This may be of interest.
-----Original Message-----
From: Gary Chapman [mailto:[EMAIL PROTECTED]]
Sent: May 24, 2000 1:30 PM
To: [EMAIL PROTECTED]
Subject: L.A. Times column, 5/22/00-- Ethics
Friends,
Below is my column from The Los Angeles Times that ran this past Monday, May
22, 2000. As always, please feel free to pass this on, but please retain the
copyright notice.
I'm sending this from Seattle, where I've been for five days. I attended the
conference of Computer Professionals for Social Responsibility called
"Directions and Implications of Advanced Computing," thirteen years after
the first one, which I also attended. It was wonderful to see so many old
friends here and to make some new ones.
The conference included my panel discussion with Dr. Bill Joy of Sun
Microsystems, which was very interesting and well-attended. As expected, we
chewed over Bill's recent essay in Wired magazine for about two hours. I
understand that someone at the University of Washington videotaped this
event and will put it on the Internet with streaming video sometime soon.
I'll let everyone know if and when that becomes available.
The next day I gave a talk at Microsoft and met several very interesting
people at Microsoft Research, and then yesterday I gave the same talk at the
university in the computer science department. A very full few days, but
also very enjoyable.
It's been beautiful here, but 102 F (39 C) in Austin, so I'll have to brace
myself for my return to Texas heat.
Hope everyone is doing well.
Best,
-- Gary
[EMAIL PROTECTED]
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DIGITAL NATION
Monday, May 22, 2000
Some "Dot-Coms" Know Value of Stock but Put No Stock in Values
By Gary Chapman
Copyright 2000, The Los Angeles Times, All Rights Reserved
Are we closing in on another era of business scandals and suspect ethics?
Will the "new economy" wind up repeating the behavior of the notorious "Me
Decade," the 1980s?
Fortune magazine, in a March cover story on business ethics in the new
economy, said, "Questionable behavior is Silicon Valley's next big thing."
The money to be made in the new economy is not only creating great
temptations, it is also creating some new ways of doing business that may
skirt the edges of ethical behavior. The pace and novelty of the digital
economy may prevent many businesspeople from even seeing these ethical
issues.
"Let's face it: Some people think about ethics and other people think about
money," says James Werbel, co-director of the Murray Bacon Center for Ethics
and Business at Iowa State University. Werbel says that business ethics is a
strong feature of nearly every business school curriculum, but that
"training in ethics has minimal impact on people. What has a bigger impact
on people is the leadership in organizations."
John Boatwright, executive director of the Society for Business Ethics and a
professor of management at Loyola University Chicago, agrees. "The evidence
is clear: It starts at the top. No course can overcome the culture. The key
to business ethics is not getting to individuals but to the industry."
So what about the leadership in the new economy?
A scathing assessment has come from an unexpected source. In an article last
month titled "My View: Hollow.com," the chief executive of Forrester
Research, George F. Colony, said he interviewed a lot of other CEOs,
including "dot-com" executives, and concluded that they run "vapid, shallow
and hollow companies." (The article is at
http://www.forrester.com/ER/Marketing/0,1503,183,FF.html.)
"Many of the dot-com CEOs," Colony wrote, "lacked depth, experience and
common business sense. Their commitment was short term -- three years on the
average. They talked about their highly fluid work force -- a constantly
changing cast of characters, washing in on the promise of more stock options
and an IPO and then washing out, post-offering, in search of another pre-IPO
company."
Colony was describing what has come to be known in Silicon Valley as "flip
and flee," a term of irony and derision that people both inside and outside
the industry are beginning to view as a serious ethical flaw.
Randy Komisar, former CEO of LucasArts Entertainment and WebTV, told
Fortune, "People walk into a VC [venture capital] presentation and their
first line is about exit strategy. They're not talking about the investors
-- they're talking about themselves. How will they cash out? And this raises
a subtle point: These founders don't think of themselves as CEOs of
operating companies. They think of themselves as investors."
The point of "flip and flee" becomes how to raise money and then bail out at
the peak of valuation, even if you've dragged the public into risky
exposure. Then you move on somewhere else to do it again.
Of his interviews with dot-com CEOs, Colony also wrote: "There was a
fanatical focus on valuation -- getting public and liquid -- while value --
what the customer eventually gets -- was a back-seat discussion."
Werbel says, "There are obviously major financial incentives that promote
this kind of behavior." He adds, "Some of these people will be spending time
in jail soon."
Another sign of ethical issues in the high-tech industry, for some people,
has been the Microsoft antitrust trial. Despite all the talk about the trial
and its outcome so far, there has been very little discussion in the
industry about whether Microsoft has behaved ethically.
According to Jeffrey L. Seglin, a professor of literature at Emerson College
in Boston and author of "The Good, the Bad and Your Business: Choosing Right
When Ethical Dilemmas Pull You Apart," "Bill Gates appeared in court under
oath and wasn't entirely truthful in the way he answered questions."
Microsoft's explanations for the way its operating system, Windows, works
with its Internet browser have changed several times during the antitrust
case, depending on who is asking the question and what purpose the answer is
meant to serve.
Paulina Borsook, author of the new book "Cyberselfish," says, "This culture
is now so deforming, to the kind of people it favors and requires. If you're
trying to survive in that world, you cannot have time to reflect. . . . In
addition, these people have no exit strategy, no preparedness for doing
anything else.
"This thinking is so pervasive," she says. "These are the rules now -- what
other rules are you going to play by?"
The image of the heroic frontiersman on the "electronic frontier" is how
high-tech entrepreneurs describe and justify themselves, says Borsook. "This
is so at odds with reality -- they're really just enmeshed in power and
finance. While they have the rhetoric left over from the early rise of the
Internet, the information revolution and so on, their world is really a lot
more like the 'Liar's Poker' era of Wall Street 15 years ago."
That's when newspapers and TV last showed masters of the business world
being led off to jail in handcuffs.
Gary Chapman is director of the 21st Century Project at the University of
Texas at Austin. He can be reached at [EMAIL PROTECTED]
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