IP: Gary Chapman's L.A. Times column, 5/22/00-- Ethics

[Dave Farber <farber () cis upenn edu>]

> - Ethics
>
> From: Gary Chapman <gary.chapman () mail utexas edu>
> 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
>
> gary.chapman () mail utexas edu
>
>    ------------------------------------------
>
> 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 >Texas at Austin. He can be reached at gary.chapman () mail utexas edu.
>
>    ------------------------------------------
>
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