Case

Human rights

Corporations sometimes face dilemmas linked to operations in countries with governments accused of violating human rights. A high-profile case was IBM scandal of doing business with the Nazis. In the 1930s and 1940s, IBM provided Hollerith punch cards to the Third Reich, which were used in the operational management of extermination camps.

In the 1970s, Polaroid stopped selling equipment to the government in apartheid South Africa when it learned that cameras were used to make IDs for the surveillance of dissidents. In 1993, Levi Strauss and Co. canceled contracts in China due to the systematic violation of human rights perpetrated by the government.

More recently, Google accepted the Chinese government's request to censor keywords like Tiananmen Square and Dalai Lama in its search engine. The CEO Eric Schmidt stated: "I think it is arrogant to enter a country where we are starting our operations and tell the country how to govern itself".

Case Questions:

1. Are there ethical issues involved? Which one and why?

2. Does mission matter when assessing gaps between a leader's values and the organization he or she is running?

3. Should boards consider risky personal behavior in hiring executives? What should boards do if the risky personal behavior comes from the founding CEO?