TERESAS DOWNSIZING DILEMMA

Teresa Nnadi had never thought of ethics as something that she needed to be
concerned about, as a consultant. After all, there are more ethical dilemmas in
medicine and law than in consulting. In her opinion, it was all about
consequences. If the doctor is wrong, the patient may die. If the lawyer is wrong,
an innocent client may go to the electric chair. What was the worst that could
happen if she gave bad advice?
Her perspective changed forever when she was engaged as a consultant to
restructure AZ Foods.
AZ Foods was one of the oldest and most respected manufacturing
conglomerates in the country. It was established in1946 and produced sugar,
rice, flour and other commodities for the entire West African coast. It was one of
the largest employers of labour in Nigeria and enjoyed an enviable reputation
locally and internationally. With the recession, however, and the deteriorating
economic situation, its profits began to steadily nose-dive. It needed to find a
way to remain competitive in turbulent times. That was when Teresa was called
in.
The Federal Republic of Nigeria lies on the coast of West Africa, along the Gulf of
Guinea. Oil rich Nigeria has an economy in tatters. Though the country had made
approximately $350Billion in revenues since 1970, real GDP per capita had
hardly grown since it gained its independence in 1960. In three decade the
proportion of the population living in poverty had doubled to 70%. Nigeria, once
an agricultural exporter had become a net importer- even though more than 60%
of its arable land is not under cultivation. Corruption perception index (CPI),
based on surveys of risk analysts and international agencies, put Nigeria at the
bottom of the rankings consistently. A survey conducted in 2002 of Nigerian
firms suggested that bribery occurred on a massive scale, with 100% of the firms
indicating they thought public funds were being diverted. Although corruption
occurred in various forms in Nigeria they are popularly classified into three
categories- extortion, capture and theft. It was in this kind of environment AZ
foods operated.
Analysts are however of the opinion that the future is bright for the FMCG sector
in Nigeria. The country has a very strong, dynamic and growing population of
over 170 million people with over 40% less than 15 years old. By 2050, Nigeria is
projected to have the 3rd largest population in the world. This represents a
rapidly growing number of consumers that can be served. The manufacturing
sector plays a pivotal role in any economy and has many dynamic benefits
crucial for economic transformation.
Teresa was a consummate professional and a consultant of privileged pedigree.
Having worked for almost a decade in one of the worlds leading management
consulting firms, she had left to set up her own management consultancy. Dr.

Udoh, her mentor and a senior consultant, had recommended her to Alhaji
Mahmoud Yusuf, the Managing Director of AZ Foods, for the project. What she
lacked in experience and gravitas, he said, she made up for in business acumen
and audacity. He saw her as a rising star in the profession and was determined to
help her make a success of her first project.

It wasnt until Teresa got on the project that she realized why the client had hired
her. They had their own ideas on how they wanted to resolve their profitability
problem and just wanted her to rubber-stamp their decision. That was why they
wanted a relatively young consultant; they were expecting her to be agreeable to
their proposed solution downsizing forty percent of their workforce.
Not one to take things at face value, Teresa conducted her research and found
out that aside from the fact that downsizing tended to enhance shareholder
wealth, it did not usually live up to its promise as a cure-all for organizational
ineffectiveness. Over the past ten years, many organizations had thrown away
legions of good people in the name of downsizing, rightsizing, reengineering,
becoming lean and mean, and a host of other euphemisms for retrenching
employees. Sadly, the research seemed to indicate that most of this was for no
good reason. To the extent that consultants participated in and encouraged this
carnage, they were acting in a highly unethical fashion.
Teresa knew that, the consequences of giving bad advice could be devastating.
Twenty thousand employees would lose their means of livelihood, and AZ Foods
would not see much improvement, except for a marginal increase in shareholder
wealth, it would also not be positioned to take advantage of projected growth. On
the other hand, could she afford to lose this client? Her performance on her first
project had the potential to make or mar her reputation in the consulting
industry. If she walked out on one of the biggest FMCG clients in the country,
what would be her professional fate? Could her fledgling company survive the
scandal?
She decided to have a chat with Dr. Udoh. With his characteristic bluntness, he
cut to the chase.
Do the right thing, Teresa. If you sense that what AZ Foods wants you to do is
unethical, it probably is. Dont rationalize it to yourself by saying every
consultant acts unethically from time to time. Discuss it with Mahmoud. Most
likely, he wants to do the right thing, too. But he may not know right from
wrong.
Are you suggesting I should tell Alhaji that what he wants me to do is
unethical?
Of course not. Dont tell him outright. In a friendly manner, discuss your
concern about the outcomes of what he wants you to do and suggest an
alternative.

