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UNDERSTANDING INTERNATIONAL ETHICS AND CORPORATE RESPONSIBILITY WITH A HOLISTIC APPROACH

The case of Korean universities

Jae Eon Yu

Introduction

Business scholars argue that management is a practice in which managers have to face complex issues in social and business contexts including ethical problems, moral dilemmas, social responsibility and environmental sustainability (Golsing and Mintzberg, 2004; Lawrence and Weber, 2011). Dealing with these complex issues in business practice, business schools should offer programmes concerning training and education in ethics and moral reasoning: Corporate Social Responsibility (CSR) (Segon and Booth, 2009). In general, the aims of international management educational programmes (e.g. MBA) are to prepare graduates for managerial roles, help students gain a better understanding of business practice and its needs, enrich their skills and techniques, and provide them with competencies relevant to their business careers (Baruch and Lemming, 1996: 27). In line with the purposes of these educational programmes, international management education focuses on concepts and concerns that are essential to business theories of finance, management, operations and production, marketing, international business and economics, etc., while business ethics and CSR focus on the purpose and roles of these theories and techniques (Buchholz, 1989). With the increase in attention on business ethics and CSR, business schools in Korea (e.g. Korea University at Seoul, Keimyung University at Daegu) have introduced business ethics and CSR as elective courses in both undergraduate and MBA programmes since 1993. Teaching business ethics and CSR is not solely about preparing graduates to be successful future managers or leaders who can resolve specific ethical problems or moral dilemmas in business and society, but also to develop competences or capacities for ethical and moral judgements in the industrial and business context. To do so, critical perspectives are needed to question economic rationality and its business practice which are influenced by the dominant economic paradigm.

What does the meaning of development ethics and CSR mean in the context of Korean society?

As far as international management education is concerned in Korea, research on business ethics and CSR has proliferated in recent years. Some have pointed out that business education in developing countries relies heavily on imported knowledge, methods and techniques, both in terms of topic areas and in terms of pedagogical organizations (Islam, 2011: 89). Based on the author's experience in business education in Korean universities during the last decade, this is true in the case of Korea as well. More recently, a number of Korean universities have introduced business ethics or ethical management and CSR in undergraduate and MBA programmes as the ethical content in business school subjects, which is required by ranking agencies, and the Association to Advance Collegiate Schools of Business (AACSB).

In order to provide a conceptual understanding of business ethics and CSR, we consider the meanings of ethics and CSR in general, and explore the meaning of business ethics, ethical management and CSR in the context of Korean society in particular. Ethics is the branch of philosophy concerned with ‘evaluating human action’. It is concerned with what is right or wrong based on consequence-based reasoning. According to morals or moral philosophy, what is considered right or wrong behaviour is based on social custom or ethical narratives. This kind of moral and ethical reasoning ignores the practical situation that morality and ethical reasoning are inextricably intertwined (Littrell, 2011: 53). Dealing with real-world situations, however, professional managers have to face issues in the full complexity of management as a living practice. As far as business education is concerned, therefore, ethics as regards the rights and wrongs of business theories and their implementation is rarely considered, while business education focuses on concepts and concerns that are essential to ‘functional’ business theories such as finance, economics, organization and management, and human resource management, etc. (Buchholz, 1989). On the other hand, while there remains a lack of consensus regarding the precise meaning and scope of CSR, corporate engagement with social responsibility or CSR means doing social good that is beyond the interests of the firm (Mc Williams and Siegel, 2001; Garriga and Mele, 2004). In the context of Korean business companies, business ethics and CSR have come to represent ‘strategic tools’ that create a good corporate image of the source of wealth creation and sustainable development rather than ‘genuine philanthropy’ among some academic and practitioner circles (Hemingway and Maclagan, 2004). Some important work has already been conducted to reveal the problematic deployment of business ethics and CSR by Korean corporations. Yu (2005) explains how some researchers have illustrated the corporate practice of ‘greenwashing’, how Korean corporations profess to practise business ethics and CSR without applying the lessons of morality, ethics and environmentalism to their business processes. Similarly, Yu and Lee (2008) present an incisive critique into how business ethics is invoked as a mechanism to sustain the hegemonic authority of corporations at the expense of disenfranchised stakeholders. Scholars interested in business ethics issues should extend these arguments and account for the discursive outcomes of development ethics and the corporate mobilization of corporate engagement with social responsibility in Korean society.

