Corruption at the Top in France and Illinois

An important implication of the saying, a fish rots from the head down, is that it is important that corrupt heads be swiftly punished so underlings get the message that crime in public office carries considerable risk. In the matter of Ukraine’s possible accession (not merger!) into the E.U. as a new state, the old, deeply entrenched, culture of corruption in the potential state has been of particular concern in the E.U.’s executive branch, the European Commission. In both the E.U. and U.S., it’s worth asking whether some states are more corrupt than others. It is a mistake to treat all states alike in terms of where to direct federal resources and how much of a given state’s resources should be devoted to investigations of state officials. At least in 2025, Illinois and France could be said to have been “problem children” in this regard, and this doesn’t mean that Hawaii and Sweden, for example, also had as sordid corrupt cultures.

In September 2025, a state court in Paris “found Sarkozy guilty of criminal conspiracy in connection with the alleged Libyan financing of his victorious 2007 presidential campaign . . . and sentenced him to five years in prison.”[1] A day before going to prison in mid-October, Sarkozy said he would be taking a biography of Jesus and The Count of Monte Christo with him to prison, so it seems that he was continuing with his innocent-victim role in spite of the conviction and sentencing. Short of any contrition or even public recognition by Sarkozy of his own corruption, it fell on Hollande of the Socialist group to praise “the independence of the judiciary,” especially given that the incumbent, Macron, spent an hour with the convicted ex-president on the day before the Sarkozy, of the same political group, was to show up at a prison.[2] In a corrupt culture, it is natural to worry about whether judges might be persuaded that it is in their interests to reduce or rescind the sentence of a powerful political figure.

Admittedly, in notoriously corrupt Illinois, by 2025 four former heads of state had spent substantial time in prison. Otto Kerner, for example, was convicted in 1973 on 17 counts of mail fraud, conspiracy, perjury, and other charges related to a bribery scheme and was sentenced to three years. Dan Walker was convicted in 1987 of bank fraud and perjury related to fraudulent loans that he had obtained after leaving the high office. George Ryan was convicted in 2006 on fraud and racketeering charges related to bribes; he served five and a half years. Last but hardly least, Rod Blagojevich was impeached and removed from office in 2009, and convicted in 2011 on 18 counts of corruption. Whereas the president of the E.U. cannot pardon state officials, the president of the U.S. can, and U.S. President Trump pardoned “Blago’s” sentence in 2020 after the former head of Illinois had served eight years; the former head of France could only hope in vain for a pardon from E.U. President Von der Leyen, but corruption at the state level could end up appreciably shortening Sarkozy’s sentence, and the meeting with Macron could be a sign that their shared political group might work behind the scenes to free the convicted former leader.

Once begun and allowed to spread throughout a state, whether Illinois or France, political corruption involving money is much more difficult than a fire to put out. Companies such as Enron, Wells Fargo Bank, Arthur Andersen, and even Uber came to be known for their deeply dysfunctional organizational cultures. This does not mean that manager-groups at every or even most companies are that unethical.

It is fortunate that not every company is corrupt mentally, for changing an entrenched sordid organizational culture is very difficult at best, with plenty of strategic firings being just one part of the cure. A so-called “coach” hired by Starbucks, for example, to change the attitudes of the executives towards the employees (especially those who try to unionize) would have a full plate. Such a “coach” would find it very frustrating to “drive” talking-points; the obscenely stretched use of jargon wouldn’t get the consultant very far up against the entrenched acerbic attitudes that had come to dominate the organizational culture. Let’s just say the Pike’s Peak blend of coffee was hardly the only thing that was known for being bitter at Starbucks by 2025.

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1. Euronews, “Sarkozy Received by Macron at Elysée Palace before Five-Year Prison Term States on Tuesday,” Euronews.com, 20 October, 2025.
2. Ibid.

On Fiat-Chrysler’s Merger Proposal to Renault: Too Broad?

 As Renault was considering Fiat Chrysler’s proposal to merge, industry executives and analysts believed “that carmakers must link up to share the cost of a transition from internal combustion engines to avoid being run over by fast-moving tech industry challengers like Tesla or Uber.”[1] To be sure, (b)y purchasing parts together, combining their manufacturing operations and sharing the cost of research and development,” the merger could “eventually save 5 billion euros per year,” according to Fiat.[2] The R & D would include funds spent on developing new models as well as on high tech oriented to the future. Although significant efficiency could be achieved due to under-used factories and all the money going into product development, the basic problem was one of insufficient scale (i.e., revenue) to support (i.e., finance) the very costly research and development needed on electric and/or self-diving cars. In its statement, Fiat Chrysler pointed to “the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry in areas like connectivity, electrification, and autonomous driving.”[3] The insufficient scale was particularly troubling given the declining E.U. auto market at a time when Tesla, Google and Uber were making progress on electric and self-driving cars. Fiat Chrysler could really use the expertise at Renault and Nissan on electric cars. I'm not sure, however, that a merger was the optimal route forward.

