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Ethics Oslo and Akershus University College and Oslo University Start January 16 2012 Tore Audun Høie

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1 Ethics Oslo and Akershus University College and Oslo University Start January 16 2012 Tore Audun Høie

2 Course Goals Knowledge. Know key forms and issues of ethics Criticism. Be able to argue for or against a proposition Constructive. Be able to suggest simple ethical guidelines International. Transpose those guidelines to an international perspective Application. Use guidelines in daily work Tore Audun Høie

3 Lecture 1 Introduction Why ethics What is ethics? What is the difference between ethics and morals? What is a Code of Ethics? Symmetrical ethics, and assymetrical ethics Open and closed systems Instrumental and principle based ethics Other ethical principles Tore Audun Høie

4 Why ethics for organisations? * A basis for values and visions * To motivate employees * Perhaps demanded by customers * For good relationships to stakeholders * An overall check on plans * To avoid various exposures and risks * Part of governance * Sustainability Tore Audun Høie

5 Why ethics II * The finance crisis * A number of crimes, near-crimes and transgressions * Managerialism (Robert Locke) * Management not contributing to organisation growth/health * Not contributing to society * Money only management * «Greed is good» * Short term and limited plans Greed is good. Embrace it. Love it. Live it. In fact, greed may be the one thing that can save us. Don’t believe me? Greed was the foundation for this country. The brave souls who risked their life to settle in a new country did so out of self interest. Our forefathers recognized the importance of self-interest in the Declaration of Independence where they emphasized our unalienable right to pursue happiness. Robert Pagliarini blog, Moneywatch 2010 Tore Audun Høie

6 Why ethics III * Self-interest is pervasive economic idea * Not supported by research, as overriding paradigm * Country differences, in Japan a negative personality trait Other personal goals, sometimes more important: * Family and friends * Personal development (e.g. Maslow) * Aestetics, a nice place to live * Contribution to society Tore Audun Høie

7 Relevance of ethics to ICT * Do good work (Aristotle) * Plan holistically (systems theory) * Consider end use (Aristotle) * Evaluate both ends and means (Kant) * Be stakeholder oriented (ISO 26000) * Take care of the environment (ISO 26000) * Contribute to knowledge Tore Audun Høie

8 Definition Ethics Moral philosophy. Determining rights and wrongs, selecting actions to achieve good results, evaluating motives. (attempting to summarise several definitions) The achievement of wisdom, choosing actions that are benefical and acceptable long term; or sustainable. This implies a society focus. Tore Audun Høie

9 Definition Morals Beliefs and behaviour of group. The group can be: * Nation, or geographical area * Group of nations * Religious or life view groups, and subgroups * Profession or similar * Other organisation, e.g. sports, clan, NGO... In an international organisation there can be many morals. Tore Audun Høie

10 Forms of ethics 1. Metaethics (what is good? etc) 2. Normative ethics (what should we do?) 3. Applied ethics (how do we apply ethics to work and lives?) 4. Moral psychology (the biological and psychological bases) 1.Descriptive ethics (what morals people follow) In the course, emphasis on 2 and 3. Tore Audun Høie

11 Codes of ethics Applying ethics to a profession or discipline, examples: * ICT * Engineering * Medicine * Law * Journalism * Psychology The Challenger disaster Tore Audun Høie

12 Symmetrical ethics – the golden rule * Do to others what you want them to do to you. * If you demand from others, demand the same from yourself (perhaps more if you are a leader) * See yourself as the other (good even for design!) * Empathy the Gold-in Rule: Do whatever is necessary to bring in the maximum gold, without getting caught Tore Audun Høie

13 Assymetrical ethics * When one party has more resources, knowledge, power * Often in professions (engineering, nursing, law...) * Need to be careful (professional!) * Need to be considerate Tore Audun Høie

14 Instrumental ethics Ethics an instrument for achieving something else. Not based on principles or conviction. «Greenwashing» Philantrophy used as an «excuse» | Tore Audun Høie

15 Principle based ethics Based on principles like (from websites): * We want to deliver first class design * We want to be best in our discipline * We will contribute to society * We consider ecological impact * We contribute to environmentalism Preferably followed by action Picture from, design for Sjø Tore Audun Høie

