Dear Ethix – Issue 33

What’s Wrong with Business?

I applaud what you are doing. What will it take to get ethical businesses?

Rob Schuler
Seattle, WA

First, I am NOT condemning your organization. The frustration I am about to express is with business in general.

I saw your full page ad in the October 20 issue of InfoWorld. In it you state, “We believe it is possible to integrate good business, advanced technology, and sound ethics.” How ridiculous! Sound ethics ARE good business.

Sure, in the short term unethical business practices seem to work, but in the long term they will destroy any business. Look at Micro$oft. Back in the early ‘90s they forced PC vendors to buy a copy of Widoze for EVERY PC they sold whether the customer wanted it or not. That helped them wipe out OS/2 but now people HATE M$, and the open source community is ACTIVELY trying to destroy them.

Look at Enron, WorldCom…I won’t bore you with the whole list but I think you get the point.

Andrew Steitz
Louisville, KY


I’ve just been reading the Technology Watch article on privacy. I’m very encouraged by it and your ongoing efforts in this area.

Yolande E. Chan, Ph.D.
Professor, Management of IT

School of Business, Queen’s University
Kingston, Ontario

The History of the VCR

Reading back issues of Ethix after having been away, I especially appreciated Al’s analysis of IT strategy in the September/October issue. Because I did a lot of research in the 1980s on the history of video recording and the companies that entered the field, I can’t help but expand on your brief comment, giving you far more information than you could ever need!

Ampex Corporation, a small American company in California, introduced the first video recorder in 1956. Called the “Quad” because had four heads that recorded information on two-inch magnetic tape, it filled a whole room. Ampex was building on its success in magnetic audio recording, which had transformed the radio business in 1948. The Quad did the same for TV by making delayed broadcasts possible.

Professor Dick Rosenbloom, the Harvard Business School professor I was working for, wanted to know why, by the early 1980s, an American invention had been given away entirely, mostly to Japanese companies. (The hefty licensing fees Ampex took in as late as the 1990s were trivial compared to the huge Within those companies, however, were individuals who made significant (if unrecognized or unrealized) contributions to the video industry.

Ampex, despite their corner on video technology, was a typical American company, working year-to-year or even quarter-to-quarter, lacking the vision to take their invention into other than professional markets. They of course improved upon the Quad, developing the standard-setting, smaller, “helical” recorder, with one head on one-inch tape, and they remained at the forefront of the technology for at least twenty years.

Ampex did have a visionary rebel, Dick Elkus, who was allowed to develop a little portable video machine that he called the “Instamatic.” It was almost ready to produce in 1969 when Ampex management axed it, saying there was no future for home video! When we met Elkus in the early 1980s, he was still bitter about what had happened. A very bright entrepreneur, a millionaire who had started several high tech companies, selling them successfully, he still loved his first baby, the Instamatic, the best.

Sony, on the other hand, was the first company to license the Quad technology, and declared: within twenty years we will shrink this machine into a suitcase and make it possible for everyone to own. (They did not articulate at that time what it would/could be used for.) They stuck with it and in 1974 (only seventeen years), they introduced the Betamax, a videocassette recorder that was an immediate hit. They did not anticipate, however, the demand for “software” — for prerecorded tapes — and thereby left an opening for the competition. Another Japanese company, JVS, jumped in with the slightly larger VHS format, got several companies to join that standard, and signed up lots of movie producers. For the complete story, see “Ampex Corporation and Video Innovation,” Richard S. Rosenbloom and Karen Freeze, in Richard Rosenbloom, ed., Research on Technological Innovation, Management, and Policy. A Research Annual, vol. 2 (JAI Press, 1985), pp. 113–185.

Karen Freeze
Seattle, WA