Dr. Tess Techster, 40, is a corporate officer responsible
for research and development of Motorola's new
"Telekom SuperPackage" of wireless telecommunications
products. In recognition of her achievements as
a technologist and business innovator, she has been
chosen by the prestigious Yarvard University Business
School to give its Annual Outstanding Young
Technologist's Business Vision Lecture. The auditorium
is packed.
The Speech
In her lecture Tess described the Telekom SuperPackage as an unprecedented achievement, combining features of user-friendliness, portability, durability, versatility, flexibility and affordability. Then she summed up:
My vision is that Motorola's Telekom SuperPackage will revolutionize economic development in the Third World by allowing millions of isolated entrepreneurs, for the first time in history, to get timely and accurate market information and make business arrangements - all at a distance.
Then came question time. Tess was jolted when one student or professor after another rose to ask her about the ethics of Motorola's selling SuperPackages in Amrubia. The climax came when Holbridge Vanderbilt, President of the Yarvard Chapter of the World Student Confederation, delivered a passionate threat:
With due respect, Dr. Techster, I must disagree. You say Motorola is helping entrepreneurs, but in Amrubia you are primarily helping a bunch of corrupt GRUNJ generals to snoop on their own people. Motorola looks the other way and cannot see brutal despotism under its very nose! If Motorola continues to do this, do not be surprised if our Confederation launches a worldwide boycott of all your products, which will not do your global brand image any good.
Tess kept her composure: "I sincerely thank all of
you for your input. Motorola prides itself on being
a good corporate citizen. I will look into what you
have told me."
The Amrubia Situation
Back at her office, Tess met with Gordon Reeve of Government Relations for a briefing. Here is what she learned.
The Republic of Amrubia, a British colony until 1955, is a poor nation of 45 million, ripe for development with its rich natural resources and adult literacy of 70 percent.
During their first 20 years of independence Amrubians enjoyed considerable personal freedom under a moderate government. Then in 1975 a military coup occurred, and a clique of generals called GRUNJ (Government Reconstruction and Unification Junta) took power. To promote "national reconstruction and unification," GRUNJ suspended elections, assigned military counterintelligence officers throughout the country down to the district level, and created informer networks in every village. Beginning last year, village informers have been issued Telekom SuperPackage equipment, often secretly. These informers are charged with reporting to the government all of their fellow villagers who express "subversive" opinions. Many Amrubians so identified have been imprisoned without proper trial, and some are known to have been tortured.
GRUNJ has also instituted rigid economic controls and stifled private initiative. Amrubia's gross domestic product has actually fallen, and is now one of the lowest in the world - $330 per capita. However, GRUNJ has permitted limited private enterprise, which explains Motorola's establishment of a sales office in Amrubia in 1985.
Amnesty International has strongly condemned the
GRUNJ regime, as has the U.S. State Department in its
latest annual report on nations violating human rights.
However, the U.S. government has not prohibited U.S.-
registered companies from doing business in Amrubia
- yet, at least.
The Meeting
The next day Tess called a meeting of key personnel in her business. The agenda: What should be Motorola's policy in Amrubia and other host nations alleged to be violating basic human rights?
"Remain there!" says Engelbert "Spike" Speer, of Sales:
We've had a sales office there for 12 years, but only last year did we start making real money. That's when the SuperPackage program got started. I've worked in the developing areas for nine years, and in my opinion this is a really unusual opportunity. The Amrubian government has indicated that it finds our new SuperPackages highly helpful to them in promoting order and development. We have sold about $11 million worth this year alone, and I think we can get about $19 million next year. But if we disengage, we will earn the lasting enmity of the Amrubian government, will lose our market share to non-American competitors who don't share our ethical standards, and will later find it very hard to re-enter that market.
"I'm not so sure," says Sarah Sterling of Law:
Of course Motorola does not take sides in host country political issues, but the fact is that already the state of Calichusetts plus several European governments and American local governments have passed legislation boycotting all products of any corporation that does business in Amrubia. And the World Student Confederation, with its intensive use of the lnternet, has gained global political clout far beyond its numbers. Keep in mind that many very ethical companies like Breineken's Beer and Pewlett Hackard have already disengaged. The very least we should do, right now, is hire a good non governmental organization to do a prompt human rights audit for us in Amrubia.
