Company without a Country

In the internet age, it is possible for a company to operate without a country, but they could find themselves longing for a country like the protagonist Philip Nolan in Hale's "The Man Without a Country" (Hale, 1863).

Nolan, a fictitious conspirator with Benedict Arnold, is sentenced to spend the rest of his life at sea and to never hear of the United States again. This suits him at first but later he longs for his country.

The technology exists today for a company to literally be without a country. Business scholar Kobrin (2001) put it this way:

"Virtual firms can race to the jurisdictional bottom at the speed of light; moving the business to a locale with a less onerous regulatory structure may entail no more than a few keystrokes" (p. 691).

This has happened. Online gambling companies have made the small inland country Antigua a hotbed of internet gambling(Can online betting change its luck?). These virtual companies, though, run the risk of being caught in a Cuba of the 1960s or a Grenada of the 1980s; revolutions could make them long for the stability of the United States like Nolan.

But is this virtual flight an ethical use of technology as a strategy? I would argue no because of the ethics of Utilitarianism. The cost in jobs, tax base, and stability out weights the profit for a single company (Velazquez, 2007).

Researchers estimate that the internet could have a "meltdown" by 2010 without significant ($43 billion to $52 billion) investment in backbone technology (Thomson,2007). Moving away from a tax structure that would help fund these improvements is unethical.

The possibility of political unrest, the unethical avoidance of tax responsibilities make a virtual company strategy too risky. It is better to be a company with a country than without.

 

References

Can online betting change its luck? Retrieved 11/27/2007, 2007, from http://www.businessweek.com/magazine/content/04_51/b3913097.htm

Hale, E. E. (1863). The man without a country Project Gutenberg

Kobrin, S. J. (2001). Territoriality and the Governance of Cyberspace. Journal of International Business Studies, 32 (4), 687-704.

Thomson, I. Internet facing 'meltdown' by 2010 - computeract!ve. Retrieved 11/27/2007, 2007, from http://www.computeractive.co.uk/vnunet/news/2203809/internet-face-meltdown-2010

Velasquez, M.G. (2006). Business Ethics: Concepts and Cases. Upper Saddle River, NJ: Pearson Education.