Professional Documents
Culture Documents
Casestudies pdf-IF PDF
Casestudies pdf-IF PDF
The term whistle-blower is defined by the third edition of The American Heritage
College Dictionary as “One who brings wrong doing within an organization to light.”
The etymology of the term whistle-blower is quite interesting and can be attributed to
several sources: the police used whistles in early times as a communication signal and
trains used their whistles to communicate warning signals. Today, the term whistle-
blower has a mixed meaning: it can have a negative connation in certain sectors with
whistle-blowers being called, among other words, “traitor,” “turncoat,” and “rat.” Or, it
can have a positive connation with whistle-blowers being called heroes.
The three women profiled as Time’s Persons of the Year fall into that latter category.
They “did the right thing” by informing their respective bosses of wrongdoings such as
mismanagement, law breaking, and fraud. In essence, these brave women refused to keep
their eyes and mouths closed.
Coleen Rowley (FBI); Sherron Watkins (Enron); and Cynthia Cooper (WorldCom)—
three career women—all worked for very high profile organizations and all were whistle-
blowers. Rowley, an FBI staff attorney, after keeping quiet about the agency’s
failure to take seriously a situation regarding French Moroccan Zacarias Moussaoui, the
so-called 19th terrorist involved in the destruction of the World Trade Centers in New
York, drafted a memo about the situation and gave copies to FBI Director Robert Mueller
and two members of the Senate Intelligence Committee. Cooper, a WorldCom vice
president, informed the board of WorldCom about inflated profit of nearly $4 billion
through its accounting practices; and finally Watkins, an Enron vice president, informed
Enron Chairman Kenneth Lay about improper accounting methods used by the company.
Like all whistle blowers, these three women placed themselves in very precarious
positions with regard to physical and emotional health, privacy, and especially
employment, since these women were the main financial supporters of their
households—two of them had “stay at home” husbands.
Rowley who had spent nearly 23 years at the FBI and was some two years away from
retirement was subjected to verbal backlashes and criticism from co-workers. Some of
her colleagues compared her to recently convicted FBI agent and spy Robert Hanson.
Fallout from Watkins’s letter to Enron’s Chairman Lay eventually led her to resign from
her $165,000 job last November. As a result of Cooper’s revelation, nearly 20,000
WorldCom employees lost their jobs and shareholders lost some $3 billion.
Whistle-blowing has resulted in terrible and even fatal endings. Two examples: in 1976,
Karen Silkwood, a chemical technician at Keer-McGee plutonium fuels production plant
in Crestcent, Oklahoma, paid with her life. She died mysteriously in a one-car automobile
crash after bringing to light problems about falsifying quality control reports on nuclear
fuel rods. More recently, in 1995, Dr. Jeffery Wigand, vice president of research and
development at Brown & Williams Tobacco Corporation, revealed what most people
thought they already knew—there is a causal relationship between tobacco and cancer
and tobacco is addictive; his company fired him summarily. However, he was been
publicly vindicated when his story was aired on CBS’s 60 Minutes on February 4, 1996.
For Silkwood, Wigand, and others who willingly tell on the bosses it “still means career
suicide—with no applause.” As recently as August 2002, a survey conducted by the
National Whistle-Blowing Center in Washington, DC found that 200 employees were
fired after reporting misconduct; others who remained in their companies faced internal
demotions; while others whistle-blowers were blackballed in their industry, unable to find
any work in that sector. Experts have offered four simple questions for anyone thinking
about whistle-blowing. First, the whistle-blower should ask the question: “Is this the
only way?” Second, “do I have the goods?” Third, “why am I doing this?” And finally,
“am I ready (for the consequences)?”
Just recently the federal government has gone to some lengths to protect whistle-blowers
with the enactment of the Sarbanes-Oxley Act 2002. This act provides whistle-blowers
with legal protection:
Although the term whistle-blower has a benign etymology as described in the case
narrative, it does conjure up a negative image. “All whistle-blowers” are turncoats.
Perhaps by developing a more positive euphemism whistle-blowers will be seem
more positively—“pioneers for truth”.
The answer should be a resounding yes. But the jury may be out on this one. It may
be a function of time before we know the real effects of whistle-blowing on an
industry, or sector. Moreover, some students may disagree and state that whistle-
blowers are not heroes because of the fallout that may accompany a whistle-blowing
situation (i.e., loss of jobs, worthless stock). But the actions taken by whistle-blowers
will undoubtedly change the ways in which companies operate.
Sample Case 2
Thomas Chan had been through this before. A valued employee would arrange a private
meeting. The meeting would begin with a few pleasantries, then the employee announces
that he or she wants to quit. Some employees say they are leaving because of the long
hours and stressful deadlines. They say they need to decompress, get to know the kids
again, or whatever. But that’s not usually the real reason. Almost every organization in
this industry is scrambling to keep up with technological advances and the competition.
