Ethics in the Software Industry

This material is part of the Giving Voice to Values curriculum collection (www.GivingVoiceToValues.org).

The Aspen Institute was founding partner, along with the Yale School of Management, and incubator for Giving Voice to Values (GVV).

Now Funded by Babson College.

Do not alter or distribute without permission. © Mary C. Gentile, 2010

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Soft issues in the Software Industry (A)1

On the evening of 30

th September 2008, Rahul sat in his cubicle at XYZ’s Gurgaon office, with

his head in his hands. Over the next few hours, he had to make an important decision that could

affect the career of several people, including his boss!

Just 36 hours ago, his client’s main database, which included a record of all transactions on the

client’s online supply-chain portal, had been critically affected when more than 10 million

transactions were deleted. On discovering this, Rahul’s team had worked continuously and

tirelessly to rectify the mistake with minimum data losses. The whole team had sighed with relief

after the problem had been resolved.

Then came the tricky part: presenting a Root Cause Analysis to the client representative. The

root was clear: a fresher had worked on the client’s software (without supervision by an

experienced person) and accidentally deleted the table. Left to himself, Rahul would have owned

responsibility for the mistake as the Project Leader and shared the root of the problem with the

client. Unfortunately, his present boss, Harshit (a temporary substitute for Nikhil, to whom Rahul

normally reported), wanted the truth covered up: he suggested that Rahul blame the “Core-

Database” team from ABC Group, another organization providing hardware support on the

project.

Rahul had been team leader for only two months. This was his first major challenge. He wanted

to be honest to his client. He wondered how he could do this, without compromising others in his

organization.

1 Case prepared by Prof Ranjini Swamy of Goa Institute of Management and Prof Nisigandha Bhuyan of

IIM-Calcutta. This case was inspired by interviews and observations of actual experiences but names and

other situational details have been changed for confidentiality and teaching purposes.





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The Company

XYZ was an IT services company, a subsidiary of a well-known business group in India that had

a reputation for its ethical work practices. The company provided innovative and low-cost IT

services and business solutions to international clients in a very competitive market. Clients were

mostly large multinationals based in the US or Europe who were looking to improve their

efficiency and agility through use of IT products and services. XYZ’s sales and profits had

climbed over time, reflective of the company’s ability to consistently meet client expectations.

In 2008, however, the company’s performance dived following the global recession and its

debilitating effects on XYZ’s customers. Many of the company’s well-known competitors were

likewise adversely affected: some big names had virtually disappeared, having become targets

for hostile takeovers. XYZ remained afloat by downsizing, severely curtailing budgets of all

projects and thereby providing low-priced products and services.

The Global Trade Project

Rahul had joined XYZ three years back as an Assistant Systems Engineer, after completing an

engineering degree. Soon after training, he was assigned to the Global Trade Project team, whose

client at the time was MCO Technologies Ltd. He became known for his technical skills and for

his out-of-box thinking. Over the three years, he developed very close friendships with members

of the client team. He reported to Harshit, who was substituting temporarily for Nikhil, the

Global Trade Team manager (See Annexure A for the reporting structure.).

The client, MCO Technologies, was a large multinational and a global leader in design and

manufacture of electronic and bio-analytical measurement equipment. It relied on an elaborate IT

infrastructure to integrate its supply chain.

The online portal was the last and critical part of the company’s supply chain. It enabled trade

and after-sales service across countries by ensuring compliance with the appropriate rules and

regulations2. It was used for (a) generating an online approval mechanism from concerned

regulatory authorities for the proposed transactions and recording their approvals; (b) recording

requests for spares/ products/ service and (c) following up with offline activities.

The Global Trade team at XYZ had to ensure that the online portal was effective in meeting their

client’s needs. It regularly maintained and updated specific software applications that supported

the portal. (A team from ABC Group3 collaborated with the Global Trade team to ensure

hardware support.)

2 For example, environmental reporting standards, customs reporting and tax reporting. 3 The client MCO Technologies, had originally been part of the ABC group and had recently been spun

off as an independent entity. It continued to receive hardware support from a team in the ABC group.





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The Global Trade Project Team

The Global Trade Project team was comprised of sixteen engineers from different disciplines

who worked 24X7 across several shifts. They were located in the office at Gurgaon, India. As

team leader, Rahul was responsible for team performance with respect to (a) the continued

availability and updating of specific applications assigned to the team, and (b) prompt and

satisfactory problem resolution.

