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Un-ethical companies and their future
11

Un-ethical companies and their future

Un-ethical companies and their future

(OP)
So I'm sure we are all aware of big projects and issues that have risen over the years, highlighting certain companies as unethical.
Classic examples such as Bechtel, Shell, Exxon-Mobil (just off the top off my head, not aiming at O&G companies specifically), however they all consistently state their ethical groundings as world class etc.

Is this going to change? Have these companies learned from their mistakes and genuinely working towards ethical work?

Also is it ethical or un-ethical to work for one of these companies? I would be interested in peoples opinions.

RE: Un-ethical companies and their future

Every organization of humans is prone to human traits which, in contrast to the great things in humanity, also include laziness, selfishness, corruptibility, self-preservation, ignorance, ego, and greed.

The organizations you name are likely no less moral or ethical than any small businesses. They just have a much larger pool of humans from which any of those negative traits might surface. They are also in the business of "big" jobs where the stakes are high and newer (less-proven) technology is being used more often.

I wonder if you would say it's unethical to work on any manned space program after the way NASA Mission Control handled the launch of Challenger? That was a lethal, expensive, disastrous event that was the result of purely human characteristics seeping into judgment calls. It was no different than the Maconda Well / Deepwater Horizon disaster in the Gulf not long ago. Nothing that happened to either organization would disqualify them from possible employment, in my opinion. You have the opportunity to do good wherever you go.

The only ethical dilemma I believe is relevant is whether or not you believe in the mission of the company. I would not expect a hardcore Catholic who is anti-contraception to go be a stalwart asset to Trojan condoms. That is an ethical choice. Similarly, if you are a stalwart environmentalist, I do not believe you would be likely to consider most of the fossil-fuel-burning companies.

I do not believe that the acts of individual people, in any company, would affect my decision to work there - unless their poor actions created a job security risk or a financial instability. Those are not ethical motivations though, but financial and security considerations.

If you're worried about the "safety record" then I would say the very large companies are much safer than small businesses. Small businesses MOSTLY do only what they have to in order to pass an OSHA audit or avoid someone turning them in. In my experience, the common idea of a 'safety foreman' is the guy who hands out safety glasses to new hires, ordering more band-aids, and drives the fork truck slower than everyone else, and is responsible for changing the dates on expired products. Giant commercial companies have policies and staff in place to actively avoid safety lawsuits.

RE: Un-ethical companies and their future

3
That's a mighty big blanket statement, calling huge corporations with tens of thousands of employees "unethical"!

Some things I might consider to be unethical have been done by some major corporations. Does that mean, by definition, the whole corporation is unethical?

When you look at the problem of illegal drugs, who do you blame? The coca or poppy farmers? The cartels? The disadvantaged youth who deal them on the street? Or the people who fuel the whole economics of the illegal drug trade by their insatiable demand? Same with fossil fuels: who do you blame when a well blows out or a tanker runs aground: the people who screwed up drilling the well or piloting the tanker? The people who pumped the product in the tanker from the ground? Or the people consuming the product as fast as it can be produced?

I don't personally like Exxon's stand on global warming, but I certainly understand why it is consistent with their business interest to hold it. I also understand why they do everything (legal) in their power to make that point of view known and to have it spread to as many others as possible, especially to people in power. But the only way I could possibly view Exxon itself as "unethical" on that point, i.e. because this corporation holds a point of view which maximizes their short- term profit while leaving a giant hole for future generations to attempt to fill in, would be to have a totally naïve perspective on what a corporation is, or should be.

A corporation isn't a "person", it's an algorithm. Its goal is to maximize profit and shareholder value for the people who own it. It has no "ethics". It should never, ever, be expected to hold any values other than those which can be defined in legal terms. In fact, if the management of a corporation attempt, as they often do, to spend the corporation's money toward values other than those fundamental to the corporation, the shareholders should be there to question why it is being done.

If you're realistic about what corporations are, and aren't, then you'll understand how important it is to have a democratic government and the rule of law in place everywhere that corporations carry out their business. Where we are in trouble is when the power of corporations intrudes into, and corrupts and undermines, the functioning of government. And we should always expect that if a corporation can do so, it will, in order to do what its algorithm tells it to do to the greatest extent possible.

If what you're asking is the simpler question of whether or not you should work for organizations whose business model offends your view of a) what's good for the world or b) what you think will make a good future for the company and hence permit it to continue to provide you with employment, then that's a dead easy one. When you have the choice, you make the choice. When the choice is between working against your ideals or going hungry, it's a much harder question to answer.

RE: Un-ethical companies and their future

Having read classic muckraker publications, such as on the meat industry, and having heard Mitt Romney say "Corporations are people, too, my friend, I'd have to entirely disagree that corporations per se cannot be evil or wicked. If companies, including ones I've worked for and quit, can save money by dumping battery acid in the bay, they will do it. If your purpose if "anything for a buck" it is hard to be considered otherwise, just as people. And far too many companies will do anything, evil or good, for a buck.

RE: Un-ethical companies and their future

(OP)
So if you are working to support this 'algorithm' and by providing the services it required you are supporting it to carry on functioning as it does then this is acceptable. But when you are doing this knowing that the company is operating in countries that have unstable democratic views (e.g. areas of west Africa), and knowing that your company is ready to take advantage of this government, is it now unethical?

