Daryl Koehn

This three-case series examines the dilemma that faced the Japanese company Snow Brand Milk Products (SBM) as it confronted the task of rebuilding and revitalization after a series of scandals, many self-induced, had threatened the company’s future. The A case begins in spring 2002 when leading consumer activist Nobuko Hiwasa was invited to join Snow Brand’s board of directors. The CEO wanted her to assist in SBM’s revitalization efforts, which were beingimplemented in the wake of two recent scandals—contaminated milk and beef mislabeling—that had almost brought down the venerable company. Hiwasa was ambivalent about taking on this Herculean task. Was the company sincere in wanting to reform and revitalize? Would the board take her seriously? Was her presence to be mere publicity-driven window dressing? How would fellow consumer advocates view her if she accepted the position? This case details the history of Snow Brand Milk Products and the missteps and scandals that plagued it in the 1990s and early part of the decade that followed, and includes Hiwasa’s decision-making process as she considers whether to join the board of a company that has been badly tainted by scandal.

Since the late 1990s, the number of apologies being offered by CEOs of large companies has exploded. Communication and management scholars have analyzed whether and why some of these apologies are more effective or more ethical than others. Most of these analyses, however, have remained at the anecdotal level. Moreover, the practical, economic consequences of apologies have not been examined. Almost no rigorous or systematic empirical work exists that examines whether stakeholders reward firms whose CEOs give apologies that are more, rather than less, ethical; and punish firms whose corporate apologies are not ethically sound. This lacuna is surprising given that the whole purpose of an apology is to restore trust between the apologizer and the recipients of the apology. It is also surprising, given that stock market participants do appear, in at least some cases, to evaluate and respond to apologies by CEOs. When Johnson and Johnson was hit by the Tylenol poisonings, its stock price plummeted. One day after CEO James Burke’s apology—an apology widely praised for being ethically sound—approximately a half billion dollars of its previously lost stock value was restored. It appears, then, that a good CEO apology may lead to an increased stock value ceteris paribus. But is the Johnson and Johnson case representative of how the market responds in general to CEO apologies?

Much of the current discussion of evil within business and professions locates evil within the individual employee. Dennis Moberg (1997) has argued for conceiving of employee viciousness as a lack of self-control. This paper argues, that while some evil behaviorsmay be well-modelled as instances of low self-control, this model does not fit much of what might qualify as evil (e.g., child-caregiversfalsely accusing their fellow employees of ritual child abuse). The paper examines three alternative models of evil, two drawn fromliterature, one from theology, and shows why these alternative models are just as relevant for thinking about the nature and cause of evil as the low self-control model drawn from the criminology literature.

A number of advocates for TQM contend that firms who embrace TQM will automatically and naturally act in ethically sound ways (Roth, 1993; Pace, 1999; Steeples, 1994). This claim is a strong one. This paper assesses its truth. We consider the many ways in which quality initiatives, if undertaken in good faith, can foster sound ethics. We explore the various ways in which TQM presupposes, and thus cannot engender, ethical behavior. And, finally, we identify some of the ethical blind spots in quality initiatives and TQM. We propose that if TQM is undertaken by thoughtful people who take steps to correct its ethical blind spots and who understand the need for an ethical underpinning, then TQM and ethics will prove mutually reinforcing.

Dignity is an important concept in ethics. Human rights organizations justify rights by appealing to human dignity. Prominent politicians have cited the need to protect human dignity and urged the founding of international institutions. The concept of human dignity is often used to evaluate and critique the ethics of select practices. In addition, the idea of dignity is used as a universal principle to ground universalist business ethics.This paper argues that there are substantial differences between the ways in which the West and China construe human dignity. Having documented these major differences, we consider two cases to show how the differences might “cash out” in actual business practice. Instead of relying upon a nonexistent universal concept of human dignity, we suggest that it is respectful and sound to seek to identify the many goods (teamwork, initiative, autonomy, respect for elders) that differing parties see at play in the case at hand and then to try to come up with ways to realize as many of these goods as possible.

The economist Milton Friedman argued that business has only one ethical responsibility: Business has a responsibility to employ all available legal means to increase corporate profits owed to stockholders (Friedman, 1993). In this article, I explore why business students find this argument so attractive. I then argue that, as an account of business ethics, Friedman's legalism is both theoretically and practically unsound. I close with some suggestions as to what would constitute a truly ethical understanding of business practice.

Ethicists typically understand unethical actsto be those that either violate social normsand mores or that prevent people fromdeveloping the character needed to thrive. This paper looks to a classical source – the mythof Prometheus' creation of man – to explore analternative understanding of what it means toact unethically. On this classical view,acting in an evil fashion is less a matter of asingle violation of some norm or of developingan unwholesome character and more a matter ofworldview or outlook. Evil enters the worldwhen humans cease to understand themselves inrelation to the divine and cast themselves asgods. The rise and fall of the Long-TermCapital Hedge Fund (LTCM) and its legendaryfounder John Meriwether nicely illustrates thehuman attempt to supplant the gods and itsuntoward consequences.

