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Laurent Ledoux 1 ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations Laurent Ledoux – 0478.

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1 Laurent Ledoux 1 ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations Laurent Ledoux – (www.philoma.org)

2 Laurent Ledoux 2

3 3 Ethical Imagination: when managers must choose between « right » & « right »1 Regulatory Innovation: when a multitude of actors interact to enforce CSR2 Contents Adaptive leadership: when leadership is required to adress conflicts in peoples values3

4 Laurent Ledoux 4 Cas 1 – Lee Pinto et le nouveau modèle automobile Que feriez-vous à la place de Lee Pinto ?

5 Laurent Ledoux 5 What did Lee Iacoca, CEO of Ford ? What does the 1974 Ford Pinto scandal teach us about CSR?

6 Laurent Ledoux 6 What would you do if you were Steve Lewis? Would you go to the meeting or not ?

7 Laurent Ledoux 7 Become who you are (Friedrich Nietzsche) Feelings?Roots? Future?Imagination? Who am I? Source: Badaracco (1997); adapted by Ledoux Steve Lewis possible questions

8 Laurent Ledoux 8 Cas 4 – Edouard Sakiz & la nouvelle pillule abortive Qui est lorganisation ? Ai-je fait tout ce qui était en mon pouvoir pour consolider ma position et la force et la stabilité de mon organisation? (Ne pas prendre de décision qui expose directement lorganisation ou confronte directement le président du CA de Hoechst) Ai-je pensé de manière créative et imaginative quant au rôle sociétal de mon organisation et aux rela- tions avec ses stakeholders? (Orchestrer un débat public entre les différents stakeholders) Dois-je jouer le rôle du lion ou du renard? (Organiser un vote au cours duquel il vote pour la suspension de RU 486) Ai-je fait tout ce qui était en mon pouvoir pour trouver le juste équilibre, tant sur le plan éthique que pratique ? (Obtenir la mise sur le marché de RU 486 – son intention – sans avoir du exposer son organisation) Léthique résulte de la tension inévitable entre Vertu & Virtu (Aristote & Machiavel) Source: Badaracco (1997); adapté par Ledoux

9 Laurent Ledoux 9 Questions to think «individual» dilemmas – Steve Lewis case Become who you are (Friedrich Nietzsche) How do my feelings and intuition define, for me, the ethical dilemma? (To respect oneself or to be loyal – loyal to whom?) Which of the values that are in conflict are most deeply rooted in my life and in my community? (To consider the dilemma as his parents son) Looking to the future, what is my way (not the way of others)? (To become partner in an investment bank) What combination of expediency and shrewdness, coupled with imagination & boldness, will move me closer to my personal goals? (To go to St Louis but to participate to the presentation) Who am I? Source: Badaracco (1997); adapted by Ledoux

10 Laurent Ledoux 10 Ethique, au sens premier: manière de s'orienter dans un milieu, de se situer dans un environnement Une éthique est la doctrine dun art particulier de vivre la « meilleure » vie possible (par ex. de vivre heureux) et des moyens daccès à cette fin (Marcel Conche, philosophe) Variations sur le mot « éthique » et distinction avec la « morale » Ethos, en grec: la coutume, l'habitude, la façon de se comporter dans un milieu Ethics is a human activity. The purpose of ethics is not to make people ethical; it is to help people make better decisions (Marvin Brown, author & ethics consultant) Une morale est un ensemble dimpératifs (commandements et interdictions) quune société ou quune communauté se donne et qui enjoint ses membres de conformer leur conduite, «librement» et de façon «désintéressée», à certaines valeurs, permettant de distinguer ce qui est le bien ou le mal.

11 Laurent Ledoux 11 An ethos is the doctrine of a particular art of living the best possible life and the means to pursue this aim (i.e. to live happily or to search for truth) (Marcel Conche, philosopher) Variations on the word « Ethics » « Ethos » in Greek: custom, habit, way of behaving in an environment The primary meaning of «Ethos» or «Ethics» has therefore to do with: making your way,positioning yourself in an environment Ethics is a human activity. The purpose of ethics is not to make people ethical; it is to help people make better decisions (Marvin Brown, author & ethics consultant) A morality is a set of duties and imperatives (positive or negatives) that a society or a community gives to itself and which enjoins its members to conform their behaviour, «freely» & in an «unselfish» way, to certain values enabling to distinguish right & wrong.

