Wednesday, May 27, 2009

Day 8: Veil of Ignorance and "the Insider".

The main topic of the day, at least for what I was doing, concerned Justice Theory (Chapter 17).

I will admit this is a complicated topic and I oftentimes shy away from it back home. A few weeks ago as I was plannig this course I thought I'd give it a try.

Now that I'm wondering what I got myself into. The text describes several different types of justice and I don't want to just stand there repeating all that. But I'm not sure what else to do.

Last night I came up with an idea, a variation of which I've seen several people talk about. This would be a veil of ignorance exercise, using information either that I knew about this country or they had given me.

I started by giving each student a money card, face down. One the other side of the card would be their starting salary as a young person. I know that somewhere between 35-40% of the country lives in poverty. So I assumed that was minimum wage, $3500/year. So there were 6 cards out of 16 that were poverty cards. 7 cards were middle-income, what I assumed to be $20,000 (a student later told me it should be 30,000, I said fine, change it.). 3 cards were upper-income, $150000.

Before they turned there cards over I told/yet sort of asked, "Panama is a class-based society. More than anything else, how smart you are, how talented, how hard you worked in school and your grades, access to a high paying job will depend on which class you were born into. You had no control over this. You had no choice whose womb you were in. This same circumstance is true in many countries, including my own, the United States." I offered them a change to challenge my premises, anything, before they found out their starting salaries. Nobody did. So I told them to turn the cards over. There was a lot of commotion, some people excited, some laughing out of frustration.

Then there was a second card I placed in front of everyone. This was a "male/female" card. Face down. I told them half the cards were male, half female. I mentioned that in the U.S. women tend to earn about 80% of what men earn. They confirmed that ratio is consistent in Panama. Ok then, if you have a "male" card, you'll be able to multiply your income by 20%, if female there is no adjustment. I tried to allow them a chance to challenge the system, there was none. Pretty consistently everyone would say "well, that's just the way it is". And ten out of 16 students are male. So they had the chance to look at their cards.

Last card... this time I used information they had given me the previous two days. I told them on the next card they would either be "athletic" (the word commonly used in job advertisements to indicate "good looking"), "average" or "feo" (spanish word for "ugly"). I figured 40% could be considered good-looking, 40% average and 20% ugly. Attractiveness I concede could to some extent be influenced by our choice, but again this is mostly a random event. Beautiful parents will have beautiful children, etc. etc. If you get the "athletic" card, you can double your income. "Average" no impact, "Feo", jobs are scare, divide your income in half. Again before allowing them to see their cards I asked if this process was how they had the described their country to me. No one challenged me. Turn your cards over I said. I went around the room, asking who was born rich, who was born male, who was born "bonito/a". Interestingly, no one was blessed with the magic combination. (all my "athletic" people were in the middle or lower class, that's how it came out). They seemed to enjoy the exercise, but I can't say we processed it at a level that satisfied me. They seemed resigned to their fate, maybe that's the lesson.

For what it's worth, a student said to me, "this is the way it is, we can't do anything about it." I acknowledge this and then pointed out that I thought in the U.S. the advantages of being beautiful or "ugly" weren't always so extreme (maybe I'm out of touch). I mentioned you can still live in, work toward, advocate toward a system you think is "fair". That means potentially giving a person from a poor background a chance, or maybe hiring someone that is qualified but not so attractive.

I then showed the film "The Insider". This is my third viewing. It's a powerful film, very long. We will process some tomorrow I hope.

Tuesday, May 26, 2009

Day 7: New Belgium Brewing Compnany (Case) and Workplace Rigths

First was passing back yesterday's exams. Without revealing confidences I was basically pleased considering the large amount of material, the limited time and English is not their first language. The class average was 80%, very consistent even slightly higher than typical exam averages in the U.S. That said, some students were a little distressed by their grades. I rather suspected there is a bit of grade inflation here relative to the students. The exam is just three days away now. The objective is to try to align our respective expectations.

