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This is a true case. Names have been changed to protect identities. Valerie Young was a marketing manager at an international cosmetics and fragrance company, Wisson, which is headquartered in Chicago. Wisson underwent a major reorganization due to cost cutting. Valeries department was downsized from 25 to 10 people the year before. They did survive as a small team though, and their role within the organization was uniqueacting as an agency, delivering designs for bottles and packaging and developing the fragrances for their brands. Valeries manager, Lionel Waters, had been with the department for 14 years. He was hired by Wissons CEO at the time, after he had worked for big names in the fragrance industry. He had launched one of the most successful female fragrances in the industry several years before. Waters joined the company in order to start new product lines for the company in the mass fragrance market. He then hired two close friends as executives with salaries well above industry standards and gave them each six weeks annual vacation. Teams were formed around them quickly and after three years, each team had its own line of fragrances that were launched worldwide. Nature of Work Valerie was hired to contribute organizational, financial, and marketing skills. The rest of the team was mainly comprised of creative individuals who had basically no interest whatsoever in the dry theoretical world of calculating numbers and strategies. Valerie had not worked in the beauty industry before, but was eager to learn everything about the world of scents and how they were developed. At that time, the department worked with many different perfumers from several fragrance companies. The perfumers themselves, or their representatives, came to present their creations for new projects, or the Wisson teams went to their suppliers offices in France to conduct so-called fragrance sessions. It takes time to develop a fragrance product that will end up being a perfect creation on the counters of the worlds department stores. The name, concept, design of the bottle and packaging, advertising, and, last but not least, the fragrance has to be put together to create an innovative and uniquely new product. Fragrance development itself takes a tremendous amount of time. First, the perfumers are briefed about the new project so that they can base their creations on already firm ideas about the end product. Then, for every new project in the department, at least 300 to 400 samples are submitted by the perfumers. The majority of those samples are usually discarded right away after smelling for the first time because the scent did not match the concept or simply did not smell good enough. Some are set aside, smelled again and again, and during that process, the perfumers get feedback about what to change. Sometimes Valeries team got 20 reworked submissions for one scent and it often happened that after all that work, the original was picked as the best choice. In the final phase, three to four fragrances remain and only those few go on to the market research testing phase. During Valeries first year at the company, the team worked with as many as eight different fragrance companies to have a good diversity of new scent ideas. After a while, they began using only perfumers from two fragrance companies for their projects. She was wondering why they stopped working with the other perfumers, because their submissions were not bad at all and they also successfully supply Wissons competitors. Why were these perfumers not good enough for Wisson It did not take long for the team members to realize that Waters was not to be questioned. The team then went forward and developed great relationships with the perfumers of the two remaining fragrance houses. The Incident And then one day, it all became clear to Valerie. She had some copies to make and walked to the copy room in the office area. As she was putting her originals in the copy machine, she saw that there was a paper jam, and the person who caused it left without taking care of it. She started to open the drawers of the paper supply and checked the output tray. There were some sheets that someone must have forgotten and she was going to throw them in the recycling container next to the copy machine. As soon as she grabbed the sheets, she saw that they looked like her bosss private companys stationary (he had a consulting company on the side). So Valerie looked closer and realized that what was in her hand were invoices from Waters to the two fragrance companies Wisson worked with that listed commissions and fees totaling almost 35,000 per month So that was the reason Wisson stopped working with other companiesthey probably refused to pay Waters kickbacks Valerie was stunned. She was left shocked and speechless. Almost as if it were like a reflex action, she took all her papers and the invoices and walked back to her office. Sitting there for a while, she tried to calm down. So many questions were running through her 528 P a r t 5 Integrating Cases head Does anyone else know about this Are other people on our team involved Is this normal in the industry Should I talk to anyone about it All kinds of thoughts were spinning inside her, and she spent the rest of that workday walking around as if she was in a cloud. Fortunately her boss was not in that day. He was probably on vacation, just like the 20 other weeks per year of time off he grants himself. When Valerie came home the night of her discovery, she told her boyfriend about it. This is one of those situations when you have to tell somebody otherwise you think you are going to explode. Her boyfriend was not directly affected by this, so she could confide in him and be sure of his honest opinion. First, he did not quite understand what she was saying because it sounded so outrageous, but then he realized what had happened. He asked her if she had told anyone else about it, and when she assured him that she had not, he recommended that she keep this information to herself for the time being, not because he is not an ethical person himself, but because he knew that her career in Chicago could be in danger if something happened to her boss. After all, her boss was in charge of the department and if he were gone, the already small team might not survive either. Valeries Dilemmas Valerie did not have a U.S. green card, only a special working visa, which allows nonU.S. citizens with unique skills to work in this country for a certain amount of time. This kind of visa is completely dependent on the fairness of the company someone is working