12 Laurent Ledoux 12 Sources possibles daides à la décision Chartes éthiques & Mission statements Obligations légales Valeurs & heuristique Principes ou règles morales & éthiques

13 Laurent Ledoux 13 Potential sources to support ethical decision-making Codes of conducts & Mission statements Legal duties Heuristics («sleep-test» rules) Moral or ethical principles

14 Laurent Ledoux 14 Donnés Fixes et consistents Émergeants de processus individuels Adaptables & reactifs aux circonst. Orientation résultats Faire le bien, ce qui est bon Orientation principes Bien faire Ethiques des vertus Ethiques de développement Ethiques déontologiques Ethiques téléologiques Catégorisation des « théories » éthiques et des principes/questions qui en découlent Source: Fisher & Lovell (2003); adapté par Ledoux

15 Laurent Ledoux 15 Institutional structure Fixity & consistency Individual processes Adaptability & responsiveness Results Doing good Principles Doing right Virtue Ethics (Aristotles, Gilligan,…) Development Ethics (Etzioni, Covey,…) Deontological Ethics (Kant, Rawls,…) Teleological Ethics (Bentham, Mill,…) A framework for ethical theories Source: Fisher & Lovell (2003); adapted by LL

16 Laurent Ledoux 16 Quick-test éthique de Texas Instrument (2001) Laction est-elle légale ? Laction est-elle compatible avec nos valeurs (de TI) ? Si vous la réalisez, vous sentirez-vous mal ? Comment laction sera-t-elle présentée dans les journaux ? Si vous pensez quelle soit mauvaise, ne la faites pas ! Si vous nêtes pas sur, demandez. Persistez dans votre demande jusquà ce que vous obteniez une réponse.

17 Laurent Ledoux 17 The Texas Instrument Ethics Quick Test (2001) Is the action legal? Does it comply with TI values? If you do it, will you feel bad? How will it look in the newspaper? If you know its wrong, dont do it! If youre not sure, ask. Keep asking until you get an answer.

18 Laurent Ledoux 18 Suez code of ethics Questions to ask yourself in front of an ethical dilemma Is it conform to the law ? Is it conform to the ethical code and values of my company ? Am I conscious that my decision can engage other people in the company ? Do I feel alright with my decision ? What would the colleagues think about my decision ? What if it would be published in a newspaper ? What would my family think about it ? What if everybody would do the same ? Should I question the person in charge of deontology ?

19 Laurent Ledoux 19 In order to develop the Groups ethics & compliance Follow the Groups ethical principles Act according to the laws and rules Nurture a culture of integrity Be loyal and honest Respect others Suez code of ethics

20 Laurent Ledoux 20 Filtre de 12 tests pour valider ou rejeter un projet de décision Posez-vous ces questions vis-à-vis de la décision que vous voulez prendre 4. Test des vertus. Votre décision facilite-t-elle la vie bonne au travers dun équilibre entre justice, bienveillance ou autres vertus ? 5. Test de transparence. Vous sentiriez-vous bien ou mal si dautres (amis, famille, collègues) étaient mis au courant de votre décision ? Ethiques déontologiques 6. Test de l universalité ou impératif catégorique. Serait-ce une bonne chose si ma décision devenait un principe universel applicable à toute situation similaire, y compris pour moi-même ? 7. Test du voile dignorance ou règle dor. Si jétais à la place de ceux qui seront affectés par ma décision, la regarderais-je positivement ? Ethiques de développement 8. Test de l intérêt communautaire. Ma décision va-t-elle aider les membres de ma communauté à se développer éthiquement ? 9. Test d intérêt personnel. Ma décision va-t-elle servir mes propres intérêts ou valeurs ? Ethiques téléologiques 12. Test utilitariste. Les conséquences anticipées de ma décision sont-elles positives pour le plus grand nombre ? 10. Test de qualité du débat. Le débat qui a conduit à ma décision a-t-il été bien mené ? Les personnes appropriées ont elles été impliquées ? Pourrais-je justifier le processus suivi devant un jury dexperts ? 3. Test hédoniste ou intuitif. Ma décision correspond-elle à ce que me disent mes tripes, avec mes valeurs ? Me fait-elle me sentir bien ? Codes de conduites propres à lorganisation Obligations légales 2. Test organisationnel. Ma décision est-elle en ligne avec le codes de conduite ou éthique de mon organisation ? 1. Test légaliste. Ma décision est-elle en ligne avec la loi ? Ethiques des vertus +/-VétoDéclic Respect de principes éthiques Heuristique basée sur lintuition ou sentiment 11. Test conséquentialiste. Les conséquences probables de ma décision sont-elles en ligne avec mes intentions ?

