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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