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A Human Approach- A study of ethical policies -

Table of Content

1 INTRODUCTION.........................................................................................................................................4

1.1 BACKGROUND........................................................................................................................................41.2 PROBLEM DISCUSSION.........................................................................................................................5

1.2.1 Problem Definition............................................................................................................................51.2.2 Purpose.............................................................................................................................................51.2.3 Structure of the thesis........................................................................................................................5

1.3 DELIMITATION.......................................................................................................................................61.3.1 Ethical policies only as documents...................................................................................................61.3.2 No investigation of how ethical policies are communicated and practiced......................................61.3.3 Well-known companies......................................................................................................................61.3.4 No consideration regarding line of business....................................................................................71.3.5 Western thinking................................................................................................................................7

2 METHODOLOGICAL FRAMEWORK....................................................................................................8

2.1 EPISTEMOLOGICAL APPROACH.........................................................................................................82.1.1 Positivism..........................................................................................................................................82.1.2 Hermeneutics.....................................................................................................................................9

2.2 CHOICE OF FRAMEWORK..................................................................................................................102.2.1 A hermeneutic approach.................................................................................................................10

2.3 DATA COLLECTION.............................................................................................................................112.3.1 Data collection method...................................................................................................................11

3 THEORETICAL FRAMEWORK.............................................................................................................16

3.1 ETHICS....................................................................................................................................................163.1.1 Definition of ethics..........................................................................................................................163.1.2 Moral dilemmas..............................................................................................................................17

3.2 PHILOSOPHICAL APPROACHES TO ETHICS...................................................................................173.2.1 Classicism.......................................................................................................................................183.2.2 Modernism.......................................................................................................................................193.2.3 Postmodernism................................................................................................................................21

3.3 ETHICAL VIEWS....................................................................................................................................223.3.1 Moral Standards..............................................................................................................................233.3.2 Laws and religion............................................................................................................................253.3.3 Relativism........................................................................................................................................263.3.4 Universalism vs. Absolutism..........................................................................................................273.3.5 The impact of culture on morality...................................................................................................28

3.4 BUSINESS ETHICS................................................................................................................................293.4.1 Managerial virtues/ethical characteristics in business...................................................................293.4.2 International business ethics...........................................................................................................30

3.5 POLICIES / CODES / STRATEGIES & STAKEHOLDERS.................................................................303.5.1 Policies and codes...........................................................................................................................313.5.2 Competitive strategy........................................................................................................................323.5.3 Stakeholders....................................................................................................................................33

4 INTERVIEWS.............................................................................................................................................35

4.1 MAGNUS FURUGÅRD.................................................................................................................................354.2 TOMAS BRYTTING.....................................................................................................................................364.3 LENNART KOSKINEN.................................................................................................................................38

5 CASE STUDY & ANALYSIS....................................................................................................................40

5.1 DESCRIPTION OF POLICIES.........................................................................................................................405.1.1 Johnson & Johnson.........................................................................................................................405.1.2 The Shell Group..............................................................................................................................415.1.3 Hennes & Mauritz...........................................................................................................................415.1.4 Nestlé...............................................................................................................................................42

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5.1.5 Unilever...........................................................................................................................................435.2 ANALYSIS...............................................................................................................................................44

5.2.1 Definition of Ethics.........................................................................................................................445.2.2 Philosophical Approaches..............................................................................................................455.2.3 Ethical Views...................................................................................................................................475.2.4 Policy/Strategy & Stakeholders......................................................................................................52

6 CONCLUSIONS & RECOMMENDATIONS..........................................................................................56

6.1 RESEARCH QUESTIONS & ANALYSIS.............................................................................................566.2 GENERAL THOUGHTS.........................................................................................................................576.3 RECOMMENDATIONS..........................................................................................................................58

6.3.1 Our own model of ethics, policies and stakeholders.......................................................................586.4 PROPOSALS FOR FURTHER RESEARCH..........................................................................................60

6.4.1 Financial impact of ethics...............................................................................................................616.4.2 Image...............................................................................................................................................616.4.3 Communicating ethics.....................................................................................................................616.4.4 Fair Trade.......................................................................................................................................61

7 EVALUATION AND CRITIQUE OF THE THESIS..............................................................................63

8 LIST OF REFERENCES............................................................................................................................66

8.1 PUBLISHED SOURCES.........................................................................................................................668.2 OTHER WRITTEN MATERIAL............................................................................................................678.3 INTERVIEWS..........................................................................................................................................688.4 SEMINARS..............................................................................................................................................68

APPENDIX

No. 1 – Letter to interviewees

No. 2 – Johnson & Johnson’s Credo

No. 3 – Shell’s General Business Principles

No. 4 – H&M’s Code of Conduct

No. 5 – Nestlé Corporate Business Principles

No. 6 – Unilever’s Business Principles

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PREFACE

Ethical and moral issues are topics widely debated in today’s society. They are something of great concern to many people, because in one way or another we all affect each other. As companies expand and grow bigger they gain more power. With the power they naturally affect people and the society even more. Their approach to responsibility of actions and their considerations of the surrounding environments, are thereby some things of great importance.

Business ethics is an area, which we have heard about at the University, but it has never been an isolated subject for us. We got interested in the topic as we read an interview with the ethical consultant Lennart Koskinen, and about a fair trade project in Sri Lanka. We felt that business ethics was something possible to learn more about, and foremost something very well worth communicating to others.

During this work we have discussed ethical problems with each other, and we have found out that the question of ethics is not as simple. There are many aspects to bear in mind, so many different angles to view a problem from. We have tried to make a thorough examination of what the philosophical theories say about moral and ethics. Something that has struck us is that the theories are as complex as the world around us. There are seldom any definite answers. We have found it very interesting to read the old philosophers’ theories, even though they are sometimes confusing and hard to grasp – their thinking appears as something everybody ought to have knowledge of.

Although we would like to make a real indepth investigation of companies’ ethical practice, we found that task impossible due to limited resources of time and money. We had to choose an area possible to investigate within the frame of a “ten-credit thesis” - an area possible to obtain abundant information about without coercion of travelling and high expenses. Therefore, our interest fell on the aspect of ethical policies of companies. This topic is normally relevant and information can be obtained without much trouble. As we were eager to explore more obvious primary sources, we have decided to interview some people highly interested in philosophical as well as practical ethics.

With our thesis we intend to reach companies currently designing ethical policies or companies reviewing their existing policies. We also believe that students, philosophers, consultants, and researchers find an interest in this area. We do not have any expectation about the knowledge of the reader of this thesis. We have tried to keep our language as simple as possible, this paper should not be hard to read and a pre-formed knowledge should not be necessary. The reason for writing in English is that we are studying within an international orientation, “International Business Academy”, at Stockholm University. Writing in English also permit us to reach far more people than if the thesis was written in Swedish. The field we have investigated is just a minor subject in the wide aspect of business ethics, however we hope to have inspired some to investigate other angles of this field.

Now when we are very close to the completion of our studies, we hope that the aspect of ethics can be a part of our professional life as well. In our search for possible employers, we also take their ethical image into consideration. We would like to work for a company, which has a good ethical policy, which stands for caring and responsibility – having a human approach.

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1 INTRODUCTION

1.1 BACKGROUND

In a world where distances become shorter and shorter. In a world of media and communication, companies are more exposed and subjected to criticism. The public can easily obtain knowledge and get impressions more abundantly than before. Obviously we are getting more and more aware of what is going on in the world around us. The awareness has changed the behavior of many people. It is getting more and more common that people demand products produced under ‘fair’ and/or environmental friendly conditions. An increased level of knowledge in general, leads to a higher inclination of change. Bigger companies are generally more scrutinized than smaller ones, due to their size of impact. Another fact is that it is getting more and more common that companies have other objectives than maximizing profit. Regardless, profit maximizing is still one of the strongest incentives in today’s business life. Shareholders have their preferred return of investments, and the companies will work as hard as possible to yield the preferred amount. Unfortunately, to reach desirable financial objectives it is very easy to reject ethical thinking in order to attract the investors with high revenues.

There are many organizations working to enlighten problem areas such as violence, environment, infringed human rights etc. As examples of organizations, Amnesty International, Greenpeace, International Labor Organization, and Fair trade organization can be mentioned. Many of these have focused their interest to the third world, as problems in this part of the world are very severe. Commonly western located companies have their production in these areas, since labor costs are very low. The use of labor in poverty stricken countries is a form of exploitation, since the workers’ salaries are not sufficient enough to survive. Very often these workers also have terrible working conditions – they have to work long hours with very physically demanding assignments.

Ethical thinking is far from new. Ethics has been a matter of interest for almost all the great philosophers throughout the history. Perhaps what can be seen is that the closer to the present these philosophers have been active, the more focused and specialized have they been. Since the industrial revolution, humanity has been very focused on achieving certain goals. Today, it is getting more common to base the thinking in several sciences. In our business department at the university, it is very popular to talk about interdisciplinary thinking. According to some thinkers this is a truly postmodern phenomenon, where classic thinking are combined with the science of today.

Sometimes the question of ethics is not so easy - there are situations of which one could call ‘dual ethics’. For instance, a person can be exposed to an ethical dilemma when either way of acting might result in acting wrongly according to ethical and moral rules. Donaldson/Werhane (1988) describe a case when an American company tried to sell aircrafts to Japan. The negotiator faced a huge ethical dilemma when he was asked by the Japanese government to ‘pay for the favors he got’. In other words, if he really wanted this deal to get through he had to bribe them. If not, he would face another problem – the company he worked for would loose expected revenue and consequently might result in the reduction of the

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working force and lay off employees. How does one act in a situation like this – is there one best way? Business ethics is not so obvious all the time – and individuals find it hard when not having any corporate policy to rely upon.

1.2 PROBLEM DISCUSSION

Due to our background-research, we found the question of ethics very interesting. Although we had distinguished our field of interest, we had to narrow it down, we had to decide the object of our research. As we had a wish to deal with the ethics having a relationship to what we study (business administration), we thought of ethical policies. We understood it, as such ones would be connected to corporate life, as well as to general ethics. One reason why we thought of ethical policies is that many companies are beginning to consider their responsibilities in a larger amount than before. In some line of business there have been an intensive work with ethical questions in recent years, many times as they have been pinpointed for being unethical in the media.

The research objective within this thesis is ethical policies, and the first thing we had to do was to consider the meaning of the phrase. We thought ‘ethical’ to be obvious, that is about ethics. From this ethical perspective, we decided to study moral philosophy – which is another name of ethical theories. Moral philosophy came to be the starting point for us and we began to review what ethics is all about. After a while we came to think of the importance of what ‘policy’ mean. Foremost, we found two meanings: a policy is written for someone regarding something. This resulted in bringing in stakeholder and strategic theories to the research.

As a follow from the above discussion we have defined our research questions.

1.2.1 Problem Definition

1. What factors within moral philosophy, stakeholder and strategic theory could possibly influence the design of ethical policies?

The answer to this question will constitute the framework for the second research question.

2. How can the factors, referred to in question no 1, be discerned in the ethical policies of companies?

1.2.2 Purpose

The purpose of this work is to explore and understand the relationship between ethical policies and theories regarding moral philosophy, stakeholders and strategies.

1.2.3 Structure of the thesis

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To understand the methodological approach and the method for the data collection one has to understand the thoughts behind the research questions and the relationship between them. This can also be seen as an understanding of the relationship between the research questions and the purpose. The first research question, “what factors within moral philosophy, stakeholder and strategic theory could possibly influence the design of ethical policies?”, was developed during our literature studies. From the beginning the question was just concerned with the philosophical perspective on ethical policies, but as we saw that stakeholders and strategic thinking constitute a very important part of ethical policies, we added these parts to the research question. However, the philosophical approach is still the issue we have focused the most on.

The theoretical part of our study, together with interviews of three professionals within business ethics will give an understanding of the factors within moral philosophy, stakeholder and strategic theories, which influence the designing of an ethical policy.

The second research question “how can the factors, referred to in question no.1, be discerned in the ethical policies of companies?” can be seen as a way of applying the knowledge obtained from the research of the first question. We will here analyze some ethical policies of different companies. The understanding we got by doing the research for the first question is critical for this analysis.

The last parts of the thesis will contain conclusions and recommendation based upon the whole work, but in particular the analysis. In the very end we will try to judge the quality of this paper.

1.3 DELIMITATION

1.3.1 Ethical policies only as documents

We intend only to investigate ethical policies in the form of a document. There may be unexpressed norms and guidelines about how to behave in a company, but we will not consider those.

1.3.2 No investigation of how ethical policies are communicated and practiced

Within the framework of this thesis, we have chosen not to consider how companies communicate their ethical policies within the company, neither how they are practiced. These are very interesting topics, but investigating them would imply a burden not possible to cope with for a thesis of this size. We also feel restrained by the monetary resources that would be required for answering questions like these.

1.3.3 Well-known companies

We have also limited the investigation to policies of well-known companies. Even though the aspect of business ethics has been widely debated during the last years, it is foremost well-

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known companies that are questioned. From the beginning of this thesis we assumed to find ethical policies among these actors in the market.

1.3.4 No consideration regarding line of business

Certainly it could be interesting to investigate the similarities among policies for companies within the same line of business. We had, however, no intention of comparing them, and therefore we concluded that the type of business the company provided, was of less importance.

1.3.5 Western thinking

Another very important delimitation is that we have limited the theoretical explanation of ethics to western theories. Looking at theories of the Asian countries would imply a different perspective, as the cultures and religions differ. It would be very relevant to take their approach on ethics into consideration, as many companies are influenced by Asian thinking. For example can the influences be seen in the ‘Just in time’ or the ‘Kaizen’-approach. However, we have reason to believe that western thoughts to a large extent still predominately influence the policies we have taken into consideration.

There are certain influences from Asian countries that will remain, since the policies frequently focus on working conditions and wages in these countries.

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2 METHODOLOGICAL FRAMEWORK

Every researcher has a background for how to work, how to think of certain information and how to investigate and treat it. Here we will present the background for our work, what considerations we have made and how we have performed the research practically.

2.1 EPISTEMOLOGICAL APPROACH

In research there are traditionally two scientific paradigms taken under consideration. In the literature these are designated differently, some authors use the terms quantitative / qualitative, others terms such as phenomenology / positivism or hermeneutics / positivism. (Holme/Solvang 1996, Hussey/Hussey 1997, Patel/Davidsson 1994) Although mentioned differently and having small theoretical differences their content have many similarities. Another way of more broadly classifying the perspectives is explaining vs. understanding (Hollis, 1994). The important thing is not how these perspectives are designated, sooner how the content, of the counterparts ‘x’ and ‘y’, can be distinguished.

Holme/Solvang (1996) argue for that there is no absolute difference between the choice of methods for the performance of research. All methods are just tools, relying upon methodological principles (i.e. analytical principles, system principles and principles of actors) that exist within the different epistemologies (i.e. positivism / hermeneutics).

Despite the non-importance of headlines for research perspective we have chosen to use one of the most common way to classify the research perspectives, positivism vs. hermeneutics. We are going to describe these as epistemological approaches, explain our choice of approach by connecting our work to the frames.

2.1.1 Positivism

Positivistic thinking can be traced long back in western history, Hollis (1994) means that the positivistic approach is highly related to the research regarding natural science. As it has been further developed it has spread itself to other scientific areas, such as social science. Hollis explains that positivism “..embraces any approach which applies scientific method to human affairs conceived as belonging to a natural order open to objective enquiry.” (1994, p.41)

Hume, one of the most famous pleader for positivism, means that the humans have two sources of knowledge: what we can interpret with our senses, and what we can calculate with logical reasoning. The overall thought of positivism is that the society and nature is run by logic. Knowledge is grounded in the particular, and if the experience can confirm it, it can be extended to be general. Positivism rejects psychological data and qualitative methods in favor of more statistic justifiable data and quantitative methods. Further it is believed that all truths of logic, mathematics and other formal systems, are justifiable by conventions in language. Language is constructed by humans and therefore solely depends on human decisions.

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A formal way of obtaining knowledge and create theories is deduction. Hussey/Hussey (1997) explains deduction as moving from the particular to the general, forming hypothesis out of a system of statements. Holme/Solvang (1996) explains that deduction is a way of proving things. This appeals very much to the positivistic thinking – moving from particular to general and trying to ensure something beyond reasonable doubt.

Holme/Solvang (1996) states that within the positivistic approach a researcher should search for facts and true logic. The purpose of positivistic research is to penetrate every event and relation, to expose every mystery and explain everything that occurs. The explanation of causality, why something occurs is very central. Facts are only true if they are ensured beyond reasonable doubt. A traditional positivistic opinion is that research should not be mixed with moral and ethics, research shall be objective and should not depend on the demands from the world around. One of the prerequisites for positivistic research is objectivity. The researcher must be able to establish a formal relationship between the individual self and the object for the study. Affection of feelings and emotions are not allowed within positivistic research. The result must be possible to show in quantitative correlation or at least by numbers representing objectivity.

Critique posed towards the positivistic thinking is that an objective and value-neutral opinion regarding science is impossible. The science is in either way most of the times exposed to free interpretation, which generally is not allowed within the positivistic approach. (Holme/Solvang, 1996)

2.1.2 Hermeneutics

The hermeneutic approach is based upon the perspective of ‘understanding’. Understanding can furthermore be viewed as a key word for hermeneutic thinking. The hermeneutics are aiming at understanding a phenomenon rather than explaining it, as do the positivists. The hermeneutic approach is to some points developed through the criticism of positivism, where the logic sense is the central starting point. The predecessors of hermeneutics were humanists and believed it was more interesting to look at a situation from the perspective of a human being, rather from outside (Hussey/Hussey, 1997). The hermeneutic science is therefore primarily about human beings.