21 Laurent Ledoux 21 Ask yourself these questions concerning the decision you wish to take 4. Light-of-day test. Would I feel good or bad if others (friends, family, colleagues) were to know of my decision and action? 5. Virtuous mean test. Does my decision add to, or detract from, the creation of a good life by finding a balance between justice, care and other virtues? Deontological ethics 6. Veil of ignorance/Golden Rule. If I were to take the place of one of those affected by my decision and plan would I regard the act positively or negatively? 7. Universality test. Would it be a good thing or a bad thing if my decision and plan were to become a universal principle applicable to all in similar situations, even to myself? Development ethics 8. The communitarian test. Would my action and plan help or hinder individuals and communities to develop ethically? 9. Self-interest test. Do the decision and plan meet or defeat my own best interests and values? Teleological ethics 11. Utilitarian test. Are the anticipated consequences of my decision and plan positive or negative for the greatest number? 12. The discourse test. Have the debates about my decision and plan been well or badly conducted? Have the appropriate people been involved? 3. Hedonistic or intuitive test. Does my decision correspond with my gut feeling and my values? Does it make me feel good? Corporate credos & mission statements Legal duties 2. Organisational test. Is my decision in accordance with my organisations rules of conduct or ethics 1. Legalist test. Is my decision in accordance with the law? Virtue ethics +/-Veto Respect of ethical principles Heuristics 10. Consequential test. Are the anticipated consequences of my decision and plan positive or negative? 12 tests filter to validate or reject a decision Trigger

22 Laurent Ledoux 22 Who are we ? What are the other strong, persuasive, competing interpretations of the situation or problem that I hope to use as a defining moment for my org.? (To understand that, for Walters, the basic ethical issue was irresponsibility: McNeils for not pulling her weight & his for not taking action) What is the cash value of this situation and of my ideas for the people whose support I need? (Refine his message and shape it to the psychological & political context in which he was working, in terms of raising productivity or improving recruiting) Have I orchestrated a process that can make the values I care about become the truth of my organization? (After hiring McNeil, to start quickly to let her & her work known to his bosses & to campaign for a more family-friendly workplace) Am I playing to win? (To take swift actions to counter Walters: While Adario was out of the office, she worked with one of the bosses to swiftly resolve McNeils issue) Truth happens to an idea. Its verity is in fact an event, an idea (William James) Questions to think «internal» dilemmas – Peter Adarios case Source: Badaracco (1997); adapted by Ledoux

23 Laurent Ledoux 23 What would you do if you were E. Sakiz ? What does the RU 486 (1982) case tell us about CSR ? Questions to think «internal» dilemmas – E. Sakizs case

24 Laurent Ledoux 24 Questions to think «societal» ethical dilemmas – Edouard Sakiz case Who is the organisation? Have I done all I can to secure my position and the strength & stability of my organization? (To refrain to take decisions that could expose directly The organization or to confront the BoAs president) Have I thought creatively & imagina- tively about my organizations role in society & its relationship to its stakeholders? (To orchestrate a public debate among the different stakeholders) Should I play the lion or the fox? (To organize and support a vote that will trigger a massive counter-reaction from other actors) Have you done all you can to strike a balance, both morally & practically? (To market the new drug without endangering the organization) Ethics result from the inescapable tension between Virtue & Virtu (Aristote & Machiavel) Source: Badaracco (1997); adapted by Ledoux

25 Laurent Ledoux 25 Commonalities & divergences between the 4 case studies Right vs. Wrong (moral choice) Right vs. Right (ethical dilemma) Complexity Who is the organisation? Who are we? Who am I? Cas pratiques Decisions impact Ethical decisions form, reveal & test the self (John Dewey) Lessons Do you think you can govern innocently, without dirtying your hands? (Jean-Paul Sartre) Edouard Sakiz To distribute the abortion pill? Peter Adario To dismiss Kathryn McNeil? Steve Lewis To attend St Louis meeting? Carlos Pinto To retrieve & fix the cars? Source: Badaracco (1997); adapted by Ledoux

