BUSINESS ETHICS AND CORPORATE

CORRUPTION CONTROL

Masoud Shadnam

Rouen Business SchoolFall 2012

ABOUT ME Masoud SHADNAM Ph.D. in Management and Organization

Studies from Simon Fraser University in Vancouver, Canada

Research: Morality in Organizational Life Experience: Several years of consultancy

for companies in oil and energy, IT, and auto industries

Office: A238 Office hours: By appointment Email: msh@rouenbs.fr

ABOUT YOU

COURSE CONTENT Lectures, videos, and anything presented in

class

Textbooks: Linda K. Treviño & Katherine Nelson (2011).

Managing Business Ethics: Straight Talk About How To Do It Right

Wim Dubbink, Luc van Liedekerke, & Henk van Luijk (2011). European Business Ethics Cases in Context

Peter Fleming & Stelios C. Zyglidopoulos (2009). Charting Corporate Corruption: Agency, Structure and Escalation

Sim B. Sitkin, Laura B. Cardinal, & Katinka M. Bijlsma-Frankema (2010). Organizational Control

ASSESSMENT Case analysis report (individual) 50%

Select an organization (any size or type) for your analysis, as soon as possible

Check in this list if anyone else has selected that organization before you: https://docs.google.com/spreadsheet/ccc?key=0AnZ5br65RERqdEllNE9ZTVFJcUdEVmZuSi1HeVREeUE

If it was not already selected, then add your name and the organization’s name to the list

Video presentation (group) 30% Build your own group of filmmakers Every group has to have three, four, or five members Let me know (email) the complete names of your group members

and the broad topic of your video by the end of next week (Nov 18th)

Class assignments 20% A variety of activities that we will have in class

FUNDAMENTALS OF MORALITY

AND ETHICSMasoud Shadnam

Rouen Business SchoolFall 2012

WHAT DO WE MEAN WHEN TALKING ABOUT ETHICS AND MORALITY?

GazaDecember 2008-January 2009

Israel

Palestine

WHAT DO WE MEAN WHEN TALKING ABOUT ETHICS AND MORALITY?

More than 1385 killed, 425 of those were women and children

10 soldiers (4 killed in friendly fire) and 3 civilians killed

GazaDecember 2008-January 2009

Self defense? 18 people killed by rockets from 2001 to 2009

Israel

Palestine

ETHICS AND MORALITY What do we have in mind when talking about

ethics and morality? The consequences of our actions Our intentions Our values Our rights Our responsibilities Our character Our humanity How we are judged by others Having a choice

All of the above and more?

THERE WAS A TIME… [The dominant moral culture of advanced

modernity] has continued to be one of unresolved and apparently unresolvable moral and other disagreements in which the evaluative and normative utterances of the contending parties present a problem of interpretation.

My explanation was and is that the precepts that are thus uttered were once at home in, and intelligible in terms of, a context of practical beliefs and of supporting habits of though, feeling, and action, a context that has since been lost…

Alasdair MacIntyre, 2007: p. vii (After Virtue)

TAKING AWAY THE MYSTERY Ethics is a difficult and sometimes

mysterious thing, but we cannot make it go away. We frequently find ourselves facing ethical dilemmas – situations concerning right and wrong where values are in conflict.

Mystery makes it inaccessible to us

We do not deny the difficulties, but rather try to draw them out, clarify them, and understand them

ETHICS VERSUS MORALITY Morality

How people evaluate things in terms of good, bad, right, wrong, fair, unfair, just, unjust, etc.

Moral rules, moral theories, etc.Descriptive: is/are

EthicsPhilosophical inquiries on what really is

good, bad, right, wrong, fair, unfair, just, unjust, etc.

Ethical rules, ethical theories, etc.Prescriptive: should be/do

WHICH ONE IS WHICH? In Norway, genetic technology and its human

proponents, biotechnologists, are considered morally suspect and are excluded from “good society” through regulatory processes that embrace consumer protest, environmental activism and manufacturers’ reluctance.

Sara Skodbo, 2005

The social responsibility of business is to increase its profits.

Milton Friedman, 1970

Descriptive => Morality

Prescriptive => Ethics

WHICH ONE IS WHICH? We cannot accept to have in our country women

who are prisoners behind netting, cut off from all social life, deprived of identity… The burka is not a sign of religion, it is a sign of subservience.

Nicolas Sarkozy, 2009

There is a local male discourse that is associated with violence and a particular form of self-assertion which, more than anything, implies being in control, being in command, having authority not only, or primarily, over women, but over other men.

