Virtuous Business

Politics, Charity, and Self-Interest

noreply@blogger.com (Michael) — Fri, 01 Aug 2008 16:23:00 +0000

Today's WSJ reports that the world's largest retailer is "warning" employees that if the democrats take over next year it will likely hurt their bottom-line, as well as their employment levels (see article here Wal-Mart Warns of Democratic Win - WSJ.com ).

Why the fear of dems? Won't Obama's tax-cuts for the poorest Americans increase the spending of Wal-Mart's key constituents? One word...Unionization. W-M is one of the most aggressive in fighting unionization (and one of the worst Fortune 500 firms in terms of benefits for hourly employees).

However despite their concerns, W-M leaders are covering their bases with the PAC support of Dems almost equal to their support of the GOP--in stark contrast to the 2000 and 2004 elections.

It would be easy to interpret this as W-M pressuring their employees to vote GOP-or else.

Is this type of political involvement merely seeking their own self-interest, or is it manipulating their employees through thinly veiled threats? Thoughts?

Presenting Virtues...

noreply@blogger.com (Michael) — Fri, 25 Jul 2008 15:30:00 +0000

Drs. Seaman, Smith, and Williams recently presented "Lessons Learned from teaching Virtues to MBA Students" to the National Faculty Leadership Conference in Washington DC.
Overall, the presentation was well-received, and it generated some very interesting discussions about the role of virtues in forming student's world-views.
Here is the video we showed to introduce the course.

Is cheating worth it?

noreply@blogger.com (MLW) — Fri, 14 Sep 2007 15:59:00 +0000

Some argue that the current business environment favors cheaters. After all, when Drexel Lambert, Enron, Tyco, Worldcom...were essentially robbed by their CEO's the vast benefits accrued to the thieves, not the shareholders. Even after substantial penalties, fees, fines, and jail time these men had millions in the bank and their families continued to benefit from this wrong doing while salaried employees of these firms struggle to make ends meet through unemployment and lost retirements. I'm reminded of this each time I see the Michael Milkin Institute in Santa Monica.

Well, today's NYT reports that Bill Belichick of the New England Patriots has been fined $500,000, the team fined $250,000 and they lost a first-round draft pick for video-taping opposing team coach's signals. Assuming this has been a long-standing practice (as suggested by the Eagles who lost Super Bowl XXXIX to the Patriots 24-21), I wonder...are three Super Bowls in six years, plus countless team advertising contracts, and individual contracts to players like Brady and even Coach Belichick worth only $750,000 in cash and a loss of 1/2 of a team's first round picks?

Apparently whoever said "cheaters never win" was not an NFL fan.

The Ethics of Eating

noreply@blogger.com (MLW) — Wed, 29 Aug 2007 14:19:00 +0000

I just finished listening to an interesting but provocative interview with Barbara Kingsolver, author of Animal, Vegetable, Miracle. In this book, Kingsolver reports of a one-year journey with her family to understand more clearly the impact of their family-dining on the global economy and environment. Her experience is wonderful, enriching, and deeply disturbing. I recommend the book (I'm getting it from the library), and an excellent interview on NPR's Speaking of Faith.

It is not a "granola Bible" as some might expect, but an encouragement to personal sacrifice, responsibility, and individual accountability.

Profit and Healthcare

noreply@blogger.com (MLW) — Mon, 09 Jul 2007 22:51:00 +0000

Michael Moore's newest movie, Sicko, opened recently to good reviews. I've not seen it (yet), but am interested in his take on the state of healthcare in the US. The realities of the insurance/healthcare industry came home to me last week in a personal way.

I had a minor 1-day surgery at a local hospital here in LA. It wasn't technically "out-patient", but I was out of the hospital within 12-hours from the time I first reported in. (The surgery went very well BTW).

A few weeks later I received a statement from the hospital with a bill for $39,000. That bill was separate from those provided by the surgeon and anesthesiologist (each over $5,000). I was amazed that 12-hours of care at a hospital could possibly cost that much.

The next week I received my "Explanation of Benefit" and the insurance company apparently has a contractual rate of app. $4,000 for the 12-hour stay in the hospital. That is 1/10 of the cost they billed me. Since the insurance company pays for a theoretical 90% of the cost, my co-pay was $400. That is 1% of the bill the hospital originally sent me (and what I assume would have been the total due if I did not have private insurance). Amazing.