"Get out of there!" says Walt Welliver of HR:
We would never do business with a company that treated its employees the way GRUNJ treats its citizens. The fact is that most of the SuperPackages would be used by GRUNJ, primarily to suppress their own people. GRUNJ wants SuperPackages because local village informers can conceal the equipment easily, so that other villagers won't know that they are informers. True, some businesspeople have been and will be issued licenses for SuperPackages, but they would almost all be people working closely with GRUNJ. GRUNJ will not allow any so-called "rising middle class" of business and professional people to have free use of SuperPackages. So far, only 20 percent of the SuperPackages in Amrubia are in private hands, and you should also know that almost none of these are owned by nongovernmental organizations. Even the International Mercy Volunteers cannot use a SuperPackage there except in case of an actual emergency.
Toward Decision
Tess summed up the meeting: "What I hear is that Amrubia is a country that could develop beautifully, but is being held back by a government with ethical standards very different from Motorola's. I hear you saying that our SuperPackages might help develop a democratically inclined middle class, but not much; and that it will help GRUNJ quite a bit more.
"Let's meet again next Tuesday to formulate a clear recommendation to senior management: to remain, to remain with qualifications, or to disengage. Please come prepared for a frank and open discussion."
This case takes place in the recent past in Chikorpan, an East Asian nation with a culture deeply influenced by the Confucian tradition. Motorola's business has been booming in Chikorpan, outpacing the corporation's ability to find and train qualified Chikorpanese Motorolans to handle the rapidly growing management workload. Consequently, it has been necessary to assign a large number of transpatriate Motorolans to Chikorpan. These transpatriates are enormously expensive, and partly for this reason corporate leadership is sponsoring numerous "localizing" initiatives to recruit, train, and upgrade high-potential Chikorpanese Motorolans, and to induct them as quickly as possible into the corporate culture.
Among these initiatives are several by Motorola University. For example, MU has sent Frank Blunt to Chikorpan to offer training to the Human Resources (HR) staff. Frank's assignment was to serve as moderator and primary resource person for a two-week seminar in Fusan.
Frank is from the American Midwest. In his 35 years with Motorola he has built an enviable reputation as an HR specialist, both in the United States and also, for briefer periods, in Europe.
A keystone of Frank's working philosophy of HR is honesty and openness in performance evaluation. For some years he has passionately advocated putting an end to the practice in which a supervisor gives a marginal employee a high performance evaluation in order to get rid of him/her by arranging his/her transfer to another, unsuspecting, department. "Such fraudulent evaluations betray trust and are a danger to Motorola and a favor to no one, including the employee," Frank has said.
Frank feels pretty much the same way about terminations. "If the employee isn't cutting it, he should be terminated, and told why," he told the Fusan Seminar participants. "Integrity necessitates nothing less."
Among the participants at the Fusan Seminar were Siew Chee-Wah and Ingrid Marklund. Chee-Wah, 43, known informally among his Westerner friends as "Chuck," was former chief of HR at the corporation's Mei An Facility. His performance was good, and the need for qualified Chikorpanese HR specialists was urgent, so that after only two years at Mei An, Chuck was promoted and transferred to a top job in Fusan. There was at the time no Chikorpanese Motorolan available to replace him at Mei An, so his job went to a Swedish transpatriate, Ingrid Marklund, 29. Chuck thought highly of Ingrid, who, among all his foreign colleagues, seemed to be the one with the deepest understanding of "the Chikorpanese culture."
During the Fusan Seminar, Chuck politely and indirectly asked Frank whether it would be OK to terminate a substandard Chikorpanese employee by both gently pointing out the employee's shortcomings and making some vague reference to the possibility of re-employment at some future time - "if and when demand for the product requires upsizing the force."
Frank replied with apparent incredulity, "Well, Chuck, let's see, that would be lying to the employee, wouldn't it?" Chuck immediately sensed that he had gone too far, and made a vague reply of polite demurral.
At this point the normally cool Ingrid spoke up heatedly: "But if I send a man of 30 or 40 back to his family and village without giving him some means of saving face, he and his family will lose the respect of people who have been part of their lives for decades, even generations. Why can't I just give him some kind of a - what you Americans call - a 'fig leaf'? My study of Chikorpanese culture tells me that even if he himself doesn't really believe the fig leaf story, as long as it has a surface plausibility back in the village, he can use it and everybody will feel better that way."
