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Nicolas Castiglioni

09/12/15

CORPORATE SOCIAL RESPONSIBILITY

COURSEWORK:
Select a case of irresponsible business behaviour. Provide a case for why
you think this is irresponsible, and identify how you think this might be
addressed.

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3rd Year Management, 130022039

09/12/15

Nicolas Castiglioni

In business, you are often faced with some very difficult choices, choices that define you.
As a mater of fact right and wrong are relative concepts, you dont just choose one and
stick to it. Businessmen tend to bend their perception of right, over time, in order to
achieve their goals. This is especially true for one Business figure: Bernard Tapie. The
french businessman is a voluble, charismatic figure with a chequered past. He made a
fortune in business and served as a minister under Franois Mitterrand, the Socialist
president. He owned a cycling team, and a football club the Olympique Marseille, both
very successful. But was involved in numerous scandals, lost his fortune and later
recreated himself as television presenter and actor. We will try and analyse the various
scandals he as been involved in, and explain why these actions could be seen as
irresponsible from a CSR perspective.
Tapie has always been a controversial figure. For instance, two important scandals: Les
chteaux de Bokassa (1981) and Le match truqu VA-OM (1995) have been very
polemical in France.
The former emperor of Central African Republic, Jean Bedel Bokassa, is the first to
prosecute Bernard Tapie in justice. Just after the emperors fall in 1979, Tapie managed to
buy its French castles for about a tenth of their market value, in the intent of giving them to
charity (to the UNICEF). Tapie got the emperor to sell him the castles for this ridiculous
value, by tricking him into believing that the French State was going to seize them and that
he would be better off selling them before then. But Bokassa soon realised the deception,
and attacked the buyer. The Abidjan court finally cancelled the sale and Tapie was required
to give the properties back to Bokassa.
Then, in May 1993, an other scandal involving Tapie came up. A player of the french
football club of Valenciennes revealed an attempt of corruption by some representatives of
the Olympique de Marseille (at the time owned by the businessman). The game, between
OM and VA, in question was just a couple of days before Marseille had to face AC Milan
for the Champions league final, a very important game considering that by winning
Marseille became the first french team to ever win the title. Tapie wanted to be sure his
players where at the top of their game, and decided to make sure the players of the
opposite team would go easy on them.. The businessman finally served six months in
prison for match-fixing involving his football team.
These scandals show how Tapie is ready to do whatever it takes to get to its goals. An
important ethical question is therefore raised here. We ofter hear the assumption : What
matters in the motive, but does that really mean it is right to do whatever it takes for a
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3rd Year Management, 130022039

09/12/15

Nicolas Castiglioni

greater good? In the first scandal Tapie took advantage of a very controversial figure :
Bokassa. At the time the emperor was pictured by the media like a monster, a cruel
dictator. And Tapie decided it was right to trick him, get his castles and give them back to
humanity in charity, in pursuit for the collective happiness. But does that noble motive
justifies lying and tricking Bokassa in order to get the castles? A similar question can be
asked when looking at the second scandal. At the time Marseille was a good team, and
probably deserved to win the European championship. Winning the cup would have made
the all country proud. And would have made especially happy the people of the South, who
always felt like they where on the sideline of Paris and the rest of France. Tapie knew all
of this, and it is probably one the reasons that pushed him to make sure his players
where at the top of their shape for the game. Again, even though the motives behind his
actions weren't purely self interested, he stilled crossed a line and made something illegal
in order to get to his goal.
Aristippus and Epicurus viewed happiness as the only good, and this as lead to a theory
accepted my many : Utilitarianism. It could be argued that Tapie follows this ethics, he
believes that the best moral action is the one that maximises utility. Everything he does, he
does it with the intent of bringing well-being and satisfaction along himself and the people
that surrounds him. But by doing so, he often ignores justice in the first place.
Contrarily to Utilitarians, Libertarians do not believe right rests on utility. Persons, no mater
who they are, should not be used merely as means to the welfare of others. Their life,
labor, properties etc. belongs to them alone and they should choose to do what they want
with them. They do not have to use their belongings for the good of the society as a whole,
if they do not want to.
An answer to this moral dilemma may be found on Immanuel Kants work (1724-1804). To
him, humans are rational beings, worthy of dignity and respect, and morality is not about
maximising happiness or any other end: it is about respecting persons as ends in
themselves. He also argues that just because something makes many people happy, it
doesnt make it right. Tapie bases morality on interests and preferences, but that doesnt
make it right. It just makes him become better at calculation.
Therefore, If we accept Kant's assumption that what matters is going the right thing
because it is right and not for an ulterior motive, Tapie is acting unmorally. Even if in the
long term the consequences of his actions may benefit a large number of persons, it
doesnt justify lying to Bokassa or fixing a football game. This philosophy can be summed
very well by Kants words : The duty to the truth holds regardless of the consequences.