Central to the hermeneutic approach is that reality is seen as subjective and multiple, each person has his/her own image of how the world is like. It is the unique and the singular, which interest the hermeneutic researcher and is has to be understood from within, rather than explained from outside. The hermeneutic research can be seen as subjective in two senses. Firstly, the research object has his/her own view of seeing things, which he/she tries to convey to the researcher. Secondly, in order to understand the research objective, the researcher automatically does an interpretation of the research object’s behavior and words. An interpretation is always subjective, since it is done from one’s own perspective.

One’s own perspective is further built upon own values, preconceptions and pre-understandings, which can be seen as the starting point for the researcher. The pre-understanding is seen as objective, and prejudices as subjective. Pre-understanding is something that one has from education, scientific studies or other experiences. A prejudice is a socially grounded thought of a phenomenon, for instance how we might think an

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unemployed person make to little effort in finding a job. The prejudices are influenced by our own values, but also the ones existing in our social environment (Holme/Solvang, 1996). The way of seeing things can be dependent of culture, but people within same culture can be from different social classes, having different political opinions or just having different backgrounds, which influence their interpretation of the world.

In order trying to understand the research object, a relation naturally appears between the researcher and the object. It is important that the relation is good so the research object feels comfortable and can trust the researcher. The researcher in turn must feel he/she can trust the research object. The researcher must be aware of the fact that he/she influences the result by only being present (Holme/Solvang, 1997). There are deficiencies in the hermeneutic approach, which should be mentioned. One can never really be totally sure of the truthfulness in the message the research object is conveying. There can also be mechanisms and relations in the social processes which individuals not are aware of, but anyway are controlling their actions. These influences are therefore not mentioned and thus not highlighted in the research (Wiedersheim-Paul, 1991) Within a hermeneutic approach an inductive research process is used. Induction implies that general conclusions are drawn from empirical facts (Hussey/Hussey, 1997). Knowledge from a hermeneutic view is based on the previous mentioned key concepts, the subjective perception of reality, the pre-understanding, and the interpretation. The pre-understanding is seen as a way of creating knowledge about meanings, signification, social constructions and context bound sentences etc. The interpretation is the tool used by the researcher in order to form a theory from the empirical situation.

2.2 CHOICE OF FRAMEWORK

2.2.1 A hermeneutic approach

There are two intentions with this work: to describe the theoretical framework influencing the design of ethical policies, and to explore and understand the relationship between the framework and some selected policies.

Regarding the above, this work has no purpose of trying to prove something, neither explain why something occurs. We state no hypothesis and have no objective of finding an absolute truth. We are trying to understand the matter of ethical policies and their relationship to the theories. We are focusing on what kind of role ethical thinking has and how it’s considered within the “policies”. Due to our purpose with the work, we have chosen to rely upon a mostly hermeneutic approach. The knowledge will be obtained inductively and will be presented according to our interpretation. This implies that a pure objectivity might not be the case of this work. Even though trying to emancipate ourselves from pre-conceptions and subjectivity, it is not always possible.

One can argue about that trying to find a relationship between theories and policies could better be investigated under a positivistic approach. We rejected this argument through the following reasoning: Except from some theories, ethics is withdrawn from thinking in figures and numbers. Good and evil are considered, but not in a very distinct way. The theories discuss the possibility of measuring these aspects, but are not in themself, quantitative datas.

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In a positivistic approach it is of course not necessary to have ‘quantities’ to start with, but however necessary to try to find either logical or mathematical relations. Such findings are not what we expect and search for. We are not interested in a correlation in statistical terms, sooner if the policies do seem to be formulated upon the framework of the different theories. We want to understand, not explain.

Furthermore it is possible to question our qualitative approach in that sense, if we really have the human approach – if we try to understand something from inside – if we try to get close to something. We have seen it out of this aspect, even though we are studying something very static, (a written policy cannot be seen as a living object, the living part is how the policy is practiced) we would like to come very close to it. Therefore we have tried to make a thorough investigation of moral philosophy, stakeholder and strategic theories which we have found being related to ethical policies. We strive to understand different aspects of ethical policies.

Approaching this objectively is almost impossible, as philosophy is about thinking and thinking can never be unaffected by the person’s own perception. Because of this we conceive our study to be of a qualitative character.

2.3 DATA COLLECTION

Within the hermeneutics, research is often performed according to qualitative methods. Holme/Solvang (1996) mention some common methods, these are non-standardized interviews where the researcher learns from time to time, and case studies, as well as observation. In general the information is collected carefully under such flexible, normal, and day-to-day circumstances as possible. The sources of information must have an individual freedom of forming their opinions - the effect of the researcher must be minimized.

2.3.1 Data collection method

We are now going to describe the practical way we have used in our investigation, which helped us to reach our interesting conclusions.

There are two ways of obtaining data for research. One can use either primary or secondary sources. Lekvall/Wahlbin (1993) describe secondary data to consist of former presented work, it can be statistics, investigations, articles etc. The main thing is that the data is not collected primarily for the object of research. Primary data are obtained directly for the purpose of research. Primary data is most of the time collected through questioning or observation. For secondary data the collection mainly consists of searching for relevant information among established sources. The problems appearing with secondary data are mainly concerning the quality, validity and reliability of the sources.

2.3.1.1 Secondary data collection

Secondary data, like books, articles, reports and thesis have been the sources for initiating a basic knowledge within the subject of ethical policies. In answering to the first research question “what factors in moral philosophy, stakeholder and strategic theory influence the design of ethical policies” we have to a large extent used material of a secondary character.

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We have found the secondary data at libraries, the Internet, bookshops and by contacting companies for annual reports. In the search for information on the Internet and at libraries we have used key words, such as: ethics, moral, business ethics, ethical policies, strategy, codes of conduct and fair trade. These were chosen as they highly relate to our research objective. The problem with a research area such as this is that it has a high actuality and many interested participants. Therefore it sometimes is very hard to obtain the relevant literature - other people have ‘crossed the road earlier’.

2.3.1.2 Primary data collection

Our primary data collection can be divided into two parts, regarding our two research questions.

Primary data referring to question no 1.

In order to gain an understanding about how philosophy, stakeholders and strategic thinking influence the design of ethical policies, we have taken two initiatives into consideration. We could either perform interviews with persons responsible for ethical policies at the companies, or we could perform interviews with more objective professionals, such as consultants and researchers who generally work with ethics or ethical policies.

The option of interviewing the responsible persons of ethical policies in companies was excluded during the collection of the policies. Many of the people responsible for the policies, often named “information managers”, seemed to have very limited knowledge about the ethical policies. Some had to check out first if they had any, before they answered to our request for ethical policies. We also thought that it could be difficult to have a discussion about ethical policies in a philosophical way with these people. During the research we have heard about several cases where companies employ consultants to create ethical policies. It would therefore not be of relevance to question such companies.

Another reason for not interviewing the companies is concerned with the question of the purpose of ethical policies. We do not think that we would be able to obtain reliable information from the companies since they probably answer in favor of the company. They would not be able to criticize ethical policies with the same vigor as outsiders.

Interviews and technique

Because of the reason mentioned above we have chosen to interview professionals within business ethics rather than companies. More precisely we have chosen to interview three persons. This might seem as a narrow perspective, but we expected these persons to be very knowledgeable and competent within the ethical field. No others than these persons were asked to participate in our study.

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We decided to interview these persons based upon all the material we have collected. Several times we come across their names, either by being referred to in the literature, or by being the authors themselves. Our interviewees are:

- Magnus Furugård, Managing Director of Caring Company.- Lennart Koskinen, Priest and ethical consultant (Humankonsult AB).- Tomas Brytting, Associate professor in the Center for Ethics and Economics at Stockholm

School of Economics.

A qualitative interview often resembles a discussion more than an ordinary interview. This is also seen as the strength of qualitative interviews. The researcher does not control the interviewee in the same way as in other forms of interviews. The researcher is on the contrary striving to promote the interviewee to influence the development of the conversation (Holme/Solvang, 1997). Merriam (1998) mentions three types of qualitative interviews: highly structured/standardized, semi-structured and unstructured/informal interviews, but says also that qualitative interviews are commonly more unstructured than structured. Our interviews are resembled as a mixture of the three types. Our question of the purpose of ethical policies can be seen as a highly structured question, whereas our questions about relativism and absolutism can be seen as semi-structured since we develop the questions differently from time to time due to new subjects the conversation brings up. Also, extra time is left to discuss openly about issues that are brought up by the interviewee.

Trost (1993) inspired us to make a preliminary question-guide before the interviews. This made us feel comfortable and prepared for the interviews, as we knew basically how to perform them. Approximately one week before the interviews we sent out the question guide, to give our interviewees a chance to prepare for the interview. The preliminary question guide can be found in appendix no 1. Since our knowledge evolved from the time we sent out the questionnaire, we also stressed the importance of policy-strategy and policy-stakeholder in the interviews.

Trost (1993) claims that taping interviews give certain benefits. We considered this and found that a tape recorder would allow us to really participate in the discussion, ignore to note everything down and go back and listen to the interviews several times. Because of the benefits, we made the choice to use a tape recorder during the interviews. Out of respect, we always asked the interviewees if they would let us use the tape recorder. No one showed any reluctance, so we performed the interviews as planned.

Primary data referring to question no. 2

Case-study

Our second research question is highly dependent upon the first question. By using the knowledge we obtained from theoretical studies and from interviews, we have made a solid study of ethical policies to see how different factors within moral philosophy, stakeholder and strategy theories could be discerned in “real” cases. Looking upon Lekvall/Wahlbin’s (1993) definition of case studies as indepth studies of individual cases, we consider our second part of empirical study as such. We are going to look into each one of the policies, but as to avoid reiterations we sometimes talk about one topic of policy and relate similar topics of the other policies to it. It can be difficult to state whether ethical policies are primary or secondary data.

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Merriam (1998) defines documents as primary sources when the “originator of the document is recounting firsthand experience with the phenomenon of interest”. Given this definition, the ethical policies in our research can be regarded as primary data. It can be exemplified by looking upon the collection of Unilever’s policy. Unilever has a policy, which is specific for them and not taken from another company. Unilever is then the originator of the document and recounts first hand experience with the ethical policy. On the other hand, if they had used another company’s policy, the policy would not be considered as a primary data.

As our scope of interest is ethical policies, we have studied documents, not living species. Therefore, ethical policies are seen as “the reality” we are studying. Within qualitative research the selection of what objects to investigate do not have the same importance as in quantitative research. Within a qualitative perspective the most important thing is to find objects that have something to tell, that will enhance the understanding (Holme/Solvang, 1997). As our purpose is to investigate the matter of ethical policies, the most important step for us was to obtain policies, regardless of the types of companies. We chose well-known companies as we thought it was more probable to find ethical policies in such, than in unknown companies. We also received recommendations regarding companies known to have ethical policies. Common for all of them was that they work internationally in some way (either in production or in the market), although this was not a criterion for choosing them.

In our collection of ethical policies, we have contacted the following companies: Johnson & Johnson, Nestlé, Kooperativa Förbundet, Asea Brown Boveri, Hennes & Mauritz, Unilever, IBM, Astra, Pharmacia Upjohn and Ikea.

We have contacted the companies either by phone or by mail. When phoning the companies we mainly asked for the information manager, since from the first contact with the companies we learned that this person often is in charge of such requests. Since we noticed that many companies have different opinions about what an ethical policy is, we decided to collect all those policies, which indicate the desired ethical conduct of companies. We did not consider what areas they brought up, as long as they indicated a desired behavior. For example in the case of ”Johnson & Johnson”, we were told that they had a ”Credo”, but not an ethical policy. However, we let them send it to us and by our definition we think it could be regarded as an ethical policy. It is very different between companies what is considered as an ethical policy. We did not receive policies from all the companies we contacted. Those we received policies from were:

- Johnson & Johnson- Nestlé, - Asea Brown Boveri, - Unilever

We have also downloaded Hennes & Mauritz’s and the Shell Group’s policies directly from companies web-sites, without contacting the companies in question.

Concerning the policy of Asea Brown Boveri, we discovered by later contact with them that their policy was just for internal use, it is nothing that they normally communicate externally. Out of respect and ethical reasons we chose not to use their policy in our analysis. At Pharmacia Upjohn they told us they did not have an ethical policy, Astra’s information manager did not know whether they had one or not, and at IBM the policy was only for

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internal use. Kooperativa Förbundet told us they were working on a policy currently, but had no material to provide so far.

Analyzing method

In analyzing the ethical policies we first skimmed all the policies to get an overview of how they were designed. Then we read thoroughly one policy at a time. We discussed the topics that had struck our minds and made notices about it. We continued to do so with all the policies and for each new policy new things appeared in our minds, which were discussed. Later on we scrutinized each policy again, but then we were more focused on finding the different factors that we have written about in the theory chapter and discussed during the interviews. When having found something that could relate to our theories, we really tried to go beyond what was really written in order to discern problems and thoughts that could be of importance for the designing of the ethical statements. We went back to the policies several times in order to discover new topics to discuss, as well as see new perspectives.

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3 THEORETICAL FRAMEWORK

Within the theoretical framework of this thesis we explain different thoughts of ethics or moral philosophy. Philosophy is a science, which study fundamental questions of human existence, moral and knowledge.

As a second point within the theoretical framework, we present some thoughts regarding policies and strategies. These are a set of principles constituting something a company would like to achieve. In this part we also discuss the aspect of a company’s stakeholders.

Together with our interviews, the different parts of the theoretical framework will set the framework for the coming analysis of ethical policies.

3.1 ETHICS

Ethics is seen by some as the theory of morality, while others define ethics synonymous to moral. Regardless of what word one is to use, there are several perspectives to take into account. The different terms can be seen out of social -, business -, and relative perspectives. We will now describe some thoughts in different angles of ethics. The thoughts we will describe constitute philosophy and a discussion of ethics.

3.1.1 Definition of ethics

What is ethics? According to Donaldson/Werhane (1988) ethics is “the study about what people ought to pursue, that is, what the good is for people, or alternatively, the determination of which actions are the right actions for people to perform”. Harvey (1994) defines ethic, as a practice and a reflection upon that. As a practice, ethics is described as “the conscious appeal to norms and values to which, on reasonable grounds, we hold ourselves obliged, as reciprocally, we hold others obliged to the same norms and values”. As a reflection, ethics is the methodical and systematic elaboration of the norms and values we appeal to in our daily activities.

Koskinen (1995) chose to define ethics as the theory about morality. Ethics is when morality has reached a conscious level and can be communicated. Hermerén (1989) says that everybody has a moral, but not everybody has an ethics. Saying that everybody understands morality does not imply that everybody is ‘moral’. Being immoral is also to take a moral position, although it can be judged negatively from the perspective of certain criteria. On the other hand, animals are amoral, since they do not have the kind of abstract reflection that is needed to make oneself and one's actions to serve as an object for one’s own thinking. Morality does further consist of norms and values, which determine our judgements, decisions and actions. Norms are defined as a concept which explain all the statements about the desirable (right = duty) or the undesirable (= wrong, prohibited) in actions. Values stand for the desirable (= the good) or the detestable state or circumstances in the world.

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3.1.2 Moral dilemmas

Something that has forced the human to think about ethics is moral dilemmas – situations when we do not know how to act.

According to Frankena/Granrose (1974) there are two kind of moral dilemmas. One of those concern situations where one is convinced that something is wrong, but still is very tempted to perform the immoral action. For instance when a controller gets tempted to embezzle money from the company. This is a simple kind of moral struggle, which is commonly discussed in daily life and does not belong to the moral theory. Moral theory is concerned with more complex dilemmas. It treats typically problems where one finds oneself in a situation where one's values become contradictory to another.

An example of a more complex moral dilemma is about a citizen who is very nationalistic, who has always followed the laws and been loyal to his country. One day his country declares war and thereby he is confronted with a moral dilemma. Should he join the army and fight for his country and thus act against his belief that killing is wrong, or should he hold on to his belief and be disloyal to his country and nationalistic feelings? The citizen is here torn between two important values. He may earlier not have experienced that these values could contrast each other. To come to a conclusion about what he should do, he has to reflect and critically scrutinize and analyze the two options. This kind of reflection in a generalized extension, is what moral theory is about.

3.2 PHILOSOPHICAL APPROACHES TO ETHICS

Like with epistemology, ethics can be classified in a number of ways. There might be disciplines named differently, even though they plead for almost similar approaches. Throughout history in western society one can distinguish three major views of ethics: the Classical -, the Modern -, and the Postmodern view. To some extent they correspond to each other, but they are to a large extent colored by the social era they appeared in.

In addition to the classification mentioned above one can classify more towards ethical grounds, for example ‘ethics of duty’ (deontology), ‘ethics of consequences’ (teleology) and ‘ethics of intention’ (voluntary ethics) (Koskinen, 1995). As will be described, ethics of duty and ethics of consequences are mostly used in connection to modernism, but these aspects have always been present in ethical discussions and philosophies. Voluntary ethics is perhaps the ground that mostly corresponds to the postmodern perspective.

According to Heller (1988) ethics might also be classified into Interpretative, Normative, and Therapeutic aspects. These aspects deal with the view of ethics as being either something that indicates what is moral, or answer questions regarding what people should do, or how people could learn to live up to moral expectations.

In our overview of ethics/moral philosophy, we have chosen to use the first classification of ethics, but the aspects mentioned in the ‘second lead’ will to some extent be incorporated into the first way of explaining the theory of ethics.

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3.2.1 Classicism

Searching the roots of ethics one has to look as far back as to the old Greek philosophers (Socrates, Plato and Aristotle). These men worked long before the Bible and the ten commandments, they worked long before business ethics was a matter of interest, and they worked long before the appearance of the next era of philosophical ethics. The values and norms they expressed greatly influenced how people live and act for thousands of years. To be more precise their work can be dated back to approximately 2 400 years (Bonniers Lexikon, 1997). The ethical approach they proposed were normative to its character and at least Plato believed that there was a right eternal ‘good’, which always should be searched for. These men did of course have different opinions, but there are many similarities in their thinking. Socrates (470-399 BC) was the oldest philosopher compared to Plato and Aristotle, and Socrates is said to be the father of ethics (Frankena/Granrose, 1974).