As with nearly everything, potential downsides existed. First, the merger would dilute the shares that the state of France already had in Renault from being its largest stockholder. Second, political leaders in that state as well as Italy would doubtless “fight to preserve as many jobs” in the respective states as possible.[4] In its analysis, however, The New York Times claimed at the time that it would be difficult for the merged company to avoid job cuts, given that the companies’ respective companies were operating below capacity.

So perhaps the anticipated savings of €5 million were optimistic, which raises the question: why not an alliance to fund a shared R&D center where work would be done on high cost, future revenue electrification and self-driving cars? Pushing for a full-blown merger would risk clashing corporate cultures. Also, the inevitable politics as duplicate management positions are eliminated would not be cost-free. Furthermore, the alliance between Renault and Nissan, already strained, could suffer or break apart in the event of a merger but not another alliance.

The basic problem was not enough scale (i.e., revenue) in either company to finance the heavy cost of R&D without compensating revenue in the short or medium term. When the gains from other efficiencies are not the main point of a merger, an alliance or partnership focused on the main problem may have been a better fit.

The problem of scale in terms of having enough money to finance the high-tech research need not incur the disproportional costs that come with increased organizational size and complexity. The costs of integration organizationally, for example, increase disproportionately with organizational size (and complexity).[5] Empire-building, a political as much as economic propensity at the upper level of organizations, can give rise to optimistic forecasts of savings from various efficiencies from mergers while the financial downsides are minimized. We could note, for example, the skepticism regarding Fiat Chrysler’s claim that no jobs would be lost and no factories would be closed. If the urgency for the merger was due to the advances by Tesla, etc., then perhaps a better proposal would have been delimited by that main problem rather than blown up to the form of a complete merger.

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[1] Jack Ewing et al, “Renault Considering Fiat’s Offer to Merge Into a New Auto Giant,” The New York Times, May 27, 2019

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] James D. Thompson, Organizations in Action: Social Science Bases of Administrative Theory (London: Routledge, 2003).

It’s Only Fair

Astonishingly, organizations can violate their own mission statement without any manager or non-supervisory employee being aware of the violation. This can happen even when the people in an organization really do take their mission seriously. At Goodwill, the mission is to end poverty, a laudable goal. It follows explicitly (i.e., according to a sign in the stores) that “every customer has an equal opportunity to purchase any item for sale.” Although the sign bases this point on the fact that the goods “come from public donation,” I submit that ending poverty by giving the poor access to relatively low-priced merchandise is hampered if some customers are permitted to fill their carts with on-sale (i.e., color of week) items when the doors open. Certainly allowing those resale-minded customers to deprive other customers of a selection of items on sale (especially clothing, which even homeless people need) is not fair.

According to the sign, possible violations include any employee or volunteer of a store being able to purchase items in the store whether for themselves or others. “Nor may merchandise be reserved or set aside for anyone.” To be sure, recognition is also given to the possibility that a customer might think that the organization is not being fair. When I interviewed a store manager about whether allowing customers who resell items on sale in “garage sales” conveniently misconstrued as businesses to buy in such bulk that effectively deprives other customers, whose use for the clothing is for personal use, she dodged the question itself but took my point implicitly by admitted that she knew of no way in which the practice could be thwarted. I told her I had a few ideas, but she was not interested in them. I topld her I am a business ethicist and would be writing on this case. Patronizingly, she quipped, “Have fun writing your paper!” In retrospect, I wish I had replied, “Have fun managing!” How interested would the organization’s management be? I wondered at the time.

Goodwill could indeed have stepped in to prevent the obviously unfair practice of certain customers, who actually compete with each other in going around—as part of their re-selling businesses—to different Goodwill stores to swoop up as many shirts or pants on sale. 