RE: Un-ethical companies and their future

One should be careful to not confuse a "company" with its owners/employees. Is the Catholic Church an unethical corporation because an admittedly large number of priests molested children and other priests even attempted to cover it up? Do we throw out the baby with the bathwater? Corporations and other large assemblies of people are composed of people, good, bad, or indifferent. No company run by people can be guaranteed to stay unsullied, because people have free will and have the ability to sin mightily, like Bernie Madoff or John DeLorean.

There are organizations that were founded to be unethical, the KKK, the Nazis, and the Crips. People join these organizations knowing full well that they are going to do things prohibited by any plausible code of ethics.

As for companies with charters and plausible codes of ethics, you can only blame people who directed the unethical behavior and those who obeyed. In that regard, "companies" can never fully learn the lesson, because people are weak and subject to temptations. A robotic mechanization of a company charter and code of ethics could never behave unethically, except by errors in programming. This is what distinguishes humans and robots; we don't follow our programming very well, or at all.

TTFN
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RE: Un-ethical companies and their future

Do you buy clothing, apparel, electronics, or other consumer items made in sweatshops and in countries with abhorrent labor practices and social conditions?

RE: Un-ethical companies and their future

Looking from that perspective (exploitation of people), working for e.g. ExxonMobil or Shell is the same as joining Nazi party in 1930's or 1940's. The Nazis look even better in that comparison, because they did things they believed in while Oil giants do these things purely for money.

Yet, nobody was put on trial for crimes against humanity = working for (let alone running) the Supermajors and others.

Dejan IVANOVIC
Process Engineer, MSChE

RE: Un-ethical companies and their future

A factory, per se, does not necessarily equate to a sweatshop. What distinguishes a sweatshop from a Ford assembly plant are the people who run the factory and the people that enforce the laws. 100 years ago, US factories might have been considered sweatshops as well, 6-day workweeks, employment of children, no vacation, no sick days, etc. What changed were the laws and the people who run the factories and the people who enforce the laws.

While the wages in those sweatshops are low by US standards, they are not low by the standards of the countries they're in. What we do about that is a wholly separate ethical question. Do we go in as social do-gooders and pay them $7.25 an hour while the rest of country has to live on a couple of dollars a day? Would the social upheaval that ensures be considered in the ethics of what we do? 30 years ago, China's factories were almost all considered to be sweatshops; yet, from those horrid beginnings a large middle and upper class has developed to the point where even in China, outsourcing might become an economic necessity.

TTFN
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RE: Un-ethical companies and their future

Just as big of a question is, are you unethical if you buy from a company that you believe is unethical?

The same can be said about grease payments, are they unethical? You haven't done anything unlawful, by paying for faster service.

If you don't agree with a companies practices and you believe it is a management problem, then don't purchase there products.

Would you visit diner that had good food but bad service?

RE: Un-ethical companies and their future

I use the word "contract" instead of "algorithm", but it amounts to the same thing, Moltenmetal's statement

Quote (moltenmetal)

A corporation isn't a "person", it's an algorithm. Its goal is to maximize profit and shareholder value for the people who own it. It has no "ethics". It should never, ever, be expected to hold any values other than those which can be defined in legal terms. In fact, if the management of a corporation attempt, as they often do, to spend the corporation's money toward values other than those fundamental to the corporation, the shareholders should be there to question why it is being done.

is spot on. The Citzen's United decision was an absolute travesty. A contract cannot have morals. An algorithm cannot have ethics. People have these traits. If a person bribes a Nigerian official in the name of a company, that person is exhibiting immoral, unethical behavior, not the company. If you fine the company for an action, then you are fining the stock holders of the company (people).

When you are talking about a company the size of Exxon/Mobil or Bechtel, things done in the name of the company can vary widely from location to location. The Halliburton manager in Farmington may say "we cannot take any steps to unduly influence other companies or regulators, our employees may not spend company funds 'entertaining' clients or regulators in any way". The Halliburton manager in Lafayette may say "Your bonus is based on sales" and leave it to the staff to make that happen. which one is moral or ethical? Both. Which operation has a better chance of behaving ethically? Probably Farmington. Which operation has a better chance of surviving the current downturn? I'd bet on Lafayette.

If you go to work for a big company, accept that the company cannot be unethical or immoral and comport yourself in a way that is ethical and consistent with your morality. I had a friend once who found himself in the least ethical department in any company I've ever heard of. He kept his moral compass intact and when the entire department was fired (with one suicide and four indictments), my friend was shown to have not been tainted by the filth and was transferred to a field location where he worked for the company for another 25 years before his retirement. We can't all be a crystal pure as my friend, but damnit we can try.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

I agree with Moltenmetal, but I disagree with zdas04:
If a person bribes a Nigerian official in the name of a company, that person is exhibiting immoral, unethical behavior, not the company. If you fine the company for an action, then you are fining the stock holders of the company (people).

Of course, the persons on both sides of the bribe are exhibiting unethical and likely criminal behavior and should be treated accordingly.
But it also makes sense to look into the company. Most cases of bribery that I read about in newspapers in the last years involved a sales rep bribing someone with their companies money, often with funds that at least seemd to be earmarked for that purpose. A company can try by good accounting to make such things impossible. By fining companies (and thus shareholders) for failing to do so, you hopefully push all companies towards not bribing nigerian officials.

