Introduction
It takes a global corporation billions of dollars to maintain a positive reputation for over a hundred years but all this can be lost through one gigantic scandal. Most mega-scandals however, do not involve massive events but rather the aftermath of mishandled or poorly handled miniscule events. The instant issue, from a casual perusal may seem like a miniature discipline issue that can be effectively handled by midlevel management as an addendum for a routine meeting. However, a careful evaluation may lead to a graver conclusion that mishandling the situation can be an anathema to the giant corporation. Yet again, this is not merely an issue of discipline as IBM is in the business of renting and selling some of the leading technological inventions (Moore, 2009). Therefore, losing a singular employee, let alone a group of them merely because of disciplinary issues could mean losing billions of dollars worth of patentable ideas down the line. This is the predicament faced by the management of IBM in the event that the instant case study was to become a reality in the organization.
Background/history of issue/problem/topic
The instant case study entails a group of employees, whose number is not ascertained, lying to accounting staff so as to get reimbursed on inexistent events and expenses. With IBM having hundreds of thousands of global employees, this number could be vast. Secondly, the amount of money swindled is substantial since industry estimates for a modest trip to the Caribbean from the USA would amount to between US$5000 to US$7000 with trips undertaken at the expense of the employer bound to cost more. The envisaged scenario, therefore, involves employees swindling the company of thousands of dollars each.
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Most importantly, the basic principle behind applications for reimbursement is trust based on a presupposition that employees are honest and would to attempt to steal from the company. The acts by the employees, therefore, amount to a breach of trust. Secondly, reimbursements for a company as large as IBM cannot be processed without presentation of supporting documents. The aforesaid employees would also be guilty fraud under the criminal laws of any state in the USA. The scope of the problem is that the swindling has been done by a number of employees hence it is not a singular peculiar event. Secondly, breach of trust and lack of ethics has been exhibited by employees of a company that has an international brand to protect. Further, a labor relations issue must come into play as the employees will need to be disciplined in some way. Finally, a criminal offense has been committed that must be handled.
Thesis Statement
These grave happenings in a company such as IBM would automatically have massive adverse consequences no matter how well they are handled and the strategy approached by the company ought to concentrate on the extenuation of damage not the avoidance, which would amount to a cover-up and make things much worse.
Current State of Issue/problem/topic
Based on the immediate action to be taken by the management staff handling the issue, IBM is either facing a small stint of negative publicity that can be managed or siting in a massive scandal that has the potential to cripple the giant corporation. Initially, the Watergate Scandal had little if anything to do with the presidency just as the instant case has nothing to do with top management who may not even be aware of it. It is however, the attempt to cover it up that made Watergate synonymous with an event rather than a location. Transparency would have cost the administration some embarrassment but it would have been overcome, a cover-up was however devastating. Similarly, as IBM management would be focused on a minor internal wrangle, the world would be focused on the management. The current state of problem entails the making of a collection of decisions. The first is what to do about the cause of the problem. This cause could either be displeasure among members of staff or the existence of a well-known loophole in the accounting office. The second decision to be made relates to what internal measures to be undertaken to discipline the members of staff for swindling monies from the company. Finally, and most important is the decision on whether or not to involve the authorities.
For most companies, this would be a relatively simple decision. Some employees have decided to steal from the company and have been caught with proper evidence being available to management. The company would decide to perform an in-depth inventory, catch all the culprits, fire them, and call the police. This would then be followed by a recruitment exercise and the matter would quickly be forgotten. With regard to IBM however, the first issue is the relevance of the employees to the company. IBM makes the bulk of its revenue from selling or leasing some of the most potent inventions in the world with most of them being developed by its employees (Moore, 2009).
Further, many of the inventions by IBM are worth tens of billions of dollars annually such as inventing the concept of the ATM machine or the floppy disk and even the hard disk. The nature of the claims in the case study show that the members of staff in issue herein are not in the janitorial services and might as well be inventors. Getting rid of them might be tantamount to getting rid of the next massive world changing invention. Secondly, there is the issue of reputation to consider. Trust in a corporation is not based on the company itself but employees of the company. A breach of trust by several employees can lead customers and clients both actual and potential to question the trustworthiness of the company. Firing the group and calling the ;’.police would be the right decision but for IBM, it would be a critical decision that would require input from the highest echelons of the company.