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3rd Year Management, 130022039

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Nicolas Castiglioni

If there is a sector of the economy more in need of a proper sense of corporate social
responsibility its probably financial services. To this extent, a good example of a
controversial business behaviour is the one surrounding the Adidas - Crdit Lyonnais
case.
In 1990 Tapie bought Adidas for 249.3 million euros, thanks to a loan from a subsidiary of
the Credit Lyonnais (today LCL) bank. Adidas was in financial trouble at the time, and
Tapie wanted to restructure it a sell it back a years later for a profit. Business model he had
managed to apply successfully to many companies in financial difficulty before then. But in
1992, he decided to join the French government and, in order to avoid conflict of interest,
he had to sell his group. He especially had to sell its crowned jewel adidas to a group of
investors, lead by Robert-Louis Dreyfus and including a subsidiary of Credit Lyonnais, for
315.5 million euros. The whole transaction was mandated by Credit Lyonnais. Adidas
became quickly profitable again and 100% of the shares where then sold to Dreyfus,
including those owned by credit Lyonnais. In 1996, soon after Adidass IPO, Bernard Tapie
launched a Legal procedure against Credit Lyonnais (which at the time had recently been
nationalised by the french government) denouncing faults in the execution of the sale.
Credit Lyonnais and Dreyfus where suspected of coming to an agreement, involving a
favourable loan to investors in exchange for the future acquisition of the banks share for
twice their value. Credit Lyonnais was also suspected of owning some companies involved
in the acquisition of Adidas, making the bank a partial owner of the company it was
mandated to sell and violating its engagement not to act as a counterparty in the
operation. In 2008, after a complicated battle between the French government, owners of
credit Lyonnais, and Bernard Tapie, a private arbitration by the economy minister Christine
Lagarde leads to Tapie winning the case and Credit Lyonnais having to pay him 285 million
euros. Today this legal battle is far from over, Lagarde is suspected of abuse of authority
in favour of Tapie and various procedures contesting this decision are currently making
their way through the Courts.
This situation is similar to the one of Tapie and Bokassa we analysed earlier. Just as the
businessman did to the Emperor, it is clear that Credit Lyonnais took advantage of the
situation in which Tapie was in order to profit from Adidass sale. Taipies hands where tied
by being in the government first, and then by the legal problems he had related to its
football team. And wasnt therefore in a position to defend its personal assets. It was clear
that, even though he did it many times for a greater good, Tapie had managed to be in
the position he was at the time by behaving numerous times in an unethical way. But does
that mean he deserved to be beaten at his own game? In the 90s Crdit Lyonnais was at
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the edge of bankruptcy, and this controversial move was probably part of a plan to save
the company. Again, this would have benefitted many stockholders in the bank, especially
employees who may have lost their jobs and customers who had their savings in the bank.
But it doesnt make breaking their engagement not to act as a counterparty" good. Is lying
about what you are going to do justified in a case like this?
To Aristotle justice means giving each person what they deserve, giving each person its
due. The material asset being disputed here is the money derived from the sale of Adidas,
and more particularly the cut the bank got into the transaction by illegal means. But is it
the right thing to give the money to Tapie? Aristotle argues that an object or asset should
be given to the person that best realises the purpose. And Tapie would probably use the
money to make what he believes to be right, making some happy and others less. And at
this point libertarians would argue that he should be entitled to use the money as he
pleases, as he should be able to do what he wants with its own assets. But on the other
hand, Utilitarians would say the money should be used to achieve a greater good and at
this point it wouldnt really mater if it was Tapie or Credit Lyonnais to use that money.
It is hard to understand if at that point it is the a good thing or a bad thing that Tapie won
the dispute, as it all depends on how he is going to spend the money. But what we can say
is that the actions of Credit Lyonnais cannot be justified by neither the Libertarianists or the
Utilitarianists. As a mater of fact, the first ones have an important perception of personal
autonomy, underlying that Tapies assets should have been sold in the way he intended
them to be and that Crdit Lyonnais shouldnt have broken its word. The Entitlement
theory by Robert Nozik support this. It states that the only just transaction is a voluntary
one, and the state should only act to correct the injustice in the distribution of welfare
generated by the spontaneous play of market forces. As the transaction in question is
neither voluntary or related to changes in the market forces, it cannot be considered as
just. Looking at this through the utilitarian philosophy, we can still not justify the actions
undertaken by the bank at the expenses of the French businessman. Credit Lyonnais
clearly made this financial operation in order to double its investment, and therefore
benefit the bank and its stakeholders. There is no evidence of a pursuit of a greater good
for humanity, or even for a community larger than the one actively involved within the bank
itself. Contrary to what happened between Tapie and Bokassa, this wrong doing is not
justifiable even on the basis of an attempt to maximise any kind of greater utility or
greatest happiness.

