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Ledoux.laurent@gmail.com – 0478 62 14 20 ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations Laurent Ledoux ledoux.laurent@gmail.com.

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1 ledoux.laurent@gmail.com – 0478 62 14 20
ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations Laurent Ledoux (www.philoma.org)

2 Moral imagination is the condition of free deeds Steiner

3 Contents 1 Ethical Imagination: when managers must choose between « right » & « right » 2 Regulatory Innovation: when a multitude of actors interact to enforce CSR 3 Adaptive leadership: when leadership is required to adress conflicts in people’s values

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

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

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

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

8 Qui est l’organisation ?
Cas 4 – Edouard Sakiz & la nouvelle pillule abortive “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 l’organisation 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) Qui est l’organisation ? “L’éthique résulte de la tension inévitable entre Vertu & Virtu” (Aristote & Machiavel) “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) “Dois-je jouer le rôle du lion ou du renard?” (Organiser un vote au cours duquel il vote pour la suspension de RU 486) Source: Badaracco (1997); adapté par Ledoux

9 (Friedrich Nietzsche)
Questions to think «individual» dilemmas – Steve Lewis’ case “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) Who am I? “Become who you are” (Friedrich Nietzsche) “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) “Looking to the future, what is my way (not the way of others)?” (To become partner in an investment bank) Source: Badaracco (1997); adapted by Ledoux

10 Ethos, en grec: la coutume, l'habitude,
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 Ethique, au sens premier: manière de s'orienter dans un milieu, de se situer dans un environnement 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 éthique est la doctrine d’un art particulier de vivre la « meilleure » vie possible (par ex. de vivre heureux) et des moyens d’accès à cette fin (Marcel Conche, philosophe) Une morale est un ensemble d’impératifs (commandements et interdictions) qu’une société ou qu’une 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 « Ethos » in Greek: custom, habit, way of behaving in an environment
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) 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) 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 Chartes éthiques & Mission statements Obligations légales Valeurs &
Sources possibles d’aides à la décision Chartes éthiques & Mission statements Obligations légales Valeurs & heuristique Principes ou règles morales & éthiques

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

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

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

16 L’action est-elle légale ?
Quick-test éthique de Texas Instrument (2001) L’action est-elle légale ? L’action est-elle compatible avec nos valeurs (de TI) ? Si vous la réalisez, vous sentirez-vous mal ? Comment l’action sera-t-elle présentée dans les journaux ? Si vous pensez qu’elle soit mauvaise, ne la faites pas ! Si vous n’êtes pas sur, demandez. Persistez dans votre demande jusqu’à ce que vous obteniez une réponse.

17 Does it comply with TI values? If you do it, will you feel bad?
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 it’s wrong, don’t do it! If you’re not sure, ask. Keep asking until you get an answer.

18 Questions to ask yourself in front of an ethical dilemma
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 In order to develop the Group’s ethics & compliance
Suez’ code of ethics In order to develop the Group’s ethics & compliance Follow the Group’s ethical principles Act according to the laws and rules Nurture a culture of integrity Be loyal and honest Respect others

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 +/- Véto Déclic Obligations légales 1. Test “légaliste”. Ma décision est-elle en ligne avec la loi ? Codes de conduites propres à l’organisation 2. Test “organisationnel”. Ma décision est-elle en ligne avec le codes de conduite ou éthique de mon organisation ? Heuristique basée sur l’intuition ou sentiment 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 ? Respect de principes éthiques Ethiques des vertus 4. Test des “vertus”. Votre décision facilite-t-elle la vie bonne au travers d’un équilibre entre justice, bienveillance ou autres vertus ? 5. Test de “transparence”. Vous sentiriez-vous bien ou mal si d’autres (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 d’ignorance” ou “règle d’or”. Si j’étais 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 ? 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 d’experts ? Ethiques téléologiques 11. Test “conséquentialiste”. Les conséquences probables de ma décision sont-elles en ligne avec mes intentions ? 12. Test “utilitariste”. Les conséquences anticipées de ma décision sont-elles positives pour le plus grand nombre ?

21 Corporate credos & mission statements Respect of ethical principles
12 tests filter to validate or reject a decision Ask yourself these questions concerning the decision you wish to take +/- Veto Trigger Legal duties 1. Legalist test. Is my decision in accordance with the law? Corporate credos & mission statements 2. Organisational test. Is my decision in accordance with my organisation’s rules of conduct or ethics Heuristics 3. Hedonistic or intuitive test. Does my decision correspond with my gut feeling and my values? Does it make me feel good? Respect of ethical principles Virtue ethics 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 10. Consequential test. Are the anticipated consequences of my decision and plan positive or negative? 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?

