Global Ethics 101

A retiring Hewlett-Packard executive offers four lessons on building a moral business foundation in a global economy

by Jack Novia

A few months ago, I spent some time with students at Dartmouth College's Tuck School of Business. Instead of simply asking questions about managing people and hitting numbers, the students asked what it meant to build a responsible and ethical corporation in the 21st century, in an increasingly globalized world. I suppose I shouldn't have been surprised by their interest in business ethics. Several recent studies, including those conducted by Stanford University and Goldman Sachs (GS), suggest that a majority of B-school graduates and other students are willing to forgo financial benefits to work for companies with better reputations for corporate social responsibility and ethics. These studies suggest that solid ethics and high standards of conduct really matter to more and more of tomorrow's business leaders, and I take a lot of comfort in that, particularly as I prepare to leave the workforce.

Although I am from an older generation—one perhaps not as prepared or well equipped for the rapid globalization of today—I've witnessed this trend develop over the span of my career. And while business leaders of any generation, in any locale, face the same basic moral hurdles, I can offer insight into the role of ethics in an increasingly globalized world.

Following are a handful of my most notable experiences and the important ethical lessons they taught me. These are things I wish I had known at the beginning, instead of the end, of my three-decade career.

• Grow responsibly, particularly in emerging markets. Emerging markets—places like China, India and Russia—present great opportunities for business, but they also can be fraught with risk that must be managed well. In Brazil, for example, it's tempting to just sit back and let growth happen—to say yes to every opportunity that comes your way. And believe me, as a results-driven businessman, I've been tempted. But a company must pace its growth with its infrastructure's ability to absorb that growth, particularly in regard to ethics.

I've found that the biggest challenge in emerging markets isn't hiring quality employees or finding new business. It's the management of growth itself. Making sure that internal systems are in place is crucial to maintaining a company's high ethical standards. To do it right in places like Brazil means that sometimes a business must slow down, cover its bases, and make sure it's ready to operate properly in a country or region before it begins focusing on more business. It is incredibly hard to turn down a deal, but companies must be dedicated to equipping their employees with the right ethical tools and training before they're faced with tough decisions.

• Manage ethics within your entire sphere of influence. As the world's biggest technology company by revenue, Hewlett-Packard (HPQ) operates one of the industry's largest supply chains. By holding our suppliers to the same standards to which we hold ourselves, we can lead by example and make a sizable impact on the way our suppliers do business, while also mitigating our risk. Large companies have a responsibility to wield their influence for the better.

HP recently released a list of its largest suppliers, representing more than 95% of our company's procurement expenditures for materials, manufacturing, and assembly of products worldwide. The group includes Cisco Systems (CSCO), 3M (MMM), Flextronics (FLEX), and Hon Hai Precision Industry. As the first tech company to release this kind of information, HP has opened itself to criticism. But the benefits far outweigh the risks; HP hopes other companies will follow suit, thereby raising supply-chain standards throughout the sector.