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STARTUP ETHICS: When Do Startups Have to Grow Up and Embrace Diversity?

Tuesday, Jul. 8, 2014

Source: Wikimedia

For a long time, Silicon Valley’s Internet titans have refused to publicly report on the diversity of their workforce. Earlier this year, Google reversed the trend by releasing their employment diversity statistics. Yahoo, Facebook, and others soon followed. While there has long been a perception of a Silicon Valley diversity problem, the stats are now here to show it. Women only comprise 30% of Google’s total staff, and only 17% in the company’s tech staff. Over 60% of its employees are Caucasian, 30% are Asian, and only 5% are Black or Hispanic. Silicon Valley firms often point to the lack of diversity in the job applicant pool to defend their statistics, but critics also point to the prevalent “sexist culture” in startups that drives women away. This news raises two critical questions. Do startups get a “pass” on creating diversity in their rapidly growing staffs? If so, for how long? Second, at what point do startups owe the public transparency about their worker diversity?

  Joe: Staffing statistics are an outcome of supply. Silicon Valley’s move into primary and secondary education, to excite and motivate students about computer science careers and entering into supporting curriculums, is the same path other technology industries have taken decades ago. In spite of the effort, the U.S. supply demographics for technology industries still does not match the general population and probably never will. Regardless, the whole diversity debate is upside down. Diversity is not an end but a means. It’s that simple. Companies who have broken that code leverage it and thrive. Startups succeed by putting together people who have the core intelligence, the passion, and the ability to communicate. A startup is in a street fight. Sexism, diversity, etc. are non issues – survival is. Each member depends on each other and are blind to race, sex, national origin, etc. . “Corporate think” is the most strategic task of leadership. Founders may not always get that. “Thinking” can easily get corrupted in the process of staffing during rapid expansion. Ne'er′-do-well management types can creep in and have a corrosive effect on all aspects of the culture before a founder who isn’t paying attention recognizes the impact. As far as public transparency – really? Companies hire “locally”. Would a software company founded and operating in India get a diversity 5-star rating versus a company founded and operating in South Bay?

  Marty: I believe that a diverse workforce is a worthy aspiration, and certainly implementing cultural diversity can give rise to ethical issues. Yet I don’t believe that any business, especially private ones (startups), have any ethical obligation to embrace diversity. Everyone and every company has societal obligations, but there are many ways to help society, like feeding the hungry, or paying a living wage, which don’t involve diversity. So accusing a company of an ethical violation, just because they don’t embrace diversity, doesn’t make any sense. You should be looking at the bigger picture of what they do in total to benefit society. For companies that do embrace diversity, there are many potential ethical issues. For example, in some cultures, government agents expect businesses to provide incentive payments to expedite approval of requests such as permit and variance applications. In others, these are considered bribes, which violate ethical business practices, as well as the laws. Does that mean a company should never hire employees from any of these cultures? There are many other religious and gender practices which can cause ethical conflicts.

  Elizabeth: Discrimination goes hand-in-hand with such a diversity discussion. Title VII of the Civil Rights Act applies to employers with 15 or more employees. This Act prohibits discrimination in hiring and firing decisions, as well as decisions regarding promotion or demotion, compensation, and similar employment matters. Technology companies, per se, are not exempt from a Title VII violation (which is policed by the Equal Employment Opportunity Commission, or EEOC). Google, Yahoo!, and other technology companies are just as responsible for its discriminatory actions and its hostile work environments as any other company with more than 15 employees. How is this an ethical issue for small start-up companies with fewer than 15 employees? As Joe noted, excluding talent does not benefit anyone. Start-up companies should find the best talent suited for its needs as possible. This can best occur when individuals are not intimidated, discouraged, or prevented from applying for a job or from performing in a job. A society functions best when the individual members cooperate and augment resources, not quash them. Thus, if ethics is put into a societal context, then start-up companies, like any other company, have an ethical obligation to create a micro- and macro-environment that realizes and optimizes diversity. It not only is legally mandatory, but it also makes good business sense and is part of the larger corporate social responsibility of every business entity.

Getting to work on diversity at Google (Google)

Google statistics show Silicon Valley has a diversity problem (Washington Post)

Framework for Ethical Thinking (Markkula Center)


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