So the argument is not a moral one (must punish evil company!) but about creating conditions where activly preventing criminal behavior pays better than turing a blind eye. If a company can't show that they activly prevent corruption, don't hold a share.

RE: Un-ethical companies and their future

Fines are one of a few means by which a company's management can be incentivized to maintain ethical standards. As many of the posters alluded to, companies often have very noble policies about prohibitions against unethical or illegal behavior. However, humans often do the wrong thing because they're tempted by other things like bonuses, promotions, and the like. This forms the basis of the fundamental conflict for ethical behavior, and is what often tips the balance toward unethical behavior or condoning the same. So, a manager of such an employee might not be personally doing the unethical things, but might turn a blind eye towards that because of the bonus or promotion at stake. Civil and criminal penalties are therefore factors that can hopefully tip the balance back the other way. Fines and penalties often spur renewal and reinvigoration of training and enforcement of ethical behavior within a company.

TTFN
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RE: Un-ethical companies and their future

MartinLe,
Reading through your post, I have a hard time picking out the part of my post that you disagree with. I worked for a company that tried to do everything possible to prevent unethical behavior. Everything. No "unaccountable funds" allowed anywhere. All employees attend ethics class every year that end with signing the company's ethics policy. An so forth. Still, there were cases where people overcharged for work (some of which never really happened) and split the overage with a company employee (often to the tune of tens of thousands of dollars). There were cases were a local manager would "purchase" an uncontrolled component (replacement valves can cost many thousands of dollars and don't get an inventory record, and invoices are easy to fake) and use that money to bribe someone. There are many ways to do this, and most large companies have "Loss Prevention" departments (the one in the company I worked for was staffed entirely with former FBI agents) that work hard, but can't catch everything. At the end of the day it is just people acting in what they perceive to be their own best interests. That perception can lead people to unethical behavior that a company does not condone and will prosecute.

Be careful of putting much credence in "what you read in the newspaper", the ethics of that industry is no better than the companies they report on. I know people who worked at Enron, and the "rot" that was so widely reported could actually be tracked to the departments run by a couple of specific individuals. The rest of the company was mostly ignorant of the wrong doing and certainly did not condone it. Many tens of thousands of people were totally innocent and will forever be tainted by the broad brush the media painted the story with.

The corporation is simply a legal document. Every action take in the name of the corporation is taken by human beings acting on their own perceptions of "right" and "wrong".

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

Even with all of that, in some countries it typically takes 6 months to get a phone line installed. And it is common to pay extra, grease payments, to have it installed in less than a month.

Getting a phone line is not wrong, or illegal, but the grease payment to get it installed faster becomes an issue.

Would it not be the same thing to have a news person to write a good article about your company?

So some difficult to explain payments happen. And there is a line, but that line I don't feel is no payments.

On the other hand, has a company sales agent never offered to buy you lunch? That could be seen as a bribe, when the truth is if you could be bribed with lunch, you are too easy.

RE: Un-ethical companies and their future

cranky, unless an official expediting fee run through the relevant organizations books, those 'grease fees' are bribes and illegal under measures in places like the UK & USA (I had my ethics training a few months ago where they labored this point).

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Un-ethical companies and their future

Quote (EmmanuelTop)


Looking from that perspective (exploitation of people), working for e.g. ExxonMobil or Shell is the same as joining Nazi party in 1930's or 1940's. The Nazis look even better in that comparison, because they did things they believed in while Oil giants do these things purely for money.
...

In the 1930s, we did not know how bad the Nazis were going to be. There was no embargo against Germany. The Nazis liked to point out that they were not treating their jews any worse that the Americans were treating their negroes. The Indian wars, a precedent cited extensively by the Nazis, were within living memory.

A really good read on this is The Smartest Guys in the Room, by Bethany McLean and Peter Elkind, all about Enron. The book is very different from the documentary. The authors figure that Kenneth Lay and Jeffrey Skilling were bad managers. Skilling comes off in the book as a fairly decent person. They managed to create a predatory corporate culture that made everything else possible, except real profits, of course.

--
JHG

RE: Un-ethical companies and their future

zdas04,
I understood your post to mean (among other things) that it does not make sense to fine a cooperation, only individuals. This is the statement I disagree with.
Did I misread your post?

You raise the point that even if a company tries hard to crack down on unethical behavior, some will still find workaraounds. No disagreement here.




RE: Un-ethical companies and their future

My principal point is that we should EXPECT a corporation to do whatever it can get away with in order to maximize its profit. Expecting otherwise is foolhardy and naïve. And given this expectation, we are also naïve and foolhardy to attribute virtues to corporations- to believe that corporations can "police themselves" for instance, or to imagine Disney gives a rat's ass about the wellbeing of children (not to pick on them in particular, they're just a handy example)... We're similarly foolhardy and naive if we think that government regulation is all "red tape" and taxation is "evil". Yes, there is a balance between free enterprise and public control/oversight. It's easy to be too strict in some areas and too lenient in others, and it needs dynamic balancing by people who are engaged, informed and who care about the public good. We fail entirely when we give up the role of the people, through their democratic institutions and the rule of law, to exercise the control that is necessary to keep corporations from extremes of excess.

