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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
http://klempner.freeshell.org/businesspathways/
Issue number 28
11th April 2006
CONTENTS
I. 'Virtue Business Ethics' by Ovidiu Gherghe
II. 'CSR, PR and Scientology' by Rama Varma
III. 'Summit for the Future' by Felix Bopp
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EDITOR'S NOTE
Last August (Philosophy for Business Issue 21) I gave advance notice of an
upcoming 'Summit for the Future on Risk' organized by the Club of Amsterdam,
taking place on 3-5 May. In addition to keynote speeches from prominent
business personalities, there will be a choice from five knowledge streams on
'life sciences', 'media and entertainment', 'trade - Asian leadership?',
'healthcare' and 'corporate governance', plus five interdisciplinary streams on
'innovation as risk taking', 'knowledge based risk management', 'values and
spirituality', 'cross-cultural competence', and 'creative leadership'.
I will be contributing as 'catalyst philosopher' to the knowledge stream on
corporate governance. More information including links to the Club of Amsterdam
web site and Summit for the Future blog can be found below.
Also in this issue, Pathways student Ovidiu Gherghe offers a considered view of
the role of virtue business ethics, with particular reference to the tension
between the 'entrepreneur type' and the 'organizationalist type', both of which
are needed yet which seem to espouse contrary ideals and values. While Pathways
student Rama Varma, a business analyst by profession, casts a somewhat
sceptical eye on the role of PR companies in promoting their clients CSR
credentials.
Geoffrey Klempner
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I. 'VIRTUE BUSINESS ETHICS' BY OVIDIU GHERGHE
In the Introduction of his book A Better Way To Think About Business, Robert C.
Solomon writes: 'virtues and values come together in visions of business and the
role of business in life.'[1] Solomon is attempting to go beyond the traditional
value based ethical teaching of contemporary business by introducing the
philosophical concept of virtue. Traditional branches of normative business
ethics are being challenged in current times as a result of high profile cases
of corporate misbehavior. This article is but a feeble attempt to untie
possible confusions especially if the term business ethics appear as an
oxymoron at first observation -- a contradiction nullifying itself. I will try
to demonstrate that confusion in the kinds of characters and their personal
inclinations affect the overall ethical business climate. Finally, I will
propose that since virtues are subjective and personally adjusted, the best
route towards a well balanced and socially responsible corporation will remain
the proper cultivation of individual virtues that promote not only cooperation
but well being in general.
I
In my personal judgment the number one issue facing corporate ethical
responsibility in contemporary business is the failure of human resource modus
operandi by not recognizing the transition in terms of the individual character
of each member in relation to the organization's philosophy. The failure stems
from a mistake of classification. On one side there seems to be the self-driven
and innovative person: the entrepreneur type. On the other, there is the
ladder-ascending and value driven, the organizationist type. A leading cause of
such confusion may lie in the fact that some entrepreneurs do become
organizationists and vice-versa. The following case study should help explain
in more detail the format of my argument:
An individual, let us call him John is a self-starter and by finding an
innovative way to do something better he decided to enter the world of
business. He registered with his local authorities in order to conduct his
affairs and began building his new organization.
Being a legal entity and operating under the legal assessment of business law
for his operation does not extinguish his character as an entrepreneur. That is
because entrepreneurship is a personal vision, while the law is a public
co-agreement of sorts. These two aspects are expected to come into conflict
with each other and may briskly collide from time to time in the
business-world. If maximizing profit-making becomes the sole goal of the
organization, then the entrepreneur character is altered and subjugated as a
result of such inclination. Established organizations which focus their
recruiting efforts on stable enforcers may suffer in the long run due to lack
of innovation, while companies which invest in the free-spirited entrepreneur
solely may also fail to adjust for the long run. This may be due in part to the
cyclical nature of the business climate. Those who assume the answer to the
organizational character dilemma to be as simple as providing a multitude of
varying characters, will most likely fail to understand that the predominant
factors in any organization will be crafted out within the entrepreneurship
vision of character opposed to the organizationist's principles. What
successful organizations will eventually want is an ethical vision that shifts
the focus to the importance of members' individualized virtues.