Socrates indicated that virtue could be taught and that “man” with knowledge of ‘good’, would always do ‘good’ (Heller, 1988). In Frankena/Granrose (1974) one learns that Socrates’ mission was to teach the people of Athens. As a consequence he became imprisoned since he violated the laws of Athens. Being a prisoner Socrates naturally thought of the opportunity to escape. After long discussions he came to the conclusion that it would be immoral, as he would break the commandments of the state. Finding the laws wrong, one should act to change them – not violate them. On the other hand he was unable to continue the mission of teaching, and would thereby be restrained for the purpose of doing ‘good’. However, as a man with knowledge of the good, he would choose to do the right thing. The moral dilemma of Socrates has been a foundation to his philosophical and ethical thinking. Aspects of ethics had naturally been considered even before Socrates, but in a less reflective form.

Plato (427-347 BC) denied all forms of moral relativism and expressed that some people automatically have higher moral principles since they come from a higher class within society. He thereby claimed that ethics or morality is segregated and to be more ‘good’ or ‘correct’ as one moves up the social pyramide. Plato’s philosophy is explained to be very pure and precise, also very absolutistic (Bonniers Lexikon, 1997). Plato spoke for a philosophy of ‘ideas’, he meant that our daily reality was not real. He saw a shadow of the ‘true’ / ‘real’ world, made of ideas. In this world the most outstanding and real was the ‘good’. Drawing this to an extreme point, Plato’s absolute moral philosophy was his perception of what constituted the reality.

Aristotle (384-322 BC) rejected the ‘idea world’ of Plato, he meant that the ideas cannot be seen in a world of their own – sooner that they exist in the world of substance. Aristotle believed that the meaning of things (substances) was to be expressed with help of ideas. Making this more clear, he meant that the thoughts of ethics must be based on what we interpret as the reality, they must have a relevance for what the ‘reality’ requires.

To some extent Aristotle had a teleological opinion, the consequences were of great importance to him. He believed that everything could be explained and justified out of its’ purpose. In Aristotle’s view, ethics was the ‘golden middle way of happiness’ – a harmony between the power and forces within the soul. In opposite to Socrates, Aristotle did not believe that a man always do what he have to do according to the ‘good’ even if he has full knowledge of it. (Frankena/Granrose, 1974) He found this very hard to explain, and did not

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choose the explanation of ‘mistake’ as Socrates. Socrates said that if a man acted towards his knowledge it was a mistake and therefore forgiveness was given. Even though Aristotle had a teleological approach he could be seen as an act-deontologist. Sometimes he really focused on the actions instead of the result. An example is how he questioned whether a man could be blamed or praised for just being or for what he does.

Virtues were central to Aristotle, he can be said to be the one connecting them to ethics. He described a virtue as the attitude which makes one a good human and makes one perform an act well. The virtues are not just abstract thoughts, they are expressed concretely in one’s action Virtues are also associated with the capability to feel empathy, courage, self-confidence and security. One has to penetrate the inner life of the humans in concern, and try to understand their perception of the world, their intentions and reasons to be able to state what is right and wrong (Brytting, 1998). The virtues can be regarded as the middle way of two vices. Aristotle gives the example of cowardice and arrogance as such. The middle way is then the courage to do what one ought to without fear or hesitation, but also without too much arrogance. Another example is the virtue generosity, which is in between greed and wastefulness. Aristotle expresses this by saying ‘the wasteful person offers too much and keeps too little, while the greedy person keeps too much and offers too little’. Pride is another classical virtue, it can be seen as something between vanity and exaggerated humility or self-denial (Koskinen, 1999).

3.2.2 Modernism

In the eighteenth century, together with the growth of industrialism, new thoughts of ethics came to the light. The theories of this age are more formal and focused than the ones of classicism, which had a more broad focus. Modernistic ethical thinking has a strong relationship to other scientific theories such as: rationalism, empiricism and positivism.

3.2.2.1 Teleology vs. Deontology

Modernistic ethical theories have traditionally been categorized as being teleological or deontological. To make this classification more understandable one can say that teleology is the ethics of consequences and that deontology is the ethics of duty. Teleological theories maintain that consequences and/or results determine the moral worth of actions. Deontological theories deny such reasoning and insist upon the importance of the motive of the agent, or the kind of act involved in determining what is morally required (Hearn, 1971). Using an old proverb to exemplify ‘the end justifies the means’ the teleologists believe in this, while the deontologists focus more on the morality of actions. The different modern scientific paradigms support either the teleological or the deontological approach. Utilitarianism is the paradigm most used to advocate the teleological approach and ‘Kantianism’ pledges for the deontological approach.

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3.2.1.2.1 Ethics of consequences - Utilitarianism

The part of utilitarianism is based on Hearn, 1971 and Slote, 1983.

Utilitarianism asserts that one shall always seek the solution that brings about the greatest amount of pleasure to the greatest number of people. Bentham, one of the most known and famous predecessors of utilitarianism pledged for this as he wrote, ‘the greatest happiness of the greatest number’.

Jeremy Bentham is considered as being the one forming the classical theory regarding utilitarianism. Bentham’s main interest was not problems of moral philosophy, sooner societal and formal problems of moral and ethics. The work of Bentham has obvious connections to quantitative theories. He stated that pleasure and pain are variables possible to measure and relate to each other in quantitative terms. Giving pleasure and pain quantitative values was intended for the society and legislators. Knowing the values of these variables, it should be easier to decide upon what action to take in certain questions. Focusing on pleasure, as Bentham, means that pleasure constitutes the ‘good’ – the one thing worth striving for. This approach can with other words be expressed as hedonism – a word that can be derived from the Greek word ‘hedona’ which means enjoyment, pleasure or delight.

Another famous utilitarian is John Stuart Mill. He was accused of being to vague since he denied some thoughts of utilitarianism. Although, being a hedonist as Bentham, Mill did not see ethics out of the same selfish nature as Bentham. Mill claims that the concern for one’s own happiness often is a reason for unhappiness. He also meant that the individual pleasure could be an outcome of the happiness of others – if the happiness of others were desired. Bentham believed that individual welfare could correspond to the social good (which he strove for), however, he did not ever consider the character of the individual. The individual could only obtain pleasure through its own happiness, not from anyone else’s.

Act / Extreme utilitarianism vs. Rule / Restricted utilitarianism

The ‘utilitarian code’- ‘the greatest happiness to the greatest number’ can be seen in two ways. It can either mean; considering everyone’s interests and doing what will bring about the most net good, the greatest happiness; or it can mean that one should benefit the maximum number of persons. What is moral and ethical will highly depend on which way one see it: ‘the most good’ or the ‘benefit to the greatest number’. Utilitarianism has traditionally been interpreted in the first sense – the most good. Exemplifying this in distinct situations would mean: giving pleasure to five people and harm two is better than giving less pleasure to ten people and harming no one. Although ten people are made better off, the ‘good’ is not maximized - in a pure utilitarian way. The utilitarianism do not bother for which persons the pleasure is valid, it disregards who really ‘need’ the pleasure and do not make a judgment upon who gets it. The strict form of utilitarianism is called act or extreme utilitarianism; it maximizes utility and advocates regardless situation the most ‘good’. Another form of utilitarianism is rule or restricted utilitarianism. This form advocates that the situational context has to be interpreted. Rule (restricted) utilitarianism means that one can not always maximize the utility no matter what. There are rules to be followed, for example such as keeping promises. According to the rule utilitarianism it is more ethical to stick to the promised than seek the most pleasure.

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3.2.1.2.2 Ethics of duty - Kantianism

The origin for the word ‘deontology’ is Greek. The word ‘deon’ means duty, that is - what ought to be done. The German philosopher Immanuel Kant (1724-1804) is one of the most known predecessors for the deontological approach. He strictly argued that ‘you shall always act so that your way of acting can be made to a universal law’.

Kant was active in various disciplines of science, but philosophy strongly influenced him in whatever he did. As a moral philosopher, Kant was known for the categorical imperative - moral was duty, and absolute. He meant however that we have a subjective view on reality and therefore he also said that ‘the reality follows the common sense’. In Kant’s view there was an objective reality, but the human can not possibly interpret this.

Kant saw some things as necessities – for example the religion. He claimed that the humans need religion as a way of justifying the moral. Hospers (1972) describes the ethical theory of Kant to be formalistic. Formalistic ethics proposes ‘the rightness of an act does not depend upon the consequences, either if they are actual, probable or intended’. According to Kant happiness is good when it is a reward of virtue. The happiness is always in correlation to the virtues, and happiness must be qualified – deserved. The only thing that is good without qualification (in the ethical theory) is the good will. Kant’s own words about the good will are (quoted in Hospers, 1961):

“A good will is good not because of what it performs, or effects, not by its aptness for the attainment of some proposed end, but simply by the virtue of the volition – that is, it is good in itself, and considered by itself is to be esteemed much higher than all that can be brought about by it.”

Kant, Fundamental Principles of the metaphysics of Morals, Pt. I, p. II.

Furthermore it is easy to believe that what is right – is good. This is according to Kant, not always the matter. Something can be ethical without being right, it is a question of interpretation. Kant had two ways of judging whether something was right or wrong, consistency or reversibility. Within consistency ethics is a matter of reason. A person has not used reason correctly if he arrives to ‘wrong’ – inconsistent conclusions. The reasons should always bring to the right acting – the ethical acting. Reversibility is more relative to its matter, it is about that all the things you think fit as universal laws, but accordingly do not attract to everybody. Then, even if you think it is right, it is ‘wrong’ in a sense that it is not general or natural.

The ethical theory of Kant imposes many questions; what is duty? what is wrong?; what is right?; what is the good will?. Kant himself had many answers, but these answers are very complex and make the whole of his theory of ethics somewhat fuzzy. He saw himself as very absolute and formal – but anyway he used concepts that take different characteristics in different situations and contexts.

3.2.3 Postmodernism

Postmodernism is perhaps the most complicated philosophical approach to understand and explain. In Bonniers Lexikon (1997) postmodernism is described as a mixture of different

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philosophies. An approach uniting classicism and functionalism, as well as denying many thoughts of modernism. Postmodernism does not preach for the absolute, for the universal or for the rational approach to life and science. Postmodernism appeared foremost in architecture, literature and visual arts in the 1980’s. Lately it has been used as a scientifically approach within business and other social sciences (Hollis, 1994). The main thought of postmodernism is not to reject or dismiss other theories, sooner to enlarge them by saying what if? Holism – trying to interpret the whole – is connected to postmodernism and being ‘postmodern’ means that one refuses to do simplifications of reality. Reality is seen as an object, being nothing else than we make it to.

The postmodernism accepts the coexistence of multiple moral perspectives, and tends to be pluralistic. Ethical relativism is natural within postmodernism, as the universal principles are rejected. It is believed that the truth is situational and that it is not possible to make to broad generalizations. Postmodernism is about interpreting the whole - then deconstruct it for gaining an understanding of the individual parts. Each part is unique and can only be completely understood if looking with the same eyes as the object of research.

In Benhabib (1992) postmodernism is compared to feminism. Although there are differences between these, they share some major beliefs. Making ethics to a question of gender would imply that there might be differences in the view of ethics. Traditionally all the ‘great thinkers’ have been men and many studies only focus on men. Gilligan (Christian/Traber, 1997) has created a theory of moral development, where she believes that humans moves from just caring for oneself to caring for others and to finally caring for both oneself and others. Her approach is a bit different from Kohlberg’s (described in the same book). He means that one as a child, start to develop a morality by learning how to act in order to avoid pain from a higher authority. Later on in life one arrives to the stage where one begins to look at how the community expects one to behave. Then one starts to develop an understanding of social utility. The last stage implies understanding of justice.

According to Remneland (1998) the postmodernism advocates that one should not simplify and make ethical judgements on narrow grounds. The pluralism of postmodernism proposes views out of different angles, and a greater tolerance to ambiguity and differences.

Postmodernism partly stands for an ethical thinking that advocate the intention - intention in form of will or accident. Koskinen (1995) means that this does not reject norms completely but say that they must not be strictly considered all the time. Even though a moral/ethical norm can be stated like ‘you shall not commit murder’, this norm is in the postmodern society related to the will and purpose. If we had no intention to kill and did it by accident, we are not judged according to the same moral principles – even though we still have done something ‘bad’ or ‘evil’.

3.3 ETHICAL VIEWS

Ethics and Business Ethics, either if one prefer to see them as separated or in gathered form, are affected by different ways of thinking. We have chosen to present certain views that will enlarge both the discussion of philosophical approaches and the aspect of business ethics.

There are different viewpoints on ethics, treating on what basis one could decide whether something is moral or immoral. There is the absolutism, whose adherents believe that there is

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just one truth about what is moral. Their contradictors are the ethical relativists who believe that different social groups have their own moral codes and the moral code each group is seen as true. Hence, they state that there are several truths about what is wrong and right. In between those standpoints one can look upon universal values, which a lot of human right organizations have as starting points for their work.

3.3.1 Moral Standards

Believing in universal values does not have to mean that they are absolute. They can be adapted to time and context. Hospers (1972) mention some general moral standards that people may be affected by, when doing moral judgements.

1) Parental authority: Much of what one has learnt about what is right and wrong, one has been taught from one’s parents. However, it is not a sufficient argument for adopting a moral rule. Different parents give different commandments and how would we know which one is the right one. We cannot answer in terms of parental authority since both of the commandments have that as a source. Besides, suppose all parental rules would agree on one another, we would still have to be confronted with the question “What is it that makes parental commandments right?”

2) Custom and public opinion: Custom and public opinion may have an impact on our moral opinions. However, the same objections as for parental authority, could be given here, concerning using custom and public opinion as a guideline for moral codes. There is an enormous variety of customs in the world, which would be the ones to follow? Another question is if it would be wrong to change the customs. Would a change mean that the existing ones were immoral? Customs have however, through history always been subjects for change by leaders of the people. Changes have occurred when the public opinion has been of majority. Why is it then so that the majority justifies what is right? In the Middle ages the majority believed that the earth was flat, which turned out to be wrong. In scientific research one would never state that what public opinion says is right, is right. The majority could be stupid, ignorant and easily affected by other people's opinion.

3) The law of the land: One can find connections between morality and the law, but it is important to emphasize that they are not identical. There are several issues, contradicting the law for being a moral point of departure.

The law covers a lot of matters that has nothing to do with morality (or at least seem not to) for instance that one is not allowed to park everywhere.

However, there are numerous events of private life it does not take up, e.g. if you break a promise with your friend. These events may be regarded from the perspective of right and wrong.

The law is unique to every country. Would it be morally right to do something on one side of the border and wrong on the other side? Morality would be very biased if it was like that.

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Laws are repealed. When something was wrong the other day would it then be right the next day? According to law it could be so, but moral does hardly work that way.

4) Reason: When being in a moral dilemma one is likely to get the advice of “following reason”. This base seems to be more promising than the former ones, but it may be difficult to explain what reason really stands for. It could according to Hospers have three different meanings:

It could be interpreted as ‘follow reasoning’. When talking about deductive reasoning, one first makes a couple of assumptions and then to end up with a conclusion. When it is logically derived, it is valid, otherwise not.

An example: All acts committed indoors are right.The act was committed indoors.

Therefore: The act is right.

Despite the stupidity of this reasoning, it is a perfectly valid reasoning. This is the problem with reasoning. How can we state which premises are true ones? It would be impossible to try to decide that with the help of reasoning, since we then would have to ask the same question and so on. Reasoning is of high importance in ethics, but it cannot determine an ethical issue alone.

“Reason” could as well mean to do the most reasonable thing. There is however, no easy answer to find on this statement. If there are several persons deciding upon what to do in an awkward situation, there might be different opinions about what is the most reasonable thing to do.

The command of follow reason may also mean that one should follow the course of action that could be defended with the best reasons in its favor. The only problem with this is that people may produce different reasons for the same action and thus end up with different conclusions about what course of action to take.

5) Conscience: the conscience may play a big role when deciding how to act. One has learnt to follow one’s conscience when faced with a problem with no obvious solution. The problem if this was supposed to be a guideline, is that people’s conscience can be totally different from one another. In general one’s conscience is dependent of the childhood and how one has been brought up. One tends to have bad conscience about those things one’s parents told one not to do as a child. Since parents’ commandments may differ widely between each other, this is one of the reasons for people’s different consciences.

One reason for not having conscience as a basis for moral judgement is that certain people do commit crimes just because their conscience tell them to do so. Many murders have been committed because of this reason. In such cases the murderer often thinks that it is the voice of God, which tells him to commit the act. In other cases, people often believe that conscience is the proof of God’s existence. But then again, whose “God” is the right one?

6) Revelation: the most widespread moral standard, is the belief that God has commanded what is wrong and right, expressed in the Ten Commandments in the Bible. As mentioned

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previously, God’s commandments can be heard through one’s conscience, but the Christians do not believe that it is always God’s voice speaking. Therefore, one should just follow the conscience when the message is in accordance with the Revelation. If not, one should follow Revelation and not the conscience.

3.3.2 Laws and religion

Laws and religion have been briefly mentioned in Hospers’ model and elsewhere, but deserve a more broad discussion in themselves. Each society has a set of principles, which works as laws, they are written and most of the time decided under democratic circumstances. The purpose of these is to maintain justice in the society. Koskinen (1995) discusses how the Western jurisdiction has evolved out of the religious context. The church has been one of the most powerful sources in deciding what the human is allowed to do. The Christian society has to a large extent adapted laws based on Jewish and Roman principles.

