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Resetting the ethical compass

In 1982, a small number of people died in the US state of Illinois as a result of ingesting poison that had been illegally added to a common painkiller named Tylenol, which is marketed by Johnson & Johnson. As you would expect, an investigation followed and the determination was that a person or persons unknown removed individual bottles of the product from the shelves, inserted the poison and returned the product to the shelves.

The perpetrator of the crime has never been brought to justice, however, partly as a result of the crime, we now have enhanced product safety including tamper-resistant packaging. We also have an example of an excellent corporate culture that was immediately proactive in understanding and protecting society rather than its shareholders, which in the longer term has arguably increased corporate longevity and added considerably to the company’s ongoing shareholder value.

To make the point, we have to go back a tad further to 1979 when James Burke, then CEO of Johnson & Johnson, threatened to repudiate an internal document that had been hanging on walls at company offices and factories since 1943 as, in his belief, it was being observed more in the breach than the observance. The document, entitled ‘Our Credo’ promotes a list of principles to live by in Johnson & Johnson’s corporate world, with the initial sentence suggesting the company’s first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. The meeting apparently reaffirmed their commitment to the Company’s Credo. In 1982 when it was clear Tylenol was the chosen carrier of the poison that was killing people in Illinois, Johnson & Johnson immediately made the decision to remove the product from store shelves across the USA and spent money asking people not to use any stocks of the product that had been already purchased. The decision is estimated to have cost them $100 million, but it is the textbook example of how to handle a crisis and come through it with an unstained reputation. According to The Atlantic magazine, the actions by James Burke three years earlier to challenge his executives to live by the Company Credo paid off in spades as he was on a plane when news of the poisoning broke. By the time he landed, employees were already ordering Tylenol off store shelves.

While Johnson & Johnson do have a responsibility to adequately reward their shareholders (it is also in ‘The Credo’) someone a long time ago realised that looking after their customers was a particularly good way of ensuring that the staff, suppliers, agents and contractors, as well as the shareholders, all shared a sustainable future return.

Unfortunately, Johnson & Johnson don’t seem to be a typical large company when it comes to fulfilling their responsibilities to the public. The Atlantic article gives the example of a number of large manufacturers where their responsibility to the public seems to be subsumed by other corporate objectives. In the case of Volkswagen, not only did they install devices in a generation of their vehicles of all sizes and types that actively cheated when the on board vehicle computer calculated that an emissions test was being undertaken, they corporately funded testing where diesel fumes were breathed in by monkeys and humans for hours at a time with a view to ‘proving’ that diesel-fuelled cars do not produce harmful particulate matter as suggested by a number of scientific sources.

There are also examples closer to home. The current Australian Banks public relations campaign suggesting that around 80% of profit is paid as dividends to ‘everyday Australians’ who hold superannuation accounts is disputed by The Conversation’s fact checking unit, which suggests the ‘real’ number of Australians who benefit to be closer to 60%. It’s also very co-incidental that the campaign was launched at the same time as the Royal Commission into the banking and finance industry was launched at the insistence of the National Party (with some assistance from the ALP) who dragged PM Turnbull into announcing the ‘regrettable but necessary’ enquiry.

Sociologist Dr Diane Vaughn has a theory known as the ‘normalisation of deviance’. Briefly, the theory suggests that people within an organisation become so familiar with behaviour that deviates from societal norms, the deviant behaviour becomes normal within the organisation, which leads to people within the group no longer able to realise that the behaviour is incorrect. The US Government’s National Library of Medicine defines the problem In a medical context as Over time, even egregious violations of standards of practice may become “normalized and offers a number of examples as diverse as medical errors, the Chernobyl disaster and the loss of space shuttles Challenger and Columbus.

Luckily, some companies have someone in authority within the company that can recognise the normalisation of deviance while others have to suffer a ‘hallmark’ incident, whether it be complications after surgery, damage to their public image or unfortunately deaths before the corporate ethical compass is reset. It seems that someone in authority has to suggest that the action is inappropriate, followed by the organisation actually processing the message and determining that their normal behaviour was clearly in error and then making a decision to modify it. In Volkswagen’s case they changed a considerable number of their senior management and in the bank’s case, they are attempting to modify perceptions of staff, customers and the public through advertising the benefits of the existing banking system.

Which begs the question – is the Australian Government generally also a victim of normalisation of deviance? The evidence would suggest so. The Australian Government, like all governments, is supposed to improve the society that we live in. We live in a first world economy and accordingly elect a government to supply services such as health, transportation, defence, education, welfare and support for those who need it. The other part of the ‘deal’ is that we pay for the provision of these services through taxes and user charges (such as vehicle registration, public transport fares, rates, development charges and so on). However, our governments over the past 10 to 15 years seem to have been more interested in deriving additional benefits for their support base, a general reduction in service provision to the community that elects them and victimisation of those who are generally disadvantaged. They do this by firing more scorn and disgust at those looking to come here for a better life despite this nation being populated by people who have themselves (or their ancestors) done exactly the same thing.