According to Amartya Sen (1990), development is about the expansion of human capabilities. Since Sen's capability approach has revolutionized our understanding of human development, phrases like ‘development ethic’, ‘good living’ and ‘well-being’ have been used to understand human development that rests firmly on the values and attitudes of ordinary people (Croker, 1991; Gasper, 1996). In Western theories, Sen's followers have not yet ventured into the field of applied development ethics. It is to reflect on the usefulness and relevance of some of the concepts of human development and hypothetical accounts of well-being advocated by social theorists. The ideas of development ethics and human development have been underlined in the South Report, which was complied by an independent team of scholars from developing countries. Human development has to be directed at the fulfilment of human potential and the improvement of social and economic well-being of the people (South Commission, 1990: 11). Taking account of the views of ordinary people from developing countries (e.g. Korea) may also provide social theorists and scientists with some useful insights into human development from critical perspectives (Yu, 2011).

Developing critical perspectives on economic rationality in Korean societies

From business education's perspective, researchers have important insights into understanding the capability of students who think critically in business practice. For instance, some scholars argue that ‘the challenge for modern business education is to develop ethical sensitivity among young people; a ground work for building a virtuous society’ (Wankel and Stachowicz-Stanusch, 2011: 5). In a similar vein, other researchers have understood how processes of participatory and critical action research increase our capacity to find alternative possibilities and develop ‘questions’ through the process of problematization (Yu, 2004; Styhre and Sundgren, 2005). Participatory and critical action research is a useful approach that makes use of ‘student-centred’ learning in order for a researcher to liberate ‘subjugated knowledge’ in organizations and societies (O'Hara, 2005). More recently, critical perspectives on economic rationality in management and business education have paid considerable attention to Korean business schools as teachers emphasize critical learning practice through posing ethical questions and ‘problems’ for business practice, which leads to a meta-level learning process (Yu, 2011). Critical perspectives or critical management studies (CMS) in the management literature have directed a lot of attention to academics with the publication of Mats Alvesson and Hugh Willmott's (1992) edited volume devoted to conceptualizing the efficacy of critical theory for organization studies. Following the publication of Alvesson, Bridgman and Willmott's (2009) edited volume, the concepts of critical learning and CMS eventually proliferated among business school academics, particularly in Europe, the United States, and recently in South Korea (Yu, 2011). As Alvesson, Bridgman andWillmott (2009: 6) observe, other streams of critical thinking labelled ‘postmodernism’ and ‘poststructuralism’ have emerged during the 1990s.

While seeking critical appreciation from the poststructuralist perspective, Michel Foucault provides another explanation for ‘discursive formations’ in which knowledge can be intertwined with power as power systems are a product of knowledge (Foucault, 1977: 1980). Influenced by Foucault's thought, some critical thinkers provided a critical voice that reveals a power and knowledge relationship which can be found between researchers and the researched within the asymmetrical dialogical practice (Wray-Bliss, 2003; Voronov, 2008). As CMS is based on the social theory on which CMS is founded since it contributes to the promotion and development of more humane forms of management, Foucault-inspired critical thinkers tend to question the humanist concept of autonomy in organizations through the preaching of ethics or emancipatory values (Chan and Garrick, 2002). However, it has been identified that CMS became a ‘conservative’ tool for accommodation of the diverse viewpoints in management practice. In other words, CMS becomes just another ‘tool kit’ for managers who can deploy discursive resource to further their domination without the collaboration of prestigious institutions and/or influential academics on CMS (Fournier and Grey, 2000: 24; Grey and Willmott, 2002). On this issue, a number of writers on CMS argue that CMS and critical pedagogies should link with social practice to consider the question of the social, ethical, environmental and political issues which management education and action-based learning raise (Grey and Mitev, 1995; Grey and Willmott, 2002; Fenwick, 2003; Eden, 2003; Reynolds and Vince, 2004; Antonacopoulou and Chiva, 2007; Cunliffe, 2009; Cunliffe and Linstead, 2009). In this sense, the critical learning approach might follow Freirean ‘pedagogy of oppressed’ which aims to appreciate the ‘fairness’ in practice that emphasizes voices, benefits, standpoints and concerns of research participants or others and the otherness of our experience (Cunliffe, 2002; Brewis and Wray-Bliss, 2008). To draw attention to critical appreciation and research ethics, Brewis and Wary-Bliss (2008: 1533) proposed ‘ethics of reciprocity’ as the central warrant of participatory and critical action research if the critical learning approach makes sense for the ‘philosophical and methodological reflexivity’ which makes a difference from non-critical management studies (Fournier and Grey, 2000:19).

