Why Didnt We Know?

By: Ralph Hasson

Case Analysis
By: Aman Singh Shrinet
Roll No. 261070
FMG 26 Section B

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Table of Content
Case Overview . 03
Situation Analysis ... 03
Identification of Problems .. 04
Analysis of Problems ....... 05
Alternatives .. 06
Evaluating Alternatives ...... 06
Recommendations ... 06
Contingency Plan .... 07
References 07

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Case Overview
The purpose of this case study analysis is to determine the ineffective communication practices
in Galvatrens. The case depicts a situation in which an unethical practice Channel Stuffing was
carried out in the company which failed to reach the top level management despite newly
developed reporting policies and channels. It also leads to termination of one of the employees of
the company who busted the channel stuffing which led to inflated sales figure. As a result,
company is facing a lawsuit and challenges to improve its future course of action.

Situation Analysis
Galvatrens, a consumer products company in Houston, has a lawsuit which was filled by its
former Division Sales Manager, Mike Fields who claims of unethical practice being carried out
in the organization to inflate the sales numbers by a colleague. He also claims that he was
wrongfully terminated for trying to report this illegal scheme. He confidentially informed the
companys COO, Harry Mart, who is responsible for day to day activities of the organization but
harry chose not to personally address Mikes urgent message and referred the matter to Mike's
boss, Terry Sample. Mike was informed by that his performance was not up to the mark and
mike would have to accept a demotion or a transfer. Mike being a divorced father couldnt leave
town, hence he filled a lawsuit. Chip Brownlee, CEO of the Company, a while back instituted a
number of policies with his general counsel including an open door policy for raising workplace
concerns. It encouraged the employees to go to the manager or supervisor at any level for
assistance. Now the major problem that Chip and the board of directors faces is why after such
policies only one person came up with fraud in sales scheme and ended up suing the company.

Strengths Weakness
Good Experience Resistance to change
Better Products Old practices prevailing

Opportunity Threats
Employees oriented Unethical Practices in the
management company

Exhibit 1: SWOT Analysis of Galvatrens

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 Board of Directors
Dan Richardson Arch Carter Sheila Cruse

CEO
Chip Brownlee

Harry Mart Sydney Baydown

COO General Manager

Terry Samples
Ex. Sr. VP Sales

Greg Wilson
Ex Divisional Sales Manager

Mike Fields
Ex Divisional Sales Manager

Exhibit 2: Organizational Structure of Galvatrens

Identification of Problems
The major problem in front of the CEO and Board of Directors is why there was a Channel
Surfing and why it was only reported by one employee who ended up suing the company. The
following underling problems will help in analyzing the problems more effectively.
Galvatrens, a consumer products company in Houston, facing a whistle-blowing lawsuit from a
former division sales manager who stated his employment was wrongfully terminated after he
reported an illegal Channel Surfing scheme.
Galvatrens, within its organization is also facing serious problems of Ineffective Communication
channels, lack of involvement of CEO and COO in the internal matters of the company, lack of
ethical channel for the new open door policies.

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Analysis of Problems

Whistle Blowing Lawsuit

Mike Fields has filed an unethical lawsuit of wrongfully terminated after he reported an illegal
Sales Scheme to the management. He was asked by his immediate boss Terry Samples, to accept
a demotion or a transfer in other states, which he couldnt accept being a divorced father.

Ineffective Communication Channels

There were plenty of instances which showed ineffective communication channels. Mike
reported his concern to Harry expecting confidentiality yet instead of actively taking action harry
chose to delegate the work to Mikes Immediate boss. He chose not to personally attend to
Mikes message thereby escalating the problem. Also, the company failed in finding facts from
Terry Samples regarding the case. Also, Senior leaders failed to listen effectively to the sound
advice from the experts.

Lack of Involvement of CEO and COO in Internal Matters

It can be analyzed from the case that there was less importance given to the internal matters by
the CEO and COO and more emphasis given to the revenues and the profits of the company.
Since, senior managers are the decision maker they should have been proactive and should have
been involved in this situation more radically.
Harry Mart, COO of the company, who was responsible for the day to day activities of the
organization chose not to personally handle Mikes message because he was too busy trying to
acquire another company. He also didnt participate in the board discussions about the lawsuit.
Also, the fact that CEO Chip Brownlee was not aware of this situation and also not of Mike
Fields shows his lack of knowledge in the Companys internal matters.

Lack of Ethical Channel

Although there were many policies such as 24/7 Helpline, open door policies, etc implemented
by the CEO with his general counsel yet the employees were not properly trained for these
policies to use them effectively. The CEO was influenced by the senior management in not
hiring the Ombudsman and also in not conducting a proper training necessary for open door
policy.
Also, when informed of issue senior management did not informed the CEO about the issue.
Also, there was less participation of the employees to use hotline or open door policy because of
the perception that problem will go away or management will use the persons performance to
get rid of him/her and also they hesitate to report wrongdoing if they lack conclusive proof and
worry that nothing will be done.

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Alternatives
Following Alternatives can be accounted for:
Developing an effective communication system and better implementation of the
policies.
Developing an effective ethical system by appointing an ombudsman.
Provide Training to employees of the company.
Senior management should be given proper training in soft skills to foster a healthy
environment for the employees and the company.

Evaluating Alternatives
Development of an effective communication system will help by better flowing of
information throughout the organization. It will help in preventing the situation of panic.
Development of an effective ethical system will ensure that employees has their own
rights and can freely approach the top management with their grievances.
In order to better implement the policies of the company, the company should make sure
that all the employees are trained for the situation in order to make the best use out of the
policies.
Senior management should be equipped with required interpersonal skills in order to be
readily available for the employees irrespective of their own workload. It will ensure an
environment where employees will approach senior management with their grievances
without hesitations.

Recommendations
In order to overcome the problems, the organization should go step by step and find solutions to
the problems. To handle the lawsuit by the Mike Fields, the organization should go for the out of
court settlement and should also allow to pay some compensation to Mike because the whole
situation was handled so badly. Mike should also be allowed to join with less number of working
hours until his personal problems are resolved.
As a CEO Chip should make sure that the COO Harry Mart, never ignores any complaint of this
type irrespective of the workload and also to inform Harry to follow the procedures outlined by
the Companys Policies in case of Whistle Blowing Event. Also, to set an example in the
organization, Chip should develop a more effective ethics channel to see that all the employees
are given a proper medium to communicate and share their grievances in the organization.
However, the Board of Directors should monitor these events by appointing Ombudsman who

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reports directly to CEO and Board of Directors but should not directly involve itself in
companys internal matters.
Even if the company reaches a settlement with Mike Fields, the company should appoint a
committee be it outside committee or inside to carry out Independent Investigation regarding the
Sale Chanel Stuffing Scheme. The investigation will help in identifying any flaws in the working
of the company and will help in minimizing the misconduct in future course. The Independent
Committee should report directly to CEO or the Board of Directors.
Also, the company should take necessary steps in order to train its employee to use the
companys policies in raising concerns relating to workplace. The company should make ethics
programme to be a priority. The company should develop a develop and implement an informal
and anonymous system for reporting any concern in a confidential manner and in retaliation free
zone.

Contingency Plan
Should develop a committee handling the anonymous feedback from employees and this
committee should report directly to Board of Directors.
Hire committee to investigate the Channel Stuffing and take proper steps to ensure that it
never happens again.

References
https://hbr.org/2007/04/why-didnt-we-know
https://www.linkedin.com/pulse/case-analysis-why-didnt-we-know-mr-
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