Members of the team were in the age group of 22- 26 years. Generally, there was a good mix of

experienced and inexperienced members. The new members were not allowed to work

independently on the client’s applications, unless the team leader had confidence in them or a

senior could supervise their work. Any mail going to some important user or manager had to be

reviewed by a senior team member. New members were largely allotted routine work; however,

they were expected to observe their seniors on more complex tasks and learn from them. Senior

members hand-held the new members through the initial months and helped them settle quickly

into the project. In this way, mistakes, especially those that could result in downtime of the

client’s websites, were minimized.

Contact with the client was fairly frequent. There were regular weekly meetings with Patrick, the

Client Portfolio Manager, to discuss various operational issues and review milestones. Patrick

also regularly evaluated the team’s performance on several parameters such as application

availability, time taken to respond to top/high-priority issues raised, feedback from the users of

the applications and the quality of delivery. Mistakes, when committed, were analysed by the

client representative and the team; if they established that the mistakes were caused by

negligence, the client could legitimately ask to be compensated for the resultant tangible and

intangible losses. This was incorporated into the agreement between MCO Technologies and

XYZ.

Team members were friendly with each other and with the clients: many smaller technical issues

were resolved off-the-record and at no additional cost to the client. They were, however, not very

close to the ABC team, despite working together since the project’s inception in 2003.

Interaction frequency was high when there were tasks to be done together (such as rebooting of

servers or dealing with hardware problems). Relationships between the teams remained largely

official and task-focused.

The Global Trade Team was known for its efficiency and innovative solutions. Its customers

were generally extremely satisfied with the team’s performance: it was the only team in XYZ

that was consistently able to achieve a Customer Satisfaction Index of 5.0 out of 5.0 in the last

three years.





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The Problem

In 2008, the Global Trade team experienced its share of churn, as did other teams. Following the

simultaneous exit of some senior members4 from the project, many newcomers were inducted

into the team. The workload on the remaining senior members of the team increased

tremendously. All important or complex technical issues had to be resolved by them. They

worked longer hours: Rahul for instance, was working 12 hours daily. Yet, it was difficult to

keep up with client demands. As a result, the seniors had little time to teach/train the newcomers.

Pawan Patel was one of the newcomers. Despite being fresh out of college, Pawan quickly

learned the technical aspects of the project and the procedures to be followed. Seeing his

adeptness, Rahul began assigning him more responsibilities. More recently, he had asked Pawan

to study the structure of the master table in the MCO Technologies’ online database. Since the

senior members of the team were busy, Rahul decided to give Pawan independent charge of the

task, believing that he was trained enough to work on his own.

While going through the master table, Pawan inadvertently deleted critical sections of it. Within

an hour, several hundred transactions that were to occur through the website started reporting

“error” status5. As a result, MCO was not able to transact anything through their online portal for

some time.

The Global Trade team immediately disabled the website. They worked on an emergency footing

to rectify the problem. Since the data lost was huge, it took almost 18 hours to rebuild all the

table components and copy all the data from the DRP (Disaster Recovery) server. But losses

were inevitable: Rahul’s boss, Harshit, estimated the resultant loss to be a minimum of $8000-

$12,000 (tangible & intangible) though the client figures of the loss were apparently much higher

at $40-50,000, after factoring in the resultant cost of delayed deliveries and wasted trips of

engineers to their customers’ sites. Patrick appreciated the team’s responsiveness; however, he

wanted a meeting to do a root-cause analysis immediately after the problem was resolved.

Before the meeting, Rahul discussed possible responses with his boss, Harshit. As team leader,

he proposed to take responsibility for the error. However, Harshit did not approve. If Rahul took

4 New members frequently replaced the older ones who left the project to join other teams in XYZ or to

take on added responsibilities. 5 The deletion of major section of the master table affected a real-time application on the portal. As a

result, the users could not create the messages (with the necessary details like product id, components,

destination, price etc.) for the products to be shipped in or out though the online application. Since the

messages could not be created, approvals from the regulatory authorities could not be obtained. The

transporters were idle either at the border of the concerned country or at the warehouses, and so

customer orders could not be fulfilled. Again, support engineers were stranded at the customer premises

without the necessary repair parts, as their requests could not be processed. They sat idle. The client

therefore experienced the loss of several man-hours, until the glitch was addressed.





