Abstract
Let us recapitulate what we have learned: If we want to convince companies to be sustainable, we need something other than simple appeals to their good will clothed in the ideals of CSR or the triple bottom line. Economic arguments for ethically sustainable enterprise also fall short of our goal. We have explained why: They are caught in a double category mistake. First, they mix up the systemic impulses that govern how people and enterprises act. Second, the appeals miss the relevant level where entrepreneurial action would be triggered. What we now need for our arguments is a closer look at these category mistakes.
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Notes
- 1.
Commercial arguments in favor of ethical management come from the belief that sustainably responsible practices will reduce the transaction costs and produce greater profits, eg by avoiding the later costs of breaking with social or environmental standards or by improving the product brand or employer brand (cf. Gray and Balmer 1998; Hutton et al. 2001).
- 2.
One dramatic example is the abduction of Jakob von Metzler. To find out where the kidnapped boy was kept, the deputy police commissioner of Frankfurt, Wolfgang Daschner, threatened the kidnapper Magnus Gäfgen with torture in the hope of rescuing the child alive. With the life of Jakob von Metzler at stake, Wolfgang Daschner decided against his oath to uphold the law. As an expression of the dilemma of conscience and his own responsibility for his decision, he noted in the official files that his decision was questionable. By this, he laid the grounds for his own prosecution over the matter.
- 3.
We can name the normative principles proposed by Otto et al. (2007) for ethically constrained competition: “Competition should not intend or pursue the destruction of the competitor… should not be violent, but peaceful… should not be aggressive, but – if possible – based on inner calm … should not be degrading… should not be hidden, but transparent “(l.c. 43; italics by the author). This intensive emphasize on what should be done shows that companies actually tend to do the opposite, a frequent cause for scandal for the followers of ethical management.
- 4.
This is where the arguments of value (Hemel 2007, 2013; Leisinger 2014), responsibility (Ulrich 1986, 1997), and governance-oriented company ethics (Wieland 2001, 2002) and the virtue ethical concepts of humane management (Dierksmeier 2011, 2012, 2013; von Kimakowitz et al. 2010; Dierksmeier et al. 2011) coincide. Even economic ethics that remain committed to the idea of the homo oeconomicus believe in trust and the people perspective as the basis for commercial practice (cf. Suchanek 2001, 186ff, 2012).
- 5.
In Germany, one can name Claus Hipp, Karl-Ludwig Schweisfurth, or Götz Werner; on the international stage, we would include Ray Anderson, the founder of Interface, Douglas Tompkins, founder of The North Face and Esprit, or Jeremy Moon, the founder of Icebreaker.
- 6.
“Millennials overwhelmingly believe that business needs a reset in terms of paying as much attention to people and purpose as it does products and profit. Seventy-five percent of Millennials believe businesses are too fixated on their own agendas and not focused enough on helping to improve society “(Deloitte Millenium Survey 2015, Executive Review, 1). On its German web pages on the study, Deloitte explains: “Social involvement is becoming important: A majority of people (Germany 62 % /Worldwide 75 %) is criticizing the profit thinking of companies. Their social relevance is given considerable attention—43 % of German respondents think that companies have more impact on social issues than the government. The behavior of companies is considered an ethical statement by a majority of respondents (Germany 39 %/Worldwide 53 %); they demand that executives help improve the state of society.” (http://www2.deloitte.com/de/de/pages/innovation/contents/millennial-survey-2015.html; translation from the German).
- 7.
As Shoshana Zuboff argues in her article “The Secrets of Surveillance Capitalism” (Zuboff 2016) the internet and content driven business models of Google, Facebook and Co are based on the gathering of information about how individuals move and behave. “In its thirst for knowledge of and influence over the most detailed nuances of our behavior” they venture on “the significance of behavioral surplus”. Veiled with the argument that the knowledge about individual attitudes and behaviors would serve as basis for delivering individually customized and optimized products and services these data are not used in favor of the customer but rather in favor of those who want to use these data to influence the customer. As Facebook did show with an experiment in 2013 every user individual and all users as a dynamic group can be influenced and manipulated easily by changing the algorithm of the newsfeeds. By doing this on large scale not only markets could be manipulated but even the outcome of political elections as the recent discussion of Facebook on how to deal with Donald Trump in the presidential election campaign does unveil (Lobe 2016).
- 8.
Friedrich Glasl calls this last step of escalation “Together into the abyss” (Glasl 1980, 302).
- 9.
