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Ethics Day 2

27 August 2018 21:38

Pogo Case Study


Pogo Inc.-----> Designer, Manufacturer and retailer My Role: VP- HR Task for Management Meeting
US Heartland • Responsibilities: • B/g:
Company Background ○ Develop and coordinate human capital strategies ○ Inc. mkt. share and profit margins
Customer: ○ Morale and productivity enh. ○ Launch european n/w
○ Demographic: Young Adults and Youth ○ Limit turnover ○ Add 25 new stores on west cost
○ Employment ○ Close manufacturing in US
Company ○ Compensation
○ Reach: ○ Benefits • Messages
 250 outlets ○ Training and development ○ Mile High: VP HR position +20% pay
 New stores planned for West cost ○ Emp relations ○ Washington Lobyist: Org. lab.->DOL investigate offshore lab. Practices
 7 stores in Europe ○ Form labor policies ○ Review prod. And quality reports of 11 manufacturing facilities.
 Manufacturing in 16 countries (through 47 contractors) ○ Neg. bargain agreements  Minor problems
○ Industry growth, But Analysts have doubts on POGO • History with Pogo  2/5 ventilation systems in Bala Pong down for repair
○ Stock Price: down 35% from 3 years ago ○ Built reputation  Bala Pong down 3/9 qual contr
○ $1.3 bn in revenue, earning less than analyst's expectations ○ Developed trust with union  Bala Pong has 19 yr relation initiated by vp manufacturing
○ Sales $327 per sq foot ○ Resp. due to change b/c Port Walker closure  Several thousand employees (mostly women)
○ Stable mkt share (9%) • Immediate Goals ○ Senior HR: When closed, can employees (15-20+ yr veterans) transfer within the company?
○ Sales Segmentation: 54% of college market overall ○ Expand the purview of resp. to global working cond. ○ POGO WOMEN's Council: Report on working conditions- sent to manufacturing- never
 20% :College marketing partnerships  What responsibilities to global manf. Fac. Workers? forwarded(3 months)
 9% online sales  What career path offered to me? ○ Worker's Union: Outsourcing, undercutting wages,job security
○ Criticized by Labour grps, politicians----> off-shore manufacturing ○ Mayor: Concerns about the factory shutting down, please call as the community is small
○ Marketing: Celebrities
○ CSR: Urban neighbourhood rejuvenation
○ Employment:
 Preferred Employer Questions:
 350 employees in Port Walker  What responsibilities to global manf. Fac. Workers?
○ Governance:  Whether POGO has resp towards workers (not direct employees) working
 Chairman (founder) conditions
 CEO  When closed, can employees (15-20+ yr veterans) transfer within the
 CFO company?
 3x Directors- fin, retail, manuf.
 CEO of Consulting firm for internet strategy
 President of Chairman's college (?)
○ Mission:
people, Service, Quality and Distinction

Competitors
○ Number of Competitors dec.
○ comp. inc. mkt share through consolidation

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Ethics Day 2-Sadhu
27 August 2018 23:09

