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Archive for May 18th, 1998

REMARKABLE PUBLIC CONSENSUS AGAINST MICROSOFT ANTITRUST ACTION

May 18th, 1998 • Posted in: Statline

Emergency negotiations over Windows 98 between the U.S. Department ofJustice, many states’ attorneysgeneral, and Microsoft broke down over the weekend. But they helpedcrystallize public interest in a key question: Does Microsoft have an unfairmonopoly on computer operating systems?

While it is likely that lawsuits will now be filed Monday against thesoftware company, a May 6 poll commissioned by Microsoft finds surprising public resistanceagainst such suits. While the funder of the poll may make some suspicious,the survey wasconducted by Peter D. Hart Research and Robert Teeter Research, twonationally known public opinionresearch firms.

Question: Do you think that your attorney general should bring a lawsuit that blocks Microsoft from releasing Windows 98 in your state, or should they not bring such a suit?

Should not bring suit:
64%
Should bring suit:
12%
Not sure:
24%



INDIA BLASTS, AND THE WORLD BRISTLES

May 18th, 1998 • Posted in: Commentary

by Rushworth M. Kidder

Ethics, some say, is fine for the small stuff. But when the stakes really get ratcheted up in business or diplomacy–c’mon, ethics? Don’t we need something more hardball?

It’s a good time to ask. Talk about ratcheting. That’s what India did when it exploded five nuclear devices last week. Those tests, and the decision by Pakistan to respond in kind, should force multinational firms to reconsider how and whether to do business in India. Reason: These tests reopened what is arguably the most high-leverage moral issue of our times.

Why “moral”? Because, frankly, there’s no other satisfactory way to frame this debate. It’s not a legal issue. India violated no law. Nor do the standard frames–political, diplomatic, economic, technological, military–account for the difficulties. True, we can explain a lot by looking at internal politics or studying diplomatic outcries. We can watch markets respond. We can comment on India’s technological prowess, or assess her military gains.

But at bottom the question is not, “How can we best explain it?” It is, “Was it the right thing for India to do?” And that’s a moral question.

Other nations typically painted the issue in black and white. Presuming that it’s good to ban nuclear weapons and bad to build them, the West found that India acted immorally. The response in India was different: A poll in the Times of India found a 91 percent approval for the first series of three tests.

If you’re serious about ethical analysis, that raises a tough conundrum. You can dismiss nearly one-sixth of the world’s population as immoral. Or you see this as something more than a right-versus-wrong issue. It’s a question of right versus right, with formidable moral arguments on both sides.

How so? Start by noting that it represents a classic stand-off of the short term against the long term. The moral case for the former–India’s immediate security needs–hinges on the perceived threat from its saber-rattling neighbors, China and Pakistan. Never mind (goes this argument) that building nuclear weapons may produce long-term instability. The short-term gain of a strong deterrent is imperative for survival and trumps every other choice.

Conversely, you can build a case for the long term. India’s children will suffer miserably if they’re handed a world chock-full of nukes. So serious is that difficulty (goes this argument) that it easily overshadows any risk of immediate invasion.

Similarly, you can build arguments pitting us against them. Here, the defense of a single nation is hugely important–the argument supporting the smaller us. But so is the global benefit of forestalling an arms race–the argument of the larger them.

How to resolve these competing claims? Start by recognizing two fundamentally different ways of determining what’s right. On one hand are those who feel that ethics is best served by doing the greatest good for the greatest number. To them, the rightness of an action lies in its outcomes: If what we do produces good consequences, we’ve done the moral thing. And since the consequences of nuclear proliferation are so appalling, the right thing to do is to condemn India vigorously. That’s President Clinton’s utilitarian approach.

On the other hand lies an equally noble moral principle, focusing on universal principles. Arguing that the five nations in the nuclear club (the United States, Russia, China, Britain, and France) are being hypocritical in asserting that it’s okay for them to have these weapons but not for anyone else, India has identified a kind of discrimination that, in principle, ought to be repugnant to democratic societies everywhere, regardless of its outcomes. It’s the “We’ve got ours but you can’t have yours” fallacy, so often heard in the environment-versus-development arguments about the emerging nations. That’s Indian prime minister Atal Bihari Vajpayee’s more Kantian approach.

