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ETHICAL BEHAVIOR & CSR For SASAC managers Sept. 6th 2012

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ETHICAL BEHAVIOR & CSR For SASAC managers Sept. 6th 2012 Laurent Ledoux (

2 What do you understand by
Ethical behavior ? Corporate Social Responsibility ?

3 1 Reflecting on ethical behavior in business today 2 Reflecting on Corporate Social Responsibility today 3 Reflecting on the type of leadership needed to promote ethical behavior & CSR

4 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 ?

5 Case 2: What would you do if you were
Steve Lewis ? Would you go to the meeting or not ?

6 (Friedrich Nietzsche)
Lewis’ possible questions “How do my feelings and intuition define, for me, the ethical dilemma?” (To respect oneself or to be loyal – loyal to whom?) “Which of the values that are in conflict are most deeply rooted in my life and in my community?” (To consider the dilemma as his parents’ son) Who am I? “Become who you are” (Friedrich Nietzsche) “What combination of expediency and shrewdness, coupled with imagination & boldness, will move me closer to my personal goals?” (To go to St Louis but to participate to the presentation) “Looking to the future, what is my way (not the way of others)?” (To become partner in an investment bank) Source: Badaracco (1997); adapted by Ledoux

7 « 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 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. 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)

8 Possible sources when facing an ethical dilemma
Codes of conducts & Mission statements Legal duties Moral or ethical principles Heuristics («sleep-test» rules)

9 Institutional structure
4 main categories of ethics Individual processes Adaptability & responsiveness Virtue Ethics (Aristotles, Gilligan,…) Development Ethics (Etzioni, Covey,…) Principles “Doing right” Results “Doing good” Deontological Ethics (Kant, Rawls,…) Teleological Ethics (Bentham, Mill,…) Institutional structure Fixity & consistency Source: Fisher & Lovell (2003); adapted by LL

10 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.

11 Questions to ask yourself in front of an ethical dilemma
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 ?

12 Case 3: What would you do if you were M
Case 3: What would you do if you were M. Wang, the head of the marketing department ? Would you fire Mrs Jie ?

13 “Truth happens to an idea.
Wang’s possible questions to think «internal» dilemmas “What are the other strong, persuasive, competing interpretations of the situation or problem that I hope to use as a defining moment for my org.?” (To understand that, for Walters, the basic ethical issue was irresponsibility: McNeil’s for not pulling her weight & his for not taking action) “What is the cash value of this situation and 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) Who are we ? “Truth happens to an idea. Its verity is in fact an event, an idea” (William James) “Have I orchestrated a process that can make the values I care about become the truth of my organization?” (After hiring McNeil, to start quickly to let her & her work known to 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) Source: Badaracco (1997); adapted by Ledoux

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

15 Who is the organisation?
Edward Sakiz’s possible questions “Have I done all I can to secure my position and the strength & stability of my organization?” (To refrain to take decisions that could expose directly The organization or to confront the BoA’s president) “Have I thought creatively & imagina- tively about my organization’s role in society & its relationship to its stakeholders?” (To orchestrate a public debate among the different stakeholders) Who is the organisation? “Ethics result from the inescapable tension between Virtue & Virtu” (Aristote & Machiavel) “Have you done all you can to strike a balance, both morally & practically?” (To market the new drug without endangering the organization) “Should I play the lion or the fox?” (To organize and support a vote that will trigger a massive counter-reaction from other actors) Source: Badaracco (1997); adapted by Ledoux


17 Moral imagination is the condition of free deeds Steiner

18 The 4 orders & the tensions between the individual and the group
Spiritualities Metaphysics (secular or religious) * Synthesis based on the texts from André Comte-Sponville, Marcel Conche & François Jourde Wisdoms Ascending hierarchy for individuals possibly induces Ethical order Good vs. Bad (Self, subjective or relative Will) completes limits Moral order Right vs. Wrong (Universal or universalisable duties) limits Juridical & political order Legal vs. Illegal Descending hierarchy for groups limits Economic, technical & scientific order Possible vs. Impossible (Natural and rational Law)