The Parables of the Sadhu ○ Questioning the applicability of Jesus in an interpersonal society
• Prof. on 6 month sabatical ○ Everyone did their bit
• went trecking in Nepal ○ Counter- Westerners approach to problem solving- throw material goods at the problem
• Study of how groups respond • No one wanted to exert themselves beyond certain self-imposed limits
• Fulfilment only when
• Companion: Anthropologist to shed light on people ○ Sadhu dies in care
• 18000 ft. pass to reach Mulkinath ○ Sadhu demonstrates he can walk down two days to the village
• 6yrs prior-pulmonary edema @16500 ft ○ Persuade someone to take care of Sadhu in village_ impractical; villagers uncaring
• Concerned for 18000 ft • Throwing rocks, in sun-obj 1&2
• Wettest Spring in 20 yrs • Excuses for high stakes moral dilemma- high adrenaline, superordinate goal and once in a lifetime
• Camped in hut-14500ft opportunity
• Group: • Resentment towards people who bring up dilemma and the actions
○ 4 New Zealand • It is difficult to emerge from such dilemmas
○ 2 Swiss Couples • Stress-The real test for individual and corporate values and ethics
○ Japanese hiking club • Business context-managers should agree for dealing with dilemmas
• Order-New Zealanders-Americans_Swiss-Jap • Parallel with business situation- Immediate action was needed
• Stephen-Altitude Sickness • No-one realized the magnitude of the decision
• Pasang- Sirdar • No process for consensus
• New Zealander dumped body ○ Group did not have preconditions on how to act
• Stephen and Swiss gave clothing ○ So they acted as individuals
• Cowen-concerned about withstanding the height-wanted to get across ○ Croos-culturalism added more complexity
• Swiss told that the Sadhu was fine • Some org have values exceeding those of its managers
• 1 hour delay for Stephen • May be ambiguous
• Stephen guilt tripping Cowen over death(?) of Sadhu • Org with strong shared value weather the storms and come out fine
• Japanese refused use of horse to transport the Sadhu • Need of guidelines of an agreed upon process
• Pasang pressed Stephen to carry on
○ Couldn't carry Sadhu down 1000 ft and make it back in time
○ Carried him 500 ft and pointed out the hut
○ Gave food and drink
• Ambiguity in deadness
• Example of breakdown between Corporate and individual ethics
○ Not one person took responsibility for the Sadhu
○ Not to inconvenience oneself

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Ethics Day 2- Sadhu
28 August 2018 06:20

• Meaning of leadership in large org


• People in touch with their core beliefs and beliefs of others are more comfortable living on Questions
the cutting edge  Why did the Sadhu take this route and not the easier one (Kali Sandaki gorge)?
• Leader understands, interprets and manages corporate culture  Why did he not have any protection against the elements?
○ Strong sense of purpose  Why was he lying in the snow
○ Tolerant of ambiguity  Where is the limit of responsibility
○ Resolve conflict  What are practical limits of moral imagination and vision
• Is manageability transferable? Is it proper to manipulate others' values?  Is there a collective ethic differing from individual ethic
• Most interesting exp: 1975 Khumbu  Why were they so reluctant to try the lower path
○ Recovering from altitude sickness  How much to sacrifice ourselves for strangers
○ Family funeral in Manang
○ Why didn't stephen take care of Sadhu-
• Neither was for mountain climbing
○ Hard stressed physically
○ No support system in "community"
○ Beyond individual capacity
• Current interest in corporate culture= positive response to pessimism
• Corporate sense of freedom of inquiry, personal values and reinforces focused sense of
direction.
• Lesson of Sadhu: in complex corporate situation, individual deserves support of group
• If individual has stake in success of the group, he can add a lot
• Management's role- to be sensitive of individual needs and, shape and focus them for the
benefit of the group
• Greshem's law of Currency- driving away god practices because of precedent
• No plan for sadhu contingency
• Conflict of responses- Utilitarian vs Christian ethic of compassion

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Ethics Day 2- FBR
28 August 2018 06:49

• Background • Hear faint voices and laughter of children


• As a boy passion began • Jai collapsed
• 4 months climbing and 8 months engineering • Shepherd woman- man would not last long in the cold
• 40yr old woman taking care of the man, offering food and water
• 24000ft summit • Tried to rise- hip broken and feet swollen
• Experienced climbers • Ate and drank water
• Started at 2 am • Communicate using gestures- need to get down to opposite face
• 1pm turnaround time- not followed because few days wait • Signal to carry down the mountain to village
• Falling light • 500 feet at a time
• Test ice before using ice pick • 3 days
• Slab of ice and snow- extending above underlying rock • Village officials transported on donkey back to larger village with hospital
○ Gauging supported weight not possible • Refused payment and refused to leave until Jai's ride was secured
○ Untied ropes • More painful donkey than shepherd woman's back
• Cornice fractured and fell • Recognized fragility of life
• Fell onto back and started sliding on snow • Doctor diagnosed broken hip and fallen arches
• Followed protocol in crisis • Impermanent injuries
○ Ditched unnecessary gear- to avoid injury
○ Removed backpack with provision
○ Steered by digging feet into the snow
○ Punched through the snow Questions
○ Abrasions and lacerations because of friction with mountain  Why did the woman help Jai
• 3000 feet drop
• Torn through snow suit
• Bars of food
• Skin bloody, knees weak arms are heavy
• Broken hip and arches
• Slid down opposite to camp
• Terrain and bod condition made retracing impossible
• Began descent
○ Standing against rock for rest-sitting would take effort to get up
○ 24 hrs for 6-7 hr hike
• Dog bark- Civilisation

