Are our demands for socially responsible companies and governments unreasonable? How often do you as a consumer, employee, investor or everyday citizen compromise your stated values for convenience or cost savings? When push comes to shove, how easily would you abandon what you say you value to protect your personal interests? Can we really blame corporations and governments for cutting corners when we may often do so ourselves? Drawing on fascinating research and case studies, this public lecture reveals the complexity of human behaviour as it relates to the choices and actions we actually make versus those we believe we would make. It challenges the assumption that corporations, governments and NGOs can achieve the level of social responsibility we believe they must, while being composed of demonstrably imperfect beings – ourselves. Timothy Devinney is Professor of Strategy at UTS Business School and one of Australia's leading business scholars.  He is a Fellow of the Academy of International Business, the Australia-New Zealand Academy of Management and the Advanced Institute of Management (UK) and the Rockefeller Foundation. He is the only management academic to be awarded an Alexander von Humboldt Foundation Research Award and Fellowship. He has MA, MBA and PhD degrees from the University of Chicago in Economics and Statistics and a BSc (Hons) from Carnegie Mellon University in Psychology and Applied Mathematics. Introduced by Christopher Zinn, Director Communications & Campaigns, CHOICE. UTSpeaks is a free public lecture series presented by UTS experts discussing a range of important issues confronting contemporary Australia.

1. Ethical Vanities
THINK.CHANGE.DO

2. Acknowledgements & Co-Conspirators
 Pat Auger
 Grahame Dowling
 Jordan Louviere
 Paul Burke
 Russell Belk
 Giana Eckhardt
 Christine Eckert
 Nidthida Lin (Perm-Ajchariyawong)
 Joachim Schwalbach
 Michal Ulrych, Vichit Laoledchai, Thomas
Birtchnell, Sandra Peter, Omer Konacki, Michael
McGee, Steve Cook, Sandra Kleinsasser, Anja
Schwerk

3. Acknowledgements & Supporters
 Australian Research Council
 Alexander von Humboldt
Foundation (Germany)
 Rockefeller Foundation (US)
 Cambridge U. P. (UK)
 Various corporations, NGOs
and universities
 Particularly UTS and Robert
Button and Jane Westbrook

4. A Disclaimer

5. The Basic Logic of Today’s Talk
 Corporate Social Responsibility arises ONLY when
the human components accept and act upon their
responsibility
 The corporation is “us” as:
 Managers The dilemma is that we
 Workers rarely act with a level of
 Investors responsibility that we
 Customers
demand from companies

6. The Complexity of Context, The Fallacy of Generalization
 The “Good Samaritan” Experiments
 Context trumps „values‟ (up to a point?)
Those Helping
80%
63%
60%
45%
40%
20%
10%
0%
No Hurry Moderate Hurry High Hurry

7. The Lesson of the Good Samaritan Experiments
Ironically, a person in a hurry is less likely to help people, even if he
is going to speak on the parable of the Good Samaritan. Some
literally stepped over the victim on their way to the next building!
The results seem to show that thinking about norms does not imply
that one will act on them. Maybe that “ethics become a luxury as
the speed of our daily lives increases”. Or maybe peoples’
cognition was narrowed by the hurriedness and they failed to make
the immediate connection of an emergency.
Darley & Batson (1973)

8. A More Managerial Perspective: Truthful or Cynical?

9. What is Required?
 We need to understand the reality of individual behavior:
 In an environment that allows us to understand the trade-offs that
we make as ordinary [consumers, workers, investors, …, members
of the the society]
 When there are costs to our behavior
 And the consequences are potentially unknown
 This is an enormous task
 What follows is just a glimpse of the inconvenient reality that we
seem to be uncovering

10. Why is This Critical?
 Basing corporate and social policy on “myth”,
“anecdote” and “opinion lacking scientific evidence”
 Is costly and inefficient
 Bad policy and products/services that fail
 Dangerous socially
 Implies the sanctity of one opinion over another based on
power and persuasion rather than transparency and evidence

11. ETHICAL VANITIES I
THE MYTH OF
THE ETHICAL
CONSUMER

12. Consumer Social Responsibility:
Do We Care When We Consume?
According to LOHAS about 30 percent of U.S. adults—more
than 63 million consumers—now purchase goods and services
with a nod toward the products’ health, environmental, social
justice and sustainability value. The marketplace, worth $227
billion a year, is expanding at a healthy pace and is projected
to reach $1 trillion annually by 2020. (LOHAS, 2006)
70 percent of respondents believed that a firm’s business
ethics had “some influence” on their purchasing decisions.
(Uusitalo & Oksanen, 2004)
YET, What does this imply about behavior?