II
The error may be in personal perception. When a person says 'I want to be a
successful business person' what are they envisioning? What personal drives
affect this determination? Surely 'business person' cannot be something fixated
in a singular finality. It must account for the spirit of entrepreneurship that
starts the individual's quest for such taste for the business world, but not so
much as to lose oneself in the glory of the super-hero entrepreneur. Solomon
talks about the myth of the entrepreneur:
'The entrepreneur, according to the familiar John Wayne
mythology, is the lone frontiersman who single-handedly
sets up an industry or perhaps establishes a whole new
world. The myth is thus part and parcel of a much older
American myth, the myth of individualism, the myth of the
solitary hero.'[2]
Solomon recognizes that the myth is exaggerated and may even become
counterproductive to an organization. It is worth noting that Solomon refers to
a specific organization, one which is established under the legal requirements
as a public corporation. However, more so-called entrepreneurs begin by forming
sole proprietorships or partnerships, both legal personal entities for the
individual to conduct the affairs of business. In the United States
entrepreneurship is a large industry in itself, but the individual entrepreneur
stubbornly struggles to transform his or her own personal drives of their
initial call to business with those of a successful and responsible
organization. The entrepreneur thrives due to the propagation of a virtual
cultural folklore aimed at presenting the adventure of business to potential
free choice-making individuals. The image of self-made richness and acclaimed
societal stature may lead one's impulses to accept -- at one time or another --
the title of entrepreneur. But what exactly is an entrepreneur? One
dictionary[3] defines it as 'a person who undertakes a commercial risk for
profit,' a definition more inclined towards defining the term simply as an
opportunist of chance. That, of course, is the opposite trait of an
organizationist who in turn looks at conserving core principles as a duty to
the establishment. The entrepreneur is living in a world where business means a
reaction to a marketable medium, an idea which comes to life as a result of an
attempt at an unique vision. According to the Jay Conrad Levinson in Guerilla
Marketing[4] the core credo for the entrepreneur personality as published by
Entrepreneur Magazine[5] -- 'a worthy publication for any person who considers
himself or herself an entrepreneur'[6] -- states the following:
'I do not choose to be a common man. It is my right to be
uncommon -- if I can. I seek opportunity -- not security. I
do not wish to be a kept citizen, humbled and dulled by
having the state look after me.
I want to take the calculated risk, to dream and to build,
to fail and to succeed.
I refuse to barter incentive for a dole; I prefer the
challenges of life to the guaranteed existence; the thrill
of fulfillment to the stale calm of Utopia.
I will not trade freedom for beneficence nor my dignity for
a handout. I will never cower before any master nor bend to
any threat.
