observations at the intersection of business innovation, culture, finance, leadership and political economy

Tension of Either-Or

Back in July Seth Godin published a blog post entitled No Such Thing as Business Ethics. I’ve never read a book by Godin. I’m not a regular reader of his blog. So, I didn’t happen to see the post until mid-August. It’s stayed with me since.

Around the same time that I read Godin’s piece there was a front page story in The New York Times about a labor dispute taking place in Palmyra, Pennsylvania. 300 foreign students walked off the job at a Hershey’s plant to protest what they claimed were unfair labor conditions in summer jobs they had paid to obtain, under the auspices of the State Department’s J-1 Visa designation, a short-term cultural exchange program for college students.

It turns out that while Hershey’s did own the plant, there were several layers of subcontractors and staffing agencies between the company and the workers. Hershey’s was washing its hands of the problem by pointing fingers at its subcontractors–via a post on its Facebook page.

Then, at the end of August, Apple was charged for a second time this year by a group of five Chinese NGOs with alleged widespread environmental degradation within its supplier network. Again, stonewalling and broad, deep and, in this case, opaque subcontractor relationships factored into the picture. The NGOs had published one report in early January to which Apple refused to reply. Finally, only hours in advance of the publication of this second, more detailed one, the Company agreed to conversations with one of the reports’ co-authors.

In his post Godin wrestles with the apparent dichotomy many business thinkers have tackled: doing good versus maximizing profit. And like many before him, he takes the position that more often than not–and, by his reckoning, more frequently now than in the past–it’s an either-or choice, driven by deepening global complexity, a weighting of short-term performance over long-term and an ability to limit transparency–made possible in part, he notes, by multi-layered subcontracting networks.

As the Hershey’s and the Apple situations reveal, the tension of the either-or is all too real. Godin’s conclusion? Only when every individual employee commits to doing the right thing can business overcome the pressure and do good. My own? Only when the CEO makes that commitment is the either-or eliminated, freeing a company, its employees to make strategic and operational choices focused on long-term–profitable–good.

The Hershey’s and Apple situations are still very much in play. Both companies with strong founder legacies are under the stewardship of brand new CEOs. Hershey’s, while having softened its stance on its situation a touch, remains oddly quiet. Activists continue to agitate and the State Department is conducting a review.

And yesterday Financial Times columnist Michael Skapinker published an article calling for Apple to open its factories to outside inspection, comparing the situation to that faced by Nike in its factories in Asia in the late 1990s–an apt analogy. You can read it here. A thorough and balanced article by Forbes contributor Amy Westervelt–Tim Cook’s Challenge: Sorting Out Apple’s Chinese Supply Chain–is here.

You can read The Other Side of Apple, the Chinese NGOs’ report on Apple’s alleged environmental infringements, here. Storyteller and Apple fanboy Mike Daisey is performing his piece The Agony and the Ecstasy of Steve Jobs at the Sydney Opera House from September 24 – October 2 and at New York’s Public Theatre from October 11 – November 13. You can buy tickets for the Sydney performance here and New York’s here. The Sydney Morning Herald‘s just-published interview with Daisey is here.

Note: This article is one of a regular series, Bass Notes, on ethics, accountability and sustainability. Subscribe to Bass Notes and regular postings via email or RSS below.

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