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According to a survey by the American Society for Industrial Security and Pricewaterhouse Coopers, trade theft cost Fortune 1000 companies more than $45 billion in 1999. However, the loss was closer to $100 billion from other estimates (Edwards, 2000). And most of these activities have been carried out by American Allies viz. Germany, Japan, South Korea, and France. As the cold war hostilities have laid their arms & national security has been redefined to allow more dependence on economic security, economic espionage becomes a potent threat to the nation.
To protect US against economic espionage the Economic Espionage Act was passed into law in the year of 1996. In the act the conversion of a trade secret is defined broadly to cover every conceivable act of trade secret misappropriation including theft, appropriation without authorization, concealment, fraud, artifice, deception, copying without authorization, duplication, sketches, drawings, photographs, downloads, uploads, alterations, destruction, photo copies, transmissions, deliveries, mail, communications, or other transfers or conveyances of such trade secrets without authorization (p. 181).
As per Edwin Fraumann, author of Economic Espionage: Security Missions Redefined article in Public Administration Review, Vol. 57, No. 4 (Jul. - Aug., 1997), there are two distinct ways of committing economic espionage:
Electronic access of protected information - Hacking, Tapping
Physical access of protected information - Trespassing, surveillance
Access to personnel working in protected environments - Bribing, Hiring a competitor's personnel, planting mole
Non Intrusive methods - Processing of collected data to extract intelligence out of it
Thus to put an effective cap on the espionage activities various steps have to be taken. However these steps should be taken in such a manner that they antagonize the existing staff by creating a wall of distrust among the company & its executives.
According to Trust distrust quadrants espoused by Marjorie Chan, author of Corporate Espionage and Workplace Trust/Distrust published in Journal of Business Ethics, Vol. 42, No. 1 (Jan., 2003) high trust/ high distrust conditions emerge as the most significant in the twenty first century as this is an era of high interdependence among corporations & executives. Managers in this situation have conflicting positions of improving motivation which can only be done by increased trust on both sides of the table at the same time also controlling activities of their staff which would generate some distrust among their staff. Some theories propounded to achieve this delicate balance successfully are:
Over generalized trust should be controlled by bounded trust - Lewicki
Bias towards trust should be tempered with prudence - Wicks
Prudent Paranoia & constructive suspicion - Kramer
Thus managers have to effectively walk on a tightrope to improve motivation & thus productivity of their employees by creating an environment of trust whereas maintaining a watchful eye towards their environment & should have proper knowledge of economic espionage activities. In India these activities are covered under the Official Secrets Act.
Privacy as defined in various forum is "The right of an individual to be secure from unauthorized disclosure of information about oneself". Schoeman defined the extent of this trait in a person to be that others have limited access to information about him, limited access to the intimacies of his life, or limited access to his thoughts or his body. An individual's privacy concerns the degree to which others may have information about her and sensory access to her. An individual's privacy may be invaded in the following ways:
Unauthorized access is gained to personal information as a result of a security breach or an absence of appropriate internal controls.
The risk of secondary use, which is information provided for one purpose may be re-used for unrelated purposes without the individual's knowledge or consent, by duplication of records
In the two readings the moral aspects of consumer & workplace privacy are discussed.
To highlight the need of information on customers buying behavior it is imperative to understand that to survive in the increasingly competitive global economy, companies depend on vast quantities of information to build strong bonds with current customers, and to attract new customers. Further this need can be well supported by the advances in information technology (IT) which continues to increase in capability and implementation of IT is becoming more affordable and fair IT practices work as a fiduciary norm to build trust with the consumers.
As per research done by Laufer and Wolfe 1977, Milne and Gordon 1993, Stone and Stone 1990 on privacy they found that individuals are willing to disclose personal information in exchange for some economic or social benefit subject to the "privacy calculus," an assessment that their personal information will subsequently be used fairly and they will not suffer negative consequences. The authors, Mary J. Culnan and Pamela K. Armstrong, further provide a generalization derived from their research that individuals are less likely to perceive information collection procedures as privacy-invasive when
Information is collected in the context of an existing relationship,
They perceive that they have the ability to control future use of the information,
The information collected or used is relevant to the transaction, and
They believe the information will be used to draw reliable and valid inferences about them.
