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ETHICAL BEHAVIOR & CSRFor SASAC managers

Sept. 6th 2012

Laurent Ledouxledoux.laurent@gmail.com – 0478 62 14 20

(www.philoma.org)

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Case 1 : What would you do if you were the CEO of the Car Company ?

Case 1 : What would you do if you were the CEO of the Car Company ?

Would you retrieve the car from the markets or not ?

Would you retrieve the car from the markets or not ?

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Case 2: What would you do if you were Steve Lewis ?

Case 2: What would you do if you were Steve Lewis ?

Would you go to the meeting or not ?

Would you go to the meeting or not ?

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“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?

Source: Badaracco (1997); adapted by Ledoux

Lewis’ possible questions

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Ethics, a major branch of philosophy, encompasses right conduct

& good living

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)

Ethics, a major branch of philosophy, encompasses right conduct

& good living

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)

« 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

A morality is a set of duties & imperatives (positive or negatives)

that a society or a community gives to itself & 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 & imperatives (positive or negatives)

that a society or a community gives to itself & which enjoins its members to conform their behaviour,

«freely» & in an «unselfish» way, to certain values enabling to distinguish right & wrong.

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Codes of conducts &Mission statements

Legalduties

Heuristics(«sleep-test» rules)

Moral or ethicalprinciples

Possible sources when facing an ethical dilemma

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Institutional structureFixity & consistency

Individual processesAdaptability & responsiveness

Results“Doing good”

Principles“Doing right”

VirtueEthics

(Aristotles, Gilligan,…)

DevelopmentEthics

(Etzioni, Covey,…)

DeontologicalEthics

(Kant, Rawls,…)

TeleologicalEthics

(Bentham, Mill,…)

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

4 main categories of ethics

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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.

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Suez’ code of ethics

Questions to ask yourself in front of an ethical dilemma

• Is it conform to the law ?• Is it conform to the ethical code and values of my company ?• Am I conscious that my decision can engage other people in the

company ?• Do I feel alright with my decision ?• What would the colleagues think about my decision ?• What if it would be published in a newspaper ?• What would my family think about it ?• What if everybody would do the same ?• Should I question the person in charge of deontology ?

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Case 3: What would you do if you were M. Wang, the head of the marketing department ?

Case 3: What would you do if you were M. Wang, the head of the marketing department ?

Would you fire Mrs Jie ? Would you fire Mrs Jie ?

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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)

Wang’s possible questions to think «internal» dilemmas

Source: Badaracco (1997); adapted by Ledoux

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Case 4: What would you do if you were Edouard Sakiz, the CEO of Roussel-Uclaf ?

Case 4: What would you do if you were Edouard Sakiz, the CEO of Roussel-Uclaf ?

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Who is theorganisation?

“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)

Source: Badaracco (1997); adapted by Ledoux

Edward Sakiz’s possible questions

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* 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)

Moral orderRight vs. Wrong

(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

WisdomsWisdomsSpiritualities

Metaphysics(secular or religious)

SpiritualitiesMetaphysics

(secular or religious)

possibly induces

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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

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

Trigger

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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?

MethodHow to promote it?

• Regulation or self-regulation?• Soft or hard?

• Global or Issue-related?

DynamicHow did/does CSR evolve?

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

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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

Fair

Viable

Sustainable

Livable

Yesterday’s representation…

Yesterday’s representation…

Economique

Environnement

SocialEquitable

Viable

Durable

Vivable

Economicsphere

Socialsphere

Biosphere

Laurent Ledoux – 31/03/11

Today’s representation…Today’s representation…

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Meeting the needs of the present generation without compromising the ability of future generations to meet their needs

Brundtland Report for the UN - 1987

Meeting the needs of the present generation without compromising the ability of future generations to meet their needs

Brundtland Report for the UN - 1987

Not only environmental issues…

Not only environmental issues…

Source : Ph. Defeyt based on PNUD Source : Isabelle Cassiers, Conférence au Collège Belgique, d’après le PNUD

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Sustainability

Towards Stagnation(Too little efficiency)

TowardsBrittleness(Too little diversity)

Greater efficiency (streamlining)

Diversity & Interconnectivity

Optimum

100%

0%

Optimal balance

Greaterresilience

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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.

Efficient management(Technical skills)

8 components of CSR

nowadays

Evolution of CSR so far?

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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

Explaining the growing impact of “CSR”& co-regulation during the last 50 years ?

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What does teach us the Toyota brake scandal ?

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Protestantethos

Protestantethos

Birth of

modernCapitalism

Birth of

modernCapitalism

Time

ConsumeristCapitalism

ConsumeristCapitalism

Promotionof a childish ethos

Promotionof a childish ethos

Post-capitalistEthos

Post-capitalistEthos

Rise of the post-capitalist economy

Rise of the post-capitalist economy

?Progressist

ethosProgressist

ethos

Expansion of

industrial Capitalism

Expansion of

industrial Capitalism

Evolution of the relations between capitalism & the dominant ethos

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Who are my stakeholders & how to engage them to work with you ?