The notion that the "ethics of a corporation" (a fundamentally idiotic concept in my view) are the responsibility of the people who work for it, or the sum (or perhaps lowest common denominator) of the people who work for it- and that the solution to corporate greed and malfeasance is to somehow expect people who work for corporations to be better people. An example: giving "sustainability" training to young engineers, in the expectation that they will magically make the world a better place as a result- all the while, having zero influence on the underlying economic factors that drive the way we use resources and energy. All that will do is make the young engineers prematurely cynical- though some might argue that in itself is an important coping strategy if you intend to stay in this profession long term.

RE: Un-ethical companies and their future

MartinLe,
My contention is that by definition you cannot punish a contract or an algorithm. They are abstract concepts that don't have a butt to smack. Fining BP for Macondo ends up fining the United Auto Workers Pension Fund (a huge holder of BP stock) members. Do you think that some retired auto worker in Lansing had any decision-making responsibility regarding that fire and spill? Should the corporation (and therefore that retiree in Lansing) pay for clean-up? Absolutely. Should the corporation pay reparations to people who were actually harmed by the spill? Yes. Should the corporation pay reparations to people who were not allowed (by the government) to work the fisheries for 3 months? I don't think so, but it is probably grayer than the rest. How about $7B in fines that end up going into the general fund? Our guy in Lansing really doesn't need his butt smacked for the decisions that corporate employees made.

"Punishment" is a human activity that really cannot be applied effectively to a contract or algorithm. Did a manager issue specific instructions to someone to shortcut established safety regulations? I have followed this case closely and I don't know, if there was then that butt should be smacked. Did any individual break a law? If so then he or she should be prosecuted.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

I think that regardless of whether you consider these companies algorithms,organizations, or whatever, the history of the last 30-40 years shows that big fish eat the little ones, consolidate and grow larger and larger. That gives them more leverage, more power, and more influence.

Without major changes in the legal framework under which corporations run, this will continue unabated. I don't see the political willpower required to force such changes in existence, so I assume that more and more consolidation will happen.

It will be interesting to see if one of these mega giants ever goes under catastrophically. I just hope I'm retired and living on an island without a radio by then.

RE: Un-ethical companies and their future

Martin's point is that making the corporation aware of the fine before it acts, will influence the corporation/algorithm by adjusting the risk/reward in favor of the ethical choice, rather than the unethical choice.

An algorithm wouldn't regularly choose to not put 50 cents in the parking meter if it knew the parking ticket is $500. If the ticket was just a warning, or only $5, and there was a <10% chance of getting caught, then the algorithm would never pay the meter.

RE: Un-ethical companies and their future

I have master service agreements with 56 corporations. EVERY SINGLE ONE of them has language in the contract that the corporation will not tolerate illegal activity and that anyone observing illegal behavior in the company's name and not reporting it will be terminated. In other words not feeding that parking meter is a dismissal offence and observing someone not feeding the parking meter and not reporting them is a dismissal offense. Every single illegal act ever committed in the name of a corporation has been made in direct contradiction of the company's explicit instructions.

I know that 56 corporations (almost all in the same industry) is not a very big sample of a population of hundreds of thousands of corporations, but 100% seems significant.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

moltenmetal, 1gibson: exactly.

zdas04,
You seem to insist that once the language "corporation will not tolerate illegal activity and that anyone observing illegal behavior in the company's name and not reporting it will be terminated" is there the company is in the clear and all illegal wrongdoing rest firmly on the shoulders of the individuals doing it.

I've seen and heard things that I think where legal but gray area, but since I'm not sure I won't write about them here. Most of the shady stuff was done in the interst of the company
Let me just state that language against illegal activity on the companies behalve alone does not suffice.

some public institutions bar 'misbehaving' companies from contracts for X years, this IMO a good lever to apply but only possibly with companies that work directly for said institutions.

You braught the example of a spill, we were talking about corruption and bribes. A corruption example: German arms firm giving money to a middleman, who bribed greece officials into buying an air defence system. Company paid 37m€ fines but avoided court
In all likelyhood the upper managers got of lightly. Without a fine, what incentive would the company have for anti-corruption measures?



RE: Un-ethical companies and their future

Actually there are laws that bar the company I work for from reporting some illegal activity. It has to do with customer privacy.

We are also bared from refusing to serving them. So if you want to find a gray area, they are there in the laws.

RE: Un-ethical companies and their future

Zdas, that language you mention is equivalent to a sign listing the hours you are supposed to pay the meter, and "vehicles will be towed at owner's expense." Yes it could happen, but it won't unless you are trying to get caught (leave car parked illegally for a few days.)

If you saw people getting towed all the time, and there was someone in a tow truck watching you from across the street, you would nod, smile, and feed the meter.

RE: Un-ethical companies and their future

Quote (MartinLe)

Most of the shady stuff was done in the interst of the company

If you made that "Perceived interest of the company" I would go along.