The results of the author's research suggest that companies can gain business advantage through customer retention by observing procedural fairness.
In the next reading on privacy at work by Anders J. Persson and Sven Ove Hansson in the Journal of Business Ethics, Vol. 42, No. 1 (Jan., 2003), the aspect of ethical considerations by the employer while intruding on the employee's privacy is discussed.
Employees have various legitimate reasons to undertake intrusion among their employees:
To ensure that the employee performs the tasks and fulfils the role responsibilities, owed to the employer, that are explicit or implicit in the contract of employment,
To protect the employee's own interests in matters for which the employer is morally responsible, and to do this with means that are also in the employee's own interest, or
To protect a third party's legitimate interests in matters for which the employer is morally responsible.
Given the above considerations there should be still some ethical practices followed while intruding on the privacy of the employees. As per the author following should be the considerations:
The written description in the employment contract issued with the offer of job.
The efficient means in which it is carried out to achieve its purpose.
The means should be the least intrusive among the available means.
The intrusion should not be so severe as to outweigh the value of achieving its purpose.
The importance of stakeholder management is to support an organization in achieving its strategic objectives by interpreting and influencing both the external and internal environments and by creating positive relationships with stakeholders through the appropriate management of their expectations and agreed objectives (by wikipedia). In today's multi-stakeholder network the role of organizations in managing them is becoming all the more critical to the performance of the organization. Organizations have to address complex problems and challenges in cooperation with multiple stakeholders to enhance the legitimacy of corporate activities. This effect of managing the stakeholders well should be articulated in the Triple Bottom Line approach where equal considerations are given to Profits, People & the Planet. According to Julia Roloff in her article in the Journal of business ethics there are 2 major approaches to effectively utilize & employ all the stakeholders of the organization towards common goal. The 2 approaches which supplement each other are as follows:
Organization-focussed: The focus is on the welfare of the entire organization
Issue-focussed: In this the focus is on an issue that affects their relationship with other societal groups and organizations
Usually however the management approaches the stakeholders ex ante and also includes only those stakeholders it wishes to communicate with. As a consequence, the very aim of accountability practice, which is to address the information needs and concerns of all relevant stakeholders by providing reliable and relevant information is missed due to the flawed decision making process. This is where the management approach should change towards the accountability approach.
Stakeholder accountability as an approach is stressed upon by the authors Andreas Rasche and Daniel E. EsserSource in their article published in Journal of Business Ethics, Vol. 65, No. 3 (May, 2006). They suggest that organizations as a part of the strategic decision for a certain standard, management needs to identify and act according to the needs of all stakeholders. The concept of stakeholder accountability offers a theoretically well-founded framework for overcoming the problem of "managerial capture". Confronted with mounting pressure to ensure accountability vis-à-vis customers, citizens and beneficiaries, organizational leaders need to decide how to choose and implement so-called accountability standards. Yet while looking for an appropriate standard, they often base their decisions on cost-benefit calculations, thus neglecting other important spheres of influence pertaining to more broadly defined stakeholder interests. These issues are particularly addressed by the authors when they are pushing the case towards stakeholder accountability.
Change takes place in many ways, hence according to the Ulrich, effective alterations need to occur especially with regard to the following points:
Rights for citizens and communities affected by organizational activities
Obligations on corporate actors with respect to social and environmental matters
A market frame work in which progressive companies can thrive, where governments can respond appropriately to the demands of their citizens, and where NGOs can deliver complementary goods and services without weakening the state's capacity for effective governance
Mergers & Acquisitions
In this competitive world where each organization is racing to be on top of its game growth of the organization becomes a key issue. Growth can be achieved in two ways viz. organic & inorganic. Organic growth is that approach where the company keeps on adding up to its capacity by extending its own production parameters. Inorganic growth is achieved by merging or acquiring another organization. Inorganic growth approach are called mergers when all the parties involved (2 or more) are more or less equal in size & decide to retain proportional control of the newly created organization. Mergers can be classified using two approaches:
According to phase, that is along pre- and post merger lines
According to stakeholder, that is along the lines of different stakeholder groups for vital impairment of legitimate interests
Ethical evaluation of a merger process cannot be done with a simple quantitative comparison - for example the number of employees before and after the merger. Quantitative analyses can only provide a first indication of where stakeholders are suffering vital infringement upon their legitimate interests in a merger process. But the evaluation should be more qualitative & any operation that causes legitimate interests to suffer vital infringement should be avoided in a merger process. In a four quadrant process where the two axes represent "Are interest vitally infringed upon?" & "Are the interests legitimate" respectively. A yes to both signifies the "ethically unacceptable" position of a merger.
