Tuesday, 23rd September 2025 marked the beginning of a milestone tenth year for the business seminars at Northumbria University, and what a compelling start it was. I had the opportunity to attend this event, a fascinating seminar that explored a compelling and unsettling question: how do firms manage their own ethical contradictions? The seminar, based on a study by Dr Nicholas D. Wong and his colleagues—Andrew Smith, Allan Discua Cruz, Nicholas Burton, and Elenia Charalambous—provides a compelling framework for understanding this phenomenon. Through a detailed analysis of two prominent 20th-century British family firms, Cadbury and Rowntree, the research reveals that rather than being passive victims of circumstance, companies actively and strategically manage their contradictory ethical positions. As Dr Wong explained, the choice of these historic cases was a deliberate research decision to allow for a comprehensive study of all stakeholders. The study, which initially had three cases, ultimately settled on these two because their stories perfectly encapsulated a central paradox: the firms’ benevolent treatment of workers in Britain was, in fact, enabled by their exploitation of labour in the tropics.
Dr Wong demonstrated that firms facing ethical paradoxes employ a range of sophisticated strategies to navigate the tension between public reputation and private reality. He detailed and analysed the three core strategies identified by the study—disinforming, subordinating, and self-doubting—and showed how Cadbury and Rowntree used these tactics to manage their respective crises of conscience. Furthermore, the essay will argue that while increasing supply chain transparency is a crucial first step in addressing modern slavery, it is ultimately insufficient. A deeper, more fundamental shift in corporate values is necessary to foster genuine ethical conduct. One insightful comment from the audience drew a comparison between the three management strategies and the stages of grief, suggesting that firms navigate ethical challenges in a similar, multi-stage process.
The foundational ethical paradox for both Cadbury and Rowntree rested on their celebrated domestic reputations. As Quaker-owned companies, they were lauded as pioneers of enlightened capitalism, providing their employees with unheard-of benefits, including housing, education, and healthcare. Cadbury’s model village of Bournville and Rowntree’s in York were testament to their commitment to social welfare. This benevolent image was not merely a marketing tool; it was deeply ingrained in the religious and social principles of the founding families. However, this domestic benevolence existed in stark contrast to their global business practices. The paradox became acute when it was revealed that Cadbury sourced a significant portion of its cocoa from the Portuguese colony of São Tomé, where the produce was cultivated using brutal, slave-based labour. Similarly, Rowntree, which had its own cocoa estates in the Caribbean, relied on a system of indentured labour that was, in all but name, a form of modern slavery. This created a profound ethical conflict: how could a company so deeply committed to the welfare of its workers at home tolerate, and profit from, the suffering of others abroad?
It is crucial to understand that while the UK officially abolished slavery throughout its empire in 1834, the attitudes and legacies of the institution persisted well into the 20th century. The idea of racial and cultural hierarchies that had underpinned colonial-era slavery remained, often manifesting as justifications for new forms of exploitation like indentured and forced labour. This historical context is vital to comprehending why companies could participate in such practices without facing immediate public condemnation.
Dr Wong explained that a hidden ethical contradiction only becomes a prominent public problem (a concept referred to as salience) due to a complex mix of both endogenous and exogenous factors. Endogenous factors are those that arise from within the firm itself, such as the deeply held religious beliefs of the Quaker families. These beliefs played a crucial role in shaping their domestic corporate responsibility. However, the study shows that these internal values were ultimately unable to prevent their entanglement in overseas exploitation. Exogenous factors are external forces that act upon the firm, such as public scrutiny and historical contingency. A key exogenous force in the Cadbury case was a prominent newspaper campaign, beginning in 1905, led by the journalist Henry Woodd Nevinson, who publicly reported on the situation in São Tomé and was the first to brand it “modern slavery.” This was not a sudden revelation for the firm; reports from missionaries had been reaching Cadbury as early as 1901. It was this external pressure that transformed Cadbury’s ethical paradox from a private concern into an unavoidable public crisis.
The research meticulously identifies three core strategies that firms use to manage such a contradiction once it becomes salient. The first, and arguably most direct, is disinforming. This is the act of deliberately misrepresenting facts to obscure the paradox from both internal and external stakeholders. It is not merely a failure to disclose, but a proactive effort to mislead. The research provides a striking example of this strategy at work within Cadbury. When the company directors became aware that some of their cocoa sacks were clearly marked with “São Tomé”—a public admission of the product’s origin that could draw scrutiny—they arranged for the bags to be discretely removed from the factory floor and destroyed. This action was not about resolving the ethical paradox but about making it invisible. It was a calculated attempt to control the flow of information and maintain a public image of purity, knowing full well that their business model depended on morally compromised sources.