I don't know how else to say this, a company can not have morals, ethics, or remorse. Those are human attributes and only people can hold them. If an employee sees the best interests of the company to lie, cheat, steel, and bribe, that is that individual acting wrongly. The company is just an abstract concept. If the CEO of Enron requires his managers to require their supervisors to require their employees to break the law, and they do, then everyone in the company should be punished. Punishing "the company" is simply passing the punishment on to stock holders who did not knowingly participate in the wrongdoing. A company does not have a butt to smack. Do you think that Enron is embarrassed that they were fined for stealing a bunch of money? I don't. If evil things are done in the name of a corporation (and they are), then it is people doing evil things. People who can be punished People who should be punished. This whole thing goes away if employees of a company ever reach the comprehension that they personally will be jailed, fined, punished for the actions they take in the name of the company. If evil managers learn that threatening someone's job if the DON'T break the law is actually extortion and comes with jail time, then many evils of the world go away. The problem is that the law makers are getting too rich off the illegal activities.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

Something does not fit... Why would an individual (= employee) try to bribe someone in company's interest? That certainly puts "negative ethics" on the company as well, not on the employee only. And certainly it is the company that stands behind the bribery, not just the individual.

Each company has certain culture, created, endorsed and stimulated by the management. So I would not agree completely with the statement that only individuals are responsible. Yes, if you go all the way to the CEO and shareholders etc. But even if you "remove" them the successors will likely continue in the same spirit because this is what has been bringing the extra profit all the time. So...

Dejan IVANOVIC
Process Engineer, MSChE

RE: Un-ethical companies and their future

I don't think it is just an "algorithm".

I once worked in a company A (Non US) where I had to handle a client claim for premature product failure. People in the department did not want to recognize and admit there was a failure in the quotation stage (well informed case but bad product selection). I tried to document the problem internally and have this escalated but at some point it was useless and it became beyond my reach to fix this defect. Client (utility) needed to replace the product and had to pay for everything. I found this abusive and non ethical.

Now couple years later, I am in company B (US). The environment is really different. Compliance is enforced with reminders, annual compliance session (with the ombudperson or management being present), attendance is mandatory and with very detailed workflows to fill in and acknowledge, no conflict of interest, no gifts, no disclosure of information, no retaliation, enforce inclusive behavior, no harassment whatsoever, etc. maybe you recognize who this company is...

So are both Companies A and B completely innocent when they conduct their businesses, I really don't think so. Dirty things can happen. But the compliance program in place was so rigorous , the message was hammered again and again and with all that the integrity of a lot of the leaders was real. At the very end it does not fix the problem but it helps A LOT to be in a company which has solid core ethics (not just slogan). I think it boils down to reputation / legacy damage : at what extent this is NOT tolerated by the Leaders. Its a difficult problem and also for leadership succession.

RE: Un-ethical companies and their future

It is true that some companies, divisions, etc. do a poor job of evaluating there management, or do a poor job of finding managers. And if the problem is upper management does a poor job of controlling money, and resources then it is ripe for problems.

This is why many mutual fund companies look into the companies they invest in. So if union retirement plans do a poor job of looking into the companies they invest in, then they do deserve to take loss for not doing there job.

From an self-directed invester point of view, if a company has few mutual funds invested in it, it might be a clue. But other than knowing the insides of a company, there is no way to know the type of management they have, or there business conduct risk.

But you can say that the problems start at the top, because each layer of management must evaluate the levels below them. Also a good training, and employee outreach program goes a long way to a well behaved company.

RE: Un-ethical companies and their future

rotw,
The difference between the two companies is almost certainly the attitude of a single manager in both cases. A person. A stack of paper cannot make a decision. The manager in Company A is looking at avoiding costs (at the expense of future sales, possibly). The manager in Company B is looking at building long-term relationships. Swap those two people between the companies and both managers would likely fire their customer service staff and start over.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

2
All I can say is, beware places that wear their ethics so publicly on their sleeves- chances are, there's a history of malfeasance behind it, and chances are also good that the malfeasance isn't completely gone.

It's like the extremes of safety culture you see in some places. When people start suffering over whether or not you've got a lid on your coffee cup, you know the effort isn't serious any more- it's exaggerated to the point of ridiculousness.

RE: Un-ethical companies and their future

Molten,

I couldn't agree with you more. I take safety seriously, if for no other reason then self preservation. I work for a company that has an "extreme safety culture". I am proud of the work we do, but digging through google articles I see a history that I wouldn't be proud of.

Sometimes I feel like some of the observations or procedures specified by our safety group are nothing more than a façade. Recently we had a string of "foreign bodies" in peoples eyes. This was because they say the work area was too dark and people were dropping their safety glasses to their noses to see something when they get something in their eye. Safety group brought in light plants, but due to the congested area, these light plants were set up in areas where natural light was already coming in (well lit areas). These light plants did nothing. When I complained that if they were seriously concerned, they would put the effort in to relocate these light plants to dark areas (crazy idea I know). It would costs us some manhours for sure, but if the concern was genuine this would be seen as a necessity. I had the project manager straight up tell me if I wanted them moved to move them myself (what kind of response is that?) As an engineer I have no authority over craft or any heavy equipment, so he essentially said go screw yourself.

Point being, this was done as a "good faith effort" to show the client we care about safety. I however, see through the BS and know there was not good faith effort whatsoever.

RE: Un-ethical companies and their future

zdas,

I see what you try to say. I will think about it.