Given this recent experience my curiosity was piqued by a story in Sunday's LA Times. This story reports a local physician who bought a hospital and discovered that the contractual rates allowed by the insurers were insufficient to cover his costs. So he canceled all standing insurance contracts and modified his business model to take a larger portion of the healthcare expense (rather than it all going to the insurance companies).

At first the article gives the impression that "this greedy physician is charging more than other local hospitals!". It even describes the value of his two local homes, and the expensive decor within them. However, by the end of the article, I came to the conclusion that the physician was merely turning the tables on the insurance companies. I suspect that the CEO of Blue Cross or WellPoint is worth much more than this physician. And somehow I think most of us are OK with that.

So a simple question...is it any more or less ethical for a practicing physician (who also happens to be the owner and CEO of seven local hospitals) to build a personal net-worth of over $300 million (as stated in the article) than it is for the CEO of a large insurance company?

Hospital group rejects system and cashes in - Los Angeles Times

Doctors, Insurance, and the state of healthcare

noreply@blogger.com (Michael) — Sun, 08 Jul 2007 16:57:00 +0000

Michael Moore's new movie, Sicko, has focused national attention on the economics of healthcare in our country.  The dysfunction of the system came home to me recently.  I had a minor surgery where I was treated and released in the same day.  A few weeks later I received the hospital bill for $39,000  (not including the separate physician's charges which were several thousand each for  the surgeon and the anesthesiologist).  I was amazed at the cost of 12-hours of hospitalization. 

Even more amazing, a few days later I received the "Explanation of Benefits" from my insurance company and discovered that the insurance company's agreed upon rate for the procedure was less than $4000.  That is nearly 1/10 of the amount the hospital stated as its charges.  My $400 co-pay was 10% of the insurance company's agreed upon rate, but only 1% of what the hospital says it was due.  Amazing.

Well, the plot thickened a bit today when I read in the LA Times has an excellent article on a local physician who has modified his business model to take more of the profit from the insurance companies.  He bought a local hospital, canceled all insurance contracts, and steered patients towards the ER for treatment.  He strengthened his ER staff and support services to dramatically reduce the wait times at the ER over other local hospitals.  Apparently the insurance companies have to pay the ER charges--regardless of the price.  I recommend reading the article.

What do you think about the virtue of such practices?  They are clearly legal, and some argue they aren't increasing the costs at all...simply transferring the profits from the insurance companies to the providers.  Read and discuss...

Hospital group rejects system and cashes in - Los Angeles Times

Literature and Ethics

noreply@blogger.com (MLW) — Fri, 29 Jun 2007 23:11:00 +0000

At a recent conference several colleagues and I argued that the apparent lack of values in many businesses today might be addressed through a richer introduction to literature for business leaders. Some evidence of this assertion is the course offered by MIT's Sloan School of Management titled "Literatue, Ethics & Authority".

Since it is summer time and I have more time for leisure reading I decided I would try to spend a bit more time reading "literature" and less time reading academic work. So far this summer I've read about nine contemporary novels including six books by NY Times Bestseller Stephen Frey. These books are all fun to read and deal with ethics directly. I highly recommend them for summer fun that will make you think about the little decisions that we make each day and how they contribute to a broader pattern of ethical (or unethical) living.

Profit with Honor

noreply@blogger.com (MLW) — Fri, 29 Jun 2007 21:50:00 +0000

I recently re-read Yankelovich's Profit With Honor and found it to be an acceptable introduction to the discussion of free-market theories verses Corporate Social Responsibility (CSR) and his own "Stewardship Ethic". I recommend it. ****

Economics for Humans

noreply@blogger.com (Dave) — Mon, 12 Mar 2007 08:22:00 +0000

A friend recommended this book to me, written by the economist Julie Nelson. Following is a book description. After I've had a chance to read the book, I'll post a review. Tbe book may be purchased at Amazon (http://www.amazon.com/Economics-Humans-Julie-Nelson/dp/0226572021/ref=sr_1_7/103-2995489-6023037?ie=UTF8&s=books&qid=1173687784&sr=8-7).

