Fluent Essays

Attached are all the relevant documents needed to complete a case analysis. Also there is a .pdf which can be used as a reference document, also attached. In the attached document there are highlighted areas in yellow. These are the required readings and can be used as cited references. There is no need to APA cite, just put the appropriate section in parens (). For example, if information from the Resume Fraud section is used, put (Resume Fraud) after the text as the cite. This paper should be original as turn it in will be used to review. Project 3: Leading Ethically and Legally at Home and Abroad Step 1: Perform Ethical Analysis Vice President Dodger has provided you with the Electropic LLC case file , which details recent events at Electropic LLC, one of Colossal’s technology companies. He has asked you to analyze the legal and ethical aspects of the case. The ethical aspects of the situation seem complex, and you realize that you need a structured way to think through the various resolutions to the case and their implications. You know that there are many different schools of ethical thought and a variety of frameworks or approaches for analyzing ethical problems, but you decide that the best approach to this particular situation is Badaracco's right versus right framework . You’ll start by working through the right vs. right ethical analysis, considering the various options for action and the winners and losers for each option. What are your recommendations for the best ethical course of action? Be sure to analyze all four questions and all three tests of Badaracco’s framework. When you've finished analyzing the ethical aspects of this case, continue to the next step, in which you'll consider any legal issues that could affect your decisions. Electropic LLC Notice: Contains Confidential Information Electropic LLC is a respected and profitable website design and hosting company in Colossal Corporation's technology group. Melissa Aldredge has been a project manager at Electropic LLC for several years and was recently considered for promotion to a senior project manager position. Ultimately, the promotion was awarded to another long-term employee, June Pyle. June and Melissa have a history of one-upping each other and sharing an internal rivalry within the company. Melissa recently reported internally that she had learned that June, who was given the promotion over her, had never finished her MBA degree. All of June's business cards have "MBA" after her name, and the signature line of her email reads "June Pyle, MBA."   Electropic LLC's policy manual states that potential employees must submit transcripts for all degrees listed on their resumes. However,  this requirement was not in place 10 years ago when June Pyle was hired. June has a history of stellar performance and was promoted not because of her MBA, but because of her consistently exemplary work. June has received excellent performance evaluations during her time at Electropic LLC, and her leadership has led to increased revenue as well as positive press for the company. Her record of success is what led to her promotion. As a result of Melissa's report, the director of human resources sent an email to all employees who were hired prior to the policy change requiring transcript validation, asking that they provide transcripts to validate their credentials. June did not respond to the director's request for transcripts and was called into the director's office. In a very tense and tearful interview, June confessed to the director that she does not have an MBA. She admitted that she was 12 credits away from completing her degree, but when her dad got sick, she had to drop out. She said that she really needed a job to support her family and she put the MBA on her resume hoping it would help her find a job. She shared that she always intended to go back to school but became so busy with work that she didn’t have time. Once she was hired, she felt that there was no turning back and she had to keep the lie going by placing "MBA" in her email signature line and on her business cards. An MBA was not a requirement for the assistant project specialist job June was hired for 10 years ago, but four years ago, it was made a requirement for the senior project manager position she holds now. Two of the current senior project managers do not have MBA degrees because they were promoted before this requirement was in place. Vice President Dodger has asked you to write a memo with your recommendations on how human resources should handle this issue. June has a record of excellence with Electropic LLC, and her superiors would be unhappy to lose her; however, ethical practice and the law must be considered here as well. Badaracco’s Right vs Right Framework There are a variety of ethical frameworks that may be used instrumentally to analyze those difficult questions that businesspersons must regularly address. Some ethical issues present clear yes or no answers, a clear right and wrong, but other ethical issues are much more difficult to address. Professor Joseph Badaracco developed a framework for addressing those more difficult questions, and particularly those questions of "right versus right"; that is, when an ethical dilemma could result in multiple "right" responses, based in attempted adherence to multiple, conflicting ethical values that cannot simultaneously be fulfilled. Badaracco's framework aims to resolve ethical dilemmas involving conflicting yet legitimate moral values. Step 2: Perform Legal Analysis As you continue to sift through and consider all the details of the Electropic LLC case, Vice President Dodger reaches out with an important note: INBOX (1 NEW EMAIL) From: Kenneth Dodger, Vice President, Colossal Corporation To: You Just wanted to remind you that in addition to the ethical aspects of the Electropic LLC situation, there may be legal implications that the human resources department needs to account for before moving forward with any plan of action. To that end, you’ll need to review any relevant information about fraud and employment at will , that might affect what could or should be done about the situation at Electropic LLC. When you’ve worked through the possible legal implications and arrived at a recommended course of action for Electropic LLC's HR department, it's time to present your analyses, recommendations, and action plan in a report. Please use your outline and research notes to inform the writing of your report. That’s all for now. I know this is a tricky case. Thank you for your efforts. Ken Résumé Fraud Fraud, often called misrepresentation, is a very broad legal concept that incorporates a variety of types of fraud and misrepresentation, both civil and criminal. There are considerable variations across the states as to the specific categorization of types of fraud as either civil or criminal law violations, or both. The federal government criminalizes a variety of types of fraud including mail and wire fraud, bankruptcy fraud, and securities fraud. These federal laws apply to everyone in the United States, regardless of the state in which the fraud occurs. Although there is variation as to which explicit types of fraud are criminalized within each state, in all states, some types of fraud unquestionably carry both civil and criminal penalties. Résumé fraud is a specific type of fraud that