Where’s the Line ?

A couple weeks ago we reported that at the Nike Women’s Marathon, held October 19 in San Francisco, the training shoe company awarded the first place prize to Nora Colligan of Austin, TX, even though Arien O’Connell, a school teacher from Brooklyn, ran the best time. Nike explained that Colligan was part of its elite group of pros and that the “winner” was to be selected from this group alone. Later, Nike lamely issued a statement saying, in effect, that everyone was a winner.

This didn’t sit very well with BNET readers. In fact, of the 252 people who voted in the poll, 80 percent said that Nike should declare O’Connell the winner.

Nike hasn’t done that. But Nike competitor Reebok has. In a clever bit of public relations bravura, Reebok presented O’Connell with a trophy inscribed with the words “Winner and Heroine of Non-Elite Runners Everywhere,” along with a free pair of shoes each month for a year, T-shirts for the kids in her class, and a $2,500 donation to her school.

Reebok surprised O’Connell by giving her the award at a special ceremony at her Beginning with Children Charter School.

 Loading ...

BNET’s users should be the ones running BNET. They always leave smart comments. For example, after reading yesterday’s piece about Knowledge@Wharton’s take on how tying shareholder value to executive compensation contributed to current unpleasantness in the financial sector, BNET reader, thommygunns, writes:

Do you think the analysis — that tying executive performance to shareholder value — goes far enough? Any time you focus on the value of return for one specific group (i.e. ‘the shareholder’) over the other stakeholders of a company you run the risk of negatively affecting the broader economy for the benefit of a few. Yes, executives received ample, and sometimes spectacularly excessive, compensation for what have become highly visible failures, but this was only possible because boards, and shareholders, allowed it. Seems that this is becoming the modern version of a witch hunt, with executives on the dunking stool. In a witch hunt everyone is usually a little bit guilty, but fear and uncertainty allow us to cast our guilt on others.

Keep the insights coming, people.

Some little controversy erupted around last week’s post, Are Some Execs Committing Treason?

BNET member DrBruin says that corporations are basically amoral and a-loyal, and cannot be expected to pledge allegiance to any nation or even any system of principles:

Transnational corporations, such as IBM, Exxon, Ford, Procter & Gamble, General Electric, etc., have no loyalty to any country or to any way of life, political system, or set of ideals. They are loyal only to themselves and to the goal of making a buck. Most of these companies will blithely take actions that are against the best interests of the United States if those actions are likely to produce profits or improve cash flow for the company. National boundaries, ideologies, and human rights are irrelevant in this environment. All that matters is who can buy and who can sell. The only thing that keeps our leading defense contractors from selling more of our military technology to potential enemies are the laws that will put them in jail. Otherwise, most of them would do it in a heartbeat.

But fellow member, criving, demurs, saying that nations like China are the future and that griping about such old fashioned notions as national loyalty is really just a kind of sour grapes:

As China has been the force in PC components manufacturing for some years, I believe it is ridiculous to even mention the label treasonous… and considering the hundreds of PhD’s being produced by China, India and others it is just a matter of time to see Chinese companies take the lead in all areas of key technological advances. The USA can enjoy the last years on the top, get ready for [a] Chinesse lead and start sending more kids to college. Hamburger making and George Bush are leading the USA to the fall of the empire.

So who’s right? If corporate responsibility includes things like a duty to the environment and a duty equal opportunity and a duty to diversity, does it not also include a duty to country? And if not, why not?

Google’s informal motto is a simple one, “don’t be evil.” It has certainly helped the hipster search giant’s reputation among, well, hipster Web searchers, though the company hasn’t always lived up to its ideal. Take for example the company’s alleged complicity with China’s Golden Shield Project, which monitors Internet traffic coming into the country for information the authoritarian government finds inappropriate, which has been condemned by both Amnesty International and Human Rights Watch.

Yahoo, whose Mountain View, Ca., office halls sport posters of Google, asking the question, “Sometimes evil?,” has also been put on the hot seat for its ethical gaffs in China. After Yahoo turned over the personal information of Chinese dissident, Shi Tao to the Chinese authorities – which sentenced him to 10 years in laogai – CEO Jerry Yang was compelled to the ultimate Chinese act of contrition: bowing three times to the Tao’s mother during a congressional hearing.

Not to be outdone on the “evil” front, in 2005 Microsoft was roundly condemned for assisting authorities in stifling Chinese bloggers by helping censors remove words like “freedom” and “democracy.”

Just as China has been cleaning house for the Beijing Olympics, it appears the three companies are trying to clean up their ethical acts with regard to human rights in China and elsewhere. They have reached a voluntary agreement to adhere to a code of conduct when dealing with Internet-restricting countries. The deal comes at the prompting of U.S. Senators, Dick Durbin, D-Ill., and Tom Coburn, R-Okla., who were concerned that the three might be forced by the Chinese government to turn over Internet data of athletes, journalists and others at the Olympics.

