w I:thicalDilemma,-liNG IN BUSINESS

vou think it's ever okay to lie? If you were negotiatingthe release of hostages, most people wotHd probably

ee that if lying would lead to the hostages' safety, it's'. What about in business, where the stakes are rarely

P or death? Business executives such as Martha Stewart

e gone to jail for lying (submitting a false statement toeral investigators). Is misrepresehtation or omitting fac-

'"'>okay as long as there is no outright lie?Consider the negotiation process. A good negotiatorer shows all his cards, right? And so ornittihg cettainin-nation is just part of the process~WeU, it may surprise

-. to learn that the law will hold you liable for omittingmnation if partial disclosure is misleadihg or if one side

" superior information not accessible to the other.Tnone case (Jordan v. Duff and PhelPs),a company (Duff, Phelps) withheld information from an employee"dan) about the impending sale of the company. The,blem: Jordan 'was leaving the organization and there-e sold his shares in the cornpany. Ten days later, when

~ sale of the company became public, tboseshares be-JCworth much more. Jordan sued his former ern1/lo'ter

~r'"---"~' ..u~ cx<::reI~e.

on the grounds that. it should have disclosed this informa-tion to him, Duff and Phelps countered that it had neverlied to Jordan. The Court of Appeals argued that in suchsituations, one party cannot take "opportunistic advan-tage" Of the other. In the eyes of the law, sometimes omit-ting releva~1tfacts can be as bad as lying.

Questions

L In a bllsinesscontext, is it ever okay to lie? Jfyes,what are those situations? Why is it okay to lie inthese situations?

2. A recent survey revealed that 24 percent of managerssaid they have fired someone for lying. Do you thinkit's fair to fire an employee who lies, 1.10matter whatthe nature of the lie? Explain.

3. In b\,\siness, is withholding information for your ownadvantage the same as lying? "'Thyor why not?

4. In ab\lsinesscontext, if someone has something togain by lying, what percentage of people, do youthink"w{}uld lie?

rces:Based on "Lying at Work Could Get YouFiJ,'ed,"UPI,MaJ,'ch5, gOO6;"Brain S<;ansDetect More Activityin Those Who Lie,""tel'S,November 29,2004; and P. Ekman and E. L. Rosenberg,. Whatthe.Fcr(tRev(lals;B«si{iandApplied Studies of SpontaneousExpression"g thefacial Action Coding System(CA.PS),2nd ed. (New York: Oxford U;niversity Press., 2004).

~ase Incident 1-DATA WILL SET YOUFREE"

r'd CEO Alan Mulany is known for.starting !11ee~ingsbymg "Data ,viII set you free" and for trying toclIange-d's culture to one based on increased acc()untability,

rn.oreinformation sharing, and hard metrics. "You can'tmanage a secret/~ he is also fond of saying. It's not yet clearwhet,fierMulalIy's approach explains why Ford weathered

~ - ,~.

the recession in bett~f. shflP~ t1;Ianits lJ$.rl'ials BManClChrysler. Howevet,.Mplalli$.flPpr<~ac1;Iis~cl.eparture forFord, which was noto}5ot(s for.its$elf~ontaihe9fiefdomswhere little jnformation was spared. SOIIle q:nnpfimeshave found that mana,.gillgpeoplea~cordingto lJ,arclII1et-ricshas paidoff.ConsiderF:r~es~!ile SeIIli~oJ;1dw:tor, acomputer chip manufacturetl?as~<;l in ';\l.lstii:1,Te~as.

Freescale has discovered that it! o:rde:rto ..1Iave.the rightpeople at the right time to dotherightJPP. itneedsan ex-tensive and elat>orateset of mettlcs tomarrflge 24,000 em-ployees in 30 counhies.Ofpahicular cONcern to Freescaleis retention. "There's nogcreat~r6osttijan htimaiI capital,especially in the tech.n01ugy indtistry," saysJignashii Patel,Freescale's director of global wentsQurcing and indu-sion. "When you've got a tenuregemployee thatde~idestowalk out the door, ifsnotjl.lstol1ep~rsoh leaving, it's thatperson's knowledg~ an.d ne~vork and skills."

To manage talent and preventtl.lrhover, Freescaleholdsline managers accountable forrecruhillg, pirillg,;llld te-taining employees. To do thatimaria,gersneed to projecttheir talent needs into the future and reconcile those withprojected availabilities. Patelptovides linemaaagers YvithCensus data that help them make their projecticms, but atthe end of the day the responsipllitY is theirs, "v\'hat wehave done is taken aUof our indusion data, <111our metrics,

;li:1dwfve I1'loyedthe accountabilitY over to theunite fatel 8~ys.

pateI al~9 provides Fre.escale managers \\lith benedata.~Q tPt;y .can.compare their effectiveness wit1,other units., 1'hehench1114rk data include the n..pepple hired, tUrnove:rs, and promotions-am!dmNns by demogcraphic catego):'ies. "There's- [a re!..investment] for everything we do," says Patel.