may result in civil or criminal penalties, or both, depending on which state the fraud occurs in. In its most primal form, résumé fraud is a type of common law, civil fraud wherein the intentional misrepresentations of material facts are made in a résumé, and justifiably relied upon in the hiring of an individual for employment. In the absence of any statutory provision specifically addressing résumé fraud in a given state, the common law provides the remedy for résumé fraud typically in the form of damages (monetary compensation). However, many states have statutorily imposed sanctions specifically for committing résumé fraud. For example, in New Jersey, both persons and legal entities are prohibited from intending to deceive by falsely representing the receipt of a degree, credential, or certification, which one has not actually acquired "in connection with any business, trade, profession or occupation" (N.J.S.A. 18A:3-15.2). A violation of this provision is treated as a civil law violation, and each instance of résumé fraud carries with it a $1000.00 civil fine (N.J.S.A. 18A:3-15.5). On the other hand, in the state of Kentucky, "fraudulent use of an educational record" is considered a Class A misdemeanor, which is punishable by up to 12 months in jail and fines (KY Rev. Stat. Ann. 434.442). The Kentucky statute explicitly includes making false written representations for certain educational achievements, such as a degree, in employment applications. The states do differ as to how they treat résumé fraud, but whether it is treated as a civil violation or as a criminal violation, résumé fraud is a dishonest practice that should be avoided. At-will employees should be particularly aware that résumé fraud provides a justifiable basis for termination that may undermine otherwise legitimate arguments for wrongful discharge (or other exceptions to the employment at will doctrine). For contract employees, résumé fraud is often considered "just cause" for termination of an employee who would otherwise be protected from termination by contractual "just cause" provisions. Finally, in addition to the legal consequences of résumé fraud, the reputational damage of lying on a résumé could undermine one’s career prospects as it did for former Yahoo CEO, Scott Thompson, whose résumé represented that he had a double major, including a degree in computer science, from Stonehill College, a degree that was not awarded from until several years after he graduated. After being exposed by a Yahoo shareholder, Thompson stepped down from his position in disgrace (Mackay, 2012). References Mackey, M. (2012, May 15). Ex-Yahoo CEO Scott Thompson and seven other cases of resume fraud. The Huffington Post. Retrieved from http://www.huffingtonpost.com/2012/05/15/yahoo-ceo-scott-thompsons-resume-fraud_n_1516061.html Résumé Misrepresentations Robert Irvine’s Stretched Résumé  For many job seekers the first—and maybe the only—chance they get to impress a potential employer is a résumé. What are the ethics of presenting your qualifications on a sheet of paper? Robert Irvine is a muscled chef from England who you may have seen hosting the Food Network’s popular Dinner: Impossible. It’s a good job. The TV show generates free publicity for his cookbook Mission: Cook! and affords him the credibility to open his own restaurants. That was the idea he brought to St. Petersburg, Florida, in 2008. His was to open two new restaurants in South Florida: Ooze and Schmooze. Ooze was going to be the accessible, entry-level place, and Schmooze the highbrow complement. His biography—the summary of his professional life and experiences that he presented to potential investors—was impressive. According to the St. Petersburg Times, he advertised his résumé as including the following credentials (Montgomery, 2008): · a bachelor’s of science degree in food and nutrition from the University of Leeds · royal experience working on the wedding cake for Prince Charles and Princess Diana · a title of knight, as in Sir Robert Irvine, Knight Commander of the Royal Victorian Order, handpicked by the Queen · several Five Star Diamond Awards from the American Academy of Hospitality Sciences · a tenure as a White House chef. Everything came to an end, though, at least temporarily, when the Food Network fired him for lies on his résumé. Here’s the truth about the items listed above: · The bachelor’s of science degree? According to a press officer at the University of Leeds, “We cannot find any connection in our records between Robert and the university.” · The royal wedding cake? Well, he did help pick some of the fruit that went into it. · The knighthood? No. · The Five Star Diamond Award? True, but it’s not the AAA’s prestigious Five Diamond Award or Mobil’s five stars. The American Academy of Hospitality Sciences is actually a guy’s apartment in New York, and the award is granted to anyone who pays a fee. · White House chef? Kind of. But he didn’t prepare sophisticated dishes for the president or anything like that; he cooked food for the cafeteria line, serving military workers at the White House. Certainly, Robert Irvine isn’t the first guy to stretch his résumé, but he does an excellent job of exploring the many ways people can misrepresent themselves when trying to get a job. Generally, there are two kinds of résumé abuses. Positive résumé misrepresentations are those items on a résumé that simply aren’t true: · false credentials—These are certificates of accomplishment that don’t exist. Irvine said he had a BS degree. He didn’t. This kind of misrepresentation is especially tempting for job seekers who didn’t quite finish their degree. One of the obvious practical problems is that claims like this can be verified or disproven by human resource departments. (Or, as in Irvine’s case, by inquiring newspaper reporters.) · false experience—Untruthfully claiming to have participated in projects. Irvine asserted that he’d been a White House chef, meaning he’d planned sophisticated menus and prepared dishes for dignitaries. He didn’t. He cooked assembly-line food in the cafeteria for White House staff workers. · embellished experience—This is the easiest kind of résumé misrepresentation. Irvine really did work on the royal wedding cake, but only picking fruit, not actually making it. His claim, therefore, isn’t directly false, but incredibly misleading. The same could be said about the Five Star Diamond Award. While technically true, it’s not the meaningful award that people imagine it to be. · false chronology—Anyone who’s suffered long periods of unemployment—or just been fired from a job and taken a while to find another one—has surely been tempted to adjust the dates on their résumé to make it seem as though they went smoothly from one post to another. · false references—Listing someone to vouch for your experience who really won’t or can’t. Irvine said he’d been selected by the Queen of England for a knighthood. It never got to the point where someone actually called her to ask, but if they would’ve, she would’ve drawn a blank. Of course people don’t normally list royalty as a reference, but in everyday life, it’s easy to commit the same misrepresentation. One fraternity brother could list another as a former boss, for example. Negative résumé misrepresentations are those items that would appear on a complete résumé, one listing all your working