Dear Ethix – Issue 26

Desirable Visions, Undesirable Regulations

I just read the entire issue of Ethix [Ethix-25] and the article by David Korten in YES! I am passionately moved to comment even while still airborne St Louis to Seattle. In the Ethix Forum section, John Reed has it wrong; he sees more diligence from Boards and improved regulatory means to control the miscreants. Rosalind Picard, Anne Taylor, and Harold Boughton have it right. This is an inside-out problem.

How Companies Lie is absolutely wrong! The fundamental problem is the lack of values, ethics, and internally generated sense of what is right and what is wrong. The answer is not in better federal regulation but in executive responsibility to employees and communities, not in more elaborate accounting rules, but in a compulsion to tell the truth, all the truth, all the time, and the understanding that withholding truth is the equivalent of a lie.

I could not find a logical path from our current system to [David Korten’s] ideal that would not cause a global financial catastrophe. But I found his end state beguiling and attractive. Can we get there from here within our current system? I don’t know. He is correct that we have created incentives that encourage financial mendacity.

Two major causes are the anonymous system of corporate ownership in our system and the lack of accountability in product costs for the environmental damages they cause. Perhaps the solution can be effected from within the system, but it would take major change. I would endorse regulation vesting a large percentage of ownership of publicly traded companies in employees and other local stakeholders. Such a system might discourage the growth of large corporations where large scale is not necessary for the product. Thus 747s might require a large corporation. The production of hamburgers would not. The McDonalds and Seattle Best Coffees of the world would be more locally owned, even if they were affiliated with some kind of franchise that guarantees quality.

I can’t figure out how to write that enabling legislation but I can dream about the end state! The fact that corporations like Enron can exist where there is no real tangible product, only bartering and speculation on various forms of currency, is terrible. It says that the temples of today are spiritless financial artifacts with no incentive to support the people except as a political strategy to wield influence.
Peter M. Morton
Bellevue, WA

The Benefits of Indecision

I just got back from two months in Europe and read the July-August issue of Ethix. Excellent, as usual, the whole thing! I was particularly interested in Al’s article on “bridging between technology and management.” My research supports what you say about the communication difficulties.

What I found especially important was the idea (drawn in part from the Sample book) that leaders need to be comfortable with the gray areas, and not make decisiveness such a virtue. Companies whose managers/leaders allow consensus to develop by encouraging and listening to conflicting views for a good period of time tend to fare pretty well in the marketplace. A case in point is Braun (Germany). When you put their story into a case study, traditional business school professors are not comfortable with it. They want a very clear decision point and concrete, black and white “facts.” In my field research I may find decision points, but often very gray, messy, complex “facts”–hardly textbook material for management decisions. I cannot, however, just make things up, so I have to write a strong teaching note that defends this kind of “both/and” business leadership and my presentation of it. (Whether current Gillette management will let Braun continue to operate this way is another question altogether.)

I also appreciated Jeff Van Duzer’s article — clear, concise, persuasive. Thanks much — I’m looking forward to the next issue!
Dr. Karen J. Freeze,
Visiting Scholar, Jackson School of International Studies
University of Washington

Ethical Sales

I really do like your publication and everything it is about. I will be recommending it to all of my business contacts. As a former senior executive and officer of a publicly traded company, I would welcome the opportunity to write an article for you. Something that comes to mind, having spent 20+ years in the professional sales arena, would be an article that addresses the need for honest, ethical salespeople in today’s marketplace.

There is a terrible stigma attached to professional salespeople. Many people think negatively of them and of business in general. And yet, it is the hard-working salesperson that, honestly representing the company and its associated products/services, is responsible for driving much of the American economy. Nothing really happens until a sale is made, even if it is the selling of an idea or a concept. Ultimately, the sales profession is an honorable profession when it is approached with the professionalism, integrity and ethics of what we have come to expect from other professions.
Bud Boughton
Greenwood IN