Deciding to merge and implementing a merger are not two singular acts; both of them consist of different individual acts & processes that have to be closed for successful completion. Out of these individual actions some would draw positive effects on the stakeholders and others negative. One can't expect to move forward by applying part of different kinds of utilitarian ethics and thus offsetting positive and negative effects.
Authors Andreas Rasche and Daniel E. Esser in their article published in Journal of Business Ethics, Vol. 65, No. 3 (May, 2006) highlight the stakeholder analysis approach & the rights of the stakeholder to identify the ethical issues in a merger. According to them there are two key stakeholders who affect the process most:
Employees of all parties involved in an M & A situation and their rights
Shareholders of all parties involved in an M & A situation and their responsibilities
In the case of mergers and acquisitions the basic employee rights that are not always respected in clude the right to information, the right to participate in the management decision to accept or fight the merger, and job protection for long-time loyal "at will" employees. Employee's right to information is an equal right. That is, employees have a right to control their future so long as exercising that right does not interfere with the equal rights of another stakeholder to do likewise. As employees have responsibilities, they need to be accorded the correlative rights implied in these responsibilities. This doesn't mean that the employees know all about the strategic approaches or decisions which led to the M & A situation but they should be fully aware of their positions vis-à-vis the changes that might be brought in w.r.t to the change in guard.
Similarly fiduciary responsibilities to shareholders are taken very seriously, for it is the shareholder who stands to benefit or lose in any stock exchange or acquisition. Shareholders while have the right to maximize their wealth they might take an interest in employees for more practical reasons. If morale is bad and trust is undermined, the resulting loss of productivity and efficiency and even the loss of good managers is not in the self-interest of the share holder. So shareholder responsibility is not only a moral obligation, it may be a smart business invest ment as well.
Authors Olaf Karitzki and Alexander Brink, in their article published in the Journal of Business Ethics, Vol. 43, No. 1/2, Business Ethics in the Global Knowledge Economy (Mar., 2003), develop the principles of ethics that can be applied to mergers based on existing and valid explicit and implicit contracts. Explicit contract is what is laid in black & white while discussing the terms of the merger & if any of the provisions would not have been met the merger deal wouldn't have gone through. The term "implicit contract" refers to all parts in or parallel to an explicit contract which are not precisely negotiated and codified but whose express alteration or removal would have led at least one party not to have agreed to the terms of the contract. Implicit contracts are, as a rule, not defined explicitly and their content is therefore often unclear and diffuse. Further the author stresses that only previously legitimized interests are brought "into the marriage" and observing explicit and implicit contracts during a merger is not only necessary but also sufficient for an acceptance of the merger. The authors of this paper introduce the concept of "vitality criterion" to aid in locating and articulating implicit contracts. The criterion states that an action in the context of a merger becomes unacceptable for ethical reasons when legitimate interests of stakeholders are infringed in a vital manner. In using the vitality concept, checks need only be made as to whether the measure taken or planned would lead to considerable impairment or undermine opportunities. On the other hand - and this is a fundamental objection - all that is not sanctioned by the criterion introduced falls under a general permission of being able to act at one's own risk in a market economy.
Managers have two options:
On the one hand they can ensure that a vital impairment becomes a non-vital one.
On the other hand, the management can try to re-negotiate implicit contracts, which must be possible as especially a period of upheaval such as a merger is often used to break up old structures.
