VIDEOTEK CORPORATION
Jeremy Campbell is the chief executive officer and chairman of a relatively young, publicly held Boston high-tech company we'll call VideoTe !for video technology"# VideoTe was founded in $%& by (arl )ant*, who created a device that could convert blac and white computer monitors into color monitors, which he sold for +&# The company started with two people and grew uicly to a core of . people who respected )ant* as a visionary# /ome in the founding group described him as a 0deep-thining, 0deep-thining, spiritual type of person, with high ethical standards#0 The company culture evolved naturally out of his style# 1t was a hard wor2high trust culture# 3ood people were hired and trusted to wor hard and well for the company, and they did# 1t was common for people to wor 4 to & hours a wee for VideoTe# They believed in what they were doing and they believed in their product# The company grew explosively to $, employees and over +5 million in sales in $%%6# 1n $%&%, when the company had achieved approximately +6 million in sales, it went public# 7 professional manager, Campbell, was recruited from a large company to bring operational sanity to this small company that was growing out of control# 8e was named president and C(9# )ant*, now a multimillionaire, happily became a member of the board# Campbell brought in his own team--big company types:to manage the company# 8owever, he recogni*ed the value of Videote's culture, and he vowed to perpetuate it# )anagement today still prides itself on the company's flat organi*ational structure !e#g#, few layers of management" and efficient, open communication via the company's e-mail system originally set up by (arl# Just about everything that needs to be communicated within the company is communicated by e-mail# (mployees who are on the road eep in touch via their laptops# 1n support of communication openness, a uniue feature of the system allows messages to be sent anonymously# But all is not rosy at VideoTe# ;ot long after Jeremy's arrival, long-time employees began to uestion top management's commitment to all aspects of the culture# They felt that he especially lied the 0hard wor0 part, but what happened to 0high trust0< /omething was amiss# Jeremy seemed to be big on words but short on follow-through# 8e was doing some things that seemed highly uestionable and supporting the uestionable conduct of his friends# The ey uestion seemed to be, 0Could this top management team be trusted<0 =inally, the company has been experiencing a slowdown in growth# 1t needs new products to sustain its growth, but so far new products introduced under Jeremy's leadership have had disappointing results# =ollowing are two ethics-related e-mail messages# The first is a message sent to all employees by Jeremy Campbell in response to an incident of unethical behavior that the grapevine was bu**ing about# The second communication is an electronic mail message also sent to all employees a month later by an anonymous employee#
(-)ail Communication =rom the Chairman and C(9> =rom> JeremyCam?VT@ $-)7A-$%%% To> 7ll /taff /ub> (thical Conduct# 7ctions, ;ot ords#
The VideoTe Dhilosophy is a blueprint for action, a template for daily life at VideoTe# The second we forget that, we are vulnerable to internal challenges that threaten the very foundation of our continued success# 9ne precept of the VideoTe Dhilosophy must not be compromised under any circumstances> e live and wor ethically# 1t is imperative to remind ourselves of certain ey values which support this commitment> The goal of any business is to mae a sound profit# 9ur dedication to uality will help us reali*e that goal# e do not compromise our integrity in the name of profits# VideoTe is changing the way people do business# Because we truly have an impact on people's lives, we must set a positive example of leadership and credibility in all things we do# e are honest and fair in all transactions with our customers, suppliers, shareholders, and each other# 7s specific challenges to these values have arisen, we have addressed them swiftly and decisively# 1n order to maintain focus on ethical behavior throughout the organi*ation, 1 have formed a tas force consisting of Joe Eonaldson, Bill /yes, 7lan 3olden, and Joyce (ldridge# This group will examine the following issues in depth and provide me with specific recommendations for corrective action> •
• •
Aelationships between VideoTe employees and customers and suppliers 9utside business activities of VideoTe employees Drotection of company assets and intellectual property rights
Beyond your own conduct, you have an obligation to report circumstances which you believe to be in conflict with VideoTe's ethical standards# 9ur ethics committee--composed of Joe Eonaldson, Feslie Bolton, 7lan 3olden, and Joyce (ldridge--has been established to hear these reports and recommend the appropriate response# VideoTe has been successful because of our ethics, not in spite of them# 9nly by remaining true to ourselves--resolute in our beliefs and consistent in our actions--will we continue to fulfill our mission# This reuires both courage
and wisdom, the very same ualities that have made us the company that we are today# Jeremy