Emancipatory potential of critical management education (CME) should be combined with collective thinking and action in order to identify, learn and change the larger problematic and social contexts within which organization takes place (Fenwick, 2003: 625; Reynolds and Vince, 2004:448). However, a cogent question is raised. For instance, how do we create a (critical) philosophy or new concepts and reflexive methods to challenge ‘privileged voices’ through making the fairness for the collective and social processes of action-based learning as action research and action learning denote a ‘power with’ role for a facilitator who works with learners through participation and negotiation towards organizational transformation and social change (Fenwick, 2003; Yu, 2004)?This question leads us to the main criticism of business education for ethics that lies in the fact that there is a mismatch between business ethics and education in terms of any actual contribution to business education or practice (Lawter, Guo and Rua, 2011). On this issue, a more practice-oriented version of CME is proposed to make a collaborative form of inquiry in which academics and practitioners, researchers and community members leverage their differences, knowledge and experience towards social change (Cunliffe, 2002, 2009; Kemmis, 2008; Grant, Nelson and Mitchell, 2008). These claims are well supported though CME remains relatively marginal and peripheral to management education and research rather than shaping the mainstream of management education (Walsh and Weber, 2002; Eden, 2003).

Though CME tried to broaden the objectives of research through ‘emancipatory value’ and participation, it has already been argued that these approaches fail to qualify as scientific research, as they do not clarify what knowledge may help to ensure an acceptable level of autonomy from outside variation. This is due to the apparent lack of durability and exhaustiveness in the results of these approaches. What they lack is the systematic inclusiveness of judgements (Valera and Shear, 1999). The point is that management research and methods have proven successful in some areas (e.g. economic performance and efficiency), but research methods are not adequately developed to the contextualized form of research including a reference to andragology, a discipline dedicated to the support of social interventions (De Zeeuw, 2010:6–9). In order to make the contexualized form of research that qualifies as research, De Zeeuw (2010:5, 11) suggests that research is needed to create the contexualization necessary to their own form of research. In other words, when researchers or participants conduct research under critical perspectives, what is needed is for research to include a ‘judgement system’ as well as observations or reports of observations. Another point is that critical action learning that aims to support social interventions implies an interest in reflecting and acting both collectively in order to learn and change in broader social and societal contexts, and focusing on how social and cultural changes take place through dialogical practice and ethical awareness (Cunliffe, 2002; Reynolds andVince, 2004:447–448).

Our proposal for a critical learning methodology

We propose a holistic approach, what we call ‘critical learning methodology’, which values a systemic paradigm that appreciates the holistic nature of life, including economic, social, biological and political life. In our proposal for a critical learning methodology (CLM), there are two types of learning processes, namely primary learning and secondary learning. The primary learning process and the secondary learning process are inextricably linked with each other through the process of problematization. The outputs of the secondary process of learning through problematization become the input of the primary process of learning that occurs through the process of ‘problem-solving’, which deals with problem-solving or decision-making activities within practice. The output of the secondary learning process is the meta-level of learning. This learning process, in turn, becomes the input of the primary process of ‘problem-solving’ that is carried out by action research, which also produces outputs. The final outputs are critical and collective actions for making feasible and desirable changes within learning processes. As an example, the primary learning process is concerned with problem-solving or decision-making in practice. Here, the focus would be upon the research of practical use of management disciplines and business theories, and the improvement of problematic situations or the development of managerial practice.This would lead to the primary process of learning occurring within business practice. On the other hand, the meta-level of learning is concerned with systemic inquiries that question the ‘taken-for-granted’ assumptions of management disciplines and business theories, and reveal the complex relation of power and knowledge in a wider context that are examined critically. The intent of the meta-level of learning is to account for the concerns of ‘the others’ (e.g. empowerment of students, disadvantaged groups in society, stakeholders and global citizenships perspectives) . As a consequence, the ‘deep learning’ process of CLM leads participants to systemic research that evolves from the appreciation of the holistic nature of life and ethics that generate through such a collective process of engaging with ‘the others’. When participants appreciate themselves as an integral part of wider contexts through the engagement of multiple relationships with diverse groups of people (e.g. educators, learners, stakeholders of critical learning projects), the meta-level of learning takes place in wider contexts. Such relations have developed from the multiple links of social, economical and political aspects among diverse groups of people who are involved and affected by critical learning (or action research) projects.