The number of corporate apologies has increased dramatically during the past decade. This article delves into the ethics of apologies offered by chief executive officers (CEOs). It examines ways in which public apologies on the part of a representative (CEO) of a corporate body (the firm) differ from both private, interpersonal apologies, on the one hand, and nation-state/collective apologies, on the other. The article then seeks to ground ethically desirable elements of a corporate apology in the nature or essence of the corporate apology itself. It explores the largely ignored roles played by the speaker’s ethos and audience pathos in genuine or ethical apologies and suggests that attention needs to be paid to the problems posed by “role contamination,” context, and other overlooked factors. The reception by the actual audience of a given apology is a highly contingent matter. Ethicists should concentrate, therefore, on what makes a proffered apology, in principle, trustworthy and not merely efficacious for a given audience.

Michael Pirron is CEO of Impact Makers, an IT consulting firm based in Virginia. Impact Makers decided to reincorporate as a Benefit Corporation when Virginia passed the legislation. In this interview with Professor Daryl Koehn from DePaul University, Pirron discusses why he chose to reincorporate and their organization’s decision to give all their profits to charity. To do this, Impact Makers set up a new financial innovation to protect the social purpose of the organization. They gave all their common stock to two public charities and if the organization is ever sold, all the proceeds would go to charitable organizations in their community.

Teachers and managers strive to be determining causes, leading those whom we instruct or supervise to act in some ways rather than others. If we are seeking to be causes, then we ought to admit our mission and monitor how well we are doing. Yet, instead of owning up to our failures, we hide behind claims such as “some students are unteachable because their habits are bad,” or “we have little time to affect our students who are being indoctrinated by other business school professors to believe that narrow self-interest does and should rule the world.” Perhaps it is we who have failed our students, not the reverse. Examining our business ethics pedagogy is crucial because regulation is not by itself going to prevent future scandals. This paper presents three structures for teaching business ethics in a liberal arts, transformative way. While no pedagogy comes with a guarantee, these approaches at least have the potential to transform students because they force students to have “some skin in the game.”

The recent financial meltdown in the US mortgage markets and the ongoing budgetary crises in Europe suggest that we are at an economic and ethical crossroads. What has caused the problems? Do we need to rethink in some fundamental way our ethical notions and some of our practices? These questions clearly are not separable, for, as I shall argue, some of our ideas about corporate responsibilities, technological innovations, and nation states’ ability to regulate corporations have been a cause of the recent problems. Key ethical notions need to be rethought

This paper examines what, if anything, "Eastern philosophy" can teach us about business ethics. The whole idea of "Eastern ethics" or so-called "Asian values" is suspect on a number of scores. The paper argues that It is better to refer to specific ideas of particular thinkers influential within one country or tradition. The paper concentrates on the philosophy of two such thinkers – Watsuji Tetsuro of Japan and Confucius. When this more "micro" approach is adopted, we can learn some important lessons with respect to the meaning of trust, the longterm nature of relations, and ethics that extend far beyond the limited idea of rights. The paper considers these lessons in the business context.

Claus Dierksmeier admirably combats the misperception that Kant is a deontologist with no regard for virtue. Dierksmeier contends Kant offers a theory of virtue that can contribute in significant ways to advancing the analysis of, e.g., stakeholder theory and internal compliance programs. His plea that business ethicists should view Kant as a resource for thinking more widely and deeply about virtue seems eminently sensible. However, there are grounds for questioning whether a Kantian approach will be of much help in thinking through the ethics of real world business practices.

Scholars are increasingly interested in possible relationships between aesthetics and ethics and in the pedagogical value of art. This paper considers some specific works of art and explores their multi-faceted relation to ethics and morality. I argue that art has both positive and negative relationships to ethics and morality (which I distinguish in a very rough way as the paper progresses). Art works of various sorts may productively be used in the business ethics classroom,but instructors need to keep in mind the multivalent relationship between art, on the one hand, and ethics and morality on the other.

Social enterprises may take a variety of legal forms (limited liability companies, nonprofit entities, etc.). This paper focuses primarily upon one particular new form increasingly popular within the United States—the “Benefit Corporation.” I evaluate whether US Benefit Corporations are likely to realize as much social benefit as is frequently claimed. Part One of the paper describes the features of Benefit Corporations as they are constituted in many states. Part Two lays out the benefits extolled by supporters of this US legal corporate form. Part Three challenges these claims and adduces some reasons for doubting whether Benefit Corporations will prove to be as socially useful as they claim to be. Part Four concludes with some suggestions for future lines of research into the nature of the firm and Benefit Corporations in particular.

The discipline of business ethics traditionally has paid too much attention to articulating and applying the moral law and has devoted too little thinking to the nature and consequences of evil for our souls. For purposes of this discussion, I shall limit myself to Dante’s vision of evil as a diminution of human being. On his journey through hell, Dante encounters the shades—people who, through their own actions, have rendered themselves less than fully human. This paper concentrates especially on the various types of fraud andtheir psychic effects as portrayed by Dante in his book Inferno.