So who’s right? Surely it’s right to focus on outcomes and reduce proliferation. And surely it’s right to honor the principles of fairness, equal access, and mutual respect. One thing is sure: It’s too glib to dismiss either side as simply “wrong.”

Can we resolve this dilemma? Probably. But resolution may require movement on both sides. The Indian explosions are a call to the nuclear club to move far more rapidly to disassemble nuclear arsenals and give granite assurances of their refusal to strike first. That would deflate the moral authority of India’s discrimination-and-hypocrisy argument. The Western outrage, in turn, is a call to India to embrace the Comprehensive Test Ban Treaty. That would gut the utilitarian arguments of the West.

Is there a third way through? Can we turn this wrenching dilemma into a win-win trilemma? Hopefully. India seems to want a more open business environment: Just days prior to the tests, Prime Minister Vajpayee unveiled a wide-ranging 90-day reform plan to the Confederation of Indian Industries, aimed at attracting more foreign investment and bumping up India’s economic growth. But a trilemma will only emerge if all sides stop moralizing about wrongdoing, engage in serious ethical analysis, acknowledge right on both sides, and keep seeking moral resolutions.

When the stakes are this high, nothing less than ethics can properly frame the debate.

(c)1998 by Rushworth Kidder



OWNERSHIP AND ETHICS

May 18th, 1998 • Posted in: Weekly Overview

Possession and ownership are said to be “nine-tenths of the law,” and there isa definite parallel when looking through the lens of corporate ethics.Several stories this week deal with control of, possession of, andresponsibility for a product or service.

Our lead story deals with recent developments relating to the ownership ofrecords relating to our finances and buying habits. Recent moves by creditcard companies and banks have stimulated new government interest in privacy.

Also in this week’s news is a story relating to the ownership of informationon the Internet. A German executive has been charged with allowing anInternet service provider (ISP) to distribute pornography and other illicitmaterial. The prosecution claims the ISP owns and is responsible for thematerial; the firm’s executive says his company is simply a conduit for thevast worldwide flow of information over the ‘Net.

In other news, we report on two stories relating to Asian business ethics:Nike’s announcement last week that it will improve conditions at its Asianplants, and a ban on direct selling in China that has left some prospectivesalespeople stuck with inventory.

The continuing battle over Big Tobacco’s corporate responsibilities continuesto go global, with a European ban against most forms of cigarette advertisingand a suit against U.S. tobacco companies lodged by Guatemala.

Two stories from Great Britain deal with ethical issues causing continuedcontroversy there and worldwide. One report highlights a global flap over adocumentary on drug smuggling–aired in Britain, the United States, and other partsof the world–that a respected British newspaper has labeled a fake. Ourother report from London details a new measure to allow patenting of certaingenetically engineered life forms.

From New York comes the story of the acquittal of two former Texaco executivescharged with destroying evidence in one of the biggest discrimination cases inhistory.

And from Florida comes a novel approach to getting guns off the street–putting new shoes on the street, courtesy of a guns-for-shoes swapsponsored by a local radio station.

–Carl Hausman



WORLD HEALTH ORGANIZATION AND EUROPEAN UNION SLAM TOBACCO

May 18th, 1998 • Posted in: News

BRUSSELS and the UNITED KINGDOM
Big Tobacco was scored by criticism from theWorld Health Organization (WHO) and the European Union last week in separatemeasures denouncing the influence of the global tobacco industry.

World Health Organization leader Gro Harlem Brundtland called for a”broad alliance” against the tobacco industry, Reuters reported. In a speechmarking her election as WHO head, she claimed that the tobacco industry istargeting children in Europe to make up for shrinking markets in the West.