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responsibility for the error, XYZ would have to make good the client’s losses. The project was

due for renewal in 2 months; if the error was attributed to negligence, the renewal would not be

automatic. The issue had already gained high visibility among the senior managers of MCO

Technologies. The reputation of XYZ was at stake here. All this could be avoided if Rahul

assigned the blame to the ABC team, citing a technical network glitch.

Rahul pointed out that it would be an outright lie; moreover, he didn’t want to take advantage of

the client’s trust in him. Harshit responded by asking Rahul to prepare for the consequences: he

said XYZ would definitely terminate the employee responsible for causing such a loss to it and

for straining the relationship with the client. Harshit had worked at ABC for eight years and so

Rahul believed him.

The Alternatives

As Rahul saw it, he had four options: Take the blame; blame Pawan Patel; blame the ABC team;

or report on his boss to the company’s Ethics Counsellor and hope that they would settle the

issue within the company.

If Rahul took the blame, Patrick would likely appreciate his honesty. However, Patrick could

lose trust in the firm’s reliability. The client organization could give poor ratings to the team,

impose a fine to recoup losses and add more checks on the processes within the team. Harshit6,

the person temporarily in-charge of the project, could get angry with Rahul if this happened but

the team members could be counted on to support him.

If Rahul blamed Pawan (the new entrant to the team) for the problem, the company’s practice of

allowing freshers to work with the client’s critical data would come under scrutiny. XYZ’s

relationship with MCO Technologies could become a problem. More immediately, the

performance ratings of the team and of Harshit could be adversely affected. Pawan would be

fired even though he made the mistake inadvertently. Team members would perceive the

management as non-supportive; team- spirit could be adversely impacted.

He could blame the ABC team by making the issue sound very complex and burying it in a hail

of long mail chains. Harshit would surely approve! There was a more than fair chance7 that the

ABC team would remain unaware of Rahul’s actions. (If they did, it would be their word against

his.) Other members of the Global Trade project could be expected to support him: they just

6 Nikhil, Rahul’s boss, could have helped Rahul handle the situation; unfortunately he was on long leave. 77 XYZ owned the codes in the server; the ABC team could at most show that everything was fine from

their side during that time. They could not access or investigate what happened inside the XYZ codes/

applications.





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wanted the team to get out of this mess. However, there was a small risk that Patrick8 would get

to know the truth. It was one thing to commit a mistake but if Patrick came to know that Rahul

had lied to him, he would find that unacceptable.

Lastly, Rahul could report Harshit’s suggestion to the company’s Ethics Counsellor. However

he was not very optimistic about this option. He believed such Counsellors were at best “paper

tigers”. He sincerely doubted whether Harshit would face any adverse consequences. There had

been previous occasions when the senior management had taken the side of the manager accused

under similar circumstances. If, however, Harshit was implicated by the Counsellor it would set

an example to all managers. Team members were not very fond of Harshit; so any punishment to

him would be more than welcomed by them!

As Rahul mulled over these options, he realized that he was still not comfortable with blaming

the ABC team or others. He wanted to be honest to Patrick, without compromising the interests

of the company. How could he accomplish this? Whom could he approach? What could he say?

Question for discussion

If you were in Rahul’s position, how would you obtain the cooperation of your seniors and your

client for achieving your goal (remaining honest to the customer without jeopardizing the

interests of your company and team)? Detail what you would say, to whom and how, in order to

obtain their cooperation and achieve your objective.

Rev 8.1.2013

8 Patrick was the IT Manager from the business side. He had no idea what went on in the technical level.

It would therefore be very difficult to figure out the truth.





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Annexure: Reporting structure9

9 The XYZ-MCO Technologies Account was headed by the Group Leader. Harshit was responsible for

two other teams (Finance & Quality teams) and reported to the Group Leader. He was assessed for the

performance of all the teams under his purview. Nikhil, the Global Trade Team manager, reported to

Harshit. Nikhil had two teams under him. Rahul was the Team Lead of one of these Teams. Rahul was

mainly responsible for ensuring the performance of his team and for meeting client requirements with

respect to the applications assigned to his team.

Group

leader

XYZ-MCO

Harshit-

Manager

Nikhil

Global

Trade Team

Mngr

Rahul

Team

leader

Pawan

Patel

Team

member

Formatted: Not Highlight




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Ethics in the Software Industry