CASE STUDY 5.1
The Aggressive Ad Agency
To the executive committee:
Based on the facts presented to me, the issue is how RGS&H will regain its reputation and brand image. With the rapid advancement of technology, more and more computer programs were developed by many companies such as Apple, Microsoft and Lotus to provide office solutions to replace the traditional pen and paper-based office files with digital files. Every company in the technology sector wanted to grasp as much of the market share that they could acquire and beat the competition in the process. Lotus was a key competitor to the newly introduced Microsoft Excel software that offered spreadsheets to keep financial data and apply multiple types of function with the click of a button.
In the process of this constant competition, competitors would usually use several tips, tricks and knowledge of past employees to promote their product and downplay that of the competitors. Rossin Greenberg Seronick & Hill (RGS&H) recently hired two of Lotus employees who offered to provide information about Lotus competition to Microsoft, which is thrilling for Microsoft but also very risky in the meantime. The following set of suggestions are by no means an exhaustive set of solutions; however, I believe that they would form the foundation that would signal to the public of an ethical conspiracy going on with RGS&H. Mr. Neal Hill of RGS&H offered past performance information from Jamie Mambro and Jay Williams who were past employees of an agency who did marketing for Lotus and had enough knowledge of Lotus trade secrets, their advertisement campaign and how can they respond to Microsoft products, i.e. Excel that challenge one of their core products. The offer made by Mr. Neal brings into light the ethical environment at RGS&H regarding regulations targeting inside information, patents, intellectual property and confidentiality.
To address this ethical issue, I would like to propose two strategies that could help RGS&H normalize their relationship with Microsoft, repair their image and their ethical environment. First of all, I recommend that the company create an ethics team who is actively involved in the recruitment of new employees and particularly in training those new hires on ethical conduct. The team should be led by an experience Ethics Officer and counsel who can keep the company out of trouble. Secondly, RGS&H should relieve Mr. Neal and the two new hires of their duties as they are in gross misconduct of their current or former employment by offering to relieve confidential and inside information. Nowadays it is widespread to have Non-Disclosure agreements in every industry, but even if those are absent, it is an understood norm that trade secrets are kept confidential.
I firmly believe that the Ethics team can be a great resource being involved in the day to day operations in areas such as new business development, recruitment and training of new hires and review of individual contracts and other documentation. They can also be a tremendous advisory team to the board of directors of your company in matters involving ethics. I also believe that Mr. Neal failed in fulfilling his role as the face of RGS&H by offering unethical information for the benefit of Microsoft and the company is a startup and mid-tier, agency can not afford to spoil its reputation by providing such information as no other company in the industry would trust them with their secrets and would avoid doing business with them. Similarly, relieving Mr. Neal, Mr. Mambro and Mr. Williams would signal to other employees that the company has zero tolerance for unethical behavior and signal to the market that they could be trusted with trade secrets and additional confidential information. This would also trigger a cultural shift within the agency towards values related to maintaining good corporate relations above and beyond one’s greed and desires to attract new business by illegal and unethical ways.
Having a proper code of ethics shows that the company is serious in its business dealings with its clients and make sure that their secrets are safe with the company. Not only does it serve as a set of regulations or guidelines for your company to follow but also as a goal for the company to achieve, i.e. attracting ethical and lawful business and engraving a name that can be trusted in the industry. Creating an ethical environment means training your employees on ethical conduct during onboarding and requiring such training on various internals throughout their employment, i.e. at least once a year. It is essential to mention that the effectiveness of such programs heavily rely on management involvement and investment in the process and management conveying the message that they have zero tolerance towards unethical behavior. Ethical conduct would result in a motivated and trained workforce that would attract new clients.
Establishing the Ethics Committee is another critical task for RGS&H. The committee should consist of non-resident stakeholders of the firm, i.e. non-employees who can make objective rather than subjective decisions. The benefit of bringing outsiders into the game is that no signal department, function or person in the company is exempt from following the ethical culture and no internal factors can impact the ethical culture of the company to their own benefit. By doing so, RGS&H can eliminate the risk of any ethical lapses due to conflict of interests and influences. Even though the committee is not formed of the internal employees, it should be kept in mind that the committee consists well educated, respected and well-known people from different aspects of life who can provide their honest and productive opinion to the board and management.
Incidents of the past can be recovered from using the right techniques and expertise, and I would like to offer help from my company and myself to help RGS&H recover from the incident with Microsoft. It is time that your firm repair their image by eliminating bad factors from the company and ensuring that proper measures are taken to ensure such incidents do not happen in the future. As an ethical consultancy, we would like to advise you in the processes related to establishing and monitoring ethics programs within your organization. Please feel free to contact us if you have any questions about this report and to discuss the next step forward.
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