The Need for a Solution or Course of Action
IBM would need to solve the internal aspect of the problem in a manner that avoids repeat of the same, does no create legal implications for the company, and also does not wound the reputation of the company. The source of the problem must be identified and resolved. Secondly, the disciplinary issues must be resolved in a manner that not only adheres to federal and state labor laws but also the International Labor Organization rules. This includes a fair hearing which allows the individual employees to understand the charges they are facing and also accord them the opportunity to defend themselves. IBM has a reputation for not allowing industrial relations in its US branches. However, its reputation for labor relations is stellar.
The IBM reputation has shown that the company can take major risks whenever the interest of the corporation demands (Ghosh, 2017). These risks include cutting regulatory corners and in some instances bribing officials to look the other way. In many cases however, this cutting of corners has not ended well for the company and it is possible that the company may elect to do the right thing. Therefore, it would be expected that internal investigations would be conducted thoroughly and employees allowed an opportunity to defend themselves. Afterwards, a fair decision would be made on how to handle the employees. The possible solution would be that for any employees who are found to be culpable, a summary dismissal must ensue. However negotiations should be made with the employees for n ex gratia package contingent upon execution of circumspectly designed non- disclosure agreement and also an agreement not to deal with competitors of IBM. These two agreements should be absolutely confidential.
The second part of the problem entails whether or not IBM should inform law enforcement authorities of the problem which would contemporaneously include informing the media and the whole world. Solving the matter internally may seem to be the safest option and one least likely to harm the company more so in the light of the confidential agreements aforesaid. However, as aforesaid, many of the commercial activities by IBM require trust between IBM and its clientele. An employee who swindles the company may as well have swindled a customer, leaked some information or fudged some findings. This is where the culture of IBM as a company comes into play. IBM has through honesty and professional ethics gradually developed a reputation over a period of over a century. This reputation is based on trust, the making of ethical decisions, and doing the right thing.
The principle of caveat emptor absolves vendors from informing their customers about any negative attributes of their products subject to industry minimum regulation. This is because customers ought to verify the quality of products before purchasing them. However, some of IBM products are so advanced that IBM staff members have to manage them on behalf of their customers. Company trust and brand name reputation are, therefore, fundamental assets for IBM that can never to put to risk. In the case one of the clients had already been offended by the employee and upon realization of the offence it is found that IBM had covered another offense by the same employee, this may be ruinous to the reputation of the company. It would be in the best interest of the company to not only inform the authorities about the employee and let the law to take its cause but also issue a formal statement explaining the problem and indicating the steps that the company had taken to resolve the issue.
Conclusion
As expected in major companies, this issue will be the subject of several meetings from the mid-level to the top echelons of management. The meetings will consider what is to be done with the employees and also the system that had allowed the crisis to arise in the first place. The decision will be easy if these are ordinary management employees such as accountants, supervisors or human resource management officials. However, if the employees are major innovators, the decision will be harder and may only be made at the higher echelons of power. Therefore, depending on who the workers are, the matter might be resolved quickly with terminations or take time as the management looks for options with a view not to terminate a top innovator. The same will apply to the issue on whether or not the police and the media will be involved. Simple employees will be handled according to the law but senior innovators will see the issue handled internally involving a massive cover up. The future of the issue will depend on which course of action IBM will take. If the company decides to follow the law, this will be followed by a massive public relations campaign that shows how IBM did the right thing and saved the reputation of the company by allowing the law to take its course. If the matter is covered up, it might be forgotten for some time, and with some luck a very long time but when it eventually breaks out, the massive public relations campaign will be against not for IBM and just as McDonnell Douglas and the cover up about the defective cargo door for the DC 10, no company can survive such a scandal.
References
Ghosh, M. (2017). CBI books officials of air India, IBM in software scam worth Rs 225 crore . Retrieved from http://www.newindianexpress.com/nation/2017/jan/13/cbi-books-officials-of-air-india-ibm-in-software-scam-worth-rs-225-crore-1559298.html
Moore, A. (2009, December 1). Organizational Behavior and Business Management - IBM. Retrieved from http://www.andrewpmoore.com
