Sunday, 9 March 2008

Enhancing ethical behaviour with IT

Ethical behavior is an important part of a company’s culture. Can you enhance it by using IT? Discuss.

I think that before IT is used to enhance ethical behaviour within a company the company
first has to make the decision on just how far reaching its code of ethics will be. "We find
that firms using ethics-related terms [in their annual 10-K reports to the Securities
Commission] are more likely to be “sin” stocks, are more likely to be the object of class
action lawsuits, and are more likely to score poorly on measures of corporate governance"
(Loughran, McDonald & Yun, 2007). Companies like this - that allude to considering ethical
implications in its day to day business but don't actually follow this through will never
enhance anything through IT.

What about when a company decides that it does actually have some moral backbone? Take Gap
as an example. "An undercover Observer investigation in the back streets of New Delhi
exposes how, despite Gap's rigorous social audit systems launched in 2004 to weed out child
labour in its production processes, the system is being abused by unscrupulous
subcontractors. The result is that children, in this case working in conditions close to
slavery, appear to still be making some of its clothes" (McDougall, 2007). Gaps' obvious
good intentions in 2004 contained loopholes that subcontractors were able to expose and
profit from. My answer to closing these loopholes would be the implentation of a watertight
IT - based supply chain system.

Thinking out loud I would expect that only Gap - endorsed factories could enter production information into Gaps databases and tag the items with barcodes / radio frequencies that only Gaps computers would understand. Any exceptions to this can be quickly reported - to the manager of a warehouse taking delivery, or to the team of executives that run the company. A spokesperson for Gap said "At Gap, we firmly believe that under no circumstances is it acceptable for children to produce or work on garments" (McDougall, 2007). I believe that if the company were more thorough in checking its processes - and all processes in multinationals now involve IT, it's a fact - then its ethical behaviour could have been enhanced much sooner than the point where it was taking some stock off the shelves.

A company's IT recycling policy can also greatly enhance its ethical behaviour. It is one
thing to ensure that old computer equipment is correctly disposed of rather than just ending
up on a landfill, but it is another to donate obsolete equipment that has been written off
to companies such as Comm-Tech in London (which helps charities with IT requirements and
refurbishes the obsolete kit for them at a low price).

Loughran, Tim , McDonald, Bill and Yun, Hayong (2007) A Wolf in Sheep's Clothing: The Use of
Ethics-Related Terms in 10-K Reports [Online] University of Notre DamAvailable from (Accessed 9th March 2008)

McDougall, D (2007) Child sweatshop shame threatens Gaps ethical image [Online] London:
Guardian Media Ltd.Available from
(Accessed 9th March 2008)

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