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Monday, February 13, 2017

Strategic CSR - Silicon Valley

The article in the url below discusses the recent intervention by the information technology industry in the debate in the U.S. about immigration. In particular, the article demonstrates how important immigration is to IT firms, judging by the large number of well-known founders, CEOs, and senior executives who are foreign-born:
"Attracting hyper-brainy people from around the world is at the heart of the tech business model. Mr Brin was born in Moscow, Mr Pichai in Tamil Nadu and Satya Nadella, the head of Microsoft, in Hyderabad. The biological father of the late Steve Jobs was a Syrian who moved to America, a journey that as of this week would be impossible. Half of all the American startups that are worth more than $1bn were founded by migrants. Many of the engineers at tech firms were born abroad, too. In Cupertino, a posh suburb in Silicon Valley, half the population is foreign-born."
These executives are intervening on the side of more open immigration, therefore, because it is good for their business (and, by extension, good for the U.S. economy). What is interesting about the article, however, is not that the IT industry is being vocal in its opposition to efforts to limit immigration, but that the industry is so selective about which issues it chooses to protest. By taking such a high-profile stand now, therefore, the article suggests the industry risks exposing its hypocrisy:
"For decades tech bosses have pushed a convenient doublespeak to explain their firms' rise. Their dazzling products are the creations of their leaders. The resulting fortunes are these visionaries' just reward. But the economic and social consequences of the industry's output, not all of them good, are no one's responsibility. Instead, the industry argues, they are the result of unavoidable shifts in technology, in turn responding to society's broad demands. This logic has allowed tech firms to avoid responsibility for the stolen or bilious content that they publish and for the jobs that their algorithms help eliminate—to say nothing of their own oligopolistic market shares. Silicon Valley boasts of its own might and shrugs at its own impotence both at once."
The article goes on to note the various recent issues, other than immigration, where the industry has been slower to take action – such as, job losses (due to outsourcing and technological progress), fake news (enabled by social media), and income inequality (driven by pay disparities), and so on. In reality, the article concludes, the 'holier-than-thou' approach of the IT industry on the issue of immigration is merely dressed-up self-interest that is used selectively to advance goals that are, ultimately, very narrow:
"Often [tech firms] define virtue as what they judge to be in their business interests. Last year, Mr Cook dismissed a demand by the European Union to pay more tax as 'political crap.' In December Apple agreed to a state request to ban the New York Times's app in China, where the firm makes just over a fifth of its sales. Mr Zuckerberg fits the same pattern: he says he wants to give away 99% of his fortune and that he believes in the ideal of free expression, but his firm paid a tax rate of just 6% over the past half-decade, and he has toadied up to China's censors, too. Oligopolistic, hubristic and ruthless to its core, Silicon Valley is no beacon of moral leadership."
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Silicon Valiant
By Schumpeter
February 4, 2017
The Economist
Late Edition – Final