The application of the vitality criterion - any operation causing legitimate interests to suffer vital infringement should be avoided in a merger process - a merger initiated by an egoistic, power hungry and profit driven management need not necessarily be classified as immoral - according to the vitality criterion.
Leaders need to have a sense of purpose and a guiding vision, which help bundle individual and organizational energy. Leaders have been traditionally thought of as the hero of the organization who straddles multiple platforms & roles while achieving excellent results for the organization. In this traditional model a leader-follower concept was predominant where followers were the only stakeholders for the leader. With the approach to management changing from satisficing (maximize satisfaction) the interests of the shareholder to generating maximum value for all the stakeholders, be it internal-external or core-fringe, the roles of the traditional leader has also changed. The leader assumes the role of a coordinator and a cultivator towards the different stakeholders.
The authors Thomas Maak and Nicola M. Pless in the reproduction of Proceedings of the 18th Eben AnnualConference held in Bonn as an article in Journal of Business Ethics, Vol. 66, No. 1, (Jun., 2006) enumerate the various responsibilities of a leader towards the different stakeholders.
Shareholders - Safeguarding investment capital and ensuring an adequate return
Employees - Mobilizing people and leading teams, often across business, countries and/or cultures to achieve performance objectives that are derived from the strategic objectives of the firm.
Business partners - Ensuring that ethical, environmental and labor standards are also respected and applied by their business partners
Clients and Customers - Matching the customers & clients needs by providing them best-in-class products & services which are not harmful & all real & potential risks are transparently communicated
Society - Fostering contributions to the society for an inclusive development
Environment - Choosing processes which are environmentally friendly
The authors further reiterate the fact that responsible leadership is the art of building and sustaining good relationships to all relevant stake holders (Maak and Pless, 2006: 40). A responsible leader's core task is to weave a web of inclusion where the leader engages him among equals.
To embark on an entrepreneurial journey one should be mentally equipped to tackle multiple challenges & road blocks. In this scenario the relationship between entrepreneurship and ethics has largely been characterized as antithetical. Often entrepreneurial leaders lean towards goals & achievements while confronted with a dilemma between increased productivity & ethical processes. Gita Surie & Allan Ashley propound a conceptual model integrating pragmatism, a philosophical approach that emphasizes experimentation and action characteristic of entrepreneurial leadership, with ethics to suggest that the two are not incompatible and that sustaining entrepreneurial leadership for value creation necessitates ethical action to build legitimacy. This model prepares the leaders to meet multiple demanding challenges
Ethics challenge - Recognizing, assessing & dealing with a multitude of ethical dilemmas
Diversity challenge - Creating a multicultural (Cox, 2001) and inclusive (Gilbert and Ivancevich, 2000; Pless and Maak, 2004) environment
Business in society challenge - Becoming a good corporate citizen
Stakeholder challenge - Creating sustainable and trustful relationships with different stakeholders
Corruption is the grossest violations of all ethical concepts. Corruption renders hollow the pillars of the nations. It negatively impacts the social & economic development indices of a nation. There are various contributors to this phenomenon.
Voracious ambition of the individuals to achieve their goals at any cost.
Greed of individuals & organizations which disregards any other moral considerations
Poor quality of institutional framework tends to get stretched in moments of consideration.
Otherwise law abiding & respectful citizens stoop to corrupt levels by indulging in self-deception & rationalization
Authors Stelios C. Zyglidopoulos; Peter J. Fleming; Sandra Rothenberg focus on the concept of rationalization displayed by otherwise law-abiding & respectful citizens. The process where individuals attempt to justify past and future corrupt deeds to themselves and others is called as rationalization. The individuals try to alleviate their moral anxiety & ward off their guilt via various explanations. The author's research on the aspects of how rationalization has a domino effect I and often entails a process of overcompensation whereby the justification forwarded is excessive in relation to the actual act. Such over-rationalization provides an impetus for further and more serious acts of illegality. This dynamic gap between the act and excessive rationalization explains why corruption often escalates in severity and scope in the organization. The display of similar behavior because of similar constraints among organizations is called organizational isomorphism. The authors further analyze the influence of this effect on corruption both competitive & institutional.