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Ethics Day 2 Notes
Tuesday, August 28, 2018 6:41 PM

The parable of the Sadhu


• Claire- Same as Bowen • What did Jai learn:
• Cameron- Something different ○ Fragility of life
• Edem- Would have helped Stephen ○ Regret of choice- 1pm vs 4pm
• Ben- I'd take him to the hut, ensure hs basic survival ○ Self-lessness
• Sushrut- I'd ask, in gestures, his intentions, and then help him live, if that is his choice ○ Trust
• Fransesco- Same as Bowen ○ Don't break the rule- overconfidence
○ He learns he is lucky- to jump the right way, to survive
• Sanctitiy of Life vs your own goals fall, to find hut
• Goals vs ethics ○ Jai sees his life as a gift
• What's McCoy's goal? ○ What responsibility do I have to others who have picked
○ Wrting about it is cathartic me up, or to others in general
○ Climbing the mountain?  Everyone has to discover that on their own
○ getting it done/feeling good about yourself
○ goal oriented, group segmentation • What should Jai do after he recovers
○ Sadhu's responsibility to himself ○ Think about the responsibility that you own
○ no-one is fully owning responsibility
• What ethical process could be employed to give resolution?

Jai Jaikumar

• why did the woman do what she did?


○ Ethics translated to moral values
○ Altruistic intentions
○ Sanctity of life-responsibility
○ No time pressure
○ greater means to help-warmth, own home
○ lower risk factors
○ Cultural factors may play a factor
○ Bystander effect
○ Children-setting an example
○ Shepherd- Helping animals vs helping humans
○ Reciprosity?

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Ethics Day 2 Notes-2
Tuesday, August 28, 2018 8:51 PM

Information Capital: Knowledge of norms, global


operations,geography, history etc
• Geerheart Psychological Capital: Comfortable inn complex env.
○ Cross Cultural dimaensions of Difference Relational Capital: Ability to trust, empathi
 Performance orientation
 Future orientation- whether country prescribes long term awards vs short Gaining Experience:
term Travel, Read, watch, study, connect
 assertiveness
 power distance-degree of social inequality Leveraging our Collective Knowledge
 Uncertianity avoidance- tolerance to uncertain situations How do you build trust and respect.
One tip for conducting business
• Michelle Gelfand (U Maryland)
 Observe social behaviour Canada:
○ Cross culture: You work with them, then you can get to trust after a few months
 There is variability within distinct groups Show respect: Remember details, ask them about stuff. Show interest.
 How to effectively lead cross-cultural relations: One key tip: Pay on time
□ respect
□ tolerance • Do your Homework
□ open-mindedness • Three Errors:
□ curiosity ○ Structural Encasement: Trapped in ones way to see the
□ preparedness world
□ flexibility ○ Translational Error (consequence of 1): Errors from
misinterpreting behaviour of foreigner through one's
cultural lens
○ Ethnocentricism: Evaluating points of difference as
inferior

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Ethics Day 2: 3
Tuesday, August 28, 2018 9:32 PM