At her next meeting with the client, Teresa followed Dr. Udohs advice. Alhaji, I
understand that downsizing may be the answer, but Im concerned about the
research about downsizing. Particularly the research that finds that downsizing
may have no impact on effectiveness in the long term but will certainly be
devastating to those employees who are forced to leave and those employees
who have to pick up the slack. Heres an alternative that I have been thinking
about
Forget about this research, Teresa. Let the consequences be on my head; you
go full speed ahead.
Teresas bulldog tenacity required her to take another shot at Alhaji Why not
give me an opportunity to do some more research prior to the meeting with the
committee and lets analyse this further at that meeting?
However, Alhaji lost his temper and slammed his fist on the table. Young
woman, you are not listening to me! I will retrench my staff regardless of what
your analysis says.
A pregnant pause followed and then Teresa replied calmly. Alhaji, what you
want is contrary to the ethics of my profession and I have no choice but to make
my presentation as is to the committee.
Are you saying I am unethical? I, who have been doing business before you
learnt how to read! What nonsense! And to think you came so highly
recommended!
Im sorry Alhaji I would have to leave at this point.
She realised she might not be getting the support of Alhaji Yusuf by suggesting
that he was unethical. What would she do at this point to get her proposal
through? Should she quit knowing that Alhaji would not be supporting her as she
makes the final presentation to the committee? But then, this is the real world
would she always quit over an ethical dilemma and not find ways to go about her
business, on the other hand promoting ethics as she succeeds through each
dilemma. Perhaps standing her ground might cause Alhaji to reconsider his
position. She hoped he would revert to Dr Udoh and seek his opinion or would he
get the buy in of the other members of the committee to question her
competence and hire another consultant whom he can push around? Could she
on the other hand find ways to also get the support of the other committee
members?
Meanwhile, it was a committee of four members including Alhaji that were
saddled with the responsibility of deciding on the restructuring. The other
committee members who would be responsible for taking the final decision
comprised Mr Ayo the Chief financial Officer, Mr Ojo the Head Human Resources,
and Mr Caleb, the Head of operations. The Chief financial officer is a Chartered
Accountant having written the ICAN professional exams upon returning to Nigeria
after completing an MBA from the prestigious YALE business school. He had

worked at a competing FMCG company where it was rumoured he quit on

account of ethics.
Mr Ojo the human resources head has been rumoured to be Alhaji's boy whom he
had helped up the career ladder, Mr Ojo has been with AZ foods for almost a
decade and has grown through the rungs.
Finally, Mr Caleb joined AZ foods 5 years ago upon being recommended by a
shareholder Mr Tony Briggs.
From her days in Ethics class in Business School Teresa had been taught that
whether an act is right or wrong depends only on the results of that act. The
more good consequences an act produces the better or more right that act. This
has been her guide so far. When faced with an ethical dilemma she would often
choose the action that maximises the good consequences. What should be her
position in this instance? Should she quit at this point or devise a plan of action?
What would be her plan of action?

GUIDE QUESTIONS

What values are involved in the situation? Honesty. Compassion. Social

Responsibility. Justice. Professionalism. What is the values driven proposition?
Retrenching the employees is an unethical decision; hence she needs to walk
away.

What are the objectives? Stay true to her professional ethics. What do they
wish to accomplish with the voice or action? Uphold her professional integrity
and maintain her reputation.

What is at stake and for whom in this situation? Alhaji profitability of the
company. Teresa her professional reputation.

What factors make it easier for the action to be carried out or makes it
difficult? Her youth and inexperience.

What are the risks of action and how can they be minimised?

Who are potential allies in this situation? What are the available
resources?

Whats the most effective action plan? What are the most persuasive
arguments? To whom should they be delivered, when and how?


What reasons and rationalisations are expected and what would be the
most effective response?

SOLUTIONS/ACTIONS PLAN
Theresa should go ahead with her presentation to the committee advising them
against the downsizing, highlighting research she has done that doesn't support
it. She should devise ways to meet and discuss with the committee members
prior to the meeting highlighting her concerns.