The New Belgium Brewing Company was scheduled for discussion today. This is one of my favorite cases and I was really looking forward to it. It's always interesting to spend about 30 minutes doing all the wonderful things NBB does, singing its sustainability praises, then targeting their conversion to wind power. The substantial investment was only possible because the workforce agreed to give up their profit bonuses for five years (I'm assuming it's five years of no bonuses because the case says that's the payback period for the turbines. Sounds like a good number). When I ask U.S. students, are you ready to give up your compensation?, it's fun to watch all the "this company is so great" students retreat. Of course I tried the same tactic with with these students. For some reason I never got the sense that this case or its issues "clicked". It may be an old lesson that I have to relearn many times; each class is different and don't expect to be able to replicate what worked with one class with another.

Fortunately I saved a good question for the end. "What if a Panamanian went to the U.S. to study the New Belgium model. They studied everything NBB does. Maybe even worked there for a time. The Panamanian returns here to establish a company (a brewer, a restaurant, small manufacturer, a service company, anything) that follows NBB's methods. Would it work?" They had some very good ideas.. here's a summary:

- There are cultural differences with respect to attitudes toward the environment and expectations at work. Workers here just aren't used to the same approaches to empowerment, etc.

- There would be a strong need for training about environmental issues and business processes.

- There is a general lack of education and awareness about sustainability in Panama. (This is not surprising for a developing country).

- There would be problems with technical support and infrastructure. For example, no local companies could sell or support these types of systems. The government would be of little help.

- There would be a definite challenge trying to do any green marketing or pass along a green premium in the form of price. Consumers in Panama are very price sensitive.

I was extremely please they came up with these ideas.

The last half of the class we returned to the issue of workplace rights. I had the idea to take key rights topics in the assigned chapter and have two columns on the whiteboard, one for the U.S. and one for Panama. Using my own knowledge and the text, we're able to fill in the U.S. side of the ledger very easily. Then I asked them for the Panamanian side. There were often uncertainites and even disagreements in the class. In those instances I encouraged students to pursue such a topic as a class project (every student must complete a project where he/she connects any course topic to practices in Panama).

Here's the list of workplace rights topics and what they suggested was true for Panama. I figure there's no need to present what is true for the U.S.

1. Minimum/living wage $285/month (that's $1.38/hour)
no juristiction enforces a living wage

2. Legally required benefits Social security type system for pensions
a seniority benefit every 90 days, 10% of monthly pay
vacations

3. Workplace health/safety OSHA-type system of standards, inspections, fines
widely-agreed this system was an ineffective deterent
(variety of compliance and corruption challenges)

4. EEO anti-discrimination rules and regulations in place
cultural values/ineffective enforcement are challenges
*see further discussion below

5. Sexual Harassment weak legal system doesn't always protect employees
some MNCs (Dell) have been especially diligent


I'm going to finish up the list tomorrow with three more items: Drug-testing, Surveillance and Unions.

An extremely interesting issue has emerged the past two class sessions, employers will openly discriminate against "ugly" people. For instance one woman told me job listings often ask for a picture of the applicant or will use a requirement such as "athletic". A male student told me of a general manager of a "customer service" unit came through, saw a new employee (male) that was deemed to be "to ugly to work with the public". This employee was fired on the spot. It has caught me a little off guard. I asked about job competencies, and whether some who might be deemed unattractive generally could also present themselves very professionally (clean, neat, etc.) There was a modest concession of the point, but I couldn't escape the sense there was a strong sense that (a) such discrimination was widely practiced (b) was generally consistent with prevailing norms and values and (c) there is no effective legal recourse for such a circumstance.

I'm going to reflect on this issue for a while. My initial reaction is this is fascinating, silly and troubling all at once. But it will take a little while to think more critically about it.

Tomorrow the issue of "cultural relativism" is up. Not sure whether to continue to pursue this.

Monday, May 25, 2009

Day 6: Exam, Rights, Discrimination and Facebook

EXAM 1 in the first section.

Second section I introduced tomorrow’s case, New Belgium Brewing Company. (looked at their website basically). We also discussed the project; a description/topic is due on Wednesday. Then we started a section on rights.

After some of the basics, a definition of rights and duties, I introduced “Dan Keplinger”, as I sometimes do in the states. He’s a Towson U. grad, aka “King Gimp”, severe case of cerebral palsy. When his mother (in the film “King Gimp”) enrolls him in a mainstream public high school, the principal tries to steer her toward a “special needs” school. She refuses. During Dan’s time in high school, he requires resources like a writer and note-taker. The cost of these services is irrelevant, if we say that Dan Keplinger has a right to an education. Utilitarianism might argue against his public education, if it were not for the fact he discovers a gift for painting. The students seemed interested in his story, and wanted to see examples of his work. I showed them on his website, www.kinggimp.com.