Field of research: the case of a Korean company

To provide practical examples of CLM, we demonstrate how our methodology is applied in business education. It is based on the author's experience on action research projects that were carried out by undergraduate students in business schools in Korean universities during 2010 and 2011. The case is introduced and demonstrated briefly to indicate how the critical learning approach to business education happened within the context of Korean institutions. The case study was carried out by the author (Dr Jae Eon Yu) as he was a member of the consulting team for Korean companies during 2010 and 2011. The author (as researcher) acted as an observer and as a participant. In other words, he acted as an ‘outsider’ to observe the current situation within Korean companies. Among several Korean companies that we have researched, we introduced a Korean multinational company called ‘Shinsegae’, which was founded in 1963. ‘Shinsegae’ aims to provide products and services to retailers who sell various products for domestic customers in Korea. The founder of Shinsegae is the daughter of a famous ‘chaebol’ family in Korea. There had been great development of the company in terms of economic performance, a reputation for job security (almost lifetime employment), and a steady expansion of domestic and international business activities until the IMF financial crisis broke out in 1997. During the IMF financial crisis, Shinsegae had to re-evaluate their current corporate strategy of expanding business activities and opened up newly network-based discount wholesale stores in Seoul. Shinsegae was able to recognize the ethical management that was critical to encourage the employees for a fair competition for the better performance of Shinsegae. It had been argued that the open-door policy was one of the key success factors to run the organizations effectively and efficiently under the vision of ‘ethical management’ within Shinsegae. However, the Chief Executive Officer (CEO) had to follow a top-down approach to carry out ethical management within Shinsegae since 1999 as most managers and workers were very reluctant to work with morality or work under ethical principles in their working place at the time. As a first step, the CEO had to increase the efficiency of the operational activities of the company in order to survive its competitive environments. To do so, the CEO made a great effort to encourage the employees' contribution to the better performance which had occurred mainly through the successful business of the network-based local discount wholesale stores. Under the ethical governance of corporate culture which formed cooperative movements and had sprung from voluntarily aggregated workers' groups, the ‘rational judgements’ often played according to top-down guidance within Shinsegae. At the time, many executives thought that the road to ethical management was too far away. However, Mr H. S. Gu, who was CEO, was determined to push the vision of the ethical management to be implemented within Shinsegae in order to improve the situation in Shinsegae, and attract new customers. At last, executives and their workers supported the vision of ethical management and made the organization for implementing the vision of ethical management within Shinsegae. Consequently, the management worked hard to improve the public corporate image and organizational performance of Shinsegae. In practice, there are increasing dilemmas when managers face uneasy situations which involve uncertainty that is expected from an unknown future, and an emotional concern with ethical dilemmas among employees. Indeed, no one likes to pay bribes or to conspire in their ‘indirect’ payment to the government agencies or marketing director of the distribution networks. Unfortunately, these ethical problems seem to have happened within organizations and societies in Korea. According to the vice president of Shinsegae, the strategic issues of ethical management turned to more practical issues such as the determinants of economic growth, efficiency and the merits of a ‘corporate image development’. Early conceptions of ethical management concerned themselves with efficiency, rational and westernized approach involving growth, and strategic orientations towards an ‘enterprise excellence’ facilitating economic development towards the survival of Shinsegae in turbulent and hostile environments. In such situations, little attention was devoted to the development of human values and potential as ends in themselves. In other words, human resource development should be directed towards the development of ethical management and the need to push internal recruitment in which suitable employees should be deployed both horizontally and vertically to fill a position which would better match his/her capability and interest or enhance job exposure. The way forward for ethical management in Shinsegae, then, is to fulfil the ultimate ends of ethical management towards the development of human values and potential, which develops human capabilities and communication skills within Shinsegae. What is required is a new kind of ‘Eastern’ way of thinking and an alternative philosophy that is informed by current discourse on the ethical approach to management that is firmly rooted in social reality.