A "garage sale" of a reseller open for business at her personal residence. Beyond the cars is the Goodwill store at which I had observed the opening of a major, half-off, sale on shoes and clothing (and misc) just a week earlier. Some of the athletic shoes, which sold for $7 without any negotiation (a sign that a reseller is hosting the "garage sale"), I had seen in a cart full of such shoes at the beginning of the sale at the Goodwill store. 

The personal-use customers can have little chance, or practical opportunity, to get an item on sale because Goodwill allows customers even at the opening of a sale to fill their carts entire of one kind of item (e.g., athletic shoes). Even if a wife/mother is buying athletic shoes for her husband and teenage kids, a whole cartful is suspicious. I witnessed a woman head immediately to the shoe section when the doors open and quickly throw as many athletic shoes in her card as she could before other customers had a chance to take advantage of the sale. Clearly, the monopolistic character of the woman’s behavior and that her commercial interests could eclipse the personal-use interest of other customers who would do without as a result not only reek of unfairness, but also violate the “equal opportunity to purchase any item in the store.”

A reseller had her cart full just seven minutes after the Goodwill store opened with a sale that would practically guarantee that the reselling would be lucrative. The number of men's shorts alone in this cart points to something beyond personal use. The resellers do not pay taxes on their profits because the sales, primped as "garage sales," are easy not to report. Legally, the income from genuine garage sales is taxable.

Meanwhile, Goodwill looks the other way undoubtedly because more revenue and less risk of having items unable to be sold are obtained when the re-sellers buy in bulk. In other words, the lack of recognition of the tilted status quo and of ideas on how to restore balance may not be accidents. A false premise that the status quo must be balanced, or that the status quo does not justify effort to achieve balance may also be in the mix. A policy could be put into effect that limits the number of same-classification items on sale that can be purchased by each customer.

Already I can think of ways in which the commercial customers could get around this limitation, for profit-seekers hate limits, whether internal or external. They could bring along family and friends to divide up the quickly stashed merchandise. They could fill their respective carts when the doors open and carefully stash their carts so to be able to make multiple trips to different cashiers.

At some point, however, store employees and even managers can be relied on to help enforce the policy by being on the lookout for such tricks. A customer’s claim that she needs a cartful of sneakers in order to try them on to find one that fits can be easily rebuffed. Only six items are allowed in the fitting rooms anyway. Such games and how to deconstruct them could be incorporated into training. It is not difficult, for example, to see people quickly filling their respective carts with one or two item-classifications shortly after the doors open. The store manager with whom I spoke had no problem in identifying the re-sellers who buy in bulk. Her hands’ off, laissez faire attitude was problematic as it did not fit with the organization’s mission to reduce poverty in a fair way, which in turn requires equal access to the merchandise. Hiding behind the relatively effortless status quo, as if it were intractable or even as fair as possible, evinces a willingness to live with an unfairness that could otherwise be reduced even if it cannot be eliminated. Not having any ideas when imperfect measures could make a dent evinces an unwillingness to think too far from the status quo (i.e., outside the box).

See "A Lack of Good Will at Goodwill."

See also Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon. 

Hierarchy Hampered Down in American Business

Without going into either the labor or management camp, a person can viably critique the operation of hierarchy itself in business organizations. The notion is typically associated with the concentration of power at “the top,” rather than the relation of middle-level managers to “retail” managers and their subordinates. Efficiency of power at a corporate headquarters does not necessarily translate into “downward” efficiency at the level of middle management. I submit that precisely this efficiency is rather severely compromised in American business.

“The word hierarchy derives from ancient Gree (hierarchia, literally the ‘rule of a high priest’) and was first used to describe the heavenly orders of angels and, more generally, to characterize a stratified order of spiritual or temporal governance.”[1] The early focus on the situs of a high priest rather than all priests, and the heavenly orders rather than the relation between them and the earthly orders set the tone: the top matters most in a hierarchy. I am guilty in that my theory of organizational leadership applies exclusively at the top: the leadership of an organization. Supervisory management is in my view another animal. Yet it too is important, and I contend that it is woefully neglected in American business.

Customers, for example, of retail businesses will recognize the frustration in dealing with not only  a rude or stubborn employee—even acting at odds with a company policy!—but also that employee’s gatekeeping, or outright refusal to get a supervisor as requested. The sense of entitlement that a non-supervisory employee may have rivals the sense of importance of a CEO. Getting to a store manager can nonetheless require a lot of effort and patience; typically an assistant manager is sent to put out the little brush fires. Employees may know how to exploit this gap that exists between what the employees and a store manager are doing, such as by insisting that aggrieved customers first inform the indolent employee of what will be said to the manager (a conflict of interest to be sure!).