19 Corporate credos & mission statements Respect of ethical principles
12 tests filter to validate or reject a decision Ask yourself these questions concerning the decision you wish to take +/- Veto Trigger Legal duties 1. Legalist test. Is my decision in accordance with the law? Corporate credos & mission statements 2. Organisational test. Is my decision in accordance with my organisation’s rules of conduct or ethics Heuristics 3. Hedonistic or intuitive test. Does my decision correspond with my gut feeling and my values? Does it make me feel good? Respect of ethical principles Virtue ethics 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 10. Consequential test. Are the anticipated consequences of my decision and plan positive or negative? 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?

20 & stimulates creativity
Ethical dilemmas Reveal Ourselves & stimulates creativity Badaracco

21 1 Reflecting on ethical behavior in business today 2 Reflecting on Corporate Social Responsibility today 3 Reflecting on the type of leadership needed to promote ethical behavior & CSR

22 What are your questions about CSR ?


24 Motivation Power locus Dynamic Method
In whose interest & why? For Share- or Stakeholders? Marketing opportunism or moral duty? Power locus Who drives CSR? Internally: managers or «corporates»? Externally: Govs, NGOs or corporates? Dynamic How did/does CSR evolve? Concept’s evolution so far? Today’s logic in a globalized economy? Method How to promote it? Regulation or self-regulation? Soft or hard? Global or Issue-related?

25 Strategic manifestation:
Economic ethics “Part of ethics which deals with behaviours and institutions of this sphere, i. e., of the entirety of exchange activities of goods and services and of production related to this exchange.” (French Penal Code – 1994) Business ethics Corporate ethics “Presents itself as responsibility ethics (not only of conviction), organised as a doctrine which guides activities and behaviour at work” (Fabienne Cardot) 3 levels of commitment 3. Values ethics 1. Governance ethics 2. Deontological ethics Strategic manifestation: CSR

26 Yesterday’s representation…
Corporate Social Responsibility The 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 Sustainable Livable Viable Yesterday’s representation…

27 Today’s representation…
Biosphere Social sphere Equitable Social Economique Durable Economic sphere Vivable Viable Environnement Today’s representation… Laurent Ledoux – 31/03/11

28 Laurent Ledoux – 31/03/11

29 Meeting the needs of the present generation without compromising the ability of future generations to meet their needs Brundtland Report for the UN Not only environmental issues… Gro Harlem Brundtland (Norwegian pronunciation: [ɡruː hɑːɭɛm brʉntlɑnː]  ( listen)) (born Gro Harlem, 20 April 1939) is a Norwegian Social democratic politician, diplomat, and physician, and an international leader in sustainable development and public health. She served three terms as Prime Minister of Norway (1981, , ), and has served as the Director General of the World Health Organization. She now serves as a Special Envoy on Climate Change for the United Nations Secretary-General Ban Ki-moon.[1] In 2008 she became the recipient of the Thomas Jefferson Foundation Medal in Architecture.[2] Source : Ph. Defeyt based on PNUD Source : Isabelle Cassiers, Conférence au Collège Belgique, d’après le PNUD

30 Laurent Ledoux – 31/03/11

31 (Too little diversity) (Too little efficiency)
Interconnectivity Optimal balance Sustainability 100% 0% Towards Brittleness (Too little diversity) Towards Stagnation (Too little efficiency) Optimum Greater efficiency (streamlining) Greater resilience Diversity & Interconnectivity Ulanowicz