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3rd Year Management, 130022039

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Nicolas Castiglioni

Tapies life raises numerous ethical dilemmas. He is not a bad person di per se, but he
his ready to act in a morally questionable manner in order to get to his goals. All those
scandals in which he has been involved over the years, draw a character in struggle
between two ways of seeing the world : Libertarianism and Utilitarianism. An internal battle
between individualism and a vision of a greater good. As mater of fact, Tapie started his
career as a businessman by buying and selling Companies with the final goal of making
profit for himself. He then started thinking about his image, and about giving back to the
society. And, as we saw in the Bokassa and OM cases, he embraced the Utilitarian
philosophy and more particularly living by the famous motto the end justifies the means.
And finally, when Credit Lyonnais did wrong on him, he went back to a Libertarian way of
thinking emphasising the concepts of personal property and autonomy and fought to
get his money back.
The problem is that both those philosophies have limitations, and therefore by acting like
he did Tapie often acted irresponsibly and did wrong on many people. In utilitarianism no
moral principle is absolute or necessary, all human beings are not worthy of respect and
can be treated as mere instruments for the collective happiness (as Tapie did with
Bokassa). Universal human rights are often ignored. Libertarianism on the other hand,
emphasises human dignity and individual rights, but often ignores the concept of greatest
happiness.
A philosophy that tries to solve those limitations, and that Businessmens as Tapie may
want to adopt when facing difficult decisions, is the one developed by John Stuart Mill in
the 19th century. He tried to save utilitarianism by recasting it as a more human, less
calculating doctrine. He wanted to reconcile individual rights with the pursuit of a greater
good. To him, people should be free to to do whatever they want, provided they do not
affect others negatively. But utility is still the ultimate appeal on all ethical questions. we
should maximise utility in the long run, by respective everyones private liberties and trying
to built together a greater good appealing to all people. Business leaders should
therefore achieve self-improvement without harming others, or society at large. They
should have a holistic view of the consequences of their action on their environment and
on society as a whole, but still respect individual liberties and individual rights. By doing so,
they may not be able to drastically change the situation and improve overalls happiness
overnight. But, in the long run, things will get better and they will be able to get to their
objectives without harming others.

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09/12/15

REFERENCES:
Le Figaro in English. (2011). Why the new IMF chief is being investigated. Available: http://
www.lefigaro.fr/politique/2011/08/05/01002-20110805ARTFIG00455-why-the-new-imfchief-is-being-investigated.php. Last accessed 10/12/2015.
LeFigaro.fr. (2013). Bernard Tapie, une longue liste d'ennuis judiciaires. Available: http://
www.lefigaro.fr/actualite-france/2013/06/28/01016-20130628ARTFIG00503-bernard-tapieune-longue-liste-d-ennuis-judiciaires.php. Last accessed 10/12/2015.
TOM ADAMS. (2011). The shame of Marseille. Available: http://www.espnfc.com/story/
894439/rewind-to-1993-the-shame-of-marseille. Last accessed 10/12/2015.

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