22 Oct 2007


Not all corporate responsibility dilemmas involve serious issues like sweatshop labor, product tampering or accounting scandals (think Enron). But conflict commonly arises when it becomes potentially unprofitable to “do the right thing.” That is not to say that organizations find themselves doing bad deeds to turn a profit (though some doubtlessly do). Read the below two situations and ask yourself how you would respond:

Situation 1
An investment bank made some poor investment decisions. Their decisions cost their customers a lot of money. The investors knew the risks but they are still angry. The investment bankers want to retain what little customer money is left because they can still make money from the investment fees and charges, which also increases their bonuses. They don’t want the investors to pull their remaining funds out. Investors feel betrayed and are asking the company for an apology. If they don’t receive the apology, they will likely take their remaining funds to another investment bank. Some investors are also asking for compensation. The people working at the investment bank generally feel responsible for losing people’s money. They are sorry. They understand the significance of looking after investors’ pension savings. The sales, marketing and customer relations teams in particular want to issue an apology, because they are at the frontline, dealing with angry customers. However the investment team does not want to lose face and apologize. Also the legal team says that if the bank apologizes to the customers, it is the same as admitting responsibility for losing investors’ money, and that in turn they will become liable. This opens the door to customers suing them. Should the bank apologize? What is the right way to behave?

Situation 2
A hospital discovers that some of its surgical equipment was used on a patient with a blood-borne disease. Unfortunately, the sterilization process does not kill the disease bacteria. The hospital was previously unaware of this fact. Once it found out, the hospital immediately destroyed the equipment. Unfortunately, the equipment has already been used to treat another six other patients. It’s highly unlikely that the disease has been transmitted to other patients. But there is a remote possibility.

However, even if the patients were infected, there’s a very strong chance that either no one would find out or be able to medically confirm whether they were infected. Here’s why: the disease in question affects the brain. Initially it impedes memory and motor function. Five of the six potentially infected patients are aged over 70 years. It takes around 20 years for the blood-borne disease to present, plus several more years for the disease to affect a person. So it is likely these patients would have died before any potential infection takes hold. Additionally, it is likely they would already have some of the symptoms associated with the disease, as these symptoms are also common to other illnesses associated with aging. Added to this, there is no reliable way to diagnose that someone has the disease, except post mortem, i.e., via an autopsy. And autopsies on the elderly are not common.

Essentially, even if these older patients were infected, no-one might ever know. However the sixth patient was in her 30’s.

The dilemma faced by the hospital’s medical board was whether or not to tell the patients of their potential infection. Should they just tell the younger patient and not the older patients? After all, there was an extremely low risk of contamination. Also there was no way to test if the patients were infected or not, so was it worth distressing them? How would the news impact the patients? Would the patients needlessly think they were becoming ill every time they forgot a phone number? What sort of lawsuit would the hospital face from the patients? But what if one of the patients was a blood donor? They could potentially infect others, even though the risks were minute. If this occurred, then the potential for litigation seemed limitless. What should the hospital do?

What happened in the end?
Both these companies were considered leaders in their industry. Each had well articulated CR programs. In the first situation, the bank did not apologize. (It also went on to lose more money, further inflaming the situation). In the second situation the hospital did decide (after lengthy debate) to disclose the potential infection to all the patients.

1 comment:

Anamma blog team said...

It's an intersting comparision to look at losing a lot of money and potentially losing one's life. Good cases.