing is what has set a benchmark for ongoing scholarly work. What strikes most is his success – together with other colleagues – to establish philosophy as a legitimate core discipline in management research.

Many management scholars still consider economics to be the main theoretical foundation of management studies – a view maybe still strongest reflected in some of the management studies communities in Europe. In the 1960s, certainly with the rise and growth of marketing and parts of organizational behavior research, we can now consider psychology as a legitimate member of the canonized disciplines of management inquiry.

But this project of widening the theoretical and disciplinary avenues to management research is not over yet. In his writing Donaldson has certainly elevated philosophy as a strong candidate; in his editorial work at AMR he has contributed to make approaches from political science, sociology and others more familiar to the core community of management researchers. We can argue that continuing to widen the disciplinary focus of research in management is truly a ‘Donaldsonian Theme’ and a task for current and future generations of business ethics scholars.

Just as an afterthought - at the end of the conference there was arguably one topic conspicuously absent during the discussion: namely the phenomenon of power (corporate or political, alike). Looking at contemporary debates on, for instance, income inequality or on the roots and fallout of the financial crisis, this seems a somewhat conspicuous omission.  One explanation though could be that – as Richard DeGeorge, chair of the philosophy department during Donaldson’s PhD studies, pointed out at the conference – Donaldson as a student did not take too much liking in Karl Marx’ writings…

The good news then is that this weekend’s conference was not a celebration of Donaldson’s retirement. He will continue as Wharton faculty to be an active scholar and thus surprise, challenge and inspire us hopefully for many more years to come.

Top photo by frankrizzo805, reproduced under the Creative Commons License.
    
 


When Keurig fights “coffee pirates,” who loses? Loyal consumers

This box of Keurig-licensed K-cups won't work in the company's new Keurig 2.0 machines.

This box of Keurig-licensed K-cups won’t work in the company’s new Keurig 2.0 machines.

As you may have heard, Keurig is engaged in a battle with a host of companies that aspire to provide consumers with ‘pirate’ coffee pods. And who is losing this battle? The consumer.

For those of you who aren’t familiar with it, Keurig’s business model is pretty much the same as the business model used by most producers of desktop printers. Desktop printers have become almost trivially cheap — you can buy a laser printer for under a hundred bucks now — but the cartridges cost a bundle. That’s where they make their money. Likewise, Keurig sells its popular single-cup coffee makers at astonishingly reasonable prices, and makes its money on the coffee pods. Naturally, given that the pods are lucrative and easy to make, there have been imitators. A large number of companies have sold, over the last few years, their own “K-cups,” pods of coffee designed specifically to work in Keurig’s machines. Consumers love this, both because competition lowers prices and because it expands the range of roasts and flavours available.

To fight the onslaught of packagers of (perfectly legal) pirate K-cups, Keurig recently starting selling its “Keurig 2.0″ line of coffee makers. The 2.0 machines incorporate a digital rights management (DRM) system, designed to ensure that Keurig machines work only with Keurig branded and Keurig licensed pods, effectively shutting out the competition, at least temporarily. The result is that all those non-licensed Keurig imitators won’t work in the new 2.0 machines.

The result has included a $600 million lawsuit, along with some professional and some amateur attempts to break Keurig’s DRM.

Who ultimately loses in this fight? Arguably the consumer. Not only has choice been restricted, but there’s also an enormous information gap. Keurig has done a less than stellar job — I’m being charitable, here — of informing consumers about their new DRM system. The result has been frustration, both with the newly-limited choice of pods, but also with coffee machines that don’t work as expected.

Take me for example. My beloved Keurig died a couple of weeks ago. Its high-pressure water pump moaned and groaned and finally gave up the ghost. So I promptly bought a shiny new Keurig 2.0 (with a number of fancy new features) at Costco. Nowhere on the packaging did Keurig inform me that most of the dozen or so boxes of coffee and tea currently in my basement (well over $100 worth) simply will not work in the new machine. And it’s not just ‘pirate’ pods that won’t work; nor will older Keurig-licensed K-cups, ones that bear the Keurig logo but that don’t have have the DRM-ready labels that the new machines require. Those are essentially garbage now.

A call to Keurig resulted in an offer of three gift certificates, each good for a box of pods (worth $12 or so). But that doesn’t come anywhere close to covering what I’ve lost, never mind the frustration.

And it’s not just Keurig itself. Retailers have been complicit in this abuse of customers. Many of them still stock the ‘pirate’ pods, as well as older Keurig-licensed pods. In some cases (and Canadian Tire for example is guilty of this), they do this while aggressively selling the 2.0 machines, without any hint to the consumer of what the problem is.

The battle of the K-cups is about a bunch of things: intellectual property, competition, and innovation for starters. The back-and-forth of those things is pretty much standard fare in a thriving market economy. But ethical businesses — not to mention smart businesses — need to work harder to stay true to their goal of providing good value to their customers.

Chris MacDonald is director of the Jim Pattison Ethical Leadership Program at the Ted Rogers School of Management, and founding co-editor of the Business Ethics Journal Review.


    
 


Introductory Training for BSCI Participants: Request for Qualifications

In the new BSCI COC greater emphasis is placed on ownership and initiative, and less so on compliance and audits. The introductory training for participants is a highly important step in engendering a culture shift or change of emphasis. … [visit site to read more]

    
 


Alibaba’s charity is good for the developing world—but its business is better

“When you have $1 million, you’re a lucky person. When you have $10 million, you have trouble. When you have more than $1 billion, you have responsibility.” So says Jack Ma, founder and executive chairman of the Alibaba Group. Alibaba — the Chinese e-commerce giant — gained international prominence after its recent record-breaking IPO.

The talk about responsibility is not just talk. Ma says he has earmarked $3 billion of his IPO earnings to donate to environmental and educational projects in China. So Ma is clearly a man who believes in giving back. On the corporate side, under his leadership Alibaba has pledged to donate 0.3% of profits to environmental protection initiatives. If 0.3% seems like a small amount, consider that that’s a percentage of revenue, not profits. And on annual revenues in the $7.5 billion range, 0.3% turns out to be something a little over $22 million. Nothing to sneeze at.

So let me ask a silly question: why do we think such charitable moves are a good thing? Well, pretty simply because we think they produce good outcomes.

But if we commend such moves, ethically, because they are likely to produce good outcomes, then we should also praise Alibaba’s business activities more generally. Ecommerce companies like Alibaba connect people together and enable commerce. They enable enormous quantities of mutually-advantageous exchange.

According to Wired,

Ma says part of his strategy for growing the company is to continue expanding into developing countries—countries where approximately 6.5 billion people don’t use e-commerce today. “That’s the opportunity we could have,” he says. “We’re trying to help Nigerian SMEs sell to the Philippines and the Philippines sell to Pakistan and Pakistan sell to Argentina.”

If Alibaba can achieve that, it will have done more good in the world — and deserve more moral praise — than Ma and Alibaba’s philanthropy combined.

Chris MacDonald is director of the Jim Pattison Ethical Leadership Program at the Ted Rogers School of Management, and founding co-editor of the Business Ethics Journal Review.


    
 


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