The Limits of Corporate Responsibility
Crow's Nest ·
Jul 5, 2011 at 11:05am
The Wall Street Journal is reporting today that Cisco Systems has agreed to a contract with the ruling Communist Party of China to provide an infrastructure of cameras, networking equipment, and software which will ostensibly be used to protect the public safety, but which human rights advocates are concerned may be used against political dissenters for political reasons.
Does the company have the responsibility to consider the uses to which their technology will be put?
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May '10
Re: The Limits of Corporate Responsibility
Does a firearms manufacturer take into account that the same gun that defends a home can also be used to rob one? Should kitchen knives be banned because the same one that debones a chicken can slit a man's throat? Or should baseball be banned because the bat is equally effective in smashing skulls as hitting home runs?
Aug '10
Re: The Limits of Corporate Responsibility
What was the name of the machete company in China where they bought all those machetes that ended up in Ruanda ? Or the plastic shirt bag manufacturer that serviced the dry cleaning industry, but their bags became a cheap device used by PolPot to kill hundreds of thousands of Cambodians.
Cisco knows better, but then so did Loral.
Aug '10
Re: The Limits of Corporate Responsibility
I'm surprised China would need Cisco to put something like that in place.
What is the Chinese government coming to when it needs to outsource for electronic surveillance?!
Jun '11
Re: The Limits of Corporate Responsibility
Is a gun dealer resonsible for selling a gun to someone who uses it to commit a crime? If a "reasonable and prudent" person would have reason, based on the evidence, to believe that the sale would lead to a crime, then yes. Should the evidence available lead Cisco to believe China will use the equipment for ill?
Feb '11
Re: The Limits of Corporate Responsibility
First thought: The most morally relevant question might concern the per se uses of the technology, rather than the accidental uses to which it may be put. Noticing this distinction doesn’t solve the problem, though, at least not by itself.
If I decide to open up a gun shop called “Guns for Gangs,” somehow this seems morally repulsive, even if I don’t require customers to be in gangs in order to purchase my guns. It might happen that my store is ultimately bad for gangs, if, say, many more law abiding people buy my guns than criminals. But that wouldn’t make it any less repulsive, because the name of the shop suggests that the purpose of the shop (which is not the same as my intentions in establishing the shop) is the sale of guns to criminals.
On the other hand, if I open up a gun shop called “Safety Matters,” somehow this seems morally permissible, even if perchance some criminals manage to purchase my guns; for since the shop’s purpose is the sale of guns to people for personal protection, the criminal use of these weapons seems to have an accidental relation to the shop.
Feb '11
Re: The Limits of Corporate Responsibility
My intention in comment #5 is not to suggest that the name of the gun shop is especially morally relevant; but rather that the moral questions concerning the sale of guns is strongly shaped by what we think a gun shop is — especially what its purpose is.
Going back to Cisco: If I think of the situation described as: businessmen fill an order for cameras, even though they know the customers are rotten people, then I think there’s no problem whatever. They acted appropriately. But if I think of it as: businessmen cooperate in a corrupt government spying program, then I find Cisco’s behavior morally outrageous.
I incline towards the former, but largely in order to remain consistent with a web of other political convictions I have — and the worry that if I allow the latter to be the proper description of this case, I won’t be able to find any economic activity morally permissible (which is absurd).
Aug '10
Re: The Limits of Corporate Responsibility
Crow's Nest:
Does the company have the responsibility to consider the uses to which their technology will be put? ·
Hmm... Responsibility to whom?
Beyond the responsibility to obey the rule of law, a company has a responsibility to its shareholders to not tarnish its reputation too badly and so lose out on profits. A company may even burnish its reputation with various outreach schemes and ethical pledges. Some companies are even founded with a certain moral mission in mind.
But aside from the law and attention to its own reputation, I'm not sure a company owes the general populace any kind of responsibility.
Fortunately, reputation is powerful mojo. And a reputation for supplying authoritarian regimes with the means to spy on dissenters doesn't exactly sound like a selling point to me.
We'll see.
May '10
Re: The Limits of Corporate Responsibility
Exactly.
The business world doesn't get its own morality. Ethics (like business ethics) are merely the application of universal moral principles to specific situations. Of course, a company must consider the likely use of its products or services when there is such obvious reason to suspect malicious intent.
When your would-be consumers demonstrate their tech savvy every week (via their remarkable hacking expertise, among other skills), one is tempted to respond, "Well, they will buy this technology and software from someone else if not me." But participation in evil isn't justified by the inescapability of evil's existence.
Using EJ's example, one doesn't have to investigate every customer who wishes to buy a baseball bat to be sure of his or her intentions. But if you happen to know that a particular consumer is a brutal thug, that knowledge is not irrelevant.