for, and means that Valerie could lose the right to work, or even the right to stay in the United States if she did not have this job any longer. And that was not all. She had just been accepted for the masters of science program at the University of Chicago and was looking forward to starting it. Her tuition would be reimbursed by the company if she got As and Bs in her classes. This was a huge opportunity to gear her career toward greater challenges and successes. But what about ethics What about her own values In this situation, there was so much more at stake than just right or wrong. The decision she had to make would influence other peoples lives as well as her own. Her colleagues had become her friends, and even though her boss disregarded good management and leadership principles, these individuals formed friendships among themselves, particularly since they had been reduced to only a handful of people. Instead of joining his team in building up not only professional but also friendly relationship with his employees, Waters preferred to look for only one goalto enrich himself. He did not care about relationships with other fragrance companies either. Perfumers are somewhat like artists they sometimes work well under pressure and they are often inspired by their customers as well. To have the greatest diversity of fragrance submissions, Waters should have worked with perfumers from more than only two companies. This would have given Wissons products a big competitive advantage. Waters was a constant example of how not to be ethical in handling business and employees. Instead of being a leader who would help activate ethics mindfulness in others, he was the polar opposite. He seemed to have made it one of his goals to spend as much of the companys money as possible. Launch events went overboard with extravagances and expenses on one occasion, just to show off his horseback riding talent, he rented an entire stable outside of Chicago for one hour. The cost 25,000and he expensed it to the company. Usually he showed up late for meetings or canceled them entirely even when the attendees were already in the office. Or, he would tell someone something really important came up, and then relate a completely different version to somebody else. Waters team did all the work and had to make most decisions without him because he was rarely around. Mondays and Fridays he usually stayed home or at his other office, and with some traveling and all that vacation time, there was never much opportunity to actually work with him. So they learned to be efficient and productive by themselves without the person who was supposed to be their team leader, teacher, and supervisor. It finally deteriorated to the point that even the most positive colleagues realized that Waters contributed nothing to either the work level or to morale, both of which were already low. And that was without even being burdened with the things Valerie now knew Could she let her boss get away with this Was she not obligated to report this After all, in the companys policies it was clearly stated Personal payments, bribes or kickbacks to customers or suppliers or the receipt of kickbacks, bribes or personal payments by employees are absolutely prohibited. How could she even work with Waters any longer under these circumstances She felt her anger toward him growing stronger. What kind of person was this man Was he just a greedy human being Didnt he make enough money already He has always acted as if he were the most nave person in the office, and now shes discovered this She wished she had never seen those papers. It would have been much easier for her to continue her work and conduct business as usual. Valeries Decision and Rationale What Valerie had to do, or not do, somehow became an easy decision for her. It was clear that she was unable to report this before she had another job or even before she graduated from the masters program, which was her ultimate short-term Integrating Cases 529 goal. Getting another job is not easy without a green card. The Immigration and Naturalization Service has made it more difficult for nonU.S. citizens to work in the United States, so companies hesitate to hire people like Valerie because it means a lot of paperwork and expenses for them. Also, workers with Valeries type of visa have only 30 days to find a new job in the event they lose theirs otherwise, they are required to leave the country. Basically, Valerie did not really have a choice if she did not want to become a martyr for the ethics cause. She decided to wait for a while before bringing these findings to light, at least until she was close to graduating from the masters program so that she could receive her degree. It seemed that the highly ethical stance would be to report this right away, but it also seemed silly to sacrifice herself and her own future for the sake of outing someone who had been so unethical. Did she act morally and ethically correctly She felt that she put her own interests before ethics for now, and that bothered her deeply, but she knew she was going to do what had to be done as soon as her circumstances allowed for it. Valeries discovery changed everything, and nothing. She still had to set up meetings with their long-time perfumers, and participate and act as if she knew nothing about what happened. She did try talking to Waters about involving other fragrance companies again. Her stated reason to him was that Wisson only receives approximately 100 submissions per project now, instead of the 300 to 400 in prior years. He was not willing to discuss that topic at all though, which obviously did not surprise her. She wondered whether the perfumers knew about these sweet deals too, or if they believed that their hard work won them their projects. Every time Waters said something regarding the importance of keeping the fragrance development as this teams responsibility, she said to herself, Yes, and I know why What Next When the timing is right, and Valerie makes this crucial information public, of course, Waters and his future will be affected. He will certainly lose his job, could possibly face criminal charges, and his reputation in the industry will be destroyed. For the team, the question will be if it can survive without him. The teams do have a very strong brand manager among them, who has an excellent reputation within the Wisson organization. Perhaps he will be able to take over the team and restart this department the right way. Source Dench, S. How personal can ethics get Journal of Management Development, 2006, 10, 10131017. 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