experience, but that conveniently get left out of the one you submit to a potential employer. If you were fired from your first job at McDonald’s years ago because you kept forgetting to take the fries out of the oil pit, no one’s going to object when you drop those months off your work history. On the other hand, if, up until two months ago, you were in charge of the vehicle fleet for a hotel and you were fired for taking your girlfriend out in the company limo after hours, leaving that off your résumé is misleading to new prospective employers. In the case of Irvine, things worked out for him in the end. After he publicly recognized the truth and cleaned up the most outrageous resume claims, he got his TV show back. The Ethics of Stretching the Résumé It’s hard to define all the ethical lines dividing what should and shouldn’t be included in a job applicant’s résumé, but steps can be taken to control the situation. If you’re sitting at your desk trying to figure out whether there should be any deleting, fudging, or exaggerating, two questions can help get a hold of the situation: 1. Who will be affected by my decision? 2. Does it matter what everyone else is doing? The first person affected by your decision is you, and everyone’s most immediate ethical responsibility is the one they hold to themselves, the responsibility to respect their own dignity and abilities. One way of taking that responsibility seriously is to look back at the jobs you’ve held and ask what kinds of tasks they entailed and how those experiences and the skills taken from them might be stated in a broad and appealing way. Irvine probably went overboard when he translated the fact that he’d chosen fruit included in a royal wedding cake into the claim that he participated in assembling and cooking it. But it also seems like it’d be a mistake to say that he’d been a fruit picker on a wedding cake job. In the culinary world, his was important fruit picking. Irvine’s mistake, in other words, wasn’t that he tried to make himself look good, it’s that he couldn’t find a way to do it without essentially lying about his experience. The duty to present yourself positively to potential employers may also justify the decision to leave certain, let’s say, unfortunate aspects of your professional life off the résumé. Irvine doesn’t talk much about how his endeavor to create restaurants in St. Petersburg fell apart in a sorry mess. If tomorrow he goes out and tries to stir up investors for a new pair of restaurants somewhere else, he has an obligation to be honest with them about what happened last time. But if he’s looking for a job as a TV cook, or just as a cook in a restaurant, then he may be able to justify leaving that bad episode unmentioned. The reasoning? The fact that he’s bad at mounting restaurants doesn’t mean he’s a bad TV personality or an error-prone cook. The one job has little in common with the others. So if he’s applying to be a cook, he could possibly leave the negative information about his other business ventures out based on the idea that it’s simply not applicable to the employment being sought. The duty to yourself, finally, points toward a résumé presentation that sets your accomplishments and skills in boldface while not dwelling on extraneous shortcomings. Another person affected by your résumé decisions—the choice about how much truth to tell and hide—is the person doing the hiring. If you claim experience you don’t really have and skills you don’t possess, the supervisor who oversaw your contracting won’t just be disappointed and angry as he or she watches you stumble and trip over tasks that should be easy. The botched hiring will also reflect negatively on him when superiors evaluate his or her performance and make decisions about pay raises and promotions. They are going to suffer because you lied. There is, in other words, a loser when you scam to get a job that you’re not really qualified for. Moreover, that harm accrues to the company as a whole. Maybe costs will increase because more training than expected will be necessary. Maybe an account will be lost when you fumble an assignment that should be automatic. Your potential future workmates also have a stake in your application for a job. If you claim, as Irvine did, to have worked on the Charles and Diana wedding cake, it seems fair for your boss to assume you’ll be able to manage producing first-rate cakes for ordinary people. If you can’t, if you have no idea how to serve up even a simple layer cake, someone else on the team is going to have to step in and do your work for you. They probably won’t get your paycheck at the end of the month, however. Other applicants for a job also have a stake in your own application. It’s a competitive world, and while you’re the one who can best make the case for your ability, making false claims doesn’t just give you an opportunity you may not otherwise receive: it takes an opportunity away from someone else. What’s Everyone Else Doing? The first step in getting control of your résumé’s relation with the hard truth is working through how any particular decision affects those involved. The second step is determining whether it matters what everyone else is doing. The question is important because applying for jobs doesn’t happen in a vacuum. If everyone stretches their qualifications to the extent Irvine demonstrated, then obviously you may want to consider whether you need to do the same just to get a fair shake. A web page with a very truthful URL, Fakeresume.com, takes up the question about how much fibbing is going on out there: “Over 53 percent of job seekers lie on their résumés. Over 70 percent of college graduates admit to lying on their résumés to get hired. Can you afford not to know the techniques, tricks, and methods they use?” (“The Ugly Truth,” n.d.). Fair question. Of course no one knows exactly how much cheating goes on, but as Irvine exemplifies, there’s definitely some out there. So should you get in on it? The argument in favor roughly corresponds with the web page’s pitch. If everyone’s doing it—if exaggeration is expected—then employing the same misrepresentations that guide everyone else isn’t really lying. Like driving sixty down a fifty-five miles-per-hour highway when all the other cars are going that fast too, your exaggerations are following the rules as everyone seems to understand them. From this point of view, you may even have a duty to exaggerate, because not doing so, as the web page claims, isn’t being an ethical hero, it’s just being outsmarted. And in a competitive environment, you at least have the moral obligation to not let yourself be snookered. On the other side, where do these percentages—53 percent, over 70 percent—come from? The web page doesn’t say, and if they’re not true, then doesn’t the whole argument reduce to an excuse to lie? In the case of Fakeresume.com, it couldn’t be more obvious what’s going on. The site is offering you a way to not tell the truth and not feel bad about it. Instead of offering moral guidance, it’s inventing a way for you to justify taking the easy path, to justify padding the résumé without having to consider whether that’s the right thing to do. In the midst of résumé-stretching dilemmas, what other people are doing matters. Hiring is relative; there’s hardly anyone who’s perfect for any job, and recruiters take the applicant who’s