BUSINESS ETHICS SIMULATION:
National Farm and Garden, Inc.
PROCESS
1. Develop teams of five participants (depending
on roles used).
2. Have each person read the National Farm & Garden background page
as an introduction to the exercise.
3. Assign each person a role to play and give him/her the specific
role description to review.
4. Indicate the desired outcome of the process (for example, press
conference, written and/or oral presentations, short-term plan,
long-term plan, employee meeting, etc.).
5. Allow the teams to proceed without interruption for at least 45
minutes, depending on the outcome specified above.
6. Create feedback mechanisms appropriate for the desired outcome.
7. Link simulation issues, process, outcomes, and experience to
course training and learning objectives.
*All rights reserved. Copyright by O.C. Ferrell and
Linda Ferrell. For permission to use, contact the author. The research
and conceptual assistance of Larry Gonzales, Pat Hansen, Heidi
Hollenbeck, Marilynn Hill, Michael Mitchell, Craig Hurst, Bill Haskins,
and Dana Schubert is gratefully acknowledged.
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NATIONAL FARM AND GARDEN, INC., BACKGROUND [everyone reads]
National Farm and Garden, Inc. (NFG) was incorporated in Nebraska in
1935 and has been a leading supplier of farming equipment for more than
60 years. Over the last five years, however, demand for NFG’s flagship
product, the Ultra Tiller, has been declining. To make matters worse,
NFG’s market lead was overtaken by the competition for the first time
two years ago.
Last year, NFG expanded its product line with the “Turbo Tiller,” a
highly advertised and much anticipated upgrade to the Ultra Tiller. The
product launch was timed to coincide with last year’s fall tilling
season. Due to the timing of the release, the research and development
process was shortened, and the manufacturing department was pressed to
produce high numbers to meet anticipated demand. All responsible
divisions approved the product launch and schedule. In order to release
the product as scheduled, however, the manufacturing department was
forced to employ the safety shield design from the Ultra Tiller. When
attached, the shield protects the user from the tilling blades; however,
it is necessary to remove the shield in order to clean the product.
Because of differences between the Ultra and Turbo models, the Turbo’s
shield is very difficult to reattach after cleaning and the process
requires specialized tools. Owners can have the supplier make
modifications on site or at the sales location, or leave the shielding
off and continue operation. All product documentation warns against
operating the tiller without the shielding, and the product itself has
three distinct warning labels on it. Modifications are now available
that allow for the shield to be removed and replaced quite easily, and
these modifications are covered by the factory warranty. However, most
owners have elected to operate the Turbo Tiller without the safety
shielding after its first cleaning.
Over the last year, a number of farm animals (chickens, cats, a dog, and
two goats) have been killed by Turbo Tillers being operated without the
guard. Two weeks ago, a 7-year-old Nebraska boy riding on the back of an
unshielded tiller fell off. When the tiller caught the sleeve of his
shirt, his arm was permanently mangled, requiring amputation. One of the
child’s parents owns the local newspaper, which ran a story about the
accident on the front page of the local paper the next day. NFG’s CEO
has called an emergency meeting with the company’s divisional vice
president, director of product development, director of manufacturing,
director of sales, and vice president of public relations to discuss the
situation and develop a plan of action.
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ROLES
Divisional Vice President
You are the divisional V.P. and have been with the company for many
years. Historically, you have not been a pushy individual and
generally prefer to stay in the background. When there are major
decisions to be made or crises to address, you are frequently not
available. The CEO recently put you on a 60-day “action plan” to
improve your division’s output; failure to achieve this plan will
result in your termination, even though you are just a few years shy
of retirement. Therefore, you now find it necessary to satisfy not
only your own objectives, but the CEO’s very high expectations as
well. This has caused great turmoil within all divisions as you place
increasing pressure on your subordinates.
As the divisional V.P., you are focused on coordinating all
departments. You are responsible for output from the sales,
manufacturing, and field service engineering departments. The R&D
department, which must sign off on all new products before they are
approved for production, is not under your supervision.
Recently, you received a memorandum from the director of R&D
outlining some potential problems with the development and testing of
the Turbo Tiller. The memo was copied to you, the director of
manufacturing, and the director of sales. You agreed with the
director of manufacturing not to share the contents of the memo with
your CEO because you felt that bringing this small concern to his
attention would cause unnecessary problems for each division.
Moreover, the CEO is known for his abrasive personality and has a
history of yelling at bearers of bad news.
The CEO has called an all-hands emergency meeting at 7:00 A.M.
tomorrow. You are expected to bring all knowledge of this situation
with you for discussion and creation of a comprehensive action plan.
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Director of Product Development
You are the director of product development. Although you have a
master’s degree in mechanical engineering from Stanford University,
you are originally from the inner cities of Chicago, where you grew
up in the school of “hard knocks.” From previous experience, you tend
to be rather uncompromising about products that are engineered within
your organization. Your engineering team has been very successful in
the past, and you are quite proud of the many new successful products
your department has developed.
You originally fast tracked the Turbo Tiller product due to constant
pressure, particularly from the director of sales. However, upon
further investigation, you have become concerned about the
implementation of the product’s safety shield. Consequently, you
recently sent a memorandum to the director of manufacturing, director
of sales, and the divisional vice president outlining the fact that
consumers could sue National Farm and Garden under the state’s strict
liability doctrine, which holds manufacturers, distributors,
wholesalers, retailers, and others in the chain of distribution of a
defective product liable for the damages caused by the defect
regardless of fault. Moreover, plaintiffs could cite the state’s
concept of defect of manufacture when the manufacturer fails to (1)
properly assemble a product (2) properly test a product, and (3)
adequately check the quality of the product component parts or
materials used in manufacturing. You now believe that NFG has
violated all of these “defects of manufacture.”
