Corporate Ethics

While putting together the MSLinux Index, I became interested in whether high-tech companies like Microsoft, IBM, and HP have well-defined corporate ethics policies.

Microsoft

Searching Microsoft for the word "Ethics" in August 1999 found many entries in an online encyclopedia, plus pages about the ethics of software retailers, consultants, VAR's, doctors, font designers, students, or the Department of Justice, but there appeared to be no pages about an ethics policy for Microsoft itself. (I emailed their PR agency; they assured me Microsoft did have an ethics policy, asked me why I thought it should be on the web, and said they'd look into it.)
My favorite hit was Developing a Code of Ethics for Your VAP Business, which says:
For your convenience, we've reproduced the IEEE/ACM [code of ethics]...
Here are some guidelines to consider when you develop your own code of conduct: ... Develop your code for the right reasons. Research just published by Arthur Andersen's Ethics and Responsible Business Practices group shows that when a company develops an ethical code for the wrong reasons-i.e., simply to boost sales or avoid lawsuits-ethical standards throughout the organization actually drop. The right reasons to develop an ethical code include a desire to be a better member of the community, and to offer improved customer service.
The IEEE/ACM code reads in part:
Be fair and avoid deception in all statements, particularly public ones, concerning software or related documents, methods and tools.
Microsoft does seem to be aware of the issue of corporate ethics with respect to itself; according to Heise Online, they recently surveyed German journalists, asking them how much they agreed with statements like "Microsoft stands for high ethical standards". (No word on the survey results.)

On the eve of the close of the 1999 antitrust trial, a lawyer for Microsoft was quoted on CNET as saying

"Even a monopoly is free to compete aggressively. I read in the press how Microsoft isn't contrite. We're not going to church here. It's not confession. It's litigation."

Microsoft - 21 Sept 1999

Microsoft's PR agency called me back with a URL: http://www.microsoft.com/mscorp/values.htm. It reads in part:
Integrity: Our managers and employees must always act with the utmost integrity, and be guided by what is ethical and right for our customers. We compete vigorously and fairly.
Last Updated: September 16, 1999

Microsoft - 5 October 1999

In the case of United States vs. Microsoft, the judge published detailed findings describing anticompetitive actions by Microsoft. Here is an excerpt of those findings covering Java. The judge seems to feel that Microsoft competed unfairly, if not unethically. The excerpt ends with the line
The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest.

Microsoft - June 2000

The pro-business, Republican judge in the Microsoft antitrust trial explained his ruling, saying in a June, 2000 interview "if someone lies to you once, how much else can you credit as the truth?'"

Microsoft - June 2002

Microsoft updated www.microsoft.com/mscorp/values.htm; it now redirects to www.microsoft.com/mscorp. It no longer contains the text 'Integrity: ... We compete vigorously and fairly.' quoted above. Instead, it says
Great People with Great Values
Delivering on our mission requires great people who are bright, creative and energetic, and who share the following values:
(It says it was last updated 6 June 2002.)

Microsoft - August 2006

www.microsoft.com/mscorp now is a redirect to http://www.microsoft.com/about/default.mspx. This no longer contains the text above; instead, it says:
Our Values
As a company, and as individuals, we value integrity, honesty, openness, personal excellence, constructive self-criticism, continual self-improvement, and mutual respect. We are committed to our customers and partners and have a passion for technology. We take on big challenges, and pride ourselves on seeing them through. We hold ourselves accountable to our customers, shareholders, partners, and employees by honoring our commitments, providing results, and striving for the highest quality.

The text previously at www.microsoft.com/mscorp/values.htm appears to have migrated to Microsoft Standards of Business Conduct, which says

Great People with Great Values
Microsoft Values
Our values guide our behaviors and must shine through in all our interactions with each other and our stakeholders. Microsoft employees are great people who share the following values:
followed by a bulleted list identical to the earlier one.

The site MicrosoftIntegrity.com appears to an internal site aimed at Microsoft employees, created for Microsoft's Office of Legal Compliance.

On 12 July 2006, the EU announced they were fining Microsoft 1.5 million Euros per day for not complying with the EU's 2004 antitrust decision.

On 19 July 2006, Amnesty International released a report titled "Undermining Freedom of Expression in China" criticizing Yahoo, Google, and Microsoft for cooperating with repressive actions by the Chinese government. news.com has some coverage of reactions by the three companies to the report.

On 21 July 2006, Microsoft announced Windows Principles: Twelve Tenets to Promote Competition. So far, they have only been published in Microsoft's press release area, and have not been incorporated into Microsoft's code of ethics.

There are several references at Microsoft.com to codes of ethics for its partners, but the codes only cover software piracy. For instance: Microsoft Office 2003 Sales Rep Bonus Program (which says "Piracy Requirements: Payment of bonuses is conditioned on the VAR complying with the Sales Representative Code of Ethics", which says that the VAR will not sell pirated software), and the Microsoft Partner Program (which offers system builders volume-based rebates if they sign a Code of Ethics which only covers software piracy.)

Microsoft and ethics in the press

There are a handful of articles about Microsoft and ethics out there, e.g. There are also several web sites devoted to Microsoft issues, e.g. the straightforwardly anti-Microsoft YAMOO! and the straightforwardly pro-Microsoft Committee for the Moral Defense of Microsoft.

IBM

Searching IBM for ethics found references to the idea of being a good corporate citizen, and to a "strict code of ethics" monitored by the "IBM Professional Practices Committee", although neither are defined online.

Hewlett-Packard

Searching HP for ethics actually finds a document defining "The HP Way", which reads in part:
We conduct our business with uncompromising integrity.
HP employees are expected to be open and honest in their dealings to earn trust and loyalty of others. Every employee adheres to the highest standards of business ethics and understands that anything less is unacceptable. This is something that is an integral part of our organization, a deeply ingrained tradition that is passed from one generation to another.

Online Resources about Business Ethics

While we're talking about ethics...

As has been noted in Salon.com , it's hard for technology journalists to avoid owning stock in technology companies, and the only sensible way to deal with it is full disclosure. To that end, I should note that I was one of the folks included in Red Hat's stock brouhaha; I and several thousand other open source developers were allowed to purchase about 400 shares each of Red Hat stock at the IPO. However, my friends at Microsoft can testify that I have not changed my views since becoming an investor. I also own shares of Cendant and AMD, among others. (And as of late 2003, I own options in Google.)

Copyright 1999-2006 Dan Kegel
[email protected]
Last updated: 5 Aug 2006
[Return to www.kegel.com]