(-)ail Communication from 7nonymous (mployee =rom> /(CA(T?VT@ $-7DA-$%%% To> 7ll /taff /ub> Dreliminary Aeport from VideoTe (thics Committee The VideoTe ethics committee, consisting of Joe Eonaldson, Feslie Bolton, 7lan 3olden, and Joyce (ldridge, has been meeting to ensure that all VideoTe employees act in the most ethical possible manner# e must all remember the timeless words of our president Jeremy Campbell> 09ne precept of the VideoTe Dhilosophy must not be compromised under any circumstances> e live and wor ethically#0 1n light of this, we have prepared the $%%5 /pearshaft of (thics awards for cases of outstanding ethical behavior within VideoTe# =or instance, the ethics committee has received nominations from a few employees for one particular director of VideoTe who is also a maor stocholder in one of VideoTe's customers, and whose son, a former employee of VideoTe, is also involved with this customer# )oreover, according to these employees, VideoTe has spent large sums of money and plans to spend even more to develop products for this customer, despite the fact that they have not lived up to the terms of their initial agreement with VideoTe# 8owever, to avoid the slightest tiniest hint of a conflict of interest, the director in uestion stepped out of the meeting when the board of directors voted to approve the deal# ell, he didn't actually step out of the room, but he didn't vote on it, and that ualifies him for the 3olden /pearshaft of (thics# (ven if VideoTe eventually loses money on the deal, we can still be proud to have lived by the highest of ethical standards# =rom another employee who even read the annual report, we learned that the eight-person board of directors voted in $%%5 to give all seven of the non-employee directors stoc options# e thin that it was very important that the directors get these stoc options# The directors do not have nearly enough money# 1n fact, some of them are practically living on the brin of poverty, or at any rate on the brin of being merely well off# =or the eight of them to generously give the seven of themselves these options was the least they could do# 7fter all, the options are only worth
+&, among them# Because of this generous and self-sacrificingmove we are awarding the entire board of directors the /ilver /pearshaft of (thics# Eon't believe the rumor that top management has been inconsistent in ethical word and deed# The malcontents who are spreading this rumor are woefully misinformed about a recent incident# 7s everyone nows, 7my )asterson has been one of our finest sales representatives for several years# 8owever, her commitment to the firm recently came into uestion when she steadfastly refused to release customer confidential information, even when encouraged to do so by some highly placed VideoTe managers, and even when releasing the information would have clearly contributed to VideoTe's bottom line# ;or would 7my accept the +$, top management offered her to go uietly# The entire top management team has been awarded a Bron*e /pearshaft of (thics for their unending support of unuestioning loyalty to the firm# !By the way, donations to help 7my defray her legal expenses on her unust discharge lawsuit may be sent directly to her home#" /adly, it has also come to our attention that some employees have said that our 8uman Aesources Dolicies do not live up to VideoTe's ethical philosophy# ;othing could be further from the truth# The 8uman Aesources Dolicies have been reviewed and considered as broadly as possible within the company# =or instance, the company policy on nepotism was carefully evaluated by both Jim and Eana /wift# The company policy on termination of employees was scrutini*ed by a tremendous number of VideoTe employees within the B and TC Eivisions Gtwo new product divisions that have been shut down, resulting in millions of dollars in losses and hundreds of layoffsH# The ethics committee will also be inviting the employees who made the /pearshaft of (thics nominations to personally review the termination policy, as soon as we can learn their names# =inally, VideoTe's policy on fair compensation was exhaustively studied by Jeremy himself, with the assistance of Business Week maga*ine, and he said he is fully satisfied that VideoTe is paying fair compensation# There are so many outstanding feats of ethical behavior within this company that we are sorry we can honor only an outstanding few# e hope that this will inspire everyone within the company to try harder in the coming year to live up to VideoTe's high ethical standards# Fastly, we offer a few words from Jeremy himself> 01 am personally chagrined that anyone could have any perception that any VideoTe employee would do anything unethical# hoever you are, you had better ust change your perception, BusterI0 Joe Eonaldson, Feslie Bolton, 7lan 3olden, and Joyce (ldridge--;9TI 7pril =oolsI
Case uestions> $# (valuate Jeremy CampbellKs e-mail communication# 7ssume that this was the only LformalM communication employees had received from him regarding ethics !aside from a LTen CommandmentsM N type brochure handed to every employee at orientation"# Eo you thin email is an appropriate medium for this message< hy or why not< 8ow would you evaluate the content of the communication itself< 5# ;ext, thin about the anonymous e-mail communication# 7ssume that this communication represents the thining of a large number of other employees, not ust a lone dissenter# hat does it say about the alignment or misalignment of VideoTeKs ethical culture< =or example, what does the communication say about the perception of ethical leadership, reward systems, honesty and decision processes in the firm< .# /hortly after this anonymous communication was sent, the ability to send anonymous communications was eliminated from the firmKs email system# hat ind of symbolic message do you thin that action sent< 6# (arl )ant*, the founder, was a cultural hero while he ran the company during its early years# 8e had created and maintained the hard wor2high trust culture and had respect of the people who wored for him# ;ow, however, many see him as someone who sold out, and a growing number of people from the original committed group are leaving to oin other companies# 1n fact, less than five people remain from the original .# They get together for a beer occasionally and reminisce about old times# Aecently, one of them went on about how money and power can corrupt, L1 wonder if the culture was ever real
