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MGT 6000

The Skeleton in the


Corporate Closet
Case Analysis
Erica Huffman
/2014

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Executive Summary
In this case, the CEO of General Parkelite Company, GPC, Hap Parker, is facing an ethical
dilemma regarding the authenticity of the founder of the company, Hud Parker. This is especially
difficult for Hap because Hud is his grandfather and his familys name, as well as the future of
the company is at stake. During a tour given by corporate archivist, David Fisher, Donna Cooper,
the writer hired to author GPCs 75th anniversary book, stumbled upon a hidden drawer in a desk
that included evidence that indicated that Hud was not the true inventor of the companys bread
and butter winning patent, a miracle plastic called Parkelite. The finding suggests that Karl
Gintz, Huds friend from college, was the true owner of the invention. If this is the case, it would
mean that the company was founded on a lie. Furthermore, the companys 75th anniversary is
coming up and current branding efforts are in place to showcase Hud Parker and his innovative
prowess. The discovery could not have come at a worse time.
GPCs culture is firmly rooted in trust and integrity. Therefore, the fact that the business may
have been started unethically could be detrimental to the company image and internal corporate
values if handled without care. Because these values are emphasized within the culture of the
company, Hap must lead by example and disclose the information if found to be factual.
However, by approaching the disclosure in a way that can positively impact the company, he
may be able to both strengthen the company and end a family tradition of deceit. Though the
information could hurt in the short-term, revealing the true owner will benefit GPC in the longrun.
Statement of the Problem
In the case of The Skeleton in the Corporate Closet, there is a difficult ethical decision
that Hap must make as the CEO of General Parkelite Company. First, in the short-term, he must

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decide what to do with this unexpected and unwanted ambiguous new information. He has two
options. He could ignore the finding and continue to cover up information or he could disclose
the information. By revealing the fact that the companys founder was a fraud, will undoubtedly
bring about strong reactions by all stakeholders of the company. Ultimately however, Hap must
use this unfortunate situation in a way that will bring about positive representation of the
company in the long-run.
Analysis of the Problem
Because Hap inherited this ethical dilemma from the actions of his grandfather, there is
nothing that he could have done to avoid it. Therefore, this case does not require an analysis of
root cause. The only thing that he could be at blame for is not investigating the history of the
company. With a lawsuit in GPCs past, regarding true ownership of the invention of Parkelite,
further study may have been warranted. However, as a relative of Hud, it is reasonable that Hap
trusted his familys intentions and good name. Nevertheless, even with prior investigation of the
companys history, the implied unethical decisions of Hud Parker would still exist. It would only
change when the truth was revealed, not if. Hap cannot change the past but he can control his
response and shape the future of GPC in the process.
Recommended Solution
The first thing that Hap should do is determine if the new information is factual. In order
to do so, he should hire a professional and unbiased historian to research the founding history of
the company. Extensive research should be put towards the lawsuit. Though exact truth will
likely not be found, the historian could make educated possible explanations. After weighing the
likelihood of each, there will likely be strong evidence pointing one way or the other. If it is
determined that Hud is still the true inventor of Parkelite, no other action is required. However, if

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it is found that Karl was the true inventor, Hap must reveal this new information. Before doing
so, Hap needs to speak with his PR team and choose the best plan of action regarding the reveal.
This must be done carefully and strategically in order to present the information in a positive
light. Hap could use the 75th anniversary to his advantage by using it as a platform to honor both
Karl and Hud. The book that Donna is writing could serve as a powerful way to do so. The true
story of invention could be explained as that coming from Huds Princeton peer. Karls
contribution as the brilliant master-mind of GPCs miracle plastic, Parkelite, clearly deserves to
be celebrated. Likewise, Hud should also still be celebrated as the groundbreaking businessman
who built GPC into a successful company. By painting the picture this way, both players can be
celebrated for their influences on the company.
Moreover, Hap must give credit where it is due. He needs to highlight Karls
innovativeness. Karl deserves the reputation of brilliant inventor. He should also hire someone to
look up Karls rightful heirs. They deserve to be compensated for their relatives invention.
Without Parkelite, the company would not be as successful as it is.
It is important for Hap to disclose the ethical failures of his grandfather because it is the
ethical, truthful thing to do. It is crucial to look at the big picture when facing ethical decisions
(Gentile). He must do so in order to promote the ethical culture that the company operates
within. As the CEO, his actions are very important to determining the degree of company culture
alignment. The leaders of the firm imprint their own values into the corporate culture and lead by
example (Jones et al). If Hap attempts to cover up the lie and it is later exposed, his employees
would lose trust in him as well as the company. This is not a risk worth taking. If top
management is perceived as ethical, employees will also act ethically (Verluzen). Therefore,
Haps truthfulness will speak volumes to his employees.

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Ethically driven corporate cultures are crucial for sustainable companies because they
promote a sense of community and intrinsically motivated behaviors. Employees with integrity
are powerful factors in ethical corporate behavior because they are internally driven to do the
right thing (Verluzen). Employees who feel that the culture is ethical have decreased turnover,
increased productivity, increased motivation and decreased misconduct (Meinert). In addition,
organizations that foster a sense of community experience an increase in positive attitudes,
employee attachment and innovation (Delios). All of these factors benefit the company greatly. If
Hap decides to continue to lie about the true inventor of Parkelite, the employees will feel a
misalignment between the promoted culture and reality. There will be little differentiating his
fraudulent behaviors from his grandfathers. If this were to happen, morale would decrease and
alienation among employees would occur (Verluzen). This would discourage employees to speak
up about unethical situations and may cause a snowball effect of ethical lapses (Meinert). Also, it
would put the company in a bad light with the rest of its stakeholders It would even alienate
some of GPCs customers. In the long-run this would be detrimental to GPS.
Revealing the new information could also serve as a branding opportunity. However, it is
vital that Hap reiterates that top management had no prior awareness of the secret drawer and its
containments. Otherwise, these efforts will be rejected. Because revealing the information is the
truthful thing to do, GPC would actually promote its trusting brand image. Despite the unethical
actions of the past, positive branding gains can be made. This would prove to be especially
effective because the message of integrity that would be promoted aligns with the current culture
of the company. GPS can gain a competitive advantage by promoting a well-defined set of values
that can resonate with diverse audiences (Vallaster). This applies to both consumers and
businesses. Consumers, who identify with the trustful image that GPS is demonstrating, may be

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more likely to support the company. Additionally, this branding move would help align GPS with
business partners who share the same values of trust and integrity. By continuously showing
integrity and truthfulness, GPC can bounce back from their fraudulant founding and become a
more sustainable and ethically driven company.

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