One can however discuss how laws are connected to moral. What is legally correct might not always be morally correct. Koskinen means that our feelings and personal opinions can reflect a higher moral than what the law implies. There is also contradictions in the law that may conflict with personal opinions. Killing is for example normally forbidden and accepted as immoral, but war - is in some cases accepted. Harvey (1994) does not find it reasonable that moral is equal to what the law says, as the law changes. Another factor is also that the jurisdiction may not be set under democratic circumstances. Democracy is still a dream in many nations, and the laws in these countries may sooner prohibit good moral than reinforce it.

Although the existence of common international laws, multinational companies are exposed to dilemmas. Should they follow the jurisdiction in the country of the headquarters, or follow the jurisdiction in each country they operate? There are laws regulating such dilemmas (i.e. accounting), but the problems still exist. Harvey (1994) says that if the law is just, they shall follow it, otherwise they should strive for acting so morally good that possibly could be allowed in these nations.

Some nations and cultures are to a larger extent than others affected by the beliefs of the church. In Northern Ireland people are fighting hard for their catholic and moral faith, often with rough and immoral methods. The jurisdiction of the church is here so strong that many people would do anything for it to be the most divine. Koskinen (1995) describes how the norms of the church have been influencing the society over time. The norms have always been subjects for interpretation, and people in different time-eras and countries tend to interpret them differently. The most famous of all norms, are perhaps the Ten commandments. Koskinen has rewritten them to make them more understandable in the context of today and has also taken a way the part ‘you may not…’, instead he has expressed them in more positive terms.

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3.3.3 Relativism

When judging someone on an ethical ground one mostly does it from one’s own standpoint about what is right and wrong. When saying that it is wrong to let children in South America to work in factories, it is because we in the Western World think that it is wrong, while in South America it is completely natural and necessary to survive. In this case our moral is based upon Western thinking, but suppose we lived eight hundred years ago, at that time almost all children helped their families by working. This example reveals that ethics is not just dependent upon culture, but also upon time. This approach is called ‘relativism’ and it denies that there are any ‘moral standard’ or universal moral principles that exist everywhere and has always existed. Relativism can further be divided into subgroups.

3.3.3.1 Sociological Relativism

The view that different groups of people - different tribes, different cultures, different civilizations - have different moral standards to evaluate what is wrong and right, is called ‘sociological relativism’ (Hospers, 1972).

This view can hardly be denied from any philosophers. Anthropologists and sociologists that have come up with these reports have lived with these people and should therefore know better than philosophers. The expression ‘sociological relativism’ may be seen out of two senses. In the first sense, it implies what is just said, that different groups think differently about what is right and wrong, but in a second sense “sociological relativism” may mean that groups have the same basic beliefs and values, but they are manifested differently due to culture and environment. However, sociological relativism is not about ethics, it just describes how it is.

3.3.3.2 Ethical Relativism

The ethical relativist advocates that what is wrong for one group of people may be right for another. Thus, an act that is thought right in one society may be considered wrong in another. Both beliefs are from this perspective true. What is thought right in a society is the same, in relative matter as what is right. Within ethical relativism there are several truths. Polygamy is right in polygamy societies, but not in monogamous societies (Hospers, 1972).

According to Donaldson (1988) there are two main arguments, which are in favor of ethical relativism. The first is that there is an abundance of evidence speaking for the existence of a bewildering variety of moral codes in the world. Anthropologists have come back with many stories about habits and moral customs, when they have studied different social groups in the world. The research performed on the subject has not yet come up with some moral code that has always existed everywhere. Because the ethical relativism’s counterpart, universalism implies that there are moral codes that exist and always have existed everywhere. (Donaldson equals universalism with absolutism). Having not found any universal moral codes, this is for the relativists a splendid proof of the fact that they do not exist.

The second point favoring ethical relativism looks upon the assumption of the existence of an absolute moral. Upon what foundation could an absolute moral code rest? If there was a

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universal moral code saying that one ought not to steal, who would be the commander of that commandment? Being Christian this moral message is naturally stated by God, since it is one of the Ten Commandments. There are though a huge number of other religions in the world having other Gods and there are also those who do not believe in any God, i.e. Atheists. For the average man it is maybe not important to know who the founder of universal laws could be, but for an philosopher it is one of his functions to discover on what grounds our every day beliefs are resting on. However, the ethical relativists believe that it is possible to find basis for universally morality if moral codes are allowed to be variable, ephemeral, and relative to time, place and circumstance. For the absolutist this does not apply for a moral code, he believes in moral commands, obedience to which is obligatory on all men, whether they know or not, whatever they feel and whatever their customs may be. This concludes that a universal obligation cannot be formed upon feelings, since feelings vary. God can therefore not be seen as a commander within the absolutism.

The arguments against ethical relativism are that in the end it is destroying the conception of morality. Saying that there is no universal standard is to take away the incentives for the struggle of a better world. The discrimination of people of a certain race cannot be seen as universally unethical, since the relativists do not believe there is any universal standards that such a judgement could be made upon. The theory of a non-existence of universal moral codes cannot be proved since it may happen that a common moral code is discovered.

A complex issue within ethical relativism is the comparison between morals. Since there is no universal moral code one cannot make judgement on moral codes between different races or cultures. Still people tend to do so; e.g. we may say that Chinese moral codes are better than those of African cannibals. What is actually meant by such statement is that Chinese’ standards are closer to our own, than standards of African cannibals. This shows the core of egocentric humans, thinking that our own moral is the highest one. In reality, however, we have no ground to make such judgements. The ‘Africans’ are probably, on their side, considering their culture and ethical thinking to be the right one.

3.3.4 Universalism vs. Absolutism

The Enlightenment stated the first version of common morality three hundred years ago. The development of a commercialized society has however, eroded the ground on which these principles were founded (Christians/Traber, 1997).

Christian/Traber (1997) believe there are some very strong values, which are universally held. One of those is the “care for one’s children”. They further discuss the fact that people do bad things, which contradicts the belief of universally values. It does however, not imply that there are no universal values. A rule that is usually seen as universal is “don’t kill”. In regard to how one wish others to behave towards oneself it would be irrational to think that the rule “don’t kill” would not be followed. Yet, few people would agree that this rule was absolute. In certain cases people may think that killing is justifiable, e.g. in war. Another example is to wish to assist in someone’s death when the person is suffering deeply. The conclusion is that there are universal values, but they may not be absolute. Here the ethical relativism comes in, in judging whether a homicide could be justified. The question is if homicides in any cases are morally justified? The law plays a central part in these issues, deciding under what circumstances, homicides are justifiable.

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Christians/Traber (1997) mention the primal sacredness of life as being the protonorm bringing all humans together into a common oneness. They argue for that three main ethical principles representing all humans would be “human dignity”, “truth” and “non-violence”.

3.3.5 The impact of culture on morality

Chandran Kukathas (Frankel Paul/Miller/Paul, 1994) argues that the variety of beliefs and practices among different societies is a proof that morality and culture have a strong relationship. Where cultural differences prevail, there is often also a tendency to moral conflicts. Then, what does cultural differences mean? And what is culture? Culture is by Kymlicka (Frankel Paul/Miller/Paul, 1994) suggested to be defined “in terms of the existence of a viable community of individuals with a shared heritage (language, history etc.)” Elliot is also referred to, by the same authors, and he describes culture as something more than the visible activities of culture, such as art, religion, customs and habits. He compares culture to the man, where the man is much more than just the assemblage of the various parts of the human body. As the different parts of culture cannot exist in isolation, nor can one culture exist solely, separated from other cultures. One cannot distinguish the boundaries from one culture to another. Elliot exemplifies this when he says: “European culture has an area, but no definite frontiers: and you cannot build Chinese walls.” There is no absolute line to separate West from East. However, despite of the difficulty in finding specific frontiers between cultures, one cannot deny that different cultures exist. What one should bear in mind is that different cultures do not have to imply that they do not have something in common. They may not have similar visible material things and standards, but more deeply values may be the same. For example, one can find similar values in the Islamic and the Christian culture, although a lack of awareness of it may exist. This does not have the purpose of saying that the two cultures are closely related. What is important is that they are not completely unrelated. Interaction between two cultures can make them evolve to more common standards.

Kukathas further says that the reasons for the conflicts between cultures are not as dependent on fundamental values as we think. It is more often about a lack of understanding in cultural traditions. This advocates for the establishment of cross-cultural moral standards. There is however, an objection to make about cross-cultural standards. Even though there are deep universal values, other different opinions and values on a level up may prevail, that still provoke cultural conflicts. Take the examples of the Christian and the Islamic culture. Although they realize that they have the same deeper beliefs e.g. commitment to monotheism, there may be differences. One example is the woman’s right in society, which is not considered equally within the religions. This implies that deep convergence between cultures may not help to understand conflicts, since the divergence at intermediate level may have a heavy impact, that is not taken into account. The objection can be concluded, by saying that moral conflicts many times do not deal with the deepest philosophical levels, rather with more intermediate ones.

In contrast to many others, Kukathas does not see cultural diversity, as an impossible obstacle to gain universal values. Referring to Adam Smith’s theory of moral sentiments, he suggests that the role of sympathy in shaping people’s beliefs is a major factor of one’s development of a morality. Individuals are concerned of being in harmony with those around and therefore one tends to adapt one’s behavior to the group or society. In this way standards of behavior are developed, which make the ground for judging oneself and others. These moral standards

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are shaped differently according to circumstances and therefore could be different among societies.

3.4 BUSINESS ETHICS

Having the intention of studying ethical policies of companies, we thought it important to discuss the specific question of business ethics.

What is meant by business ethics? Donaldson/Werhane (1988) define business ethics as a study that seeks to understand business practices, institutions, and actions from a human perspective. It involves the evaluation of business practices in terms of how it either contributes or fails to contribute to the general human good. There are many definitions to find in the literature. Cowton/Crisp (1998) propose three different approaches. First, one can say that business ethics sometimes is used to refer to the ethical outlook, appearing in behavior or in explicit statements, of a company or of an individual doing business. Secondly business ethics is constituted of the set of principles or reasons that ought to be followed in business. One could easily pinpoint at behaviors in business activities that are immoral. Thirdly, business ethics could be seen as a philosophical issue with its own topic of discussions and variety of ethical positions.

Solomon (Donaldson/Freeman, 1988) states that business ethics is a kind of “understanding” and that a lot of the wrongdoing in society is due to a lack of understanding what business really is about. One fails to see the big picture as one is too focused on the urgency of goals, ambitions and demands. One is taking a role, and does not always act as one should have done if one had been outside the company’s frontiers. Business ethics in this sense is seen as a personal approach, more than a policy approach. Central concepts are such as social self-awareness, a clear sense of purpose, of honor, and of the virtues in business.

3.4.1 Managerial virtues/ethical characteristics in business

Harvey (1994) proposes that business ethics could be thought of as “managerial virtues”. Virtues are by Koskinen (1995) described as the good characteristics, which determine us to act morally in a certain situation. Harvey says that virtue can be communitarian as well as a personal concept. The advantage of virtue is that morality is seen as a pattern of attitudes and behavior expressing the basic commitments of clearly defined groups or communities. One can experience it as a large gap between the general moral principles and the situations in everyday. However, the gap can be overcome when one succeeds to elaborate the outlines of the morality that are associated with particular social roles and communities.

In business, Solomon (Harvey, 1994) suggests that a cluster of specific business virtues could be developed. He takes the Aristotelian position of ethics by emphasizing the communitarian character of all virtues. Business is further described as a practice “To say that business is a practice is to say that it is not only a social activity with at least several participants but that it has goals and rules and boundaries and a purpose.” The basic purpose of business is seen not only as ‘making profit’ but also ‘doing well’, fostering welfare in the sense that business provides desired services, which make people’s lives more enjoyable. Solomon presents a number of virtues, which could be strongly associated to business life: honesty, fairness, trust

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and toughness. Koskinen (seminar, Akademibokhandeln) also point at these in saying that honesty, trust, fairness must be every businessman’s wish about the counterpart in a business activity. The concepts should be quite obvious and natural to follow within business. Solomon continues with the corporate self and associate virtues such as: friendliness, honor, loyalty and shame. Caring and compassion are also mentioned to constitute fundamental attitudes of the company. Finally, justice is mentioned as the ultimate virtue of corporate life.

3.4.2 International business ethics

One of international business ethics dilemmas is the question about how a company should perform in a foreign country (Harvey, 1994). Should the managers follow the business principles they usually follow in their home country, or act according the saying “When in Rome, do as the Romans do”? Countries differ in their ethical approaches due to culture and religion, but also different laws have impact on ethical thinking. There are some important moral aspects that companies from different countries may deal with differently. Examples of such, are safe labor conditions, wage levels, environmental or pharmaceutical regulations, different positions ascribed to women and to men on the basis of deeply engrained cultural reasons, low-level nepotism, child labor and ‘facilitating payments’ offered to officials or customers.

Donaldson/Werhane (1988) have developed a model, which they call “an ethical algorithm”. The model is a base for how one should behave in circumstances, which differ from one’s home country. The first question one should pose oneself is if the moral reasons underlying the host country’s approach to a certain situation, are related to the country’s economic development, or if it is independent of that level. In Muslim countries, not allowing women to have managerial positions, it is a custom related to religious beliefs saying that women shall not command over men. It is most probably not due to the level of economic development. A company’s pollution of the air or of the sea is however, more likely to be related to the economic development.

If conditions, which could be linked to the economic development, prevail and if such conditions would not be morally allowed in the home country, then managers would neither allow them in the host country.

If the conditions or a certain practice are not linked to the economic level of the country one has to pose oneself two more questions: First, is it possible to conduct business in the country without following the standards that are morally unacceptable in the home country? Secondly, does the practice imply a violation of fundamental human rights? If the questions are answered negatively, the practice can be considered as morally permissible. If, however the questions are answered affirmatively, then the practice must be considered as immoral and therefore impermissible.

3.5 POLICIES / CODES / STRATEGIES & STAKEHOLDERS

If codes of conduct are ethical policies or not, can be discussed. It seems to be a play with words as both codes of conduct and policies are about behavior. The expression ‘code of conduct’ is mostly used in connection to ethical policies, commonly they are also termed

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ethical codes. The particular with codes of conduct seems to be that they are mostly used in connection to one perspective of ethics. That perspective regards decent conditions for the actors producing the goods and services. One reason for this, is the pressure Non-government organizations have managed to put large corporations under. With boycotts and other fierce weapons like bad rumors, blacklisting etc. many companies have come to a point where they have established ethical policies regarding their preferences and principles in the matter of subcontractors. Subcontractors are however not the only ones to consider in ethical question, there are more stakeholders to bear in mind.

3.5.1 Policies and codes A code of conduct/ethical policy is a way of formalizing the ethical responsibility of the company. Commonly it is used as a strategy, which should guide the behavior and actions in the present and future. In the report on codes of conduct (Fair trade center, 1998) a code of conduct is defined as ‘a set of rules and principles for working conditions that shall be in force within the production of the goods’. The rules can be more or less detailed as well as strong. Gilbert (1992) has connected the philosophy of ethics to corporate strategy. He defines a corporate strategy as something that should be used to guide behavior towards the stated objectives. He further means that it is an idea that could hold great promise.

“A strategy is simply a set of decisions, the product of thoughtful reflection, that lays claim to a specific, enduring position in relation to an environment, in anticipation that those decisions can produce a benefit from that position.”

Gilbert (1992, p. 60)

Such a definition has made us see the similarities among codes of conduct – ethical policies – and ethical strategies. There are no great differences in the initial thought of these concepts, the interpretation are very similar.

Ethical policies or codes in particular are by Hosmer (Kitson/Campbell, 1996) seen as ‘statements of the norms and beliefs of an organization’. He further makes a distinction between ‘codes of ethics’ and ‘rules of ethics’. Ethical rules consist of requirements to act in particular ways, more than expectations of a certain behavior. Kitson/Campbell discuss the connection between strategies and ethical codes. Having an ethical code only in terms of strategic thinking does not necessarily make the company ‘good’. They also mention that some companies are tools in themselves to obtain a better and more ethical society. However they do agree to that most of the times an ethical policy or code is a result of a strategic answer to stakeholder requirements.

The corporate strategy concept relies very much upon the purpose and mission of the business and can, therefore differ between organizations and/or companies. Furthermore, Gilbert (1992) has furthermore made a wider definition of strategy in the concept of ethics. Corporations can have either one or all of the following approaches to strategy:

1) Human Decision Assumption – purposeful action at the corporation requires, in part, that persons devote attention to questions about the purpose(s) for that action.

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2) Interrelationship Assumption – purposeful action at the corporation requires, in part, acknowledgement of the influences that relationships with others “outside” the corporation can bring to bear on that action.

3) Advantage Assumption – purposeful action at the corporation requires, in part, that persons choose and actively seek a position of lasting benefit in relation to influential “outside” forces.

Gilbert also means that a strategy is the product of the human will and choice, it has though foremost two reasons:

the acknowledged influence of relationship with others, and a plan of purposeful action that can improve the chances of deriving lasting benefits from

acting in consonance with the plan in the presence of others.

3.5.2 Competitive strategy

Having an ethical policy must further be seen in the aspect of a competitive tool. Not having such, while competitors have one is probably a strategic mistake. The reactions of the consumers must be a great influence for every company. Taking the responsibility that is more and more demanded gives a corporation a competitive advantage. Michael Porter (1983) explains how a competitive strategy is a combination of the objectives the corporation strive for and the means by which they try to reach them. Porter agrees with Gilbert (1992) and says that the concept ‘strategy’ can be used to guide the behavior of the company. Porter means that a competitive strategy is formulated within a frame of four cornerstones: 1) The corporate strengths and weaknesses2) The set of values by the main actors3) The expectations of the society4) The opportunities and threats for growth within the line of business.

