Publications

Authors: Jenny Mead and Patricia H. Werhane, Darden Business Publishing

The AIDS crisis had ravaged many developing countries by 1999 and, in particular, on the continent of Africa. Two-thirds (22 million) of the estimated 33.4 million people living with HIV/AIDS worldwide in 1998 were in sub-Saharan Africa, considered the "global epicenter" of the disease. The death toll in the region was twelve million and the life expectancy plummeted from sixty-two years to forty-seven years.

Chicago-based Abbott Laboratories had responded at the start of the AIDS outbreak by developing the HIV diagnostic test kit and then, later in the crisis, developed some of the state-of-the-art HIV/AIDS drugs. Abbott executives, led by CEO Miles White, wanted to address the crisis in sub-Saharan Africa, but in a specific, efficient and effective way. This case details the evolution of the AIDS crisis, Abbott Laboratories' HIV/AIDS drug production and the company's efforts to find other ways to globally battle HIV/AIDS.

Abbott and the AIDS Crisis (B)

Authors: Jenny Mead and Patricia H. Werhane

In 1999 and 2000, Abbott Laboratories' senior management considered a number of philanthropic options that could make a difference and define the focus for Abbott and the Abbott Fund's charitable programs. Although the cause was humanitarian, it was considered important that the programs align strategically with Abbott's leadership in the HIV/AIDS arena. The Abbott Fund officially launched the Program for Orphans and Vulnerable Children in June 2000. The program assisted orphans and vulnerable children infected and affected by HIV/AIDS as well as the communities that cared for them.

They chose Tanzania as host for a pilot program, which involved updating the country's community health care infrastructure. Abbott partnered with Tanzania's Ministry of Health over the next five years to upgrade the facilities at Muhimbili National Hospital in Dar Es Salaam, the Tanzanian capital; build an HIV center comprising an outpatient clinic and counseling/support facilities; create a national HIV teaching center; and introduce pharmacy, health information and management systems.

The dramatic growth of the Abbott Fund HIV/AIDS programs suggested a strategic turning point for the Abbott Fund, transforming it from a domestic philanthropic program to one with a global focus, now aligned with Abbott's international business focus. By 2003, nearly $20 million from the Abbott Fund was being invested in its developing-world AIDS programs.

Abbott and the AIDS Crisis (C): What Lies Ahead?

The partnership between Abbott and the government of Tanzania continued to flourish. As a demonstration of Abbott's long-term commitment to Tanzania, in 2007, the Abbott Fund opened its first office outside Abbott headquarters in Illinois. The new office in Dar es Salaam, led by Divisional Vice President Christy Wistar, oversaw the expanding number of philanthropic projects in Tanzania. In June 2007, Abbott CEO Miles White returned to Tanzania for the third time and announced the Abbott Fund's future plans to modernize the 23 regional laboratories across Tanzania.

By the end of 2007, the Abbott Fund had invested more than $50 million in Tanzania alone, strengthening and modernizing the health care infrastructure and systems countrywide. The Abbott Fund planned to continue its support of numerous programs and organizations that were working to prevent mother-to-child transmission of HIV/AIDS and deliver effective care and treatment to HIV-infected patients. The Abbott Fund also supported programs that provided for the basic needs of orphans and vulnerable children in Tanzania and elsewhere in Africa and India.

 BHP Billiton and Mozal (A)

Authors: Laura P. Hartman, Jenny Mead and Patricia H. Werhane, Darden Business Publishing

BHP Billiton, the world's largest diversified resource company at the start of the 21st century, began a feasibility study in 1995 for building an aluminum smelter project in the Maputo province in southern Mozambique — one of the world's poorest countries that was hampered by fragile legal, financial, health, safety, environmental, and community institutional structures and capacity. BHP Billiton was committed to sustainable development and believed that social and environmental performance were critical factors in business success.