26 Laurent Ledoux 26 * Synthèse basée sur des textes dAndré Comte-Sponville, Marcel Conche & François Jourde Ordre économico-technico-scientifique Possible vs. Impossible (lois de la nature et de la raison) Ordre juridico-politique Légal vs. Illégal Ordre des morales Bien vs. Mal (obligations « universelles » ou universalisables) limitent complètent Hiérarchie ascendante des Primautés pour les individus Hiérarchie ascendante des Primautés pour les individus Ordre des éthiques Bon vs. Mauvais (Volonté propre, subjective ou relative) Les 4 ordres et les tensions entre lindividu et le groupe Enchaînement descendant des Primats pour les groupes Enchaînement descendant des Primats pour les groupes Sagesses Spiritualités Métaphysiques (profane ou religieuse) Spiritualités Métaphysiques (profane ou religieuse) Induit (éventuellement)

27 Laurent Ledoux 27 * Synthesis based on the texts from André Comte-Sponville, Marcel Conche & François Jourde Economic, technical & scientific order Possible vs. Impossible (Natural and rational Law) Juridical & political order Legal vs. Illegal Moral order Right vs. Wrong (Universal or universalisable duties) limits completes Ascending hierarchy for individuals Ascending hierarchy for individuals Ethical order Good vs. Bad (Self, subjective or relative Will) The 4 orders & the tensions between the individual and the group Descending hierarchy for groups Descending hierarchy for groups Wisdoms Spiritualities Metaphysics (secular or religious) Spiritualities Metaphysics (secular or religious) possibly induces

28 Laurent Ledoux 28 Ethical Imagination: when managers must choose between « right » & « right »1 Regulatory Innovation: when a multitude of actors interact to enforce CSR2 Contents Adaptive leadership: when leadership is required to adress conflicts in peoples values3

29 Laurent Ledoux 29 CSR Business Ethics Sustainable development Corporate citizenship Code of ethics Authentifications Labels Societal performance Deontologies Company philosophies Company codes Citizenship actions CSR – Abundance of concepts

30 Laurent Ledoux 30 CSR – Static definitions Economic ethics Part of ethics which deals with behaviours and institutions of this sphere, i. e., of the entirety of exchange activities of goods and services and of production related to this exchange. (French Penal Code – 1994) Economic ethics Part of ethics which deals with behaviours and institutions of this sphere, i. e., of the entirety of exchange activities of goods and services and of production related to this exchange. (French Penal Code – 1994) Business ethics Corporate ethics Presents itself as responsibility ethics (not only of conviction), organised as a doctrine which guides activities and behaviour at work (Fabienne Cardot) Corporate ethics Presents itself as responsibility ethics (not only of conviction), organised as a doctrine which guides activities and behaviour at work (Fabienne Cardot) Pragmatic & little theorised Contextual & in action Responsive & fragmented Strategic manifestation: CSR Dialog & questioning 3 levels of commitment 3. Values ethics 1. Governance ethics 2. Deontological ethics

31 Laurent Ledoux 31 RSE – Définitions (statiques) Responsabilité « Sociale » (sociétale) des Entreprises Ensemble des obligations, légales ou volontaires, quune entreprise doit assumer afin de passer pour un modèle imitable de bonne citoyenneté dans un milieu donné (Jean Pasquero) Responsabilité « Sociale » (sociétale) des Entreprises Ensemble des obligations, légales ou volontaires, quune entreprise doit assumer afin de passer pour un modèle imitable de bonne citoyenneté dans un milieu donné (Jean Pasquero) Economique Environnement Social Les 3 dimensions de la RSE Equitable Viable Durable Vivable

32 Laurent Ledoux 32 CSR – Static definitions Corporate Social Responsibility The entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero) Corporate Social Responsibility The entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero) Economic Environmental Social The three dimensions of CSR Fair Viable Sustainable Livable

33 Laurent Ledoux 33 Key questions about CSR Motivation In whose interest & why? For Share- or Stakeholders? Marketing opportunism or moral duty? Power locus Who drives CSR? Internally: managers or «corporates»? Externally: Govs, NGOs or corporates? Dynamic How did/does CSR evolve? Concepts evolution so far? Todays logic in a globalized economy? You cant properly think about «Motivation» & «Power locus» without understanding the CSR «Dynamic»

34 Laurent Ledoux 34 Corporate Social Responsibility The entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero) Corporate Social Responsibility The entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero) Economic Environmental Social The three dimensions of CSR Fair Viable Sustainable Livable Yesterdays representation…

35 5/21/2014 9:04:50 AM Economique Environnement Social Equitable Viable Durable Vivable Economic sphere Social sphere Biosphere Laurent Ledoux – 31/03/11 Todays representation…

36 Laurent Ledoux 36 Motivation In whose interest & why? For Share- or Stakeholders? Marketing opportunism or moral duty? Power locus Who drives CSR? Internally: managers or «corporates»? Externally: Govs, NGOs or corporates? Method How to promote it? Regulation or self-regulation? Soft or hard? Global or Issue-related? Dynamic How did/does CSR evolve? Concepts evolution so far? Todays logic in a globalized economy?