The European Union last week pledged a gradual but comprehensive ban ontobacco advertising. The ban, expected to be ratified by member states,prohibits cigarette advertising in nearly every public venue, includingnewspapers, magazines, billboards, sports uniforms, and even in a traditionalstronghold of the tobacco industry, Formula-One auto racing events.



GUATEMALA SUES FOR TOBACCO DAMAGES

May 18th, 1998 • Posted in: News

HOUSTON and GUATEMALA
An U.S. law firm has launched a lawsuit againstseveral tobacco companies on behalf of Guatemala seeking unspecified damagesfor treating smoking-related diseases.

The lawsuit also charges the tobacco companies with violating provisions ofthe U.S. Racketeering Influenced and Corrupt Organizations (RICO) act.

The suit was brought in conjunction with Guatemalan attorney general AciscloValladares Molina, who claims Guatemala is the first foreign nation to sueU.S. tobacco interests.



NEWSPAPER CHARGES DRUG DOCUMENTARY FAKED

May 18th, 1998 • Posted in: News

LONDON
The Guardian newspaper charged last week that an award-winning TVdocumentary on drug smuggling contained several faked sequences.

The Guardian claimed the producers of “The Connection,” which was airedthroughout Britain and in an edited segment on CBS’s “60 Minutes” in theUnited States, faked interviews, misrepresented the actions of the purported”mule” smuggling the drugs, and bought the mule’s airplane ticket.

Carlton Communications, the firm that distributed the documentary, haspromised to investigate the allegations. The producer of the program has notyet commented in detail on the charges, according to The Guardian.



NIKE VOWS TO IMPROVE CONDITIONS IN ASIAN FACTORIES

May 18th, 1998 • Posted in: News

WASHINGTON, D.C.
Admitting that Nike products have become “synonymous withslave wages, forced overtime, and arbitrary abuse,” Nike chairman Phil Knightvowed to raise the minimum age of factory workers in Asia, allow third partymonitoring of labor conditions there, and provide free education for workers.

The announcement, delivered at a speech to the National Press Club, comesafter recently renewed bouts of criticism from human rights organizations.

Several critics welcomed Knight’s announcement as a first step but continuedto fault Nike for not raising the minimum wage paid Asian workers.



CHINA UPHOLDS BAN ON DIRECT SELLING

May 18th, 1998 • Posted in: News

BEIJING
Chinese authorities have upheld last month’s ban on all forms of direct selling,stranding the investments of tens of thousands of Chinese salespeople andangering international direct sales firms such as Amway, Avon, and Mary KayCosmetics.

China justifies the ban as necessary to protect the economy of the nation,which has few laws to govern direct sales. Critics contend that the Chinesegovernment fears that the methods of direct selling–including motivationalmeetings and high autonomy on the part of individual salespeople–may weakenCommunist rule.

Reuters reports that the ban has sparked rioting in some cities where outragedChinese have been stuck with now impossible-to-sell inventory.



EU PARLIAMENT OKs PATENTING OF LIFE FORMS

May 18th, 1998 • Posted in: News

LONDON
The European Parliament has approved a controversial plan thatallows patenting of certain genetically engineered life forms.

The plan was endorsed only after it excluded patents related to cloning andhuman embryos, the BBC reported.

Critics charged that allowing corporations to control such patents couldcripple agricultural economies dependent on specific crops, and that allowingprivate patents on genetically engineered medical treatments could price curesout the reach of the poor.

Advocates of genetic patenting contended that such protections will stimulateresearch and development.



SALE OF CREDIT CARD DATA, COMPILATION OF BANK RECORDS CHALLENGED

May 18th, 1998 • Posted in: News

WASHINGTON, D.C.
Consumer privacy issues came to the forefront last week inseveral developments relating to marketing and banking.