Author Alvaro Cuervo-Cazurra concentrates on the effects of corruption on the different economic factors, specifically concentrating on the FDI inflows. He concludes that countries with high levels of corruption remit higher FDI which further corruption suggests that investors who have been exposed to bribery at home may not be deterred by corruption abroad, but instead seek countries where corruption is prevalent. Corruption creates challenges for investors, because it increases the cost of operating abroad, as well as the uncertainty and risk involved. The author argues that corruption does not impact on all foreign investors equally, because there is variability in the cost of engaging in bribery abroad. Investors from countries that have laws against bribery abroad are likely to further limit their FDI in countries with high levels of corruption. These laws increase the cost of engaging in bribery abroad. In contrast, investors from countries with high levels of corruption appear not to limit their FDI in other countries that also have high levels of corruption. They have experienced corruption at home. As a result, they are apparently not deterred by corruption as much as other investors. They may even seek countries with high corruption. Corruption apparently further discourages FDI from countries that have signed the OECD Convention, whereas it does not deter FDI from countries with high corruption. The implication of these two findings is that corruption in the host country not only reduces FDI, but also changes the composition of FDI. Consequently, a government that confronts and reduces corruption in the country is likely to be rewarded not only with more FDI, but also with more FDI from countries that actively discourage bribery and with less FDI from countries that have high levels of corruption. This will reinforce the efforts of the government in combating corruption.
Ethics & Internet
As the use of the Internet for qualitative studies continues to escalate, it is imperative that the research community engages in a dialogue regarding the application of ethical standards to this new venue. One on-line researcher has been dismayed by the abuse of the medium.. The on-line focus groups or depth interviews even more than survey research will require careful attention to the challenges of virtual environments. We urgently need an accepted ethics of online research and online marketing behavior. Without this, unscrupulous marketing tactics and resultant consumer fear will make performing online research impractical. Although ethics is not a neglected topic in marketing research, there have been relatively few studies that have addressed the ethics of con ducting qualitative on-line research. The answers to these ethical challenges are not simple. Qualitative on-line researchers can turn to several possibilities including a reliance upon: govern ment (and laws), industry standards (including those sponsored by professional associations and those sponsored by individual companies), or personal conscience (e.g., applying moral reasoning).
Codes of research ethics serve to protect research participants from harm, provide a con sistent set of expectations regarding the actions of researchers, encourage ethical behavior, provide guidance in making decisions, guard researchers from moral and legal problems, create industry awareness, and support the institution of social science (e.g., by increasing support for research which in turn, can increase participation rates) (Castleberry et al., 1993). Jacoby (1994, p. 42) outlines seven benefits for developing a code of ethics for associations which include: clarifying expectations, fairness, accountability, role modeling, establishing credibility, decrease in unethical practices, and avoidance of hypocrisy and shame. In brief, codes benefit both the profession and society in which the profession is practiced.
The author's classification of four core values provides the most applicable conceptual framework. His core values are non-deception, non-discrimination, non malfeasance, and beneficence. These virtues have direct application to marketing research in general and to qualitative on-line research in particular.
While a majority of the respondents felt that a uniform code of ethics was needed to cover qualitative research over the Internet, a small minority did not. Their opposition centered on the following points:
Improving a code would tamper with First Amendment Constitutional rights that have so far been protected by the court system,
Enforcing a code will be impossible. These points merit discussion since the likelihood of a code's adoption may well be dependent on persuasive counter-arguments.
The research findings indicate that it is important for each of the major marketing research organizations to incorporate a multidisciplinary addendum to their existing codes. The addendum could assist researchers in making sensitive and informed decisions during the research process in cyberspace.
Aberrant consumer behaviour costs firms millions of pounds a year, and the Internet has provided young techno-literate consumers with a new medium to exploit businesses. This paper addresses Internet related ethics and describes the ways in which young consumers misdemean on the Internet and their attitudes towards these. Using a sample of 219 generation Y consumers, the study identified 24 aberrant behaviours which grouped into five factors; illegal, questionable activities, hacking related, human Internet trade and downloading. The consequences of these behaviours have implications for educators, consumer policy and marketers.