Employees would just leave one stressful job for another one.
Also, many of the people who leave API join a start-up company a few months later.
These start-up firms can be pressure cookers where everyone works 16 hours each day
and has to perform a variety of tasks. For example, engineers in these small firms might
have to meet customers or work on venture capital proposals rather than focus on
specialized tasks related to their knowledge. API now has over 6,000 employees, so it is
easier to assign people to work that matches their technical competencies.
No, the problem isn’t the stress or long hours, Chan thought. The problem is money—too
much money. Most of the people who leave are millionaires. Suzanne Chalmers is one of
them. Thanks to generous stock options that have skyrocketed on the stock markets,
many employees at API have more money than they can use. Most are under 40 years
old, so they are too young to retire. But their financial independence gives them less
reason to remain with API.
The Meeting
The meeting with Suzanne Chalmers took place a few hours after the telephone call. it
began like the others, with the initial pleasantries and brief discussion about progress on
the latest fiber-optic router project. Then, Suzanne made her well-rehearsed statement:
“Thomas, I’ve really enjoyed working here, but I’m going to leave Advanced Photonics.”
Suzanne took a breath, then looked at Chan. When he didn’t reply after a few seconds,
she continued: “I need to take time off. You know, get away to recharge my batteries.
The project’s nearly done and the team can complete it without me. Well, anyway, I’m
thinking of leaving.”
Chan spoke in a calm voice. He suggested that Suzanne should take an unpaid leave for
two or maybe three months, complete with paid benefits, then return refreshed. Suzanne
politely rejected that offer, saying that she needs to get away from work for a while.
Thomas then asked Suzanne whether she was unhappy with her work environment—
whether she was getting the latest computer technology to do her work and whether there
were problems with coworkers. The workplace was fine, Susanne replied. The job was
getting a bit routine, but she had a comfortable workplace with excellent coworkers.
Chan then apologized for the cramped workspace, due mainly to the rapid increase in the
number of people hired over the past year. He suggested that if Suzanne took a couple of
months off, API would give her special treatment with a larger work space with a better
view of the park behind the campus like building when she returned. She politely thanked
Chan for that offer, but it wasn’t what she needed. Besides, it wouldn’t be fair to have a
large workspace when other team members work in small quarters.
Chan was running out of tactics, so he tried his last hope: money. He asked whether
Suzanne had higher offers. Suzanne replied that she regularly received calls from other
companies, and some of them offered more money. Most were start-up firms that offered
a lower salary but higher potential gains in stock options. Chan knew from market
surveys that Suzanne was already paid well in the industry. He also knew that’ API
couldn’t compete on share option potential. Employees working in start-up firms
sometimes saw their shares increase by 5 or 10 times their initial value, whereas shares at
API and other large firms increased more slowly. However, Chan promised Suzanne that
he would recommend that she receive a significant raise—maybe 25 percent more—and
more stock options. Chan added that Chalmers was one of API’s most valuable
employees and that the company would suffer if she left the firm.
The meeting ended with Chalmers promising to consider Chan’s offer of higher pay and
stock options. Two days later, Chan received her resignation in writing. Five months
later, Chan learned that after a few months traveling with her husband, Chalmers joined a
start-up software firm in the area.
Solutions For Case 2
Case Synopsis
This case describes a meeting with software engineer Suzanne Chalmers and Thomas
Chan, the vice-president of software engineering at Advanced Photonics Inc. (API).
Chalmers arranges the meeting to indicate her intention to leave API. Chan tries to keep
her by offering better conditions and, eventually, more money and share options. But
Chan knows that Chalmers is already a millionaire from her share options and the
appreciation of API’s share price. The case highlights the difficulty in motivating people
to stay and the relative importance of financial rewards compared to other sources of
motivation. Soon after the meeting, Chalmers submits her resignation and, after a few
months rest, takes up a position at a start-up company.
2. Do financial rewards have any value in situations such as this, where employees are
relatively wealthy?
Yes, most people value money even when they have enough. The textbook explains
that money affects employee motivation in complex ways. It satisfies most needs to
some extent. For example, Chalmers might value a special bonus or pile of share
options for completing a special project. The money is valued for its symbolism, not
as much for what it buys.
At the same time, the facts in this case suggest that money has relatively low
importance to Suzanne. She didn’t mention money at all in the meeting, except in
response to a question from Chan. She has been offered several jobs with more
money (or higher potential appreciation of share options.
5. If you were Thomas Chan, what strategy, if any, would you use to motivate Susan
Chalmers to stay at Advanced Photonics Inc?
As the previous question suggests, I would look more closely at job design and career
issues. There is some evidence that Chalmers wants to do something different from
IP software engineering. The job seems to be getting routine. Moreover, she later
took a job at a start-up firm where she probably performed a wider variety of tasks.
Chan should have explored these needs with Chalmers. Instead, he focused on
working conditions—the size of office, financial compensation, etc.