Considering Glasl’s model with the global ethos values in mind and comparing them to international conflict research, we see that all conflict resolution models put forward, such as the Harvard Negotiation Model of Fischer and Ury (1981), Ury (1991), and Fisher and Shapiro (2005) or the Human Dignity Modell of Donna Hicks (2011), also rely on that canon of global ethos values.
- 10.
To help us distinguish between the terms leading, leadership, leadership styles, and leadership systems, the following definitions can be useful (Glauner 2016c):
Leading means taking decisions in instances of incomplete knowledge. It is the process of structuring complex incidents by selecting the means, ways, and goals (factual focus) and organizing and motivating people (people focus) with the aim of getting the involved actors to solve the tasks and reach the goals on their own accord.
Leadership means the ability to inspire people for a cause so that they are themselves motivated to pursue it. Good leadership pursues voluntary and active work on the assigned duties, not blind obedience. Leading means activating values that are shared on an interpersonal level. They follow the idea of people as sense-oriented beings.
Leadership styles are concrete approaches used to activate the people being led. From the point of view of the leader, these are systemic practices that help employees find, coordinate, and introduce solutions for complex circumstances. Leadership styles form leadership systems.
Leadership systems are systems of values that organize the actual interaction between leading and being led. Leadership systems are expressions of historical and socio-cultural concepts that define the view of man and the roles of the leader and the follower.
Leadership responsibility means the comprehensive responsibility for the people who are being led (mistakes made by employees are mistakes of the leader).
- 11.
Otto et al. (2007) can find in swarm intelligence, that is, in the unreflected decisions of the many, a potential that companies can use for their competitive purposes, eg in understanding their environments (l.c. 158), but also in forming their organizations or innovating. What makes sense for fish or birds – namely, the responsive reactions of a massive group of cognitively not overly developed individuals in a not overly complex environment (eg when a seal hunts a school of herrings)—does not make as much sense for cognitively highly developed individuals in highly complex environments. History suggests that the swarm behavior of humans does not normally lead to better solutions. Instead, the outcome is often sub-par, eg the typical boom-and-bust effect in swarmed markets. Organizational research and the study of democratically inclusive decision-making processes (Grande 2012) show us that self-constituent groups only manage to reach optimum decisions quickly or effectively in complex environments, when they only include a limited number of individuals and when these share the key values and worldviews. Specifically, this would include those ethos values that govern a smooth handling of differences and that have the potential to produce and accommodate different perspectives. As soon as the number of participants and/or the complexity of the problem to be managed and/or the differences in the values and worldviews of the group increase, swarm intelligence soon devolves into swarm stupidity. Every member of the swarm then just goes with the flow and follows only one idea, without even considering other options, and the system becomes incapable of managing itself quickly, efficiently, or effectively.
- 12.
Jared Diamond (2005) and Colin Woodard (2004) have given impressive proof that such a collapse is indeed not unusual for humankind. Nico Paech argues, the only way to avoid such a collapse is to rise above the lures of excess (Paech 2012), which seems a noble ambition. A sober mind, however, knows that this goes against our nature as humans.
- 13.
The spiral of price erosion can be seen in the hours that an average employee needs to work in order to be able to afford something. In 1960, everyday essentials cost 20 min of work (two pounds of bread), 39 min (half a pound of butter), 51 min (10 eggs), or 15 min (a bottle of beer), compared to the following work required in 1991 and 2007: for a 2-pound loaf of bread eleven/ten minutes, six/five minutes for the butter, eight/seven minutes for the eggs, and 3 min for the beer.
The rate of erosion is even more impressive when looking at higher-price commodities, such as fridges, washing machines, or television sets. For a fridge, the average employee in 1960, 1991, and 2007 had to work 156.5 h, or 30 h and 27 min, or 24 h and 12 min. In the case of washing machines, this went down from 224.5 h (1960), to 53 h and 27 min (1991) and 35 h and 34 min (2007). For TVs, it was 351 h, 38 min (1960), 79 h and 4 min (1991) or 23 h and 2 min in 2007. (cf. http://www.handelsblatt.com/politik/konjunktur/nachrichten/butter-zucker-tageszeitung-tabelle-kaufkraft-der-lohnminute/2937670.html)
- 14.
Even though no reliable figures have been published by the Federal Reserve Bank since the financial crisis of 2008, we can safely assume that the global markets are currently flooded with several times more liquid capital than would be required to finance the real global economy.
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Glauner, F. (2016). The Rationale of Strategy Development for Future Viability: Creating Resources. In: Future Viability, Business Models, and Values. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-34030-2_6
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