After the next break we come back I have written some of the key rights terms (chapter 14) on the board, e.g. social welfare rights, human rights, legal and moral rights and the UNDHR. I have asked the students to pay attention to these in their reading rather than going over every categorization.

I then applied rights to the workplace. “Every U.S. worker has a right to fair treatment”, at least as outlined in the 1964 Civil Rights Act. Every U.S. worker has a right to be free from age, sex, religion, national origin, race and disability discrimination. (though the first and last one are part of other laws). I asked them about discrimination in Panama.

They tell me that these forms of discrimination are also illegal in Panama, but still take place. For example, there are job advertisements that might say “seeking female salesperson between 22 and 29”. When I asked what would happen if a male applied for such a job, the answer is his application would be taken but he would never be called. I pressed the matter a little further, “how can an advertisement exist if the contents of it are illegal?” there was no answer, just people shrugging their shoulders.

There was at least open agreement that there was little in the way of discrimination on the basis of race. This is a fairly diverse culture racially with a fair representation of Hispanics, caucasians, Africans and Asians here. I rather wonder about national origin, since I hear about immigration issues involving Colombians, Venezuelans, and some other countries.

Sensing it might yield a more interesting exploration, I stayed with sex discrimination. I mentioned the classic flight attendant example in the U.S.; men couldn’t work as flight attendants initially because the job was poorly defined as setting a “soothing atmosphere for the weary business traveler” (something like that). they seemed interested if there weren’t any jobs that a company couldn’t define as strictly for men or women. “Prison guard” or “bridal dress consultant” are examples, but these are very exceptional.

then I was asked about “freedom to hire”? “If it’s my company, can’t I hire who I want? If I want to hire a man, or a woman, or whoever, why shouldn’t I be able to?” There seemed to be at least a couple of people who expressed this point of view. “A business is not a party” I answered. “If you’re having a party, go ahead and invite only men, or only women, only whites or only blacks. But that’s a temporary private event. A business is an on-going public endeavor. If you want to operate publicly, to participate in a very public endeavor such as wealth creation, you cannot deny opportunities based on personal prejudice.” (more or less) I could see some questioning faces, though I was not challenged any further.

I transitioned to the Peter Oiler case. He was a truck driver, fired after twenty years of good service by Winn Dixie stores, for cross-dressing. At first they seemed confused, but as I shared an excerpt from the case, it mentions the company’s position that he might harm the company’s image. The class quickly divided, much like my students do in the U.S. Some feel it’s his own business what he does, and the company is losing a good employee, and the job doesn’t have much of an image component to it; others I could tell thought Peter Oiler was “crazy”, “dangerous”, “something was wrong” (I did press them on this, asking if they were sure, or if they were qualified to give a diagnosis, the few that did backed off, though the essential “I’m uncomfortable with this” remained). They also agreed that in Panama such an employer might harm a company’s image, and might lead to bad publicity.

The Peter Oiler case also introduces the concept of “employment at will”. I asked if an employer in Panama could fire an employee for “no cause”. The students disagreed with themselves; most arguing that it couldn’t be done but they weren’t sure. There was general agreement that (1) Panamanian companies are quite good at finding ways/reasons to fire employees they no longer wanted and (2) to the extent the rationale for dismissal is poor, there is a financial penalty. (lots of wild percentages were thrown around..). I indicated this would be a good topic for a project.

Finally we discussed my Facebook example: a friend loses out on a job because of what he posts on his facebook page (in the example the friend lists “slasher” movies has his favorite, posts pictures of heavy drinking, along with being passed out and with frequent use of profanity). The class divided again, along similar lines to Peter Oiler. Some expressed that employees must remain “professional” at all times; others claiming that your own time is your own business and that “everyone is entitled to a little fun”. There was broader agreement that simply not hiring someone because they drink too much wouldn’t be an effective staffing strategy in Panama.

