Ethics Microsoft is the global leader in computer software, and well recognized in the field of corporate social responsibility and philanthropy. However, since 1990 the computing giant has been plagued by allegations of antitrust violations and monopolistic, non-competitive business practices.
By answering the three questions posed in Part 5, Case 7 of Business Ethics: Ethical Decision Making and Cases; this review will address how such a legal and ethical dichotomy is possible, and how the issues relate to one another in arms of corporate reputation. 1. What unique aspects of the software industry created the opportunity for Microsoft’s monopoly and anti- competitive practices? The field of computer software development is highly competitive and constantly evolving. With the release offensives 3. In 1990, Microsoft introduced the world of personal computing to a Graphical User Interface, or GIG. The primary Operating System (SO) prior with Windows 3. 0 was text-based DOS (also a Microsoft product, produced under contract with hardware manufacturer MOM). Later that same year, Microsoft also released MS Excel 3. And MS Word for Windows 2. 0, programs that integrated seamlessly with the Windows GU’, while other leading spreadsheet and word processing programs were still based in DOS.
The simultaneous development of SO software and Application software poised Microsoft for market domination. Because both the SO and the Applications were developed by the same company, Microsoft application programmers had access to Object Linking and Embedding (OLE) codes earlier than third party developers. This allowed their products to hit the market faster than the competition, while creating a strong, co-branded marketing platform.
Though he simultaneous development itself is not unethical, early access by the Microsoft Application programmers to the OLE was deemed to be an anti- competitive practice, and became one of many ethical issues unique to the software industry that was examined in the Federal Trade Commission investigations of Microsoft in 1990. 2. Discuss the role of Microsoft’s leadership and corporate culture in generating a large volume of ethical and legal issues.
In the opening paragraph of a letter to employees regarding Business Conduct, Steven A Balmier, Microsoft CEO writes: “Microsoft aspires to be a great company, and our success depends on you. It depends on people who innovate and are committed to growing our business responsibly. People who dedicate themselves to really satisfying customers, helping partners, and improving the communities in which we do business. People who are accountable for achieving big, bold goals with unwavering integrity. People who are leaders, who appreciate that to be truly great, we must continually strive to do better ourselves and help others improve. In addition to a socially responsible code of conduct, community-focused initiatives, and the creation of over 15 million Internet Technology jobs relied, Microsoft founder Bill Gates is head of the single largest philanthropic organization in the world: the Bill and Melinda Gates Foundation, with an endowment of 37. 1 billion dollars. Even with this publicly ethical image, Microsoft has been mired in litigation since 1 990, and has paid billions of dollars in legal settlements and fees to address allegations of anti-competitive business practices.
Hollywood even jumped On the bandwagon with the 2001 film “Antitrust?’; an industrial- espionage thriller in which actor Tim Robbins bears a striking resemblance to Bill Gates and employs “secret and ruthless means of dispatching anti-trust problems. ” Why? A mountain cannot be climbed without stepping on the rocks that form it. Does that mean the mountain climber is a villain; stepping on poor, defenseless rocks? Not from the perspective of the mountain climber. Perhaps he is searching for cleaner water to provide to his family.
Perhaps he is seeking greater knowledge of how mountains are formed and therefore how to preserve them for future generations. Perhaps he wants to see what is on the other side, and if it can benefit his people. But if you ask the rocks… It would not be difficult to find several of them who claim to have been injured in the process; if rocks could talk. Apply this simplistic analogy to the global leader that is Microsoft and it is not difficult to find a disgruntled rock that has been stepped on.
So this is the dilemma: to forgo ethics in pursuit of growth (and step on rocks to climb a mountain), or to forgo growth in pursuit of ethics (to avoid stepping on anything and end up going nowhere)? The ideal answer is to balance the two extremes. However, an entity, whether individual or corporate, cannot achieve balance without experiencing both sides of an issue. Perhaps it is only now, after losing and rebuilding it’s reputation, that Microsoft can operate with the balance to which they aspire in their code Of conduct. . How do Microsoft’s social responsibility and philanthropic efforts relate to it’s reputation and ability to overcome it’s legal problems? Diffused by the positive impacts of the many charities supported by Microsoft and the Bill and Melinda Gates Foundation, including countless museums, schools, and libraries around the world, Microsoft has survived the threat of a recoup, changes in leadership, a variety of legal battles, and antitrust lawsuits in both the US and the European Union (DID).
Since these large settlements, Microsoft has become more cautious in it’s business practices, and focused on Corporate Citizenship strategies which allow them to maintain their status as a globally accepted platform; but not an Application- to-SO monopoly. The Windows SO platform is now one on which other companies may grow as well, not just Microsoft. As such, despite the reputation-smearing legal battles of the past decade, Microsoft products are till widely accepted as the industry norm, with the largest variety of applications available and the greatest amount of support.
From a public Opinion standpoint, Microsoft has overcome it’s legal issues by doing more good than harm in the global scheme of things. From a legal standpoint, the penalties imposed by the case rulings were successful in forcing Microsoft to re-evaluate it’s business practices and pursue a more ethical code of conduct; and, in so doing, their new-found moral compass has led them to the forefront of corporate social responsibility as well.