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Microsoft in Russia shows importance of embedding responsible behaviour

Global companies have always faced problems when it comes to consistency. Being the same everywhere at once is very hard to do. And in doing so many big brands have become the focus of campaigners tired of the monotony such consistency can create.

The 20th century corporate challenge was making sure products and services were more or less of equal quality and value around the world.

The 21st century business hurdle is consistency in behaviours. Which is where embedding ethics beyond just a code of conduct is probably the hardest part to get right.

The New York Times has been running a series of articles on Russia titled “Above the Law”, looking at corruption and the rule of law, amongst other topics, in the country.

The latest in-depth article considers accusations against Microsoft about the practices of some of its local lawyers in Russia. The piece claims collusion, at least, with authorities determined to clamp down on environmental and human rights groups.

The activities of the authorities have been clearly devious, underhand, violent in places and deeply worrying for businesses investing in Russia who care about values and the free speech of NGOs and campaigners.

Microsoft has clearly taken the accusations seriously, already committing in a letter to the New York Times to: “Increase monitoring and training of the local counsel who have powers of attorney for our antipiracy program, with more clearly defined responsibilities and accountabilities”.

Kudos to them for reacting quickly. Thumbs down for not being aware of the warning signs that were likely visible if only they had looked. Now they will be very much aware. It often takes a mini-scandal to make monitoring happen, that is not new.

The case shows just how hard it is for companies with big vulnerable brands to maintain their reputation in the face of so many differing operating environments.

Being in charge of that in Microsoft or any other company is a daunting challenge. Examples such as this show why such executives need much more support, budget and buy-in from across the company.

Reputation, as someone once said, departs on a fast horse and returns, if ever, slowly on foot. Just ask Yahoo!

UPDATE: 14/09/10: Microsoft’s PR firm have pointed out to me the full response they have made on their blog. The company has clearly responded to the issue with speed and depth. The question remains, of course, as to how it all happened in the first place. I am sure the company has Foreign Corrupt Practices Act compliance systems in place in Russia. A values audit would also not have gone amiss.

Useful resources:

Report on embedding corporate responsibility in large companies

An upcoming conference on embedding values and codes of conduct

A report on managing business ethics in Russia

An article on ethics and expansion in Russia

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