It is my heritage to stand erect, proud and unafraid, to
think and act for myself, to enjoy the benefits of my
creations and to face the world boldly and say: This... I
have done. All this is what it means to be an
entrepreneur.'[7]
Levinson could challenge Solomon by saying that entrepreneurship is a possible
dream, an aspiration where the personal character breaks free into living
reality. Solomon may counter by pointing out to the risk in personal
aspirations leads to hardship and unforeseen circumstances and misses the point
of character ethics. Levinson, early in his book, quotes out of the Harvard
Business Review that an 'entrepreneur is not a multinational conglomerate but a
profit-seeking individual.'[8] Solomon may point out that a similar strand of
metaphor is employed by those who see the field as a 'jungle out there' and not
all business must be a vicious battlefield. Levinson's point is that a small
business must have a different decision-making process than larger
organizations due to economical restrains and other marketplace factors. To
him, the larger the organization, the larger the problem. 'The Fortune 500 may
have big bucks in the same way the brontosaurus had a weight problem,' says
Levinson.[9] The entrepreneur is a warrior with different weapons:
'But like the furry, quick mammal you've got the
flexibility, the speed, the disregard of image, that
enables you to use radio commercials and also hire
high-school students to hand out printed circulars on
street corners. You don't have a body of rules to follow, a
committee to answer to, a set structure to follow. You are a
guerilla.'[10]
III
In a totally unrelated article from the Entrepreneur Magazine,[11] Patty Vogan
discusses the importance of formulating a company credo right from the
beginning of business operation. Citing good customer service as a prerequisite
for success, Vogan considers the limitation of time because entrepreneurs 'are
wearing 20 different hats' to be the main reason new companies do not take the
time to write their credo down. Without it, there is no higher purpose or a
higher cause. That would leave the entrepreneur simply handling and processing
transactions, an empty process in due time. Vogan's idea of a good company
credo serves to remind and motivate. She writes:
'A good credo reminds people of why the business exists. It
motivates and lifts their spirits. It's a unifying force, a
statement of common values that allows your employees to
understand the importance of the customer experience and to
collaborate in achieving a consistently high standard. A
good credo, well communicated, simply allows employees (and
their boss!) to enjoy their work more.'[12]
The first shocking observation is obviously the differences in Levinson's
entrepreneurship credo and Vogan's company credo. In popular terminology, the
term credo stands simply for belief. It is at this point it must occur that
personal 'entrepreneurship' credo conflicts with the 'organizational' one. How
beneficial is it for your employees to adapt your belief-system if you are not
a 'common man' as recited by Levinson? Would they want to work for anyone who
did not care much about providing some sort of security to the employees? The
point -- of course is to show the possible error in classification between the
entrepreneur and the organizationist -- which is the problem with most business
ethics today.
One possible thread to begin discovering the inner-workings of such conflict
will be the observation that a self-starting drive to become a free individual
that Levinson envisions, does not make sense as a publicly inspirational
company credo. Vogan goes on to analyze two examples of corporate credos that
she considers successful. First, she discusses Disneyland's recognizable slogan
'the happiest place on Earth' and describes the company's policy to only discuss
personal issues among employees in separated areas called 'off stage' while
respecting the company's credo while stepping out for their chores throughout
the public area of the amusement park, the 'on stage'. Vogan maintains her
focus on customer service and talks about the employee commitment to high
company standards. The second case is Ritz-Carlton's 'Ladies and gentlemen
serving ladies and gentlemen' and she goes on to say:
'The credo, which is drilled into the hotel staff during
the training, very simply sums up how employees should
think of themselves and their guests. This powerful
philosophy, brilliantly expressed in a few short words, has
helped make the Ritz-Carlton a huge success.'[13]
First thing to note is the difference between what the entrepreneurial credo is
and what kind of company one ought to be. So far we have only dissected the
conflict and shown its ramifications. Once the agreement is in effect between
the differences in kind, there seems to be no end to the business ethics
debate. Just add a seed of virtue ethics.
IV
Professor Solomon eventually finds some quality to the concept of
entrepreneurship, although it does not appear so much. At best he appreciates
the entrepreneur for finding 'a gap in the market.' But what is it that may
become the glue to these three visions in terms of not only explication, but
also of offering a resolution to the corporate and individual ethical concerns?
Solomon offers this resolution by presenting an understanding into the nature of
virtues and further proposes corporate responsibility that manifests itself into
action that is generally approved. My observation is that the same proposal
seems to work equally well when applied to an individual position, such as
Levinson's and the guerilla entrepreneur credo. Virtues are subjective and can
be combined to form positive combinations in people who not only attempt to
make a living (or a profit) but interweave it with corporations who are in the
business of making money. It turns out that the entrepreneur and the company
man could mutually do good together without having to sacrifice from their
other ethical responsibilities directed towards their customers, employees and
society at large.