Sunday, May 24, 2009

Day 5: Utilitarianism/Pinto, "Black Money", Fraud/Whistleblowing

Key themes: finished utilitarianism/Pinto case, PBS documentary (“Black Money”) and chapter 6 on Fraud and Whistleblowing

I started the day checking in with a few students who’d been quiet the day before, I asked if they really prefer to live under a “looser” (i.e. somewhat corrupt) system, like Panama or a somewhat stricter system like the U.S. Again the students I asked seemed to like the Panama system, citing the ease of getting away with things (it’s definitely cheaper to be caught committing a crime or fraud here). I thought about asking what the larger costs/problems are, but I decided against asking this question. I want to be careful about not appearing as if I’m attacking their system.

We finished a powerpoint set on the Pinto controversy. I have two students that argued forcefully that Ford was wrong to allow the car to be designed, manufactured and sold as is. I tried to press the the point that there are always tradeoffs, no car, especially one at the bottom of the pricing structure, could be perfectly safe. Still, to their credit, they stuck with their positions. There may be many tradeoffs but this one seems especially noteworthy. I didn’t get much response to the “value of a human life” angle. It’s entirely likely I didn’t ask it appropriately.

I started a section on “fraud”, quickly touching on some key points (definition, basic characteristics) from Chapter 6. I also presented a recent example of a Maryland state employee that was caught in a scheme where she swindled a state health program out of $1.7 million over ten years. The value of this example is that she was caught after her bank became suspicious. Also the corrective action implemented by the state is more division of labor and oversight; arguably more bureaucracy but it makes fraudulent schemes less likely.

after the first break we watched “Black Money” video (PBS frontline show). The interesting element now is that maybe the developed nations of the world (BAE in the U.K. and Siemens in Germany) are involved in corruption, not the petty kind we so often see in the developing world (like Panama) but the really big kind (at the top, with lots and lots of money at stake).

A student asked almost as soon as it was over, “doesn’t this prove that corruption is everywhere? It always goes on.”

I answered “sort of.” Then I pointed out that two factors still make the BAE/Siemens scandals volatile and difficult to draw a “corruption” is everywhere conclusion. First, that the OECD is still “pushing” the case, though I admit I’m still unclear exactly what type of enforcement powers the OECD has. Second, the U.S. is still vigorously investigating the case (as far as we can tell).

After the second break the president of the university asked for a few minutes to address the class. He did a nice job encouraging them to do well, even pointing out that professors don’t give grades students earn them. This was a nicely timed sentiment, we have our first exam in the next class session. The president took about a half an hour, which left me forty minutes to finish the fraud section (COSC), very quick mention of crisis management and some material on whistleblowers. I came back to Sherron Watkins and Peter Gardiner (BAE case) as examples. We considered reasons why they might want to come forward. When it comes to things that discourage whistleblowers I quickly touched on those elements in the text. I particularly like to pause at “fear of retribution” as a dissuading factor. I cite my fondness for mafia movies (Godfather, Good Fellas, Sopranos) and discuss the concept of being “made” in a crime family. Businesses can also “make” whistleblowers. They seem to like this example.

Exam 1 is next class, we’ll see if we’re ready.

Day 4: U.N. Global Compact, Corruption case

Global Compact... Panama firms that are members, Banco General and its Social Report for 2007. This could be one of the student projects.

Reasons to Join and Reasons not to Join.

El Rancho Chicken Farm, courtesy of Eduardo Schmidt.

we discussed each of the dilemmas, “options” to the chicken farm manager.

a lot of interesting discussion, particularly about the $100 bribe to be paid to the government official that would enable the farm to buy more dollars which enables them to buy more feed. Also the “dynamic agent” fee to facilitate shipment of feed and delay that of competitors.

there was some concern that the agent might not be reliable, that is that he would go to the highest bidder. this would be dangerous.

I asked pointedly that I wanted to use this case because it was from this general part of the world and might come closer to representing Panamanian business practices. does this happen here? all the time they answered. they were anxious to give me examples. corruption and bribes occur all the time, it’s more difficult to find an occasion when it’s not used.

Then I asked, suppose I’m the new president of Panama. along with several close aids I visit the U.S., Canada, U.K. and other countries known for having the lowest levels of corruption. We spend a lot of time learning how governments fight corruption and we come back with some good idea. it will be difficult, it will be hard, but we think we can do it.

Do you wish us success? Do you want Panama to change? the answer for the most part was “no”.