The e-survey revealed that many items considered in this survey are clearly illegal and unethical and the severity of these activities is born out by high percentages of people who thought the activities were wrong. In addition, each has a victim, be it a business entity as in the case of "Selling counterfeit goods over the Internet", or an individual, as in the case of "Impersonating someone else by using their credit cards to purchase goods". Whilst some might argue that these activities are ethically ques tionable, they are likely to be more com mon amongst Generation Y's because activities such as "Accessing sites with bad taste subject matter" and "Online gambling" showed low percentages of respondents agreeing that these behaviours were wrong. Some of the unethical internet practices are:
Hacking related activities
Human Internet Trade
Downloading copyright material
One major implication is the need for consumer education which focuses on the costs and consequences of these activities. Consumers need to be educated about why prices are structured as they are, for instance, as a result of the high costs of soft ware development and to know about the potential damage to the future quality of prod ucts and services. In the meantime, firms will need remain proactive in employing encryption techniques to software, DVD's and CD's, such CPRM (copy right protection for recordable media).
The Internet enhances temptation, opportunity, and anonymity and reduces the perceived illegality of unethical behaviours which is likely to worsen as access increases. This study identified 24 unethical activities, some of which generation Ys use to exploit business via the Internet and related technologies, and despite the fact that these activities are costly to business and society, many were not seen as wrong. It would appear that the Internet provides the aberrant consumer with a "cloak" under which they can partially hide their identity and protect themselves from the scrutiny of both the law and society. The study is however limited by the sample specific nature of the results and further research might use young and older respondents to discover how generalisable these findings are to the wider Internet population, especially since Internet culture can be considered global, transcending national and cultural boundaries. Given the easy attitudes towards some behaviours, future research might investigate whether consumers have actually participated in these behaviours, or been a victim of them.
Ethics & Diversity
Racism in the workplace exists on the level of white collar employees as well as for blue collar workers. This is after many years, even decades, of most of the largest companies in America having programs focusing on cultural diversity. Training sessions which teach people how to go about changing attitudes toward minorities do not seem to have much of an overall effect. And, while some employees would never made belittling comments themselves, they still do not have the self-confidence to not laugh along with everyone else at a racist joke or comment.
Many times, racism is not a public, overt action. Sometimes, many people who think of themselves as without prejudice may make racist comments without even knowing they made them. They may hear others putting down a fellow worker and take notice but be completely ignorant of their own prejudice and behaviors. Saying something like "you sure are smart for a black man," or a woman, or a Latino, is the kind of comment where the person usually has no sense of his or her own racism and many times think they had sincerely given the person a compliment.
Companies, who take aggressive efforts to attain cultural diversity, often opt for changes in corporate policies that give incentives for employees who increase productivity in their departments based on cultural diversity. Often, this translates into major changes in corporate policies, such as in engaging in peer reviews over the traditional boss/underling scenario. When managers are reviewed by those underneath them, there is less of a chance that they will engage in racist comments or actions.
Racism in the workplace is still practiced because racists are more successful at covering up their behavior. The fact that a worker no longer tongues racial slurs for all to hear at his place of employment does not necessarily mean he has had a change of heart. He still may meet at a bar for a few drinks with fellow employees after work, and engage in racist jokes or put-downs. The basic prejudice is still there, and as long as it is, there can be no comfort taken in the fact that actions in the workplace have changed. A racially-biased attitude remains. People cannot congratulate themselves on making progress on racism in the workplace until this type of attitude itself is a thing of the past.
It is important that the moral ideal of equality be recognized as logically distinct from the condition (or virtue) of justice in the political sense. Justice in this sense exists among a citizenry, irrespective of the number of the populace included in that citizenry. Further, the moral ideal is parasitic upon the political virtue, for "equality" is unspecified-it means nothing until we are told in what respect that equality is to be realized. In a political context, "equality" is specified as "equal rights''-equal access to the public realm, public goods and offices, equal treatment under the law-in brief, the equality of citizenship. If citizenship is not a possibility, political equality is unintelligible. The ideal emerges as a generalization of the real condition and refers back to that condition for its content.