22 “Truth happens to an idea.
Questions to think «internal» dilemmas – Peter Adario’s case “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: McNeil’s 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) Who are we ? “Truth happens to an idea. Its verity is in fact an event, an idea” (William James) “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 McNeil’s issue) Source: Badaracco (1997); adapted by Ledoux

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

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

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

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

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

28 Contents 1 Ethical Imagination: when managers must choose between « right » & « right » 2 Regulatory Innovation: when a multitude of actors interact to enforce CSR 3 Adaptive leadership: when leadership is required to adress conflicts in people’s values

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

30 Pragmatic & little theorised Strategic manifestation:
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) 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) Pragmatic & little theorised Responsive & fragmented 3 levels of commitment 3. Values ethics 1. Governance ethics 2. Deontological ethics Strategic manifestation: CSR Dialog & questioning Contextual & in action

31 Economique Environnement Social Equitable Durable Vivable Viable
RSE – Définitions (statiques) Responsabilité « Sociale » (sociétale) des Entreprises Ensemble des obligations, légales ou volontaires, qu’une 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 Durable Vivable Viable

32 Economic Environmental Social Fair Sustainable Livable Viable
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) Economic Environmental Social The three dimensions of CSR Fair Sustainable Livable Viable

33 Motivation Power locus Dynamic
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? You can’t properly think about «Motivation» & «Power locus» without understanding the CSR «Dynamic» Dynamic How did/does CSR evolve? Concept’s evolution so far? Today’s logic in a globalized economy?

34 Yesterday’s representation…
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 Sustainable Livable Viable Yesterday’s representation…

35 Today’s representation…
Biosphere Social sphere Equitable Social Economique Durable Economic sphere Vivable Viable Environnement Today’s representation… Laurent Ledoux – 31/03/11

36 Motivation Power locus Dynamic Method
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? Concept’s evolution so far? Today’s logic in a globalized economy? Method How to promote it? Regulation or self-regulation? Soft or hard? Global or Issue-related?

37 Evolution jusqu’à nos jours ?
Dynamique – Comment le concept de RSE a-t-il évolué jusqu’à nos jours ? 8 composantes de la RSE aujourd’hui Richesse du concept RSE Evolution jusqu’à nos jours ? Participation citoyenne «Engagement» proactif Reddition des comptes Triple bilan Rectitude éthique Codes de bonnes conduite Réceptivité sociale Système de «gestion sociétale» Limitation des nuisances Priorité à l’environnement Sollicitude Besoins des employés Philanthropie Dons & mécénat d’entreprise Gestion efficiente (compétence Technique) Temps Eco. Classique (XIIXe S.) Eco. Traditionnelle (XIXe S.) Début du XXe S. Années 1960 Années 1970 Années 1990 Années 2000 Source : Jean Pasquero (2005), adapté par Ledoux

38 Evolution so far? Dynamic – How has the CSR concept evolved so far?
Content richness of the CSR concept 8 components of CSR nowadays Evolution so far? Citizen participation Proactive «engagement» Performance reporting Triple balance sheet Ethical rectitude Codes of conduct Social responsiveness « Societal management » system Environmental nuisance limit Priority given to the environment Sollicitude Employees’ needs Philanthropy Grants & corporate patronage Efficient management (Technical skills) Time Classical eco. (18th century) Traditional eco. (19th c.) Beg. of 20th c. 1960’s 1970’s 1990’s Beg. of 21th c. Source : Jean Pasquero (2005), adapted by Ledoux

39 What did M. Toyoda, CEO of Toyota?
What does the 2010 Toyota break scandal teach us about CSR? AKio Toyoda 4.3 billion

40 Co-regulation based on reputation rather than law Frydman

41 Explaining the growing impact of “CSR”
& co-regulation during the last 50 years ? Transfer of States’ duties to corporates “Coherency” of the coregulation system Effectively Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Highly stylised process*: in reality these trends overlap each other Regulatory innovation process Hard Growth of surveillance & social controls’ web 2003 Nike vs. Kasky Consumers’ CSR concerns legally recognized Voluntary adoption of codes of conducts 2 conditions of responsibility: Inscription of corporates in a history: possibility to define acts in the past that need to be acknowledged in the present in order to allow a future; requires an order made of memory, promesses, permanency and identification of subjects through time; Inscription in a given environment (milieu) in which a relationship with others can be established. This is exactly what is denied when we limit a company’s objective to the maximization of the shareholders’ value. Khan: responsibility presupposes liberty. 2001 Global Compact corporates become world citizens Politization of comsumption Corporates’ emancipation from states «Formally» but self-fulfilling prophecy Soft Time * Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

42 Emmanuel Faber whole society adequate return shareholder’s value
Optimize value for the under the constraint of an for shareholders Emmanuel Faber whole society adequate return Nos comptes nous racontent des contes: il faut que nous changions les contes que nous nous racontons Maximize (without limits) under the constraint of the shareholder’s value respect of the law Milton Friedman 42