Day 3: Stakeholder/Clarkson, Enron, Public Policy

I. finish/followed up with PETA/KFC... how would monitoring take place?

also if PETA is low power/high legitmacy/high urgency what would that mean? (salience model)?
what if we thought the claims were urgent? How does that change things?

clarkson principles:

which one is most important?
what is most commonly followed already?
why one is most difficult?

this was a tough exercise... it’s not easy to separate and prioritize these. but it does force them to really look at the principles, consider implications for implementation.

II. enron case:

we discussed the mechanics of enron a little bit. (spe’s, fastow’s magic, AA)
enron culture and the “rank and yank” system...
interesting stuff here, most students seemed interested in working in high reward/high risk cultures. I missed the opportunity to ask about “risk” and skirting the law, or being “ruthless”

III. government/public policy (chapter 4)

finish up with a rudy and cheating example. While I was not surprised that most students would not report a cheating student to the professor (or the university), I was surprised with the degree of passion most students expressed. This reflects in all likelihood the tight bonds these students establish within their cadres.

I asked, “what if you weren’t in the class, it was someone else, possibly even at another university, what would you think of a person who said to you “I think I’m going to turn that student in”. Most expressed their general disagreement with this but indicated it wouldn’t be a big deal, a few said anyone who did that could not be their friend.

More interesting was three years later and Rudy has applied for a job at your company. The boss wants to know if there’s anything he should know about Rudy. Again a few outspoken types were passionate, do not tell anyone. However I surveyed the class asking “would you say absolutely nothing, or perhaps something?” 12 said “something” , 5 said “nothing.

Tuesday, May 19, 2009

Day 2: Discussing "The Corpporation", sweatshops, living wage, stakeholders and social responsibility

Day 2

begin with discussing “the corporation”. I like to start with a general, “what did you think of the film?” question, just to get things started.

*most of the students “liked it”. when I asked them why, they gave some basic answers, “shows injustice”, “shows what happens/“dangers” when businesses get too greedy”.

I followed up with “what stories/parts of the film did you think was especially interesting or you learned something from?” replies:
-BGH (a couple of students were “really disgusted” by this. When I asked if this was a controversy in Panama, they said no. They hadn’t heard of it. Though one student was aware of that it was a controversy in Europe)
-news stories (“the investigators”) according to one student: “the news should be reported truthfully and not censored because of some company”.
-Kathie Lee Gifford and sweatshops
Kathie Lee was an interesting discussion. They didn’t know her background (former Miss America, former TV celebrity, product endorser). She endorses a line of clothes for Wal-Mart, she is a “brand” in and of herself. Does she think to ask the question about where the clothes come from? Can we blame her for that? Interesting division of opinion here (because I did describe her as a bright, independent woman) some felt that should have been smart enough to ask the question, or at least have someone find out the answer for her. Other students felt it was understandable to have missed this.

“living wage” came up. Baltimore has a living wage statute, one of several cities that does. note that it does not require every firm to pay a living wage, just those that have contracts with the city. This is also significantly higher than our minimum wage. I missed an opportunity to ask about minimum wages or a living wage in Panama.

also RE: sweatshops and Nike. I like to emphasize that Nike doesn’t own the factories and doesn’t employee the people, however Michael Moore’s comment about “Nike’s people” is a very good use of the word, a very important concept. These workers are, in a sense, a part of Nike. My experience at home is the same: students can get a little reckless about overstating Nike’s involvement with these factories (i.e. thinking and actually saying for example, “Nike runs (or manages) these factories/sweatshops”. Even though it’s important to separate Nike (and other apparel) companies from ownership, it remains important to think about these workers as part of “Nike’s people”. This point seems useful as we prepare to consider stakeholder claims and legitimacy.

Interestingly when I asked “was the film fair?” a few students quickly said, “no”, that the film didn’t provide much of the corporate response to its messages. We just had time for some general discussion here because I needed to move on. Now that I think about it, a good question to ask would have been “What would some of these companies, or an industry association, actually say about this movie?”

All that took almost an hour. Now I need to quickly present some material on stakeholder before we take a break. I like to ask students to help share info from the text, so I ask them the following questions (and to use the book, with specific page numbers!) to answer.

What is the definition of a stakeholder?
What are primary and secondary stakeholders? (definitions and then examples of each)
What are the elements of stakeholder salience?