At its core, an economy is about providing goods and services for human well-being. But many economists and critics preach that an economy is something far different: a cold and heartless system that operates outside of human control. In this impassioned and perceptive work, Julie A. Nelson asks a compelling question: If our economic world is something that we as humans create, aren’t ethics and human relationships—dimensions of a full and rich life—intrinsically part of the picture? Is it possible to take this thing we call economics and give it a body and a soul?

Economics for Humans argues against the well-ingrained notion that economics is immune to moral values and distant from human relationships. Here, Nelson locates the impediment to envisioning a more considerate economic world in an assumption that is shared by both neoliberals and the political left. Despite their seemingly insurmountable differences, Nelson notes that they both make use of the metaphor, first proposed by Adam Smith, that the economy is a machine. This pervasive idea, Nelson argues, has blinded us to the qualities that make us work and care for one another—qualities that also make businesses thrive and markets grow. We can wed our interest in money with our justifiable concerns about ethics and social well-being. And we can do so if we recognize that an economy is not a machine, but a living, beating heart that circulates blood to all parts of the body while also serving as an emblem of compassion and care.

Nothing less than a manifesto, Economics for Humans will both invigorate and inspire readers to reshape the way they view the economy, its possibilities, and their place within it.

Virtue and Narcissism

noreply@blogger.com (Michael) — Thu, 01 Mar 2007 20:31:00 +0000

As a professor and father of three young children I have a good amount of exposure to today's youth. Yesterday's LA Times reported a study by San Diego State psychologist Jean Twenge that argues Gen Y is overcome with "self-esteem" to the point of neurotic narcissism. Read it here and see if you agree. I wonder...how will this contribute to the "me-first" self-interest we often see from today's business leaders?

Virtue and Narcissism

noreply@blogger.com (Michael) — Thu, 01 Mar 2007 20:24:00 +0000

As a professor and father of three young children I have a good amount of exposure to today's youth. Yesterday's LA TImes reported a study by San Diego State psychologist Jean Twenge that argues Gen Y is overcome with "self-esteem" to the point of neurotic narcissism. Read it here and see if you agree. I wonder...how will this contribute to the "me-first" self-interest we often see from today's business leaders?

Business 3.0

noreply@blogger.com (Michael) — Sun, 25 Feb 2007 22:27:00 +0000

Busines 2.0 is one of my favorite magazines. My wife and I both read it within days of its arrival each month. However, the above titled Op/Ed piece that caught my attention today is from another of my favorite New Economy rags...Fast Company. Here Futurist Andrew Zolli argues that sustainability is the "Dawinian hurdle" before today's capitalism that makes Friedman's "free-markets" increasingly irrelevant. While his remedies may be insufficient, his clarion call to action towards creating a sustainable economic system is convincing.

A place for virtue

noreply@blogger.com (Michael) — Fri, 23 Feb 2007 17:29:00 +0000

Let's face it...many residents of our world are growing concerned about capitalism's ability to offer a sustainable, healthy future for the earth, its citizens, and the global economy. One need not look any further than a simple Amazon search to discover that many scholars, thinkers and writers are concerned about the sustainability of our current commercial practices. Nearly every week there are Op/Ed pieces in leading publications, like this one from yesterday's LA Times that argue our current system is unsustainable.

Unfortunately, there are few viable alternatives.

Global socialism is clearly waning as the Soviets, Chinese, and soon Cuba rush to imitate elements of free-market capitalism over the controlled economies of the last century.

A variety of theocratic systems (e.g., Islaamism, Christianism...) are viewed by some as alternatives towards a sustainable future, but most view these systems as hopelessly narrow and/or alienating.

CSR is an idea favored by some, but many powerful capitalists resist it as too "fuzzy" and difficult to implement. On the other hand, social activists often argue that CSR is simply a clever way for capitalists to dress up their non-sustainable policies.

Finally, some argue that the most effective lever for sustainability is the free markets themselves. Through the judicious application of free markets, vouchers, taxes, and credits they argue that the "long-term interests of shareholders" will counter balance any short-term profit maximization.

These are issues that need to be discussed. They need to be discussed by the political, cultural, and corporate leaders of our world. And, they need to be discussed by the men and women who will one day become those leaders. That is why we are starting this blog. This is an invitation to conversation. Let's get started.