best suited. Your obligation—to yourself and to the recruiter—is to show why you may be the best suited of the applicants. That may mean (using the language of Fakeresume.com) using the résumé-enhancing techniques commonly employed. It doesn’t mean, however, just imagining that everyone else is lying their pants off and then using that as an excuse to lie yourself. Résumé Verification and the Law One problem Robert Irvine faced was his very public personality. To stir up interest in the restaurants he planned for St. Petersburg, he had to stir up interest in himself. All the commotion drew the attention of a local newspaper reporter who ended up blowing the whistle on the résumé exaggerations and concoctions. More ordinarily, job applicants don’t need to worry about reporters prying into their claims. Most medium and larger companies do, however, pass résumés through human resources departments which typically confirm the significant, objective claims of job seekers. Items like degrees obtained can typically be verified, as well as dates of previous employment and job titles. Every company will follow its own internal guidelines, of course, so it’s impossible to make a table listing the misrepresentations that will and won’t slip through. But it’s certain that objectively false information may come to light sooner or later. If false information does come to light, are there legal complications? Probably not. Because résumés aren’t binding, signed agreements between the applicant and employer, they’re generally protected by free-speech guidelines. In the case of Irvine, if he claimed he was Superman, there’s nothing the police could do about it. That said, efforts have been made to take some action against the most extreme cases of résumé misrepresentations. A number of legislative measures have been proposed to punish those who lie about a military record and honors received. In Washington State in 2006, legislation was advanced to fine and briefly imprison applicants found guilty of claiming advanced degrees they didn’t actually earn, though the measure ultimately failed (Heckman, 2006). Most résumé misrepresentations don’t cross into illegality. This is one of those areas in the business world where legal right and wrong diverges clearly from ethical right and wrong. Ethical Egoism and Résumé Misrepresentations Ethical egoism means your moral responsibility is to act in your own interest no matter what that may require. This provides a license for outright résumé invention (a false BS degree and imaginary knighthood for Irvine). But, as is always the case with egoism, the question must be asked whether job seekers really serve their own interests when they claim things that may later be revealed to be false or when they land jobs they later won’t be able to perform because their qualifications were fake. One specific warning for the egoist comes from the admissions department at the Massachusetts Institute of Technology. One of the world’s elite universities, the task of selecting each year’s freshman class is as daunting as it is important for a school dedicated to preserving its reputation. The head of that office in 2007 was Marilee Jones. One of her central skills was the ability to distinguish high schoolers who’d truly excelled from those who got great grades by taking easy classes. Her widely admired skill, in other words, was filtering out grade sheets (which are students’ résumés) that misleadingly stretched the students’ classroom accomplishments. She went on using that skill until it was discovered that twenty-eight years earlier, when she’d first applied to work at the school, she’d invented a few degrees for herself. She was fired on the spot (Bombardieri & Ryan, 2007). Employment at will is a doctrine of common law that allows either the employee or the employer to terminate an employment relationship at any time, for any reason, with or without notice, and even for a morally reprehensible reason, so long as the ending of the relationship does not fall into an exception to the employment-at-will doctrine. Employment at will is the prevailing legal doctrine concerning employment relationship termination in 49 US states (not Montana). In the overwhelming majority of the United States, employment at will and its exceptions govern the rules by which one may legally terminate an employee. The generally accepted exceptions to employment at will include · express contract, · implied contract, · promissory estoppel, · public policy violations, and · good faith and fair dealing. We discuss these five exceptions below. Express Contract Exception If an employer terminates an employee in violation of the terms of an express contract between the employer and employee, then the employee can sue the employer for breach of contract (and, in some states, wrongful termination). For example, an employment contract guarantees that the employee will be employed by the employer for a definite duration of time, with cognizable boundaries, such as a "one-year period" or "for six months." The employer terminates the employee before the stated period has expired, and that termination is not otherwise permitted by the contract. Likewise, consider a case where an employment contract states that an employee can be terminated only "for cause" or "for just cause," and the employee is terminated without cause. Implied Contract Exception Implied contracts are contracts created by the conduct of the parties, which include any representations or assurances made by the employer prior to or during the term of employment. In some states, an implied contract is an exception to the employment-at-will doctrine. For example, if an employer provides an employee handbook to a new employee, the provisions in the handbook may be considered part of the contractual relationship. Often, such handbooks outline a procedure for performance review, discipline, and discharge of the employee. An employer who fails to live up to procedural obligations prior to discharging an employee could be liable. Promissory Estoppel Exception In many states, promissory estoppel acts as an exception to the employment-at-will doctrine. That is, when an employer makes a promise to an employee of employment or a period of employment, and the employee relies on that promise to his detriment, and it leads to injustice, then an employee may be able to have that promise enforced regardless of employment at will. For example, John is offered a job with Widget Co. He discusses with Widget's manager that, to take the job, he needs to move from California to New Jersey and give up an already lucrative position with benefits. The manager assures John that he will have gainful employment and a substantially larger income with Widget Co. for at least a year if he makes the move. In reliance on this promise, John quits his job and moves to New Jersey to begin work at Widget Co. After one week, John is laid off. Despite being an employee at will, John may be able to recover under the theory of promissory estoppel. Public Policy Violations Exception Most states in the United States prohibit an employer from firing an employee if the reason for the action violates some readily accepted public policy. This prohibition prevents an employer from terminating an employee for exercising a legal right, including a right contained in state and federal laws; or