China and ethical dilemmas for global ICT companies

In the last few decades corporate social responsibility (CSR), i.e. a company’s compliance with ethical standards and responsibility towards society, has become an increasingly popular term to use when formulating business vision. In the ICT field, CSR can relate to issues such as digital divides, freedom of speech, human rights among other things. The globalization of ICT poses several challenges to CSR. This has becomes particularly obvious in the case of China and the activities of multinational companies that seek to gain access to the giant Chinese market. China as an authoritarian state has a set of regulations and expectations on ICT use that sometimes goes against some of the underlying principles, which most global ICT companies subscribe to in their CSR declarations. What does that mean for global companies and their CSR practices in China?

ICT firms are often working in domains that are traditionally under the control of the government and the nature of the Chinese business landscape makes it difficult for big business not to encounter the state. Companies in China are naturally expected to comply with regulations concerning censorship and control of information. Most companies also, of course, conform to these regulations in order to be able to do business in China. The allure of the giant market has moreover sometimes required global companies to make amendments and concessions to their business practices. For example a few years ago Yahoo was heavily criticized as the company chose to give out sensitive user information to the governement, which led to the incarceration of a Chinese journalist. It was also the same environment which Google decided to leave as it infringed to greatly on their vision of ethical business behavior.

Today, a large body of the international business literature acknowledges the influence of multinational companies on the business environment and sometimes even the political landscape in emerging economies. Scholars posit that multinational companies are able to project corporate social responsibility practices, proper ethical conduct on local firms in the host country. But the case of some global ICT companies in China also illustrates that it is of interest to inquire deeper into how companies choose to be less socially responsible in order to do business. For example, Axis communications, a large Swedish company selling network video solutions, was a few years ago criticized by Amnesty for selling surveillance cameras to the Chinese government. The response from Axis to this criticism was that the company was not responsible for how customers use the cameras. This might sound like a weak explanation as the company itself claims on its webppage that it ”is taking long-term responsibility by thinking big in the areas of business conduct and social and environmental responsibility”.

However in the defence of Axis and its fellow competitors on the Chinese market, one can ask: what can companies really do to influence? This question should have a greater priority on business forums than it has had so far. The Chinese market really tests the mettle of global ICT companies social responsibility ambitions. On this testing ground companies need to reconsider what they mean with being socially responsible. There has been a tendency that terms such as ”socially responsible” and ”ethical conduct” just have been standard marketing slogans to use in an increasingly competitive market place.

November 4, 2013

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