Having received no response to this memo, you are contemplating
whether to escalate the issue by going to the CEO. The only reason
you have not already done so is the CEO’s historic temper when
confronted with negative situations.
The CEO has called an all-hands emergency meeting at 7:00 A.M.
tomorrow. You are expected to bring all knowledge of this situation
with you for discussion and creation of a comprehensive action plan.
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Director of Manufacturing
You are the director of manufacturing. A graduate from the University
of Alabama with a bachelor of science degree in industrial
manufacturing, you have worked for NFG for 20 years. You are required
to provide reports to top management on a weekly, monthly, and
quarterly basis. Top management creates the exact measures of
performance that you provide; although you have a say in what these
reports focus on, you often disagree with their exact focus. Your
overall performance is evaluated based more on numbers of units
produced than on quality. Despite this, you enjoy working for the
company. You consider the group like family, and especially
appreciate the effort the CEO has made to make you feel valued and
supported.
You are aware of the difficulties the Ultra Tiller guard pose when
used on the Turbo Tiller. Due to the Turbo Tiller’s larger size, the
guard is nearly impossible to replace after removal. Re-attachment of
the shield requires a professional machine shop and additional
assistance. However, with your knowledge of statistics, you know
that, even without the shield in place, the chances of an animal or a
person being injured by the Turbo Tiller are small. Thus, you agreed
with the divisional V.P. to bury a memo sent by the director of R&D
stating related concerns. You both felt that the risks were small
enough and that raising these concerns to your superiors would only
cause headaches and paperwork. Furthermore, you need to stay on
schedule in order to reach your volume goals if you are to earn your
bonus.
You have also received several E-mails from the manager of the field
service engineering department about reports of farmers operating the
Turbo Tiller without the guard. When you requested statistical data
regarding the number and location of occurrences and any related
accidents, the field service engineering manager replied with field
data indicating that more than 85 percent of all Turbo Tillers are
eventually operated without the guard.
The CEO has called an all-hands emergency meeting at 7:00 A.M.
tomorrow. You are expected to bring all knowledge of this situation
with you for discussion and creation of a comprehensive action plan.
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Director of Sales
You are the director of sales and have been with NFG for more than
ten years. You were recruited from a competing firm and have more
than 25 years of sales experience in the industry. Because of sagging
sales, you face extreme pressure from above to meet your numbers.
However, you feel that sales forecasts have been set unrealistically.
Furthermore, these aggressive forecasts create churning within your
department as your sales staff consistently complain that their
quotas are unrealistic. Although you are adamant that declining sales
are industry and product offering issues, you are reluctant to raise
these concerns to the CEO because of his history of ripping the heads
off messengers bearing bad news. You have witnessed this phenomenon
firsthand as the CEO literally screamed at a coworker who brought a
problem to his attention. On the other hand, the CEO has promised you
a new BMW if your department reaches its numbers this year. Of
course, you enthusiastically promised to achieve these results and
quickly ran from the room.
The Turbo Tiller has been a much-anticipated addition to your
stagnant product portfolio, but you were concerned that it would be
delayed due to red tape and wrote daily E-mails to the R&D manager
about getting it to market on a timely basis. You have received a
memo from the R&D Manager about some legal concerns over the Turbo
Tiller. However, you feel that these concerns are manufacturing’s
problem, not your department’s. Furthermore, because the director of
manufacturing received a carbon copy of the memo, you are sure that
the concerns will be addressed appropriately.
You have organized training on this product for your sales staff that
included proper operating procedures and the dangers of standing
within five feet of the tilling blades. Independent of these training
sessions, you arranged a separate class on how to address and
downplay these concerns with customers.
The CEO has called an all-hands emergency meeting at 7:00 A.M.
tomorrow. You are expected to bring all knowledge of this situation
with you for discussion and creation of a comprehensive action plan.
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V.P. of Public Relations
You are the most recent addition to the management staff at NFG,
having been with the company for just three years. You obtained a
bachelor’s degree in human resources from Ohio State University, and
a master’s degree in communications from Florida State University.
Prior to working with NFG, you handled public relations at a
nonprofit organization for five years. You took this job because you
thought it would be a personal challenge to represent a larger
for-profit business. Besides, you were raised in Nebraska, and are a
farmer at heart.
Nearly six months ago, you learned that the company had developed and
released a product that has some safety concerns. Most department
heads were not concerned about the problem because of a lack of solid
evidence that a danger existed. You have been monitoring the
situation, although it has not been your highest priority due to
recent union negotiations. Recently, the CEO informed you that a
corporate meeting is eminent. As the V.P. of Public Relations, it is
your responsibility to gain information about public opinion to
present to the CEO. As you begin to collect this information, you
find disturbing news. Many consumers don’t trust NFG because of its
handling of a chemical spill five years ago. Additionally, many
rumors are circulating about NFG’s hiring practices.
You know that a single negative event can wipe out a company’s
reputation and destroy favorable customer attitudes established
through years of expensive advertising campaigns and other
promotional efforts. In this situation you need to minimize the
negative publicity, yet still address the media. You suddenly wish
the company had developed a crisis plan before this happened.
The CEO has called an all-hands emergency meeting at 7:00 A.M.
tomorrow. You are expected to bring all knowledge of this situation
with you for discussion and creation of a comprehensive action plan.
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