Let’s look at some examples. According to evidence at a Senate Estimates hearing last year, 42 million phone calls to Centrelink received an engaged signal in the first 10 months of the 2016/2017 financial year. It, according to the ABC is a significant jump on the previous two financial years. The reason offered by the Department of Human Services is that people are using auto diallers, redialling the number every few seconds. While that might be true, have Centrelink executives considered that people wouldn’t need to resort to auto diallers if there was capacity in the system to receive and handle the traffic that is the reality, rather than the obviously flawed estimation?

Admittedly, some would expect the phone to be picked up on the first ring, which is probably unrealistic, however Centrelink’s call waiting times are not getting better. It is also fair to suggest their process is obscure and difficult to follow, with different parts of the organisation apparently not talking to each other. If you are lucky enough to get through to Centrelink, please remember it is not the fault of the probably relatively lowly paid staff member on the other end of the phone that the system seems to be designed to discourage you applying for something that is probably your entitlement, it is the management and political masters that make the system what it is.

Another example is the treatment of refugees that attempt to come to Australia to claim what is a legal entitlement. While it is fair to suggest that Keating’s Prime Ministership saw the ‘processing’ of those with refugee claims in ‘detention centres’, the Howard Prime Ministership politicised the process during an election campaign by demonising the refugees picked up from a sinking boat by the Norwegian crewed Tampa and it is fair to suggest that since then both sides of Australian politics have been on a race to the bottom to introduce even more cruel and unusual punishments. If we thought current Treasurer Morrison was inhumane, he had nothing on current Minister responsible Peter Dutton. Yet, Dutton according to his website is married with children so he must have some compassion and capacity to demonstrate affection (and dare we say it, love). Logically, all his predecessors also would show care and compassion for those close to them.

The same could be said for the ministers of the Australian Government who are showing no care for the environment by ‘betting the farm’ on the use of climate change-inducing fossil fuel (including coal); claiming that ‘trickle-down’ economics will assist those who are in the lesser paying jobs; reducing the effectiveness of programs such as Medicare, the NDIS or public schools across the country. The politicians all have families, relatives and you would hope friends. To do so, there is obviously an ability for empathy and care. If you met them on a one to one basis outside the political sphere, they are probably all quite approachable and pleasant people to be around. Yet, when it comes to assisting all potential and current Australians to access the services that this community has deemed necessary for all of us to maximise our potential (with the subsequent improvement to our society) they are involved in a penny pinching and mean government who seemingly makes it hard for those who need help while demonising them for political advantage.

In the case of Johnson & Johnson, the CEO had the foresight to see that deviance from the company’s Credo was becoming the norm and he reset the corporate ethics. In the case of Volkswagen and the Australian banks an external body with the resources and funding to break the cycle of deviance acted appropriately. There are two potential ways for the current Australian Government to break out of the cycle of normalisation of deviance, either the current leader realises what is occurring and actively stops it (as occurred at Johnson & Johnson) or an external body acts appropriately (in this case, the Government is voted out and the relevant political parties conduct a review of why that occurred rather than what went wrong with the election marketing campaign).

Unfortunately, it seems like the current leader of the government either can’t see or be bothered using the ‘reset’ button.

What do you think?

This article by 2353NM was originally published on The Political Sword.

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9 comments

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  1. New England Cocky

    An excellent analysis of “thinking” and self-serving in Canberra … and other haunts of politicians.

    “Which begs the question – is the Australian Government generally also a victim of normalisation of deviance? The evidence would suggest so. The Australian Government, like all governments, is supposed to improve the society that we live in. We live in a first world economy and accordingly elect a government to supply services such as health, transportation, defence, education, welfare and support for those who need it. The other part of the ‘deal’ is that we pay for the provision of these services through taxes and user charges (such as vehicle registration, public transport fares, rates, development charges and so on). However, our governments over the past 10 to 15 years seem to have been more interested in deriving additional benefits for their support base, a general reduction in service provision to the community that elects them and victimisation of those who are generally disadvantaged. They do this by firing more scorn and disgust at those looking to come here for a better life despite this nation being populated by people who have themselves (or their ancestors) done exactly the same thing.”

    Worth reading again because it appears from a geographical distance from Canberra, Sydney and Brisbane that politicians of all persuasions are only interested in amassing realestate and other investments using the Parliamentary Allowances Scheme that apparently runs on an “honour system”. Now when was there any honour among politicians????

  2. Zathras

    When it comes to corporate financial self-interest you need look no further than the USA Ford Pinto case of 1968 where Ford determined it would be cheaper (ie more desirable) to let people die due to a vehicle design fault than recall the vehicles and make them safer.

    Not much has changed in the 50 years since except that the self-interest has found it’s way out of the boardroom and to the top of the governance tree.

