Ethics: Harder in a Recession?

Companies that had moved toward certain ethical goals before the economic crisis aren't giving up their gains

Information technology consultant Dena L. Smith lays out a hypothetical dilemma: Should an IT department hire a more expensive vendor because the vendor shares its own company's ethics standards, or should it go with a lower-cost provider that doesn't?

Companies with established ethical standards that guide how they conduct business frequently confront this kind of question, Smith says, but it's a particularly tough question today, given the recession.

With IT departments forced to cut budgets and staff, CIOs will find it difficult to allocate dollars for applications that promote corporate ethics.

"The decisions were easier in the days when the economics were favorable, but the choices may have to be more limited now," says former CIO John Stevenson, president of consultancy JG Stevenson Associates.

"Now it's how much can you afford to do versus how much do you have to do so you don't get burned."

Stevenson says companies that had moved toward certain ethical goals before the economic crisis -- whether those goals involved green initiatives or corporate responsibility programs -- aren't giving up their gains.

"But if they haven't done that yet, it gets more difficult to say we'll spend more money than we have to," he says.

Even when CIOs are committed to designing systems that promote ethical behavior, they usually have to sell the applications by promoting whatever financial benefits the tools can create -- and not on any particular ethical merit.

Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University, says he knows a CIO who had to justify everything by talking about the business's long-term financial interests rather than ethics.

"He was afraid to [highlight ethics], because he thought he would be perceived in the wrong way," Hanson says.

"In some organizations, a value-based argument will have some traction; in others, it will be disregarded or even ridiculed."

Diane Bryant, CIO at Intel, says complying with ethical standards isn't cheap. Consider, she says, that Intel's storage requirements grow at 35% a year, driven in part by the need to retain data for compliance reasons and to fulfill potential e-discovery requests.

"We do certainly talk a lot about the additional costs that come onto IT with all these additional ethics and security requirements. It's a very large spend for any IT organization, and it continues to grow," Bryant notes.

"But it's talked about as a must-do. It's an accepted part of the IT budget."

Pratt is a Computerworld contributing writer in Waltham, Mass. Contact her at marykpratt@verizon.net.

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