Thursday, March 22, 2007

My Principles, or the Milk and Cookies?

[This column originally appeared on Sunday, January 18, 2004, in The New York Times Money & Business section, where "The Right Thing" column ran monthly from September 1998 through January 2004. In February 2004, "The Right Thing" started running as a weekly syndicated column in newspapers throughout the country and internationally. A collection of "The Right Thing" columns from September 1998 through July 2002 is available by clicking on The Right Thing Book from amazon.com.]

Growing up in Boonton, N.J., I routinely stopped at the supermarket on my way to the local bowling alley to pick up a package of Archway ginger cookies, my favorite snack at the time. More than 30 years later, as an adult living in Boston, each time I shop at the grocery store I buy three half-pint boxes of milk -- the kind that requires no initial refrigeration -- to have on hand in the pantry. And I continue to buy Archway cookies.

Both products are made by Parmalat, the Italian conglomerate in which executives are accused of making up phony bank accounts and siphoning off millions in company funds to finance other ventures.

Now I face a choice: Should I stop buying both products as a sign of dissatisfaction with the company?

What makes this scandal different from some others is that Parmalat makes products that I immediately recognize. In my daily life, I never encounter the Enron brand, and I wouldn't recognize a Tyco product if it were to hit me through a $6,000 shower curtain. But Parmalat's products are different. I use them. I like them. I feed them to my grandsons.

So do I stage a personal boycott? If I say yes, is it because I believe it's wrong to buy products from a company in the midst of a scandal? Or because this is the scandal that broke this camel's back? Or because I believe that not doing so would signal that I condone bad behavior at the top?

"One of the questions you have to ask yourself is, 'What message am I sending and to whom?"' said Michael Josephson, the president of the Josephson Institute of Ethics in Marina del Rey, Calif. He said that by boycotting the products, I would be more likely to hurt the roughly 36,000 employees at Parmalat companies who have not been accused of wrongdoing.

But do companies deserve an ethical pass out of concern that a boycott might cost employees their jobs? "Employees can be innocent victims of boycotts and this is unfair," said Joseph L. Badaracco Jr., a professor of business ethics at Harvard Business School. But the problem is unavoidable, he said, "short of giving up boycotts, which isn't good either," adding that doing so would let "bad managers use their employees as human shields to protect themselves from boycotts they deserve."

But the question remains: Is a boycott deserved? "If executives are willing to engage in financial corruption, I would be less likely to trust them and less likely to buy their product," said Linda Klebe Trevino, a professor of organizational behavior at Pennsylvania State University. "I would ask myself if these executives would also be willing to compromise product quality or even safety for short-term financial gain."

Even Mr. Josephson, who expressed concern that a boycott might punish the wrong people, said his biggest fear was that the cumulative effect of egregious corporate behavior would be to make people "immobilized and immune" -- to cynically accept such behavior as the status quo.

All this insight, of course, does nothing to instruct me about my Parmalat conundrum.

"If you don't like what a company is doing, then you shouldn't buy its products, not because you hope it will impact them, but based on the principle that you don't want your personal money going to some firm that is doing something of which you disapprove," said Laura P. Hartman, a professor of business ethics at DePaul University in Chicago and co-editor of "Rising Above Sweatshops: Innovative Approaches to Global Labor Challenges" (Praeger, 2003).

If I buy her argument, am I destined to a life without my favorite cookies and milk? Not necessarily. "If the firm makes the right choices, ousts the bad guys and changes its practices, then you should go ahead and support it again," she said.

As I write this, 10 people associated with the Parmalat scandal have been arrested. A turnaround team had been brought in to try to shore up the company's finances. None of this is enough to indicate that the company has been set straight. But it's a nice start. And, soon, Parmalat's milk and cookies may again be gracing my cabinets.

2 comments:

Anonymous said...

Mmmm. Archway oatmeal and raisin.

pcarpenter said...

In this example, the executives have stolen company money. This hurts the owners, ( which in a publicly owned corporation are the stockholders). Boycotting the product only compounds the hurt.

This is very different from doing business with a company whose on-going business practices are unethical. A company who profits from brutal labor practices, political payoffs or large scale environmental damage is enhancing their profit at the expense of their employees and community. A boycott removes their profit and defeats their motivation.

Does taking a gift signify approval of a neighbor's project?

There's a lot of construction going on in L.L.'s neighborhood. Empty lots are being dug up for foundations of new homes. Existi...