Logically, the conclusion is simple enough: all discrimination is wrong prima facie because it violates justice, and that goes for reverse discrimination too. No violation of justice among the citizens may be justified (may overcome the prima facie objection) by appeal to the ideal of equality, for that ideal is logically dependent upon the notion of justice. Reverse discrimination, then, which attempts no other justification than an appeal to equality, is wrong. To the extent that we adopt a program of discrimination, reverse or otherwise, justice in the political sense is destroyed, and none of us, specifically affected or not, is a citizen, a bearer of rights-we are all petitioners for favors.
And to the same extent, the ideal of equality is undermined, for it has content only where justice obtains, and by destroying justice we render the ideal meaningless. It is, then, an ironic paradox, if not a contradiction in terms, to assert that the ideal of equality justifies the violation of justice.
Restitution for a disadvantaged group whose rights under the law have been violated is possible by legal means, but restitution for a disadvantaged group whose grievance is that there was no law to protect them simply is not. First, outside of the area of justice defined by the law, no sense can be made of "the group's rights," for no law recognizes that group or the individuals in it, qua members, as bearers of rights (hence any group
can constitute itself as a disgdvantaged minority in some sense and demand similar restitution). Second, outside of the area of prote-tion of law, no sense can be made of the violation of rights (hence the amount of the recompense cannot be decided by any objective criterion). For both reasons, the practice of reverse discrimination undermines the foundation of the very ideal in whose name it is advocated; it destroys justice, law, equality, and citizenship itself, and replaces them with power struggles and popularity contests.
Bioethics is the systematic study of value questions that emerge from technology, medicine and biology and their "application to life". With the advent of technology and the recent advances as evidenced in the Human Genome Project, biotechnology has enlarged the bioethical debates. Yet the very advances in biotechnology are part of what contributes to the reality of bioterrorism. Al though biological and chemical weapons have been in existence for decades, the public is not prepared for the public health, social and psychological impacts of these weapons. The enormity of what bioterrorism presents, and the reality that every act of bioterrorism cannot be prevented, raises parallel issues as those generated by biotechnology on matters of value, interests, dignity and justice, of human nature and personal responsibility. This convergence of events surfaces interdependencies and calls for an interdisciplinary response from business, public health, medicine and religion. The additional response to bioterrorism now required by these systems raises issues as to how they will define their role and function to "conduct them in an ethical manner that emphasizes a basic community service orientation and justifies the public trust".
This paper presents a modest overview of the links between public health, medicine, business and religious communities - what each are asking and attempting to do in response to the bio-dynamics of the times. The topics of death and life crystallize the issues of morality and justice that are the heart of being a person. The dialectic tension of biotechnology - bioterrorism manifests the interdependencies, complexities and interlocking nature of phenomena comprising the "sign of the times". Because of this complexity, it generates a number of questions - and questions generate space - a way to investigate, to ponder, and to wonder how all of this might inform business ethics in an international forum. The intent is to invite discussion on the role and future for business and business ethics given their relationship to bioethics, biotechnology and bioterrorism. If it heightens awareness, produces critique and/or inspires thinking, it has met its objective.
Ethics in Financial Industry
Socially responsible banking is becoming a well-established notion in the financial services industry. Financial institutions are coming round to the idea that there is more to invest than just to check the figures. In the US, every one out of eight dollars invested is subject to some social or ethical screen. Banks increasingly are involved with financing economic activity that aims at sustainable development and offer microcredit to the poor and deprived.