16 Compliance ethics Within existing laws, standards, guidelines, morals May need a «compliance officer» in large organisations - e.g. what does it mean to «follow standard»? Ensures that organisation «does no wrongs», but difficult The Ethics & Compliance Officer Association (ECOA) is a member-driven association exclusively for individuals responsible for their organization's ethics, compliance, and business conduct programs. The only organization of its kind, its members represent the largest group of ethics and compliance practitioners in the world. The ECOA is credited with formally "founding" the ethics and compliance field in 1991. December 2010 Tore Audun Høie

17 Positive ethics * Contributing positively to: - Organisation - Profession - Society - Environment - and other stakeholders Normally cannot balance lack of compliance Tore Audun Høie

18 Positive ethics 2011: We invite you to submit a a manuscript for the Special Issue of the Journal of Business Ethics on Positive Organizational (POE). This issue targets the Journal of Business Ethics view that ethics encompasses “all human action aimed at securing a good life.” Towards this end, more research must be directed toward the best of human functioning, especially within the context of today’s ethically challenged business environment and protracted economic downturn. Tore Audun Høie

19 The moralist My life view is superior Other views are inferior I have the answers I need no other authority The ethicist My life view is based on reflection I evaluate life views I have questions I respect other views Aristotle (384-322) ? Tore Audun Høie

20 Openness and privacy Openness Privacy Publish information «Personal room», integrity Register information Information may cause harm Compare information Info may cause embarrasment Analyse information Wrong information Find missing information Wrong use of information Issues: Data Protection Data Inspectorate Open Government Tore Audun Høie

21 Discussion Wikileaks Villains or heroes? Tore Audun Høie

22 Quality information (as applied to website) * Correct * Timely * Relevant * Interesting * Useful Tore Audun Høie

23 Principles («organisation virtues»): Already: Openness – privacy Symmetrical – asymmetrical ethics Quality Also: Legitimacy Credibility Traceability Accountability Stewardship Objectivity Fairness Flexibility Creativity Sustainability Tore Audun Høie

24 Ethics applies to: Professional duties Employee care Customer care, and supplier responsibilities Environment care Ownership (price, value, opportunities..) Financing Exploration * - the list is being extended Tore Audun Høie

25 Conclusion lecture 1 Ethics important, and varied Includes social responsibility, and governance Needs terminology, and philosophy Very relevant to society, now Lecture 1 needed for evaluation in lecture 2 Tore Audun Høie

26 Homework for lesson 2 Look up Pfizer on Internet. What do they do, and how big are they? What does their website say about social responsibility and ethics? Do they mention a recent fine? What were they fined, and why? What happened to the Pfizer CEO, and why? Is it easy to find this information? What is your evaluation of their social responsibility? Tore Audun Høie

27 Lecture 2 Ethical transgressions (and crimes) The lecture will present some transgressions that are typical of today's business and political environment, and attempt to indicate trends and need for action. Tore Audun Høie

28 Categories of ethical problems Crimes Greed Poor quality Incompetence Other Tore Audun Høie

29 Philosophical problems Beliefs (axioms) not clearly expressed Not defining, or defining poorly (example CRM) Belief that microoptimisation gives macrooptimisation Optimisation instead of satisfiation (Herb Simon) Overall effects seldom evaluated (like competence, motivation) Transactions instead of relationships (and trust) Hierarchic structures, top down Money only, and often short term Quality and service ignored or downplayed, including data quality Tore Audun Høie

30 An important professional problem : ”An ICT system supporting other coordinating ideals than those wanted, can have a contraproductive effect” ”Koordination och informationssystem i företag och nätverk”. PhD thesis. Ulf Melin, Linköping Universitet 2002. - you buy the supplier's assumptions Tore Audun Høie

31 Consequences customer: Need clear expressions of own position Need to communicate to supplier Need to check that supplier has understood Need to evaluate any deviation from own norm Need to reevaluate own position, perhaps every year Tore Audun Høie

32 Consequences supplier: * Need to know customer values * Need to know own values, and reflect on them * Need to adapt to customer needs, if not in line with own values * Need to inform customer if values unethical or not sustainable I.e. Supplier depends to some extent on customer values Tore Audun Høie

33 Ethical problem in ICT Texas University found inaccuracy problem 2003. Supplier Dell answered that machines were overtaxed. Later, leaky motherboards was found to be the cause. Dell attempted to hide the problems, even for own staff. Not even Dell lawyers were helped. Tore Audun Høie

