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NewsNotables – Issue 34

Harvard Will Require 1st Year MBA Students Take Ethics Course

Boston Globe, December 30, 2004
The Harvard Business School is introducing the most comprehensive revamping of its ethics instruction in the school’s 95-year history. First year MBA students will be required to take a new ethics course. The interdisciplinary course called Leadership and Corporate Accountability will include case studies on Enron, WorldCom and the 1991 Salomon Brothers illegal bids in a Treasury bill auction.

Much of the content in the new course is colored by those cases. In the Enron study, students will mull over how the company’s innovations were corrupted and how factors such as its compensation system and its earnings management practices contributed to its initial success and then its fall from grace.

Comment: Most people will hail Harvard for taking this initiative, but why concentrate only on the negative? There are many fine examples of ethical companies that have stood the test during trying times or who aren’t in the news because they are well grounded in ethical behavior.

Internet As 800-Pound Gorilla

Seattle Times, January 10, 2004
The Internet is a phenomenal corporate resource, a mega-library on the desk of every worker that enables them to know anything and everything around the clock. Used correctly, it supplies the tools to put businesses on the fast tract and give them the competitive edge they need in order to stay ahead of the competition.

Or perhaps it is the ultimate distraction that sits between people and productivity. Come to work in the morning and there is a choice:

Either log on to your competitors site, assess it’s strategy and plan a counterattack

—or—

Enter the world of pornography, downloading infinite salacious images, shop until you drop, download music, investigate sports or investment opportunities and then wait to collect your paycheck.

While this seems like extreme behavior for anyone with an ounce of work ethic, it is a common problem for corporations in an area of personal and work technologies.

Consideration: Should employers monitor employee use of the Internet or should employers just trust their employees to get their work done and use the Internet at their own discretion?

IBM Documents Give Rare Look At Sensitive Plans On “Offshoring”

Wall Street Journal, January 19, 2004
In a rare look at the numbers and verbal nuances a big U.S. company chews over when moving jobs abroad, internal documents from IBM show that it expects to save $168 million annually by shifting several thousand high-paying programming jobs overseas.

The documents indicate that for internal IBM accounting purposes, a programmer in China with three to five years experience would cost about $12.50 an hour, including salary and benefits. A person familiar with IBM’s internal billing rates says that’s less than one-fourth the $56 an hour cost of a comparable U.S. employee. IBM plans to shift the jobs from various U.S. locations to China, India and Brazil, where wages for skilled programmers are substantially lower. An IBM spokesman said the company expects to shift 3,000 U.S. jobs overseas this year.

Comments: Assuming IBM would pass the cost savings on to the consumer by charging less for their related products, could these reduced costs enable companies to be more competitive and add employment opportunities in the U.S.?

These cost cuts should increase shareholder value. How do you balance shareholder value with nationalism?

By Roger Eigsti
Board President,
Institute for Business, Technology, and Ethics

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