Microsoft Corporation\'s Code of Ethics

Microsoft Corporation's Code Of Ethics

Does the firm have a Code of Ethics? Is it published?

Defenders of nonproprietary software (versus Microsoft's proprietary model) might state that a Microsoft Code of Ethics is an oxymoron, given the company's perceived rapacity and market dominance. But the Microsoft Corporation does have a formal, published ethical code, the "Microsoft Standards of Business Conduct," and these standards are indeed accessible as well as formally defined. The Microsoft ethical code is included as a section on the company's official corporate website about business responsibility.

This section defines, publicly for all Internet users as well as for shareholders, Microsoft's regulatory compliance (including antitrust, insider trading, and patent laws), respect for the diversity for its employees and customers, its support of political actions on the part of its employees, affirms its commitment to technology development, stresses its respect for online customer privacy, ethical relations with vendors, and stresses over and over that Microsoft honestly and accurately records and reports business information. "We comply with all applicable local, state, and federal laws regarding record completion and accuracy, and are fiscally responsible." (Microsoft Standards of Business Conduct, 2003)

Is the Code of Ethics adequate? If so, why? If not why?

Microsoft's code of ethics applies to company software development, the legal and financial compliance of all the various national and international facets of its business dealings, and underlines its fair treatment of employees and customers. It is sweeping in its manifesto, but so sweeping it is inclined to be vague. Other than stressing Microsoft's compliance with laws, it is short on specifics as to how these compliances are achieved. In the part of the site that states that Microsoft is compliant with antitrust laws, for example, it states that Microsoft is not in violation of these laws. Implicit is the company's attempt to undo some of the damage wrecked upon it by the U.S. federal government's antitrust lawsuit against Microsoft regarding its Internet explorer. But the Business code of ethics simply denies any violations, without mentioning the lawsuit, why the Internet browser was wrongly defamed, or anything specific as to how the company is achieving antitrust compliance now.

The code contains many vague generalities, such "as responsible business leaders, it is not enough to intend to do things right, we must also do them in the right way. That means making business decisions and taking appropriate actions that are ethical and in compliance with applicable legal requirements." (Microsoft Standards of Business Conduct, 2003) Very well, one might add, but is this a business decision one should boast of, that one is compliant with the law -- it is a bit like a person bragging he or she has never been to prison, nor done anything that might result in him or her being thrown into jail. Also, it does not say how the business is complaint with not only antitrust standards, but also any standards at all.

Additionally, "The Standards of Business Conduct are not intended to cover every issue or situation you may face as a Microsoft employee. Nor does it replace other more detailed policies. You should use the Standards as a reference guide in addition to Microsoft's policies, including the Employee Handbook, required for your specific job. For example, the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Corporate Controller, and other employees of the finance organization must also comply with the Microsoft Finance Code of Professional Conduct." This further underlines the vague and non-situation specific nature of the code. (Microsoft Standards of Business Conduct, 2003)

How does the firm perform on the four steps of Social Responsibility? Be specific.

The firm theoretically encourages individual social responsibility on the part of its employees by encouraging political action, but without requiring a particular ideological point-of-view to be supported. As a company, Microsoft is socially responsive in its philanthropic as well as capitalist in its use of largess of funds. The philanthropic as well as the capitalist mission of the company fosters life-improving technical communication, education, and development. The firm supports education in high schools, and also computers have emerged as means of education and connection to enhance the lives and minds of many people. But a rival computer firm might contend that Microsoft has accomplished this in a monopolistic way that stifles the creativity of rival firms, and could squash the inroads new ideas could make in the market to improve computers and education in the future.

Thus, the dominance of the firm in the market structure may be socially irresponsible or counterproductive in terms of curtailing costs for its products, needlessly gouging consumers and acting unfairly against rival firms. For a business to be socially responsible it must fulfill its obligations to its employees, shareholders, consumers, and to the community where it operates at large. Microsoft provides quality salaries, benefits, and the ability to engage in intellectually rewarding work to its employees. It has enriched its shareholders as well as its founder many times over. Consumers, however, may be paying more than they ought, because of the company's monopoly in the market, its ubiquity in home and office work (one must know Windows on a basic level to get virtually any office job in the country, if not the world) and its use of proprietary software.

As for the community, the question remains open if the corporate fostering of technical innovation within the company and its philanthropy around the world through its largess 'makes up' for creating a fairly uncompetitive market. Microsoft states as well that it has worked with the government to stem hackers and security impingements, but outside of the company, the Microsoft system's impingements from security threats, thus posing a community danger to user information, privacy, and the finances of business that use Microsoft, remains a topic of open debate. ("Trustworthy Computing," 2004)