CASE STUDY A PERSONAL CRUSADE
The senior leaders of DM Bicycle Company ?led into the conference room, their hands full of coffee containers, BlackBerrys, and the agenda for that morning’s meeting. With the end of the ?scal year in sight, the CEO, Gino Duncan, wanted to discuss sales projections for FY11.
“Good morning, everyone,” he said. “Thanks for coming in early. I know y’all can’t wait to break down the budget, but before we get started, do you notice anything unusual outside?” He gestured at the window behind him.
Carolyn Bridges, DMBC’s HR [human resource] director, peered down on what looked from the 10th ?oor like a procession of shiny beetles scuttling down the Bicentennial Greenway. They were actually bikers wearing helmets that re?ected the bright North Carolina sunlight. “Lots of cyclists out this morning,” she said. Carolyn had ridden the Greenway many times since she joined the company, but she couldn’t remember ever seeing so much traf?c.
“Bingo!” Gino said. “More and more people are biking to work, and that’s good news for us.”
Gino had created DMBC, now a public company, out of his passion for the outdoors and his eye for unique bicycle designs. The company’s
1,500 employees all worked at its headquarters and factory in Greensboro. The bikes were called “Greenies,” as a tribute to their hometown.
Everyone in the room knew that orders were coming in at a record rate. Carolyn relished the thought of ?nally being able to staff up for increased production. She hoped that the strong sales growth meant the company could reinstate the bonus pool that had been discontinued when the ?nancial crisis struck. But her excitement was short-lived. Gino’s face grew serious. “As most of you know,” he said, his emotion nearly overcoming him, “about eight months ago my nine-year-old daughter, Nicole, was diagnosed with Batten disease.”
His listeners nodded sympathetically. Most of them could remember Nicole and her brothers riding their bikes around the of?ce on training wheels. Gino had taken Nicole’s diagnosis very hard and had spent several months working from Rochester,
New York, while she was undergoing experimental treatment.
“It’s an inherited neurological disorder that affects two to four out of every 100,000 born in the U.S. each year,” Gino continued. “They start exhibiting symptoms between the ages of ?ve and 10, and don’t make it past their early twenties. They go blind, become mentally impaired, and are af?icted with seizures . . .” His voice began to crack. After a moment, he said, “As you can see from our projections, we’re about to have the best year in our 23-year history. I’d like to divide the windfall between a new CSR program focused on Batten disease and employee bonuses.”
The room was silent. Then one of the executives asked the question that was on everyone’s mind.
“Just for clari?cation—by ‘divide between’ do you mean split equally?”
Gino’s eyes ?icked toward the speaker. “To be blunt, which do you think is more important? Finding a cure for a devastating disease, or putting a little extra padding in someone’s wallet?”
Carolyn was shocked. The company had not given raises in three years and in some cases had been forced to cut salaries, yet Gino seemed to want to direct the bulk of the expected pro?ts toward ?ghting for his daughter’s life. She respected his fatherly feelings, but was this really a corporate responsibility?
1. Is diverting a portion of corporate pro?ts to ?ghting a childhood disease a legitimate CSR activity for DMBC? What percent of pro?ts would be appropriate? Explain.
2. Where on Carroll’s global CSR pyramid (Figure 5.1) would you put Gino Duncan’s idea? Explain.
3. Which, if any, of the ten general ethical principles presented in this chapter seem to drive Gino Duncan’s pro?t-sharing decision? Which ethical principle should drive any decision about corporate pro?t sharing? Explain.
4. If you were a member of DMBC’s corporate board of directors, what would you advise Gino Duncan to do? Explain your ethical reasoning.
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