What Porter tries to explain is that a strategy has foremost two dimensions to take into consideration, internal and external dimensions. The four factors mentioned above can be distinguished within these dimensions, and they define the limit within which a corporation can be successful. The suitability of a competitive strategy can be justified throughout a ‘test of consistency’ according to Porter. The test implies a number of questions such as: Internal consistency - Objectives in accordance with each other?- Do the operative action-plans attach to the objectives?- Do the operative action-plans support each other?

Environmental and societal adaptation - Do the objectives and plans take advantage of the opportunities of the line of business?- Do the objectives and plans take the threats into consideration as much as the resources

allow?- Can the environment absorb the actions in a reasonable time perspective?- How is social requirements taken into consideration?

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Adjustment to resources- Are the objectives and plans in consistency with the available resources?- Do the time perspective reflect the corporate ability to change?

Information and realization- Have the key persons become aware of and got full insight in the objectives?- Are there enough congruence between the plans and objectives, and the qualities of the

key persons, to guarantee commitment and obligation?- Is there enough leadership capacity to bring about effective accomplishments?

Doing this test will not secure a good strategy or great achievements, but it can however be a way of finding out strength and weaknesses of the strategy or policy.

3.5.3 Stakeholders

Within businesses of companies there are many different stakeholders to consider. There is an abundance of different views, regarding which stakeholders to really keep in mind. Some look at it out of a business ethics perspective, which to some extent imply different stakeholders for ethical questions than for other questions. Some say that a company has some stakeholders, regardless if it is ethics or something else in concern.

3.5.3.1 Business ethics and stakeholders

Below we have mentioned how different authors conceive issues of business ethics. In distinguishing an issue, one automatically (perhaps unconsciously) defines a stakeholder. The issue has to mean something to someone, and the stakeholder is that someone. One can also start in the other end – with stakeholders – and try to distinguish certain issues of interest. Donaldson/Werhane (1988) have made eleven points of issues which are included in business ethics:

1. Advertising practices, for example, false or misleading advertising2. Product safety3. Monopolistic price schemes and their effects on the consumer4. The pursuit of profits5. The treatment of workers, including salaries, working conditions, worker participation,

and the access to pension plans and benefits6. The effects of pollution, both economic and environmental7. Payments of "sensitive" sums of money to foreign government, and the public in

determining corporate policy8. The proper roles of shareholders, management, government, and the public in

determining the corporate policy.9. Discriminatory hiring policies, conditions, and policies of advancement10. The limits of private ownership11. Insider trading

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Cannon (1994) has made a wider division of business ethics and states four key issues in ethics: innovation, people, technology and markets.

Lennart Koskinen (1999), has together with an international group of managers, developed seven criteria which could serve as starting points in judging whether companies are ethical or not. They are:

- Business concept- Social responsibility- Personnel policy- Responsibility- Honesty- Environmental considerations- Human Rights

Michael Porter (1983) has created a model of areas to consider in the setting up of a competitive strategy. This does not particularly mention ethical policies, but it defines major areas of interest. The areas are Product range, Target groups, Marketing, Sales, Distribution, Production, Labor, Purchasing, Research & Development, Finance and control. Porter means that success within these areas requires consistent business related goals plus definition of how the operations are aimed to be competitive.

Kotler (1997) defines stakeholders as customers, suppliers, employees and distributors. Kitson/Campbell (1996) define them as more than shareholders, directors and creditors – but not directly who they are. Brytting (1998) makes perhaps the most thorough description of stakeholders. He defines them as customers, subcontractors, environment, competitors, employees, owners and the society.

Brytting indicates that all stakeholders are indispensable for the organization and that they all the time must be drawn to it out of competitive temptations. Further it is meant that the contribution of the stakeholders are made under free will. If the organization takes undue advantage of the goodness, the stakeholders will leave the organization to its’ destiny.

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4 INTERVIEWS

As explained earlier in this paper, we have interviewed three persons in the aim of enlarging our theoretical understanding of ethics. We have chosen to introduce the discussions from each interview in a summarized form. The content of the summaries will resemble the content of the theoretical framework, since we used this as a background for the discussion. The interview guide that was sent to the interviewees approximately one week before can be found in the appendix no 1.

4.1 Magnus Furugård

Magnus Furugård is the founder and owner of Caring Company. He started the company in 1992 with the business idea to develop the social and environmental responsibility of companies. With the ethical perspective as a base, the company is basically divided into three divisions: information, consulting and auditing. Magnus Furugård has his background in studies in business administration and the Greenpeace organization.

Magnus Furugård is a person used to discuss ethics. He explained to us that he sometimes has introductions in ethical reasoning with organizations and that he guides them in what consequences their work might result in. He has a very practical approach to ethics. The major point for him is to obtain a better society - a better society, which consists of the environment and a human thinking. For Furugård ethics is about humans and their approach to environment and circumstances. Ethics is something general, which we can bring into all situations as it appears to us. The same knowledge within ethics can be applied to several perspectives. Looking in a business perspective, the business ethics is the relationship between the organization and the social context.

When talking specifically about policies, Furugård poses a rhetorical question and asks us about our view of what a policy is. Briefly we say that a policy many times is being used as a tool for communication, a base for responsibilities and duties. For Furugård it is foremost a strong management tool, it is a guideline to maintain a high moral and ethical standard. It is something of great importance that must permeate the whole organization. He also says that it is very important that the stakeholders of an organization have a respect for the policy.

Ethics is something one cannot just decide, it requires a discussion and a united set of values. We discussed whether there is a set of universal principles in ethical thinking. Furugård strongly believes this, he says that many times cultural ethics is exaggerated. He maintains that we share thoughts of human rights, the principle of caring etc. The socio-economic situation of a country might have certain requirements, but such a situation, do not equal to ‘culture’. Religion is often something stronger than culture, which might influence the ethical approach of humans. The difference among religions is not that widely separated in sense of basic beliefs.

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Keeping the thoughts of universal principles in mind, we turn to the thought of relativism. Furugård imposes that an organization must make an ethical standpoint, and thereafter live by it. If it is not possible to work in a setting without violating parts of the standpoint, one has either to go as far as possible or chose not to work in such a setting. Compromises are sometimes necessary, but not compulsory – it is a choice. It is also important not to see a policy as a set of rules, then one get restricted and cannot adjust to certain situations. The policy shall not be something limiting, sooner enhancing how to strive for a better ethic.

In today’s society a company must communicate their standpoints to maintain their position among the public. Image and core values are some of the strongest marketing tools. A policy can be internal, but more and more companies chose to communicate how they work and what they stand for. Trying to attract customers with good ethics can be seen as very ‘cheap’. Some people believe this to be bad, they mean it is to do something for wrong reasons. However, customers are necessary for the business – without them it cease to exist. Only trying to maintain a good image as a purpose of attracting customer – and not really acting upon what is said, then one can question the companies.

The reasons for an ethical approach are simple according to Furugård. It is not possible only to live by the principle of profit maximizing. However it might not be a contradiction between profit and ethics, sooner an ethical approach will attract more customers. The customers will though have to choose whether they want to pay for ethical practice of an organization or not. Raising the ethical level might lead to increased expenditures and thereby raise the financial costs of an organization. Furugård stresses that customers are influenced by four factors – price, confidence, service and quality. These factors do not necessarily have to be ranked, sooner they can differ in ranking between different products. The factors also depend on each other - for example the more service a customer gets the more it is prepared to pay for the product.

Talking about the ethical approach of companies, Furugård means that a broad spectrum exists. In one end there are companies not caring about ethics at all, and in the other end there are companies using their business to achieve a better society. In between there are companies with codes of conduct, ethical standards (for example Social Accountability 8000) and the fair trade label.

Furugård further means companies shall strive to practice and communicate the policy. The ones to judge the quality of a policy are the stakeholders: owners, society, employees, customers and suppliers. A policy must continuously be revised and brought up to discussion. How useful a policy is depends on how well defined and discussed it is. It is of major importance to bring the broad topics down to the specific.

4.2 Tomas Brytting

Tomas Brytting is associate professor at the Center for ethics and economics, a department of Stockholm School of Economics. He has written several books about business ethics, and he has also done an extensive report on ethical codes/policies.

From the very beginning Brytting makes clear that he rather prefers moral philosophy instead of ethics. He believes that term to be more describing of what it is all about. His definition of

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ethics and moral correlates with the classic – ethics is the theory of moral. He means that it is minor nuances that make out the difference. Moral philosophy is a systematic distinction of what is right and wrong, good or evil. Ethics might have more to do with rules of acting, and moral with the act in it self.

An ethical policy is by Brytting conceived as something, which reveals the standpoint of a company. He means that many companies in the past did not dare to openly communicate the policy, as it could be understood as a juridical obligation. This is something that has changed through time - today it is conceived in positive terms to reveal the policy to the public.

In talking about the meaning of words such as justice, fair, good, reasonable in a policy. Brytting means that they might not mean so much for people outside the organization, but for insiders they must mean a great deal. Within the organization one must discuss the core values and decide what implications they have for the business. To specify more in the policy is useless, as it then becomes like a law – a bureaucracy.

Regarding ethical dilemmas, Brytting means that it is not possible for a company to safeguard itself in a policy. A company has to make choices, it has to give priority to some actions. Some ethical choices seem to be global, for example the caring for the own group of people nearby, restrictions against violence and the preference for truth.

Brytting means further that the political and practical level of ethics might be very different from the “spoken” or “private” level. The social ethics might deal with questions more global than private ethics. An example is that even though murder is morally wrong on a private level, it can be justified socially. Take the example of NATO and their effort to end the ‘terror’ caused by Milosevic. Brytting is willing to accept ‘double standard of morality’, that it sometimes is called. He mentions his gratefulness for the Allied in the Second world war, as they were able to defeat Hitler.

Brytting also means that one has to separate ethics and emotions at a level of moral philosophy. Ethics is not only what the emotions tell you is right. One may for example feel very guilty when someone get hurt in a car accident, even though it was just an accident.

Regarding culture, Brytting indicates that companies must have respect for different cultures. Culture is a pattern of life, which has been transferred, communicated or passed along from generation to generation. There is a difference between accepting and respecting. In today’s heterogeneous society it is also hard to distinguish one culture. By working in a certain culture a company can contribute to injustices, this is a choice they have to make. It is though possible to work there if the company is trying to find new ways, trying to find a fair way. Within business ethics the ultimate practice for Brytting is that the company is good. The intention with the company does not have to interfere with this. Making money at the same time is not morally wrong. He believes that the society sometimes demands a self-destructive approach of ethics, which he really dislikes. There must be nothing wrong in earning one’s living and at the same time being good. The society must allow people to be happy in themselves. Sometimes it almost seems like the thought of doing nothing is better than the one of doing something. The attitude and cynicism by some people irritate him a lot. He believes that we are too afraid of being let down and therefore we choose not to trust anybody.

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Brytting means that it is not possible to satisfy all thoughts of ethics. Sometimes we have to let justice be more important than freedom, and vice versa. It is important not to put the ethical level too high - it must be possible to be ethical. Each and one of us are responsible for our room of action. We have an individual responsibility for the common good.

In his work Brytting has seen all kind of ethical policies or codes. Their quality varies greatly, and same with the content. He has always chosen not to interfere in what perspectives the policy focuses on. As Brytting believes in the responsibility for the things that one can affect, he thinks that a company can consider the views of their different stakeholders. However, the company in itself must decide what to give priority to.

4.3 Lennart Koskinen

Lennart Koskinen is a priest in the Swedish church and an ethical consultant in his own company, Humankonsult AB. His main interests are religious and philosophical questions in connection to ethics.

Lennart Koskinen has a very human approach to ethics. According to him, ethics is a wish of the good, a thought of what it is we should strive for. Acting ethical means not to reduce the possibility of good. Acting ethical can also be said as minimizing the evil or wrong. He has a view of ethics as something that requires discussion, not rules and control. A rule is something that requires a sanction, if being violated.

Koskinen emphasizes the deontic logic, which gives a more broad view of ethics than we are used to. Normally we put two positions under ethical reasoning, mostly true and false. The deontical logic proposes a scale that starts with prohibited, which is followed by wrong, right and duty. The ‘two-position-ethics’ can be traced back to Aristotle and his ethics of virtues. Koskinen favors an approach where the perspective of ethics is widen from just the will to avoid the wrong, to have the will to be good – to become someone who can be proud over its’ actions.

A policy is by Koskinen seen as a standpoint - an attitude. He would not like to see it as a contingent liability. He talks about a policy as ethical guidelines rather than ethical rules. Of course some rules can be justified, but values are the most important. According to him there is always the risk of misinterpretation of a policy, this has to be dealt with through discussions.

When we discuss universal principles, Koskinen says he believes they do exist. However, he says it depends on how much one can generalize. Basically the good and evil can be traced in every human being. A policy might be something to put words on what is wished - to be able to avoid the evil, the wrong. A universal principle that exists is for example, ‘pacta sunt servanda’, which means to keep agreements, not to lie and keep promises. He does not deny that there are differences in how agreements are made, in some cultures it is made under strong juridical forms. In other cultures all that counts is a handshake. He strongly emphasizes that regardless of how the agreement is made, it is a common principle that the agreement shall not be broken.

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When it comes to the problem of moral dilemmas and either way of acting may result in being unethical – Koskinen indicates that companies must strive to minimize the evil. To choose between bad or evil options is often harder than to choose between good options. We gave an example of bribes vs. layoffs (the one mentioned in the introduction) and we have a long discussion of what constitutes a bribe. In Sweden people are very extreme in their opinions about bribery, and such opinions are not a custom in many other countries. Sometimes one has to adapt to local circumstances, because social systems in other cultures might depend on other factors than the Swedish. Koskinen takes the example of some African countries where customs officers are not paid by the nation. It is expected that those who have something to declare pay these men. In Sweden we have a tendency to see such costs as bribes. Koskinen believes that it could be possible to bring such cost into the accounting and legitimize them. There is a thin line between bribery and gifts, and one shall never accept a ‘gift’ that will cause a situation of counter-dependency.

The stakeholders of a company are very important for Koskinen. He talks about primary and secondary stakeholders. Primary stakeholders are such like owners, customers, managers and employees. Secondary are those of society, future and the environment. He strongly advocates that ownership generate responsibilities. The owners have the possibility of replacing the board of directors and that is an opportunity that shall be thought of as a mean to bring an organization to a higher ethical commitment.

In our discussion about stakeholders Koskinen says that it is of major importance that humans and companies start to think about how we use resources. He means that we have to think in a future perspective for the coming generations. These generations will have to pay the costs for what we have done, to use his words ‘we live on the account of our children’.

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5 CASE STUDY & ANALYSIS

We are going to analyze the content of some ethical policies / codes of conduct. Preparing for this we have firstly made a real deep literature investigation, for drawing up a wide theoretical framework. Now we intend to use the content of the framework in our analysis. First, we will though describe the ‘cases’ for our study.

5.1 Description of policies

The content of the corporate policies / principles / codes / strategies, we have chosen to investigate, look as below (in their complete they can be found in the appendix). In presenting the internal views of the policy we have to a large extent used the companies’ own words.

5.1.1 Johnson & Johnson

”..Johnson & Johnson is a thriving family of 164 companies, serving the markets in 175 countries. With sales exceeding $20 billion, Johnson & Johnson is ranked as the world’s largest manufacturer of health care products serving the consumer, professional, pharmaceutical and diagnostic markets.”

According to Johnson & Johnson’s own words “high ethical standards and a commitment to improve quality of life have been keystones in the development of Johnson & Johnson from the beginning”. The company recognizes responsibility in different areas, foremost, responsibility towards customers, employees, shareholders and the local community in which it works. Johnson & Johnson formulated a ‘credo’ over fifty years ago. The initiator was the General Robert Wood Johnson, and he meant to spread his philosophy of business. The credo has remained unchanged over the years and has been of ‘great guidance and inspiration’. (“Career opportunities in Europé”, Johnson & Johnson’s internal produced material)

5.1.1.1 Content

The Credo1 strongly emphasizes the matter of responsibility. Johnson & Johnson’s primary responsibility is towards their customers, or in other words, all those who use their products and services. Other groups of interest are employees, suppliers, distributors, stockholders and communities. Under each stakeholder it is more specified how the responsibility can be pictured. One could say that responsibility is the major virtue, but that they also emphasize others as fairness and goodness.

1 Appendix no 2.

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5.1.2 The Shell Group

The Royal Dutch/Shell Group of companies has grown out of an alliance made in 1907 between Royal Dutch Petroleum Company in the Netherlands and the “Shell” Transport and Trading Company in the UK. Today the group has a wide international business divided into five core businesses: Exploration and Production, Oil Products, Chemicals, Gas & Power generation, and Renewables.

According to the own introduction to the business principles (www.shell.com – Living by our values), they have existed in their written form since 1976, and have remained highly consistent ever since, because the core values on which the Principles were originally based have endured.

Proudly Shell also tells us that they are the first major energy company to support publicly the United Nations Universal Declaration of Human Rights and the emergence of the concept of sustainable development.

All companies within the Shell group are expected to comply with the Principles as a matter of course. In joint ventures, they use their influence to persuade partners to adopt and apply principles consistent with theirs. They also expect contractors to conform to the Principles in all aspects of their work with the Shell companies.

5.1.2.1 Content

The business principles2 are divided into nine areas: objectives, responsibilities, economic principles, business integrity, political activities, health-safety-and the environment, the community, competition and communication. Under ‘responsibility’ they have stated to whom the Shell Group is responsible, more precisely to shareholders, customers, employees, those with whom they do business, and the society. All the other areas are also further developed and many words such as safety, high standards, good, honesty, efficiency etc. are used.

