Implementing and Auditing Ethics Programs
Implementing and Auditing Ethics Programs
Sandy Miller is one of only a handful of women who have broken through the “glass ceiling” into management in the construction industry. She was promoted to assistant plant manager after just three years with Unity Welding & Construction. She has proven to the men around her that she can handle the job, and she is now being toasted by assistant managers from other plants across the country. Jack, her boss, has been her advocate within the company, personally lobbying upper management on her behalf.
Unity is a national firm with 20 fabrication plants, mostly in the Southwest. The company does contract work for other firms that require welding or fabrication of metals into items used in the construction of aircraft, ships, bridges, and component parts for consumer durables. Each plant caters to a specific industry. Sandy’s plant fabricates parts for the automotive industry and is located in Arizona. Arizona is perfect location for Sandy because of her acute asthma. Once, when she was a teenager visiting relatives in Atlanta, she had to be hospitalized because of her reactions to the different plants and foliage. At the time, Sandy’s doctor had told her family that she would have fewer problems with her asthma if she resided in one of the more arid regions of the United States.
Sandy developed some innovative ways to increase productivity during her first six months as a manager. Among these was a “team concept” program that gives responsibility for certain projects to workers on the plant floor. The program offers incentives if employees decrease job times and increase profitability. With Jack’s full support, the program has been very successful. Worker salaries on these special projects have increased from an average of $15 per hour to $24 per hour, yet the company’s bottom line has continued to improve. Workers are starting to compete to get on special project teams. Consequently, Sandy’s first performance review after the promotion was excellent. Jack told her that if her performance continued, she would probably make plant manager in three to six years.
With competition among employees increasing, however, Sandy began to notice that some workers were starting to cut corners. Minor injuries were on the rise, and Sandy became concerned about how some employees were disposing of toxic wastes. When she informed Jack about her concerns, he wrote the following memo:
Attention: Workers on Special Projects
it has come to management’s attention that minor injuries are on the rise. Please review the Occupational Safety and Health Administration guidelines to make sure you are in compliance. In addition, there are rumors of improper disposal of wastes. Please read again the statement from the Environmental Protection Agency. Finally, congrats to Special Project Team Wolf. Profitability on your job increased 8 percent with an increase of $4.50 an hour for each member of the group. Great job!!
Shortly after Jack sent out the memo, the automobile industry went into a recession. Some of Sandy’s workers were to be laid off. Sandy went through the records and found that some of the workers designated for termination were among her most productive. When she pointed this out to Jack, he said he’d take care of it. By calling in some favors, Jack was able to save the workers’ jobs, and no pink slips went out at Sandy’s plant. Jack and Sandy’s efforts to save jobs soon became a hot topic throughout the plant grapevine.
A few months later, in November, the special project teams were working especially hard. Sandy noticed that the teams with the highest hourly wages were also the ones that were cutting corners the most. She ran a spot inspection and found major quality problems with the products, as well as pollution problems. She also learned that several teams had “procured” software from the competition to reduce their production times. Sandy realized that something needed to be done quickly, so she went to Jack.
“Jack, we’ve got some major problems,” she told him. “Quality has decreased below our contract’s specifications. I’ve got workers cutting so many corners that it’s just a matter of time before someone really gets hurt. And to top it all off, some of the special project teams have gotten a hold of our competitor’s software. What are we going to do?”
Jack looked at Sandy and said, “Nothing.”
“What do you mean, nothing!?” asked Sandy.
“Let me explain something to you,” Jack responded calmly. “We’re in a recession. The only reason 20 percent of our workers still have jobs is that our costs are down and our production is way up. I know quality is down; I’ve doctored some of the quality report forms myself. I also know about the software. Sandy, the only reason we’re still working is because of the special projects program you implemented. And I’ve got news for you—production orders are going down in December. If we lay off the productive workers, we cut out the lean and save only the lazy workers we can’t fire because of seniority. And, have you ever fired someone around Christmas time? It’s not a pretty sight.”
“So I’ll tell you what you’re going to do. Sandy, you’re going to forget about OSHA, the EPA, and the software, and you’re going to doctor up the quality-control reports—because if you don’t, we’re both out of jobs. Have you ever tried getting a job in a recession? With your asthma problems, even if you did find a job, insurance would never cover your treatments. You owe me, Sandy. Don’t worry. When the recession goes away, we’ll straighten everything out,” said Jack.
Sandy left Jack’s office and thought about her options.
Each answer must be at least 150 words
1. How have Sandy’s actions contributed to employee commitment and organizational performance?
2. What are the ethical and legal issues?
3. What are Sandy’s options?
4. What Would You Do?