Edited on Jul 5, 2011 at 12:19pmMay '10
Re: The Limits of Corporate Responsibility
Midget Faded Rattlesnake
But aside from the law and attention to its own reputation, I'm not sure a company owes the general populace any kind of responsibility.
Companies are not faceless blobs or virtual constructs. They are groups of persons working in concert for collective benefit. One's moral obligations to fellow human beings and to God do not vaporize the moment one steps into an office.
Families, charities, political organizations, sports teams, armies — however you group people together, that grouping does not eliminate the moral responsibilities of individual persons.
Dec '10
Re: The Limits of Corporate Responsibility
Of course companies have a moral responsibility to ensure their products are not purchased for some bad purpose. All people are morally responsible for the consequences of their decisions. But the modern (American) corporation has no soul. Family run businesses can make moral decisions because they are controlled by individuals who are ultimately accountable. Managers for publicly traded companies are accountable to no one but each other and their year-end bonus formula (and we can debate whether they are accountable to shareholders .. under present DE law as a shareholder you have little more than the right to sell your shares if you are dissatisfied).
Of course folks will say corporate managers are supposed to manage to a profit. But individual people are also supposed to follow the golden rule, and that moral requirement does not go away when they put on their corporate manager hat. Businesses that follow moral principles do not become suppliers for "bad guys."
Businesses that believe in the "ostrich principle" (i.e. I can't see what they will do with what I sell them) have no problems supplying the bad guys.
But everyone remembers what Lenin said about capitalists and the rope market.
Feb '11
Re: The Limits of Corporate Responsibility
By the way, answering this question, “yes” does not necessarily entail that the businessmen in question have a responsibility never to do business with bad people. Answering this question negatively — saying that businessmen have no moral responsibility even to consider how their products might be used — is making a very strong claim. I doubt it’s defensible. Those of us who think that at least some consideration is warranted need to come up with some sort of coherent story about when and under what circumstances a businessman should decide not to sell his wares, even if it might be monetarily profitable.
On MFR’s suggestion about a company’s concern for its reputation: The reputation of a company can be tarnished by immoral behavior only if the people by and large believe it is doing something immoral. But if the people believe that the company has no responsibility other than profits, how can they be upset if it participates in a profitable relationship with authoritarian regimes? Shouldn’t they praise it for its profitable ruthlessness?
Aug '10
Re: The Limits of Corporate Responsibility
Devil's Advocate Mode = ON
Think about how much of the hardware that the Chinese government is buying from Cisco is actually manufactured IN China, in factories that are not owned by Cisco.
Let's imagine what would happen if Cisco refused the Chinese government's requisition. What would happen to their contracts with Chinese manufacturers? What would happen to any of Cisco's intellectual property that is currently located in China? How quickly could Cisco possibly switch to suppliers in other countries?
Devil's Advocate Mode = OFF
While I'm sympathetic to Cisco over the short-term, I'd still like to know what moves the company makes in the medium-to-long term. Look at Google for an example.
When China came down on Google, the company had to comply in the short-term because it already had resources and personnel tied up in China. However, Google was later able to cut some of its ties to China after it had the time to move resources out of the country.
Cisco now has an opportunity to start shifting manufacturing to other countries, so it won't find itself in this position again in the future.
Aug '10
Re: The Limits of Corporate Responsibility
Aaron Miller
Midget Faded Rattlesnake
But aside from the law and attention to its own reputation, I'm not sure a company owes the general populace any kind of responsibility.
Companies are not faceless blobs or virtual constructs. They are groups of persons working in concert for collective benefit. One's moral obligations to fellow human beings and to God do not vaporize the moment one steps into an office.
Families, charities, political organizations, sports teams, armies — however you group people together, that grouping does not eliminate the moral responsibilities of individual persons.
Well, yes.
But the primary mechanism by which outsiders hold organizations accountable to moral obligations is reputation.
Edited on Jul 5, 2011 at 12:47pmAug '10
Re: The Limits of Corporate Responsibility
SMatthewStolte
On MFR’s suggestion about a company’s concern for its reputation: The reputation of a company can be tarnished by immoral behavior only if the people by and large believe it is doing something immoral. But if the people believe that the company has no responsibility other than profits, how can they be upset if it participates in a profitable relationship with authoritarian regimes? Shouldn’t they praise it for its profitable ruthlessness?
What I was trying to get at is that reputation is the primary mechanism by which non-company members can punish a "misbehaving" company. It happens to be a pretty powerful mechanism, too.
As a consumer, I don't care if a company I use is "profitably ruthless" or not -- in fact, if I'm an outsider to the company, I have zero interest in whether the company makes a profit serving me. But I do care very much whether the company pleases me, and that includes pleasing my moral sensibilities.
Reputation transmits general approval or disapproval of a company into rewards or hits to its pocketbook -- where it counts.