for failing to perform an illegal act for the employer. Firing an employee for performing some public duty (showing up to jury duty), for exposing illegal conduct (such as reporting violation of some law to the employer or a government agency), or for exercising her rights as a US or state citizen (such as voting) are all against public policy. This exception to employment at will encompasses the inability to terminate an employee if doing so would violate her state or federal statutory rights. If an employee is terminated because of her race, this may be a violation of Title VII of the Civil Rights Act of 1964, and so an otherwise at-will employee would have a claim against the employer for violating a federal statute. Moreover, it is against public policy to terminate an employee for refusing to commit an illegal act, such as a crime. Good Faith and Fair Dealing Exception A minority of states impose upon the employer a duty to exercise good faith and fair dealing in regard to all employees. This doctrine, to varying degrees, means that an employer must treat an employee fairly in the decision to fire her. This generally means that an employer would violate these duties in firing an employee without due cause or justification. The preceding five generally accepted exceptions to employment at will allow injured parties to seek recovery even in the face of the employment-at-will doctrine. As such, they limit the circumstances by which an employer can terminate an employee. Step 3: Write Your Electropic LLC Report Use your outline and research notes to prepare your report. Be sure to meet the following requirements laid out by the VP: · Using Badaracco’s right vs. right framework and your legal analysis, prepare a report. · Include APA-formatted in-text citations and an APA-formatted reference list (do not format the body of the report using APA style, just the reference list). See references and citations  for details. · Include in your report a detailed analysis of all four questions and three tests of the Badaracco framework; also include an analysis of the legal issues. · Include a specific recommendation on what actions, if any, HR should take based on your legal and ethical analysis and conclusions. · The report should be no more than 10 pages (double spaced, 12-point font; the reference list does not count toward page limit). · Title your file using this protocol: lastname_Electropic_date.docx. Copyright 2002 Page 1 Lecture Text Joseph L. Badaracco, Jr.: Defining Moments* This will probably surprise many of you: I’m going to say very little about Enron. As I understand the Enron story, if you put aside the colossal scale of the collapse, and all the disruption and harm it caused to thousands of people—and that’s an enormous set of things to put aside—I don’t think it is a particularly interesting story. From what I’ve read in the newspapers, and I’ve tried to follow this very carefully and have gotten lots of inquiries from journalists, the folks at Enron and some folks at Anderson did a lot of things that were wrong. They shouldn’t have done them. It was clear what was right and what was wrong. And for the vast majority of people, there is very little value in talking about right and wrong. Most people fortunately have a sense of what the difference is between the two; for those who don’t, in most cases, it is often hopeless. You have to keep an eye out for them. If you find them in your organization, you must usher them toward the doorway. I’m going to talk about a different kind of problem, a different set of problems. And these are the kinds of problems which, in the years I’ve spent looking at managers who take their responsibilities really seriously, are the problems that when they recount them for you, you get a sense that their stomachs are tightening a little bit, that they’re breathing a little faster. It might be an experience that they learned from, something that they were glad they did once, but in many cases, the problem is something that they don’t want to relive again. These problems have a simple name. I call them “right versus right” problems. Let me give you a couple of examples. Let me start with one; since I’ve mentioned Enron, let’s talk about the bookend to Enron. If Enron is the biggest and worst of the corporate ethic scandals, let me talk just a little bit about the famous Tylenol episode of the early 1980s. I’m sure you’ve all heard the standard story. In the fall—I believe it was 1982—six people in the Chicago area died of cyanide-laced Tylenol tablets. James Burke, the chairman of the company at the time, has been widely praised as a hero for, in the standard phrase, “doing the right thing.” Burke is an alumnus of Harvard Business School. We have a case study of the Tylenol episode. He’s come back and talked about it. I’ve had the chance to interview him. And, like several of my colleagues, I’ve put a blunt question to him. I said, “Mr. Burke, look, what you did resurrecting the brand was phenomenal.” (Think about a brand that’s * Edited for clarity Copyright 2002 Page 2 been implicated in a series of deaths: That was phenomenal.) “But surely this couldn’t have been a difficult issue about doing the right thing. You had to get that product off the shelves. Other people might have died if there was more cyanide. You would have been litigated to death if you left even more of the product out there. You had to remove it.” Burke’s answer, surprisingly, in private conversations, is that it is largely true; the decision to pull the product was not a difficult one. But on one occasion he went on and told me a fascinating story that took place a couple of days before J&J decided to pull Tylenol. The company had decided it was going to pull the product, and Burke decided that he ought to come down to Washington D.C. and talk to two people. One was the head of the Food and Drug Administration; his company’s principal regulator. The other was the head of the FBI. He sat down with the two men. They said, “Look, Mr. Burke, we’ve thought about this a lot. We want you to leave the Tylenol out on the shelves.” Burke asked why. The head of the FDA said, “We’ve got Halloween coming up. We don’t want copycats to think that they can tamper with a product and basically be the tail that wags the dog of a big company.” And the head of the FBI, William Webster, said, “We don’t know whether this is terrorism or not, but the U.S. policy is ‘we don’t accede to terrorists.’ So could you please leave the product on the shelves?” Burke said, still says, that at that moment he does not know what he would have done. As a corporate officer, as a human being, he wanted the product off the shelves. As a citizen, he was being asked by the man who was responsible for the safety of foods and drugs, and by the chief law enforcement officer in the United States, to leave it out there. This was an unambiguous conflict between right and right. And what Burke says is interesting. He says, “I got lucky.” There was a knock on the door. Somebody handed William Webster a note. Webster read it. He talked with his counterpart. They said, “Mr. Burke, you can pull the Tylenol.” The note said that there had been another poisoning, this one in California, not Chicago—strychnine, not cyanide. They concluded that it wasn’t terrorism; that if it was copycatting, it was already underway. It was better to get the product off the shelves, in case any more of it was contaminated. But the key statement is Burke’s—to this day, he still doesn’t know what he would have done. Now, that’s a grand, once-in-a-career sort of right versus right problem. There are some that happen every couple of months, and I bet many of you have counterparts to the story I’m about to tell you. You’re at home one night. I’ll dress the story up a little. There’s a knock on the door. You open it up. It’s somebody you’ve worked with Copyright 2002 Page 3 who lives a couple of towns away. He actually works for you. He comes in and says, “Look, I’m sorry to interrupt. I just wanted to talk to you for a couple of minutes.” “Sure,” you say. “Come on in. Have a drink.” And what this guy says to you is he has found the house of his dreams. And he tells you that this is what he and his wife have been looking for. And they had to take a little money out of the kids’ college fund, and it’s going to be a really big mortgage. But, you know, since you’re the best boss he’s ever had and a good friend, and possibly even the best boss he could ever conceive of having, he just wanted you to be the first to know. But you know that there are layoffs coming to the company, and you know that this individual’s name is on the list. Now, I dressed this story up a little bit. But in the last ten years, I’ve been told four different versions of this exact same story. What’s the basic issue here? Well, you’re supposed to do the right thing, right? What’s the right thing? As a corporate officer, you have a duty of confidentiality, and under that duty you are not supposed to disclose the layoffs until all the ducks are lined up with HR and Legal, until it makes the most sense for the company to make the announcement. And I’m sure everybody in here can understand why. As a friend, you owe a debt to this person. If he were just about to jump off a financial precipice, wouldn’t a friend reach out and pull him back? By the way, maybe this individual has actually heard something through the grapevine and is implicitly asking you, “What’s really going on? Should I go ahead with this?” And if somebody asks you a question, you’re supposed to tell him the truth. So again, this is not right versus wrong. This is right versus right versus right. And then there are the everyday examples: the soccer game, the budget, and the relative you ought to visit in the hospital. That’s not right and wrong. That’s right versus right. These problems actually go back a long way and they have an interesting name. They’re sometimes called “dirty hands” problems. I want to tell you just briefly about the origin of that phrase. It’s the title of a play by the French existentialist philosopher, Jean- Paul Sartre, who lived and wrote in the middle of the last century. And his play, Dirty Hands, is set in Paris during the Second World War. Paris is occupied. There are three characters. There’s an older man who has run a Communist Party cell during the occupation. There’s a young man who has just joined. He’s a brand new recruit, and he’s full of idealism and zeal. And there is a woman in the play, so there’s a romantic rivalry going on between the two men for her affections. But the real rivalry is between the two men over the older man’s stewardship of this little unit. Copyright 2002 Page 4 At the climax of the play, the young man accuses the older man of selling out, of having done too many deals to keep this operation afloat. And what the older man says in response is the following: “How you cling to your purity, young man. How afraid you are to soil your hands. All right, stay pure. What good will it do you? Purity is an idea for a yogi or a monk. For someone standing on the sidelines wearing kid gloves.” He goes on to say, “Well, I have dirty hands. I have plunged them in filth and blood, but what do you think? Do you think you can govern innocently?” Do you think you govern innocently? I think that is such a powerful phrase. Do you think you can have real responsibility in life and just get served up one nice, slow underhand softball pitch, right versus wrong, one after another, and just do the right thing? The hard decisions that all of us can remember making are ones where one thing was right and another was a real obligation, and so was something else. I am really bedeviled about finding a way to do both. These are the hard problems. And by the way, these aren’t just a nice little category of interesting problems to talk about. They’re managerial problems, because when they arise in an organization, people watch very closely. The people working for you will watch you very closely. Why? Because when you’ve got to choose between right and right, when you’ve got to indicate what your real priorities are, then the veils, the masks, whatever we all wear, slip a little bit. People get a little better sense of who you are, how much they can trust you, what the rules of the game are, and how they get ahead. There is between bosses and the people working for them a close, continuous, silent, observational relationship. And in these right versus right moments, you catch some glimpses. People do watch very carefully. Now, I want to do two things with the remainder of my time. I want to put in front of you a framework for thinking about these right versus right problems, a practically-oriented framework, and then I want to talk a little bit about the book that’s in front of you and indicate how some of the advice and lessons and stories in that book help form an approach to these sorts of right versus right problems. But let me first of all give you a framework. And by the way, this isn’t Joe’s framework. It’s not a Harvard Business School framework. I will give credit where credit is due, because these questions of right versus right go back a long, long, long way. My understanding of human evolution is that at some distant point there was sort of a disgusting pool of some gunk that had carbon molecules in it. And then it was hit by lightning, or a volcano overflowed into it. And then some of these molecules started replicating. And then some of these replicators got big and Copyright 2002 Page 5 complicated, and then somehow some of them developed consciousness, and eventually they became us. There are lots of mysteries to be filled in in that story; but at some point, very, very early on there was this spark of consciousness. And people started thinking about the dilemmas of leadership and competing responsibilities. So I want to put in front of you—in the form of four questions—some of these ideas that have stood the test of time, not just centuries, but millennia. I want to make this as useful and practical as I can. Question number one, faced with the right versus right dilemma, get out a piece of paper and for each plan of action you have for dealing with this dilemma, create a list. Make a list of everybody who’s going to win and everybody who’s going to lose, of all the costs, of all the benefits, of all the risks, and net, net, net, net, net. Pick the plan of action that does the most good and the least harm. The origin of this way of thinking can be traced way back, but it was crystallized in the early part of the 1800s by a man named John Stuart Mill. It’s called utilitarianism, if you want to impress people. Mill said, “The essence of responsible behavior is doing whatever