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Financialization and the Employee Suicide Crisis at France Telecom

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Abstract

The privatization of France Telecom (FT) in 1997 led to the implementation of a profit-oriented financialization strategy. An unforgiving work environment was developed, which has unsettled many employees. Between February 2008 and October 2011, 69 employees took their own life. Many left notes blaming management for having privileged the interests of shareholders over those of employees. Through interviews with employees and professional practitioners associated with FT, we reveal that employees strongly resented the company’s use of financialization policies to maximize shareholder value. Pursuit of such policies led to the de-institutionalization of socially prescribed norms that were applied commonly in Continental European workplaces. Feelings of anomie, disgrace, futility and isolation ensued among employees. This case highlights an important effect of a modern corporation’s adoption of financialization policies. It points to the need to improve workplace sensitivities and the ethical dispositions of companies and their managers.

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Notes

  1. By “Continental European countries”, we refer to France, Germany, Italy, Spain, Portugal, Belgium and Luxembourg. More specifically, our comments apply strongly to France and Germany because of the similarities they represent as corporatist welfare states (Esping-Andersen 1989).

  2. (Monitoring Centre on Stress and Forced Mobility, http://www.observatoiredustressft.org/images/stories/pdf/Recensement_suicides_2008-2009_V24-06-2011.pdf; http://www.observatoiredustressft.org/images/stories/recensemt_suicides_27_oct_2011.pdf).

  3. The rate of suicide was higher than the national average of 16 in 2009 (when it was 19) and 2010 (27).

  4. http://www.lemonde.fr/economie/article/2010/03/25/stephane-richard-ma-responsabilite-c-est-la-cohesion-sociale_1324271_3234.html#ens_id=1347697.

  5. http://www.france24.com/en/20100409-prosecutors-office-probes-suicides-france-telecom.

  6. http://www.telegraph.co.uk/finance/financial-crime/9379649/Former-France-Telecom-boss-Didier-Lombard-bailed-in-suicides-investigation.html.

  7. Suicides à France Télécom: un document accablant, Le Parisien, 7 May 2013, http://www.leparisien.fr/.

  8. “Didier Lombard reste mis en examen”, Le Figaro, 3 July 2013, http://www.lefigaro.fr/flash-eco/2013.

  9. We do not argue that financialization was solely responsible for the suicides, but that it is due to a multiplicity of factors.

  10. http://stats.oecd.org/Index.aspx?DataSetCode=UN_DEN#.

  11. http://www.orange.com/en_EN/finance/documentation/.

  12. Those acquisitions were made at the height of the boom, just before the telecom bubble burst. They are now seen as poor managerial decisions, particularly as they were made primarily for cash, and not shares.

  13. http://www.orange.com/en_EN/finance/documentation/registration-documents/index-old.jsp#.

  14. http://www.eurofound.europa.eu/eiro/2009/11/articles/fr0911029i.htm.

  15. http://www.orange.com/en_EN/finance/documentation/registration-documents/index-old.jsp#.

  16. Three thousand employees joined the plan before 31 December 2010. FT amended the plan on 23 December 2010 to provide additional benefits. It extended the period of cover until 31 December 2014 for all eligible employees who had not yet joined. http://www.orange.com/media/doc-finance/en/registration-documents/att00013459/registration-doc2005-vol1_en.pdf.

  17. From 1997 to 2002 the dividend per share was €1.

  18. http://www.orange.com.

  19. For detailed exploration of workplace bullying, see Salin (2003) and Hoel and Beale (2006).

  20. http://www.observatoiredustressft.org/.

  21. http://www.observatoiredustressft.org/.

  22. This was described tartly by unions as Allez Casse-Toi [Get Lost].

  23. http://www.eurofound.europa.eu/eiro/2009/11/articles/fr0911029i.htm.

  24. Barberot is the CEO of Globe Cast, a subsidiary of FT since 2010.

  25. The meeting minutes are available on http://www.mediapart.fr/files/ACSED.pdf (last accessed on July 30, 2014).

  26. The judgment is accessible at http://www.observatoiredustressft.org/.

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Authors and Affiliations

  1. Accounting Department, College of Business & Economics, United Arab Emirates University, Maqam Campus Bldg. H3, Second Floor, Room 2058, P.O. Box 15551, Al Ain, United Arab Emirates

    Nihel Chabrak

  2. College of Business, Victoria University, Melbourne, Australia

    Russell Craig

  3. Department of Management Marketing and Strategy, Télécom Business School, Institut Mines Télécom, Paris, France

    Nabyla Daidj

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  1. Nihel Chabrak
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  2. Russell Craig
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  3. Nabyla Daidj
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Correspondence to Nihel Chabrak.

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Chabrak, N., Craig, R. & Daidj, N. Financialization and the Employee Suicide Crisis at France Telecom. J Bus Ethics 139, 501–515 (2016). https://doi.org/10.1007/s10551-015-2602-8

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