The approach of assessment of the banks focuses on environmental and social conduct of the banks. We are much more interested in how banks take account of their social responsibility in a pro-active manner. Therefore, we assess bank performance with respect to items that have a voluntary character. Furthermore, we will not include economic performance indicators as we are interested in CSR performance of the banks. We have four groups of indicators about a bank's social responsibility:
Codes of ethics, sustainability reporting, and environmental management systems; Environmental management;
Responsible financial products; and
The application of the framework resulted in a CSR score for 32 banks in fifteen countries and three regions. Comparing the three regions, we cannot find significant differences. However, there are important differences when we look into country and individual bank performance. Banks from the Netherlands, Germany, France, and the UK on average achieve the highest CSR score. Those, from Sweden, Italy, and Japan had the lowest score. As to the individual bank results, we established that Dutch Rabobank has the highest score. ABN Amro, Barclays, and HSBC are the runner up banks. The two Scandinavian banks are the poorest performers. There is a positive and significant association between a bank's CSR score and its financial size and quality. We also established that, in general, banks' CSR performance improved considerably between 2000 and 2005. Furthermore, there are significant changes regarding their relative position with respect to CSR performance. In all, this research shows that CSR is an increasingly important issue in the international banking industry. It gets deeper and deeper into the banks' business as usual. We think it is important and interesting to find out what exactly drives banks' CSR performance. To this extent, we will have to apply the framework developed here for a couple of years and relate it to the financial conduct of the business and to managerial and HRM characteristics of the individual bank. Furthermore, we would like to expand our analysis to a much larger group of banks and would aim at including banks from emerging markets too.
There are two kinds of risk associated with a firm's stock: systematic risk and unsystematic or business risk. Systematic risk is the stock's correlation with the return of the stock market. Business risk "reflects the variation in a stock's return ascribable to firm-specific forces". Normally, business risk is irrelevant to financial theory because a diversified portfolio of securities can reduce and even eliminate business risk. However, a firm that successfully manages its business risk can provide above-normal returns to shareholders in the form of increased cash flows. There are two kinds of risk associated with a firm's stock: systematic risk and unsystematic or business risk. Systematic risk is the stock's correlation with the return of the stock mar ket. Business risk "reflects the variation in a stock's return ascribable to firm-specific forces". Normally, business risk is irrelevant to financial theory because a diversified portfolio of securities can reduce and even eliminate business risk. However, a firm that successfully manages its business risk can provide above-normal returns to shareholders in the form of increased cash flows. As a result, strategic management is fundamentally about business risk management.
The real option logic of CSR provides a sharper focus on the relationship of CSR to risk. First, real options by their nature deal with operating, rather than financial assets. They are concerned with risk related to firm-specific rather than market forces. Similarly, real CSR options involve operating and strategic decisions by managers that are likely to have an impact on the business or unsystematic risk of the firm. The real options logic of CSR thus shifts the interested party from the portfolio investor to the corporate manager.
Second, real options provide an important way for firms to manage business risk by reducing the downside risk of future investments. Frequently, risk is conceptualized simply as the volatility of firm profitability and is measured as a variance in returns. However, considerable research indicates that managers only include the probability of loss, rather than the prob ability of gains, within their concept of risk. Thus, downside risk is especially relevant to firms and their managers.
Finally, a real CSR option explicitly includes a time dimension. The decision to invest in the CSR option is made before the investment could have a possible impact on business risk. This ex ante perspective is clearly different from the focus on market risk and variance of accounting returns used in most CSR risk research, which is ex post in nature. These measures of risk are ex post measures because they look at historical returns. However, managers do not make decisions based on historical variability of re turns, but on the perception of risk in the future. The link between CSR and downside risk, made clear through the real options approach, renders useless these ex post measures from a theoretical viewpoint. Thus, given the nature of corporate social responsibility as a real option, we would hypothesize that the more proactive the CSR projects of the firm, the lower the ex ante downside business risk of the firm.
Thus, much of the CSR-risk literature would seem to be of little relevance to the business manager or to strategic management, because of its focus on systematic risk, risk as variance of all outcomes, and use of ex post measures of risk. This confusion is due largely to the lack of a rigorous theoretical basis to link CSR with risk. Real options theory provides such a basis and makes explicit important distinctions among the different kinds of risk and their measures. By making such a link clearer, the strategic relevance of corporate social responsibility for the firm is greatly enhanced.