promotes the greatest happiness for the greatest number of people.” Mill went on to talk a little bit about happiness. He didn’t mean just stuff you could count or stuff that makes you feel good right away. He said happiness is everything that gives beauty and dignity and work and value to life. Do as much of the good stuff as you can and as little of the bad stuff, and you’re doing the right thing. And I think that if you talk with most serious, practical people who have real responsibilities in the world, this sort of cost-benefit way of thinking, this look-at-the-consequences approach to ethics is their natural, intuitive way of thinking. And it’s the first question. Which way of proceeding is going to get me the best net-net consequences? Why four questions if the first question is such a good one? I hesitate to do this a little but, Rick, you’re sitting right up in front here. And I come from Harvard Business School where we use the case method. I’m really not that comfortable lecturing. We use cold calls, Rick. I don’t know if you can all see Rick. He’s sitting up here with kind a slight, forced smile on his face. He’s thinking, “Why didn’t I come back a little earlier from lunch and sit in the back with some of my friends? I’m never going to do this again.” Rick, do you mind telling us roughly how old you are? RICK: I’m fifty-three. PROFESSOR BADARACCO: Fifty-three. Do you work out? RICK: I do. PROFESSOR BADARACCO: You work out. And how often? Copyright 2002 Page 6 RICK: It could be a little more frequently, shall we say. PROFESSOR BADARACCO: OK. You watch what you eat? RICK: Definitely. PROFESSOR BADARACCO: You watch it in the sense of regulating it, or you’re just sort of observing it as it goes by? RICK: No, I watch my diet very carefully. PROFESSOR BADARACCO: I’ve been putting all that information in this little hand-held device here, Rick. It’s connected to an actuarial table up at MIT that forecasts longevity. And it factors in some biotech breakthroughs as well. And it looks as if you could easily live, keep this up, another good fifty years, which would put you above a hundred. That’s the good news, Rick. The bad news is that Jerry and Doug have planned a little ceremony for you later in the afternoon, and they’re going to take a photo of you for your loved ones and give you a nice medal, and then we’ve got a Washington D.C. police officer who’s going to escort you out to a D.C. police ambulance. It’s going to take you to a hospital. In that hospital, we’ve got seven people on life support. They’re in urgent need of organ transplants. I’m assuming you’ve got the complete set. I should have checked that out earlier. I apologize. And we calculated again, the greatest good for the greatest number of people, certified MIT, online, real time. They’re going to live about 350 additional years. So we’re going to have a nice little ceremony. I see some of your coworkers are kind of getting into this, Rick. RICK: You have no idea. PROFESSOR BADARACCO: Rick, why can’t we do this to you? RICK: Well, I have a wife. I have a son. PROFESSOR BADARACCO: He says he has a wife and a son. RICK: They sure would like to have me around a little longer. PROFESSOR BADARACCO: They’d like him around a little longer. Well, that’s an empirical question. We could check that out. These other seven, Rick, are married. RICK: I see. PROFESSOR BADARACCO: Big families. RICK: You’re telling me I should have had more children. PROFESSOR BADARACCO: Well, actually, Rick, one of them is a Nobel Laureate. He’s already got one Nobel Prize. He’s working on a second, on infectious diseases around the world. RICK: My son is an honor student. Copyright 2002 Page 7 PROFESSOR BADARACCO: His son is an honor student. Very good. Rick, why can’t we do this to you? Anybody want to help Rick out? PROFESSOR BADARACCO: All right, phone a friend. And the answer is exactly right. Individual rights. In fact, what you do, Rick—you get this right—is you pound on the table, “I am a human being. I have rights. You can’t do this to me.” And everyone behind you would rise up like a chorus and say, “Of course you cannot do this to Rick.” The whole point about having a right is that people can't do things to you, no matter how spectacular the consequences are for everybody else. And the second big question you’ve got to ask that has always been asked in these right versus right situations is which groups and which individuals in which groups have rights that we must absolutely respect, that we cannot violate, whatever we do to wrestle with this right versus right problem? What’s the origin of this idea of rights? I don’t know. You can find it in the Declaration of Independence. If you stay here a couple of days you can go read it in the original version. You can go across any ocean, go south of this country. You can find ideas of human rights in the foundational political documents of many countries. But you can go back much further to every religious tradition that says human beings are special. They may have come out of a slime pool, but at some point, they got a divine spark. You can’t just chop them up, no matter how great the consequences are. And we in America today, people doing business in this part of the world today, live in a world where we are surrounded by rights: human rights, political rights, and economic rights, the rights of the people who invest in an organization to earn high, sustained, legal, risk- adjusted returns. So the second big question faced with right versus right has to do with whose rights you’ve really got to respect. Now, I suspect there’s some folks in the audience who have a mathematical background or engineering training, and you might be thinking that now we are pretty close to a really practical and analytical way of dealing with these problems. You could almost write a formula. Maximize the net-net consequences for everybody affected, subject to the constraint of not violating anybody’s rights. That sounds pretty good. Let me try another little story out on you. Again, true story, set in the Second World War, in a Greek village. It’s recounted in a book by a man named John Knowles. The book is called The Magus. Imagine that you were the mayor of a small Greek village. Your village has been occupied. A couple kids from your village got hold of a weapon, and they killed a couple of the soldiers in the occupying force. The commander of the occupying force is furious. He brings you, the mayor, into the town square. He rounds up a hundred women and children and puts them in the town square. He picks two kids at Copyright 2002 Page 8 random out of the crowd, puts them in front you about twenty feet away, and then he hands you a rifle. And he says, “Either you execute these two criminals for killing my soldiers, or I’m going to have my soldiers shoot into the crowd.” Now, what do you do? Assume we exclude all the sort of action/adventure options that involve swinging from ropes and concealed weapons. It’s a stark choice and in fact it was a real choice. Now, in terms of consequences—one hundred people or two—you should probably fire that rifle. In terms of human rights, they’re innocent. It’s wrong. You can’t take their life from them. The mayor, as the story goes, picked up the rifle, aimed it at the two kids, pulled the trigger, but all he heard were clicks. There was no ammunition in the rifle. And