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Insensitive computer programmers with little knowledge of geography have cost the giant Microsoft company hundreds of millions of dollars in lost business and led hapless company employees to be arrested by offended governments.

The problem has damaged the company's reputation and the "trust rating," which is seen as key to keeping the company competitive, has dropped, a senior Microsoft executive revealed yesterday at the International Geographers Conference in Glasgow.

In a frank assessment of the company's problems in trying to be a global player without offending local sensibilities, Tom Edwards, its senior geopolitical strategist, said employees' lack of basic geography was to blame.

The company has now launched geography classes for its staff to avoid further bloomers which have caused embarrassment and cost money on a grand scale. He said that as a geographer himself it was depressing that Americans had a reputation for being particularly unaware of the rest of the world. The annual National Geographic Survey had thrown up the sad fact that only 23 out of 56 young Americans knew the whereabouts of the Pacific Ocean.

"It is therefore no surprise that some of our employees, however bright they may, have only a hazy idea about the rest of the world," he said. "The repercussions on us can be very serious."

As an American company with a global reach, Microsoft had to try and foster trust for reliability of its software and not cause offence.

He said in all cases the mistakes made were simply through ignorance but this was not how they were seen in the countries concerned. They were all seen as deliberate policy and so the offence taken was far greater as a result.

Perhaps the best known, and one of the most expensive, errors was a colour-coded world map showing time zones, which showed the disputed Jammu-Kashmir region as not being in India - an offence under Indian law. The mistake led to the whole of the Windows 95 operating system being banned in the country, losing large sales. For its replacement, Microsoft, Office 97, Microsoft removed the colour coding and sold 100,000 copies in India.

Mr Edwards said the decisions on what to do about disputes arising over Microsoft products was taken entirely on commercial grounds.

For example when employees were arrested in Turkey because Kurdistan had been shown as a separate entity on maps of the country, a decision was taken to remove Kurdistan from all maps.

"Of course we offended Kurds by doing this but we had offended the Turks more and they were a much more important market for our products. It was a hard commercial decision, not political."

One mistake that caused catastrophic offence was a game called Kakuto Chojin, a hand to hand fighting game. The fighting went on with rhythmic chanting in the background which in reviewing the game Mr Edwards noticed appeared to be Arabic.

"I checked with an Arabic speaker in the company who was also a Muslim about what the chant meant and it was from the Koran. He went ballistic. It was an incredible insult to Islam." He asked for the game to be withdrawn but it was issued against his advice in the United States in the belief that it would not be noticed.

Three months later, the Saudi Arabian government made a formal protest. Microsoft withdrew the game worldwide.

His investigations showed the Japanese, who had developed the game for Microsoft, had added the chant to the tape because they liked the sound of it without checking its origins. "They were chastised and corrected," he said.

Mr Edwards said it was better to be honest and open about these mistakes. It was all part of rebuilding that vital trust in the product.

· A game called Age of Empires 2 offended the Saudi Arabian authorities because it showed victorious Muslim armies turning churches into mosques. The game was withdrawn from sale in the kingdom

· The Korean government, objected because Microsoft software showed the national flag in reverse. The software had to be changed.

· The Spanish version of Windows used the word Hembra - meaning "woman" in Spain - for choosing gender. But in some Central American republics, notably Nicaragua, the word is an insult meaning "bitch". The programme was changed.

· Microsoft employees were questioned by police in China, where it is an offence to refer to Taiwan as country or as the Republic of China. Now Taiwan is not referred to as country and all software worldwide avoids the issue by referring to places as "regions or districts".

· Uruguay is a republic and proud if it but in Microsoft's Outlook in Uruguay, the company offended the government by describing Tuesday April 30 as the queen's birthday.

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