34 Consequences of Dell problem Motherboard production was outsourced, what responsibility remained with Dell? Non-openness may have contributed to problem. No big fine, no repercussions from professionals, is that ethical? Dell was «darling» of business schools, have they updated theory? - And Dell was also fined for accounting fraud. Dell boss was replaced. Tore Audun Høie

35 Conclusion from many ICT problems Many ethical challenges within ICT Many unreflected projects Knowledge is sometimes incomplete or missing ICT as a knowledge discipline needs refinement Philosophy may have a major positive effect on ICT Tore Audun Høie

36 Damning BP verdict points to cost cuts Years of cost-cutting and lack of investment led to BP's Texas City refinery fire that killed 15 workers, a watchdog has said An ad from 1999: Tore Audun Høie

37 BP Alaska BP fined in 1999 for offshore dumping, agreed to probationary action Pipe corrosion widespread, formal warnings in 2002 and 2004 Oil leak in Prudhoe Bay 2006, inspectors found several miles of bad corrosion. Engineer fired for corrosion warning, case pending 2010 Four more accidents 2008-2009 Tore Audun Høie

38 BP Macondo field Explosion 20 April 2010, 11 persons died Blowout preventer did not work, remote blowout preventer not installed. BP was in charge of the drilling, Transocean owned the drill, Halliburton cemented well. Uncertainty about accountability. Several decisions regarding drilling, cementing and technology solutions influenced by cost and time considerations. Tore Audun Høie

39 BP Norway Fire 13 July 2011. Nobody hurt, but work stalled for weeks. Petroleum Safety Authority Norway says reason was poor maintenance, 10 issues were outstanding and not amended. A general problem in the North Sea is ageing equipment. Tore Audun Høie

40 The trade organisation: In May 2011 the American Petroleum Institution had the following statement on its website: “… when spills occur, the United States employs world-leading preparedness planning and response capabilities to minimize environmental harm”. Tore Audun Høie

41 General consideration, perhaps valid outside oil: Safety downprioritized (and not even well understood) Maintenance not done till too late Prioritizing cost (and time) Short term perspective, little reflection A pervasive culture, that is difficult to change Regulations weak and sometimes not observed Tore Audun Høie

42 Fake medical journals In a law suit in Australia 2009 it became known that the publisher Elsevier, and the Pharma company Merck had cooperated to publish the Australasian Journal of Bone and Joint Medicine (AJBJM), the journal is apparently dedicated to promote Merck products. The AJBJM was distributed to 20000 doctors, it is unclear to what extent they believed the journal was authentic. Later 8 further fake journals were found. Elsevier refuses to inform who paid. Tore Audun Høie

43 Elsevier's viewpooint Elsevier has officially regretted the incidents, and have apparently reformed: «We are committed to ensuring that advertising, reprint or other commercial revenue has no impact or influence on editorial decisions.” ( january 2011) In addition, Elsevier will work closely with other publishers and industry associations to set standards for best practices on ethical matters, errors and retractions--and are prepared to provide specialized legal review and counsel if necessary. Tore Audun Høie

44 Merck's viewpoint The journal promoted Merck's product Vioxx for uses that it was not approved for. This has caused personal problems and perhaps death of patients. Merck failed to share research showing the dangers of Vioxx. Merck lawyer became the new boss. Tore Audun Høie

45 Book viewpoint: I n a new book, ‘All The Justice Money Can Buy,’ former National Public Radio reporter Snigdha Prakash, who was embedded with a team of plaintiffs’ lawyers for one of those trials, describes legal machinations, strategies and battles that eventually led Merck to reach a $5 billion settlement Tore Audun Høie

46 Professional viewpoint Merck has been a generous supporter of medical personnel especially nurses. Merck paid nurses to provide potential patients for Vioxx Merck apparently drew up a «hit list» to «neutralize» or discredit personel criticizing Vioxx (The Independent 6 March 2010). It is difficult to find criticism from professional organisations Little media coverage, especially in the US Tore Audun Høie

47 Finance crisis In 2006 speculators started to withdraw from overheated US housing market. Banks offered better terms, for instance No Income, No Assets loans, later called NINJA loans. Loans were bundled into «instruments» that were quality controlled by credit rating agencies and sold to other banks. In 2009 the International Monetary Fund estimated that the cumulative losses of banks and other financial institutions exceeded 4 trillion US dollars Tore Audun Høie