37 Laurent Ledoux 37 Temps Richesse du concept RSE Source : Jean Pasquero (2005), adapté par Ledoux Philanthropie Dons & mécénat dentreprise Sollicitude Besoins des employés Limitation des nuisances Priorité à lenvironnement Eco. Classique (XIIXe S.) Eco. Traditionnelle (XIXe S.) Début du XXe S. Années 1960 Réceptivité sociale Système de «gestion sociétale» Rectitude éthique Codes de bonnes conduite Reddition des comptes Triple bilan Participation citoyenne «Engagement» proactif Années 1970 Années 1990 Années 2000 Dynamique – Comment le concept de RSE a-t-il évolué jusquà nos jours ? Gestion efficiente (compétence Technique) 8 composantes de la RSE aujourdhui Evolution jusquà nos jours ?

38 Laurent Ledoux 38 Time Content richness of the CSR concept Source : Jean Pasquero (2005), adapted by Ledoux Philanthropy Grants & corporate patronage Sollicitude Employees needs Environmental nuisance limit Priority given to the environment Classical eco. (18th century) Traditional eco. (19th c.) Beg. of 20th c. 1960s Social responsiveness « Societal management » system Ethical rectitude Codes of conduct Performance reporting Triple balance sheet Citizen participation Proactive «engagement» 1970s1990s Beg. of 21th c. Dynamic – How has the CSR concept evolved so far? Efficient management (Technical skills) 8 components of CSR nowadays Evolution so far?

39 Laurent Ledoux 39 What does the 2010 Toyota break scandal teach us about CSR? What did M. Toyoda, CEO of Toyota?

40 Laurent Ledoux 40

41 Laurent Ledoux Global Compact corporates become world citizens Time Coherency of the coregulation system Corporates emancipation from states Politization of comsumption Voluntary adoption of codes of conducts Growth of surveillance & social controls web Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Transfer of States duties to corporates Regulatory innovation process Highly stylised process*: in reality these trends overlap each other «Formally» but self-fulfilling prophecy «Formally» but self-fulfilling prophecy Effectively * Source: Responsabilité sociale des entreprises et co-régulation, by Berns & al, Nike vs. Kasky Consumers CSR concerns legally recognized Soft Hard Explaining the growing impact of CSR & co-regulation during the last 50 years ?

42 Laurent Ledoux Emmanuel Faber 42 Milton Friedman

43 Laurent Ledoux

44 44 Protestant ethos Protestant ethos Birth of modern Capitalism Birth of modern Capitalism Time Consumerist Capitalism Consumerist Capitalism Promotion of a childish ethos Promotion of a childish ethos Post-capitalist Ethos Post-capitalist Ethos Rise of the post- capitalist economy ? Progressist ethos Progressist ethos Expansion of industrial Capitalism Evolution of the relations between capitalism & the dominant ethos

45 Laurent Ledoux 45 Dynamique – Comment la RSE évolue aujourdhui dans une économie globalisée ? 2001 Global Compact Entreprises: Citoyens du monde Temps Cohérence du système de corégulation Les entreprises sémancipent des états Politisation de la consommation Adoption volontaire de codes de conduites Croissance de la surveillance & du tissu de contrôles sociaux Empowerment de tiers par Etats & juges Prolifération à trav. réputation & transparence Transfert de devoirs étatiques à des entreprises Processus dinnovation régulatoire Process stylisé*: dans la réalité ces tendances se chevauchent «Formallement» mais prophétie auto-réalisatrice «Formallement» mais prophétie auto-réalisatrice « Effective- ment » * Source: Responsabilité sociale des entreprises et co-régulation, de Berns & al, Nike vs. Kasky Préoccupations RSE des consummateurs légalement reconnues Soft Hard Evolution aujourdhui ?

