InReview – Issue 52

Doing Right in a Shrinking World: How Corporate America Can Balance Ethics and Profit in a Changing Economy by Louis DeThomasis and Neal St. Anthony. Austin, Texas, Greenleaf Book Group, 2006; xxv, 162 pp.

Louis DeThomasis is the chancellor of Saint Mary’s University of Minnesota and a senior fellow of the Hendrickson Institute for Ethical Leadership. He serves as a consultant, speaker, and board member to corporations, not-for-profit organizations, and mutual funds. Neal St. Anthony is a business columnist for the Star Tribune of Minneapolis, and a member of the Society of Professional Journalists and the Society of American Business Editors.

DeThomasis and St. Anthony lay out an ambitious goal in their little book. They state:

“In the global setting in which all business operates, there is no consensus about ethical business principles. Yet if we can’t collaboratively create a globally accepted understanding of business ethics, then the third millennium economic forces that have the potential to solve the human conditions of poverty, marginalization, and terrorism will never achieve that noble and critically important outcome. In this book, we will attempt to move the dialogue in the direction of a globally acceptable understanding by coming up with a pragmatic, effective, and meaningful definition of the term business ethics,” p. 20.

They move toward this lofty and important goal by looking at the history of ethics, the problems with rooting ethics in either the law or one particular religion, and then attempt to develop a set of practical guidelines for the business ethics discussion. They interviewed nine business leaders, four from very large firms and the rest from small-to-medium-sized businesses, and offer a business perspective from one or more of these leaders under the heading, “What the Execs are Saying” at the end of each chapter.

My difficulties with the book start with the basic foundations. I will illustrate with two examples, but there are others.

The authors argue that we shouldn’t be ethical but should do ethics (Chapter 3 — You Can’t Be Ethical). But doing and being are fundamentally tied together. Psychology suggests that people who experience more integration between who they are and what they do, are more likely to behave consistently when facing such tough choices. Most of us call such consistency integrity. Perhaps the authors were overstating their case to counter those who talk about being ethical but don’t give attention to daily practice. But in overstating the case, they lose sight of connecting with the “character and being” part of ethics.

A second problem area is the premise, “Good ethics is good business.” For example,

“Business leaders must believe that if they give more, they will get more back for themselves, for their organizations, and for society,” p. 2.

“It pays to do ethics in business. Have faith!” p. 137.

Unfortunately, sometimes acting ethically will cost you. It may well be true that most of the time good ethics is good business, but this is not a universal truth simply because one believes it to be so. If it were, business ethics would reduce to best strategies for success.

There are some very good ideas in this book. But the authors fall far short of their lofty goals, and I believe they go off track in several places.

Reviewed by Albert M. Erisman

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Leaving Microsoft to Change the World: An Entrepreneur’s Odyssey to Educate the World’s Children by John Wood; New York, Harper Collins, 2006; vi, 266 pp.

John Wood is a former Microsoft director of business development for the Greater China region. He left Microsoft in 1999 to start a nonprofit, Room to Read, which supplies books and schools to poor children in the world, starting in Nepal.

This biographical book offers a glimpse into the international corporate world of Microsoft with some side-splitting and often strongly critical comments about the key players such as Bill Gates and Steve Balmer. Often a few pages later, these business leaders are lauded for their insights and strategies. Wood describes the growing unrest he felt working for Microsoft, and a very awkward interview he arranged for Bill Gates in Beijing that ultimately led him to leave.

Interwoven with the Microsoft story is the pull toward the children of Nepal. On a backpacking trip there while on vacation, he met with people in a remote village, and became determined to do something about their lack of books and lack of education. Through a growing passion, he was pulled further and further into this involvement. The two forces led to his leaving Microsoft, rather abruptly, and starting a nonprofit organization based in San Francisco to help meet the literacy needs of the children of the world. In six years, he had delivered 1.2 million books, established 2,600 libraries and 200 schools, sending 1,700 girls to school on scholarship.

This is a wonderful book on three distinct levels. First it is a great story. John Wood is an excellent writer and the reader is pulled into his passion and drive to make a difference. Second, this book offers a great glimpse into the uneven corporate world, with great ideas and insight one minute and absurd behavior the next. In the end, Wood is grateful for his Microsoft training that had a great deal of application to running a not-for-profit.