BHP Billiton believed firmly that sustainable development involved engaging and partnering with its community stakeholders to address the challenges associated with establishing resource projects and to share the benefits of success. Was this possible in Mozambique, given the nation's social and political challenges, the prevalence of malaria and HIV, and the weak infrastructure? Acknowledging that stakeholders had a role to play in achieving a successful and sustainable project, BHP Billiton adopted this slogan for the project: "Together we make a difference." The company called the project "Mozal." But would or could they be successful? And at what cost?

BHP Billiton and Mozal (B)

BHP Billiton began construction of Phase 1 of the Mozal aluminum smelter in 1998. Because of the challenges that the community presented, BHP Billiton and its partners created the Mozal Community Development Trust (MCDT), which worked to improve the infrastructure, social services and health care of the community. During the two construction phases, the project contributed more than $160 million to the local economy, principally through the employment of Mozambican laborers and the use of local contractors and suppliers. The MCDT implemented malaria prevention and HIV/AIDS prevention program, made improvements to the health clinics and schools, instituted work force training and development, and supported small and medium enterprises.

In addition, it initiated projects aimed at raising the level of education of the country's engineers and technologists to international standards. In 2002, when both phases of the Mozal smelter were complete, the World Bank's International Finance Committee (IFC) stated that Mozal had set a precedent for future projects in Mozambique. Mozal, said the IFC, "illustrates the clear advantages of incorporating environmental and social issues early in a project, and reflects the approach and procedures IFC has been refining and putting in place to deal with environmental and social issues." For BHP Billiton, the Mozal experience demonstrated that, when establishing a major resource project, it made good business sense to invest not only in the venture but also in the host community.

Corporate Responsibility: The American Experience

Authors: Archie B. Carroll, Kenneth J. Lipartito, Kenneth E. Goodpaster, Patricia Werhane and James E. Post

This thought-provoking history of corporate responsibility in the U.S. is a landmark publication documenting the story of corporate power and business behavior from the mid-18th century to the modern day. It shows how the idea of corporate responsibility has evolved over time with the roles, responsibilities and performance of corporations coming increasingly under the spotlight as new norms of transparency and accountability emerge.

Today, it is expected that a corporation will be transparent in its operations; that it will reflect ethical values that are broadly shared by others in society; and that companies will enable society to achieve environmental sustainability as well as a high standard of living. As we enter the second decade of the 21st century, the social, political and economic landscape is once again shifting: the need for an informed public conversation about what is expected of the modern corporation has never been greater.

The Ethics of the Maker Movement: The Potentially Good and the Possibly Terrible

Author: Daryl Koehn

The Maker Movement has exploded onto the world scene. The movement consists of individuals who are dedicated to making their own things using advanced technology that has become ever more widely available. Creative types are no longer merely making traditional items such as wooden stools or Raggedy Ann dolls. They are manufacturing robots and cars and even producing designer E. coli bacteria. Much of this manufacturing is occurring at home; the products are sold out of the home as well.

The movement is of interest because it raises questions about the purpose of business, points to challenges of sustainability, highlights the interrelationship of the productive and distributive dimension of wealth creation, and foregrounds material and spiritual aspects of innovation and of creation. Since the Maker Movement is relatively new, it is difficult to state with any certainty what will ultimately prove to be ethically good or ethically worrisome about it. However, precisely because the movement is in its early stages, now is a good time to take stock so that those in the movement can be encouraged to become more mindful about the ethical issues that may arise as the Maker Movement gathers steam.

Global Poverty Alleviation: A Case Book

Authors: Pauline Albert, Patricia Werhane and Tim Rolph, Eds.

This case book provides examples of multi-stakeholder partnerships that aim to create sustainable enterprises for the for-profit sectors and individuals who live in conditions of poverty. A brief introduction to the case method is followed by the cases presented as descriptions with no comments or criticisms. The cases are arranged thematically and cover a broad array of solutions in diverse countries including India, Bangladesh, Vietnam, Tanzania, the United States, South Africa, Mozambique, Peru, Ghana, Haiti and Mexico.

Specific programs for alleviating — or even eradicating — poverty through profitable partnerships come from myriad sectors such as banking, health, education, infrastructure development, environment and technology. The cases highlight solutions that focus on bringing about substantive shifts in the conditions of life for those living in poverty. Ideal for teaching.

