Strategy and Ethics: Pilkington PLC

Abstract

In the late 1950s the directors of the glass-makers Pilkington had to decide how to introduce to the world market an extremely advanced manufacturing process. The process — for making plate glass on a float line — had been developed at considerable risk and expense over most of the preceding 10 years. It enabled the firm, if it wished, to cut the costs of manufacturing high quality plate glass to such an extent that an unassailable advantage could be secured over competitors. Pilkington had the choice of keeping the process to itself or making it available under license to the rest of the glass industry in return for royalty income. It decided in favour of licensing, partly because it seemed morally the better thing to do. Lord Pilkington recalled later that during the deliberations of the Directors’ Flat Glass Committee

A great deal was said about ethics: that it was not our job to deliberately deny any existing glass competitor the opportunity of living in competition with us. I don’t think we were short-sighted or rapacious.… There was a great deal of investment worldwide in plate, and people needed to have time to write off this plant or convert over. The alternative was chaotic disruption of a great industry.¹

The directors of Pilkington felt a responsibility not to disrupt ‘a great industry’ and they considered the unilateral introduction of their own world-beating process to be disruptive.