In short, retail-level managers tend not to be involved enough where customer-meets-employees; management by walking around is too easily sidelined by the endless list of things needing to be done behind a desk. Put another way, I contend that retail management is generally interpreted as being akin to upper management, rather than something unique. The situs one or even two levels above non-supervisory employees on the front line should be actively involved on that line, and the complaint access can be greatly improved such that customers do not have to depend on problematic employees for it and spend much time and effort in reaching accountability. Hierarchy is made for efficient accountability, whereas networks (e.g., organic organizational structures and flat inter-organizational relationships) may be overrated.[2] Yet the “lower” half of a company’s hierarchy is, I submit, underutilized and perhaps even unwittingly compromised in part due to the common association of hierarchy with “the top.”

Starbucks, for example, has a centralized customer service number, which can be used to register a complaint against a store employee. The offended customer may get a gift card for a few free drinks to compensate—and such compensation, rather than an apology alone, is important—but what about the distance from the centralized unit at headquarters and the store-level employee? The unit sends a communication to a regional or district manager, who in turn is supposed to communicate with the store manager, who in turn is supposed to have a talk with the employee. Considering the sheer number of links, and the distance involved, the intended message could be compromised both intentionally and unintentionally. A district manager, for instance, may just do enough to make it seem that a real correction has been made. A store manager might dismiss the charge, as it reflects badly on the store’s management. Rarely, perhaps, would a store manager tell a shift manager to listen to what the employee is saying to customers. I also doubt whether the typical complaint results in any actual and substantive negative consequences for the employee, especially if attitude is the culprit (which is not likely re-trainable).

For all that Howard Schultz’s CEOship of Starbucks has been lauded, I have been surprised at the number of times I have witnessed rude, close-minded behavior of employees at the store level. This is not to say that good employees have not worked in the stores. My point is rather that in the company’s hierarchy, the part between the district managers and the store employees seems weakest. In my booklet Bucking Starbucks’ Star, I argue that Schultz’s corporate social responsibility ventures “at the top” do not make up for managerial and employee deficiencies further “below.” I have never seen a store or even a shift manager “working the room” in stores to see how the customers were actually served, and such managers can confront centralized reports of complaints by rationalizing, the customer got free drinks, so there’s no need for me to take action against the employee. Management as walking around, even by district managers scheduling time to work along side the crews at the various stores, and in having direct access to complaining customers, could make a dent in shoring up hierarchy in business organizations where patching is most needed. Hierarchy can be a good thing, provided it is thought through in its various, distinct levels.

See: Cases of Unethical Business, Walmart: Bad Management as Unethical, and Bucking Starbucks' Star.

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[1] Niall Ferguson, “In Praise of Hierarchy,” The Wall Street Journal, January 5-6, 2018.

[2] Ibid.

On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management

Nietzsche is perhaps most stunning in his eviscerating critiques of modern morality and, relatedly, Christianity. His pessimistic attitude toward modern management is less flashy, but no less radical, for the business world would look very different were it populated by Nietzschean strength rather than so much weakness that in spite of which—and because of which, seeks to dominate even and especially people who are stronger. Accordingly, this book provides formidably severe critiques of both business ethics and management and sketches Nietzsche’s notion of strength as an alternative basis for both. Nietzsche’s notion of the ascetic priest as a bird of prey with an overwhelming urge to dominate eerily similar to both the business manager and the ethicist. Therefore, the last two chapters are on Nietzsche’s unique take on Christianity, and John D. Rockefeller, a devout Baptist ostensibly compatible even with being an acidic monopolist. 

On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management is available in print and as an ebook at Amazon. 

Bribery at Barclays: Can an Unethical Culture Be Changed?

Amid the financial crisis in 2008, Barclays raised $15 billion from Qatar and other investors. The infusion of capital saved the European bank from needing a government bailout. Unfortunately, the bank may not have disclosed the $390 million paid to the Qatari government for “advisory services” as part of the fund-raising, and the $3 billion loan facility that Barclays made available to that government.[1] The bank, along with three of its executives at the time were charged in 2017 with conspiracy to commit fraud by false representation, and providing unlawful financial assistance—in other words, paying a bribe to avoid needing an E.U. or state-level bailout. According to Amanda Staveley, a European financier, Barclays improperly favored the Qataris in the fund-raising. The relationship between the bank and the Qatari government rings of “mutual back-scratching.” Admittedly, any business deal involves both parties benefiting, and in much of the world bribery is de facto necessary cost of doing business. Nevertheless, Barclays may have had an organizational culture similar to that of Wells Fargo in which anything goes in pursuit of profit.