HealthReach and HABLA (A)

Authors: Jenny Mead, Justin Sheehan and Patricia H. Werhane, Darden Business Publishing

In 2004, there were 50 million non-English speakers in the United States and an additional 22 million who had marginal English proficiency. Many had no health insurance or access to low-cost, affordable health care. This case describes the dilemma faced in 2004 by Jim Zimmerman, the executive director of the Illinois-based HealthReach clinic, which served the area's uninsured poor, in deciding what initiatives to continue funding.

One of these was Healthcare Access by Language Advocacy (HABLA), a medical interpretation program developed in 2001 to bridge the language gap between the volunteer medical staff and their Hispanic patients, many of whom spoke little or no English. This had proved an invaluable program, but Zimmerman's funds were tight.

Islamic Banking and Finance

Author: Karen Hunt Ahmed

The religion of Islam has existed for 1,400 years but Islamic economic theory and its financial institutions emerged as an industry only in the 1970s. Islamic financial institutions (IFIs) are designed to help Muslims conduct business internationally while simultaneously upholding traditional Islamic values related to trade finance and currency movement. The basis for their existence is the Islamic moral prohibition on charging interest — interest is a central component of capitalist banking — yet IFIs conduct billions of dollars of business annually in the world economy and the de facto Islamic banking transaction is, in most cases, virtually identical to a capitalist banking transaction.

Business practices in the industry of Islamic banking and finance (IBF; Maurer 2005) have evolved to reinforce some of the major tenets of a moral belief system based on Islamic principles. In this chapter, I will discuss specific practices put into place by the IBF community that are designed to embody tenets of a belief system based on Islam while at the same time generating profits for the institution and its customers. This chapter will contribute to the discussion of best corporate practices by introducing some of those practices and discussing how those practices contribute to the success of the industry.

Living With the Dragon: Acting Ethically in a World of Unintended Consequences

Author: Daryl Koehn

The book consists of a short introduction to the significance of unintended consequences and four chapters. The first chapter develops a typology of unintended consequences and distinguishes them from historical contingencies. The second chapter analyzes three types of causes of such consequences: worldly, practical and psychological causes. The third explores the significant problems these consequences pose for standard moral theories. The fourth and final chapter examines how we might begin both to think about and cope with unintended consequences in an ethically good way.

The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A)

Authors: Jenny Mead and Patricia H. Werhane, Darden Business Publishing

In 1998, Klaus Leisinger and Karin Schmitt of the Novartis Foundation for Sustainable Development in Basel, Switzerland, were approached by a sociologist who wanted help in launching a pilot program in Tanzania to deal with the crisis of the more than 8 million HIV/AIDS-orphaned children in sub-Saharan Africa.

The proposed program was unusual in that it addressed the psychological and social traumas these children experienced. The other unusual aspect of this request was that Novartis, at that time the second-largest pharmaceutical company in the world, did not make, sell or distribute any products related to HIV/AIDS. Novartis, and its philanthropic foundation, was committed to helping the neediest in developing countries, however. Leisinger and Schmitt did not believe that "throwing money" at problems resulted in solutions; rather, they looked for innovative ways to address problems and crises. But given the unusual nature of the request, Leisinger and Schmitt had to decide whether the foundation should help launch this program.

The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (B)

The increasing problems of millions of HIV/AIDS orphans and the perceived need for an innovative and creative solution to tackle the psychological, social and economic needs of vulnerable children tipped the scales in favor of accepting sociologist Kurt Madörin's proposal: Klaus Leisinger and Karin Schmitt of the Novartis Foundation for Sustainable Development gave Madörin the go-ahead for setting up a pilot program in Tanzania to address the psychosocial needs of children who had lost parents to AIDS.

This case describes the pilot program in Tanzania, Novartis's role in creating it and — in 2001 — the launch of a Regional Psychosocial Support Initiative (REPSSI) to address the psychosocial problems on a wider scale. The Novartis Foundation and the other organizations involved had to assess different countries and determine which one would be the best headquarters for REPSSI, and they had to focus on creating a strong and effective organizational operation.