Through the process of a participatory action research project within Shinsegae, a teacher of CLM facilitates a debate on the appreciation of business practice among students via the process of problematization, which is developed into a secondary or meta-level learning process of learning or inquiring system that takes place within ‘problem-solving’ in business practice. The process of problematization is concerned with the making of ‘problems’ and ‘questions’ and selecting new possibilities or alternatives in business practice in order to bring about desirable and feasible changes in business practice from a critical perspective. During the meta-level learning process of CLM in educational practice, the ‘solutions’ of business practice are then compared with what complex relation of power and knowledge has taken place within wider and social contexts. The desirable and feasible changes are judged in accordance with the principles of ethical reasoning that generated from the ‘judgement system’ of De Zeeuw (2010) in order to render critical thinking and action possible. For instance, the meta-level of learning takes place to highlight the ‘critical voices’ from ‘the others’ who are disadvantaged groups in society and the consideration of global citizenships in wider contexts among participants. During the process of meta-level learning, systemic inquiries took place to deal with the issue of power and knowledge relationship between educators and learners in the responsive learning process. As the critical learning approach aims to appreciate the embodied nature of the learning process through ‘reflexive dialogical practice’, which supports a more symmetrical relationship between teachers and students, students challenged the ‘taken-for-granted assumptions’ of management disciplines and business theories which were taught by a teacher in the classroom (Cunliffe, 2002: 47). In this way, the learning process tends to focus on considering the morality and responsiveness of a dialogical practice through engagement with others in which our situated, embodied knowledge makes connections with self, others and our social realities (Cunliffe, 2002: 42–46). The usefulness of our proposed CLM is summarized as follows:

• Understanding business ethics and CSR as part of systems approaches to business management are to be concerned with making ‘student-centred’ learning.

• Business education for business ethics and CSR should encourage critical perspectives on economic rationality which is influenced by a mechanist paradigm.

• Business education for business ethics and CSR should foster the systemic thinking ability of students to integrate broader social, cultural, ecological and political issues with a management role and to make ethical judgements in a holistic fashion.

• Understanding business ethics and CSR from multicultural and global perspectives.

• Ensure the learning process through ‘reflexive dialogical practice’ which balances the power-knowledge relationship between teachers and students.

Conclusion

In our research project, we propose a holistic approach for the development of systemic thinking in educational practice. To facilitate systemic thinking in business education, we suggest our proposed approach ‘critical learning methodology’, which can explore the relationship of power and knowledge between teachers and students, academics and practitioners in terms of the lived experience of people through the process of problematization. Based on research experience from business education in business schools at Korean universities during 2010 and 2011, the author argues that business education for business ethics and corporate social responsibility depends on the meta-level process of learning and systemic inquiries that generate ‘questions’ and ‘problems’, which potentially possess various possibilities for alternative ways of thinking and action in real-world situations, rather than providing ‘solutions’ for business practitioners. This thought leads us then to create new values and a ‘solution’ for teaching business ethics and CSR from critical perspectives. It is our contention that case evidence demonstrated in this chapter underlines the significance of a critical approach to management, which guided us by this thought. It allows us to have a range of possibilities to develop a new style of ethical reasoning and holistic approach in educational practice. These findings are valued precisely because our critical approach to business education in a business context will ‘make a difference’ in practice. While there might be some difficulties in implementing the ‘critical learning methodology’ in other contexts, the cultural difference would be of interest to other researchers, who can learn from what we have experienced in our research projects.

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