48 Professional issues Risk management raised issues, and was overridden due to market and money considerations. Credit rating was paid by customer banks, Auditors apparently did not point to problems Boards did not intervene Bonuses were based on «efficiency», ability to handle large amount of loans Financial models did not forecast crisis, and one was called a «receipe for disaster» Tore Audun Høie

49 Ethical problems The overwhelming emphasis on money Risk and safety downprioritized Employees «doing their duty» acted unethically unknowingly Recruiting finding the wrong people Naysayers ignored Nobody looking after the financial system, a meta-issue Tore Audun Høie

50 The Arab Spring – and ethical reflection The Arab People did not have (Ali Kadri 2011, London School of Economics): * Full sovereignty over natural resources, including self- determination and popular participation in development; * The right to work; * Equality of opportunity, which is preceded by equality of condition; * The creation of favourable conditions for the enjoyment of other civil, political, economic, social and cultural rights; * Peace and security are essential elements for the right to development Tore Audun Høie

51 Background Some Arab countries have oil. In 2009 it constituted 40% of Arab GDP. Despite the high price of oil 2003-2010 “poverty levels rose, income inequality widened and unemployment rates responded poorly to economic growth…slightly more than fifty percent of the population subsists at below two dollars per day.” (Ali Kadri 2011). The general problem is according to Ali Kadri that the ruling elite derive the benefits, and for their own good, with few trickle down effects. The estimated “excess savings” are estimated at some five trillion dollars over 40 years, invested abroad, mostly in US treasury bills. Tore Audun Høie

52 Ethics Western Powers before Arab Spring * Supporting some autocrates, even financially * Exporting weapons to the autocrates * Establishing and running business in autocratic countries * Only 6 countries helped the rebellion in Libya * UK accused of returning «terrorists» to Ghadaffi Tore Audun Høie

53 Hardball «To play Hardball means being aware of when you are entering the «caution zone» - that area so rich in possibility, that lies between the place where society clearly says you can play the game and the place where society clearly says you cannot» «Fakes are an accepted part of business life and good fakers are to be admired. General Motors is admired. Stalk, George & Lachenauer, Rob Hardball. Harvard Business School Press 2004. Tore Audun Høie

54 Ethical view «Bordering on the unethical» (Financial Times) Close to «find-the-loophole» management The manager will be busy with law and borderline issues, forgetting strategy (like GM). Extreme emphasis on competition, with quality, risk and ethics not in index. Written by two Boston Consulting Group consultants (but the BCG has changed views according to the website). Tore Audun Høie

55 Reasons for disaster (engineering) 1. Poor design (not necessarily bad design) 2. Shoddy maintenance 3. Insufficient, illegible or unavailable documentation 4. Incompetent staff, misunderstandings, tiredness 5. Insufficient training 6. No or little testing of disaster situations 7. Failing measurements, or failing to measure 8. Failing communications 9. A non-quality culture, obedience, fear of speaking up 10. Organisation failures 11. Time constraints, sometimes political 12. Budget constraints, cost cutting Chiles, James R. Inviting Disaster. HarperBusiness 2001 Tore Audun Høie

56 Overall disaster conclusions (Chiles 2001) All disasters had more than one cause All disasters gave prior warnings Lack of training central Tore Audun Høie

57 Summing up chapter * Many transgressions (only few covered here) * Money considerations very important (Financial Times uses the expression «greed» in Capitalism in Crisis January 2012) * Risk and safety downprioritized, sometimes ignored * Professionalism and Reputation apparently not important * Reflection not widespread, perhaps even in academia. * Enormous losses, even financially, and sometimes a threat to society. Tore Audun Høie

58 Case for technologists: ISO 22000 Provenance Following foods from source to delivery Follow up processing of foods Determine age of foods Presenting history and origin (for repeat sales) -and should this be limited to foods? Select a food, and describe how you would implement an ICT system. Will this lead to increased or decreased sales? How is this related to ethics? Tore Audun Høie

59 It is he who knows the whatness of the thing who has understanding in the highest degree Aristotle: Happiness is a virtuous activity of the soul Moral virtue is a mean (or balance) Tore Audun Høie

60 Homework for lecture 3 Who was Aristotle? When and where did he live? Name at least two major books that he authored. What life views did he have? What can he teach us? Name at least two other philosophers from the same period, and their influence today Tore Audun Høie

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