32 Evolution of CSR so far? Content richness of the CSR concept
8 components of CSR nowadays Citizen participation Proactive «engagement» Performance reporting Triple balance sheet Ethical rectitude Codes of conduct Social responsiveness « Societal management » system Environmental nuisance limit Priority given to the environment Sollicitude Employees’ needs Philanthropy Grants & corporate patronage Efficient management (Technical skills) Time Classical eco. (18th century) Traditional eco. (19th c.) Beg. of 20th c. 1960’s 1970’s 1990’s Beg. of 21th c. Source : Jean Pasquero (2005), adapted by Ledoux

33 Co-regulation based on reputation rather than law Frydman

34 Explaining the growing impact of “CSR”
& co-regulation during the last 50 years ? Transfer of States’ duties to corporates “Coherency” of the coregulation system Effectively Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Highly stylised process*: in reality these trends overlap each other Regulatory innovation process Hard Growth of surveillance & social controls’ web 2003 Nike vs. Kasky Consumers’ CSR concerns legally recognized Voluntary adoption of codes of conducts 2 conditions of responsibility: Inscription of corporates in a history: possibility to define acts in the past that need to be acknowledged in the present in order to allow a future; requires an order made of memory, promesses, permanency and identification of subjects through time; Inscription in a given environment (milieu) in which a relationship with others can be established. This is exactly what is denied when we limit a company’s objective to the maximization of the shareholders’ value. Khan: responsibility presupposes liberty. 2001 Global Compact corporates become world citizens Politization of comsumption Corporates’ emancipation from states «Formally» but self-fulfilling prophecy Soft Time * Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

35 What does teach us the Toyota brake scandal ?
AKio Toyoda 4.3 billion Laurent Ledoux – 31/03/11

36 Rise of the post-capitalist economy Expansion of industrial Capitalism
Evolution of the relations between capitalism & the dominant ethos Post-capitalist Ethos Rise of the post-capitalist economy Protestant ethos Progressist ethos ? Birth of modern Capitalism Expansion of industrial Capitalism Time Consumerist Capitalism According to Benjamin Barber in «Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; See also Anne Salmon’s analysis in « Ethique et ordre économique : une entreprise de séduction », 2002 Promotion of a childish ethos

37 Faber whole society adequate return shareholder’s value
Optimize value for the under the constraint of an for shareholders whole society adequate return Nos comptes nous racontent des contes: il faut que nous changions les contes que nous nous racontons Maximize (without limits) under the constraint of the shareholder’s value Faber respect of the law 37

38 Profit is the consequence of the human relation that we develop daily with our shareholders, clients, employees, suppliers and the rest of society Toniutti

39 Who are my stakeholders & how to engage them to work with you ?
List your stakeholders How can each of them influence you and vice versa ? What is the right attitude to adopt with each of them ? How to turn each of them into an ally or to minimize their potentially negative impact ?

40 Stakeholder analysis Description of the stakeholder (group of organization or individual organization) Expectations & preoccupations of the stakeholder Tensegrity Our influence/impact on the stakeholder The stakeholder influence/impact on us Positive strength Key actors at stakeholder A trois, Choisissez une partie prenante qui vous semble la plus urgente avec laquelle travailler. Et remplissez la fiche. Faire un jeu de role, expliquez votre raison d’être à cette partie prenante. A 2. 2 paires partagent avec le groupe comme exemple ensuite par 2, faire le jeu de role. Negative strength Approach/Action Plan Partnership / Innovation / Good neighbor / Negociation LOW LOW HIGH

41 CSR action plan per issue
Description of issue 1 Expliquer en quoi cet enjeu représente actuellement une force stimulante ou une force contraignante Stimulating or constraining strength Identification of the related risk Stakeholders to be involved Action plan to manage the risk & to transform it into an opportunity Choisir à 3 un enjeux et remplir la fiche tous ensemble comme conclusion. Cette fiche vous permet aussi de réfléchir de manière ‘tensègre’ chaque fois que se présente une tension à vous… et que celle-ci peut mettre votre intégrité sous tensions. Exemple… c’est donc également un outil managérial. Et permet de prendre du recul…de retrouver son calme, son intégrité avant de traiter un problème… éventuellement refaire un ex de flexibilité… se poser la question de la transparence… qui peut m’aider à résoudre, qui est impliqué? Identification of the related opportunity Stakeholders to be involved Action plan to seize the opportunity & limit related risks LOW LOW HIGH