A main observation to keep in mind is that Levinson and Vogan are speaking to a
different audience than Robert Solomon. It is true that Levinson and Vogan look
in different directions when perspectives and their credos conflict, but in the
end it is Solomon who is more concerned with the corporate translation of
positive business. The multinational corporations will necessarily have to
adapt to a new -- and fast changing -- global market, but one must not lose
faith that the good majority will take the subject of virtue business ethics
more seriously. Once they do, they will eventually have to deal with some of
the questions presented so far. Reinventing the wheel is not something
corporations want to do, but rather they become forced to. In this case, the
solution seems to be Virtue Business Ethics as a personal empowerment over the
individuals forming group memberships in today's global business marketplace.
However, companies must learn that individuals are transforming living beings
and not just innate extensions. Virtue ethics require a less mechanistic and
rigid enforcement of company credos and must empower individuals to a higher
degree of ethical understanding.
FOOTNOTES
1. Robert C. Solomon, A Better Way To Think About Business, OUP, 1999, p xvi
2. Ibid. p 25
3. The American Heritage Dictionary
4. Jay Conrad Levinson, Guerilla Marketing: Secrets for Making Big Profits from
Your Small
Business, Houghton Mifflin Company, 1993
5. http://www.entrepreneur.com
6. Levinson, Guerilla Marketing, p. 285
7. Ibid. p 285-286
8. Ibid. p 15
9. Ibid. p 19
10 Ibid.
11 Patty Vogan, 'Developing Your Company's Credo', Entrepreneur Magazine,
February 17, 2006,
http://www.entrepreneur.com/article/0,4621,326585,00.html
12 Ibid.
13 Ibid.
(c) Ovidiu Gherghe 2006
E-mail: ovigher@sbcglobal.net
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II. 'CSR, PR AND SCIENTOLOGY' BY RAMA VARMA
Many companies do not bother about Corporate Social Responsibility and most
that do merely pay lip-service to it, or worse, misuse it. Believing that
companies will act with social responsibility is like believing that a burglar
entrusted with your house-keys will keep the squirrels off your flower-beds or
at worst watch Eastenders on your sofa while finishing your last packet of
crisps.
There was an article in the Guardian last week by George Monbiot on how the
public-private company Debswana is 'encouraging' the indigenous people of the
Kalahari to relinquish their native habitat because they have the diamond
mining rights in that area. Hence, when Debswana claims that it is helping the
indigenous people ('stone-age' people as Jenny Tonge of the House of Lords
called them) re-settle by giving them access to basic amenities and healthcare,
the reality is that by grabbing their habitat and forcing them to modernise,
they are denying them the only way of life they have been known for centuries.
Why not take dolphins out of the sea and put them in tanks with a staple diet
of vitamin-enriched McDonald's shark-burgers and low-fat chips?
So big corporates can easily manipulate CSR for a bit of PR. Hence the need to
apply some external controls. But how? Legislation? Trust a government that
accepts loans in exchange for peerages to do it. Consumer groups? Maybe. As as
our glorious economic model allows the big companies to monopolise the market,
the consumer will find it extremely difficult to rein in truant ones, either by
boycotting a particular brand or company or by an organised campaign through a
consumer group. Tesco's orange juice might taste of pesticide, so I go to ASDA
or Sainsbury for almost identical stuff with different packaging. And, by the
way, my local newsagent has stopped selling fresh non-branded orange juice
because Tesco can do it much cheaper and moreover, have agreed with Seville
farmers to bulk-purchase oranges.
But going back to Debswana, an internet search tells me that the PR firm that
put the gloss on its Kalahari story is Hill & Knowlton, infamous for misleading
the American public on Gulf War 1. Prior to the war, a 15-year old girl,
Nayirah, claimed on TV that she had witnessed Kuwaiti babies in a hospital
being taken out of their incubators by Iraqi soldiers and left to die. The
story was widely broadcast at that time and had the intended effect of swaying
public opinion in favour of the war. The girl was actually the daughter of the
Kuwaiti ambassador to the US and hadn't been within shooting distance of Kuwait
at that time. Apparently, she was coached by the PR firm, Hill & Knowlton. See:
http://www.geocities.com/CapitolHill/3589/us-iraq-lie.html. So the WMD campaign
for Gulf War 2 had an equally canny precedent.