    The first duty of a politician is apparently to get re-elected and so must satisfy financial sponsors as well as a majority of constituents. Policy is just a method to maintain and not a reason for their existence.

  3. Miriam English

    We really need to get big money out of politics and have elections funded solely by government allocation. That would solve the main problem.

    A second source of corruption could be removed by making it illegal for politicians to earn money from any other source during their time as politicians. They are already handsomely rewarded for their time in parliament.

    A third source of corruption could be ended by preventing ex-politicians from taking paid positions with corporations.

    And not only should these laws be observed, but they should have real teeth, with politicians violating them losing their job, being required to pay back wages for the time of the offense, and a very high likelihood of prison time.

    Why such strong penalties? Because these are the kinds of penalties imposed on ordinary people for much smaller offenses. Politicians have much more power, and their corruption causes much more damage. As Spiderman said, “With great power comes great responsibility.” Well, politicians have been partying with all the money and power, but avoiding all the responsibility. That attracts exactly the wrong kind of person into politics. That needs to change.

    We need politicians who want the job so that they can help make Australia a good and healthy place.
    We need rules that discourage those who just want to be rich and powerful.

  4. Glenn Barry

    Normalisation of deviance – great term – Welcome to the Land of Nod

  5. wam

    If the politicians were to publish their diary at the end of the month, the chance of corruption being hidden would approach zero.

    My family dealings with centrelink is like the banks if you do not know the right questions to ask you are %#@%%%#.
    My daughter, a senior college physics, chemistry teacher, had to sell her house in 2004 because she couldn’t keep up the payments. In the wash up she found the bank had been taking the $900 annual service fee, each month..

    I approve of tax cuts, as long as the companies,CEOs, executives and board members, like the PAYE, have no deductions to reduce income.

  6. Florence nee Fedup

    New term for becoming desensitised to say pornography or cruelty.

  7. Stephen Brailey

    A well written and interesting article and I like the premise. However I think it misses the point that the politicians you are referencing are expressing the will and opinion of their peers. So there current trajectories are not a point of deviance when they consider themselves as rulers of the people rather than servants of the people. The politicians you are examining have shown us time and again that they consider themselves above the law and the people they govern. Except of course their masters and peers the fellow wealthy and powerful. These people have an entire media following who will excuse them of the most apauling incompetence and coruption and day in day out justify the horrors they inflict on refugees, the poor and the environment.
    In order for the readjustment to occur that you are talking about we need a revolution not just a few years where they aren’t directly in power. Because they are expressing the will of that 2% or 10% or whatever that believe they are better then those “below” them. These people have as a group convinced themselves that educating and protecting the mass of people is a waste of time and resources. These are the sort of people who will never understand why the hungry peasants didn’t just eat the cake. Off with their heads…that’s what I say!

  8. 2353

    @ Stephen Brailey – Thanks for the compliment. I think we’re on the same side here as the premise of the article is that the referenced politicians looking after their ‘special needs groups’ (themselves, large corporate entities – including the banks) and ignoring the elephants in the room of equity, equality and the greater good. While the idea of ‘off with their heads’ has a certain appeal, the reality is that the death penalty was relegated to history across Australia decades ago. The best we can hope for is that in one state (or federally) a collection of independents and minor parties cobble together a government at the expense of the ALP and LNP. I’ve long argued that minority governments are a good thing because a range of views outside the orthodoxy of the political party in power have to be considered. Unfortunately, the mainstream media will pillory the ‘lack of certainty’ as demonstrated during the Palaszczuk ALP Queensland Government’s first term and the Gillard Prime Ministership.

    @Florence – In a couple of words – you’re correct.

    @wam – Love the idea – bet it never happens 🙂

    @Miriam English – The problem with outlawing income outside a politicians ‘profession’ is to what level do you go. Do we ban a politician’s superannuation account receiving the benefit of returns from investments or stop them having direct investments? Either way, you could argue that there could be a material benefit to the corporate entity providing the return.

    @Zathras – The article in The Atlantic discusses the Ford Pinto example as well.

    @New England Cocky – Addressing your question – I’d suggest that many years ago, there was a certain level of honour afforded to those who chose to be a politician. Their own actions have arguably reduced the respect shown to politicians to be similar to that shown to the atypical used car salesman. Thats why the LNP in particular victimise refugees and whose on welfare – they have the wherewith-all to have the trappings of respectability, they just need the feeling of being better than others.

  9. Miriam English

    2353, I doubt anybody would have a problem with superannuation if it was the norm across Australia for all workers. Direct investments, on the other hand, could easily lead to warping politicians’ decisions so should be eliminated. Such decisions should be made regarding their potential for corruption.

    I seem to recall reading the results of a survey some years ago that ranked the regard people held for a wide range of different professions. I have a feeling politicians came in below used-car salesmen right at the bottom of the list for trustworthiness and honesty. I’d say it’s probably fallen even further since then.

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