Frank was obviously taken aback by Ingrid's apparent support of Chuck's apparent disagreement. But Frank held his ground: "What I say is, integrity is integrity. Here's the real test: If Chuck can look at himself in the mirror in the morning and feel good about lying to an employee he is about to terminate, maybe that is OK. But I could not. Could you, Ingrid?"
Ingrid paused. Was she about to commit an enormous political mistake? But she decided to be gutsy: "Well," she said, "I think termination must be handled sensitively, and if the culture requires certain cosmetics, I am prepared to use them, provided that there is no legal risk in doing so, and that in doing so I do not sacrifice the essence of my own true integrity."
Frank was getting excited: "But Ingrid, that is precisely
the question: Just what is true integrity? if you did that,
Ingrid, would you be showing true integrity to yourself?
if not, then I would advise against it."
This case takes place in 1995 in Nambu, an Asian nation with a centuries-old philosophical and ethical tradition emphasizing duty and harmony in all human relationships. In 1969 Motorola formed a joint venture (JV) Partnership with a Nambunese multinational company to produce microelectronic products at a new facility in the city of Anzen, Nambu. Motorola's ownership share was 60 percent; the local partner company's, 40 percent. Many of the Anzen Facility's key managerial personnel were Motorolans, while the lower-level associates were Nambunese citizens and employees of the Partner Company.
From its very beginning, the Anzen Facility developed a strong tradition of safety consciousness. Even the most casual visitor to the Anzen plant would notice numerous signs and displays, in both Nambunese and English, urging associates to "Think and Act Safely," "Wear Protective Eyeglasses," "Report Dangerous Situations," etc.
Motorola also had other operations in Nambu. In charge of Human Resources for all these operations, including the Anzen joint venture, was Canadian Stan Stark, 47. Stan was based at Motorola headquarters, 300 kilometers north of Anzen. Since first assuming his position five years ago, Stan had made safety one of his top priorities. He took pride in the fact that during this period he had further reduced the Anzen Facility's already-low rate of accidents and lost workdays.
Sharing in this pride was a Motorolan of Dutch nationality, Henk Van Dyke, 38. Henk had been at Anzen for three years, assigned by Motorola to serve as the Human Resources manager for the entire JV facility. He enjoyed working in Nambu, but was somewhat handicapped because he did not speak Nambunese. Henk reported to Stan.
One of the operations at the Anzen Facility was "Final Test Assembly," carried out by three eight-person teams on each daily shift. These team members were all Nambunese employees of the partner company.
The employee relations manager for the Anzen Facility was Willard Wa. Willard, an employee of the partner company, was born 54 years ago in a small village in northern Nambu, and had been assigned to the JV partnership since its very first day of operation. Willard reported to Henk.
The manufacturing manager for the Final Test Assembly operation was a Nambunese Motorolan named Victor Min, 49, whom Motorola had assigned to the JV partnership for this purpose. To all who knew him, Victor personified a deep dedication to traditional Nambunese cultural values of duty and obedience.
One of the most respected of the Final Test Assembly teams was Team Three, nicknamed the "Morning Glory" team. Members of this team were intensely proud of their performance in both productivity and safety, which was among the best in the entire facility. Morning Glory team members viewed this performance as the result not only of exceptional skill, but equally important, of an unusual degree of harmony and cooperation within their team.
When Victor took over management of the Final Test Assembly operation in 1994, he made an effort to get acquainted with everyone under his supervision. He soon felt comfortable with all the Morning Glory team members except one, namely Tommy Tang, 31. Tommy had been hired by the partner company only two years earlier, after having spent several years as a mountaineering guide. Compared with most Nambunese, Tommy's values leaned a bit more toward freedom and a bit less toward duty. He hated to wear the protective eyeglasses that all Final Test Assembly associates were required to wear on duty. When his teammates would urge him to put on his safety glasses, he would give a variety of reasons why he couldn't.
On several occasions Victor spotted Tommy in the Final Test Assembly Area without his protective eye-glasses. Each time he would counsel Tommy on the need to wear them. The last time he shouted, "Tommy, this is the last time I will see you here without your safety glasses. From now on, you will either wear them or else!"
