Monday, May 16, 2011

Ethics in business

I've had cause again this week to think of my early business training over seven years working for IBM in the UK. Before starting work all employees had to agree to work according to the company's ethical principles outlined in Business Conduct Guidelines; and we all had to sign to say we'd read them and would continue to abide by them regularly thereafter. I saw a quite senior manager lose his job when he was found to have operated against the Guideline principles.

One of the IBM principles that stood out and stuck with me was a quaintly-worded "don't disparage the competition." As I recall, it was something along the lines of "We won't sell IBM products and services by knocking those of our competitors."

That was in the 1980s and I don't see quite the same wording in Section 4 of the current edition of Business Conduct Guidelines. There, the company speaks of competing vigorously for business, but 'fairly' and 'ethically' and in compliance with applicable laws and IBM policies.

Last week there were revelations that Facebook has hired a PR firm to seek to tarnish the public reputation of rival Google. That's a good example of what I understood IBM's "don't disparage the competition" to mean. Faceboook doesn't claim to operate by ethical values and guidelines. And IBM's weaker wording of the Guidelines may mean their practice would now be OK at IBM also. But I just don't see how the Facebook actions can be good business.

Google famously claims to operate a motto of "Don't be evil." And it leads to conflicts - is it better to offer filtered Google Search to the Chinese, about 20% of the world population, than no Google Search at all? Originally the company thought so, then pulled out of mainland China operations...

I think the point is that in the last millennium business-at-any-cost ruled. In the movie Wall Street Gekko famously claimed, "Greed is good" and the iconic moment was picked up in the movie sequel and modified to "Greed is good - and now it appears it's legal." But consumers are increasingly bothered about this. It doesn't feel right, and consumers are willing to pay a little bit extra to work with companies that operate ethically, or in an eco-friendly way.

It seems to me that Facebook's aggressive PR will backfire. We don't like giving our business to companies that operate like that and I suspect that consumers will make a move, if they can, to a better alternative if one comes along. Facebook may have pointed a finger at Google, but in the process has pointed three back at itself.
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