From the Director

Dr. Daniel E. Wueste

In the previous issue of Issues and Perspectives I wrote about the Creative Inquiry course, Phil 492-001, Revising rules and regulations in the interest of integrity, that I would be teaching this spring with some help from President Barker.  Classes have ended now, but, for more than one reason, I think it’s appropriate for me to say a bit more about the Creative Inquiry here.

One of the themes of the CI was that the challenges the NCAA faces in making, enforcing, or revising rules are quite like those encountered by any organization that seeks to govern conduct by means of rules.

 

Principles and rules are devices for safeguarding values.  However, unlike other devices that safeguard something of value, such as fences or locks, which protect persons or property, rules and principles call for obedience, and thus a choice to behave in accord with the rule or principle.  In choosing to comply with the rules of, say, a company’s code of conduct or a school’s honor code, one tangibly demonstrates one’s value commitments.   So too, choosing to ignore or find a way around a rule, reveals one’s value commitments, or more precisely one’s lack of commitment to the value(s) safeguarded by the rule.  Another way of getting at this idea directs attention to the fit (or lack of it) between stated values and operational values.  With an individual we might say that she not only talks the talk but also walks the walk, for example.  The same idea is in play with organizations when, for example, insisting on the coincidence of stated values and values in practice, we say that what’s at stake is the integrity of the organization or program.  And with that observation, we move quite easily to consideration of the consequences of integrity impairing actions.  For example, according to The 2012 Inside Higher Ed Survey of College and University Presidents, 79.8% of NCAA Division I presidents agree or strongly agree that “The athletic scandals of the past year have hurt the reputation of all higher education, not just the institutions involved.”  Among “presidents overall [r]oughly two-thirds” agreed or strongly agreed with this statement.  http://www.insidehighered.com/news/survey  The problem of what we might call collateral moral damage  is compounded by the fact that enforcement of NCAA rules takes a very long time—long enough that the perpetrators are often long gone when sanctions are imposed on a school.  One lesson in this is that integrity failures have real consequences—significant set backs to the interests of many, not a few of whom are innocent.  A recent $24 million bribery scandal involving the world’s largest retailer, Wal-Mart, illustrates the point well.

Roughly seven years ago, then Wal-Mart CEO H. Lee Scott Jr. made the case publically that “better business practices would help the company.”  Working with external relations experts the company “met with activists to improve Wal-Mart’s labor and health care records, to outline an aggressive energy conservation plan, to position Wal-Mart as a company that was bringing fresh, affordable food to underserved areas and to develop initiatives to help promote female workers.”  http://www.nytimes.com/2012/04/30/business/wal-mart-bribery-scandal-complicates-us-expansion-plans.html?pagewanted=2&src=rechp

Wal-Mart, in short, strove to operate in accord with its “Statement of Ethics [which serves to] guide our associates in the continued observance of high ethical standards such as honesty, integrity and compliance with the law in the conduct of Walmart’s business.”

http://www.walmartstores.com/sites/AnnualReport/2011/financials/2011_Management_Report.pdf  // Statement of Ethics: http://ethics.walmartstores.com/

What has recently emerged, as the result of a report in the New York Times http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?ref=business

“is that at about the same time Mr. Scott began the offensive to improve Wal-Mart’s image in the United States, he also rebuked the company’s internal bribery investigation in Mexico for being overly aggressive. The investigation was soon dropped.

http://www.nytimes.com/2012/04/30/business/wal-mart-bribery-scandal-complicates-us-expansion-plans.html?src=rechp  The tension between what the Times’ story reports and this statement from Wal-Mart’s Statement of Ethics is patent: “Never cover up or ignore any ethical conduct problem. Address the matter in a timely manner and seek guidance if necessary.”

Writing about the scandal in Time, Rana Foroohar, reports that

Walmart's stock has already fallen 7.5%, knocking $17 billion in value off the company. If there is a too-big-to-fail retailer, Walmart would have to be it. It has sales of $444 billion, employs 2 million people and supports tens of thousands of suppliers, some of them consumer-product giants in their own right. Its stock is held by many of the world's major pension funds--meaning that Walmart's troubles are very likely affecting your retirement money right now (emphasis added).

http://www.time.com/time/magazine/article/0,9171,2113176,00.html#ixzz1tZ7Prmc7

The bad news is that the corruption scandal doesn't seem to stop with Mexico. According to the Times, the company received 31 similar reports of "significant" allegations of corporate violations, including potential crimes by senior executives, in various global markets in 2006 alone. (The company wouldn't respond to Time's questions about any of this; that might "compromise the investigation," said a spokesperson.) It seems that many of those cases were buried, just like the problems in Mexico. Ironically, at home Walmart has strict policies for its buyers: they can't accept so much as a coffee mug from vendors.

http://www.time.com/time/magazine/article/0,9171,2113176,00.html#ixzz1tZ7Wai1E

I have invited attention to Wal-Mart’s woes to highlight a connection between the work the CI students were doing in thinking about revising NCAA rules in the interest of integrity and the challenges of maintaining integrity in organizations generally.

Those who were able to join us for the Rutland Institute’s 10th Anniversary Gala had an opportunity to see the work of the CI students in a poster display as well as an opportunity to discuss it with them.  Earlier in the day the CI students presented their posters and discussed their research with University of Nebraska-Lincoln Chancellor Harvey Perlman, North Carolina Central University Chancellor Charles Nelms, and Clemson President James Barker, who were the members of the panel for the evening program, Integrity, Ethics, Athletics: In It to Win It.  The presentations and discussion were lively and informative; Chancellors Perlman and Nelms were very favorably impressed.  The CI students, Matthew Jordan, Douglas Margison, Michael Matheiss, Adam McFarlane, Charles Hunter Payne, Philip Prince II, David Dannelly and Christopher Trusk, did an outstanding job.  It was a genuine pleasure working with them this semester.

Thank you for your interest in and support of the Rutland Institute’s work.