5.1.3 Hennes & Mauritz

H&M works within the clothing business. The corporation has more than 550 stores located in 12 European countries. 17.000 employees are in the force of H&M, they work within administration, design, in the stores as well as other areas in the business of the company. In 1998 H&M had a turnover of almost 27 Billion SEK. H&M cooperates with approximately 1.600 suppliers, because they have no own factories A great deal of their production is located to Asian countries, but in some cases to European countries as well. (Annual report of 1998)

According to the own comment regarding ethics (http://www.hm.com/hm/code/), H&M is a strongly expanding multinational company and they feel that it is increasingly important for them to take responsibility for all their actions. This counts for Europe as well as for the rest of the world. They do though state that their responsibility towards the thousands of people 2 Appendix no 3.

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http://www.shell.com/


taking part in the production of their garments is most important. They feel that they have to ensure that nobody whose work is contributing to the success is deprived of his or her human rights, or suffers mental or bodily harm.

To make a standpoint, clear to all suppliers and staff members, as well as any other parties, they have set up a Code of Conduct. It is a non-negotiable requirement, all suppliers and subcontractors, without exception, are obligated to follow this code.

5.1.3.1 Content

H&M’s code3 is focusing on circumstances for the employees of their suppliers. Major areas are defined as child labor, safety, basic rights, surroundings, environment, trust and co-operation. Under these areas it is specified what is being expected from suppliers and their sub-contractors. Many times it is very strictly formulated but sometimes very vague statements are also made.

5.1.4 Nestlé

Nestlé has a history of 130 years and has its origin in Switzerland. It is the largest and the most diversified food company in the world. Almost 500 factories, in 77 countries, produce “healthy, enjoyable food products for every stage of life”.

Nestlé carries out its global social responsibility, firstly, by taking on a long term approach to strategic decision making which recognizes the interest of their consumers, shareholders, business partners, and the world-wide economies in which they operate. Secondly, their responsibilities and values are reflected by the commitment of management and employees at all levels, to the following specific Corporate Business Principles, which define standards of behavior for all companies in the Nestlé Group, and are intended to complement applicable legislation and international recommendations.

5.1.4.1 Content

In the Nestlé Corporate Business Principles4 they firstly mention how they shall follow these, but also take local legislation, cultures and religions into account. Then some major points about their ethical beliefs are stated, like which stakeholders they have, how they do not favor short-term profit. They also mention how they conceive the law to be the most ethical guideline, what the professionalism of their employees mean, and how they think that their way of acting might be important to consumers – not only their products. This part is followed by a more thorough and deep discussion of some important aspects.

5.1.5 Unilever

3 Appendix no 4.4 Appendix no 5.

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Unilever is one of the largest suppliers of everyday commodities, foremost food, beverage detergents and hygiene products. The corporation works in 80 countries through 300 affiliates and subsidiaries. The turnover in 1997 reached 371 billion SEK and the total number of employees was 270.000.

In “How we conduct our business” (http://www.unilever.com/public/news/new_indx.htm), Unilever says that commitment to responsible corporate behavior is fundamental to its’ operating tradition. Dedicated to meeting the everyday needs of people everywhere, they say it is essential for the business success that Unilever people stay close to and understand evolving consumer needs and values. With a decentralized operating structure local companies have maximum opportunity to be closely in touch with local consumers. Local companies are predominantly, run by local people in tune with their local societies. They see their business as a part of the societies where they operate.

The principles and values, which guide Unilever’s corporate behavior, are set out for all employees in the Corporate Purpose and Code of Business Principles. To frame this corporate behavior they have worldwide operational standards, which are central to the way they do business. These standards are set to ensure the quality and safety of Unilever’s products and services, the health and safety of Unilever people at work and to minimize the environmental impact of our operations, wherever they are in the world. Every company’s chairman is required to give positive assurance on an annual basis of their company's adherence to these policies and to the broader principles set out in the Code of Business Principles. Company performance is regularly audited.

They believe that outstanding business performance must be by the highest standards of corporate behavior towards their employees, consumers and the societies and world in which we all live.

5.1.5.1 Content

In the Business Principles5 it is firstly admitted that a profitable business has highest priority, this as to maintain a certain development. In connection to profit they talk about caring for their customers, employees, shareholders, suppliers and communities. Respect, honesty and integrity are words of the highest ranking, also obeying the law is central. A further discussion is held, revealing the attitude of the company in following aspects: employees, conflicts of interest, public activities, product assurance, environmental issues, competition, reliability and financial reporting, bribery, application and compliance.

5 Appendix no 6.

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5.2 ANALYSIS

To hold on to our research questions the structure of the analysis will resemble the structure of the theoretical framework. The outcome of the interviews will affect the whole analysis and we will use them, within the structure, when we find it suitable.

Even though we have tried to have a holistic view on the policies, we do not bring each and every part of the policies to discussion. We will under each headline analyze what is important and relevant. Therefore, it differs whether all policies are mentioned or not.

As said we will use the major headlines from the theoretical framework. However, it is one that we will not regard separately – Business Ethics. Having studied a large number of various books within general ethics as well as business ethics, we have come to the conclusion that business ethics is not an isolated subject. It brings up the same ethical theories as general ethics, the difference is only that it concerns situations which one may encounter in business life. In the theoretical framework we wanted foremost to define business ethics. In the analysis we will study policies which are concerned with general ethics, but in a business context. It is therefore no meaning in having business ethics as an own paragraph. Before starting to read this analysis we advice the reader to have a look at the policies in the appendix and to remember that the objective is not to try to compare the policies with each other, although they might be analyzed together.

5.2.1 Definition of Ethics

Under ‘definition of ethics’ we will broadly discuss how the policies can be seen ethically, the further the analysis then takes us the more the perspective will be narrowed to certain factors.

What is ethics? Is there a definition to be found within ethical policies? We can in the theoretical framework see that Harvey (1994) defined ethics as a practice and a reflection upon that, and that Donaldson/Werhane (1988) thought ethics to be about what is good and right for people to do. The policies in this study, all consider what is right for companies and their employees to do. However, the policies also give restrictions of what is not allowed to do. In the interview with Lennart Koskinen we discussed that commonly a policy is a set of rules. Policies are often designed so that it is the duty of companies to comply with it. Koskinen meant that, it is not the best practice of an ethical policy, such a policy shall give ideas and thoughts – it shall give incentives to a discussion of what is right and ethical. An ethical policy shall not in it self decide what is right or wrong.

The policy of H&M is very forcing to its nature. It is a number of requirements posed towards the suppliers of their garments. Except some ‘open ends’, the whole of their policy is very strict. Mostly it is mentioned how it must be and what is not allowed. Ethics is in this policy something decided - the behavior and actions are put under ‘internal laws’. With internal laws we mean that the policy more have the shape of a law book, than guidelines.

Reviewing the policy of Shell one finds another more loose structure and view of ethics. Saying that one policy is ‘more loose’ does not mean that the ‘ethics’ is inferior. In Shell’s policy ethics is something more vague, something depending on circumstances and

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environments. The ethical approach of Shell is very wide, in many different senses one has tried to give the ethical view of the company. Clearly Shell’s policy is like the policy of H&M about behavior, but it is pictured very differently.

Another ‘face’ of ethics can be seen in the policy of Unilever. Trying to give this policy a position towards H&M and Shell, the Unilever policy can be said to be a mixture. Strong requirements and duties are mixed with a more wide discussion, with other words from obvious to general. Nestlé provides a mixture in the same sense as Unilever. The Nestlé policy gives a picture that ethics is something very specific in some cases, and more general in other.

The policy of Johnson & Johnson is revealing what the company considers as their obligation and duties. In general it is telling what must be done instead of restrictions of what to do.

To a very large extent all the policies relate to the deontological approach of ethics. The deontological approach, which implies the importance of actions. Actions are what determines the ethics, not what one would like to achieve. The teleological approach has a different view, where the achievements are more important than the actions. The policies do except from actions also look into what they result in. Is then ethics about actions, about the result of these or is it a combination of both? The theory gives a separate view, while the policies reveal a mixed view.

5.2.2 Philosophical Approaches

5.2.2.1 Virtues

Aristotle grounded the thoughts about virtues. A virtue was by him defined as ‘the middle way of two vices’, and virtues such as generosity and pride were mentioned. Under the headline of Business Ethics, Harvey (1994) proposes that ‘managerial virtues’ characterizes the ethical approach of companies. Looking at the policy of Unilever, they start their ‘code of business principles’ with saying: “Unilever conducts its business with honesty and integrity and with respect for the interest of those with whom it has relationships”.

The virtues here would be honesty and integrity. If one thinks at the definition of business ethics as how one should behave or act in business life, honesty and integrity can been seen as Unilever’s answer upon that definition. The two virtues are overall concepts that can be seen as the base for their ethical policy. If they did not work honestly and with integrity they would probably not have designed an ethical policy. The ethical policy is of course not an guarantee for acting ethically, but however, in communicating what they stand for they put requirements on themselves, requirements that others can expect that they fulfil. Their standpoint of working with integrity is further expressed when stating they obey the law.

The approach of honesty and integrity can be seen in the issues about ‘Reliability of Financial Reporting’, where they state that there will be no undisclosed or unrecorded account. Stating that they do not give or receive bribes in order to retain or bestow business or financial advantages, show their standpoint of seeing bribes as something wrong. In mentioning it, they also show that they feel it important to be honest about it.

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Shell mentions in their policy that “Shell companies insist on honesty, integrity and fairness in all the aspects of their business and expect the same in their relationships with all those with whom they do business.” Integrity, honesty and fairness can here be seen as the special virtues of Shell.

In Nestlé’s policy virtues such as trust and fairness are mentioned concerning business relations. One can also indirectly distinguish an approach of the virtue fairness within several of the topics concerning the personnel policy: “..offer opportunities for promotion based upon merit, irrespective of race, religion, sex or nationality”. It is fairness in that sense they do not discriminate people, sooner they treat everybody fairly. Everybody has got the same chance to be promoted.

A similar approach made by Unilever states: “Unilever companies are required to recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.”

5.2.2.2 Profit-maximization versus ethical behavior

The objectives and the ethical behavior of a company can be seen as relating to each other. Taking the example of Unilever they say: our first priority is to be a profitable business and that means investing and balancing short term and long term interests. It also means caring about our customers, employees, shareholders and suppliers, and the communities in which we conduct our operations.

The primary objective here is to be a profitable business, but it implies also for Unilever to care about the different stakeholders in the company. To care about the stakeholders can further be seen as Unilever’s approach to ethics. Caring is a virtue, a good characteristics which determine one to act morally in a certain situation.

Unilever seems not to see a contradiction in having profit as an objective and to be ethical at the same time. They rather see ethical behavior, such as caring, to go in line with the financial objectives. This can be seen as a postmodern thinking with a holistic view on reality. One does not need to separate traditional profit-maximization from acting ethically. Rather it is seen as natural in order to make business work.

If Unilever would not care about their customers, employees and other stakeholders, it would be hard to reach the objectives. If the customers do not feel that they are treated well, they will stop purchasing the products and services offered by the company. It implies that profit cannot be made. Same thing goes for employees, if they feel ignored and mistreated, they will not do a good work and the chances to make a good profit will be minimized. Similar reasoning can be made from the perspective of other stakeholders. One can see it from the other way around as well. If the company does not make profit it is not possible for them to care about the stakeholders in the same way as if they made a sound profit. A sound profit implies means to invest in benefits for the employees, dividends for the shareholders, better services for the consumers etc.

Postmodernism advocates a multiple of moral theories. Striving only for maximizing profit can be seen as a utilitarian approach where the result or the objective is the most important.

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The objective is seen as the good and in order to act ethically one should try maximizing the good. The utilitarianism does not take into account how one performs one’s actions on the way to the objective. The behavior and the way of acting are not of importance from an utilitarian perspective. The way companies show that they care about their stakeholders can instead be seen out of a deontologic perspective. Kant argues that the act itself is the most important. One should always try to act so one’s way of acting could be made to a universal law. Therefore, Unilever’s way of caring about others can be seen as such a one – caring is something one wish everybody to do.

Another example of companies’ deontological approaches is H&M that strongly expresses how they “..have a responsibility towards all the thousands of people taking part in the production of their garments”. One can see it as they follow their duty. Shell does explicitly state that it is the duty of management continuously to assess the priorities and discharge its responsibilities as best it can on the basis of that assessment. The same thing can be said for Johnson & Johnson’s way of stating how they take responsibility for all its stakeholders. Johnson & Johnson states as well in its policy that “Business must make a sound profit”. This shows how a teleological and deontological thinking can be combined. One does not have to exclude the other.

Shell points at the dependence of teleological and deontologic ethics when stating that profitability is essential to discharging their responsibility and staying in business. It seems that several of the companies that we have analyzed see the two different ethical approaches in this way. The ethics of duty (deontology) does not only serve as a duty just for the sake of duty. It is also a prerequisite for being able to achieve the goal of the ethics of consequences (utilitarianism). And for the company to be able to perform the duties it has to make a sound profit. Duties such as taking responsibility for the environment require means, for instance, the research to develop environmental friendly material to the products.

To conclude we quote what Brytting said at the interviews: “there must be nothing wrong in earning money as long as being good”.

5.2.3 Ethical Views

5.2.3.1 Relativism

We asked our interviewees how they conceive words such as adequate, reasonable and good. These words do not have a sharp definition, but the interviewees indicate that it is impossible not to use them. These words commonly appear in the policies of companies, often in connection with “we must....”. We thought of this as a problem in the sense that these words then mean nothing in particular. Throughout this work we have not found any universal definitions for word such as ‘reasonable’ or ‘good’. Perhaps the interpretations not only differs among cultures, they can also differ within.

For example Johnson & Johnson says in their credo that they must ‘make a sound profit’, and ‘be good citizens’. What is a sound profit or a good citizen? There is no definite definition, which is valid in all the circumstances, cultures and different work settings where J & J operates. People might say they know what a good citizen is, but they would probably give a variety of different characteristics. A sound profit would probably be defined as a profit large

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enough to reward the owners for investing their money, and large enough to give means to a future development. The difficult thing is that no one probably knows exactly how much the future development requires. Trying to forecast the preferred returns on investment in today’s society would probably only give numbers of ‘the highest possible return’.

Jeremy Bentham wanted to quantify the ethics, so that we logically could eliminate undesirable alternatives. The undesirable alternatives were those which yielded a lower amount of happiness or pleasure. According to the systematic thinking of Bentham one should thereby give words such as ‘reasonable’ or ‘sound’ a more precise definition. This has to mean that one should create a scale for example of what is desirable - undesirable or reasonable - unreasonable. Many people probably react negatively to Bentham’s way of thinking, we might think – how on earth can we quantify ethics? Sometimes in moral dilemmas like the ones companies actually face when having used these words, they might surely wish for a common scale of what is right and wrong, enough or not enough. The fact is, that even though one might not think of it immediately, we do quantify. Tomas Brytting gave an example in the interview, about insurance companies and their scale of giving an injury a relation to the sum insured. Another example is how H&M in their code of conduct, requires that at least the legal minimum wage is paid to the employees of their suppliers. They also say that the minimum level is not recommended, but they accept it anyway.

One can also connect the reasoning about interpretation of words to the general moral standards of Hospers (1972). In Reason (point four of the standards), he mentions how we are likely to become the advise of following reason when being in a moral dilemma. Then what is reason, is it to follow the outcome of a logical discussion (look at the example of “..all acts committed indoors are right..”), or is it to do the most reasonable thing? Trying to find the meaning of words such as reasonable, good or adequate in Hospers’ way will not be easy. It is very likely that one gets stuck in a circle.

5.2.3.2 Religion

Johnson & Johnson write in their policy that they must respect the dignity, consider all employees as individuals, and provide equal opportunities for those with similar merits.

Nestlé writes that they shall “..offer opportunities for promotion based upon merit, irrespective of race, religion, sex or nationality.”

Unilever states simple and clear that they “..are required to employ and promote employees on the sole basis of qualifications and abilities…”

Giving these statements the companies must mean that they are prepared to employ anyone regardless religion, as long as the merits are good enough. Within ethical relativism we have discussed how ethics and moral may be conceived differently in different religious settings. A question that follows the statements of these companies, is whether they accept employees with other religions than the most common, to practice ethics and moral according to their beliefs. For example Nestlé states in the beginning of their policy that they must take religious practice into account. What does that mean? Does it mean that they are willing to accept an ethics sometimes changing? Since different religions not all the time share moral beliefs, one

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can say that the ethics is changing. Do they have any more discussions of what this might imply to the organization?

5.2.3.3 Law

Nestlé states in its policy about employees “...to offer competitive salaries and social benefits. Working hours, wages and overtime pay comply with applicable local laws and are in line with conditions offered by similar companies.” One can in this statement question the ethics concerning ‘applicable local laws’. If this is an ethical statement, it implies that something that is right in one country may be considered as wrong in another. Laws are by Hospers referred to as one of those moral standards that people tend to use as point of departure for making ethical judgements. Among others, he brings up the factor that the law is unique to every country and asks whether it would be morally right to do something at one side of the border and wrong on the other side?

Unilever clearly states that “Unilever companies are required to comply with the laws and regulations of the countries in which they operate.”

Many times following the law is seen as acting ethically. It is of course necessary to obey the law in the country in which the company operates, but in some cases following the law without reflection may be seen as acting unethically. The laws may sometimes contradict something good the company strives for. It is then important to raise one’s voice in some way or another to show that one is not supporting the law. However, as Socrates advocated, one should not break the laws, because it would imply that one acts against the whole community law system. Sooner one should try to change the laws. Referring to the interview of Furugård, one should try to act in accordance with what the company stands for as far as it is possible according to the law. Furugård gives the example of a company operating in China. The company has a policy saying that their employees have the right to organize labor unions. Labor unions are though contemporary prohibited by the Chinese law. If the company just followed the law they would act unethically and against their beliefs. However, the company could act ethically by letting the employees organize an association but in other forms than a union, which in a way cannot be restrained by the law.

