Rein Chemical Company: Specialty Chemicals Division

Rein Chemical Company: Specialty Chemicals Division

Who should do what?

Why?

When?

There are several reasons why Anthony Garrison is facing this ethical situation.

One reason is that the Specialty Chemicals division is located in New Jersey, faraway from the headquarters. Additionally, this division, like the other two, is managed as a decentralized unit. The geographical distance and the decentralization makes it difficult to have easy communication between the headquarters and the division and to put into place control mechanisms or influence the behavior of people working at the NJ division. These people tend to make decisions independently.

A second reason is that, despite the fact that the company has a code of conduct (similar to the Credo for J&J), there is not clear relation in the case between this code and the way the strategy is implemented. The fact that the employees have the options to report unethical practices doesn’t seem an effective way to control behavior.

A third reason is that there was not an efficient control system in place, like Lancaster points out. However, one can argue that no control system is necessary when employees’ values are aligned with the company’s code of conduct. The fact that Hoffman believes that nothing should be done while others disagree shows that there is little alignment between employees’ attitudes and behaviors on the one hand and the code of conduct on the other hand.

After the preliminary investigation, Garrison should evaluate his options. Some of his options are:

- Ignore the problem and do nothing, like Hoffman suggests

- Delegate the decision to Hoffman (who is likely to do nothing) or to another executive

- Assume full responsibility and introduce change in first person

If he decides to take action or delegate the task, there are several options, such as:

- Contact the customers, tell them what happened, and restitute the overcharges

- Interrogate salespeople and found out who is...