Problems that the Company Galvetrens Faced

Table of Content

Problem Identification: The case study “Why Didn’t We Know” highlights several issues that Galvetrens encountered. Firstly, their flawed policy for confidential reporting of misconduct puts employees at risk of retaliation.

Furthermore, this flawed policy exposes the company to legal action. In the case study, Mike Field, an employee at Galvetren, expressed his concern about potential employee misconduct to the company’s COO (Hasson, Hardis, Shear, Rowe, & Robinson 2007). The COO, Harry, then brought this concern to Terry Samples, who is Mike’s supervisor. Shortly after, Terry demoted Mike under the pretense of a decline in his job performance. Unfortunately for the company, Mike filed a lawsuit for wrongful termination, claiming that he was fired in retaliation for whistleblowing.

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The company faced several issues in relation to its revised open-door policy. Firstly, inadequate staff training was provided, leading to confusion among employees regarding their roles and responsibilities in handling alleged misconduct. The lack of clear procedures on the steps management should take when receiving complaints further exacerbated this problem. As a result, lower, middle, and upper managers all struggled to effectively communicate and follow up with the relevant parties involved in the misconduct complaint. Additionally, the company’s new open-door policy included reporting procedures that were seen as problematic by many employees. It is worth noting that the company disregarded two recommendations from a consulting firm. These recommendations included hiring an ombudsman and establishing a committee of directors responsible for overseeing ethics. The consulting firm arrived at these suggestions after conducting focus groups and interviews with employees.

According to Hasson et al. (2007), the focus groups and interviews revealed that many employees would not feel comfortable raising concerns through formal management channels. The misconduct committed by the Galvatrens can be attributed to various circumstances, including the replacement of the company’s CEO in 1997. This change led to a significant shift in both the company’s portfolio and culture, with incomplete cultural changes despite the expansion of the product portfolio under new CEO Chip Brownlee (Hasson et al., 2007, 34).

A review of the events that resulted in the charges of misconduct shows problems with Galvatrens’ policies and conduct norms. For instance, a high turnover in one department suggests a lack of communication. Furthermore, employees must understand the company’s communication process. As a newly formed group in the initial group forming stage, board members should connect to “investigate their personal and group goals” (Engleberg & Wynn, 2010, p. 29).

The board members need to establish effective communication practices at the highest level of management. It was determined that several group discussions were necessary to implement a feasible plan with accountability standards. Due to Galvatrens’ lack of a written communication policy for its employees, other stakeholders were also affected. The fact that clients did not report Greg Wilson indicates a lack of trust in the company’s ability to handle the situation. The employees’ awareness of the channel-stuffing attempt did not unfold as management had anticipated.

According to the case study conducted by Hasson et al. in 2007, it is recommended that employees should have the freedom to reach out to their supervisors or managers without any fear of censorship or retaliation (p. 3). The implementation of a hotline and ethics officer was intended to promote this practice. However, in instances where employees chose to disregard the hotline and reporting process, indications of passive group characteristics were observed. Engleberg and Wynn suggest that when group members lack confidence, they tend to conform to directives even if they conflict with their own judgment, leading to heightened levels of stress in group communication (p. 68).

Harry Mart, the COO of Galvatrens, displayed irresponsible leadership when he disregarded a message from Mike Fields about possible misconducts. According to Engleberg and Wynn (2007), effective leaders should act as proactive listeners and intervene at the first sign of hostility to prevent conflicts from escalating (p. 195). This indicates that the changes implemented under new management to improve procedures and prevent misconducts were not effectively communicated to the company’s leadership. Despite efforts to establish an open door system that encourages employees to voice their concerns, Harry Mart’s disregard for Mike Fields’ message suggests that the leadership team failed to integrate this new policy into the company’s culture. Engleberg and Wynn (2007) argue that in an open system environment, inputs or challenges from external sources should be welcomed (p. 22). However, Dale Willis, the senior vice president of HR, resisted the open policy introduced by Sydney Baydown, the company’s general counsel.

Although there was some support for the new open policy at Galvetren, it was not successful due to the resistance from the company’s existing culture. The old culture was opposed to any involvement or interference from external sources. Dale Willis expressed concerns that any operation outside of management’s authority could result in important issues being overlooked and lead to disastrous consequences (Hasson et al., 2007, p. 36). When Mike Fields bypassed his supervisor and directly approached COO Harry Mart with accusations against a fellow employee, it was because there were no established protocols in place.

The company and his co-workers were directly impacted by his actions. According to Engleberg and Wynn (2007), every member is influenced and affected by the actions of other members (p. 7). The situation remained unresolved and both Mike and the accused eventually left the company for different reasons. Additionally, a lacking component is a clearly defined communication process, which should be published and reviewed by management with employees. The training on open-door policy communication, providing guidelines for specific problems, has been given less priority.

According to Hasson et al., the Vice President of HR recommended delaying training. It is important to create a step-by-step protocol to inform all employees, from top to bottom, about reports like the channel-stuffing scheme. This will prevent the report from circulating without a resolution. Additionally, there were suggestions or omissions in communication resolution made by top managers with stagnant views.

The decision to leave out the ombudsman rule from the communication plan caused serious problems to go unnoticed and created a potentially disastrous situation (Hasson et al., 2007, p. 3). To improve the system for detecting misconduct, Galvatrens should implement the following recommendations. Despite CEO Chip Brownlee’s efforts to expand the company’s product range, allegations of misconduct highlight fundamental issues with the company’s policies and ethical standards.

A high turnover in a single department indicates a lack of communication. It is advisable for Galvatrens to encourage collaborative and energetic communication within and between all departments, fostering constructive and thought-provoking conversations. To ensure the quality of these discussions, a moderation team should be formed. This team will review and edit comments for clarity, length, and relevance. The moderators may delete comments that are overly promotional, mean-spirited, or off-topic based on their judgment.

It is suggested that the company review and modify its open door policy for reporting employee misconduct. The policy encouraged employees to approach their immediate supervisors or any manager at any level for assistance. However, employees had concerns about reporting alleged misconduct to management. Therefore, human resources should revise the policy to allow employees to report concerns to someone outside of company management.

The consulting firm’s suggestion of hiring an ombudsman may be the optimal solution. However, in promoting a cooperative work environment, it is advised that human resources seek input from employees before finalizing the revised policy.
Engleberg, I., & Wynn, D. (2010). Working in groups (5th ed.). Boston, MA: Allyn & Bacon.
Hasson, R.; Hardis, S; Shear; H.; Rowe, M; Robinson, J. (April 1, 2007). Why Didn’t We Know? Harvard Business Review, Case number R0704A.

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