46 Laurent Ledoux 46 Dynamic – How CSR is evolving in todays globalized economy? 2001 Global Compact corporates become world citizens Time Coherency of the coregulation system Corporates emancipation from states Politization of comsumption Voluntary adoption of codes of conducts Growth of surveillance & social controls web Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Transfer of States duties to corporates Regulatory innovation process Highly stylised process*: in reality these trends overlap each other «Formally» but self-fulfilling prophecy «Formally» but self-fulfilling prophecy Effectively * Source: Responsabilité sociale des entreprises et co-régulation, by Berns & al, Nike vs. Kasky Consumers CSR concerns legally recognized Soft Hard Evolution today?

47 Laurent Ledoux 47 Dynamic – Proliferation through reputation & transparency Reputation – Law: differences in action mode & regulatory effects? Reputation Law 1.Immediate & discontinued 1.Slow & constant (omnipresent) 2.Externally defined 2.Interiorized & reflexive 3.Black or white 3.Grey (richer modulation) 4.Concern for single, egal, actors 4.Concern for global tendencies Current normativity results of a hybrid of law & reputation, of regulation & auto-regulation, in constant evolution Current normativity results of a hybrid of law & reputation, of regulation & auto-regulation, in constant evolution New is that this hybrid is considered to be able to develop itself as autonomous & self-sufficient New is that this hybrid is considered to be able to develop itself as autonomous & self-sufficient Evolutionary character of transparency

48 Laurent Ledoux 48 Dynamic – Main facets of the coregulation system Coregulation System Evolving hybrid of regulation & autoregulation, of Law & reputation Intellectual bricolage From voluntary social responsibility to legally binding responsibility? Started outside the laws, caught back by soft laws now; To understand it, one needs to get rid of old concepts of state sovereignty, legal order and norms pyramid; Porosity of Politics & economy based on a self-limitation of governments Open, normative power game All shots allowed? Hard & soft laws become instruments towards the realization of the objectives of a multitude of players but need inevitably to agree on certain rules and to allow a third party to «institutionalize» the game (hence the quasi-legal appeal of Global Compact) Not ethically, nor democratically elaborated Legitimate? CSR growth does not require corp. to have a soul or moral intentions; Habermas: sous-institutionalization of global laws; Decoupling between law and political institutions Less ambitious but more tangible? Do not replace intl conventions or formal concertation but ensure effective application on the field; Pragmatic actors more used to action than diplomacy Hypocrisy or alternative to bottlenecks of intl society? Source: Responsabilité sociale des entreprises et co-régulation, by Berns & al, 2007

49 Laurent Ledoux 49 Motivation – In whose interest do managers go CSR? Friedmans model Are Sternbergs friedmanian «Just Business» principles just? Ordinary decency Distributive justice Managers sole objective To maximize long term owner value * Minimal necessary values to ensure the organizations LT survival: Honesty Fairness No coercion or phys. violence Respect of laws Minimal necessary values to ensure the organizations LT survival: Honesty Fairness No coercion or phys. violence Respect of laws Rewards should be accorded in proportion to the value of agents contribution to furthering the organizations objectives * Sum of discounted cash-flows

50 Laurent Ledoux 50 Motivation – Turning Friedman upon his head? Maximize (without limits) Shareholders value Under the constraint of the respect of the law E. Faber, CEO of Danone Maximize the value for the whole society under the constraint of an « adequate return » for shareholders ?

51 Laurent Ledoux 51 Source: Webley and More, 2003 Does Ethics pay? % ROCE Average MVA/Year (with Code of conduct) Average MVA/Year (all) Average MVA/Year (no Code of conduct) Motivation – Marketing opportunism or moral obligation? ROCE by year for 42 major UK quoted companies Is ROCE a pertinent KPI? In the new system of coregulation, risk mitigation is the biggest driver Is ROCE a pertinent KPI? In the new system of coregulation, risk mitigation is the biggest driver

52 Laurent Ledoux 52 Qui est instrumentalisé ? Léthique ou les entreprises ? CSR or CSO ? Ethique Protestante Ethique Protestante Naissance du Capitalisme moderne Naissance du Capitalisme moderne Ethique Progressiste Ethique Progressiste Essor du Capitalisme industriel Essor du Capitalisme industriel Temps Capitalisme * Consumériste Capitalisme * Consumériste Promotion dune éthique infantilisante Promotion dune éthique infantilisante * Selon Benjamin Barber dans « Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; Voir aussi lanalyse dAnne Salmon dans « Ethique et ordre économique : une entreprise de séduction », 2002 RSE – Vers quelle société marchons-nous ? Ethique Post-capitaliste Ethique Post-capitaliste Essor de léconomie post- capitaliste ?