• Focus on common goals Corporate Social Responsibility


○ particularly in early phase of relationship • Conducting normal business operations in a way
• Building trust and conveying respect that adds to the society the business it is in (apart
○ Don't enter workplace without this from adding financial value to it)
• Anticipate differences that may lead to misunderstandings • Economic model: The reason is because you
before they happen by developing diffrentiate yourself in the market
○ self awareness ○ Competitive market advantage
○ other awareness ○ Justification:
 Stakeholder relations
Dishonesty Experiment  Long term strategic interests
• How we raationali  red of risk
• Dan Ariely  mark. reputation
• Whistleblowers are viewed badly  brand image
INTEGRATE ETHICS INTO YOUR WORK ○ tax breaks
• Citi
and is in a way, a citi
○ profit does not trump ethical obligation to
society
○ firm owes a variety of duties, not only to
stockholders, but also to larger web of stake
holders

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Ethics Day 2: 4
Wednesday, August 29, 2018 1:56 AM

Does Corporate Social responsibility Pay off?


Is it fair to hold corporations accountable to the standard that they
face losses?
Patagonia (?):

• Increasing demand from consumers


• Expectations increased to do more than make profit
• Orgs engaging in CSR reap benefits
○ customer loyalty
○ +ve brand repo
○ sales vol
○ recruit top talent

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Ethics- Day3- Wells Fargo
Wednesday, August 29, 2018 10:36 AM

• Characters:
○ Stumpf-Prev CEO
○ Sloan-New CEO
○ $185 mn to CPFB
 heart: Sales practices
 Focus on cross-selling financial solutions
□ Pressure to sell(to meet performance goals) caused illegal practices
 5300 employees fired
• Wells Fargo History:
○ founder 1852- Caalifornia
○ Takeovers, m&A- nation's largest commercial bank
○ Stumph- CEO(2007), chairman (2010)
 Stumph values- Solidarity and togetherness
 Led Community banking after WF and Northwest bank merger
○ Better position after 2008 crisis
○ Benefited from low cost funds, diversity of revenue sources, and refusal to sell complex
synthetic investment vehicles and no-document loan
○ Discriminatory lending practices- $175 mn settlement
○ 2008- Wachovia acquisition- 12.5bn-failure of similar banks
 Coast to coast banking soln
○ Vote of confidence from Warren Buffet
○ Berkshire Hathway had 9.5% stake in WF
○ Stellar reputation, viewed as neighborhood oriented
○ modest aspirations in wall street investment banking
○ 2015- World's most respectable bank
○ $22 bn in profits from $85bn in revenue
○ 1/3 households
○ Stress on importance of team members(want to keep them long term)
○ Six priorities- Put customer first, grow revenue, manage expenses, living vision and
values,conneccting with communities and stakeholders and managng risk
○ People as a competitive advantage, Ethics,, What's right for customers, diversity and
inclusion and Leadershiip
○ Stress on Values

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Day 3 Notes
Wednesday, August 29, 2018 6:29 PM

Community Banking: Customer facing part of banking Questions:


• Did the merger with northwest make a difference
Is cross-selling Wrong?
• In and of itself there sin't a problem
• Cross-selling is a tool- it may be reasonable to assume need other products you are
unaware of
Consolidation of large organi
• Structuring an org is hard, esp when you have a lot of team members
measuring loyalty:
• Activity
• Length of time
• Customer satisfaction
• Number of accounts
• Number of family members using the service
• Referrals
Successful orgs:
• Really clear communication
• clear startegy
Incentives were misplaced
Incentives were based on cross-selling, executives' rewards and bonuses tied to cross selling
Emphasis was put on cross-selling
Motivation was not to help customer but to avoid punishment
Very easy account opening- preying on people who couldn't understand or do anything about
it
Concerns of retaliation
Normali

Fix:
Broader metrics
explore motivation of sale rather than the number
cchange culture to remove pressure on sales
Changing rewards from number to quality
Frame in terms of productivity vs efficiency
Leaders: Evaluate performance, not adherence to ideal worker
negative effets of individually negotiated accomodations
Policies on the books but not accepted-frustration
Instead of unlimited vacation have rqd time off
Recogni

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