(this is a pretty straightforward 20 minutes or so. They read (out loud) stuff from the book, sometimes I ask people to re-read it for emphasis. There’s an occasional story or point I make along the way. for instance the film the corporation might be an example of the media as stakeholder, and if enough people view it and act in a particular way, that’s a type of salience.)

After we return from a break I ask the students to pair up. I don’t often do this “back at home”, don’t know why, I just don’t. but a new environment and a new challenge makes me more open to try different things.

I ask them, in pairs, in 10 minutes to read the three stakeholder statements from Pfizer, General Mills and General Electric. What are the similarities and differences?

*After 10 minutes, they immediately begin pointing out similarities. The statements seem to use the same concept of “stakeholders”. The lists of stakeholders, while not identical are more similar than different.
*I asked them to pick out a word, or a phrase, from each statement that would really say what that statement was all about. for Pfizer it was “partnership” , for “General Mills” it was “trust”, for GE it was “growth”. Why these differences, why these words? The students seemed to agree that “health care” and “food” were somehow more intimate products, products and businesses that require care and respect more so that GE’s conglomerate portfolio of products.

*I will admit this pedagogy worked fairly well and I will probably try it again. It helps to use variety and keep as many people involved as possible.

We then used one of my favorite examples of stakeholder management. PETA and KFC. KFC has a presence down here, most students seemed to have heard of PETA.

I started with videos from PETA’s “kentucky fried cruelty” campaign website. This includes three videos showing “the Colonel” as a warden of a hellish prison with chickens as the prisoners. Those are mostly for fun and introduce the controversy. then there’s an undercover video of chickens’ being thrown, kicked and stomped on at a KFC supplier. Once the video was shown, before I could even ask any questions several of them said, “that could never happen in Panama”. The idea is that chicken farming is done on a smaller scale, and the automation/specialization/factory nature of chicken processing in the U.S. is not as common here. This was a good discussion.

I then asked “Does PETA have a. power? b. legitimacy? c. urgency?

There is always an interesting discussion about power and legitimacy back in the states. I was surprised and even a little impressed they quickly thought PETA should have a lot of power because once they get the message out, no one will want to buy chickens from KFC. My own experience suggests that students in the U.S. who are KFC customers don’t particularly care about the video: they know that between the raising of the chickens and the cooking comes the killing, and the killing isn’t pretty and they don’t really want to know and they don’t really care. This perspective seemed to surprise the students, at least some.

Upon reflection, this seems a more signficant point now than in the moment in class. Do these students “care” more, if not about the chickens, then something about the killing of the chickens? Is there more concern with animal rights here? It bears mentioning that chicken is a common meat in many Panamanian dishes.

A very good question came up about whether PETA was going after the wrong firm, that is, that KFC doesn’t operate chicken farms, they don’t “kill” chickens. There is a “social responsibility” website for KFC that does have a “supplier code of conduct” and “animal welfare” policies. There was just enough time before the second break to acknowledge that KFC at least has addressed this issue and has some material on its website. Whether this is “enough”, we can’t pursue, time to take another break.

We return from break 2 with just under an hour. Now the topic is “social responsibility”. Again, I ask someone to share the definition from the book, she reads it, the powerpoint follows, hopefully this sinks in.

then the Milton Friedman quote comes in. It was a nice plus that Friedman has a couple of segments in the corporation, so they can put a real person with a name. so we have the pros/con stuff set up.

now I show a you tube video, “can coffee drinkers save the rain forest?” It’s a nice 4 minute video, extolling the virtues of a “back to origin” campaign starbucks has in the chipas. I also asked, most students had been to a starbucks in the states. most already thought of starbucks as socially responsible. I asked why and they said the environment was the big issue. nothing specific however.

I then ask:


then I show a counter video: “Partners?” by a group called Justice Bean to Cup. The video criticizes Starbucks’ fair trade policy with a coffee cooperative in Ethiopia.

“I’m confused,” I say, “is Starbucks socially responsible or not?”

some thoughts from the class:

*”if you don’t want to sell your coffee for .57/pound to starbucks, sell it to someone else.”
*”maybe this is a tactic by starbucks competitors to make starbucks look bad”
*”starbucks buys coffee all over the world, what is happening in other places. you can’t judge the company by what happens in one place”
*”the growers are getting greedy!* (i found this an interesting comment, I didn’t want to attack it, but I did ask, do these coffee growers look greedy? do they look like the ones with power here?)