Though the companies have thus far provided few details of the code of conduct, it is said to involve “principles of expression and privacy,” and will provide implementation of guidelines, a “learning framework” – whatever that is – and a system of assessment.

Said Michael Samway, vice president and deputy general counsel of Yahoo in letter to Durbin and Coburn, “Events around the world make a code of conduct not just ideal but essential, as companies and others work to ensure the protection of basic human rights for citizens across the globe.”

Without more details, it’s hard to tell if this is for real or the ethical equivalent of “green washing.” How can Internet companies protect the human rights in places like China and expect to continue to do business there? What real trade-offs will these companies make?

Come on, fess up. Is all of that software on your home computer legal (as in, you purchased it instead of copying the version your foolish friend just bought)? Apparently it’s not just you.

According to the 2007 State Piracy Study by the Business Software Alliance (BSA), last year one in five pieces of software in use on American PCs was unlicensed and illegal. Not a big deal, you say? The BSA begs to differ. It estimates that the tech industry lost more than $15 billion in revenue from software piracy in eight states - enough to pay for the salaries of 54,000 high tech workers.

If that figure isn’t reason enough to forgo pirated software, Clint Korver over at ethics for the real world, offers another rationale. He says ethical habits start with small things - even such things as software:

Software piracy is to theft what white lies are to lies. In both cases it is all too easy for people to tell themselves a story about how it doesn’t fully count somehow. Everyone else is doing it. No one will know. Or a myriad of other rationalizations.

Sure, this is the kind of thinking that goes into small decisions, like telling your friend those pants don’t look so bad on her. But deciding to steal - even when it’s “just” bits and bytes like Microsoft Office - isn’t so small.

 Loading ...

If business ethics can be taught - and I have yet to read a convincing argument that they cannot - how should such an important lesson be taught?

In business school, perhaps? That would seem to make a whole lot of sense. Business schools seem to be the only environment where it’s possible to gather together a group of experienced business ethics sages (professors) with the fewest number of outside interests that might compromise their teachings. After all, B-school professors may still have a few ties to the business world through consulting relationships and whatnot, but one would assume that because they’ve turned to teaching (where they can’t possibly make what they might on Wall Street), these educators are indeed interested in teaching the next generation of MBAs how not to end up like, oh say, Ken Lay.

And yet even this presumably ideal ethics training ground proves to be problematic. Case in point: A months-long scandal at West Virgina University, where the business school dean apparently awarded the governor’s daughter an MBA based on grades pulled out of “thin air” for classes she never attended. (Here’s a complete timeline of how the incident unfolded.) The Charleston Gazette today reports that the state’s Ethics Commission has begun a formal investigation into the matter.

From my outside view, it looks like a classic ethics breach: the dean and the provost, who was also involved, presumably let the rules slide so as to be able to count among their alums someone who is not only the governor’s daughter, but also an executive at big pharma company Mylan Inc.

This is exactly the sort of pedestrian dilemma that business leaders must know how to handle by the time they’ve graduated with (hopefully) well-deserved MBAs in hand. And if business schools aren’t following the fundamentals of ethical decision making, then I ask again, where should these all too valuable lessons come from?

Like what you’ve read here? Hate it? Think BNET can be better? Let us know! Email us directly, or take the Help Us Build a Better BNET poll on BNET Intercom.

A year-and-a-half ago, when I was asked to write this ethics blog, I wrote out a short introductory post. So today, my last day writing this blog, I took a quick look at it.

Everything you need to survive in today’s business world you probably learned in the schoolyard. How to choose your fights; when to stand up to the big kids; when to just take your ball and go home.

I’ve learned a lot in these past 18 months. But looking at that first post, I realize that while my ethics have sharpened from writing about them almost every day, my core beliefs remain the same. Everything you need to survive in the ethical minefield of business is schoolyard stuff, the things you learned back when you were learning how to navigate through the “rights” and “wrongs” of this world. The playground is bigger, but the rules are the same.

My favorite part of writing this blog was finding those ethics dilemmas that have no clear right or wrong answer, and posing them to you. Because in these uncomfortable spaces, learning occurs. We teach ourselves.

I’m not one to sit down and write out “rules to live by” or “top 10 maxims” or whatever it is that they display in Powerpoints at seminars. But within these tricky dilemmas, there are things I learned myself, things that sprang up again and again in my mind as I weighed a situation, and I will share them here:

• Profit never outweighs wrong.
• The solution to a tricky ethical dilemma is often to just say “no.”
• The best way to deal with a bad idea it to come up with a better one.
• If your gut tells you something is wrong, it probably is. Listen to your instincts.
• There are some work environments that you can’t fix, so dust off your resume.
• You can’t blame anyone else if you get caught up in ethically questionable behavior. There are no victims when “no” is available.
• Tolerating poor ethical behavior is just as bad as doing it yourself.
• The ethical character of an organization is dictated from the top down. Establish an environment where employees know that cutting corners will not be tolerated, and they won’t.
• Your own ethical character is tied in with the companies you do business with. Not all clients are good clients.
• You are a citizen of humanity. Selfish goals cannot outweigh the greater good.
• Writing down a code of conduct is a good thing. Establishing it by example is even better.