Marit Melhuus, 1997Descriptive => Morality

Prescriptive => Ethics

WHY DOES IT MATTER? Morality is shaped by how a group of

people see and feel the world around them

How groups of people see and feel about the world around them is shaped by public media, education system, political system, medical system, etc. Who gets to talk? About what? How are things represented?

Power => Morality

A SOCIETY DOMINATED BY

ORGANIZATIONSMasoud Shadnam

Rouen Business SchoolFall 2012

HISTORICAL ROOTS The Protestant Ethic and the Spirit of

Capitalism Max Weber

Protestant Ethic: The set of beliefs and, more particularly, the set of binding social rules that counseled secular asceticism – the methodical, rational subjection of human impulse and desire to God’s will through restless, continuous, systematic work in a worldly calling

THE PROTESTANT ETHIC Doctrines or doctrinal quarrels are less

important than the everyday conduct of one’s life guided by sanctioned norms

The social organization of moral probation – how one proves one’s worth to other people – outweighs theological beliefs

The significance of the Protestant Ethic: An individual served an unknowable God, not by

prayer or by almsgiving but by faithfully, continually, and unremittingly performing his or her worldly work

The rational and methodical pursuit of a worldly vocation, when it was crowned with economic success, proved a person before others

THE PROTESTANT ETHIC This Protestant Ethic, with its imperatives for

self-reliance, hard work, frugality, and rational planning, and its clear definition of success and failure, came to dominate a whole historical epoch in the West

Afterward, The very accumulation of wealth that the

original Protestant ethic made possible gradually stripped away its religious basis

Frugality became an aberration, conspicuous consumption in varying degrees the norm

The economy became bureaucratized

BUREAUCRATIZATION The decline of the old middle class of

entrepreneurs, free professionals, independent farmers, and small independent businessmen

The ascendance of a new middle class of salaried employees, that is, clerks, managers, executives, officials, technicians, and professionals alike, whose chief common characteristic was and is their dependence on the big organization

A mythical visitor from Mars … approaches the Earth from space, equipped with a telescope that reveals social structures. The firms reveal themselves, say, as solid green areas with faint interior contours marking out divisions and departments. Market transactions show as red lines connecting firms, forming a network in the spaces between them…

No matter whether our visitor approached the United States or the Soviet Union, urban China or the European Community, the greater part of the space below it would be within the green areas, for almost all of the inhabitants would be employees, hence inside the firm boundaries. Organizations would be the dominant feature of the landscape. A message sent back home, describing the scene, would speak of “large green areas interconnected by red lines”. It would not likely speak of “a network of red lines connecting green spots”.

… When our visitor came to know that the green masses were

organizations and the red lines connecting them were market transactions, it might be surprised to hear the structure called a market economy. “Wouldn't ‘organizational economy’ be the more appropriate term?” it might ask.

Simon, 1991: 27-28

UBIQUITY

Organizations in older civilizations (Chinese, Greek, Indian):SoldieringPublic administrationTax collection

UBIQUITY

Organizations in modern societies: Scientific discovery (research organizations) Child and adult socialization (schools and universities) Resocialization (mental hospitals and prisons) Production and distribution of goods (industrial firms, wholesale

and retail establishments) Provision of services (organizations dispensing assistance

ranging from laundry and shoe repair to medical care and investment counseling)

Protection of personal and financial security (police departments, insurance firms, banking and trust companies)

Preservation of culture (museums, art galleries, universities, libraries)

Communication (radio and television studios, telephone companies, postal service)

Recreation (bowling alleys, pool halls, park services, professional football teams)

Etc.

UBIQUITY

GROUP FORMATION

GROUPS

Nazgûls

Men

Orcs

Dwarves

Hobbits

Wizards

Elves

Trees

Trolls

Eagles

Dead Army

ElephantsFell

Beasts

Uruk Hai

AN ANALYSIS OF

THE CORPORATION

Rouen Business SchoolWinter 2012

Class Activity

ANALYSIS: THE CORPORATION [?/23] Fell Beasts: 1, 2 Hobbits: 3, 4 Elves: 5 Orcs: 6, 7 Wizards: 8 Trees: 9, 10 Men: 11, 12 Eagles: 13, 14 Trolls: 15, 16 Uruk Hai: 17 Dwarves: 18, 19 Nazgûls: 20, 21 Elephants: 22 Dead Army: 23

FORMAT OF PRESENTATION What were the main points of the video?

How do you think about those points? Agree: Do you have supporting evidence

beyond what is argued in the video? Disagree: Why do you disagree? Any evidence?

Go one step beyond the video: Based on the arguments of the video and your

agreement/disagreement with it, what do you think is the most important ethical aspect of organizations?

THANKS!