I didn’t press on them to compare Starbucks and its sourcing policies with Nike and the “sweatshop issue” because I really didn’t want to go back to sweatshops again. But there did seem to a common position among students that growing crops/farming is a different matter from working in a contractor’s factory. It may be that farmers are seen as more entrepreneurial, they produce a product and sell it. A young woman working in a “sweatshop” however is a laborer, and has much less voice about her wages, terms of employment, etc.

I concluded the day with the observation that companies that brag about their social responsibility (and starbucks is a good example here) increase stakeholder expectations. If you say you’re protecting the rainforest in the Chipas, then you destroying it (or failure to stop its destruction) in another part of the world will lead to a lot of questions.

Day 1: course intro, capitalism, agency theory, "the corporation"

“groundwork for the course”
updates to syllabus (point allocations, upcoming assignments, project)

Who’s in the class? any thoughts on this title? “can we use business and ethics in the same sentence?”

I need your help
*This is always a challenging class.
*Even more so this time since I haven’t had a lot of time to prepare, plus I’m in another country
*Sometimes we’ll look at info and keep in mind it’s obviously good for the U.S, with limited applicability to other countries (at least Panama), sometimes “business” is generic. I don’t care where you are in the world, what your religion is, what your culture and customs are, what your local laws may say, there are some universal “codes” or understandings we all share.
*Keep an open mind and share. I’m going to do my best to create an interesting and meaningful class. And I can’t do it alone.
*Small stuff: show up time, stay with me (I have to be here, those that are also here win my respect and will be rewarded. those that aren’t...
*also, keep the phones off... and other websurfing.

Dalai Lama’s take on the financial crisis: BW, 5/18/2009, p. 16

“What caused the current collapse?”
I’m telling people including some businessmen who are my friends what this global economic crisis was caused by: One, too much greed. Second, speculation. Third, not being transparent enough. That’s my view. These are moral and ethical issues.”

Conditions of capitalism. (“problems arise from the failures in one or more of these conditions”- p. 14)

three key people on their ideas:

1. Milton Friedman
2. Kenneth Arrow
3. Oliver Williamson

1. Friedman, “chicago school”, champion of the free market, critic of government regulation social responsibility

Wood: “3 elements of social control”. according to Friedman, the market controls itself, though must stay within “the rules of the game”

2. Arrow
-tension between individual wants and society’s
-tension between ends and means (some ends are not achievable)
-price is an efficient allocation of scarce resources, sometimes.
* not bad for soccer games and music concerts
* but what about education and health care?


3. Williamson
-agency theory: problems of 1. moral hazard and 2. bounded rationality

imagine the situation of a U.S. citizen who comes to Panama to work with an local real estate agent: (the reverse could also be true)
moral hazard: Can the the local agent advance his/her interest at the expense of the principal? (the answer should be “of course” though it may not always be easy).
bounded rationality: Is the U.S. principal aware of all they ways he/she can be taken advantage of? (“of course not”)
"if I come from the U.S. with a lot of money and I want to buy real estate in Panama,
is it possible a real estate agent (they're called "brokers" here) will rip me off?
the students said of course, there are many ways, such as selling you land or projects that are undesireable and/or at inflated prices.
"but I thought we were working together?, you were going to help me find a good deal and I will pay you to help me."
this helps set up "moral hazard", the brokers may advance their interests at my expense... particularly if I don't know much "bounded rationality". other examples?

This could also be a good example of Question 2.3: “cheating isn’t always in the actor’s interests, even if he/she can get away with it.”

showed the film the corporation... it’s long (two hours/ 25 minutes, we didnt’ have much of a chance to discuss this.

Background

What follows is a very raw description of my experience teaching "Business Society and Ethics" from May 18-29.

This is my fourth trip to Panama in sixteen months.

My university (Towson University, Towson Maryland) has a relationship with "Quality Leadership University" in Panama City. Basically they offer a Towson degree with Towson curriculum. Some classes are taught by locally-recruited people, other classes Towson professors come to Panama to teach. The format is one class at a time, four hours/day, five days/week for two weeks.

I am using a course packet with ten chapters from Donna Wood's Business Ethics package.

Copies of course materials: cases, links, websites, syllabus and other materials are available on request. Most materials are organized in a Blackboard site. I may be able to allow guest/viewing privileges for interested persons.