My google search on Hill & Knowlton also reveals that one of their successful
PR exercises include a campaign for Scientology. I was intrigued, because a
couple of years ago, I saw an excellent ad in the tube that made me want to
find out more about the subject (I thought then that it was a subject). Looking
on the internet, I find that it is a dodgy cult to whom members dish out
increasing sums of money for 'personal audits' that relieves them of grief and
lets them take control of their lives. Apparently, when you undergo these
sessions, you begin to realise that you are not human, but a Thetan from some
far away galaxy, who has been condemned to live on Earth for millions of years
by an evil alien called Xenu! Weird as it might seem, this cult of
extortionists seems to have a wide following in the US and Europe.
But have to go now -- didn't realise how late it was. I can never quite figure
out this new intergalactic time. The spaceship that was supposed to pick me up
for this afternoon's prayer session should be in the car park any nanosecond.
The destination is planet AlphaX789JK (just off Alpha Centauri). On the way, we
have to pick up a couple of novices from Jupiter, whom I rashly promised to
brief before the session. My speciality is levitating over a hot bed of coals
and I am hoping that being from Jupiter they should find levitating on any
other planet a dawdle. Still, I hope the Thetan minister who is conducting
today's service has the foresight to have some fire extinguishers handy.
(c) Rama Varma 2006
Rama Varma
Business Analyst
Tel: +44 (0) 1438 791575
E-mail: Rama.Varma@CGI-Europe.com
-=-
III. 'SUMMIT FOR THE FUTURE' BY FELIX BOPP
Club of Amsterdam
May 3-5, 2006
The Club of Amsterdam presents its global 'Summit for the Future on Risk',
which will take place in Amsterdam on May 3-5, 2006. This second Summit will
bring together international Thought Leaders to discuss significant, global
challenges and opportunities. This time the speakers will focus on the subject
of risk and the role of risk in innovation and global growth.
Corporate Governance & Political and Economical Risk
Good governance continues to gain prominence in public debate but it is not
clear how this can be provided on a global scale or what institutions are
necessary for it to emerge. Global companies balance risks that are economical
& political, research-based, market-oriented, organizational and technical.
What does this mean for the board of directors -- in terms of board
composition, the duties of its members, their level of commitment and
remuneration? And in terms of capacity for ongoing self-transformation? What
does this mean for the sustainable creation of value -- for the company, its
stakeholders, clients and society at large?
The keynote speakers are:
David Gutmann Chairman, Praxis International, Advisers in Leadership
They Shoot Horses, Don't They?
Pierre Delsaux acting Director, DG Internal Market, EU Commission, Free
movement of Capital, Company Law and Corporate Governance
(To be announced)
Elisabet Sahtouris Evolution Biologist, Futurist, Living Systems Design
The Biology of Business: Key to a Sustainable Future
Jaap Winter Partner, De Brauw Blackstone Westbroek
The power of uncertainty: non-mandatory corporate governance rules
And the catalysts:
Neville Hobson Accredited Communication Practitioner, ABC [Trend Watcher]
Geoffrey Klempner Philosophy for Business [Philosopher]
Clare Huffington Director, Tavistock Consultancy Service [Psychologist]
Contact
Club of Amsterdam
KNSM-Laan 15
1019 LA Amsterdam
The Netherlands
Phone +31-20-419 0254
Fax +31-20-419 0266
E-mail: summit2006@clubofamsterdam.com
Summit website: http://www.clubofamsterdam.com/summit2006.htm
Summit for the Future blog: http://summitforthefuture.blogspot.com
Club of Amsterdam website: http://www.clubofamsterdam.com
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