Then, four weeks later, a terrible event occurred. Victor entered the Final Test Assembly Area and noticed Tommy working closely with his Morning Glory teammates. All of them were wearing their protective eyeglasses except Tommy. Suddenly Victor lost control of his temper. He jumped at Tommy and slapped him several times on both sides of the head, screaming "This will teach you!" Tommy doubled over in pain, holding his ears. Then, despite his pain, he apologized over and over to Victor for not having complied with safety regulations. After two or three minutes of apology, Tommy went to see the facility's nurse.
The other seven Morning Glory members stood in shocked silence. Nothing like this had ever happened before at Anzen. None of them reported the incident. Nonetheless, rumors about it, both accurate and otherwise, spread instantly throughout the entire facility.
That night Victor had trouble sleeping. The following morning he went directly to see Tommy in the Final Test Assembly Area. He noted that Tommy was wearing the required eyeglasses. In the presence of several Morning Glory team members, Victor apologized and presented Tommy with a red envelope inside of which he had placed a substantial amount of his own money. Tommy accepted the envelope and the apology. The two men then shook hands and parted amicably.
Then, a few days later came some shocking news from the facility's doctor: Tommy had suffered permanent partial loss of his hearing as a result of the slaps he received from Victor. As a matter of standard procedure, the doctor reported this finding to both Stan Stark and Henk Van Dyke.
Stan was stunned. He sat silently for a moment. Then he placed a conference call to Henk and Willard, and questioned them about the incident and the doctor's report. Then Stan decided: "Both of you know that no Motorolan is ever allowed to physically assault a fellow associate. Could each of you please investigate this incident, and give me your recommendations within 48 hours."
Willard proceeded immediately to conduct the most thorough investigation he could. The first thing he discovered was that neither Tommy nor any of his teammates wanted to discuss the matter at all. They all felt that their team's harmony would be best served by treating the entire matter as if it had never happened. After all, Victor had apologized; Tommy had accepted the apology; and Tommy was now complying with all safety regulations. So, the only really important thing was to get on with the team's heavy workload. But Willard persisted. Finally he got some solid facts:
Two days later Willard phoned Stan with his recommendations. "Frankly," said Willard, "I think the solution is pretty simple. I recommend that the JV partnership cover all of Tommy's medical costs and then quietly, without any ceremony, make a reasonable indemnification payment to him with our apologies. Beyond that, I recommend that we do nothing - except, of course, to keep monitoring the situation carefully. In my opinion as a former manufacturing associate, this would be the best solution, because it is now clear to me that the Morning Glory team is functioning well, and continuing to accept Victor's leadership."
A few minutes later, Stan got a call from Henk, "Well," said Henk, "I recommend that we terminate Victor right away. Victor is a Motorolan, and knows very well that he is not supposed to strike an associate. That would be a violation of the basic dignity to which every Motorolan is entitled, and to which I believe all JV partnership employees are also entitled. We cannot allow a Motorolan to enforce regulations for our associates' safety by violating that safety! That just doesn't make any sense at all. And while we are at it, we should pay Tommy's medical bills and terminate him, too."
Next Stan walked down the hall to consult Cuthbert Kim, senior counsel in the Motorola Law Department for Nambu. Stan carefully explained the facts of the case and then asked, "Cuthbert, what's the procedure if I decide to terminate Victor and Tommy?" "Well, I'm afraid there is no such procedure," replied Cuthbert. "While it is true that under Nambunese law striking a subordinate is grounds for termination, it is also true that once an apology has been offered and accepted, the law determines that life can and should go on again, and that termination is not legally justified. So, you can't terminate him. And you can't terminate Tommy, either. But of course you could separate them from the company, provided you could manage to negotiate buy-out agreements that they would accept."
Stan found this hard to believe, but when he checked with an external Nambunese consulting attorney, he received essentially the same answer.
The next day, Stan asked Cuthbert to do some research
and find out how much it would cost to buy the two
associates out. Soon Cuthbert came back with the
answer: "Since Victor still has about 11 years before
he is due to retire from Motorola, he could probably
bargain hard. My estimate is that the JV partnership
would probably have to pay him about five years'
worth of salary plus benefits and fringes. For Tommy,
it might be three years' worth, because he is a relatively new employee."
"That's a huge amount of money," gasped Stan.
"On the other hand, the behavior that both Victor
and Tommy have modeled is certainly not the kind
of behavior I want at Anzen. I'll think about it and
then let you know my decision."