But I was most captivated by the third, perhaps unintentional, level of this book. Here we see a common failure of large corporations to help their employees connect with a vision that is bigger than the next sale. Microsoft creates opportunities for people throughout the world, but this was lost on Wood and many others. He thought he needed to go elsewhere to do something significant. Many companies also fail to show respect toward the individual. A friend had suggested he go to Nepal because, “If you get high enough in the mountains, you can’t hear Steve Balmer yelling at you.” Company leaders need to be more focused on a compelling purpose for their business, and on treating people in that business with respect.

On any level, I highly recommend this book.

Reviewed by Albert M. Erisman

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Making Globalization Work by Joseph Stiglitz; New York, W.W. Norton & Co., 2006; xxv, 358 pp.

Joseph Stiglitz is a professor of economics at Columbia University. He was the chief economist at the World Bank and the chairman of President Clinton’s Council of Economic Advisors. He is the author of Globalization and Its Discontents and won the Nobel Prize in Economics in 2001.

Stiglitz argues that globalization around the world is badly managed and broken. “Globalization had succeeded in unifying people from around the world — against globalization,” he says on page 7. The problem is that “globalization has unleashed market forces that by themselves are so strong that governments, especially in the developing world, often cannot control them.”

His book then lays out guidelines for specific areas of response: Trade policies, intellectual property, the environment, the multinational corporation, dealing with Third World debt, the global reserve system, and democratizing globalization. The theme of the book is that globalization lacks control since governments stop at the borders, while globalization and multinational corporations know no boundaries. In the last chapter he raises proposals for creating worldwide control, giving particular attention to those who have less power.

Those in favor of today’s version of market capitalism will have a great deal of trouble with this book, claiming that many of the controls he proposes would put glue into the system, impeding the flow of capital. They might also claim that innovation would be stifled by the limitations he suggests for intellectual property. They might be right.

But Stiglitz raises some very important questions that no one should miss. Particularly those who disagree with him should ponder the areas that others have glossed over. Many have read the more popular view on globalization by Thomas Friedman titled The World Is Flat. Anyone who reads that book should read this one. And anyone who reads this one should read Friedman’s book. These views are like two ships passing in the night, and the viewpoints should be debated and resolved. The authors have carefully ducked each other, at least in their books. Stiglitz makes a brief reference to Friedman, denying the flat world, while Friedman has no reference to Stiglitz’ earlier book.

I highly encourage anyone interested in globalization to explore the questions raised in this book.

Reviewed by Al Erisman

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The Real Pepsi Challenge: The Inspirational Story of Breaking the Color Barrier in American Business by Stephanie Capparell; New York, Wall Street Journal Books, 2007; xvii, 349 pp.

Stephanie Capparell has been at The Wall Street Journal since 1990, and is presently editor for its Marketplace page. She is the author of Shackleton’s Way. She holds degrees from Boston University and Columbia University.

This book provides a well-researched look at a period of time in the 1940s when Pepsi Cola CEO Walter Mack took a bold and, for that time radical, step in hiring a black selling team and focusing efforts on opening the “Negro” market for Pepsi Cola. This happened before the color line was crossed in baseball with Jackie Robinson, and well before the Civil Rights movement started in the 1950s in America.

As the story unfolds, we see this is anything but a simple reformer trying to change the world. Mack saw a business opportunity and was out to take advantage of it. At the same time, the book contrasts Mack with Coca Cola president Robert Woodruff. “Woodruff did give generously to black universities, but that kind of generosity only helped prop up the system of segregation. When Mack made contributions, they were tied to opportunities and focused on individuals. And that made all the difference.”

After the team broke up, those black pioneers of industry went on to other successful careers, one as a vice president of Pepsi Cola. The book tracks their lives, including interviews with them and their families in later life.

Capparell has painted an honest picture, warts and all, of a company trying to take a new step in a difficult time. She tries to navigate through acceptable language, drawing on terms from the day mixed with more modern references to African Americans. This is a fascinating picture of leadership. And it is a painful picture of a difficult time in history. It presents an often neglected view of the role of business in the transformation of society. I highly recommend it.

Reviewed by Al Erisman