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THE CHARLES BENSON PROBLEM

Charles Benson is a superior engineer who has


been employed as a design engineer with your company
for the last seven years. Benson,who is now 35 years old,
is a reliable employee as well as a skillful and inventive
engineer. Seeking to earn additional money, he decided to
start his own business, at which he would on evenings
and weekends. The products to be made and sold as part
of this business are similar to those made and sold by
your company. Bensons immediate supervisor found out
about Bensons business but took no action for several
months, believing that the business probably would not
amount to much and that eventually Benson would lose
interest in the project and drop it on his own.

However , one afternoon the supervisor found
Benson on company time using a company telephone to
order materials for his business. The supervisor
reprimanded Benson on the spot and warned him that
such practices would not be tolerated. He further stated
that the incident would be reported to you, the chief
engineer. A few days later, Benson received written notice
from you that he must divest himself of his business
within a month or resign from your company.

A month later, Bensons supervisor asked him
directly for his decision. Benson indicated that he had
though it over a and talked with friends as well as
officials of the engineers union of which he was a
member.
He stated that he would not give up the business nor
would he resign. Bensons arguments were that he was a
good employee and that his outside company did not
interfere with his work for your firm. The small amount of
business that he did could not hurt your company, and he
was neither using the companys resources nor soliciting its
accounts. Therefore, what he did with his own time was of
no concern to your firm. Benson's supervisor then reported
the conversation to you.

AS CHIEF ENGINEER, WHAT ACTION SHOULD YOU TAKE?
Background
Facts :





Charles Benson has been a superior engineer and was a
reliable employee prior to the problem.
Benson has been with the company for seven years.
The products that Benson firm makes are similar to the
products made by your company.
Bensons supervisor knew about the outside but took no
action for several months.
Benson states that he will neither give up the business
nor resign form the company.
Benson was ordered by you as chief engineer, in writing
to drop the business or resign form the company.
Benson was caught by his supervisor doing business for
his own firm on company time and using a company
telephone.
Assumptions:




1. Benson has stated that he has contacted union officials
and that they support his position. This is presumed to be
true.
2. Benson states that he is not soliciting company
accounts. This is presumed to be true.
3. Bensons current level of business will probably not hurt
your company in the sense of his being a competitor. Nor
will hiss present product line compete with your
companys product line.
5. Current company policies do not specifically forbid an
outside business, although conflict-of-interest laws as well
as secrecy clauses and the companys ownership of ides
resulting from company work impact on the legal aspects
of the problem.
4. It is assumed that Bensons business activities are no
longer done on company time and his outside work does
not currently interfere with his work that is done at your
firm.
The Charles Benson Problem-Solution




CENTRAL PROBLEM
1.) Should Charles Benson be retained as an employee or
fired?
(Limits the solution to two courses of action retaining or
firing.)


2.) What should be done about Charles Benson?
Lacks specifics about the problem that are important if
the analysis is to be presented to someone else.)
(this may be a problem that needs to be worked on, but
its solution disregards specific of Bensons case, including
the earlier warning.)
3.) What policy should your company establish regarding
employees forming outside business?
4.) What should be done about Charles Bensons outside
business considering the fact that he was warned, that
the union may take action, and that he has been a good
employee and is a superior engineer?
(tries to incorporate the relevant factors into the central
problem, resulting in an unwieldy and awkward
statement of the central problem.)
( An alternative course of action is assumed as
the solution before the analysis.)
5.) How can Charles Benson be kept with your
company?
ALTERNATIVE SOLUTIONS

1. Discharge Benson



Advantages:
Will enforce discipline, since Benson warned
that he must give up the business or resign.
Will discourage employees in the future from
starting outside businesses.
Will solve any problem of conflict of interest
due to the nature of Bensons business.
Disadvantages:
May lead to union problems due to the
unions current support of Bensons position
May lead to a morale problem if it is believed
by other employees that the company has
acted unfairly.
Will result in the loss of a superior engineer
and an otherwise reliable employee.
Advantages:
Will avoid any problem with the union.
Will result in the companys keeping a
superior engineer and an otherwise reliable
employee.
Will avoid any feeling among other
employees that Benson is being treated
unfairly.
2. Retain Benson
Disadvantages:
May result in a discipline problem, since
Benson was ordered to give up the business
or resign.
May eventually result in a direct conflict of
interest due to the nature of the products and
the customers.
Will effectively establish a company policy
on this matter that may not be desired.
May encourage other employees to start
outside businesses.
Advantages:
May avoid any problem with the union.
Will reward Benson for past performance as
a superior engineer and an otherwise reliable
employee.
Will maintain discipline, since Benson was
warned that he must give up the business or
resign.
3. Discharge* Benson as an employee but retain
him as a consultant.
*The mechanism of this discharge should be Bensons resignation.
Will avoid setting policy or precedent
regarding employee businesses.
Will solve any problem of conflict of interest
due to the nature of Bensons business
Disadvantages:
May encourage other employees to become
consultants rather than employees with the
company.
May set policy of a different kind: that
employees who start their own businesses
will be retained as consultant
DISCUSSION - ANALYSIS
1. Several important issues bear on this problem:
A. The disciplinary issue and the fact that Benson was
sold told to resign or to divest himself of his business.
B. The importance of fair treatment and its
potential effect on other employees. Benson has
been a superior engineer and an other wise
reliable employees. There is currently no conflict
of interest, and may encourage other employees to
similarly start businesses on their own.
D. Potential union involvement and a legal suit.
C. The policy issue. If Benson is retained, this will
tend to set policy and may encourage other
employees to similarly start businesses on their
own.
2. All of these issues are important and must be considered in the
decision. Therefore:
A. Discharging Benson should be avoided, since it has
considerable potential for affecting the morale of other
employees (being unfair the first mistake of a superior
and otherwise reliable employee) and could lead to
problems with the union and a legal suit.
B. Retaining Benson should also be avoided because of its
potential effect on discipline and on setting policy and
encouraging other employees to start their own
businesses.
C. Discharging Benson as an employee but
retaining him as a consultant is the only solution
that is not negatively affected by the main issues.
3. If Benson fails to accept the solution of
resigning to become a consultant, then he should
be discharged. Under these circumstances there
is less chance of his treatments being perceived
as unfair, and while the company still risks union
problems and a lawsuit, discipline will be
maintained, no policy on outside businesses will
be set, and other employees will not be
encourage to follow in Bensons footsteps.
CONCLUSION
1. Discharging Benson as an employee but
retaining him as a consultant is the best
solution considering the major issues
involved.
2. If Benson fails to resign to accept a
consultancy, he should be discharge.
4. A policy on outside employee business
should be established and publicized as
soon as possible.
3. The consultancy approach must be presented
to Benson as the only all-around fair solution, and
not as punishment, in order to maximize the
chances of his accepting it; however, it must be
presented in such a fashion that other employees
recognize the resigning or discharged employees
will not automatically be hired as consultants.
RECOMMENDATIONS OR DECISIONS
1. Discharge Benson as an employee and hire him s a
consultant.
3. Establish and publicize a policy on outside employee
businesses soon as possible.
2. If Benson fails to accept this solution, discharge him
immediately.