I think that if you swap managers, I guess it will still take some time for the "non ethical" manager to screw it up all when departing from a healthy and serious environment...(unless the guy is really mad)...I understand that all it takes is one single bad event in the press / front page to jeopardize decades of hard work :(

So the problem here is the swapping...the swapping should be prevented to occur in practice to a maximum extend.
So the culture of management is key and it is at the very end a human problem not a paperwork thing. Takes decades if not centuries to build this culture and values because it aggregates EVERYTHING.

Yes a stack of paper cannot make a decision, cannot agree more. Thanks for this.

RE: Un-ethical companies and their future

I wish SCOTUS understood that relative to Citizens United. That decision, and other more plausible ones, have ensconced companies into the level of living, breathing, human beings with "rights." But, with rights come responsibility. Companies cannot demand to to treated as people under contract law, and the expect to get a pass when it comes to criminal behavior.

TTFN
I can do absolutely anything. I'm an expert!
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RE: Un-ethical companies and their future

Citizens United was only about First Amendment rights. Free speech can not be abridged, and money is necessary to fully exercise free speech, especially in today's world.

RE: Un-ethical companies and their future

Quote (http://www.supremecourt.gov/opinions/09pdf/08-205....)

Any other course would prolong the substantial, nationwide chilling effect caused by §441b’s corporate expenditure ban.

Quote (http://www.supremecourt.gov/opinions/09pdf/08-205....)

Austin is overruled, and thus provides no basis for allowing the Government to limit corporate independent expenditures.

Yes, free speech for CORPORATIONS of any kind, not just a PAC. Thus, SCOTUS allowed General Motors have the same unlimited right to free speech as we have, except that General Motors isn't a person.

TTFN
I can do absolutely anything. I'm an expert!
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RE: Un-ethical companies and their future

The problem I have with Citizens united and all the other nonsense in the name of the first amendment is "who goes to jail?" if the corporation becomes guilty of perjury through their exercise of free speech. In a libel or slander case you can sue the company, but who do you arrest in an extortion case? The First Amendment is a big damn deal. Abridging the right to free speech must be prevented (hear that college campuses?) It can only be applied to people, not to stacks of paper.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

Wow. We agree on something else as well. MY impression is that usually, when it comes to criminal wrongdoing, the charges can be levied on specific individuals in a company, particularly those who gave the orders or who were operating on their own. Case in point, Bernie Madoff is serving time for 12 federal felonies, Kenneth Lay of Enron would have served up to 30 yrs, had he not died first, while Jeffrey Skilling is serving time for his actions at Enron.

TTFN
I can do absolutely anything. I'm an expert!
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RE: Un-ethical companies and their future

Was Ken Lay's death ever proven? I didn't recall any evidence of his death, just an announcement that he had conveniently died to escape justice. As an ex-Enron employee and shareholder I'd cheerfully have watched the lying bastard swing from a rope. I firmly believe that he's alive and had a new identity arranged by his friend Bush. I don't generally entertain consipracy theories!

RE: Un-ethical companies and their future

Agree with moltenmetal, strict compliance rules can point to problems in the past and more importantly may not work at all. If you can't get your job done without breaking all or many rules (wether safety or anti-corruption or whatever), they won't work.

A few years back I read an interesting article on corruption and measures against corruption in water supply in India. One highlight: Someone upstairs within a municipality thought (probably correctly) that contractors often overcharged in exchange for kickbacks. So they made a list of what certain parts or services may cost, as an upper ceiling. Problem was that this list was soon divorced from reality, the only way to successfully tender any work was for the contractor to sit down with the engineer doing the tender and puch costs around until the contractor could make his cut and the prescribed max. costs where kept. This is the situation you actuall want to prevent with a tender, that contractor and tendere sit alone and talk about prices. Turned out that in these situation, the discussion would often come to kickbacks ...


RE: Un-ethical companies and their future

A situation regarding engineering ethics I have frequently encountered is A-E firms getting a percentage kick-back for rep'ing specific products, and specifying those products in order to pick up a small percentage, while being less than the optimal selection in terms of price, fit and functionality for the customer. There is enough dirt in engineering back yards to clean up before picking out other industries.

One ethics matter that I find hilarious is the annual mandatory federal ethics class. The software had to be updated because people could "unethically" just skip through the whole thing in two minutes. I'm guessing the ethics course was a sweetheart deal between a congressman and his mistress to steer a few million dollars. If you don't have a moral compass by the time you are managing contracts, odds are very good a one hour computer course is not going to help. Just like in the private sector, some whitewash and eye candy is needed.

RE: Un-ethical companies and their future

Still there is the problem of perception in the area of environmental ethics. If your business is digging something out of the ground, then you have little choice but be digging it out of the ground.
Yes you can change things over time by finding a better way to use your product, or exit those operations, but that is not what I am talking about.

So the question is, what is ethical? Who decides what is ethical?

Some say GE is unethical because they paid no income taxes. Is it unethical to follow the law to reduce the amount of tax paid?

Breaking the law could be unethical, but if we look at the laws of different countries, or even states, the laws can be confusing and in conflict. So what laws are a company to follow?

RE: Un-ethical companies and their future

Zdas, I keep coming back to your issue about fining corporations being unfair to the small investors or folks with money in 401k's etc.