In H&M’s policy concerning the conditions for the workers of its producer, they state that “..their requirements may not be limited to the requirements of the national law.” This may be seen as that they have a universal principle they want to follow, irrespective of country. As laws in some countries can be seen as inhuman they require their suppliers to go beyond them. Putting requirements such as these at their producers also demands a lot from themselves. H&M states that they have responsibility towards all the thousands of people taking part in the production of their garment. This can be interpreted as following the ethics of duty, having responsibility can be seen as a duty. If H&M feels the duty to make sure that the workers of their suppliers have good working conditions, they also have the duty to make it possible for the producer to take measures. Several of the requirements set up by H&M depend to a large extent upon monetary resources, for instance that the factory has to be free from pollution may require certain equipment. Other areas in the policy requiring monetary resources are for example: lightening, temperature, meals to the workers and wages. Higher costs imply a lower profit and it may perhaps not be possible to take measures if the producer is not paid

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more for what it sells. One may therefore wonder if H&M is willing to pay more for having a more ethical approach towards the workers of their producer? This may in turn imply a higher price on their products. Are they willing to take the risk of loosing customers? However, higher prices do not have to mean a loss of customers. Furugård gives four factors that influence customers: price, quality, service and confidence. He indicates that all these, not necessarily in mentioned order, influence customers in their choice of products. If H&M inform their customers about their conduct concerning the workers of their producer, people may feel a higher confidence towards H&M. This in turn may imply that people starts buying more clothes in order to support their ethical approach.

Nestlé believes that, as a general rule, legislation is the most effective safeguard of ethical conduct, although in certain areas, additional guidance to management and employees in the form of voluntary business principles, is beneficial in order to ensure that the highest standards are met throughout the organization.

Reading this, one gets the impression that Nestlé views ethics as a set of rules or laws that are to be followed strictly. We do not think that it is that easy. One cannot preview all the ethical dilemmas that one can be confronted with. It is sometimes very hard to know how one should perform in order to act rightly. Koskinen said in our interview that ethical policies should be seen more as ethical guidelines, more than ethical rules. He means that ethical policies are supposed to provide value more than just be seen as something that determine what is right and wrong. He further says that a policy is easily misinterpreted and should therefore be discussed frequently.

5.2.3.4 Universalism

H&M does for instance take up the aspect of child labor. Their statements about this are to a large extent grounded in the conventions of the United Nations and International Labor Organization. In search for a philosophical reasoning, one can look at the statement “If a child (…) is found working in any of the factories producing our garments, we will request the factory to make sure that the measures taken are in the child’s best interest”. Before this it is stated how they, in general, dislike using children in production, but as can be seen they are prepared to take special circumstances under consideration. Their reasoning relates to the reasoning of cultural and relative ethics. However as Magnus Furugård mentioned in the interview, it is not always the culture that forces a situation to take place, more likely it is the socio-economic situation. Children are not used as labor, because someone has decided it or because parents want their children to work. It is a requirement from the social setting in poor countries, as it is hard to make a family’s living without the children’s contribution.

Nestlé does in their policy point at how they offer cooperation with relevant parties in the aspect of child labor and education. They are against all forms of child labor and, they will never provide employment for children that not have completed their compulsory education. They make a very strong standpoint here, but on the other hand they also offer help to change the socio-economic situation. By their standpoint they seem to mean that it is a universal right to have a primary education. In our work with this thesis we have really understood that knowledge and education have strong influences of what ethics is about. A person with education and a broad knowledge of life will probably find it easier to have an ethical reasoning. This does not imply what Plato thought, that people high up on the social ladder

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tend to have higher moral principles the higher up on the social ladder they are. We do not mean, as Plato would do, that one is more morally correct just because one is able to have an ethical reasoning. Going back to Nestlé, their support of primary education for all children, might be a way of helping to increase the understanding of ethics in the long run.

Looking further into the policy of Nestlé they state that they do rely upon some universal principles. They say that they are “…aware of that increasing globalization is leading to the development of more and more international recommendations”. They have chosen to comply with the recommendations of International Labor Organisation and also The World Health Organisation. Doing this they have made their opinion clear, there are some universal values. Drawing this to the discussion of relativism, universalism and absolutism we had within the theoretical frame, this would still be denied out of the universal and absolute view. These recommendations have not always existed, neither the thoughts behind them. Today we might conceive them as highly universal and absolute, they are though not conceived as that theoretically. Something universal was according to the theory something consistent over time, if one is looking at it absolutely. However, there were those who believed in the universal without the necessity of being absolute. As Donaldson (1988) says if everything ought to be relative the strive for a common better world would be useless. Christian/Traber (1997) also believes in some universal principles, for example caring for children and the rule ‘don’t kill’.

Shell thinks they are obliged to respect the human rights, another principle, which could be held for universal. H&M does the same, they insist upon the importance that these principles are followed among their suppliers.

A deeply held universal principle nowadays, is the care for our environment. All the policies mention the importance that the business is conducted under prerequisites of a sustainable development. They are not supposed to overuse resources, they are aware of that not all resources are renewable, and therefore they have a responsibility of letting some of these remain for coming generations. Our interviewees all mentioned the importance that we have to live in alignment with the nature. Although environment is not stressed particularly in the theoretical frame, caring as a virtue do imply caring for the whole, not just for particular circumstances as environment.

5.2.3.5 Culture

Johnson & Johnson declares that they are responsible towards the communities where they live and work. Shell does in their turn recognize responsibility towards the societies in which they operate – they must contribute to a sustainable development. H&M states that they must follow the national laws in the countries where they are operating. Unilever also recognizes the laws where they are located, but they also say that their code must be practiced throughout the world. Nestlé mentions how they are committed to, among others, take cultural practice into consideration.

What just have been described must be seen as an awareness about the different cultures in which all the companies operate. According to Kukathas (Frankel-Paul/Miller/Paul, 1994) their awareness might lead to conflicts within the organization whereas when cultural differences prevail – moral conflicts often appears. However, Kukathas says himself that the

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reasons for moral conflicts in different cultures are not as dependent of fundamental values as many of us tend to think. He means that the reasons for conflicts more often are a lack of understanding for the differences. All mentioned companies do seem to have an understanding of the different cultural settings in which they work. In what sense conflicts arise they will depend on the depth of the understanding and the ability to adapt to the local requirements.

Furthermore one can discuss what culture is. In the theoretical framework culture is described as something shared within the community, some basic commonly held beliefs. Culture can depend on language, history, religion etc. Culture is one of the words not really easy to define. Both the theoretical framework and the interviewees, stress that culture is not something isolated - all people within what we normally term culture might not have the same moral values. There are differences within the cultures, which also have to be considered. Johnson & Johnson seem to have taken this into consideration as they talk about how they will treat all their employees as individuals - they must show recognition and respect their dignity.

Nestlé is more focusing on adapting to the local circumstances, they say that shall “promote a sense of identification to employees all over the world, apply a number of common rules while at the same time adapting the expression of these rules to local customs and traditions”.

5.2.4 Policy/Strategy & Stakeholders

5.2.4.1 Policy vs. Strategy

In the theory we have a part discussing how a policy can be interpreted in terms of objectives. Either such one can be seen as a strategic way of obtaining advantages, a way of having/doing good business or a way of combining them both.

Johnson & Johnson has their Credo, which must be seen as an internal guideline, they have chosen to communicate. They probably would like to really reveal the core values of the company to the public. Even though they use many of the words, which have no absolute definition - they give the words a meaning. One can almost sense the emotions behind. The credo gives the feeling of that the company in general strives to be good, they do not do it out of strategic reasons. Their stakeholders are defined, and have also been given different priorities – even though no one is considered to be unimportant. To relate to Gilbert’s (1992) reasons for a policy (strategy), which were ‘acknowledged influence of relationship with others’ or a ‘plan of purposeful action to achieve lasting benefits’, one can say that Johnson & Johnson foremost complies with the first reason. Applying different approaches to strategy, also proposed by Gilbert, the credo of J & J is rooted in all of them. Only having the Credo shows a commitment. Outside forces are considered through their definition of responsibilities towards the stakeholders. There is an interest for a lasting business through reasonable returns to investors, investments in equipment and the handling of present resources.

Looking at the case of Shell, their policy seems to have another intention than the one of Johnson & Johnson’s. This one focus more at what Gilbert defines as the second reason – ‘plan of purposeful action to achieve lasting benefits’. Now we know from other sources that Shell has an extensive work of maintaining the ethics within the organization, but only by

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reading this document one is not sure of that. Sometimes they use so many ‘good’ terms that one is prepared to believe it is too hard for a company to reach such levels of ethics. We found their policy at their web-site, where one also can find more precise descriptions of how they work to achieve certain goals. The relationship between this policy and the reasoning of Michael Porter and competitive strategies is intact. The policy is clearly formulated within the four cornerstones he proposes: strength and weaknesses, values by main actors, expectations of society, and opportunities and threats.

Nestlé’s policy does to a large extent focus on particularly hot topics, among others child labor, children as consumers and breast milk substitute for infants. Their policy can be seen as a conscious strategy of showing the attitude and position of the company. Although the content is what just was explained, it is not communicated in such a commercialized form. The document we have read is too long, and too unstructured to be a fierce marketing concept. The policy does not relate so much to the competitive strategy that Porter (1983) describes.

Looking at the example of H&M their code must be seen as a strategic action towards their suppliers and their subcontractors. In the media and the current debate, topics of child labor and wage have been vividly discussed and the code might also be an answer towards the critique imposed on the garment industry. H&M also says that they intend to audit the outcome of the policy among suppliers, they say that this is not only ‘talk’ to the public to improve their image, it is something they are willing to take to action. All our interviewees mentioned the danger in trying to give an ethical message without complying with it oneself.

Unilever’s policy could be a quick guide of the standpoints of the company. It looks more like a set of rules, than a set of guidelines. As a marketing tool it can be questioned, but it has one advantage in being brief and to the point.

Using Porter’s (1983) test of whether a competitive strategy is suitable or not, none of the policies we have studied can be put under the pocket lens according to the whole content of the test. Shell has perhaps the most commercialized policy and some aspects of it can be tested. Porter poses the question whether the objectives and plans take advantage of the opportunities in the line of business. As Shell mentions themselves they strive for “…participate in the search for and development of other sources of energy.” This must be considered in high correlation with the idea of Porter, which in a broader perspective guarantees the survival of the company. Another thing could be the consistency between the goals, Shell states under the point of Business Integrity that they do not accept any direct or indirect bribes. As of today it is consistent, but if they also had mentioned how they strive to adapt to local circumstances, bribes would perhaps be seen in another light. It would of course depend in what culture, but as Lennart Koskinen said in the interview, a bribe is not always a bribe, it could as well be a cost for a service. Drawing distinctive lines, like Shell in this case, might reduce some business opportunities.

5.2.4.2 Stakeholders

Reviewing the theoretical framework regarding stakeholders, several authors had defined stakeholders and issues, which were addressed to someone. We saw how Cannon (1994) defined ethics out of following perspectives: innovation, technology, people and markets.

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Donaldson/Werhane (1988) defined eleven points of ‘business ethics’ and Koskinen (1999) had also an enumeration of criteria for judging the ethics of a company. (See paragraph 3.5.3.1 to review the different authors).

The policies are addressed to different stakeholders, but some policies are directed towards a greater number of those.

Unilever states in the introduction to their policy that they “enjoys a reputation for conducting its business with integrity and with respect for the interest of those our activities can affect.” They make a more descriptive definition and say that they will care about making a profit, customers, employees, shareholders, suppliers and the communities where they do business. Nestlé says that their “..business objective and that of management and employees at all levels, is to manufacture and market the company’s products in such a way as to create value that can be sustained over the long term for consumers, employees, shareholders, business partners and the large number of national economies in which Nestlé operates.”

H&M says “in order to make our position clear to our suppliers, our own staff, as well as any other parties we have set up a code of conduct.” The workers of the suppliers are the principal interest, but if one looks deeper into the policy particular interest are directed to specific groups such as children and women.

Shell brings up the question of stakeholders through defining to whom they have responsibilities - accordingly it is towards shareholders, customers, employees, those with whom they do business and society.

Johnson & Johnson point their interest to those using their products and services, employees, customers, communities and stockholders.

We find it relevant with the definition of stakeholders, but we are surprised that the policies in general not is more addressed to these. The policies of Johnson & Johnson and H&M have a consequent approach and structure, while the other policies do not in the same sense comply with the original definition of stakeholders. Regarding the thoughts from the literature, these are, as well, rather unstructured as they give a variety of different definitions mixing pure stakeholders with issues of interest. If the policies are intended to give guidance internally and to communicate the ethical approach of companies externally, we do believe that these policies are not as effective as intended. For instance, the policy of H&M is very narrow regarding stakeholders, and it is also very specific to its general character. We believe the policy to be effective in its perspective, but it does in no sense cover the whole of what ethics can imply. Due to the narrow perspective it almost seems like some stakeholders are forgotten. H&M do themselves state in the introduction to the policy that they must take all those contributing to their success into consideration. We question ourselves whether solely the mentioned stakeholders can constitute those contributors?

Johnson & Johnson’s policy is very consistent to its matter, it really considers those stakeholder previous mentioned. However, as we conceive it and regarding the theoretical framework some possible stakeholders are forgotten. For example, environment could be mentioned as a stakeholder. The policy of Unilever addresses some stakeholders, also mentioned in the literature, but on the other hand they tend not to bring those up within the

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actual guidelines. Shell has distinguished some major areas of interest, but the way how they present these, in connection to their general principles, is quite unstructured. Nestlé seems firstly to follow their original definition of stakeholders, but we do for example miss a discussion regarding shareholders.

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6 CONCLUSIONS & RECOMMENDATIONS

In the conclusion we will go back to the research questions and discuss the answers upon them. However, we have to a large extent answered to the first question in the theoretical framework and in the interview part, but as the both questions are highly related, the conclusion will be based upon both the questions together.

6.1 RESEARCH QUESTIONS & ANALYSIS

Concerning the first research question, the interviewees did to a large extent confirm the factors we found in the literature. However, although the interviews brought up a lot of what have been mentioned in the theoretical framework, it provided another perspective of ethics, a more human one. The interviewees spoke often in a way that made it easier to understand the ethical theories. They used examples in every day life and in business that were easy to comply with. They put other words on the theories than those words commonly used in literature. When we analyzed the policies we got further confirmation of the different factors we had found in the literature. We could discern most of them, in some way or another, within the policies. As the ethical policies in our study are seen as ‘the reality’, it is a confirmation of high importance to discern them in the ethical policies.

Here are the conclusions of the most important factors that we have found in the literature and which were discerned within the ethical policies:

There were several main streams that came back in many of the books studied. The old Greek philosophers such as Aristotle, Socrates and Plato appeared often, regardless, if the books were concerned with general ethics or business ethics. We have really understood their importance for the origin of the ethical theories, but also their strong influence on contemporary ethics. Aristotle is for example seen as the first philosopher bringing up the importance of virtues in ethics. In our analysis of the policies we saw that the virtues played a major role in many of the policies. They generally express what the company stand for in ethical issues and can therefore be seen as the ethical characteristics of the company.

Concerning the two main philosophical approaches within modernism, teleology and deontology, one can mainly discern a deontologic approach within the policies we have scrutinized. The principles/guidelines/rules within the policies are commonly designed in a way that indicates how the company should behave. One gets the impression that they will act according their principles, because it is their duty to do so. On the other hand, the teleological approach is to be distinguished in the aim of the companies, which most often is to maximize profit in one way or another.

Ethics from a relative view finds expression in the policies when companies use words

such as adequate, reasonable and good. Stating that factory time should be limited to a reasonable level (Nestlé’s policy) does not say that much. Reasonable overtime may for someone mean one hour per day, whereas for another four hours per day. In those cases, which the company chooses to use these quite vague words, it is important that discussions

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are brought up for each new project or new situation, so that everybody agrees about what exactly is ‘reasonable’.

The relative approach can also be seen in the companies’ considerations of different cultures. The consideration of culture is often expressed by statements such as that the company will adapt to local circumstances. However, we wonder to what extent the companies are prepared to adapt. One must not forget that many companies have a strong corporate culture and in order to maintain it, the company can probably not adapt too much to local conditions, since they might lose parts of their image.

Universal values are expressed to a large extent concerning employees’ rights. The respect of the individual irrespective of sex, cultural, ethnical and social background is often stressed. Another issue, commonly mentioned from a universal perspective, is concerning child labor and those children’s rights. The point in common, all the universal principles in the policies have, is that they have the United Nations’ declaration for human rights as a base.

Many of the companies state the interrelationship between acting ethically and achieving

the goal of a maximized profit. From this point of view the ethical policy can be seen as a strategy, with the purpose of making it possible to achieve the set objectives. If the ethical policy is to be regarded as a competitive tool, the company really has to communicate it externally. However, there is a danger using it as a competitive tool, since the ‘real’ purpose of the policy easily is lost. The purpose should not be just to show the ethical behavior, rather to be ethical. If being ethical then contributes to success and a better competitive position, it is of course nothing wrong with that.

Regarding stakeholders many of the companies have mentioned some in their policies. However, we do not believe that these are all those with interest in the company and we do not believe that these are well enough considered within the actual guidelines. From the theoretical framework we understand that the perception of possible stakeholders can differ, but that does not make it less important to really consider those distinguished stakeholders. It does not either make it less important to really reflect over what kind of parties that are affected by the company and their business.

