How can we identify, understand and solve the ethical dilemmas that emerge in a business situation?
This is a 2 day course that surveys a number of frameworks and models that can be used to cope with moral and ethical dilemmas. Famous cases will be used to provide a realistic grounding to the content and participants will be tasked to apply those concepts and discuss their insights. A particular emphasis is placed on the concept of justice, and how managers can apply these insights within an organisational setting.
The course is heavily group-focused and includes case discussion and role playing activities.
- “Who’s Responsible for the Drawbridge Drama?” by Mueller, U., and Schaefer, U., European School of Management & Technology, 2010
- Learning objective: The case introduces students to topics such as “responsible leadership” and “responsible business”. It also provides an engaging illustration of how people look at the same context or phenomenon, but reach very different interpretations and judgments.
- “Rajat Gupta“, by Healy, P.M., and Soltes, E., Harvard Business School, 2019
- Learning objective: The case explores how a prominent and successful executive can engage in misconduct. In addition, the case explores the nature of illicit insider trading.
- Discussion questions
- “Through the Eyes of a Whistle-Blower: How Sherry Hunt Spoke Up About Citibank’s Mortgage Fraud“, by Waytz, A., and Kilibarda, V., Kellogg School of Management, 2014
- Learning objective: The case helps students to gain experience resolving ethical dilemmas in which two values may conflict, such as professional duty and personal ethics. It enables students to identify behaviors that help a whistle-blower be effective and discuss how incentive structures, management, and culture play roles in promoting or hindering ethical behavior in organizations.
- Discussion questions
- Friedman, M., “The Social Responsibility of Business is to Increase its Profits” New York Times Magazine, September 13th 1970 [PDF version here]
- “Just good business” Special Report, The Economist, January 2008
- Alchian, A., 1950, “Uncertainty, Evolution, and Economic Theory“, Journal of Political Economy, 58(3):211-221
- Beard, S., “Deep ethics: the long-term quest to decide right from wrong” 18th June 2019
- Heath, J., “A Market Failure Approach to Business Ethics”
- Strain, Michael R., “Milton Friedman Was Right About Shareholder Capitalism“, Bloomberg Opinion September 18th 2020
- Dumitriu, S., “Why I think Milton Friedman on shareholder primacy is underrated“, January 12th 2021 (+ Twitter thread)
My related research
- 2021 “Insider trading and the potential for sabotage” Business Ethics Journal Review, Vol. 9, Issue 9, pp.54-59
- 2008 “Dealing with Dissent: Whistleblowing, Egalitarianism and the Republic of the Firm” Innovation: The European Journal of Social Science Research, Vol. 21, No. 3, pp. 267-279
- Why didn’t anyone go to prison for the financial crisis?, You’re Wrong About, Feb 10th 2020
- This episode attempts to explain the low rates of prosecution and conviction for “white collar crime” in the US. It provides an interesting discussion of the discovery of lead paint in Mattel’s children toys, as a result of an outsourced supply chain with inadequate monitoring, and lack of US consumer protection checks. The data it provides on the lack of resources at the disposal of the government is incredible. One thing I believe it misses is the assumption that “corporate wrongdoing” necessarily involves individual (and criminal) wrongdoing. In many cases executives were making decisions under conditions of uncertainty with genuine conflict over the amounts of risk that people were exposed to. I believe that the systemic problems are due more to the regulatory system than any individual or particular corporation behaviour. We should also consider why limited liability exists and what would be lost if we erred on greater flexibility to use individual scapegoats. (Just because some communities lack the resources to adequately defend themselves, and just because society seems willing to make examples of certain types of criminal, does not make that a model to apply more broadly). For further resources on the financial crisis see here.
- Crane, A., Matten, D., Glozer, S., and Spence, L., 2019, Business Ethics (Oxford University Press, 5th Edition)
- Schmidtz, D., 2006, Elements of Justice, Cambridge University Press [Buy from Amazon.com]
- The US Holocaust Museum has a module on Ethical Leadership
- Michael Sandel’s legendary Harvard course on Justice is available as an online course (view Part 1 here).
An Inspector Calls is the classic literary depiction of how responsibility can be shared among many people. Although I find the social commentary to be frustratingly simplistic, there is a 2015 BBC Drama version that you may find worth watching. The 2017 Netflix Series, ‘13 Reasons Why‘ explores similar themes, but I haven’t watched it.
The 1957 movie, ‘12 Angry Men‘ is a classic. It shows how a natural drive to reach consensus can mask important insights, and that the role of Devil’s Advocate can be important in team settings.
Here is an article on why Peep Show is “the most realistic depiction of evil“.
Here is the DuPont Conaco Double-Hulled Oil Tankers Seal Clapping Commercial (1991), and here is the Wikipedia article about Harambe.
Here is more on river blindness.
The 2022 Netflix documentary “Downfall: The Case Against Boeing” is a compelling account of how the company attempted to pass blame for the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 on pilot error, instead or recognising the risks caused by modifications to the aircrafts autopilot (which were underplayed in order to avoid additional and expensive pilot training). The trailer is here:
Eyal Press’s 2012 book ‘Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times‘ is a rich and engaging collection of stories about people refusing to adhere to authority. It shows how whistleblowers are not typically anarchists who enjoy flouting rules, but people who value those rules so highly they insist on holding their superiors to them. It includes the story of a Serbian man who, in 1991, risked his own life to protect captured Croatians from execution, as well a Swiss police official who broke the law by giving entry permits to Jewish refugees in 1938.
Regarding the importance of involving the local community in a company’s strategy, see Steve Jobs; testimonies to Cupertino city council, in 2006:
…and again in June 2011
The most famous whistleblowing case of recent times is Edward Snowden. Citizenfour is a critically acclaimed documentary:
“Official Secrets” is based on a true story, featuring whistleblower Katharine Gun. I found it interesting that she made no attempt to escalate issues internally before going outside the organisation. The fact that she worked for the UK security services added more weight to the magnitude of her actions, but also calls into question whether we should treat people with security clearance differently to dissent in other contexts.
For a contrarian view on sweatshops, see here:
My favourite documentary on Lance Armstrong is ‘The Armstrong Lie‘ (2013)
There is also a 2 part “Storyville” documentary called “Lance” available on BBC iPlayer here.
In 2011 Raj Rajaratnum was given an 11 year prison sentence for insider trading. According to Philip Mirowski (2013) this makes him just one of two people (the other being Bernie Madoff) to have gone to jail for their roles in the 2007-08 global financial crisis.
Here are a couple of op-eds on the benefits of insider trading:
- “Don’t regulate banking – liberalise it“, by Anthony J. Evans, Guardian Unlimited, September 14th 2009
- “Learning to Love Insider Trading” by Donald Boudreaux, Wall Street Journal, October 24th 2009
- “Insider trading enriches and informs us, and could prevent scandals. Legalize it“, by Dylan Matthews, July 26th 2013
Here is a New York Post article explaining how Nancy Pelosi (and her husband) have benefitted from trading off the stocks of companies that she regulates, and why she is resisting efforts to stop Congressional lawmakers from being able to continue to do so.
A charming example of passing on a favour is the music video to Clay Walker’s ‘Chain of Love‘:
Here’s Hans Rosling explaining why most of the world is better off than you think:
You can watch the PBS version of ‘Command and Control’ here.
There is a short series of videos where David Schmidtz discusses Equality. You can view them here:
Finally, you can test your understanding of the content, and provide me with useful feedback, by completing this quiz: