Abstract
We analyze two exceptional episodes of two multinational breweries who, independently from each other, decided to close a small niche brewery in a small town, namely Pedavena in Italy (part of the Heineken group) and Hoegaarden in Belgium (part of the InBev group). In both cases, the initial decision of plant closing was ultimately reversed through actions supported by an alliance of stakeholders. We develop and apply three different conceptual lenses to analyze the cases—described as Amoral Managerial (Model 0); Applied Business Ethics (Model I) and Bounded Business Ethics (Model II), respectively—showing how with the integration of stakeholder theory in business ethics research (Model II) we can enrich our understanding of the implications of stakeholder engagement in the value creation process that can be otherwise denied (Model 0) or overlooked (Model I). Our two cases also show that when managers are missing opportunities for value creation, or destroying elements of the value creation process, stakeholder alliances can repair such a stakeholder equilibration failure.
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Notes
- 1.
Allison’s analysis of the famous “thirteen days that almost shook the world” (16-28 October, 1962) moved from the explanatory model of Rational Choice (Model I), to the Organizational Process (Model II) and the Political Government (Model III).
- 2.
This was, literally, the headline of an article in “il Gazzettino”, a popular newspaper of Belluno, the major town near the Pedavena brewery, on the 23rd September 2004 (translated from Italian).
- 3.
Clearly, the description of the Amoral Managerial Model that we present here is far from being a systematic representation of a very sophisticated and articulated analytical paradigm. It is by necessity, a caricature. However, we agree with Allison that “caricature can be instructive” (Allison 1971: 32).
- 4.
Freeman (1994) defined the Separation Thesis—that is the fallacious belief according to which it is useful to think that “sentences like ‘x is a business decision’ have no ethical content or any implicit ethical point of view.” As Harris and Freeman (2008) have clarified, this fallacious belief is ultimately rooted in the more fundamental problem of the fact-value dichotomy (Putnam 1993), that is “the attempt to dichotomize ‘business facts’ and ‘moral values’.” But facts and values are entangled, therefore no business decision can be said to be ‘a-moral’, for it is inherently entangled with some ethical values, that might be implicit, ignored or even unintended, but are nevertheless embedded in that decisions. This is why Freeman concludes that the Separation Thesis is, in fact, a fallacy: separating business and ethics it is not only a bad idea (as it is based on a wrong understanding of the relationship between facts and values), but it is also an impossible task: “separating economic considerations and ethical considerations is impossible” (Harris and Freeman 2008: 545).
- 5.
“Social Issues in Management” is, by no chance, the name of the academic division within the Academy of Management that deals with “ethics”.
- 6.
A different point concerns the way Heineken managed the communication of the plant closing decision and the negotiation phase. In these two aspects, the Pedavena workers do claim that the company behaved unethically. First, because it did not act with transparency: the decision to shut down the brewery was communicated through a press release without any previous discussion with Trade Unions. In fact, Esposito (2007: 284) criticizes in her analysis Heineken Italy for the company’s “unclear and ambiguous” communication during the Pedavena case. Secondly, during the negotiations to induce the management to accept the workers’ request to put the brewery on sale—rather than shut it down and transform it in a museum or other non industrial destinations—the behavior of Heineken’s managers appeared to be “elusive” (Esposito 2007: 286), since the actions undertaken by the corporation did not match its own public statements. In particular, the workers noted that while the corporation publicly stated its willingness to favor the purchase of the Pedavena brewery by another group, the following actions did not reflect this commitment—for example, by “not finalizing a due diligence exercise” to facilitate the sale, and by “delay in replying to the letters of potential buyers.” In the Hoegaarden case, InBev followed the official regulation concerning the information phase that was imposed by law after the brutal closing of the Vilvoorde plant by Renault in 1997.
- 7.
In fact, different interpretations are possible within Kantian ethics. Other might argue that even if it is due for a ‘just cause’, that is, to save the Group competitiveness and, ultimately, jobs at international level, according to the second formulation of the categorical imperative we should always treat human beings as ends in themselves, and not as means to an end. Therefore, plant closing could be seen as a violation of this principle, treating (local) workers as means to an end (global jobs).
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de Colle, S., Fassin, Y., Freeman, R.E. (2017). When David Beats Goliath: Two Case-Studies in the Brewery Sector. In: Freeman, R., Kujala, J., Sachs, S. (eds) Stakeholder Engagement: Clinical Research Cases. Issues in Business Ethics, vol 46. Springer, Cham. https://doi.org/10.1007/978-3-319-62785-4_14
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