Why are we here? I think many people assume, wrongly, that a company exists solely to make money. Money is an important part of a company's existence, if the company is any good. But a result is not a cause. We have to go deeper and find the real reason for our being." David Packard, cofounder of Hewlett-Packard

Are U.S. companies morally responsible for putting principle before profit? As Nike found out in the 1990s, consumers often make that decision for them. Appalled by the working conditions Nike's foreign suppliers imposed on employees, many consumers stopped buying the athletic shoe company's products. The boycott forced Nike, whose leaders at first denied responsibility, to make its supplier contracts contingent on decent working conditions.

News out of China this week will now compel PC makers to choose between human rights and revenue. The Chinese government has announced that, beginning July 1, every computer sold in China must come with filtering software that blocks Internet access to "unhealthy words and images." China's rulers insist the program is intended to prevent access to pornographic Web sites; however, the software is capable of blocking other sites as well as tracking each person's Internet activity. What this means is that companies like Hewlett-Packard, Dell, and Apple will have to decide between having access to China's lucrative consumer market or standing up to censorship.

I don't mean to single out Hewlett-Packard, but it probably has the most at stake in this dilemma. HP sells more PCs in China than any other U.S. company -- 40 million computers last year alone. From where I sit, the company appears to have three choices. First, HP could comply with the Chinese government's demand and install the filtering software on the PCs it sells there. Second, the company could include a CD containing the software in its packaging -- an option that meets the government’s requirement -- and let Chinese buyers make their own decisions about installing it. Or, third, HP could refuse to participate in censorship and stop selling PCs in China. Regardless of which option the company selects, you can bet they'll be highly criticized.

These are the situations that test a company's moral sensitivity. As we've seen, it's common for leaders to try to distance their organizations from sticky issues. Hey, who are we to tell China how to run their county? We just sell PCs. As Nike learned the hard way, that approach doesn't sit well with U.S. consumers who expect companies to do the right thing. But before they make the correct choice, leaders must recognize that a moral dilemma exists.

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