42 1 Reflecting on ethical behavior in business today 2 Reflecting on Corporate Social Responsibility today 3 Reflecting on the type of leadership needed to promote ethical behavior & CSR

43 Leadership Mobilize the group for the adaptative work Heifetz

44 Distinguishing technical problems & adaptive challenges
Problem definition Solution and implementation Primary locus of resp. for the work Kind of work Type I Clear Clear Physician Technical Type II Clear Requires learning Physician and patient Technical and adaptive Type III Requires learning Requires learning Patient > physician Adaptive Source: “Leadership without easy answers”, by Ronald Heifetz

45 Modulating the stress Need to give example of second bullet
Source: “Leadership on the line”, by Ronald Heifetz & Marty Linsky

46 5 strategic principles of adaptive leadership
Identify the adaptive challenge (Unbundle the issues) Protect leadership voices w/out authority (Cover who raises questions authorities can’t raise) Give the work back to people (Put pressure on people with the problem) 5 strategic principles of Leadership Identify the adaptive challenge. Diagnose the situation in light of the values at stake, and unbundle the issues that come with it. Keep the level of distress within a tolerable range for doing adaptive work. To use the pressure cooker analogy, keep the heat up without blowing up the vessel. Focus attention on ripening issues and not on stress-reducing distractions. Identify which issues can currently engage attention; and while directing attention to them, counteract work avoidance mechanisms like denial, scapegoating, externalizing the enemy, pretending the problem is technical, or attacking individuals rather than issues. Give the work back to people, but at a rate they can stand. Place and develop responsibility by putting the pressure on the people with the problem. Protect voices of leadership without authority. Give cover to those who raise hard questions and generate distress - people who point to the internal contradictions of the society. These individuals will have latitude to provoke rethinking that authorities do not have. Keep the distress level tolerable (Control the pressure cooker) Focus on ripening issues (Counteract work avoidance mechanisms) Source: “Leadership without easy answers”, by Ronald Heifetz, adapted by Ledoux

47 Laozi 630 BC Is the one the group The best leader whose existence
barely knows Laozi

48 Efficiency Let the effect impose itself Jullien

49 Thank you !

50 4 related groups of activities of adaptive leadership
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 Mobilize the system Make interpretations Design effective interventions Act politically Orchestrate the conflict Build an adaptive culture 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” Socratic dialogue

51 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 ( 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

52 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

53 Stage Language “My life sucks” “We’re great” Language Relationship
The 5 stages of culture Stage Language “My life sucks” “We’re great” Language Relationship to people Separate Stable partnership % 5 “Life is great” Team 2% 4 “We’re great” Stable partnership 22% 3 “I’m great” Personal domination 49% 2 “My life sucks” Separate 25% 1 “Life sucks” Alienated 2% From “Tribal leadership” by Logan, King & Fischer-Wright, 2008; adapted by Ledoux

54 Freedom Inc. Getz

55 intrinsically personal self Treated as Priority to Capacity to equals
growth direct

56 Semler & Breaking down On-the-job democracy The Whyway
Knowledge boundaries Semler

57 Team management principles
Inspired by Isaac Getz (Freedom Inc.) Treated as Priority to Capacity to intrinsically personal self equals growth direct

58 Everybody wants to take initiatives The Whyway 1 2 Humility 3 Fairness

59 1 2 3 is able Trust Everybody to take initiatives People growth

60 1 2 3 has the liberty Engagement Everybody to take initiatives Adults
To let go

61 Structure of stable relationships
Marina Olivier Laurent Triad

62 Listen to your liberating question
Get off the dance floor & on the balcony Get out of the way - Let go Learn daily to ride your elephant

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