  • American Express last week announced that it would begin selling data oncardholders’ purchasing habits to a database marketing firm, sparking criticism from groups, including the Electronic Privacy Information Center.Center spokesman David Banisar told USA Today that Amex’s move was “a clarion call to Congress that they need to do something about protecting consumer privacy.”
  • Noting that the banking industry has “much at stake,” Acting Comptroller of the Currency Julie Williams last week warned bankers that they must take stepsto protect consumers’ privacy if banks intend to merge and enter into newfinancial service markets, Reuters reported.
  • Vice President Al Gore joined the debate last week, calling for an”electronic bill of rights” and new legislation to protect consumers againstunauthorized use of their personal information.



GUNS EXCHANGED FOR SNEAKERS IN ORLANDO

May 18th, 1998 • Posted in: News

ORLANDO, Florida
A guns-for-shoes swap sponsored by a Florida radio station and localpolice last week brought in 89 firearms, according to The Orlando Sentinel.

The “Kicks for Guns” swap enlisted the aid of local merchants and athletes,including the Orlando Magic basketball team, which donated high-pricedathletic shoes nicknamed “Kicks.”



TEXACO EXECS ACQUITTED IN CASE STEMMING FROM DISCRIMINATION SCANDAL

May 18th, 1998 • Posted in: News

WHITE PLAINS, New York
Two former Texaco executives who taped corporatemeetings in which officials were heard ridiculing black employees were foundinnocent last week of obstructing justice.

Richard Lundwall and Robert Ulrich were accused of destroying documentscritical to the 1997 civil case in which black employees sued fordiscrimination, collecting a record $176 million settlement.

The prosecution in the criminal case charged the two purged records anddestroyed evidence. The defense claimed the pair did not intend to obstructjustice and was not given adequate legal advice about which pieces of evidenceto retain.



INTERNET SERVICE PROVIDER EXEC ON TRIAL IN GERMANY

May 18th, 1998 • Posted in: News

MUNICH
The trial of an executive of Compuserve Germany on charges of aidingin the distribution of child pornography and Nazi insignias–both illegal inGermany–has ignited controversy here over the responsibilities of Internetproviders.

Felix Somm, accused of failing to prevent Compuserve from transmitting theforbidden images, claims that the material was part of a vast stream ofInternet content pouring into Germany from abroad, where such images may infact be legal. Somm was not personally accused of possessing or distributingthe material.

Critics have charged that the case represents an attempt to impose Germanvalues on an international medium.

The German action resembles several recent cases dealing with the legal andethical responsibilities of Internet service providers (ISPs), including arecent U.S. civil case against America OnLine, which was sued for its role indistributing an allegedly libelous report about White House aide SidneyBlumenthal. A judge dismissed the suit, deeming the Internet too unwieldy tobe closely monitored by an ISP.



THE DOWNSIDE OF E-MAIL

May 18th, 1998 • Posted in: Research Report

High technology has brought with it numerous new ways of doing business and communicating. Sometimes it may seem as if our desire to use these new technologies has outstripped our ability to use them appropriately or wisely. In the most recent edition of Idea Central, Robrt Kuttner examines this issue as it relates to that most ubiquitous type of high tech: E-mail.

E-mail’s Darker Side
By Robert Kuttner

A few years ago, when my daughter was a college freshman, I wrote a column singing the praises of E-mail. We were, suddenly, corresponding. It was, I decided, the revenge of print on electronics–a whole generation raised on the tube and the phone, rediscovering the lost art of writing letters. How utterly charming.

Now, I’m not so sure. Like all new media, E-mail has a dark side. To be sure, it saves a great deal of time and paperwork, and has facilitated new, unimagined forms of affinity.

However, E-mail is also a thief. It steals our time, and our privacy. It deceives us into thinking we have endless additional hours in the day to engage in far-flung communications that we may or may not need or want. All of a sudden, on top of everything else we have to do, E-mail is one more garden demanding tending.



THIS WEEK’S QUOTE

May 18th, 1998 • Posted in: Quote from the Ethics File

Even corporate people know that if you don’t have good human capital, you’re finished. The ‘dominator model’ produces people who only know how to obey orders, who can’t work in teams, and that is becoming a liability as the number of progressive corporations increases.

–Riane Eisler, author and historian, as quoted in Utne Reader, January-February 1998 issue