The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (C)

The Novartis Foundation and various donors undertook a risk-assessment of how REPSSI could be brought to other African countries both legally and effectively. The original initiative had to be transformed into an organization, and a host country had to be chosen to implement the program. South Africa, where the HIV/AIDS problem and its effects on children seemed the most severe, was chosen. By 2006, REPSSI, through its various organizations and institutions throughout sub-Saharan Africa, had touched the lives of more than 300,000 orphans.

It had worked at various times with more than 140 aid organizations. The collaboration had, in particular, been extremely successful in "transferring best practices in labor management, leadership and financial skills." Many of the services businesses and universities provided the NGO were pro bono. REPSSI continued to grow as 2006 came to a close and, with management stretched thin, those involved with REPSSI looked once again to Novartis's corporate human resources as well as the foundation itself to guide them to greater growth.

By 2007, the project was financially secured for another three years by the Swedish Development Agency (SIDA), the Swiss Development Cooperation (SDC), the Novartis Foundation for Sustainable Development, and other donors. The Novartis Foundation's goal was to make REPSSI the "implementing agency of choice" for such programs and securing long-term financing through expanding the donor base.

Obstacles to Ethical Decision Making: Mental Models, Milgram and the Problem of Obedience

Authors: Patricia H. Werhane, Laura Pincus Hartman, Crina Archer, Elaine E. Englehardt and Michael S. Pritchard

In commerce, many moral failures are due to narrow mindsets that preclude taking into account the moral dimensions of a decision or action. In turn, sometimes these mindsets are caused by failing to question managerial decisions from a moral point of view because of a perceived authority of management.

In the 1960s, Stanley Milgram conducted controversial experiments to investigate just how far obedience to an authority figure could subvert his subjects' moral beliefs. In this stimulating work, the authors examine the prevalence of narrow mental models and the phenomenon of obedience to an authority, to analyze and understand the challenges that business professionals encounter in making ethical decisions. "Obstacles to Ethical Decision-Making" proposes processes — including collaborative input and critique — by which individuals may reduce or overcome these challenges. It provides decision-makers at all levels in an organization with the means to place ethical considerations at the heart of managerial decision-making.

Procter & Gamble: Children's Safe Drinking Water (A)

In 1995, Procter & Gamble (P&G) scientists began researching methods of water treatment for use in communities facing water crises. P&G, one of the world's largest consumer products companies, was interested in bringing industrial-quality water treatment to remote areas worldwide, because the lack of clean water, primarily in developing countries, was alarming. In the latter half of the 1990s, approximately 1.1 billion (out of a worldwide population of around 5.6 billion) people lacked access to clean drinking water or sanitation facilities. An estimated 6 million children died annually from diseases, including diarrhea, hookworm and trachoma, brought about by contaminated water. Many of these deaths were preventable if a water sanitation product was paired with effective education and distribution. With a long history of scientific research and innovation in health, hygiene and nutrition, P&G considered ways it could address the safe drinking-water crisis as the new millennium approached. Although the company had a vast array of successful products, P&G did not offer anything that involved water purification, either domestically or in developing countries where poverty, lack of infrastructure and inaccessibility of remote communities made the prospect of cleaning up the water more difficult.

Procter & Gamble: Children's Safe Drinking Water (B)

Snow Brand Milk Products (A): Assessing the Possibility for Revitalization

Authors: Daryl, Kohen, Jenny Mead, Akira Saito and Regina Wolfe

This three-case series, set in Japan, explores corporate responsibility and brand rebuilding in the face of a serious crisis. Suitable for MBA, executive education and undergraduate students, it depicts a consumer advocate's decision-making process as she considers whether to help a company restore its badly tarnished reputation. In spring 2002, leading consumer activist Nobuko Hiwasa was invited to join the Japanese company Snow Brand Milk Products' board of directors.