Edited on Jul 5, 2011 at 12:49pmDec '10
Re: The Limits of Corporate Responsibility
Midget Faded Rattlesnake
·
Hmm... Responsibility to whom?
Beyond the responsibility to obey the rule of law, a company has a responsibility to its shareholders to not tarnish its reputation too badly and so lose out on profits. A company may even burnish its reputation with various outreach schemes and ethical pledges. Some companies are even founded with a certain moral mission in mind.
But what happens in your world if it is profitable to break the law? Should the company break the law and make profits? And what if breaking the law is popular?
It is more consistent to say that all individuals (and by extension individuals working at companies) should follow moral principles, and one of those moral principles includes obeying the rule of law. At this point there is no conflict with profit. An individual is obligated to be a good fiduciary of others' goods (which is how you make profit), but "good fiduciaries" do not commit immoral acts. A good fiduciary makes the most profit morally.
May '10
Re: The Limits of Corporate Responsibility
Midget Faded Rattlesnake
What I was trying to get at is that reputation is the primary mechanism by which non-company members can punish a "misbehaving" company. It happens to be a pretty powerful mechanism, too.
I agree. Crow's Nest's question concerned what responsibilities exist, rather than how a company can be encouraged to act responsibly. But there's no reason we can't discuss both.
Misthiocracy: Devil's Advocate Mode = ON
Think about how much of the hardware that the Chinese government is buying from Cisco is actually manufactured IN China, in factories that are not owned by Cisco.
Let's imagine what would happen if Cisco refused the Chinese government's requisition. What would happen to their contracts with Chinese manufacturers? What would happen to any of Cisco's intellectual property that is currently located in China? How quickly could Cisco possibly switch to suppliers in other countries?
Devil's Advocate Mode = OFF
Good points. Context matters.
CEOs have a responsibility to honor the free will of investors. An unfortunate consequence of accepting public investment is that most investors only care about profits so long as someone else is the company's public face.
Aug '10
Re: The Limits of Corporate Responsibility
Harry Huntington
But what happens in your world if it is profitable to break the law? Should the company break the law and make profits?
Well, these days, with so many laws, it rather depends on which law is being broken and how badly, doesn't it?
Some ways of breaking or skirting the law offend me more than others. For example, in my gig tutoring in inner-city schools, one condition of my service is that if I find out a child I tutor has questionable immigration status, I do not report this to the authorities. This is breaking the law, and it makes me uncomfortable, but I'm willing to overlook my discomfort for the sake of doing something that I think is worthwhile.
In other cases, I have been given "gifts" rather than "wages" in order to circumvent labor laws. Or my employer knows I take my work home with me, and so I'm "really paid" "under minimum wage" for my work -- and we're both OK with this.
Part of the law's responsibility is to have reasonable laws and enforce them well. If the law cannot do this, my main worry becomes being caught.
Edited on Jul 5, 2011 at 1:24pmMar '11
Re: The Limits of Corporate Responsibility
Midget Faded Rattlesnake
Fortunately, reputation is powerful mojo. And a reputation for supplying authoritarian regimes with the means to spy on dissenters doesn't exactly sound like a selling point to me.
A company's reputation might matter when an individual customer is making a personal purchase. However, I (unfortunately) can't imagine that Cisco's other large corporate customers really care if they're doing business with the ChiComs, as long as the product is good and the price is right. Many large corporations deal with shady characters day in, day out, but don't get punished for it by the market.
Aug '10
Re: The Limits of Corporate Responsibility
Harry Huntington
It is more consistent to say that all individuals (and by extension individuals working at companies) should follow moral principles, and one of those moral principles includes obeying the rule of law. At this point there is no conflict with profit. An individual is obligated to be a good fiduciary of others' goods (which is how you make profit), but "good fiduciaries" do not commit immoral acts. A good fiduciary makes the most profit morally.
OK, and whose moral principles should we follow? Yours? Mine? PETA's?
On law, there is at least theoretical agreement. On morality, there is not. (And to the extent law loses its moral force by intruding on private arrangements for no good reason, or its literal force by not being enforced, even theoretical agreement on what's legal tends to fall by the wayside.)
There is some broad consensus on morality in this country, but also a lot of moral diversity. Is it really possible to do better than to let consumers decide amongst themselves whether a company's (non-illegal) practices are immoral enough for them to take their business elsewhere?
Aug '10
Re: The Limits of Corporate Responsibility
Mendel
Many large corporations deal with shady characters day in, day out, but don't get punished for it by the market.
Assuming that this is true, what alternative mechanism of punishment could you come up with that would do less harm than good in punishing "shady practices" (that are not matters of law -- i.e, neither illegal nor rightfully dealt with through a lawsuit)?
And who decides what is "shady enough"?
Remember, (private) ratings agencies that provide the service of ranking other businesses according to "good practices" (however the agencies define that) are already market mechanisms.