Reference no: EM13660122

Closing Case - A Personal Crusade

The senior leaders of DM Bicycle Company filed into the conference room, their hands full of coffee containers, BlackBerrys, and the agenda for that morning's meeting. With the end of the fiscal 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 floor like a procession of shiny beetles scuttling down the Bicentennial Greenway. They were actually bikers wearing helmets that reflected 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 traffic.

"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 finally 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 financial 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 office 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 five and 10, and don't make it past their early twenties. They go blind, become mentally impaired, and are afflicted with seizures..." His vice 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. 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 clarification--by 'divide between' do you mean split equally?"

Gino's eyes flicked 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 profits toward fighting for his daughter's life. She respected his fatherly feelings, but was this really a corporate responsibility?

FOR DISCUSSION

1. Is diverting a portion of corporate profits to fighting a childhood disease a legitimate CSR activity for DMBC? What percent of profits would be appropriate? Explain.

2. Where on Carroll's global CSR pyramid 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 profit-sharing decision? Which ethical principle should drive any decision about corporate profit 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.