Many companies from Wall Street to Silicon Valley are now using puzzles and riddles in interviews as a way to gauge the problem-solving abilities of potential candidates. I thought I liked this approach, mostly because I love puzzles (and because it seems to be replacing flawed personality tests).

But I’ve recently started reading William Poundstone’s “How Would You Move Mount Fuji? Microsoft’s Cult of the Puzzle: How the World’s Smartest Companies Select the Most Creative Thinkers,” and, in the very first chapter, there’s a story that changed the way I think about such mind-benders. They may work well in triaging for some jobs, but they may in fact disqualify those who could be potential business leaders. Granted, not all interviewees are potential management or CEOs. But don’t such puzzles discriminate against practical thinkers in favor of creative thinkers? It’s not always about finding a creative solution to a puzzle; sometimes you need the person who has the ability to step back and say no to a puzzle, that it’s not worth solving. Which brings me to the story from the book:

During the dot-com boom of the 1990s, Microsoft was hosting a job fair at Stanford, and a grad student named Gene McKenna was interviewed and asked in an interview how he would write software to run a microwave oven from a computer. McKenna’s answer: “Why would you want to do that?” McKenna would go on to argue that the idea was ridiculous, that you wouldn’t want to have to run to your computer to use your microwave, that you wouldn’t want to cook remotely because, by the time you got there, the food would be cold. Despite prodding from the interviewer, McKenna continued to say no to the puzzle, that this was a useless feature. I think it was a wise assessment of the puzzle (see the recent success of the Flip video camera for evidence that less is often more when it comes to tech features). Companies need people who will say no to a bad puzzle; ethically, it’s invaluable to have people who can identify a problem that’s not worth solving. McKenna was not hired.

The puzzle-solving interview does have its merits. If you’re hiring, say, a computer programmer, you want someone who can think creatively. But I feel like I’ve heard of a couple computer programmers who have gone onto lead large companies, which requires a wider-range of mental skills. If we take no off the table, do these puzzle interviews still have the potential to unfairly disqualify top candidates? Doesn’t everyone get stumped occasionally? I have four words for you: Petals Around the Rose.

Petals Around the Rose is a dice riddle. You roll five dice in front of a person, and they need to tell you the score. All you can tell them is the name of the game, Petals Around the Rose. You can play an online version here. In 1977, at an early computer conference, the game was a big hit. Some got it immediately; some gave up; some went crazy. One person was so perplexed by it, so obsessed with it, that Personal Computing Magazine told the story of how this youngster stayed with it for hours until he was the last one to get it… on the plane ride home. In an interview, you don’t have such luxury of displaying such dogged tenacity on a problem. Luckily, that youngster was not interviewing for a job. His name: Bill Gates.

Ethics has never been more important in business because people have never been more conscious of the ethics involved in the companies they buy from, invest in, or do business with.

From socially-conscious investing, to assessing the environmental impact of goods and services, to the political bent of a large corporation, ethics is playing an increasingly large role in today’s business decision-making. Consumers have shed their blinders, and companies are weighing more factors than the bottom line in determining that not every client is a good client.

If your company has high ethical standards, I commend you. Now sell it. It’s an easy way to build a feel-good niche, to establish a brand identity, and then build on it with a quality product or service. Take the case of Cafedirect, the UK-based hot drink company. In the 1990s, they were the first mainstream “fair trade” coffee brand. People liked the taste of the coffee, and the taste of the fair trade idea. By 2002, they had an 8 percent share of the UK coffee market, and then they took their feel-good niche and bolstered it further with traditional advertising tactics — fetishized images of escape, naturalness and pleasure. Cafedirect is now the 5th largest coffee brand in the United Kingdom.

Quality and value are still going to come first. But if it’s a case of ceteris paribus, a strong ethical image can make the difference between you and your competitor. Doing the right thing doesn’t need an incentive, but it’s still nice to have one.

“The measure of a man’s character is defined by what he will do when he knows he will not be held accountable for his actions.”

It tough to say anything about this quote, really. It’s quite perfect. Ethics doesn’t end at the line of enforcement. Just because you can get away with it doesn’t mean you should.

One of my most smartest readers, sbrennaman354, has been carrying it around in her head for thirty years, something she heard from a mentor. It’s a line in need of movie music. It’s a line that needs to live for at least thirty more.