Questions

I. ~'PY..cloYPl.lthinkFree.scalefocuses on metrics?don't mOHtorgani~<il.tionsfoUowits approach;

2. As a manager, would you want to be accountahthe acquisitionatid retention .ofemployees yoc,Vise?Why ohvhy hot?

3. In gener:al, what do ypu think are the advant"'6limitations of such metrics?

4. Freescale focused on .metrics for the acquisitiOt.r~tentionof ernPloyees. Do you think me triesapplied to other areas of management, such asployee attitUdes, employee performance, or skvelopment? How mighttb.ase metrics be meas!'arid mah~ed?

SOUT(;es:Based an R. R. Hastings, "M~trics I.hive WinningC'ldtnre," SHRlvf Online, ApnJ9., 2007, ww\V.shrm.org; K. Bensinger:Loss Sparks Optimism," LosAnge(esTimes (Aprit24,2009); T.Talllkdar at1d A. Ghosh, "IT Conipimies Growon to Bigger-Sized P,Th!:EconomicTimes (June 16,200$), econOl:nictimesoindiatimes.com.

Case Incident 2THE GLOBAL RECESSION AND WORKPLACE MALFEASANCE

The great global recession has claimed many victims. Inmany countries, unemployment is at near-historic highs,and even those who have managed to keep theirjobs havebeen asked to accept reduced Work houts or pay cuts. Insome cases-say, the U.S. auto indnstty-jop losses pavebeen predictable but no less painfuL However, i.n athercases, they have corne as a surprise. Nonn Elrod hadearned an MBA while employed a.t an online marketingfirm. His degree didn't save his job--Elrod was laid off.inOctober 2008 and, as of April 2009, he was unemployedand still looking for work. "There's a lotoffrustration outthere," Elrod said.

The financial and psychological pain caused by the re-cession may lead you to wonder whether employees at-tempt to get even. Is t}lere e\idence the recession has led toincreased incidents of workplace violence, sabotage, ortheft? As it turns out,.this jsa very diJIi.ctJltquestion to an-swerwith any confidence. The diJIi.cpltYillustrateshow OB

i

can teach you how to think critically about problems an?analyie them carefully.

DUling any recession, there is no lack of reports on.J:hcalami tOllSeffects qf the do\\7nturn. The Times of LonG,to\reported that U.S. job losses Were directly linked to 5R fac ~

talities in eight incidents dUling one month in 200~i, "IAmong them WaSa Vietnamese man fired from his factor')job who killed 13 people at an immigration center i!Binghamton, New York.

It's not just displaced-worker violence that is gcttinpheadlii1es. Among nearly 400 emplayees asked in latc 200?whether the recessian had cal1sed a reCent rise in thefts oJ

money among employees, 18 percent said yes, 41 percentsaid no, and 41 percent were ilnsure. Though this poll sug- ~.. . .. ~gests only a small mlnonty of employers thought the reces- ..~sian had led to a1'l.increase in employee theft, the media,!reported the qpposite res4lt. The Wall Stref;!tJournal ran the mheadline "Businesses Say Theft by Their Workers Is Up."

It'..

"""Joney, under the headline "Businesses See Rise inmpJoyec Theft," l'eponed thepoHresultS as follows:\'hen asked if they had noticed a recent lise in monetary,.n among employees, such as fraudulent transactions or

lissing cash, 18% said yes, 41% were unsure and the rest;aid they hadn't." You'll notice that, put another way,Kpercent agree that theft is up, and 82 percent either dis-g-reeor are unsure. But that makes for a less sexy headline.

Another mischief factor is companies that exist to prO"ide services, software, and technology to deter workplacepft. \o\11iJethey might provide a valuable service to.the or-

ganizations they serve, it is in their interest for employersnd the general public to believeincidencesofwork.place0lence and theft are increasing. These companies often

'Jroduce press releases, which then work their way into thenedia and presumably generate potential clients for therganizations. One such company, for examPle, publicizesstudy of work.place theft, reporting it has increased eachnd every year since 2003.

We are not arguing that all business press articles-or alludies done by organizations-are inaccurate. But thesexamples do ilJustrate one of the benefits of lean;ling OB:

Put on your investigator hat, ask questions, analyze the sit-uatiQrl, and consider the sO\1rce!