6.2 GENERAL THOUGHTS

We have not found any reason to why a policy not could be of commercial purposes, as long as there is something behind. A commercialized ethics requires the company to stand for it, to really practice it. Just saying without doing is not worth much. At the same time we are saying this we must be aware of that the sometime necessary change requires time. Being ethical ‘just like that’, must not be the requirement, sooner we must require that there is a will, a strive for being ethical. That ethics sometimes also can be relative to its matter fortifies such reasoning. We fully agree to what Tomas Brytting said about that we have to allow people to be happy in themselves, we must not require either humans or companies, to be self-destructive. It sounds very reasonable that each one in this world is responsible for the individual room of action.

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Today we might not think so much about relativism - the universalism is more obvious due to the global world in which we all live. All distances are shorter, it is so easy to come in contact with each other, so easy to learn about what is happening in other parts of the world. Doing this we might conceive that we have some common opinions worth striving for. However, differences among people in different cultures or with different religious beliefs still exist. Are we just going to neglect them or actually try to take advantage of the diversity? The diversity might not be unethical, it might just imply another way of viewing things. Managing through diversity is also one of the most currently debated managing principles. In Sweden we have recently got a new law regarding discrimination, and along with that many actors discussed what possibilities that would appear having a working force with a multicultural background.

Currently there is a debate around ethical funds in Sweden. We have during this work, heard comments about and seen commercials for a company called KPA. This company claims that they only invest in ethical companies, to be more precise they say they make ethical investments. We thought of this as a good initiative, but we have come to change our opinion. One day one of us received a letter, which was supposed to create an interest for KPA. We could from this letter get information about on what grounds KPA makes their investments. These grounds were basically that the potential objects for investments not should produce certain products, and that they had to minimize their environmental impact. We certainly miss a reasoning of how companies act. A company can produce a ‘good’ product without acting good – i.e. acting unethically. We find it very arrogant to say that their investments are ethical, as they make the perspective of ethics so narrow.

6.3 RECOMMENDATIONS

6.3.1 Our own model of ethics, policies and stakeholders

In this part we have been inspired by theories of Porter (1983) and Koskinen (1999). The reasoning have some similarities, but we conceive the reasoning as our own.

We have discussed definitions of ethics and we have tried to give a view of what ethics can mean. Doing this we have had the literature and our interviewees as sources. Basically we think that ethics comes out of what we are, or in the business perspective what companies are.

Being good or being evil is linked to ‘the human approach’. A human approach can be characterized by ethical virtues, such as reliability, caring, honesty, justice, and fairness. In our model these are to be found within the soul of the company. The company soul can be compared to the human soul, it can be seen as constituting the deepest values and the emotional life of the company. If a company has an ethical approach, the soul will to a high extent be permeated of virtues that will influence the actions towards the different stakeholders. We have through our work found several proposals of how stakeholders could be classified and we have viewed different ways of doing it in the policies. By looking at them all, we tried to get a classification in a consistent manner and that took all possible stakeholders of a company into consideration.

The stakeholders we identified were employees, owners, market, society, development, production and environment. Some of these are more clearly and easily understood than

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others, such as employees and owners. Development and market might be harder to grasp. We have defined ‘market’ as the place where a company face its customers, competitors and possible cooperators. We conceive these actors as being highly linked to each other, so we did not want to split them up in separate perspectives. The ‘development perspective’ can be understood in two senses, either in a future perspective or in a research perspective.

The companies do often enumerate the different stakeholders in the beginning of the policy and do also commonly mention the virtues of the company. A deficiency that can be found in several of the policies is that the companies have a tendency to not bring together the virtues and the stakeholders throughout the whole policy. They even neglect some of their stakeholders within their principles.

When the company develop their ethical policy, our recommendation is that they should take all their stakeholders into consideration. The company should have the company virtues in mind and think about how they would like the virtues to appear in their acting and business activities concerning the different stakeholders. Other things to think about are the other factors that we have taken up: philosophical view, relativism, universalism and culture, to mention some. We stress particularly to really have the ethical thinking in mind. Within the policies we have analyzed, we got the impression that the companies sometimes forget the ethics behind the principles. As we mentioned before we think that the policies mainly have a deontologic approach and one could pose the question why the teleological approach only is aiming at profit-maximization. The companies could for instance, have as an objective to contribute to the joy of life for the employees. As it is in the policies we have scrutinized, the caring of the employees is expressed more as a duty than as an aim in itself. We advocate a postmodern view with both teleological and deontological thinking.

It is of high importance that the companies realize that designing a policy takes time, it is not done during one day. The ethical policy should be the result of ongoing discussions within the company as well as with the stakeholders outside (there of the arrows in the model). A conclusion that we have made during this work is that ethics is not an easy subject and to make it possible to state what is right and wrong, good and evil, one has to discuss. However, since there is no absolute truth about what is right and wrong, good and evil, it is very important that the policy is scrutinized and criticized frequently from both extern and intern sources so that necessary changes can be made.

It is difficult to know whether a policy should be specific or more relative to its character. We think it depends a lot of what issue it may concern. Taking the example of H&M their policy towards the workers of their supplier is very specific designed and resembles more a set of rules than guidelines. However, we think that in this case it may be good, since it deals with conditions which probably in many cases have to be changed drastically and therefore it is not enough with only guidelines. Generally we think that a balance between being relative and absolute is the best way. In both cases it is critical that the issue concerned is brought up to discussion. A principle of absolute character has to be discussed in order to assure that what is decided to be right or wrong really should be stated as that. A principle of relative character has to be discussed in order for one to know what it really means.

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6.3.1.1 The Human Approach model

Figure 1: A Human Approach - Björklund/Stålhammar 1999

With a defined set of virtues the company has expressed its’ soul. Relating the soul to each perspective gives meaning to it. The meaning must always be exposed to a dialogue and the meaning can be expressed in a policy.

All the perspectives of our model interrelate with each other in some way, but they also stand for something in themselves. The most important is that the combination of those perspectives constituting the spectrum a company work in, the spectrum to which the company is responsible. The small arrows we have drawn in the model should represent the ethical policy of a company. We think an ethical policy should be seen as a standpoint of attitude towards different stakeholders. In the policy a company can state some requirements, but we also think they should reveal their goals and intentions. Trying to root the policy in the different perspectives will make it stronger and increase the incentives for abide by it. If there is a continuous dialogue or discussion, the question of what is ethical can be elucidated. Of course a written policy cannot express an ongoing dialogue, but it can explain and make the understanding of different statements more profound.

If a company stands in front of designing an ethical policy or if they discuss their current, we think that they should have a look at this model. This model helps in defining a human approach.

6.4 PROPOSALS FOR FURTHER RESEARCH

The subject of ethics is very wide, for us it seems almost endless. There are so many angles to view a problem from, so many other subjects to which one can apply ethical thoughts. Ethics is also something that always will be of interest, one could say that as long as there are humans, ethical thoughts will exist.

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Our proposals for further research are:

6.4.1 Financial impact of ethics

An interesting topic to study could be what impact ethics has financially for a company. Does a company with high ethical standards have higher costs, than if it would not act ethically? However, this may not imply a problem as long as it is compensated with higher revenue. Ethical acting, when communicated, may have a positive impact on consumers and thus increasing the company’s revenue.

- What is the financial impact of ethics?

6.4.2 Image

How does ethical behavior of a company affect its’ image? How do consumers perceive a company having a strong ethical approach? Do they care at all, or does it actually have a positive impact?

6.4.3 Communicating ethics

During our interviews, the importance of communicating ethics to the personnel and especially to discuss it, was often stressed. We thought it would be of high interest to see how the ethical policies of companies are practiced. When we phoned the companies asking for ethical policies, several of the information managers were not sure about if they had a policy or not. Surprisingly they did in some of those cases have a policy. It appeared to us very odd that the information manager did not know. If he / she did not know, which possibilities were there that other employees would have knowledge about the ethical policy? We posed ourselves the question what the purpose is, if not the ethical policy is communicated to the employees.

- How do companies communicate their ethics in the organization and how do they make sure that it is observed?

6.4.4 Fair Trade

When doing our research we have read a lot about the organization Fair Trade in articles and over the Internet. One article (Etik och Affärer, no 2, 1999) brings up the disagreement between some companies and ‘Fair Trade’ regarding the ethical way of acting. Fair Trade works for better conditions for poor workers in the third world. They have developed a set of standards and a model of code of conduct that the companies should require that their producers follow regarding their workers. Fair Trade makes agreements with companies of looking after the producer’s implementation of the code of conduct. The products produced under fair trade conditions are then marked with the standard ‘Fair Trade’. Some companies do however think that this is a drawback of acting ethically. The companies are of the opinion

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that Fair Trade works according to, too many rules and that the ethical work therefore gets very restricted and inflexible. The companies argue that they could act more ethically by doing it themselves. They do not think that ethical standards are a good solution for acting ethically.

- Are ethical standards a good solution for acting ethical?

With this as a base we think that it would be interesting to investigate whether Fair Trade’s work is the best way of working if one wants to work as ethically as possible? Their methods and thoughts behind could be studied, as well as the ethical work of companies regarding ethics. A comparison could then be made to see the differences of the methods, and if one of them seems to create more ethical value.

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7 EVALUATION AND CRITIQUE OF THE THESIS

The quality of research is very important and in this part we will evaluate our study

Being able to see the traps, the problem areas within one’s own work is very important. By having this knowledge one can argue against possible misunderstandings, misinterpretations etc. Leininger (1994) emphasizes the need of using qualitative evaluation criteria when doing research according to qualitative/hermeneutic methods. She states that very often, quantitative criteria as validity and reliability are used for explaining and justifying the findings. This reflects according to her opinion “..a lack of knowledge of different purposes goals and philosophical assumptions of the two paradigms.” (p. 96) Further she suggests six criteria to be used in supporting and substantiating qualitative methods. The criteria are:

Credibility – refers to the ‘value’ or ‘believability’ of the findings that have been established by the researcher through prolonged observations, engagements, or participation.

In our case the truth or value depends to some extent of the literature we had read to draw up the theoretical framework of the thesis. The literature can be given special attention, but our primary sources also deserve to be evaluated. Holme/Solvang (1997) state four points that one could follow when scrutinizing the sources one has used. They are:

- observation- origin- interpretation- usefulness

Observation of sources refers to the process of finding relevant material for the thesis. It is very important to get an overview of the existing sources before choosing which to use. When we looked for literature we used the database Libris which among others includes all the libraries in Stockholm. In this way we got an overview of the existing books within the subject we aimed to study. However, there is an abundance of literature in the field of ethics and business ethics and it is therefore difficult to know how to make one’s choices. Since general ethics is a subject that deal with fundamental human values and can be derived all the way back to Aristotle, some thoughts can be seen as independent of time. Therefore, we think that it could be of importance to not just have recent literature. Instead we chose books within a wide spectrum of time. Concerning the literature about business ethics, most of the literature found was from the nineties. Since business is a very dynamic and altering area, we thought it also most relevant to use relatively new sources.

Regarding the choice of interviewees we have chosen well-known persons that we have heard much about from several sources: university, media, past thesis papers and literature. One can argue that we could have performed interviews with companies instead or we could have made a combination of both. Our defense is that we did not want to be influenced by the companies that we were going to analyze, since their statements could be biased. We also thought our chosen interviewees to be more competent within the field since they have

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worked with plenty of companies’ policies and therefore also have seen a great variety. The philosophical aspect was also considered to be easier to discuss with our interviewees.

The choice to interview three persons may be seen as narrow, but we thought that they would be very competent and to provide insightful perspectives on the subject which would give us a sufficient understanding.

Origin: in deciding the origin of the sources, the main question concerns if the sources are falsifications or real. We consider this as very difficult to know, but we have high confidence in the libraries we have collected our literatures from and therefore considered our sources obtained from there as real. Concerning the ethical policies it is almost impossible that the policies would have come from another origin than is written on the document.

Interpretation: The interpretation is about how we have interpreted the sources, their general meaning, and the intention the sources have. Since we have made a wide literature study, we think, that has helped us understand the context of what the authors have tried to convey. Discussing what we have read has also been strongly contributing to the interpretation of the material. We feel that we have understood the literature correctly.

Usefulness: Is it possible in a real way to understand and render the events, which are described by the source? In some cases we have first rendered something from a book, but later on during the research found that it is unnecessary and therefore excluded it. During the research we have always questioned if the material is relevant to support the purpose. There were one or two books that have been very difficult to understand which we have chosen to exclude.

Confirmability – refers to the repeated direct participatory and documented evidence observed or obtained from primary informant sources.

We feel we have reached or faced confirmability in our research. Our interviewees have confirmed the understanding, which we got from the literature studies. Many of the factors brought up in the theories and interviews, were found in the ethical policies.

Meaning-in-context – refers to data that have become understandable within holistic contexts or with special referent meanings to the informants or people studied in different or similar environmental contexts.

We did not chose persons representing the companies we collected policies from, as they could not be looked upon as completely objective. Ethics is to a certain extent about subjective opinions, and their professions and experiences would probably influence them to a large extent. Our interviewees can neither be seen as completely objective, but we imagined them to be less subjective as they do not have a relation with the policies in question. Regarding the environmental context from the interviews, we let the informants choose the location for the interview in order to make them feel more comfortable.

Recurrent patterning – refers to repeated instances, sequence of events, experiences, or lifeways that tend to be patterned and recur over time in designated ways and in different or similar contexts.

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In the interviews, there were often opinions that could be compared to similar thinking in the literature. However, we did not search for any particular pattern, rather for different perspectives.

Saturation – refers to the full taking in of occurrences or the full immersion into the phenomena in order to know it as fully, comprehensively, and thoroughly as possible.

Business ethics, or especially ethics in general are extremely diverse subjects, we believe it is almost impossible to reach saturation within this field. We have though tried to take every opportunity to learn about it as much as possible. We have looked in the newspaper for articles that could have a connection to our research, and we also got new angles of approach by discussing ethics with the people around us.

Transferability – refers to whether particular findings from a qualitative study can be transferred to another similar context or situation and still preserves the particularized meanings, interpretations, and inferences from the completed study.

The parts of the thesis referring to ethics and business ethics could as well be relevant in other contexts. For example, could they act as a background for discussions about business ethics in companies and organizations.

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8 LIST OF REFERENCES

8.1 PUBLISHED SOURCES

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Cannon, T., Corporate Responsibility, London: Longman Group Ltd, 1994.

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Cowton, Chrisp, Business ethics – perspectives on the practice of theory, New York: Oxford University Press, 1998.

Davidsson, B. Patel, R., Forskningsmetodikens grunder, 2nd ed. Lund: Studentlitteratur, 1994.

Donaldson, T., Werhane, P., Ethical issues in Business – a philosophical approach, Englewood Cliffs: Prentice Hall, 1988.

Frankel Paul, E., Miller, F., Paul, J., (ed.) Cultural Pluralism and Moral Knowledge, Press Syndicate of the University of Cambridge, 1994.

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Gilbert, D., The Twilight of Corporate Strategy, New York: Oxford University Press, 1992.

Harvey, B., Business Ethics – A European Approach, Hertfordshire: Prentice Hall, 1994.

Hearn, T.K., Studies in Utilitarianism, New York: Meridith Corporation, 1971.

Heller, Agnes., General Ethics, Oxford: Basil Blackwell Ltd, 1988.

Hermerén, G., Det goda företaget, Arlöv: SAFs förlag, 1989.

Hollis, M., The philosophy of social science, Cambridge University Press, 1994.

Holme, I.M., Solvang, B.K., Forskningsmetodik – om kvalitativa och kvantitativa metoder, Lund: Studentlitteratur, 1997.

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Hussey, J., Hussey, R., Business Research, Macmillian Press Ltd, 1997.

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Kitson, A., Campbell, R., The ethical organisation, London: Macmillian Press Ltd, 1996.

Koskinen, L., Etik, ekonomi och företagets själ, Stockholm: Bokförlaget Prisma, 1999.

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Leininger, Evaluation Criteria and Critique of Qualitative Research Studies. Morse, J.M. Critical Issues in Qualitative Research Method, Sage Publications, 1994.

Lekvall, P., Wahlbin, C., Information för marknadsföringsbeslut, Göteborg: IHM Förlag, 1993.

Merriam, S., Qualitative Research and Case Study Applications in Education, San Francisco: Jossey-Bass Inc. Publishers, 1998.

Paul, Miller, Paul, Cultural Pluralism and Moral Knowledge, Press Syndicate of University of Cambridge, 1994.

Porter, M. E., Konkurrens strategi, 2nd ed. Göteborg: ISL Förlag, 1983.

Slote, M., Goods and Virtues, Oxford: Clarendon Press, 1983.

Trost, J., Kvalitativa Intervjuer.Studentlitteratur. Lund, 1993.

Wiedersheim-Paul, Att utreda, forska och rapportera, Liber Ekonomi, 1991.

8.2 OTHER WRITTEN MATERIAL

Business Principles, Unilever Group

Career Opportunities in Europe – Johnson & Johnson.

Etik och affärer, no. 2, Apr-May 1999, Caring Company.

Nestlé Corporate Business Principles

Remneland, B., Business Ethics as a Strategic Choice, Master thesis, Handelshögskolan i Göteborg, Fall 1998.

Rapport om uppförandekoder och oberoende kontroll, maj 1998. Fair Trade Center.

www.fairtradecenter.a.sewww.hm.comwww.shell.com

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http://www.shell.com/

http://www.hm.com/

http://www.fairtradecenter.a.se/


www.unilever.com

8.3 INTERVIEWS

Brytting, Tomas., Associate professor at the Center for ethics and economics at Stockholm School of Economics. 1999-05-20

Furugård, Magnus., Managing Director of Caring Company. 1999-05-18

Koskinen, Lennart., Priest and ethical consultant. 1999-05-25

8.4 SEMINARS

Koskinen, Lennart. Seminar Akademibokhandeln, 1999-04-24

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