The automotive industry is facing fundamental changes: technological and social change, new competitors, intense discussions about the extent and limits of corporate responsibility. This is a field of tension, which we discussed with Professor Josef Wieland, an expert in business ethics.
Professor Josef Wieland heads the Chair of Institutional Economics, Organizational Governance, Integrity Management & Transcultural at the Zeppelin University in Friedrichshafen, Director of the Leadership Excellence Institute Zeppelin (LEIZ), Chairman of the Board of Trustees of the German Business Ethics Network (DNWE) and, among other things, has been awarded the Baden-Württemberg State Research Prize.
Professor Wieland, when you look at Daimler as an expert, what do you think of first?
My first thought is that your company has done an outstanding job in implementing high moral standards for business conduct in sensitive markets, for example. You are also one of the companies which practice sustainability and corporate social responsibility at an appropriate level for today's world - and as a global player. On the other hand, I have the impression that, all things considered, the commitment to relevant civil society processes could be thought out and structured even better.
And how do you assess the challenges?
It would be strange if you would not encounter any difficulties, because successful companies test themselves again and again in the course of their history and are always changing. This applies to their culture as well as to technologies. The ongoing diesel debate, for example, is affecting the entire industry. In my opinion, the automotive industry is facing some difficult decisions: first, in terms of technology as well as regarding the question of how future markets will turn out. Companies bear responsibility for social challenges for which there are frequently no black and white solutions.
What would it mean specifically if we would have to content ourselves with a "gray" solution?
It is a complex issue: Companies have a great deal of social responsibility, both in terms of climate protection or resource conservation as well as with regard to sustainable corporate success. If I as an automotive manufacturer switch over to electromobility overnight, this would have potential consequences for entire economic regions. Corporate decisions, however technological they may be, therefore have an impact on society. On the one hand, they can have negative effects in terms of emissions and ecological impacts, but can also lead to a deep social transformation.
In the past there was the "honorable merchant". What mechanisms are there today in globalized economic life for anchoring of responsible action?
The honorable merchant is a virtuous, ethical figure from the 16th century – a mechanism for educating the dishonorable merchant: Those who opposed this standard risked losing their membership in the Hanseatic League and their staple rights. When we talk about integrity management or moral leadership today, this is exactly what we mean: for economic stakeholders, a sense of responsibility is a must. Every company needs governance mechanisms. These structures keep the organization running. This is also being implemented at Daimler. However, governance mechanisms are only effective if they are really desired and aspired to in the corporate culture. Therefore, the top management level plays a key role in this. Given that the public, as well as a company's own employees, observe the behavior and strategic tendencies of top management on this very aspect. Only the interaction between managers who promote responsible action and structural factors within the organization can create credibility. Daimler's decision in 2011 to appoint a Board of Management member for Integrity and Legal Affairs reflects these very considerations.
And how far does corporate social responsibility go?
In the 70s, the focus was on "the business of business is business". Today, that isn't enough: Companies can no longer confine themselves to operating their economic function as effectively as possible – and simply believing that, in doing so, they are making a contribution to the welfare of society. Today, companies are needed to solve all kinds of social problems: fighting child labor and corruption, protecting the environment, buffering globalization, conquering new markets and thus securing jobs. At the same time, they are challenged to shape the future and to remain technology leaders.
Do you know what distinguishes successful companies from less successful ones?
The art of success for a company is what I call "value creation from continuous relation". This means the ability to cooperate with others, to use continuity as a factor for value creation, and to look at yourself "in relation" to others. You have to involve society from the outset.
Is this more difficult in times of short-term economic considerations, i.e. with regard to quarterly figures?
It is indeed, but quarterly figures are from the era of "shareholder value". However, the expectations have shifted towards shared value: Companies need to show what value added they create for all stakeholders in society – and not just for one.
What structures are required for this?
I am confident that Daimler will implement responsible corporate governance correctly in its operations. In my view, institutionalized stakeholder dialogs are indispensable for gaining sufficient insights into society. Given that companies like yours need an open ear to society. In addition to topic-related dialogs, advisory boards are useful. – they involve discussions in a sheltered space in which participants consider a wide range of topics relating to sustainability, innovations, personnel and many more. It is existential for the company to know what ideas and trends are in circulation – and about the current external image of one's own organization. Society is the crucial ecosystem in which a company operates, and every company should be very aware of this.
How do you assess image losses?
I'm pretty down-to-earth about it. There is a famous saying in German that - literally translated - goes like this: "your reputation comes to you by foot and leaves you with a sports car". In other words, you can lose your reputation quickly when something happens. However, I don't really think that a reputation can be destroyed that quickly. Rather, when the going gets tough, it can take the strain off because it creates legitimacy. If companies have a good reputation, society is more likely to see their bad passes.
What conditions must be created by a company which is designing a fundamental change?
You need a space in which you can experiment because your entire business is in a state of flux. A company is an organism which is developing, looking for answers to urgent questions and ideally provides realistic answers. Sometimes companies are punished for wrong answers on the market. Yet it is precisely this vitality that companies have to transport. Then it also becomes clear with regard to social responsibility that there are more problems outside than you as an individual company can meaningfully solve. The message here should be: We are on the move, we are trying out many things – mostly, we are very good at this; and not so good at other times.
Do all the things we do to improve sustainability pay off?
Every company does an infinite number of things that do not pay off in reality. Why justify yourself on the green topics of all things? The return on investment of sustainability lies in the company's innovative ability, in its social legitimacy and in its acceptance. By the way, this also applies to investments in new technologies: They are subsidized across the board because no money is earned from them from the start. The difference, however, is that nobody gets indignant about them. Strangely enough, green investments always require special legitimacy.
Data is becoming increasingly more important in society and industry. What can companies do to ensure data is handled responsibly?
Almost all people attach great importance to very responsible handling of their data. However, the privacy issue goes even further. In society, the question of "How can I protect myself from having my content published?" is highly topical. Despite technically unresolved issues, digital ethics is therefore a topic to which Daimler attributes absolute importance. Given that matters of artificial intelligence are your topics – even if we think only of autonomous driving.
In your opinion, what is necessary to lead Daimler successfully into the future?
Finding an answer to what the urban and regional mobility of the future will look like and what you can contribute to it. Participation in the relevant public discourses with a clear positioning.
An exciting task, if not a very easy one.
The easy things should be left to others.