FRANCE TÉLÉCOM AND MONSANTOBUS 400 – Business Ethics

By Célia Junon, Pradit Keomisy, Evan Palmer and Pierre Urier-Cattoire

OUTLINEIntroduction

Part I – France Télécom

Part II – Monsanto

Part III – Case Comparison

Conclusion

INTRODUCTION“Every man has the right to risk his own life in order to preserve it. Has it ever been said that a man who throws himself out the window to escape from a fire is guilty of suicide?”

Jean-Jacques Rousseau

The social contract or Principles of Political Right, 1762

PART I – FRANCE TÉLÉCOM1. Background information

2. Reactions

3. Actions and Consequences

A. Background Information1. MAJOR HISTORICAL FACTS– A PROFIT-MAKING

COMPANY

1996: the state-owned monopoly became a private firm

Costs/Benefits approach

2002: Internet Bubble 2008: Financial Crisis

= « FRENCH SOCIAL CRISIS »

22 000 layoffs planned to increase the productivity by

15% between 2004 and 2006

2. CORPORATE GOVERNANCE AND ETHICS

2003: Official Code of Ethics

“We believe in the loyalty, integrity, motivation, skills, sense of initiative and accountability of our employees”

Ethics Officers Whistle blowing program

Group Ethics Committee

3. What led to problems/symptoms

Top

• Schizophrenic Government and European Directive• Private Market > Expectations Raised• Pressure on Top Managment

Middle

• Efficiency/Effectiveness• Pressure on Middle Managment

Emp

• Downsizing/Frozen Recruitment• Not aware of everything, Internal Competition• Pressure on the Employees

B. Reactions

Management and Investors

• Personal issues• Statistics against emotion• “Faire la part des choses”

• After Government intervention: new social contract (long term vision: 2015)

• Training for managers

• TV advertisement with employees as actors

• No changes in FT quote (no visible reaction from investors)

Employees and Costumers

• Employees were first to react:• France Telecom Cries (Video)• Anti-boss song• Enquiry on employee’s feedback

• FT is the biggest firm of a tripartite oligopoly: switch cost important

no heavy reaction from costumers

Wednesday, Sep. 16 2009

The first priority is to stop the contagion that's led to this infernal spiral of suicides .

- Didier Lombard, CEO of France Telecom

Corporate Social Responsibility Committee

Media

• “The non-existing issue”

• “When statistics kill the debate”

• “From one suicide to a media storm”

Led the national debate

Government

• Made the difference• Late intervention with

“Fight against stress at work” campaign

• Is the first shareholder of the company: has the most influence

April 2010 5 suicides in 15 days

New position CEO

C. Actions and Consequences

PART II – MONSANTOA. Past and Present

B. In India

C. In North-America

A. Background Information

• Founding and history

• 1980s and GMOs

• Present

• Reputation

B. Monsanto in India• GM seeds• Heavy promotion• Huge debts• Tough climate conditions cause failing crops• Mass suicides

“Villagers gathered in the house of Anil Kondba Shende and looked at his body as the local police investigated his suicide.”

C. Monsanto in North-America

• Monsanto’s North-American Reputation

• Issues Monsanto Faces

• Private Investigators

• Many farmers keep quiet about their abuse

Monsanto vs SchmeiserThe Classic David vs Goliath Struggle

A few days later, representatives of a multi-national corporate group pay you a visit at home, demand that you surrender your vegetables and file a criminal complaint against you requesting a fine a $20,000 USD against you - for the illegal use of patented and genetically-manipulated seeds.”

“Imagine that a storm blows across your garden - and that now, without your knowledge and without your consent, foreign and genetically-manipulated seeds are in your vegetable patch which you have nourished and maintained for many years.

PART III – CASE COMPARISONA. Power

B. Business Cultures

C. Social Consequences

D. Government Interventioin

A. Power

France Telecom

Oligopoly

Monsanto

Monopoly

High Impact on the world and their marketsPart of the leading image of what is good or wrongSmaller firms follow their lead

Stakeholders expect a lot more from them than from other firms

EXACTING CULTURES

MONSANTO enlightened egoism FRANCE TELECOM egoism

Role of conflict of interest

Suicide + Violence = Forms of Expression

B. Two unique but not so different Corporate Cultures

C. Dramatic Social Consequences

Monsanto

• Monsanto’s control over farmers

• Financial and emotional burdens

• Farmer Suicides In India

France Telecom

• Bad Management• Effects of downsizing

D. Government Intervention

Monsanto

• Sphere of influence

• Little government intervention

• Monsanto has a large sphere of influence in US politics

France Telecom

• Owns a 26.97% stake in the company

• Board of directors are French State representatives

• Government and union persuaded France Telecom to suspend employee transfers to lessen the stress on the workers

Monsanto’s “Employees”Prior to being the Supreme Court Judge who put GW Bush in office,Clarence Thomas was Monsanto's lawyer.

The U.S. Secretary of Agriculture (Anne Veneman) was on the Board of Directors of Monsanto's Calgene Corporation.

The Secretary of Defense (Donald Rumsfeld) was on the Board of Directors of Monsanto's Searle pharmaceuticals.

 The U.S. Secretary of Health, Tommy Thompson, received $50,000 in donations from Monsanto during his winning campaign for Wisconsin's governor.

The two congressmen receiving the most donations from Monsanto during the last election were Larry Combest(Chairman of the House Agricultural Committee) and Attorney General John Ashcroft.

Conclusion

For the attention of my familyAnd all my business associates

The 13th of July, 2009

Thank you for spreading this message to my colleagues and employees representatives

I killed myself because of my work at France Telecom. This is the only cause. Continuous “on-time” and short-deadlines pressures, extra load of work, lack of training, general disorganization of the company. “Terror Management”!

   I’m now completely lost and disturbed. What is to become of me? It is better to put an end to that. (...) I repeat, it is my work that causes all of that, it is France Télécom to blame for my suicide.

Michel D.

PS : I know that many of you will probably say they are other causes than work (I’m alone, single,without kids, and so on). Come will also imply that I felt my age and did not accept it. But it is not true, I was always doing well. It is my work the single cause.