the mayor was told by the soldier, “If you’re going to kill the two kids, you’ve got to club them to death.” True story. Horrible story. The room always goes silent at this point. If we had more time, if we had smaller groups, and we were using a case method, I’d push you a little bit. To those of you who said, “Look, horrible choice, but I’d sacrifice two to save a hundred,” I’d say, well, shouldn’t you do the same thing here, even if you’ve got to do it in this awful way? What’s interesting is that people won’t let you off that easily. Try this yourselves sometime. Try this little story out. They’ll say, “Wait a minute. If you, as the mayor, as the leader of this organization, do something that despicable, that vivid”—I mean talk about dirty hands—“you’re going to destroy the soul of a village, the soul of the villagers.” Other people say, “If you do that, you’re going to get down on the same level as your captors.” One person said, “If you do this, what you’re going to do is you’re going to become an animal. It is subhuman.” And the mayor in the story—the story, I’m told, according the book, is real—put down the rifle. There was a line that he couldn’t cross. The soldiers did fire into the crowd. They did kill a few people and injured some others, but they spared most of the lives. So the mayor was spared the full horror of what might have happened. There’s a third question, and it’s implicit in the fact that the mayor put down the rifle, in these answers about becoming an animal, getting down on the same level as your captors. The origin of this question in the Western tradition goes back to Aristotle. In the East, it dates back to Confucius. For Confucius and Aristotle, ethics—doing the right thing, responsibility—were not really about finding the right rule. It wasn’t really about maximizing net-net consequences or doing what people were owed because of the rights they had. It was about character. It was about the character of individuals and the character of organizations. And basically, Aristotle’s answer to what a good decision is—it’s a decision made by a person with good Copyright 2002 Page 9 character, after reflection, in a good organization. And the right thing to do ought to be sort of instinctive. It ought to be spontaneous, not a matter of deliberation and calculation. Now, when you’re in an organization, when you’re in a situation like the mayor, you’re in a funny sort of place because you’re going to make an irrevocable decision. It’s part of his life, his career, and the life of this village. It is, in effect, a defining moment. And the third question, faced with one of these right versus right decisions, is what messages do I want to send about what I stand for, what we stand for, about our ideals and our principles going forward? It’s writing a little bit of your personal autobiography. But you’re not doing it on a word processor. You’re doing it with pen and ink. You can’t go back and change it. It is a defining moment. People will later talk. You won’t be there to clarify. They’ll say, “Well, we’ve had decisions like this before, and you know what so-and-so did.” Those will reverberate for a long, long time. So that’s the third question. It’s not about consequences. It’s not about rights. It’s about integrity. It’s about what individuals and their organizations or their units stand for. The fourth question will surprise you a little bit because of its origins. It’s Nicolo Machiavelli’s question. That’s right, I’m going to spend a little bit of time in this talk on ethics referring to the high priest of sleaze, and the stiletto between the ribs in the dark alley late at night, and the poisoned chalice, and all that good stuff. But let me ask you this, do you think Machiavelli’s name would be known to anybody today if all he said was that you can get ahead in life by being sleazy? I don’t think that that is news to anybody. I think the ancient Greeks knew that. The Israelites knew that. The Romans knew that. Little kids think that that’s how the world works, you know the little trail from the cookie jar—not the cookie jar, the Pepperidge Farm package, excuse me. They think they can get away with that kind of stuff, too. And you gradually try to teach them that isn’t the case. Most of us, unfortunately, know people who, because they’re smart and worked hard and had the right sponsorship and were sleazy, had nice long runs in life. It’s fortunate when they get their comeuppance, but sometimes that doesn’t come or it comes far too late. So the idea that all Machiavelli preached was that sleaze will get you ahead, that doesn’t have much traction. If you go to The Prince—and I suspect many of you can recall this from having read it in college— Machiavelli is saying something different. What he is saying is that sometimes if you’ve got real responsibility in an organization—he was talking about Renaissance Italian city-states—you find yourselves in circumstances where what you want to do as a human being, you may not be able to do and really take your responsibilities seriously. And then you’ve got to find something that will work. And Machiavelli’s enduring question is, what will work in the world as it is? That’s the fourth question. What will work in the world as it is? But Copyright 2002 Page 10 I want to come back to Machiavelli, because if you leave with just that question, people can easily misinterpret it. They can think, well, what will work in the world as it is? That means the lowest common denominator, the easy way out. They’re looking for the back door exit. That’s not Machiavelli. If you look at The Prince, the people that he admired, the people he called leaders were the people who were willing to take chances. Not reckless, but prudent chances. He said, “Fortune favors the bold.” So Machiavelli’s question, what will work in the world as it is, means what will work if you bring initiative and imagination and creativity, willingness to shake the tree, willingness to take prudent risks to the party? What will work then? Now, those are four questions, one about consequences, one about rights, one about character, one about pragmatism. That’s a way of getting an initial grasp of the problem. But you’re managers, and the key question as you full well understand is, once we’ve done some analysis, once we’ve thought about it, once we’ve talked with other people about what will work best, the payoff question is, what do we do? In fact, that’s part of the reason that Machiavelli’s question has really stood the test of time because he focused so sharply, so acutely, so realistically on what works in the world as it is. Let me just finish this little story of “the house of my dreams.” Whenever people bring this story up, I ask them, “Well, what did you do?” And surprisingly in every case, they have done the same thing. And it’s roughly what I would like to think I would do. They compromised. They bought a little time. They bent the rules a little bit. They said something like the following: “That’s wonderful. I hope everything works out great for your family.” They talk a little bit about how great the house is. But…there’s a but coming. And the “but” wasn’t “there’s a layoff and your name is on the list,” because that would violate confidentiality. The “but” was, “you know, I’ve even been a little nervous these days about how long I’m likely to have my job here. …