The second strategy, subordinating, is a more nuanced and often psychologically complex approach. This involves justifying a morally ambiguous or outright unethical action by appealing to a higher moral principle, thereby downplaying the ethical concerns of the immediate action. The study found that Rowntree primarily employed this tactic to justify its use of indentured labour. In its company magazine, Rowntree framed its investment in the West Indies not as an act of capitalist exploitation but as a benevolent mission to help the colonies become financially self-sufficient. The controversial labour practices were presented as a necessary, if regrettable, means to support this “crucial” and ultimately virtuous goal. This strategy is a powerful tool because it allows a firm to operate within a paradoxical reality by constructing a narrative that positions the unethical action as an unavoidable byproduct of a greater good. It shifts the ethical conversation from the specifics of the exploited labour to the grander, more palatable story of corporate benevolence and colonial upliftment. This moral reframing served to pacify internal stakeholders and deflect external criticism by giving the company a moral high ground to stand on.
The final strategy, self-doubting, is a form of calculated procrastination designed to delay difficult and financially costly decisions. This tactic involves feigning uncertainty about the ethical implications of a situation, even when clear evidence exists. The paper’s analysis of Cadbury’s actions regarding the São Tomé cocoa trade provides a textbook example. As early as 1901, the firm began to hear rumours and receive reports from missionaries about the use of forced labour in the colony. However, instead of taking immediate action, the company delayed its response for several years by commissioning a series of “further investigations.” This feigned uncertainty was not a genuine search for clarity but a deliberate mechanism to postpone a decision that would have had significant financial consequences, namely, finding new, more expensive sources of cocoa. The firm’s directors were not truly in doubt; they were simply avoiding the economic implications of doing the right thing. The strategy of self-doubting allowed them to continue profiting from the morally compromised situation while maintaining a public stance of cautious ethical concern.
The study of Cadbury and Rowntree provides an indispensable historical lens through which to view contemporary ethical challenges. By identifying the proactive strategies firms use to manage ethical paradoxes, the research dismantles the notion that corporate malfeasance is simply a matter of ignorance or oversight. It is, instead, a deliberate and calculated aspect of business practice. The enduring lesson is that while transparency is a powerful tool for exposure, it is a hollow victory without a corresponding change in values. True ethical reform requires more than just revealing the truth; it demands a fundamental commitment to social justice that cannot be compromised for profit.
Following the main presentation, Dr Wong took questions from the audience, demonstrating how the paper’s framework is relevant to contemporary business ethics. The seminar host, Dr Ron Beadle, explained that Chatham House rules applied to the discussion, enabling a more frank exchange. Another participant asked if Coca-Cola’s use of the retort “we are not like them,” paraphrasing “sugar is not tobacco,” in reference to the tobacco industry, was an example of the kind of paradoxical management Dr Wong had discussed. The discussion also drew parallels with cobalt mining, a sector critical for the production of electric cars and smartphones, where multinational companies face intense scrutiny over labour practices. In addition, the conversation touched upon the conditions of clothing manufacturers, where companies are often praised for sustainable practices while their production relies on cheap labour in developing countries. A participant also questioned the ethics of capitalism per se, arguing that the system itself creates and incentivizes such paradoxes. Dr Wong’s response suggested that the same strategies—disinforming, subordinating, and self-doubting—could be used to manage contemporary paradoxes, such as those related to water usage, labour rights, and environmental impact. This highlighted the timeless and universal nature of the paper’s findings and underscored the point that increasing transparency alone is not enough to change corporate behaviour.
In answer to a question, Dr Wong also offered insights into the demanding process of getting the paper published in a top-tier academic journal. He explained that their work went through a rigorous peer review process, receiving a request for major revision twice and a request for minor revision twice before it was finally accepted. This rigorous process underscores the high level of scrutiny and academic rigour that the paper was subject to, solidifying its credibility and contribution to the field of business ethics.
A follow-up question was directed at Dr Elenia Charalambous, who was also attending the seminar. She explained that the research process required meticulous work. This centred on the archival materials held by Rowntrees and Cadburys. Dr Charalambous explained how she was granted unfettered access and how developing a relationship with the archivists provided the material which proved to be critical in building the argument.
At the end of the evening, Dr Ron Beadle thanked everyone who attended for their participation and invited everyone to offer Dr Wong a vote of thanks, which was heartily given.
Please also note the blog post from the previous series: