Supplementary Comprehensive Cases
Coping with AIDS at Dexter Equipment
It had been two months since that dreadful meeting with Tom Malvern, yet Mary Egan still
couldnt think about their discussion without feeling remorse and second-guessing her actions.
The fact is, she simply hadnt recovered from the shock shed experienced when Malvern
revealed to her that he was dying of AIDS. And now thisthe threat of a suit hanging over her and
the company.
Between May 1992 and June 1996, Tom Malvern had posted an excellent record as a sales
representative under Egan in Dexter Equipment Corporations (DEC) home office. Through the
summer and early fall of 1996, however, a series of short illnesses and days off for personal
reasons had lowered Malverns work performance. Egan didnt need a medical degree to know
that Malvern simply did not look well. Furthermore, his illness had left him moody and
despondent, and his chronic absences were disrupting the work of other sales representatives.
In early October 1996, Egan had finally decided to have a frank talk with Malvern about
his absences and his declining productivity. The meeting was unpleasant from the start and, as
Egan later related, it ended on a sour note. Malvern denied that he had any major medical
problems. He claimed that he was suffering from a lingering virus infection. As for any decline
in job performance, he assured Janice that his fourth-quarter sales figures would be strong.
Shortly after this meeting, Vic Lucente, sales supervisor in another unit, had asked Egan
about Malverns health. Its okay, shed begun; well, really its not okay but he assures
me that nothing is seriously wrong. Why do you ask? In response, Lucente had explained that
Linda Keller, a fellow sales representative, had seen Tom enter an establishment known to be
frequented by gays, and rumor had it that several of Toms personal friends were avowed
homosexuals. One friend had even died of AIDS.
Over the next six weeks Malverns sick days kept piling up. A common cold turned into
acute bronchitis, and there were side effects to his medication that kept him from working for
two and three days at a time. Egan, known as a taskmaster among DEC managers, began to lose
patience with Malverns behavior, as did the other sales representatives in the unit whose
performance was suffering because of his behavior. Sales reps were organized into sales teams,
each team member contributing to the achievement of established sales goals. Malverns
absences were clearly influencing the teams performance. Judith Blanc expressed the feelings
of other team members: Our success depends completely on a team effort, she said. To meet
our sales goals, were having to carry Toms load and hes getting credit for our work to meet
those goals. None of us think thats fair.
As Malverns illness worsened, the rumor mill got busier. Malvern was often the topic of
lunchtime discussions. His supposed sexuality made some co-workers hesitant to interact with
him. Eventually, Egan heard that several employees would not use the department water
fountain. One employee told her, I dont know if Tom has AIDS or not, but Im not going to
take any chances.
The problem finally came to a head during a Friday morning sales meeting in early
December. With sales figures down from the first quarter, Egan admonished her representatives
for their poor performance and what she described as a lack of cooperation among team
members. Tempers flared and accusations were made. That afternoon Egan called Malvern into
her office and explained that if his attendance and his performance didnt improve he risked
disciplinary action, including possible discharge. Visibly shaken, Malvern broke down and
admitted that he was terminally ill with AIDS.
Late that same Friday afternoon Vic Lucente chanced to see Egan as she was leaving for
home. Hows Tom doing these days? he asked. I hear hes taking more days off than
ever. Egan responded quietly: Im just sick, Vic, she said. Tom just told me hes dying
from AIDS. I dont know what to do.
Unfortunately, it didnt take long for Malverns medical condition to be known throughout
DEC. Word even reached several of his clients, who openly expressed their concern about dealing
with him and talked of terminating their service contracts with the company. Malvern suddenly
experienced noticeable isolation from other employees, and the department began to have serious
morale problems. Malvern now faced the reality of dealing not only with his illness but also with
less-than-friendly co-workers.
Feeling both physical and mental pressure, Malvern resigned from DEC on January 12,
1997. Egan expressed sympathy but was nevertheless relieved by his voluntary termination.
Relief turned to anger and fear, however, when DEC attorneys informed her that Malvern was
suing the company for alleged invasion of privacy. He was also charging that the adverse
treatment shown him during December 1996 and January 1997 had left him with no alternative
but to resign. The Equal Employment Opportunity Commission informed DEC on February 10,
1997, that Malvern had filed a discrimination charge against them under the Americans with
Disabilities Act.
Questions
1.
Discuss fully Mary Egans handling of this incident.
2.
Assume that DEC has no policy on life-threatening illnesses; explain what the organization
should include in drafting such a policy.
3.
What points might Tom Malvern make to support his lawsuit and discrimination charge
before the EEOC?
Toxic Substances at Lukens Chemical
With fifty-three plants operating in fifteen countries throughout the world, Lukens Chemical is a
multinational corporation and a world leader in the production of standard and specialty
chemicals. Highly committed to chemical research and development, Lukens also has nineteen
research laboratories worldwide. A partial listing of the companys chemicals includes the
following:





Agricultural insecticides, herbicides, fungicides, and phosphate and nitrogen fertilizer
products
Specialty chemicals
Dyes, plastic additives, aerospace and manufacturing chemicals, organic and inorganic
paint pigments, and chemicals for residential and commercial water treatment
Consumer personal-care chemicals and home cleaning and maintenance aids
Medical products, steroids, antibiotics, vaccines, and various pharmaceuticals
Because of the nature of its products and general public criticism of the chemical industry,
senior management has adopted a proactive stance toward the handling and distribution of toxic
substances. The company has made extensive efforts to protect the health and safety of its
employees while complying with OSHA standards applicable to toxic substances in the chemical
industry. Environmentalists have spoken approvingly of company actions to protect both its
employees and the environment.
Under the direction of a dynamic president and CEO, Lukens Chemical has experienced a
12 percent annual growth in plants and facilities. Managerial, engineering, technical, and other
professional employees needed to staff the company have come largely from competitors and
college recruiting. In order to develop its HR personnel, in 1994 the company started a
specialized management training program for HR specialists. Individuals selected for this
program are rotated every six months through the functional areas of recruitment and selection,
compensation administration, training and development, labor relations, and equal employment
opportunity. Upon completion of these assignments HR specialists are assigned as plant HR
assistants. One or more of these field assignments then normally lead to the HR directorship at a
major chemical plant.
In early 1997 Paul Chavis was promoted to the position of HR director of the New Orleans
plant of Lukens Chemical. During Chaviss interview with Chad Welker, plant manager of the
New Orleans facility, he was told that the major HR concerns were a high level of union
grievance activity, high turnover, and the need to recruit new engineering and technical
personnel. It was not long after Chavis had assumed his new assignment, however, that a more
pressing problem developed. The problem began shortly after a lengthy meeting between Chavis
and Dr. Howard Loy, the plants health and safety physician. The following is part of the
conversation between the two.
Loy: Paul, as you know, our corporate management is always concerned about the
problems of employees coming into contact with toxic chemicals. Part of my job is to monitor
the facilities here and to report any work-related health problems. Since the lead pigments
department is a highly suspect area, I keep a very close watch on this particular facility.
Chavis: I know thats an important area to us; there are over 150 employees in the lead
pigments department.
Loy: My personal study, and those of other researchers, shows a relationship between lead
exposure and serious health conditions, especially various female reproductive dangers.
Chavis: Howard, that could be a real problem since we have seventeen women between the
ages of 23 and 45 working in that department. What medical problems might women encounter
from exposure to lead?
Loy: Pregnant women who have been exposed to lead may miscarry or give birth to
children with serious defects. The possibility of sterility is another danger. I believe were
running a real risk by continuing to employ women in lead pigments.
After his meeting with Loy, Chavis did some further checking. He discovered that the
department used a lead chromate pigment process, which can be especially dangerous to women.
And the problems described by Dr. Loy were confirmed by the National Institute of
Occupational Safety and Health (NIOSH).
On the basis of these facts, Chavis wrote to Dr. Kathryn Long in Houston, recommending
that some policy be developed regarding the exposure of women to lead. As a result, the
company established a policy that only women beyond childbearing years or those surgically
sterilized could hold jobs involving exposure to lead. All women in the lead pigments
department were told of this policy. Those women not accepting the companys offer of surgical
sterilization could transfer to jobs involving no contact with lead. Management established this
policy with the belief that it was being institutionally responsive to womens health needs, but
unfortunately, the replacement jobs offered were largely in clerical and maintenance positions,
jobs paying considerably less than the technical positions in the lead pigments department.
Shortly after the policy was announced, nine women filed an EEOC sex discrimination
charge against the company, alleging that it was forcing them to be surgically sterilized as a
condition for retaining their jobs. The complaining employees noted in the charge, No female
should be forced to give up her reproductive rights in order to keep her job. The EEOC suit came
as a complete surprise to Chavis and his superiors, since no women in the lead pigments
department had indicated displeasure with the policy, and the company had acted out of what it
felt was a responsible and humane concern for its female employees.
Source: This case is adapted from an actual experience. The background information is factual. All names are
fictitious.
Questions
1.
Given the recommendations of Dr. Loy, what possible courses of action could the company
take regarding womens exposure to lead?
2.
Evaluate the rights and responsibilities of both the company and the employees in this case.
Self-Managed Teams at Lake Superior Paper Company
Lake Superior Paper Company, located in Duluth, Minnesota, near plentiful timber sources, is
the largest producer of uncoated, supercalendered ground-wood paper in North America. The
mill is equipped with state-of-the-art technology and is designed to produce nearly a quartermillion tons of paper a year. It has highly automated facilities, with operations continuously
monitored by skilled workers.
When Lake Superior Paper first opened its mill, it formed twenty self-managed teams,
among them crews from the wood yard, wood-handling laboratory, pulp mill, paper machine,
calendering and roll finishing, laboratory, and maintenance areas. It also established a core of
team managers in the plant and a design team (consisting of the president and vice presidents) to
spearhead the initial mill design, start-up, and task assignments. A self-managing team system
was chosen for the new mill, said one of the mill managers, because It would have been against
the norm in the paper industry if we used a traditional work system in a new start-up operation.
Another executive explained, We had a state-of-the-art mill in terms of technology. We wanted
a state-of-the-art social system to go with it, not an old, outdated kind of traditional system.
In the early stages of the mills start-up operations, management provided specific
directions to the work teams. The majority of the workers had had no prior experience in the
paper industry or with working in a team structure. The development of truly self-managing
teams was expected to take from five to eight years. Initially, teams were under the direct
leadership of the team manager, with no rotation of member skill roles and responsibilities.
Ultimately, it was hoped that teams would find the required skills and abilities within
themselves, with members exercising control over their problems and rotating among various
coordinating and scheduling roles. Team members were compensated on a pay-for-knowledge
basis. As an employee mastered new skills, he or she was advanced upward on a nine-point pay
scale. Exhibit 7-1 shows the long-term evolutionary plan, with team managers moving from
direct supervision (stage 1) to positions of shared authority (stage 2), to boundary managers and
leaders (stages 3 and 4).
Despite the success of the mill, the implementation of self-managed teams was not without
problems, and significant challenges remain. These include the following:
1.
2.
3.
Reactions to the concept of self-managing teams still range from skepticism to their
embrace as a cure-all. Debate continues over whether the mill, with its state-of-the-art
technology, would be just as productive with a traditional style of organization.
Supervisory positions within the mill are fraught with conflict. Supervisors are often caught
in the middle, trying to satisfy the demands of management from above and the
expectations of team workers from below. Team managers express the same sentiments.
One manager described her primary role as a kind of buffer that gets it from both sides,
resulting in the occasional wish that she could just turn to one group and say, All right,
you do it.
The team managers role is difficult, since many of the managers obtained their work and
supervisory experiences in more traditional organizations where directive modes of
leadership were the norm. The transition to a team system calls not only for a new set of
roles but for an entirely different managerial philosophy. This creates internal conflicts for
team leaders.
4.
5.
There is a haunting, if not always stated, fear among some team managers that they risk
managing themselves out of a job. If they were to be truly successful, their team would
become self-managing and appear to require a team manager no longer.
Disgruntled technical team workers also question managements fair-ness. As more selfmanaged team workers complete training and are compensated through the pay-forknowledge policy, salary gaps between technical and nontechnical workers shrink.
Techs object to the pay-for-knowledge component of the self-managed team system,
which rewards workers with weak skills, knowledge, and experience for completing
training. Techs have also protested when called upon to do tasks they consider below their
statusresponsibilities they would escape under a traditional system with narrowly defined
job tasks for each level.
At Lake Superior Paper, team members, managers, and top executives realize that selfmanaging teams are vulnerable entities. Members and leaders stress that they have almost no
opportunity to rest on their laurels. One employee stressed that Working in the system is great,
but it can be very fragile. He explained that One moment a team can be really clicking, with
things going really well, and the next moment things can be in turmoil, with people hollering at
one another and a lot of hard feelings produced. This merely reflects one element of the
organizations mission and philosophy statement, which suggests that though conflict is
inevitable, it must be resolved in a timely and equitable manner.
Despite their problems in implementing self-managed teams, the Lake Superior Paper mill
has been both highly efficient and productive since it began operations. The mill has been named
as the most successful greenfield (start-up) site in the paper industry.
Source: This case is adapted from The Good and the Bad of Teams: A Practical Look at Successes and
Challenges, in Charles C. Manz and Henry P. Sims, Jr., Business without Bosses (New York: Wiley, 1993).
Reprinted by permission of the publisher.
Questions
1.
Why do you think there is still skepticism at Lake Superior Paper regarding the team
structure?
2.
One team manager explained his role as being a kind of psychologist, reacting to the
feelings, needs, and interactions of employees. What do you believe he meant by this
statement?
3.
What might top management do to lessen the concern of team managers?
Outsourcing the Training Function
At Corning, employee training has always been a critical part of the companys culture and
success. As a result, it was not surprising when top managers at Corning recently made a
decision to place an even greater emphasis on employee training by establishing the requirement
that all employees spend at least 5 percent of their work time in training. However, the training
function at Corning was to meet these goals while remaining cost-conscious and adhering to a
fixed budget. With these constraints, Cornings training team faced a paradox: They needed to
provide employees with more training by expanding the number and type of courses offered
while adhering to their current level of budgetary support. Given this challenge, the training team
considered several options and ultimately decided to outsource the training function.
Though the training function is believed to be a critical foundation for Cornings success,
the decision to outsource was based on the potential benefits of a long-term outsourcing
relationship. Ideally, by drawing upon another companys strengths, this partnership would help
Corning reduce costs while expanding the courses offered. Moreover, managers at Corning
hoped that outsourcing certain courses would enable the internal training staff to spend more
time developing courses that focused on Cornings core skills and abilities. To achieve this, it
was important to the managers at Corning that their outsourcing partner would not merely
assume the administration of the training courses. Rather, Corning needed to develop a
partnership that would help develop and adapt the training function to its business needs.
After searching the market, Corning decided to outsource its training responsibilities to the
College Center of the Finger Lakes (CCFL). CCFL is a nonprofit education and training
organization that focuses on addressing customer and market needs. The relationship between
Corning and CCFL evolved over time as the two organizations began to know and understand
each others competencies. Corning initially planned on outsourcing only courses that were
peripheral or noncritical to the companys success. Those courses that were important to
Cornings vitality would remain under internal development. Essentially, the initial agreement
called for CCFL to assume responsibility for the development and delivery of roughly sixty basic
courses. As part of the agreement, all courses were held at Cornings facilities and CCFL was to
announce courses and registration throughout Cornings computer mainframe, e-mail, and mail
services.
Once an agreement was reached, CCFL and the Corning training staff met monthly to help
the partnership proceed as smoothly as possible. These meetings focused on teaching CCFL about
Corning and Cornings needs as well as on conveying expectations for the training program. To
facilitate the success of the partnership, members of CCFLs staff became part of the strategic
planning team for the training function, and a manager from Corning was assigned to oversee the
entire outsourcing relationship.
After the partnership got off the ground, the relationship between Corning and CCFL began
changing in two primary ways. First, Corning realized that training for strategic skills and
competencies consumed most of its internal trainers time. Second, Corning realized that though
the content of the internal courses was critical to company success, the actual delivery of the
courses was not. Recognizing the changes in how the training department was evolving, Corning
shifted even more responsibilities to CCFL. The result was that Corning focused on the strategic
needs of the training program and the content of core courses while CCFL assumed responsibility
for course delivery.
Today, the Corning/CCFL partnership has been successful in meeting the needs of Corning.
More courses are available to employees, customer satisfaction with the training program has
increased, and courses take less time to be designed and developed. Moreover, the internal
training staff at Corning has been able to focus more attention on developing and enhancing the
core values essential to the objectives of the firm. This has all been accomplished while
Cornings training program has gained considerable flexibility and met its budget.
Source: Adapted from Garry J. DeRose and Janet McLaughlin, Outsourcing through Partnership, Training and
Development, (October 1995): 5155.
Questions
1.
What criteria should be used to assess whether a human resources function, like training, is
a good candidate for an outsourcing relationship?
2.
What has Corning done and what should it do to ensure that this partnership remains
successful?
3.
What potential problems do you foresee as a result of outsourcing such a core human
resources function?