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|In: Business Ethics|Last Updated:

Premise 1:Businesses aren’t moral agents.

This isn’t up for debate. The Business Roundtable, the official voice of American industry, made this clear in 1997: Businesses exist solely to maximize shareholder value. Fiduciary responsibilities? Yes. Legal obligations? Sure. But moral? Since most business success comes at the expense of competitors, they can’t be.

Premise 2: Businesses have no patriotic duty. Don’t be aghast. It’s all about shareholder value, remember? If moving manufacturing to Kuala Lumpur helps, fine and dandy. If opening a post office box in Bermuda to avoid paying taxes increases profits, wonderful. A business isn’t beholden to any particular nation. (Best exposition on this subject: Arthur Jensen’s speech to Howard Beale in Network. Rent it and you’ll find that Paddy Chayefski brilliant satire has been transformed into the business community’s manifesto.)

Premise 3: Patriotism and morality have no connection. Unless you think Americans are intrinsically more deserving than other people, or that any action, if performed by the United States of America, is automatically good, it’s inescapable that patriotism has all the moral content of being a Chicago Cubs fan. At best, patriotism is about self-interest — not a bad thing, but not a moral issue.

We’re ready: Is moving work offshore immoral? No.

You’re acting as the agent of your employer, an amoral (not immoral) entity. You’re increasing shareholder value, a goal with no intrinsic moral content. And for every human being you lay off, another gets a job. Offshoring is morally neutral.

You are, perhaps, being unpatriotic: Creating unemployment here by transferring jobs elsewhere isn’t to this country’s benefit. Even that formula is simplistic, though: If competitors reduce their costs by going offshore and you don’t, all you’re doing is contributing to your company’s failure — in the long run you save no jobs at all. What choice do you really have?

Your choice starts with your methodologies. Some lend themselves to offshoring. Others, such as “adaptive methodologies,” are better suited to up-close-and-personal on-shore staffing … and hold the promise of increasing the productivity of your developers and integrators enough to compensate for offshore rates.

Adaptive methodologies don’t fit all situations. Neither, for that matter, do the methodologies required for successful offshoring, nor anything else for that matter. Adaptive methodologies, offshoring, the Rational Unified Process, structured analysis, and all the other techniques available to you are just tools in your toolkit. Your responsibility isn’t to offshore, onshore, or anything else.

It’s to use the best tool for each job.

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|In: Industry Commentary|Last Updated:

A bunch of stuff has hit my desk recently. It all seems related somehow. See if you can find the thread that connects them:

While cleaning out old magazines I found the October issue of Darwin magazine, which published its “Fittest 50” list. Yup — there was Enron. Still, Darwin is a fine publication. Lots of others fell for Enron’s buzz, too.

Speaking of magazine articles, one in Twin Cities Business Monthly by Burt Cohen caught my eye. It wasn’t the first article I’ve seen excoriating the common business practice of placating Wall Street by focusing solely on this quarter’s results no matter how much you mortgage your future, but Cohen did say it well.

Which leads us back to Enron. How? Among the many guilty parties identified in the ongoing blamefest is Wall Street. Turns out that many of those analysts who insist on great this-quarter results looked at Enron in more friendly terms. Why? Their employers wanted Enron’s investment banking business, that’s why. With luck, Wall Street’s analysts will lose some of their clout and we can all stop being deliberately stupid just to please these geniuses.

USA Today printed something useful, too: A piece by Stephanie Armour about companies that refuse to lay off employees just to make the numbers. In it she cites a study by Watson Wyatt (www.watsonwyatt.com) showing, among other happy conclusions, that excellence in recruiting and retention results in increased shareholder value – nearly 8% more, in fact.

Back to Twin Cities Business Monthly, which profiled Joel and John Schwieters, who own eight local companies in the home construction industry. They frame and finish houses twice as fast as most construction companies; their projects lack the debris that usually litters construction sites, they’re known for exceptional quality, and they’re growing by more than 20% per year.

How do they achieve these results? Unlike nearly every other construction company, they don’t subcontract their workforce — they employ their builders, paying them a regular salary, excellent benefits, and a shared bonus pool. Even more interesting is that they’re expanding into their supply chain. Where the popular core/context theory applauds companies that prefer outsourcing any activity that’s “non-core,” (that is, not a marketplace differentiator) the Schwieters understand that controlling the supply and delivery of doors, trim, pre-built staircases and such will improve their margins.

I suppose I should mention — they’re innovative in their use of information technology, too.

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