53 Laurent Ledoux 53 Are ethics or corporates instrumentalized? Protestant ethos Protestant ethos Birth of modern Capitalism Birth of modern Capitalism Time According to Benjamin Barber in «Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; See also Anne Salmons analysis in « Ethique et ordre économique : une entreprise de séduction », 2002 Final thoughts – Where do we go? Consumerist Capitalism Consumerist Capitalism Promotion Of a childish ethic Promotion Of a childish ethic Post-capitalist Ethic Post-capitalist Ethic Rise of the post- capitalist economy ? Progressist ethos Progressist ethos Expansion of industrial Capitalism

54 Laurent Ledoux 54 Ethical Imagination: when managers must choose between « right » & « right »1 Regulatory Innovation: when a multitude of actors interact to enforce CSR2 Contents Adaptive leadership: when leadership is required to adress conflicts in peoples values3

55 Laurent Ledoux 55 Leadership – What are we talking about? Transactional Vs. Transformational Leadership (McGregor Burns) Machiavellian Leadership Leadership? Hard / Soft / Smart Leaders (Nye) Charismatic Leadership (Weber) Integral Leadership (Wilber) Force Field Analysis Expectancy theory Emotional intelligence (Goleman) Situational Leadership (Blanchard) Fifth disciplines (Senge) EPIC Advisers Conscious Leadership (Kofman) Personal power model (Hagberg) For more see Servant Leadership (Greenleaf)

56 Laurent Ledoux Make it stick 7. Dont let up 6. Create short-term wins 5. Enable action 4. Communicate for buy-in 3. Get the vision right Change Management – 8 steps to lead change: is this all? To lead change, is it enough to follow these steps? 2. Build guiding teams 1. Increase urgency Creating a climate for change Engaging & enabling the whole organization Implementing & sustaining the change Source: Leading change by John P. Kotter, adapted by Ledoux

57 Laurent Ledoux 57 Todays focus – Adaptive leadership: leadership without easy answers? Ruckelshaus case drawn from R. Heifetz will guide us today to reflect upon leadership & change

58 Laurent Ledoux 58 Adaptive leadership – Reflecting upon case 2 : William Ruckhelshaus & Tacoma What did Ruckhelshaus do or didnt do? What did he achieve? Is this a leadership case? Why or why not?

59 Laurent Ledoux 59 Adaptive leadership – Distinguishing technical problems and adaptive challenges (Parsons case) Solution and implementation Primary locus of resp. for the work Kind of work Problem definition Challenge Clear Physician Technical Clear Requires learning Physician and patient Technical and adaptive Requires learning Patient > physician Adaptive Type I Type II Type III Source: Leadership without easy answers, by Ronald Heifetz

60 Laurent Ledoux 60 Adaptive leadership – Modulating the stress Source: Leadership on the line, by Ronald Heifetz & Marty Linsky

61 Laurent Ledoux 61 Protect leadership voices w/out authority (Cover who raises questions authorities cant raise) 5 strategic principles of Leadership Keep the distress level tolerable (Control the pressure cooker) Focus on ripening issues (Counteract work avoidance mechanisms) Give the work back to people (Put pressure on people with the problem) Identify the adaptive challenge (Unbundle the issues) Adaptive leadership – 5 strategic principles of leadership Source: Leadership without easy answers, by Ronald Heifetz, adapted by Ledoux

62 Laurent Ledoux 62 Adaptive leadership – The leaders social functions Social function Direction Protection Role Orientation Controlling conflict Norm maintenance Challenge Technical Authority provides problem definition and solution Authority defines adaptive challenge, provides diagnosis & questions about problem definitions & solutions Adaptive Authority protects from external threat Authority discloses external threat Authority orients Authority disorients current roles, and resists pressure to orient people in new roles too quickly Authority restores order Authority exposes conflict, or lets it emerge Authority maintains norms Authority challenges norms, or allows them to be challenged Source: The practice of adaptive leadership, by Alexander Grashow, Ronald Heifetz & Marty Linsky

63 Laurent Ledoux 63 Adaptive challenge Faction Participant Constituencies Adaptive leadership – The politics of change & Going beyond your scope of authority Scope of authority A B