43 Profit is the consequence of the human relation that we develop daily with our shareholders, clients, employees, suppliers and the rest of society Toniutti

44 Rise of the post-capitalist economy Expansion of industrial Capitalism
Evolution of the relations between capitalism & the dominant ethos Post-capitalist Ethos Rise of the post-capitalist economy Protestant ethos Progressist ethos ? Birth of modern Capitalism Expansion of industrial Capitalism Time Consumerist Capitalism According to Benjamin Barber in «Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; See also Anne Salmon’s analysis in « Ethique et ordre économique : une entreprise de séduction », 2002 Promotion of a childish ethos

45 Evolution aujourd’hui ?
Dynamique – Comment la RSE évolue aujourd’hui dans une économie globalisée ? Transfert de devoirs étatiques à des entreprises “Cohérence” du système de corégulation Evolution aujourd’hui ? « Effective-ment » Empowerment de tiers par Etats & juges Prolifération à trav. réputation & transparence Process stylisé*: dans la réalité ces tendances se chevauchent Processus d’innovation régulatoire Hard Croissance de la surveillance & du tissu de contrôles sociaux 2003 Nike vs. Kasky Préoccupations RSE des consummateurs’ légalement reconnues Adoption volontaire de codes de conduites 2 conditions of responsibility: Inscription of corporates in a history: possibility to define acts in the past that need to be acknowledged in the present in order to allow a future; requires an order made of memory, promesses, permanency and identification of subjects through time; Inscription in a given environment (milieu) in which a relationship with others can be established. This is exactly what is denied when we limit a company’s objective to the maximization of the shareholders’ value. Khan: responsibility presupposes liberty. 2001 Global Compact Entreprises: Citoyens du monde Politisation de la consommation Les entreprises s’émancipent des états «Formallement» mais prophétie auto-réalisatrice Soft Temps * Source: “Responsabilité sociale des entreprises et co-régulation”, de Berns & al, 2007

46 Regulatory innovation process but self-fulfilling prophecy
Dynamic – How CSR is evolving in today’s globalized economy? Transfer of States’ duties to corporates “Coherency” of the coregulation system Evolution today? Effectively Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Highly stylised process*: in reality these trends overlap each other Regulatory innovation process Hard Growth of surveillance & social controls’ web 2003 Nike vs. Kasky Consumers’ CSR concerns legally recognized Voluntary adoption of codes of conducts 2 conditions of responsibility: Inscription of corporates in a history: possibility to define acts in the past that need to be acknowledged in the present in order to allow a future; requires an order made of memory, promesses, permanency and identification of subjects through time; Inscription in a given environment (milieu) in which a relationship with others can be established. This is exactly what is denied when we limit a company’s objective to the maximization of the shareholders’ value. Khan: responsibility presupposes liberty. 2001 Global Compact corporates become world citizens Politization of comsumption Corporates’ emancipation from states «Formally» but self-fulfilling prophecy Soft Time * Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

47 Reputation – Law: differences in action mode & “regulatory” effects?
Dynamic – Proliferation through reputation & transparency Reputation – Law: differences in action mode & “regulatory” effects? Law Reputation Immediate & discontinued Slow & constant (omnipresent) Evolutionary character of transparency Externally defined Interiorized & reflexive Black or white Grey (richer modulation) Concern for single, egal, actors Concern for global tendencies 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

48 regulation & autoregulation,
Dynamic – Main facets of the coregulation system “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) Coregulation System Evolving hybrid of regulation & autoregulation, of Law & reputation 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 int’l 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 int’l society? Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

49 “To maximize long term owner value*”
Motivation – In whose interest do managers go CSR? Friedman’s model Are Sternberg’s friedmanian «Just Business»’ principles just? Ordinary decency Distributive justice Manager’s sole objective “To maximize long term owner value*” Minimal necessary values to ensure the organization’s 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 organization’s objectives * Sum of discounted cash-flows

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

51 In the new system of coregulation,
Motivation – Marketing opportunism or moral obligation? Does Ethics pay? 35 ROCE by year for 42 major UK quoted companies 30 Average MVA/Year (with Code of conduct) Average MVA/Year (no Code of conduct) Average MVA/Year (all) Is ROCE a pertinent KPI? In the new system of coregulation, risk mitigation is the biggest driver % ROCE 25 20 15 1997 1998 1999 2000 2001 Source: Webley and More, 2003

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

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

54 Contents 1 Ethical Imagination: when managers must choose between « right » & « right » 2 Regulatory Innovation: when a multitude of actors interact to enforce CSR 3 Adaptive leadership: when leadership is required to adress conflicts in people’s values