13. The Problem of Believing What People Say:
Unconstrained Queries  Willingness to Pay or Action
What matters in purchasing? Utilitarians Anti-Utilitarians Who are these people? Utilitarians Anti-Utilitarians
Brand 51% 11% Females 77% 47%
People paid enough to live on 3% 96% + MBA Degree 11% 3%
Damage to the environment 22% 98% Amnesty Intl Supporter 8% 34%
Animal testing 12% 79% Machiavellianism 98 92
Human rights record of the Moral Relativism 3.29 2.90
country of production 7% 66%
Might imply significant differences
Price Premium Utilitarians Anti-Utilitarians
Child Labor 12% 16%
Dangerous Work Conditions 12% 9%
Until you examine whether
Minimum Wages 12% 13%
this translates into any difference
Animal testing 9% 8%
in willingness to pay or act Biodegradability 12% 13%
Animal By-products 10% 10%

14. Tough Tradeoffs
Functionality Ethics
Product A Product A
Lo Hi Bad Good
Lo Bad
Product B
Product B
Hi Good
Dilemma Situation = Ethics opposes Functionality (Good => Lo)
Non-Dilemma Situation = Ethics supports Functionality (Good => Hi)
Price is varied so that Functionality and Ethics are not “Free”

15. Functionality Trumps Ethics & Ethics Responds to Price

16. ETHICAL VANITIES II
THE MYTH OF
THE ETHICAL
WORKER

17. Worker Social Responsibility:
Do We Care When We Consider Our Job Contracts?
Major public issues such as a company’s
reputation for strong ethical practices have
become critical factors in choosing where
to work, even to the point where many
employees are prepared to sacrifice pay or
promotion in order to work for
organizations that are actively engaged in
good social responsibility practices
[underline added].
More specifically, concerns about ethical
behavior outweigh concerns about the
environment by all generations, when
making employment choices.
(Kelly Services Annual Workplace Survey, 2010)

18. Worker Social Responsibility: Unconstrained/MBA
Unconstrained Rating Top 5 Reasons Mentioned
4.00 35
30
3.75 25
20
Percent
3.50
15
3.25 10
5
3.00 0
The rating scale is: 1 = completely irrelevant; 2 = not very
relevant; 3 = relevant; 4 = very relevant; 5 = absolutely critical

19. Salary Sacrifice: The Ultimate Question (MBAs)
Relative Importance (Percent)
Salary/Compensation
Time Demands
Promotion Opportunities
City / Size
Bonus Split
Travel Demands
Location (Country)
Corporate Reputation
Workplace Reputation
Social Reputation
Signing Bonus
Pension
Overseas Travel
Stock Option
Contract Length

20. But What of the Ordinary Worker? Surely They Care!
Impact Weights
Salary/Compensation
Overtime Paid
Time Demands
Travel Demands
Contract Length
Corporate Reputation
Promotion Opportunities
Family Policies
City / Size
Workplace Reputation
Professional Devlpmnt
Union Wkplace
Community Wk
Pension
Flex Schedule
Social Reputation

21. ETHICAL VANITIES III
THE MYTH OF
THE SOCIALLY
RESPONSIBLE
INVESTOR

22. Investor Social Responsibility:
Do We Care When We Consider Our Investment Choices?
For years, the notion of socially responsible investing (SRI) — putting
your money into companies that represent and uphold your personal
values — was considered a fringe strategy. No longer. Last year,
$2.71 trillion — roughly one of out every nine dollars under
professional management in the United States — was invested in
companies based on their environmental or social records, according
to the Social Investment Forum.
Northern Trust – Promoting their SRI Funds, 2010

23. Superannuation Allocations

24. Pension Allocation Game
Allocations (Percent of Portfolio) Underallocation Percentage
High High Risk/Return
Risk/Return
High High Medium
Medium Risk/Return
Risk/Return
Medium Medium Risk/Return
Risk/Return
Low Low Medium
Medium Risk/Return
Risk/Return
Low Low Risk/Return
Risk/Return
0% 10% 20% 30%
0 5 10 15 20
Socially Responsible Normal Investment
Overall, the under allocation is
about 20 percentage points

25. ETHICAL VANITIES IV
INDIVIDUAL
SOCIAL
RESPONSIBILITY
http://www.6billionothers.org

26. So What Do We Make of This?
[We must] make the best of mankind as they
are, since we cannot have them as we wish
George Washington speaking of his troops (1775)
As I grow older, I pay less attention to what
men say. I just watch what they do.
Andrew Carnegie
The problem with people who have no vices is
that generally you can be pretty sure they’re going
to have some pretty annoying virtues.
Elizabeth Taylor

27. So What Do We Make of This?
 It is good to have hopes and aspirations
about human behaviour
 But we must not allow these to delude
us to the reality of that behaviour
 We cannot base policy (either corporate
or social) on hope and aspiration alone
 We must integrate this with how people
live their everyday lives in many guises
 We must be careful not to insist that our
institutions behave better than we
ourselves are capable
 But that does not imply that we do not
demand change nor can we change

28. Thank You and Questions?
More information at: www.mythoftheethicalconsumer.com

29. How Context Matters