64 Laurent Ledoux 64 Adaptive leadership – 4 critical distinctions provided by Heifetzs challenging view of leadership Leadership without easy answers Leadership without easy answers Power Progress Technical problems Adaptive challenges Personality Presence Authority Leadership Source: Leadership without easy answers, by Ronald Heifetz, adapted by Ledoux

65 Laurent Ledoux 65 I. Diagnose the system Be ready to observe & interpret before intervening Diagnose the system itself Diagnose the adaptive challenge Diagnose the political landscape Understand the qualities that makes an organization adaptive II. Mobilize the system Make interpretations Design effective interventions Act politically Orchestrate the conflict Build an adaptive culture III. See yourself as a system Identify who you are Know your tuning Broaden your bandwidth Understand your roles Articulate your purposes IV. Deploy yourself Stay connected to your purposes Engage courageously Inspire people Run experiments Thrive Adaptive leadership - 4 related groups of activities

66 Laurent Ledoux 66 Adaptive leadership – Nye: effective leadership styles - Soft, Hard & Smart Power skills Hard Power (Transactional) Soft Power (Inspirational) 1.Emotional IQ Ability to manage relationships & charisma Emotional self-awareness and control 2.Communications Persuasive words, symbols, example Persuasive to near & distant followers 3.Vision Attractive to followers Effective (balance ideals & capabilities) 1.Organizational capacity Manage reward & information systems Manage inner & outer circles 2.Machiavellian skills Ability to bully, buy and bargain Ability to build & maintain winning coalitions Smart Power (Combined Resources) 1.Contextual IQ (broad political skills) Understand evolving environment Capitalize on trends (« create luck ») Adjust style to context & followers needs Source: The powers to lead by Joseph Nye, adapted by Ledoux

67 Laurent Ledoux 67 Bibliography The practice of adaptive leadership, Ronald Heifetz, Alexander Grashow & Marty Linsky, HBR ed., 2009 Leadership without easy answers, Ronald Heifetz, HBR ed., 1994 Leadership on the line, Ronald Heifetz & Marty Linsky, HBR ed., 2002 Leadership can be taught, Sharon Daloz Parks, HBR ed., 2005 Leading quietly, Joseph Badaracco, HBR ed., 2002 Questions of character, Joseph Badaracco, HBR ed., 2006 Arts of the wise leader, Mark Strom, Sophos ed., 2007 (www.artsofthewiseleader.com) The powers to lead, Joseph Nye, HBR ed., 2008 Leading with wisdom: spiritual-based leadership in business, Peter Pruzan & Kirsten Pruzan Mikkelsen, Response ed., 2009 Rational, Ethical & Spiritual Perspectives on Leadership, Peter Pruzan, Peter Lang ed., 2009 Leadership, Spirituality and the Common Good, Henri-Claude de Bettignies & Mike J. Thompson, Garant ed., 2010

68 Laurent Ledoux 68 Bibliography La responsabilité sociale de lentreprise comme objet des sciences de gestion, Jean Pasquero dans Responsabilité sociale et environnementale de lentreprise, sous la dir. de Marie-France B.-Turcotte et Anne Salmon, Presses de lUniversité du Québec, 2005 Responsabilité sociale des entreprises et co-régulation, T. Berns, P.F. Docquir, B. Frydman, L. Hennebel & G. Lewkowicz, Bruylant 2007 La société malade la gestion, Vincent de Gauléjac, Seuil, 2005 Le capitalisme est-il moral, André Comte-Sponville, Albin Michel, 2004 Ethique et ordre économique: une entreprise de séduction, CNRS Editions, 2002 Le fondement de la morale, Marcel Conche, PUF, 1993 Rethinking business ethics – A pragmatic approach, Sandra Rosenthal & Rogene Buchholz, Oxford Press, 2000 Business Ethics & Values, Colin Fischer & Alan Lovell, FT Prentice Hall, 2003 Working ethics, Marvin Brown, Jossey-Bass, 1990 Responsabilité sociale de lentreprise : Faut-il enchaîner Prométhée ?, Philippe de Woot, Economica, 2005 Does business ethics pay?, S. Webley & E. More, London IBE, 2003 Managing messy moral matters, C.M. Fischer & C. Rice, in Strategic Human Resources, J. Leopold, L. Harris & T.J. Watson, 1999 Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole, B. Barber, 2007 Capitalism at crossroads, S. Hart, 2005


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