The principle of fining the 'owner' of a company is presumably so that the 'owner' sets up and operates the company in a way to avoid malfeasance.

This should work pretty well when you have a single owner, or even a small group of owners.

However, when you have thousands of share holders - many of them several steps removed via 401k's etc. with minimal ability to directly impact how the company is run then yeah it falls down.

I mean, look at various efforts by share holder groups to look at executive pay being blocked one way or another as to how hard it is for small share holders to impact operations of the company.

If the company board is nominally representing them then perhaps as you say the buck should fall on them and they should personally be fined/criminally prosecuted as well as the explicit 'wrong doers' where applicable.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

RE: Un-ethical companies and their future

Step 1: Fine the owners personally to the tune of 100% of their bonus the previous year.

Step 2: This page intentionally left blank

RE: Un-ethical companies and their future

One issue I have with the notion that "mom & pop" investors shouldn't shoulder the burden of malfeasance. So, Enron's stock is a high flyer, and people "invest" in (make a bet with) their stock. They then sit back happily enjoying paper gains and/or dividends and not even bother to pay attention to any rumblings of price fixing or market manipulation. So they're OK reaping the rewards of the malfeasant (?) corporate behavior, but plead innocence when things start crashing? While their roles are relatively passive, let's not forget that their very act of piling-on a high flying stock is what drives the price up and what provides the incentive for executives and managers to try and continue to pump up the price to get their bonuses. So, it's indeed rather cruel to learn this lesson, but mavens of the market have repeatedly warned people about all eggs in one basket, etc., and so, again greed is at the core of those mom&pop investors who lost their entire life savings because they bet it all on Enron. Likewise, the employees did the same with their 401K investments and lost them all when Enron crashed. For employees, there's at least some measure of peer pressure and appeals to "loyalty" that might have swayed an otherwise rational person into investing their future in Enron stock. To that end, I feel more sympathy to the Enron employees that got shafted, as I too, have had situations where you were "required" to invest in company stock.

TTFN
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RE: Un-ethical companies and their future

IRStuff,
You've missed my point completely. If I buy a stock I am betting that value will increase and I could lose that bet.

Laws were broken in the name of Enron. No question about that. The people who broke the laws should be punished to the full extent of the law. No question about that. Where I have a problem is levying a fine against Enron (since it doesn't have a physical manifestation to send to jail). Those fines only punish the billions of individual owners of Enron stock who had every reason to believe that the stock was flying high because of stellar [legal] performance. I follow this industry very closely and I had no idea what they were doing or that it was illegal. A technical trader just looks at ratios to make his decision and has no reason to look to see what it is they make or how good they are at it (I consider technical trading to be a tiny step from a Ouija board). The fines lowered the eventual liquidation value of the assets in favor of putting that money in the general fund. I don't feel that those fines were actually in the country's interest.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Un-ethical companies and their future

zdas, I understand that point, but technical trading is amoral, and must accept the consequences. Technical trading would allow you to invest in blood diamonds because that's ostensibly a very profitable business. Or any number of illicit or immoral activities.

When something like Enron happens, there has to be a penalty. The magnitude of Enron's duplicity was such that there were LOTS of people in on it, and only a few were actually punished. The fine simply represents some acknowledgement that the value of the company was based on illegal activities, i.e., a form of blood money. The executives could have avoided all of that by declaring bankruptcy 7 yrs earlier. Thus, the increased valuation that the investors lost didn't really exist. Presumably, someone who read the annual reports in detail might have noticed that liabilities were magically disappearing, but since the company was doing so well, no one bothered to do their due diligence.

In some respects, this isn't much different than Bernie Madoff's Ponzi scheme. People were willing to suspend disbelief because the profits were so beguiling, but they were beguiling precisely because they were lies.

TTFN
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RE: Un-ethical companies and their future

David: people shouldn't profit from crime, whether they committed the crime or others committed it on their behalf.

Yes, governments should and MUST fine corporations when they do wrong- taking ill-gotten gains back from the shareholders. Doesn't matter if those shareholders are retirees, mom-and-pops or Warren Buffett.

If we fail to do that, we fail to enter meaningfully into the corporate algorithm to define meaningful limits on what can and cannot be done in the name of making money.

Throwing a few people in jail in the worst cases sounds wonderful, but how's that working in practice? How many people went to jail after the sub-prime mortgage/mortage backed securities debacle in the US? And on a side note, any idea how much Canadian government money went into Canadian banks to prop them up after this debacle nearly wiped out the US financial system? Zeto dollars. I believe we were the only G7 country that can make that claim. Why? Because we still regulate our banking system in the public interest. Everyone still hates the banks, and they still screw people mercilessly when they can- and most of us hold bank shares in our RRSPs to at least get back earnings to replace the fees they charge us shamelessly for everything- but we do still set regulatory limits on their operations which greatly reduce the risk of them becoming insolvent. We've forgotten nearly all of the lessons that 1929 taught us, but not every single one.

RE: Un-ethical companies and their future

There are countries out there, also badly affected by the robbery committed by the banking system in 2008, but countries that have bailed out the citizens and not the banks. So the bankers ended up in jail, instead of receiving enormous bonuses. But we won't see that on any television, in spite of "highest democracy" standards we apparently enjoy in our countries.

