ETHICAL BEHAVIOR & CSR
For SASAC managers
Sept. 6th 2012
Laurent Ledoux
ledoux.laurent@gmail.com – 0478 62 14 20
(www.philoma.org)
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Reflecting on ethical behavior in business today
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Reflecting on Corporate Social Responsibility today
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Reflecting on the type of leadership needed to promote ethical behavior & CSR
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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 ?
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Case 2: What would you do if you were
Steve Lewis ?
Would you go to the meeting
or not ?
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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”
“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)
Source: Badaracco (1997); adapted by Ledoux
(Friedrich Nietzsche)
“Looking to the future,
what is my way
(not the way of others)?”
(To become partner in an investment bank)
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« 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)
Ethics, a major branch of philosophy,
encompasses right conduct
& good living
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.
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)
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Possible sources when facing an ethical dilemma
Codes of conducts &
Mission statements
Legal
duties
Heuristics
Moral or ethical
principles
(«sleep-test» rules)
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4 main categories of ethics
Individual processes
Adaptability & responsiveness
Virtue
Development
Ethics
(Aristotles, Gilligan,…)
Ethics
(Etzioni, Covey,…)
Principles
Results
“Doing right”
“Doing good”
Deontological
Teleological
Ethics
(Kant, Rawls,…)
Ethics
(Bentham, Mill,…)
Institutional structure
Fixity & consistency
Source: Fisher & Lovell (2003); adapted by LL
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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.
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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 ?
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Case 3: What would you do if you were M.
Wang, the head of the marketing department ?
Would you fire Mrs Jie ?
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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.?”
“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)
(To understand that, for Walters, the basic ethical issue
was irresponsibility: McNeil’s for not pulling her weight &
his for not taking action)
Who are we ?
“Truth happens to an idea.
Its verity is in fact
an event, an idea”
(William James)
“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
“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)
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Case 4: What would you do if you were
Edouard Sakiz, the CEO of Roussel-Uclaf ?
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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 & imaginatively 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)
Source: Badaracco (1997); adapted by Ledoux
“Should I play the lion or the fox?”
(To organize and support a vote that will trigger
a massive counter-reaction from other actors)
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The 4 orders & the tensions between the individual and the group
Spiritualities
* Synthesis based on
the texts from André
Comte-Sponville,
Marcel Conche &
François Jourde
Wisdoms
Metaphysics
(secular or religious)
possibly induces
Ethical order
Good vs. Bad
Ascending
hierarchy for
individuals
(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)
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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?
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Ethical
dilemmas
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Reflecting on ethical behavior in business today
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Reflecting on Corporate Social Responsibility today
3
Reflecting on the type of leadership needed to promote ethical behavior & CSR
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Motivation
Power locus
In whose interest & why?
Who drives CSR?
• For Share- or Stakeholders?
• Marketing opportunism or moral duty?
• 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?
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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)
The three
dimensions of
CSR
Fair
Social
Economic
Sustainable
Livable
Viable
Environmental
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Biosphere
Social
Social
sphere
Equitable
Economique
Economic
Durable
sphere
Vivable
Viable
Environnement
Laurent Ledoux – 31/03/11
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Laurent Ledoux – 31/03/11
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Meeting the needs of the present generation without compromising
the ability of future generations to meet their needs
Brundtland Report for the UN - 1987
Source : Ph. Defeyt based on PNUD
Source : Isabelle Cassiers, Conférence au Collège Belgique, d’après le PNUD
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Laurent Ledoux – 31/03/11
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Optimal balance
Sustainability
100%
Towards
Brittleness
(Too little
diversity)
Towards
Stagnation
Optimum
Greater efficiency
(streamlining)
0%
(Too little
efficiency)
Greater
resilience
Diversity &
Interconnectivity
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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
Traditional
eco.
eco.
(18th century) (19th c.)
Beg. of
20th c.
Source : Jean Pasquero (2005), adapted by Ledoux
1960’s
1970’s
1990’s
Beg. of
21th c.
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Explaining the growing impact of “CSR”
& co-regulation during the last 50 years ?
Transfer of
States’ duties to
corporates
“Coherency”
of the
coregulation
system
Proliferation
through reputation
& transparency
Voluntary
adoption of codes
of conducts
Empowerment
of 3rd parties by
States & Judges
2003
Growth
of surveillance
& social controls’
web
Nike
vs. Kasky
Consumers’
CSR concerns
legally recognized
2001
Corporates’
emancipation
from states
Politization
of comsumption
Global
Compact
corporates
become world citizens
Time
* Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007
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What does teach us the Toyota brake
scandal ?
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Laurent Ledoux – 31/03/11
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Evolution of the relations between capitalism & the dominant ethos
Post-capitalist
Ethos
Protestant
Progressist
ethos
ethos
Birth of
Expansion of
modern
industrial
Capitalism
Capitalism
Rise of the postcapitalist economy
Time
Consumerist
Capitalism
Promotion
of a childish ethos
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Who are my stakeholders & how to engage
them to work with you ?
A.
B.
C.
D.
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 ?
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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
Negative strength
Approach/Action Plan
Partnership / Innovation / Good neighbor / Negociation
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CSR action plan per issue
Description of issue 1
Stimulating or constraining strength
Expliquer en quoi cet enjeu représente
actuellement une force stimulante ou une
force contraignante
Identification of the related risk
Stakeholders to be involved
Action plan to manage the risk & to transform it into an opportunity
Identification of the related opportunity
Stakeholders to be involved
Action plan to seize the opportunity & limit related risks
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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
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Distinguishing technical problems & adaptive challenges
Challenge
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
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Modulating the stress
Source: “Leadership on the line”, by Ronald Heifetz & Marty Linsky
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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
5
strategic
principles of
Leadership
(Put pressure on people
with the problem)
Keep the distress level tolerable
Focus on ripening issues
(Control the pressure cooker)
(Counteract work avoidance mechanisms)
Source: “Leadership without easy answers”, by Ronald Heifetz, adapted by Ledoux
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4 related groups of activities of adaptive leadership
I. 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
III. See yourself as a system
II. Mobilize the system
• Make interpretations
• Design effective interventions
• Act politically
• Orchestrate the conflict
• Build an adaptive culture
IV. Deploy yourself
• Identify who you are
• Stay connected to your purposes
• Know your tuning
• “Engage courageously”
• “Broaden your bandwidth”
• Inspire people
• Understand your roles
• Run experiments
• Articulate your purposes
• “Thrive”
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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 (www.artsofthewiseleader.com)

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
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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
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Stage
Language
Relationship
to people
5
“Life is great”
Team
2%
“We’re great”
Stable
partnership
partnership
22%
3
“I’m great”
Personal
domination
49%
2
“My life sucks”
Separate
Separate
25%
1
“Life sucks”
Alienated
2%
4
From “Tribal leadership” by Logan, King & Fischer-Wright, 2008; adapted by Ledoux
%
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Inspired by Isaac Getz (Freedom Inc.)
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Marina
Olivier
Laurent
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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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