Questions

1. Does this caSe prove economic downturns and com-panylayof(sJaiftoleadtoworkp lace malfeasa.nce?Why 0):'why not?

2. Qoes the case provcwe can learn nothing from thebusincsspress?

3. Does this chapter provide any clues for how you canbe an informed. consumer of business news on OBiS$ues?

4. Some companies in.stall surveillance equipment(cameras,computer software) to monitor their em-ployees. Valenti Management, which owns and runs117 Wendy's and 17 Chili's restaurantS, has installedfingerprint scanners on all its cash registers. Do youthink these measures infringe too much on individ-ua.l pfivacy?Qan a company tak' prevention too far?How.do you strike a balance between prevention andintrusion?

)ources:Based on J. Bone, "Gunman Kills 13 and Takes 4Q Hostage in Upstate New York Town," The Times (April 4, 2009), http://www;timesonline.co.uk/tol/news/wodd/us_and_americas/artic1e6031421.ece; .S. E. b,jeedlema.n, "Businesses Say Theft by Tl1eirWorkers Is Up," WallStreetJournal (December n,2008), p.B8; M. C6nliri, "Tocatch aCorpoTate TRief," Business Week(February 16,2009), p. 52: P.McGeehan, "Well Educated, and Now Collecting Unemployment," New.YorkTimes (Apri15, 2009), p. Y23; and "Businesses'iee Rise in Employee Theft," MSN Money (December 12, 2008), articles.moneycentral.msn.com/lnvesting/Extra/businesses-sec-rise-n-emplolycc-tJleft.aspx.

EndnotesI. E. Saner, "The Future Is Looking Up for Psychics," The

Guardian (May 5,2009), p. 2;S. Salerno, "If I Don't See It,It's Not There," Wall StreetJournal (May 1, 2009), p. WI3;R. La Feria, "Love, Jobs & 401 (k)s," New York Times(November 21, 2008), pp. ST1, 8-9; S. Parke, "Cashing in onthe Crunch: The Self-Help Gurus Helping Themselves tc)Your Money," Mail Online (Aptil.23, 2009) ;and R Banerjee,"Astrologers Cash in on Recession Fears," The Times of India(March 10, 2009), http://timesofindia,indiatimes.comjcity/ de llli/ AstroI6gers-cash-in-on-recession-fea.rs- hrti-cleshow /424 7920.cms#ixzz141FbKpIX,

2. Cited in R Alsop, "Playing Well with Others," Wall Streetjournal, September 9,2002.

3. See, for instance, C. Penttila, "Hiring Hardships,"Fntrep'reneur,October 2002, pp. 34-35.

4. S. E. Humphrey, J. D. Nahrgang, andF. P. Morgeson,"Integrating Motivatiopa,l, Sodal, aTlqGontextua,1 Work,Design Features: A Meta-Analytic Summary and TheoreticalExtension of the Work Design Ut~rature," Journal of AppliedPsychology92, po. 5 (2007), pp. 1332~1356.

5. 1. S. Fulmer, B. Gerhart, a)1d K S..Scott, ".i\re the,JOOBestBetter? An Empirical Investigation of the RelationshipBetween Being a 'Great Place to Work' and Finn

Perfonnanee," Personnel Psychology, Wimer 2003,fip .965'-993.

6. H. Fayol, Industrial and GeneralAdministration (Paris: Dunod,1916).

7. A..I. Rraut, P.R Pedigo,».». McKenna, and M. D. Dunnette,"Tbe~ole of the Manager: "''hat's Really Important inDifferent Management Jobs," Academy of Management£.xecutive19, no. 4 (2005), pp. 122-129.

8. H,JvliJ:i.tZb.et;g,1'l~NaluTf!qf.tv1anageri(ll Work (Upper SaddleRJ.ver,NJ: Prentke Hall, 1973).

9. R. L.KatZ, "SkH1sof an Effective Administrator," Harvard

]3'tfSint;$sl}Jwi.l!'pJ.,SepteJ.Flber-Octobe.r 1974, pp. 90-102;».Barttah1,"Th~ <;reatEight Competencies: A Criterion-Centric Approach to Validation," Journal of ApPliedPsychology 90, 00.6 (~OO5), pp. 1185-1203; and S. E.S(:uUen, M;.K.Mount, and T. A. Judge, "Evidence of theCOI1strMt Validity of Development a] Ratings of ManagerialPerformance;" JOurnal ofApplied Psychology88, no. 1 (2003).pp. 5{}..;66.

l(kF,I4t1t:1:1.~s.;'\Suceessfulvs. Effective Real.Managers," AcademyofMa'i}agt!J~1 Executive, May 19$8, pp. 127-]32; andELuthans, RM. Hodgetts, and S. A. Rosenkrantz, &Managers (Cantbridge, MA: Ballinger, 1988). See a,s'F.$1:tiPBer;~nd;J.Davy, 'fA. Model and Investigation'Managerial Skills, Employ~es' Attitudes, and Mana!:;.Performa.nce," Leadership Quarterl)'13 (2002), pp. 9"-12

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