The point I am trying to make is that government(s) can be a part of the same money-making crew that instigates corruption and robbery of its own citizens, let alone corruption and exploitation of people in other countries and continents. The question then becomes, who is going to control corporations, banks, or any other company/institution set out to break the rules in order to make more profit?

Dejan IVANOVIC
Process Engineer, MSChE

RE: Un-ethical companies and their future

quote
zdas, I understand that point, but technical trading is amoral, and must accept the consequences. Technical trading would allow you to invest in blood diamonds because that's ostensibly a very profitable business. Or any number of illicit or immoral activities.
quote
I agree with this IRStuff mostly because of the speculative risk (and that is for personal/moral/ethical reasons against gambling) however concerning the risk of illegal activities I tend to agree but keeping in mind that we should assume that we live in a "world" which is ruled by the power of the law. If the illegal activities are discovered / disclosed it is the responsibility of the regulator and his failure. They are not to punish the investors who have the right to assume the system abides with the law. But this brings the issue of the reasonable doubt that people may have when they make their own judgment and that's even a philosophical problem. I guess that's why we have rulings which are to ensure the rules of the game are adhered to, so competition happens in a fair environment. I guess this is essence of the capitalism: to measure performance against enforced standard and rules so the one who is outperforming others is at the top for real reasons and also the whole thing improves. When the regulator punishes the shareholders the regulator is sending a totally wrong signal. Like if we live in a mafia world where the regulator would say "you should not have assumed anything" ; are people paying taxes to get this ? but lesson learned that discloses a little bit of the world we are living in: it is not ideal but must be improved, still we should have our fact straights or not ?

RE: Un-ethical companies and their future

2
The shareholders individually might all find an illegal act to be immoral and reprehensible. Nevertheless, when illegal actions are taking place, the shareholders collectively encourage the management to look the other way by their actions in the market. Neither the management nor the directors nor the shareholders nor any employee should profit from crime, period. And again, you're thinking about this totally the wrong way: you're thinking that this primarily has to do with the good or evil intentions of individuals, when in fact it's an algorithm at work.

Governments need to fine corporations for profit-motivated malfeasance, and they must do so to a degree sufficient to enter into the calculation of profit and loss to demonstrate that the risk of doing the wrong thing vastly outweighs the potential benefit. Otherwise, even illegal actions are not outside the realm of what a corporation will do to maximize its profits and shareholder value.

What should that fine money be spent on? That's a political decision. Money coming in from fines is money that shouldn't need to be collected from honest people in taxes. Dishonest people aren't paying them anyway.

RE: Un-ethical companies and their future

So what of arms of the federal government that enforce rules on other arms of government? Some of the fines do not involve crimes but involve record keeping practice. Is a fine on a non-profit government agency really a crime?

What about fining non-profit corporations that live on donations?

My point is where is the line between not following the rules and illegal, and reprehensiable?

The other issue is what is immoral? Who sets these standards?

In general most of us know something big is immoral, illegal, and reprehensiable (IIR). But where is that line between bad form and something slightly IIR.

Is APPLE in that gray area? Is customer privicy, more important than the demands of law enforcement?

RE: Un-ethical companies and their future

An ethical question, which is from an event I had to work through about 20 years ago.

By the European Federal Acquisition Regulation (EUFAR), all Host Nation laws had to be observed in negotiations. One specific nation I was trying to get contracts signed had a mandatory federal gratuities law. US law forbids the paying of gratuities to a foreign government official. I was directed to meet with the national general staff and get five contracts signed immediately, and don't come home until it is done. I got all five contracts signed in one day without violating US or Host Nation law.

Would that still be unethical if no laws were broken?

RE: Un-ethical companies and their future

When something is legal it is ethical? That does not set well with me, legal and ethical are not synonymous.

RE: Un-ethical companies and their future

There are ethics, laws, and culture.
It's illegal to exceed the speed limit.
The act of knowingly breaking the law is unethical.
Culturally in the US, going 5mph over the limit is more like a minimum speed on the highway.

So does anyone really consider going 5 over unethical? Wouldn't it be worse to never exceed the speed limit and clog up the roads?

RE: Un-ethical companies and their future

a nice philosophical discussion on right and wrong.

recognise that unethical behaviour has a very strong profit benefit, either individually or corporately, in the short term.

and when one of these "rats" is discovered, sure one rat becomes extinct, but another fills the void.

another day in paradise, or is paradise one day closer ?

RE: Un-ethical companies and their future

"Is APPLE in that gray area? Is customer privacy, more important than the demands of law enforcement?"

The issue is the slippery slope and the substantial probability that the means for breaking the security will be abused, by either the government or other bad actors. We have been repeatedly shown that the "government" in the guise of its intelligence and other agencies can and will abuse any power they possess in the pursuit of their objectives. The instant Apple creates the means by which to crack the security, you can bet your bottom dollar that the FBI or some other agency will immediately duplicate all relevant design information and go on to create multiple copies of the hardware and software, particularly since there was nothing in the ruling that prevents the government from doing so. So, if Apple knuckles under, the government will have the means to break your phone security. While this initial capability requires physical possession of the phone, does anyone doubt that the NSA or CIA will immediately work on being able to do that remotely?

TTFN
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