55 Emotional intelligence For more see http://www.12manage.com
Leadership – What are we talking about? Servant Leadership (Greenleaf) Transactional Vs. Transformational Leadership (McGregor Burns) Machiavellian Leadership Situational Leadership (Blanchard) Conscious Leadership (Kofman) Charismatic Leadership (Weber) Hard / Soft / Smart Leaders (Nye) Leadership? Fifth disciplines (Senge) Integral Leadership (Wilber) Force Field Analysis Personal power model (Hagberg) EPIC Advisers Emotional intelligence (Goleman) Expectancy theory For more see

56 To lead change, is it enough to follow these steps?
Change Management – 8 steps to lead change: is this all? To lead change, is it enough to follow these steps? Implementing & sustaining the change 8. Make it stick 7. Don’t let up Engaging & enabling the whole organization 6. Create short-term wins 5. Enable action 4. Communicate for buy-in 3. Get the vision right Creating a climate for change 2. Build guiding teams 1. Increase urgency Source: “Leading change” by John P. Kotter, adapted by Ledoux

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

58 What did Ruckhelshaus do or didn’t do? Is this a leadership case?
Adaptive leadership – Reflecting upon case 2 : William Ruckhelshaus & Tacoma What did Ruckhelshaus do or didn’t do? What did he achieve? Is this a leadership case? Why or why not? Need to give example of second bullet

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

60 Adaptive leadership – Modulating the stress
Need to give example of second bullet Source: “Leadership on the line”, by Ronald Heifetz & Marty Linsky

61 Leadership Identify the adaptive challenge
Adaptive leadership – 5 strategic principles of leadership Identify the adaptive challenge (Unbundle the issues) Protect leadership voices w/out authority (Cover who raises questions authorities can’t raise) Give the work back to people (Put pressure on people with the problem) 5 strategic principles of Leadership Identify the adaptive challenge. Diagnose the situation in light of the values at stake, and unbundle the issues that come with it. Keep the level of distress within a tolerable range for doing adaptive work. To use the pressure cooker analogy, keep the heat up without blowing up the vessel. Focus attention on ripening issues and not on stress-reducing distractions. Identify which issues can currently engage attention; and while directing attention to them, counteract work avoidance mechanisms like denial, scapegoating, externalizing the enemy, pretending the problem is technical, or attacking individuals rather than issues. Give the work back to people, but at a rate they can stand. Place and develop responsibility by putting the pressure on the people with the problem. Protect voices of leadership without authority. Give cover to those who raise hard questions and generate distress - people who point to the internal contradictions of the society. These individuals will have latitude to provoke rethinking that authorities do not have. Keep the distress level tolerable (Control the pressure cooker) Focus on ripening issues (Counteract work avoidance mechanisms) Source: “Leadership without easy answers”, by Ronald Heifetz, adapted by Ledoux

62 Authority provides problem definition and solution
Adaptive leadership – The leader’s social functions Social function Challenge Technical Adaptive Direction Authority provides problem definition and solution Authority defines adaptive challenge, provides diagnosis & questions about problem definitions & solutions Protection Authority protects from external threat Authority discloses external threat Role Orientation Authority orients Authority disorients current roles, and resists pressure to orient people in new roles too quickly Need to give example of second bullet Controlling conflict Authority restores order Authority exposes conflict, or lets it emerge Norm maintenance 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 Adaptive challenge Scope of authority Faction A● Participant B●
Adaptive leadership – The politics of change & Going beyond your scope of authority Adaptive challenge Scope of authority A● B● Faction Participant Constituencies

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

65 See yourself as a system IV. Deploy yourself
Adaptive leadership - 4 related groups of activities 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 Mobilize the system Make interpretations Design effective interventions Act politically Orchestrate the conflict Build an adaptive culture 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”

66 Smart Power (Combined Resources)
Adaptive leadership – Nye: effective leadership styles - Soft, Hard & Smart Power skills Smart Power (Combined Resources) Contextual IQ (broad political skills) Understand evolving environment Capitalize on trends (« create luck ») Adjust style to context & followers’ needs Soft Power (Inspirational) Hard Power (Transactional) Emotional IQ Ability to manage relationships & charisma Emotional self-awareness and control Organizational capacity Manage reward & information systems Manage inner & outer circles Communications Persuasive words, symbols, example Persuasive to near & distant followers Machiavellian skills Ability to bully, buy and bargain Ability to build & maintain winning coalitions Vision Attractive to followers Effective (balance ideals & capabilities) Source: “The powers to lead” by Joseph Nye, adapted by 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 Bibliography La responsabilité sociale de l’entreprise comme objet des sciences de gestion, Jean Pasquero dans Responsabilité sociale et environnementale de l’entreprise, sous la dir. de Marie-France B.-Turcotte et Anne Salmon, Presses de l’Université 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 l’entreprise : 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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