The full essay is at "Bribery at Barclays."

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1. Chad Bray, “Former Barclays Executives Appear in Court Over Qatar Deal,” The New York Times, July 3, 2017.

GM’s CEO: Ridding GM of Its Dysfunctional Culture or Enabling It?

I suspect that we tend to vastly underestimate the amount of energy, or raw force, sufficient to rectify an organization’s dysfunctional culture. The typical assumption is that replacing the CEO is not only necessary, but also sufficient. “A fish rots from the head down,” one might say. However, the head of a fish cannot necessarily stop, not to mention reverse, an infection spreading somewhere in the body. A sordid mentality can easily spread once it has taken hold in an organizational body. Indeed, such a pathogen can develop defense mechanisms geared to the standard antibiotics. To rely on the body to heal itself involves considerable naiveté. Relying on GM’s CEO Mary Barra to exculpate the mentality behind the faulty ignition-switch lapse and ensuing cover-up is thus arguably based on a faulty assumption of sufficiency.

On July 17, 2014, U.S. Senator Claire McCaskill, chair of the Senate Subcommittee on Consumer Protection, Product Safety and Insurance, demanded of Barra, who was testifying before the committee, “How in the world did Michael Millikin keep his job?” Stating that Millikin should be fired, U.S. Senator Richard Blumenthal noted that lawyers on Millikin’s staff were involved in “cover-up, concealment, deceit and even fraud.”[1] In return, Barra defended GM’s top lawyer as having “high integrity.” Moreover, she said that Millikin is a key part of the legal department she wants at the company—the “new GM,” as she had previously described GM under her helm. Yet can having fired only 15 people for their roles in the faulty ignition-switch episode, which led to 13 deaths and a delayed recall of 2.6 million cars, possibly turn an “old” company into a new one? The assumption that the enabling of covering things up had been limited to the 15 people fired (with financial incentives to leave—hardly a message of deterrence) is as faulty as the problematic ignition-switch itself.

To take Barra’s opinion of Millikin as having high integrity as a given involves ignoring the possibility that Barra wanted both to present a picture of a “new GM” to the world and protect GM veteran employees—essentially having it both ways. Put another way, relying on Barra means ignoring her conflict of interest.

Taking into account Barra’s possible motives, McCaskill took a look at the support for Barra’s defense of her company’s top lawyer. Millikin had said that information lawyers in his department had in April of 2013 of the link between ignition-switch and airbag failures did not get to his desk; hence he did not know of the defective switches until February 2014. If this is true, the senator reasoned, then Millikin is guilty of either “gross negligence or gross incompetence.” Whether the head of GM’s legal department acted with integrity or not, his job description includes running his department. That Barra, a manager herself, somehow omitted this point is odd. To borrow a line from the film, Inglourious Basterds, the head of the American Nazi-hunters told a German informant, “Yeah, we got a word for that kind of odd in English; it’s called suspicious.” It was suspicious that the informant arranged a meeting place at a pub being frequented by Nazi officers.

In overlooking Millikin’s failure to keep abreast of important information reaching his subordinates, Barra was essentially protecting the “old GM” even as she was selling a “new GM” to the world. There’s a word for this; it’s called lying. Were she serious about removing the culture enabling unethical and incompetent management in the company, a wholesale replacement of personnel would be needed throughout the company. To be sure, such a mammoth effort would have to take place over some time, in stages (and without giving the old guard financial incentives to leave). “Crime does not pay” and “Incompetent management is not to be tolerated” would be the messages sent in word as well as deed, and this is what integrity is all about. Contrariwise, trying to have something both ways in line with a conflict of interest is just more of the “old GM.” Even though Barra came in after the ignition-switch cover-up, indications point to her having joined the old guard even as she gives lip-service to a new GM. 

The old will of course take care of the old, so a new spark must infuse considerable energy into a company gripped by the status quo as its default in order to move the entire entity to a new, higher orbit. That is to say, much ballast must be tossed over as the trust is engaged. We as a society tend to assume that the movement comes about from mere window-dressing by a CEO. We are naïve.

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1. All quotes in this essay come from James Healey, “Senators Tell GM to Fire Top Attorney,” USA Today, July 18, 2014.