Case Analysis: The Skeleton in the Corporate Closet Introduction While gathering information for GPC Incorporated’s 75th anniversary book, a hired writer, Donna Cooper, and corporate archivist, David Fisher, discover that the company’s founder, Hudson Parker (Hud), had a secret compartment in his desk, which contained a document that may prove that he did not invent the plastic formula on which the company was founded. The document indicates that Hud may have stolen the formula from his close friend, Karl Gintz, which, if true, would make Hud a thief rather than a hero.
After this unwanted discovery, David presented the document to his boss, who then gave it to GPC’s CEO, Hudson Parker III, known as Hap. Background Hud and Karl were both chemistry students at Princeton. They became close friends and enlisted together when World War I broke out in Europe. Unfortunately, Karl was killed in France when his plane crashed. Apparently, shortly after Karl’s death, Hud mailed a letter to his girlfriend that included Karl’s hand written plastic formula.
That formula was the basis for GPC’s Parkelite product, which was a miraculous new formula for plastic which introduced an enormous technological advance in synthetic polymers when it was released. In 1938, Karl Gintz’s father filed and lost a lawsuit against GPC claiming that Karl had been the sole inventor of Parkelite. Problem Statement Hap must decide how to deal with the unwanted piece of information in a way that will serve the best interests of the stakeholders involved. If he decides to make the information public, he will need to evaluate when and how to release the information.
Analysis and Issues The relationship between Hud and Karl was described as close. They enlisted and served in the armed forces together, which would serve to bond their friendship further. These factors make it seem highly unlikely that Hud would not give Karl his due credit. The character attributed to Hud would lead him to credit Karl for his work. Since Hud is no longer alive to defend or explain his actions, Hap has no way of knowing for sure the extenuating circumstances that would lead Hud not to recognize Karl’s contributions or compensate his family for those contributions.
Research is required to gather as much information as possible on the chain of events as well as any possible extenuating circumstances. Hap cannot, in good conscience keep the document and Karl’s contributions secret, but he also will not want to risk damaging the belief his employees have in GPC. As he evaluates his options and strategies for moving forward, he needs to carefully consider how his decisions will affect the morale of his employees and other company stakeholders. Beliefs are meaningless unless they are matched by behavior appropriate to those beliefs.
The behavior exhibited by Hap and his management team is cumulative one way or another. It can build trust or it can tear it down. Hap has a moral obligation to consider how his decision is likely to affect the company’s stakeholders. In this context, the interests of the stakeholders become a major consideration and Hap’s decision must create the greatest good for all involved. He must thoroughly understand all the consequences and the steps required to avoid unjustified harm to others. Initially, it appears that stakeholders would be better served if the reputation of the company was maintained by withholding the information.
However, Hap must avoid using the stakeholders’ interests as rationalization for a cover-up. He should consider that the stakeholders will be better served if the company values of honesty and integrity are upheld. By bringing the information to light, Hap would enable the company to maintain the values it has espoused. Hap seems to call upon a servant style of leadership that focuses on the needs of his followers and encourages them to think for themselves and to engage in high levels of moral reasoning.
By presenting them with the information gathered in research as well as the information contained in the document, Hap will continue to empower employees with the ability to think and make their own decisions. He will also reinforce his commitment to continuing a culture of open and honest behavior at all levels of the company. If Hap is operating at the post-conventional level of moral development, he will act in an independent, ethical manner regardless of expectations from others inside or outside of the organization. He will make an ethical decision whatever the organizational consequences may be.
Recommendations Hap needs to gather the courage to stand up and be honest about the company’s past. Otherwise, it could have a negative impact on his company’s longstanding culture of honesty and integrity. He needs to get ahead of it and control it by carefully managing the timing and content of the information release to minimize the damage while still being open and honest. After Hap and his team have gained a complete understanding of the legal implications, they need to conduct the research necessary to gather as many facts as possible in order to convey the entire story.
It is advisable for them to hire a professional historian to thoroughly research and uncover as many of the facts and extenuating circumstances as possible. Revealing the truth and recognizing Karl’s contributions will produce a greater ratio of good to bad for Hap and for the company. Lying to cover it up will meet the immediate self-interest of protecting his reputation, his family’s reputation and the company reputation, but it will send a message to the employees that lying is acceptable in rationalized circumstances, which could then be socialized throughout the company culture. Hap is in the highest position of authority at GPC.
As such, he has an obligation to behave ethically. By resisting the temptation to cover-up his grandfather’s mistake, Hap will bolster his defense against rationalizing unethical behavior. In the long term, Hap’s decision to reveal the document and recognize Karl’s contribution will serve to reinforce the importance of honesty and integrity and prevent unethical behavior and its rationalization from getting a foothold in the company culture. References Bhide, A. and Stevenson, H. H. Harvard Business Review. Why Be Honest If Honesty Doesn’t Pay. Sep/Oct 1990, Vol. 68 Issue 5, p121-129.