The CEO wanted her to assist in SBM's revitalization efforts, which were being implemented in the wake of two recent scandals — contaminated milk and beef mislabeling — that had almost brought down the venerable company. Hiwasa had to decide whether to take on this Herculean task. Was the company sincere in wanting to reform and revitalize? Would she be accepted as an equal among the board members, and would her views and suggestions be given serious consideration? Was the request publicity-driven? How would fellow consumer advocates view her if she accepted the position? This case details the history of Snow Brand Milk Products and the missteps and scandals that plagued it in the 1990s and the early part of the decade that followed.

Snow Brand Milk Products (B): Reform and Revitalization Efforts

This case outlines the turnaround efforts Snow Brand undertook to address its grave missteps: shifting to a consumer-oriented, integrity-focused management style; providing greater transparency and communication; establishing a corporate ethics committee and a Snow Brands Code of Conduct. In June 2002, after much consideration and reflection on Snow Brand's issues (as outlined in the A case), consumer activist Nobuko Hiwasa joined its new board as its sole outside director, serving as the impetus for the changes the company made. Her appointment indicated Snow Brand Milk Products was indeed serious about reform and revitalization.

Snow Brand Milk Products (C): 2009 — Remaining Challenges

The turnaround at Snow Brand Milk Products was a real learning experience for all involved. The lessons were many, and while prioritizing them was difficult, it seemed clear that the most significant was the realization that the company existed to serve the consumer and, through that service, the broader society.

This brief case outlines the successes that Nobuko Hiwasa pushed Snow Brand management to accomplish, and introduces the challenges that the company faced in 2009: primarily, continuing to build its Corporate Social Responsibility approach and addressing environmental and social issues.

Started as Crew (B): Darlene Calhoun and McDonald's

McDonald's Corporation, the behemoth of the fast food industry, has taken its share of criticism — even ridicule — over the years. The image of the company suffered as the public began to perceive its jobs as dead-end, unskilled and unstimulating. The term "McJob," coined by an author in 1991, was slang for a low-paying job that required little skill and provided little opportunity for advancement.

But in many ways, McDonald's Corporation defied norms, using a combination of promotion-from-within strategy and benchmark employee training programs to develop an abundant pool of human capital. The company was deeply committed to its employees who "started as crew" coming up through the ranks, receiving the necessary training at its own Hamburger University. This case tells the story of Darlene Calhoun, who started working at a McDonald's as a cashier in 1977 and, 20 years later, was supervising five McDonald's stores in the Chicago area.

Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction

Authors: Laura P. Hartman, Jenny Mead, Justin Sheehan, Patricia H. Werhane and Regina Wolfe

From the early 1970s to the beginning of the 21st century, multinational corporations (MNCs) had increasingly participated in the reduction of poverty as part of their business strategies. Such participation reflected an increasing awareness of the widening gap between rich and poor across the globe. McDonald's Corporation, despite myriad criticisms directed at it about dead-end jobs and the detrimental effects of fast food, had defied norms, however.

The company used a combination of promotion-from-within strategy and benchmark employee training programs to develop an abundant pool of human capital. The company was deeply committed to its employees who "started as crew" rising through the ranks, receiving the necessary training at its Hamburger University. This case details the rise of McDonald's, its particular culture, and its emphasis on and pride in the "stared as crew" element, and illustrates these elements with stories of various employees who rose through the ranks to management and executive positions.

Transformational Gaming: Zynga's Social Strategy

Authors: Laura P. Hartman, Danielle Christmas, Jenny Mead and Patricia H. Werhane

In this novel and extremely timely case study, we will first define and explore our mental models surrounding organizations' role in poverty alleviation. We will then examine one of our most enduring and destructive mindsets surrounding the role of for-profits in developing economies: the obstructive perception that the interests of private organizations in the alleviation of global poverty should not be vested but instead should originate from charitable purposes.

This caustic model, which describes as unseemly any engagement between for-profit organizations and markets at the Base of the Pyramid, not only is extraordinarily hindering to the enterprise but, unfortunately, also is devastating in its impact on those living in poverty since it denies them the benefit of one of their greatest potential benefactor sectors. The purpose of the case study is to illustrate the power of out-of-the-box imagination and creativity, in ways not before utilized, to break through these otherwise obtrusive mindsets.