A. List your stakeholdersB. How can each of them influence you and vice versa ?C. What is the right attitude to adopt with each of them ? D. How to turn each of them into an ally or to minimize their

potentially negative impact ?

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Stakeholder analysis

Expectations & preoccupations of the stakeholder

Tensegrity

Positive strength

Negative strength

Key actors at stakeholder

Approach/Action Plan

Partnership / Innovation / Good neighbor / Negociation

Description of the stakeholder (group of organization or individual organization)

Our influence/impact on the stakeholder The stakeholder influence/impact on us

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Identification of the related risk Stakeholders to be involvedAction plan to manage the risk & to transform it into an

opportunity

CSR action plan per issue

Stimulating or constraining strength

Expliquer en quoi cet enjeu représente actuellement une force stimulante ou une force contraignante

Description of issue 1

Identification of the related opportunity Stakeholders to be involved Action plan to seize the opportunity & limit related risks

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Distinguishing technical problems & adaptive challenges

Solution and implementation

Solution and implementation

Primary locus of resp. for the work

Primary locus of resp. for the work Kind of workKind of workProblem

definition

Problem definitionChallengeChallenge

ClearClear ClearClear PhysicianPhysician TechnicalTechnical

ClearClear Requires learningRequires learning Physician and patient

Physician and patient

Technical and adaptive

Technical and adaptive

Requires learningRequires learning Requires learningRequires learning Patient > physicianPatient > physician AdaptiveAdaptive

Type IType I

Type IIType II

Type IIIType III

Source: “Leadership without easy answers”, by Ronald Heifetz

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Modulating the stress

Source: “Leadership on the line”, by Ronald Heifetz & Marty Linsky

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Protect leadership voices w/out authority

(Cover who raises questions authorities can’t raise)

5strategic

principles of

Leadership

Keep the distress level tolerable(Control the pressure cooker)

Focus on ripening issues(Counteract work avoidance mechanisms)

Give the work back to people

(Put pressure on people with the problem)

Identify the adaptive challenge(Unbundle the issues)

5 strategic principles of adaptive leadership

Source: “Leadership without easy answers”, by Ronald Heifetz, adapted by Ledoux

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I. Diagnose the system

• Be ready to observe & interpret bef. intervening

• Diagnose the system itself

• Diagnose the adaptive challenge

• Diagnose the political landscape

• Understand the qualities that makes an organization adaptive

II. Mobilize the system• Make interpretations

• Design effective interventions

• Act politically

• Orchestrate the conflict

• Build an adaptive culture

III. See yourself as a system• Identify who you are

• Know your tuning

• “Broaden your bandwidth”

• Understand your roles

• Articulate your purposes

IV. Deploy yourself• Stay connected to your purposes

• “Engage courageously”

• Inspire people

• Run experiments

• “Thrive”

4 related groups of activities of adaptive leadership

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Bibliography

The practice of adaptive leadership, Ronald Heifetz, Alexander Grashow & Marty Linsky, HBR ed., 2009

Leadership without easy answers, Ronald Heifetz, HBR ed., 1994

Leadership on the line, Ronald Heifetz & Marty Linsky, HBR ed., 2002

Leadership can be taught, Sharon Daloz Parks, HBR ed., 2005

Defining moments, Joseph Badaracco, HBR ed, 2003

Leading quietly, Joseph Badaracco, HBR ed., 2002

Questions of character, Joseph Badaracco, HBR ed., 2006

Arts of the wise leader, Mark Strom, Sophos ed., 2007 (www.artsofthewiseleader.com)

The powers to lead, Joseph Nye, HBR ed., 2008

Leading with wisdom: spiritual-based leadership in business, Peter Pruzan & Kirsten Pruzan Mikkelsen, Response ed., 2009

Rational, Ethical & Spiritual Perspectives on Leadership, Peter Pruzan, Peter Lang ed., 2009

Leadership, Spirituality and the Common Good, Henri-Claude de Bettignies & Mike J. Thompson, Garant ed., 2010

The Seven-day weekend, Ricardo Semler

Freedom Inc., Bryan Carney & Isaac Getz

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Bibliography

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

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

Working ethics, Marvin Brown, Jossey-Bass, 1990

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

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole, B. Barber, 2007

Capitalism at crossroads, S. Hart, 2005

From “Tribal leadership” by Logan, King & Fischer-Wright, 2008; adapted by Ledoux

1

2

3

4

5

Stage

Alienated

Stable partnership

Team

“Life sucks”

“I’m great”

“Life is great”

“My life sucks”

“We’re great”

Language

2%

25%

49%

22%

2%

%

Separate

Relationship to people

Separate

Stable partnership

“My life sucks”

“We’re great”

Language

Personal domination

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Inspired by Isaac Getz (Freedom Inc.)

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2

3

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2

3

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2

3

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Marina

Olivier Laurent

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Listen to your

liberating question

Get off the dance

floor & on the

balcony

Learn daily to

ride your elephant

Get out of the way -

Let go